The Vermont Supreme Court affirmed the Vermont Public Utility Commission’s (Commission’s) approval of a natural gas company’s contract to purchase renewable natural gas (RNG) produced from a New York landfill. The court found that the record was “replete with evidence” that the RNG would reduce greenhouse gas emissions by replacing “geologic gas” consumed by the gas company’s customers and that the record supported the Commission’s conclusion that the contract was consistent with the 2022 Comprehensive Energy Plan that the State issued to implement the emission reduction requirements of the Vermont Global Warming Solutions Act of 2020 (GWSA) and other statewide policies. The court noted that the company had identified RNG as one component of its approach to meeting its GWSA obligations, with the contract facilitating emissions reductions for customers who could not immediately switch from natural gas. The court also rejected the argument that applicable least-cost planning principles required the company to consider alternatives to RNG such as weatherization, fuel-switching, and efficiency. The court said these alternatives were not relevant because the contract was part of the gas company’s strategy to provide lower-carbon energy sources and separate from other strategies that involved weatherization and efficiency. In addition, the court found that evidence in the record directly supported the Commission’s determination that a social-cost-of-carbon condition adopted by the Commission made the contract cost-effective for the purpose of least-cost planning. The condition required the gas company “to manage its resale options so that the total price paid for emission reductions from RNG delivered to its customers does not exceed the social cost of carbon,” which an expert said would require the company “to resell a portion of RNG into the renewable transportation fuel markets to keep the cost below the social cost of carbon.”

Challenge to the Vermont Public Utility Commission’s approval of a natural gas company’s contract to purchase renewable natural gas produced from a New York landfill.

In re Vermont Gas Systems, Inc.

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Vermont Supreme Court Upheld Approval of Gas Company’s Contract to Purchase Renewable Natural Gas from New York Landfill

Filed

United States of America

Vermont

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Vermont Supreme Court Upheld Approval of Gas Company’s Contract to Purchase Renewable Natural Gas from New York Landfill

Target

Policy instrument

Risk

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance