Customers accuse NW Natural of greenwashing, in lawsuit over its carbon reduction program

Oregon’s largest gas utility faces another lawsuit this week, just days after Multnomah County added the company to a lawsuit related to 2021 heat dome deaths.

This time, NW Natural’s own customers filed a class action lawsuit, claiming that the company misled them about how its carbon emissions reduction program worked and that it used funds from that program to promote and generate more carbon emissions.

The complaint filed Wednesday says the company’s Smart Energy program makes false promises about reducing customers’ carbon footprints. The complaint also says the program represents a breach of contract under Oregon law because it violates the state’s ban on unfair and deceptive marketing claims.

A spokesperson for NW Natural said Thursday that the company had not yet received the complaint, but that “the company takes these matters seriously and intends to defend itself vigorously if this matter goes to court.” .

NO Natural’s Smart Energy program, which the company describes as an affordable and simple program to sign up for, is designed to help customers offset their carbon emissions. The program states that it does this through a number of projectssuch as purchasing carbon credits or increasing renewable natural gas projects.

To sign up, customers pay a monthly fee ranging from 15 cents to $10 per month, depending on the tier chosen or whether it’s a residential or business account.

The company, which serves more than 2.5 million residents in the Pacific Northwest, says more than 90,000 customers participate in the program “addressing carbon emissions related to their use of natural gas.” , according to its website.

But the claim says customers “paid for carbon offsets guaranteed to mitigate specific amounts of carbon emissions related to their natural gas use, Northwest Natural Gas failed to provide such offsets.”

“We found very quickly that anyone you asked if you were in this program, ‘What were you thinking of buying?’ The answer would be: “I was thinking of offsetting my emissions. I thought I was helping. I thought I was doing the right thing,'” said David Sugerman, the trial lawyer in the class action complaint. “And this is sort of a case of broken promises and misrepresentations .”

The claims come as the company was recently added as a defendant in Multnomah County’s $52 billion lawsuit against fossil fuel companies over the 2021 heat dome. This may be the first time that a gas utility is involved in a climate liability lawsuit. The utility faces growing calls from environmental groups to end gas use in Oregon.

But NW Natural said renewable natural gas is central to how the company plans to reduce its greenhouse gas emissions to meet Oregon’s climate goals.

Renewable natural gas, or RNG, is a type of biogas made from decomposing organic matter. RNG is often produced by capturing byproducts from landfills, livestock operations, such as digesters, or wastewater treatment. It is mainly composed of methane, a greenhouse gas 86 times more powerful at trapping heat in the atmosphere than carbon dioxide over a 20-year period.

But according to Sugerman, factory farms increase emissions rather than reduce them.

Despite NW Natural’s plan to acquire more RNG, the company has failed to meet its own targets for two years in a row and has so far purchased less than 1% to offset its emissions.

The legal complaint states: “In a recent interview, a company executive said there is no universal standard for measuring how much a renewable natural gas project actually contributes to the climate, and admitted that Claimed emissions reductions vary depending on the accounting method used. »

The company has also fought against climate action programs that would reduce gas consumption over time. In 2022, the company continued the Oregon Department of Environmental Quality’s climate protection program, which would have created limits and an overall shift away from fossil fuel use. This program is currently undergoing a second rulemaking process with the hope of restarting the program in 2025.

“As you dig deeper into this, you learn that, for many reasons, these representations and these promises are not true,” Sugerman said. “What we find is that these compensations are delicate and complicated. Most of the offsets they buy are for methane digesters on factory farms. It’s very large industrial agriculture, industrial food, animal production and they take methane and claim to digest it and create what they call renewable natural gas.

The complaint also alleges that money collected through the program is used to market the benefits of renewable natural gas, with the funds going toward things like school exercise books and leaflets sent to customers.

“It’s kind of one of those classic oxymorons, isn’t it, because there’s nothing, nothing renewable about it,” Sugerman said.

According to NW Natural’s website, approximately 78% of customer payments to the program are “used to purchase a mix of carbon offsets and renewable thermal certificates from environmental projects that reduce or prevent the emission of greenhouse gases.” The product mix is ​​made up of at least 96% carbon offsets and up to 4% renewable thermal certificates.

The remainder of the payment is used to “help educate customers on how to reduce greenhouse gas emissions and to administer the program.” NW Natural does not benefit from the Smart Energy program.

“I signed up for Smart Energy because I am concerned about the climate crisis. I was willing to pay a little more to make an environmentally friendly choice,” Nicolas Blumm, one of the plaintiffs in the lawsuit, said in a statement. “If I had known what the program really was, I wouldn’t I would never have signed up.”

Sugerman said the program is a case of “classic greenwashing.”

“The seller makes claims that something is environmentally friendly or healthy or good, and it’s not,” he said. “It drives sales, they can charge higher prices and consumers end up spending money on things they don’t get.”

The plaintiffs are seeking a full refund of payments made to the program and that NW Natural either operate the program as advertised or close it.

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This story comes to you from the Northwest News Network, a collaboration between public media organizations in Oregon and Washington.