Analysis finds specific, coordinated transition to electrification could save Oregon $1.8 billion while protecting families most at risk of rising costs
PORTLAND, Ore. — Oregon families could face sharply higher gas rates in the coming decades if utilities and state regulators fail to plan for a changing energy system, according to a new study commissioned by the Oregon Citizens’ Utility Board (CUB) and Climate Solutions.
A new analysis from Synapse Energy Economics, an independent research firm specializing in energy system planning and utility economics, looks at what happens to residential gas rates as the state follows its first economy-wide energy strategy. The Oregon Energy Strategy released last year identifies widespread electrification as part of the least-cost way for Oregon to meet future energy demand and climate goals. The new research found gas rates will rise under every future modeled — and could reach nearly six times today’s rates by 2050 without a plan to manage electrification regionally.
Other key findings include:
- Electric heat pumps will cost less to operate than gas furnaces by 2030. Across every future modeled, efficient heat pumps have lower operating costs than gas furnaces, and all-electric households have the lowest energy bills.
- Keeping gas as a backup could cost more, not less. Using both electric and gas systems to heat homes would require maintaining nearly the entire gas system while also investing in the electric system, costing approximately $2.4 billion more than a managed transition away from gas.
- Planning the transition could save Oregon $1.8 billion. Coordinating electrification geographically and strategically retiring portions of the gas system as areas electrify would mean less spending on unneeded gas infrastructure.
The reason gas rates are projected to rise is simple: As fewer homes and businesses use gas, utilities still have to pay for the network of pipes and other infrastructure that serves them. Without a managed plan, those fixed costs are spread across fewer people — putting renters, families with lower incomes and others who have fewer options to switch at greatest financial risk.
“The people who can least afford higher energy bills shouldn’t be left paying an ever-growing share of the cost of the gas system,” said Bob Jenks, Executive Director of the Oregon Citizens’ Utility Board. “This research shows why we need to start planning now to protect people from costs that will become much harder to manage later.”
The path forward: Planning now could save billions
The research provides crucial data and insights for Oregon leaders, regulators, and utilities as they map out the specific paths to follow the Oregon Energy Strategy in the months and years ahead.
One of the key findings is the added $2.4 billion expense of ‘hybrid heating’ or homes with both an electric heat pump and a gas furnace. Oregon regulators and providers have positioned hybrid heating as a way to relieve strain on the electric grid from growing electricity demand.
The Oregon Energy Strategy, however, already accounts for this growth and incorporates new energy resources, transmission, energy efficiency and demand management needed to meet the higher demand. Hybrid heating requires making those investments to expand the electric system, while also preserving — and paying for — the entire gas system.
“Oregon has identified the most affordable path toward our energy future. Now we need to plan for how we get there,” said Claire Prihoda, Oregon Clean Buildings Policy Director at Climate Solutions. “That means planning our gas and electric systems together and making deliberate choices about where we continue investing. Thoughtful planning can lower costs while building a cleaner, more affordable energy system for everyone.”
Read the full Synapse Energy Economics report
About Oregon Citizens’ Utility Board
Oregon Citizens’ Utility Board (CUB) is an independent, statewide nonprofit organization working to make Oregon utilities affordable, accessible, reliable and clean. Established by voters in 1984, CUB represents the interests of Oregon’s residential utility customers.
About Climate Solutions
Climate Solutions is a Northwest-based clean energy economy nonprofit accelerating clean energy solutions to the climate crisis. Our vision is a thriving, equitable Northwest, powered by clean energy, inspiring the transition to sustainable prosperity across the nation and beyond
