PUC backs CenterPoint plan for renewable natural gas system

State utility regulators Thursday approved CenterPoint Energy's proposal to create a Minnesota supply system for renewable natural gas, a fuel created from manure, food waste and other organic detritus.

CenterPoint's plan allows prospective renewable natural gas producers to interconnect with its distribution network. Renewable natural gas (RNG) is produced by breaking down organic waste through anaerobic digestion. Once cleaned of impurities, it can be injected into existing natural gas pipelines.

"We want to secure a local renewable gas supply," Amber Lee, CenterPoint's director of regulatory affairs said Thursday at a meeting of the Minnesota Public Utilities Commission (PUC). "It might eventually allow our customers greater access to a lower carbon fuel."

By a vote of 5-0, the PUC approved CenterPoint's petition for prices and terms of interconnection agreements for renewable gas.

Houston-based CenterPoint, Minnesota's largest natural gas utility, said the renewable supply system would not impact customer's rates. Renewable gas producers will pay to connect to the utility's pipelines.

Eventually, CenterPoint plans to ask the PUC to sell RNG to customers. While it has environmental benefits, RNG is considerably more expensive than fossil fuel gas, leading critics to question its economic viability.

Last year, the PUC unanimously shot down CenterPoint's proposal for a renewable natural gas pilot program that would have allowed the company to sell RNG to its customers on a voluntary basis.

Among the PUC's problems with that proposal was its lack of a local sourcing plan for renewable natural gas. The company tried to rectify that criticism with the plan approved Thursday.

CenterPoint said in a PUC filing that has received more than a "dozen" inquiries from RNG producers about connecting with its Minnesota system, though it did not name them.

Representatives of the biogas industry and Minnesota agriculture supported CenterPoint's proposal at Thursday's PUC meeting.

"This will enable the development of large anaerobic digesters across Minnesota," said Dan Skogen, director of government and industry relations at the Agricultural Utilization Research Institute in Crookston.

Manure from dairy farm and livestock operations is a prime source of biogas; so is food waste. Hennepin County is working on developing an anaerobic digester to recycle food waste and other organic material.

"Organic waste composes nearly one-third of our trash," John Jaimez, a Hennepin County recycling specialist told the PUC. Connecting into CenterPoint's system would greatly help the county's recycling efforts.

Hennepin, Ramsey and Washington counties are all members of a partnership that supports CenterPoint's renewable gas plan, though they have criticized the utility's interconnection costs as being too high.

Opposing CenterPoint's RNG plan were Fresh Energy, a renewable power research and advocacy group, and environmental groups the Sierra Club and the Minnesota Center for Environmental Advocacy.

Their concerns include methane leaks in the gas distribution system and the lack of a "robust accounting" system to measure the "carbon intensity" of RNG, Margaret Cherne-Hendrick, St. Paul-based Fresh Energy's director of beneficial electrification, told the PUC.

Carbon intensity refers to the amount of greenhouse gases emitted from producing, distributing and consuming a fuel.

For instance, RNG from a dairy farm takes more carbon out of the environment than it produces, while RNG made from wastewater treatment is net carbon positive — though less so than fossil gas.

The Center for Energy and Environment, a Minneapolis-based group that specializes in clean energy and energy efficiency, favored CenterPoint's plan.

"We see the petition as a step in a much broader effort to reduce greenhouse gas emissions," Audrey Partridge, the group's regulatory policy manager, told the PUC. "We need a mix of fuels and energy to decarbonize."

Mike Hughlett • 612-673-7003