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City Can Reshape Contract Talks with NW Natural

February 22nd, 2021 by dk

If the Eugene City Council doesn’t agree to another extension or draft a necessary ordinance immediately, the city’s franchise agreement with NW Natural will lapse in early May. This is not what the city or the natural gas company wants. On the other hand, it’s exactly what climate activists want. It makes no sense for the utility company to be stalling.

The franchise agreement functions as a lease on public rights-of-way. If you had millions invested in equipment and conduit, would you want to go month-to-month with your landlord? The franchise agreement gives the company fast and flexible access, but more importantly, it gives them certainty.

In this way, it’s more like a land lease. Take as an example the Phoenix Inn on Franklin Boulevard. It was built in 1993 on land that belongs to Northwest Christian College, now Bushnell University. That land lease is set to expire this year, so Bushnell will take over the 96-room hotel and renovate it as a welcome center for their campus.

Does NW Natural really want to abandon its assets inside Eugene’s city limits in a similar way? Would any members of the Eugene City Council really want to see the heat turned off for natural gas customers inside their voting district? The answer is obviously no in both instances.

The utility wants a new franchise agreement that resembles the last one. The city wants the utility to contractually share the city’s carbon neutrality goals and burdens. Those goals were first articulated by then-Mayor Kitty Piercy in 2005 and adopted by the City Council in its Climate Recovery Ordinance in 2014.

There’s absolutely no new information here. The city’s position been clear and specific for seven years, broadly understood for twice that. In spite of clear self-interest for both parties, negotiations have become a game of chicken. Its seepage is beginning to smell like rotten eggs.

Treating it like a game might not be a bad idea, if we can leave the chicken out of it. Game theory offers a strategy that provides the utility with a legal extension but gives councilors a (practical, if not theoretical) endpoint to the bargaining.

The city should halve the next extension and stipulate that all subsequent extensions will likewise be half the duration of the preceding extension. This would define an ultimate endpoint without exactly doing that. In some ways, the city has already begun using this model. The new franchise agreement’s term will be 10 years, down from 20.

Councilors want something else from a final agreement, and good for them. Council Vice President Claire Syrett stated at last week’s work session what many of her colleagues and the mayor have said many times before. They hope to “create a model other communities could follow.” Ambition is too often met with suspicion here.

This “diminishing deadlines” strategy gives the city a new tool they can use again with other recalcitrant partners in the future. If we inspire other cities to follow our lead, that’s exactly what Piercy had in mind from the start.


Don Kahle ( writes a column each Friday for The Register-Guard and archives past columns at

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