CUB Supports the Bend Climate Impact Fee

The City of Bend is considering a new way to reduce emissions: incentivizing developers to build all-electric homes. While this is not a new concept, it is a relatively new approach for Oregon cities.

For years, CUB has expressed mounting concern that continuing to grow the natural gas system will harm current and future Oregonians. This includes customers of Cascade Natural Gas, which serves Bend. Adding gas service to new buildings increases costs to existing customers and adds additional risk in the future.

This April, CUB spoke in support of Bend’s new approach to promote all-electric homes in front of the City Council. See our full letter of support for even more information!

What is Bend Doing to Promote All-Electric Homes?

When a developer builds a new home, apartment building, or even a whole neighborhood, they have to choose—gas or electric. Once a builder makes that choice, the home is basically locked into that energy source going forward. This can impact how future residents stay warm during the winter, heat their water, cook their food, and more.

95% of new single-family homes in Bend are built with gas appliances.

If, down the line, a homeowner needs to get a new appliance, the cheapest option will always be the same appliance as what the home was built with. And renters do not have a choice on what type of appliances are installed or replaced. This creates a big problem for cities that are trying to meet their carbon emissions goals. Building new homes with gas now means many people are stuck with gas for decades down the road.

Bend’s Solution: Fees for New Gas

The Bend Climate Impact Fee will place a one-time fee on new homes built with natural gas. The proposed fee will be based on the size of the home and its anticipated energy use. But developers who build with modern, all-electric systems avoid this charge entirely.

“New all-electric homes cost less to build and less to operate. By incentivizing electrification, Bend can help ensure new homeowners start saving money from day one, with lower monthly bills and protection from volatile natural gas prices. Building smart from the start also avoids the high costs of converting to electric later, locking in savings and comfort for decades to come.” - Energize Bend

This approach is part of a growing “build smart from the start” movement. Just last year, Ashland, Oregon, passed a similar new rule adding a fee for new gas appliances.

The one-time fee will be applied per dwelling, meaning for each single-family home or each unit in multifamily housing. There are three tiers, based on square footage, ranging from $1,415-3,265. Revenue from the fee will go back into Bend to pay for addressing climate change impacts from fossil fuels. This may include funding an incentive program for high-efficiency electric appliances in Bend homes.

Expanding the Gas System is Bad for Existing Customers

Climate change requires reducing the combustion of fossil fuels, including natural gas. The state’s Climate Protection Program requires that gas utilities reduce their emissions by 50% by 2035. The City of Bend has its own climate goals, too, aiming to reduce community-wide fossil fuel use by 40% in 2030 and 70% in 2050.

Adding New Gas Homes Increases Costs for Everyone

It costs Cascade Natural Gas customers approximately $1,300 for each new residential gas connection. In its most recent rate case, Cascade Natural Gas forecasts 16% residential customer growth, or roughly 12,000 new customers.

Adding these new customers would cost all customers an estimated $15.6 million in subsidies just for the hookups alone. These costs are recovered from every Cascade customer, not just those who choose to connect new homes to the gas system.

Regulators found that policies subsidizing new natural gas connections in homes no longer make sense. The Oregon Public Utility Commission has ordered that both Avista Natural Gas and NW Natural Gas phase out these subsidies.

The Bend Climate Impact Fee aligns with the policies and preferences of the people of Oregon to move away from fossil fuels that drive climate change, making our communities more susceptible to deadly heat waves and forest fires.

More Customers Means More Expensive Emissions Reductions

Oregon has set ambitious, multi-layered greenhouse gas reduction goals through legislation and executive action, aiming for significant reductions below 1990 levels. The Oregon Department of Environmental Quality (DEQ) developed the Climate Protection Plan. The plan requires natural gas utilities to reduce their greenhouse gas emissions by 50% from their historic baseline by 2035, and 90% by 2050.

Right now, Cascade needs to reduce approximately 371,854 metric tons of CO2 by 2035. If Cascade were to meet its 16% household growth, that would add about 38,000 metric tons of CO₂ per year. And all of those emissions cost money to reduce. A lot of money.

By avoiding adding new gas homes to the system, Cascade customers could avoid expensive additional emissions reduction costs. Cascade has already spent more than $8 million constructing the Knott Landfill RNG project. The gas utility has also indicated it intends to continue making similar investments and will charge customers for those costs. A far lower-cost strategy would be to avoid adding new customers altogether or to prioritize energy efficiency.

New Gas Impacts Generations of Oregonians

Cascade estimates a 50-year lifespan for the service pipe connecting a home to the gas system. This means a new connection made today stays on customers’ bills through 2076. Even if one of these homes chooses to go electric, those costs remain on everyone’s bills —except for the family that leaves the gas system.

Cascade is projecting to spend hundreds of millions on growing the gas system and expensive options to reduce emissions, driving up home gas bills already. These costs also stay on customer gas bills for decades.

As more and more customers choose to leave the gas system, those that remain will face mounting costs. The people left behind may prefer a gas stove. But many more could be those who do not have the option to go electric, no matter how expensive gas gets. Renters and low-income homeowners are the most likely to get stuck on an expensive gas system, with rising costs and fewer people to spread those costs between.

The Bend Climate Impact Fee creates the opportunity to avoid a future where those who can least afford expensive gas are stuck living in a gas home built today.

When You Are in a Hole, Stop Digging

Will Rogers once said, “If you find yourself in a hole, stop digging.” This is where we are now. Cascade must reduce emissions, but wants to keep digging itself into a deeper and deeper hole of emissions it needs to reduce.

The Bend Climate Impact Fee is a ladder out of Cascade’s emissions hole. Slowing down the growth of the gas system by adding an incentive to builders helps all gas customers.

Under current conditions and projected economic and market trends, CUB believes that policies that move households away from residential gas connections, and toward more efficient energy sources like heat pumps, are in the best interest of gas utility customers.

Stay Up to Date on Oregon Utility Issues

CUB will continue to advocate for people in Oregon on major utility issues. Sign up for the CUB email list for the latest updates, action alerts, and news on policies that affect the utilities your home relies on.

Donate to CUB

To keep up with CUB, follow us on Instagram, Facebook, Bluesky, and LinkedIn!

• Share this post on Facebook.
• Share this post on LinkedIn.
• Share this post with email.

« Back