NW Natural’s customers have filed a class action lawsuit claiming the company misled them about how its carbon reduction program works and that it’s using funds from that program to promote and generate more carbon emissions. (Christopher Furlong/Getty Images)
Oregon’s largest gas utility is facing yet another lawsuit, filed just days after Multnomah County added the company to a lawsuit related to 2021 heat dome deaths.
This time NW Natural’s own customers have filed a class action lawsuit claiming the company misled them about how its carbon reduction program works and that it’s using funds from that program to promote and generate more carbon emissions.
The complaint filed last Wednesday says the company’s Smart Energy program is making false promises about reducing customers’ carbon footprint. The complaint also says the program represents a breach of contract under Oregon law because it violates the state’s prohibition on unfair and deceptive marketing claims.
A spokesperson from NW Natural said Thursday that the company has yet to receive the complaint but “the company takes these matters seriously and intends to vigorously defend itself should this matter come to court.”
NW 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 it does so through a number of projects, like purchasing carbon credits or increasing renewable natural gas projects.
To sign up, customers pay a monthly fee that ranges from 15 cents to $10 a month, depending on the tier chosen or whether it is a residential or business account.
The company, which serves more than 2.5 million residents in the Pacific Northwest, says it has more than 90,000 customers participating in the program “who are addressing the carbon emissions from their natural gas use” according to its website.
But the claim said customers “paid for carbon offsets guaranteed to mitigate specific quantities of carbon emissions from their natural gas use, Northwest Natural Gas failed to deliver such offsets.”
“We were very quick to find that anybody you asked if you were part of this program, ‘what did you think you were buying?’ The answer would be, ‘I thought I was offsetting my emissions. I thought I was helping. I thought I was doing the right thing,’” David Sugerman, a trial lawyer and part of the class action complaint, said. “And, it’s kind of a case of broken promises and misrepresentations.”
These claims come as the company was recently added as a defendant to Multnomah County’s $52 billion lawsuit against fossil fuel companies over the 2021 heat dome. It may be the first time a gas utility has been added to a climate accountability lawsuit. The utility has been facing growing calls to end gas use in Oregon from environmental groups.
But NW Natural has 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, like digesters, or wastewater treatment. It’s mostly made up of methane — a greenhouse gas that is 86 times more potent 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, it’s failed to meet its own goals for two years in a row and has so far procured less than one percent to offset its emissions.
The legal complaint claims, “In a recent interview, a Company executive stated there is no universal standard to measure how much a renewable natural gas project actually helps the climate, and admitted that claimed emissions reductions vary based on the accounting method used.”
The company has also fought against climate action programs that would reduce the use of gas over time. In 2022, the company sued the Oregon Department of Environmental Quality’s Climate Protection Program, which would have created limits and an overall move away from fossil fuel usage. That program is currently undergoing a second rule-making process with the hope of restarting the program in 2025.
“As you dig into this, you learn that for a lot of reasons these representations and these promises aren’t true,” Sugerman said. “What we find is that these offsets are tricky and complicated. Most of the offsets that they buy are targeted at factory farm methane digesters. These are very big industrial agriculture, industrial feeding, animal production and they’re taking methane and purporting to digest it and create what they call renewable natural gas.”
The complaint also alleges the money collected from the program is used to market the benefits of renewable natural gas, with funds going to things like school workbooks and fliers sent out to customers.
“It’s kind of one of those classic oxymorons, right, because there’s nothing, nothing renewable about it,” Sugerman said.
According to NW Natural’s website, about 78% of customers’ payments into the program is “used to purchase a mix of carbon offsets and renewable thermal certificates from environmental projects that reduce, or prevent the release of, greenhouse gasses. The product mix is made up of at least 96% carbon offsets and up to 4% renewable thermal certificates.”
The remainder of the payment goes toward “helping educate customers on how to reduce greenhouse gas emissions and administering the program. NW Natural does not profit from the Smart Energy program.”
“I signed up for Smart Energy because I’m concerned about the climate crisis. I was willing to pay a bit more to make a green choice,” Nicolas Blumm, one of the plaintiffs in the lawsuit, said in a statement. “Had I known what the program really was, I would never have signed up.”
Sugerman said the program is a “classic greenwashing” case.
“The seller makes representations about something being environmentally friendly or healthy or good, and it is not,” he said. “It drives sales, they can charge premium prices and consumers wind up spending money on things that they’re not getting.”
The plaintiffs are asking for a complete refund of payments into the program and for NW Natural to either make the program work as advertised or shut it down.
GET THE MORNING HEADLINES.
This story was originally published by Oregon Public Broadcasting, an Oregon Capital Chronicle news partner.