CenterPoint Energy Minnesota’s Renewable Natural Gas Program

The answers below describe the renewable natural gas program CenterPoint Energy Minnesota Gas has proposed for Minnesota Public Utilities Commission (Commission) approval. The Commission may approve the program as proposed, approve a modified program, or reject the proposal. A printable PDF with this information is available.

What is CenterPoint Energy’s renewable natural gas program?

On August 23, 2018, CenterPoint Energy filed a proposal for a five-year pilot program with the Minnesota Public Utilities Commission to offer its customers the option to purchase natural gas from renewable sources.

Questions About Renewable Natural Gas

What is renewable natural gas?

Renewable natural gas, also known as “green gas” or biomethane, is methane obtained through three primary means:

  • Landfills – methane emissions from decomposed landfill waste, which is collected through a system of pipes.
  • Digesters – a process that involves micro-organisms consuming biomass, such as manure and corn stalks, which produces methane and carbon dioxide.
  • Gasifiers – a process whereby biomass like wood and crop residue is subjected to heat and pressure in a low oxygen environment, which converts biomass into combustible gas.

Where will CenterPoint Energy get renewable natural gas?

If the Minnesota Public Utilities Commission approves the proposed program, CenterPoint Energy will request bids from suppliers of renewable natural gas. CenterPoint Energy expects that the renewable natural gas it will obtain will come from various producers across the country.

How can I be sure that I am receiving renewable natural gas if I enroll?

When producers put their renewable natural gas into the pipeline it intermingles with the other natural gas in the pipeline system. Just as it isn’t possible to isolate electric power generated from wind once it is put into the electric grid, it is impossible to isolate molecules of renewable natural gas in the pipelines. However, CenterPoint Energy will use program revenues to make sure that renewable natural gas is being added to the pipeline system that serves CenterPoint Energy customers in Minnesota.

Do I need to update any of my appliances to use renewable natural gas?

No. Renewable natural gas is chemically identical to conventional natural gas. Any natural gas appliances in your home or business will not be damaged or experience performance changes by using renewable natural gas.

Does renewable natural gas burn like conventional natural gas?

Yes. Natural gas from a renewable source is refined just like conventional natural gas and functions identically. Customers purchasing renewable natural gas will experience no difference in the operation of natural gas equipment because of their purchase.

Why should I consider buying renewable natural gas?

Renewable natural gas has considerable environmental benefits. Using renewable natural gas, instead of conventional natural gas, results in a 40 to 100 percent or more decrease in greenhouse gas emissions, depending on the source of the renewable natural gas. Learn how renewable natural gas decreases greenhouse gas emissions (PDF).

Questions about participating in the program

Who will be eligible to sign up for the program?

The proposed program would be open to CenterPoint Energy utility customers in Minnesota. Customers who are not current on utility payments owed to CenterPoint Energy would not be eligible to participate under the proposed program. Specifically, the program is open to:
  • Residential customers;
  • Commercial and industrial customers receiving firm sales service; and
  • Commercial and industrial customers receiving interruptible sales service.

When will I be able to sign up?

If the proposed program is approved by the Minnesota Public Utilities Commission by the end of January 2019, CenterPoint Energy plans to start initial enrollment in spring 2019 and to start providing renewable natural gas service in fall 2019.

What are the details of the enrollment process?

At the time of sign-up, customers would specify how much extra they want to pay per month for renewable natural gas. CenterPoint Energy would buy as much renewable natural gas possible for the specified amount the customer selected. As wholesale prices fluctuate, the quantity of renewable natural gas CenterPoint Energy can buy for customers might change, but customers’ contributions would never go higher than what they specified.

How much will renewable natural gas cost?

Though the final rate will be determined after Minnesota Public Utility Commission approval, CenterPoint Energy estimates that the cost of renewable natural gas would be slightly less than $4.00 per therm.

Why is renewable natural gas more expensive than conventional natural gas?

Renewable natural gas is more expensive to produce than conventional natural gas. While both conventional natural gas and renewable natural gas must be processed to satisfy pipeline safety and quality standards, the processing is somewhat different and costlier for renewable natural gas. In addition, the federal government and the state of California have enacted policies meant to encourage use of renewable natural gas as vehicle fuel. These policies have also created demand for renewable natural gas and increased its price.

Will the price of renewable natural gas decrease?

It’s hard to say. In many ways, renewable natural gas is like renewable electricity twenty or more years ago. When renewable electricity first became available, it was more expensive than electricity from non-renewable sources. Voluntary green tariff programs helped develop the early renewable electricity industry so that renewable electricity became less expensive.

If I sign up, what will my program fee pay for?

Under the proposed program, ninety percent or more of program fees would go toward covering the cost of renewable natural gas that CenterPoint Energy would purchase on your behalf. Up to ten percent of program fees would go toward administrative and marketing costs for the program and a small utility shareholder incentive.

If I sign up, how will I be billed for renewable natural gas?

The charges customers agree to pay for renewable natural gas would appear on their monthly gas bills.

If I sign up, how long am I committing to be in the program?

CenterPoint Energy believes that it will be able to buy renewable natural gas for a lower price if it can commit to longer-term agreements with suppliers. To secure lower prices for customers, CenterPoint Energy is proposing to require certain minimum commitment periods for new participants. New residential customers will need to commit to the program for twelve months from the time that they sign up. New commercial and industrial participants will need to commit for two program years, which run from July to June, plus any time until the next program years starts. For example, if a residential customer signs up for the program in September 2019, they would be committed until September 2020. If a business signs up in September 2019, they would be committed until July 2022. After the initial commitment period has ended, residential customers may remain in the program or choose to terminate their subscription at any time with changes appearing on bills they receive 30 or more days after a change is requested. Commercial and industrial customers may discontinue their program subscriptions at the beginning of the next program year.

Can I participate if I rent my home?

Yes. All residential customers that are current on utility payments owed to CenterPoint Energy are eligible to participate.

Other questions

If I don’t want to sign up, will the renewable natural gas program affect my bill?

If you choose not to participate, the effects of the proposed program on your gas bill would be minimal. The Company estimates that an average residential customer would pay less than $5 total in support of the program and that cost would be spread out over five or more years. Some support by non-participating customers is needed in order to launch this program, but CenterPoint Energy designed the program to minimize the effect on non-participants.

What is the regulatory process for CenterPoint Energy’s proposed renewable natural gas program?

On August 23, CenterPoint Energy petitioned the Minnesota Public Utilities Commission for permission to provide the proposed renewable natural gas program. Interested persons will have until September 24 to comment on the proposal and until October 4 to reply to other parties’ comments. The Commission may choose to extend those deadlines. After interested parties have had the opportunity to weigh in, the Commission will consider the petition at a public hearing. If the program is approved, CenterPoint Energy will file annual status reports with the Commission describing program operation. The proposed program is a five-year pilot program. In the last year of the pilot, the Company plans to file a program evaluation report with the Commission. At that time, the Company may request to continue the program, terminate, or make changes to the program.

Is this program comparable to any other programs offered by other utilities in Minnesota or elsewhere?

If approved, this program will be one of the first green tariff programs offered by an American natural gas utility. The proposed program is comparable to electric green tariff offerings provided by electric utilities in Minnesota and across the United States. However, only a few other natural gas utilities are providing green tariff options for their customers.

Was CenterPoint Energy required to develop a renewable natural gas program?

No. No law, regulation, or other legal requirement is forcing CenterPoint Energy to propose a renewable natural gas program. CenterPoint Energy is choosing to offer this program because of its corporate commitment to sustainability and its belief that many of its customers will appreciate having a renewable natural gas option.