Eastern Pennsylvania natural gas consumers enrolling in RNG offer

By Katie Fletcher | April 27, 2016

At the beginning of 2016, The Energy Co-op, an independently-owned, local, nonprofit energy supplier, launched a renewable natural gas (RNG) product to residential consumers in the Philadelphia Electric Co. natural gas territory to offset their pipeline gas consumption.

When customers enroll in RNG they continue to use pipeline natural gas, however, The Energy Co-op purchases renewable natural gas credits (RNGCs) generated from the Lanchester Landfill in Chester County, Pennsylvania. The patent-pending RNGCs the cooperative developed enable a monetary value to be added to the environmental benefits of using landfill gas, incentivizing landfill operators to distribute RNG to local businesses as a sustainable alternative to fracked gas, according to The Energy Co-op. The gas produced at the landfill is refined and piped to nearby businesses and has the potential to serve up to 10,000 households annually.

“The way it works is similar to renewable electricity,” said Eric Kravitz, director of business development with The Energy Co-op. “The credit mechanism allows us to offer this RNG product to residential gas users by offsetting their pipeline gas consumption with biogas.” The Energy Co-op bundles the credit with the wholesale gas product for sale to residential end users.

“We’ve been a long-standing provider of renewable electricity and we’ve prided ourselves on expanding the use of renewables within the greater Philadelphia area,” Kravitz said. “We saw this as a logical next step from our electricity products.” Kravitz adds that there had been no alternative options for gas consumers. “Regardless of how you feel about gas as a fossil fuel or various extraction technologies, if you use natural gas you have no choices, so we wanted to offer consumers a green and renewable natural gas option,” he said.  

Right now, the cooperative serves predominantly consumers in the Philadelphia metro, PECO gas territory, but it’s looking to expand into additional territories within the year.

As for the cost, Kravitz said the cooperative estimates it’s around a 15-percent premium. “The percentage price premium for RNG varies based on the price of natural gas,” he adds. “Right now, natural gas is extremely cheap so the percentage increase for RNG is higher than it would have been last year when natural gas prices were higher.” For the first month of service, consumers pay $0.3889 per CCF of gas delivered to a residence. This is only for the first month’s usage, and the price subsequent is determined by The Energy Co-op in response to market conditions. A monthly customer charge of $1.70 is also included on the bill.

Since the end of January, PECO natural gas customers living in Montgomery, Chester, Delaware and Bucks Counties are able to enroll on the company’s website or by phone. According to Kravitz, enrollment has been consistent since the offering. “Since we’ve launched, we’ve had constant growth with residential enrollments,” he said. “We’ve also had a number of inquiries about licensing the RNGCs, which is another area we’re exploring to enable gas utilities or gas companies in other areas of the country to offer similar products to their customers.”

The Energy Co-Op is licensed by the Pennsylvania Public Utility Commission (PaPUC) to offer and supply natural gas services, and the cooperative sets the price consumers pay. The PaPUC regulates distribution or delivery prices and services. The Federal Energy Regulatory Commission regulates interstate pipeline prices and services. The Energy Co-op supplies natural gas to PECO based on the consumers’ usage and PECO delivers the natural gas to consumers using their natural gas distribution network.