Avista issues request for proposals for renewable natural gas

Rhea-AI Summary

Avista (AVA) has issued a request for proposal (RFP) to secure long-term renewable natural gas (RNG) resources for its customers. This initiative aims to meet carbon reduction requirements and support Avista's goal of achieving carbon neutrality in natural gas operations by 2045. The RFP is open to current owners, developers, and marketers of RNG resources.

RNG is derived from organic waste streams like landfills, wastewater treatment plants, food waste, and dairy waste. It's produced by capturing and purifying methane that would otherwise escape into the atmosphere. Avista anticipates RNG deliveries to begin no earlier than January 1, 2025. The company is considering proposals from various RNG sources, including landfills, biomass fast pyrolysis, dairy, food waste, and municipal wastewater treatment plants.

Positive

• Aligns with Avista's carbon neutrality goal for natural gas operations by 2045
• Complies with Washington's Climate Commitment Act and Oregon's carbon reduction goals
• Potential for long-term partnerships to grow the RNG market in North America
• Diversifies energy sources with renewable options

Negative

• Potential rate impact on customers due to RNG procurement
• Uncertainty in the development and maturity of the RNG market
• Possible challenges in securing sufficient RNG resources to meet goals

Insights

Environmental Policy Analyst

Avista's RFP for renewable natural gas (RNG) marks a significant step towards meeting carbon reduction goals in Washington and Oregon. This aligns with the broader trend of utilities transitioning to cleaner energy sources. The 2025 delivery timeline suggests a realistic approach, allowing time for resource development. The diverse range of RNG sources sought, including landfills and food waste, indicates a comprehensive strategy to maximize potential supplies.

However, the success of this initiative will depend on the cost-effectiveness of RNG compared to conventional natural gas. The mention of expenditure limits in Oregon highlights potential financial constraints. The long-term impact on consumer rates and the scalability of RNG production will be important factors to monitor. Overall, this move positions Avista as a proactive player in the emerging RNG market, potentially enhancing its environmental credentials and long-term sustainability.

Energy Market Analyst

Avista's RFP for RNG resources represents a strategic move in a rapidly evolving energy landscape. The company's aim to be carbon neutral in natural gas operations by 2045 is ambitious but aligns with global decarbonization trends. This initiative could provide Avista with a competitive edge and potential new revenue streams as the RNG market matures.

Investors should note the long-term nature of these contracts, which could provide stability but also pose risks if RNG technology or pricing significantly changes. The inclusion of diverse RNG sources and emerging technologies like hydrogen suggests a forward-thinking approach. However, the economic viability of these projects and their impact on Avista's financial performance will be critical to watch. The success of this initiative could position Avista as a leader in the clean energy transition, potentially attracting ESG-focused investors.

RNG sought to meet carbon reduction requirements and goals

SPOKANE, Wash., Sept. 03, 2024 (GLOBE NEWSWIRE) -- Avista, through a request for proposal (RFP), is seeking to secure renewable natural gas (RNG) resources for its customers over the long term. RNG is derived from organic waste streams that would otherwise release methane to the environment as they decompose. These sources include, for example, landfills, wastewater treatment plants, food waste and dairy waste. RNG is produced by capturing that methane that would otherwise escape to the atmosphere and purifying it to make it very similar to conventional natural gas.

“Avista is seeking to obtain RNG, so that we may build on our aspirational goals to be carbon neutral in our natural gas operations by 2045, and so that we may also meet the requirements of Washington’s Climate Commitment Act and Oregon’s carbon reduction goals,” said Jason Thackston, Avista’s chief strategy and clean energy officer. “Additionally, legislative changes have laid the groundwork for utilities, such as Avista, to enter the RNG market as developers, long-term buyers, and long-term partners to help grow and mature the RNG market in North America.”

In 2019, the Oregon legislature passed Senate Bill 98, which allows natural gas utilities to acquire RNG for delivery to their customers. The rules implementing Senate Bill 98 are established and overseen by the Public Utility Commission of Oregon, including limits on total expenditures for RNG and the overall rate impact to customers. In 2019 the Washington State legislature also passed a bill supporting RNG procurement, House Bill 1257.

The RFP is open to parties who currently own, propose to develop, or hold rights to resources, or those marketing a resource or portfolio of resources meeting Avista’s requirements for RNG. Bidders may submit multiple proposals; each proposal may include certain configuration, contracting or pricing options. Avista anticipates RNG deliveries to be no earlier than January 1, 2025.

Avista anticipates proposals from both new and existing resources such as:

• Landfill RNG
• Biomass Fast Pyrolysis Synthetic RNG
• Dairy RNG
• Food Waste RNG
• Municipal Wastewater Treatment Plant RNG
• RNG commodity portfolios (bundled or unbundled)
• Carbon Capture with synthetic RNG byproduct
• Hydrogen
• Other RNG offerings meeting Avista’s needs
  

RFP responses are due by Tuesday, October 29, 2024. The RFP and bid instructions are available on the Avista website at: myavista.com/RNGRFP

About Avista Utilities
Avista Utilities is involved in the production, transmission and distribution of energy. We provide energy services and electricity to 418,000 customers and natural gas to 382,000 customers in a service territory that covers 30,000 square miles in eastern Washington, northern Idaho and parts of southern and eastern Oregon, with a population of 1.7 million.  Avista Utilities is an operating division of Avista Corp. (NYSE: AVA). For more information, please visit www.myavista.com.

Avista Corp. and the Avista Corp. logo are trademarks of Avista Corporation.

To unsubscribe from Avista’s news release distribution, send reply message to dalila.sheehan@avistacorp.com  

Contact:                                                
Media: Jared Webley, jared.webley@avistacorp.com 
Avista 24/7 Media Access (509) 495-4174     

FAQ

What is the purpose of Avista's (AVA) recent RFP for renewable natural gas?

Avista's RFP aims to secure long-term renewable natural gas (RNG) resources to meet carbon reduction requirements and support its goal of achieving carbon neutrality in natural gas operations by 2045.

When does Avista (AVA) expect RNG deliveries to begin?

Avista anticipates RNG deliveries to begin no earlier than January 1, 2025.

What types of RNG sources is Avista (AVA) considering in its RFP?

Avista is considering RNG from sources such as landfills, biomass fast pyrolysis, dairy waste, food waste, municipal wastewater treatment plants, and other RNG offerings that meet the company's needs.

How does the RNG initiative align with Avista's (AVA) environmental goals?

The RNG initiative supports Avista's aspirational goal to be carbon neutral in its natural gas operations by 2045 and helps meet requirements of Washington's Climate Commitment Act and Oregon's carbon reduction goals.