A Natural Gas Installation Fee Could Be Coming to Bend Next Year

The City of Bend is reviewing a policy proposal that would add a scaled fee to the installation of natural gas equipment in residential homes, with the intent being to encourage electrification and reduce negative impacts of fossil fuel emissions.

The fee proposal has drawn some attention; on Feb. 11, a City Council work session discussing “Electrification Policy Process Fee Options” attracted a sizable audience. While work sessions do not allow for public comment, a prior Council meeting saw close to an hour of remarks about the policy.

In 2025, Bend city officials got the idea of electrification policy from Southern Oregon, where the City of Ashland became the first in the state “to impose a fee on new natural gas hookups,” Oregon Public Broadcasting reported. Ashland’s ordinance officially took effect this year.

Carbon calculations

In work sessions since last summer, the city manager’s office has hammered out a vision of what similar policy in Bend would look like, working with energy consulting firm BrightLine Group. The result, while still subject to change, can best be interpreted through a math equation applied to any natural gas appliance: “Social Cost x Carbon Produced x Life of Equipment x Tier Factor = Fee Amount.”

Per the City Council, a discount would then be applied to that result. With a discount of 50 to 80%, installing a gas furnace as part of an HVAC system in an average-sized Bend home would result in a final fee from $1,800 to $4,500.

Understanding the fee means defining the equation’s variables. The “Social Cost of Carbon” is a dollar value based on the social and environmental damages estimated by the Environmental Protection Agency – under the Obama and Biden administrations – to be caused by one metric ton of CO2.

The EPA lists a range of “potential values” based on discounts and future valuation; BrightLine and the City of Bend landed on the “central value” of $215, a middle-ground option also used in Ashland.

“Carbon Produced” is a measurement of an appliance’s annual carbon emissions. As Central Oregon’s power grid is not fully renewable, even fully electric devices can be responsible for carbon emissions. The proposal subtracts “electric carbon produced” from “gas carbon produced” to find a gas-specific value of emissions, multiplied by “Life of Equipment” (an appliance’s estimated service life) to get “Net Lifetime Carbon Produced.”

Finally, “Tier Factor” relates to the size of a home, with BrightLine proposing multiple scaled tiers based on square footage.

In December, BrightLine provided an early example of what the proposal could translate to. If a developer of a house with a square footage of 2,300 – an approximate citywide average that would land in “Tier 2” of three currently proposed tiers – wanted to install a gas furnace with a 15-year lifespan that annually emits 2.95 metric tons of carbon, that equation would result in a one-time fee around $9,000, excluding any discounts that the City Council agreed would apply.

A less emissions-heavy appliance, like a water heater, would generate a much lighter tentative fee, estimated by BrightLine to be around $2,000 without discounts.

Lighting the way

After deliberation on Feb. 11, the City Council decided to cut things down.

“That formula coughs out to a fairly big and scary number,” Councilor Steve Platt told the Source. “The Council landed on a much smaller amount.”

A proposed “Low Fee” would be just 20% of the result of fee calculations, while a “Reduced Fee” would halve it.

Platt mentioned the Clean Energy Targets bill, a 2021 piece of state legislation that requires Oregon’s major electricity providers to reduce greenhouse emissions significantly by 2030 and entirely by 2040. “Even if those goals aren’t met, we’ll get to that clean future eventually,” he said. “So right now, let’s work on electrification locally to benefit our community in the long-term. Things will get cleaner and cleaner over time by implementing this kind of fee.”

A study from the Energy Trust of Oregon shows that, from 2021 to 2023, 86% of newly constructed homes in Bend were installed with natural gas heating; gas furnaces made up 63% of that figure.

“We need to be really thinking about the impacts of climate change,” Councilor Mike Riley said at last week’s work session. “The longer it takes us to reduce emissions, and especially to reduce our use of fossil fuel, the more likely we’re going to have worst-case scenarios in the future.”

Other council members weren’t fully on board.

“It kind of seems like we’re robbing Peter to pay Paul,” said Councilor Gina Franzosa, questioning the fee’s “practicality” and pointing out that local energy providers still burn fossil fuels to produce electricity. Councilor Megan Norris, a planning manager for Hayden Homes, has recused herself from future voting on the issue.

Platt would like to see this policy in place by the spring or summer of 2027, but steps still need to be taken to finalize its details. Part of that process means seeking input from Bend residents, he said.

“Public engagement is something I’m committed to and I think the rest of the Council is as well,” Platt said. “We want a committee that decides where this revenue goes. Is it to help electrify homes, is it a broader community fund for making homes less power-hungry?”

Some controversy regarding the fee proposal has been stirred by a petition from NW Coalition for Energy Choice, an organization that advocates primarily in Oregon against restrictions and fees on gas usage. The lobbying group is a tax-exempt 501(c)4, which means, unlike charitable 501(c)3 nonprofits, it’s legally allowed to promote political causes as long as “social welfare” remains its primary mission.

Tax filings reviewed by the Source show that board members of NW Coalition for Energy Choice have close ties with the fossil fuel industry in the Pacific Northwest, specifically the Northwest Gas Association, a business collective that calls itself “the regional voice of the PNW gas industry.” NW Coalition for Energy Choice does not outwardly disclose these direct industry ties on its website or in its messaging.

“The Bend City Council is advancing discussions on restricting natural gas and adding taxes in new residential construction – a decision that could drive up housing costs and threaten energy reliability for local families,” the lobbying group stated in campaign messaging. “Every fee, tax, restriction, mandate or regulatory barrier makes our housing affordability crisis worse. Electrification demonstrably increases the cost of home construction, and this tax won’t achieve carbon reductions in Bend.”

On Feb. 18, the Council will vote on a motion to approve the policy’s basic framework – a first step in advancing the fee. Platt said that a work session on April 22 will serve as a “check-in” on the plan, ironing out details like, “Who gets exemptions?” and “What kind of exemptions are there?”