The Fort Collins Sustainability Group (FCSG) first proposed a Large Methane User Fee (LMUF) in May of 2024, in conjunction with Community for Sustainable Energy (CforSE). We proposed the LMUF as an alternative to increasing the franchise fee on natural gas for everyone in Fort Collins. The proposal to increase everyone’s franchise fee has since been indefinitely postponed by the City.

Since May of 2024, the FCSG has refined its LMUF proposal and has presented the concept to numerous community groups and the City’s “Our Climate Future” team. Background, key elements, and benefits of the refined proposal follow.

Background

• 25% of Fort Collins’ greenhouse gas (GHG) pollution comes from burning methane (aka natural gas) within city boundaries.
• Methane emissions in Fort Collins’ 2023 Greenhouse Gas Inventory are approximately equal to the City’s 2030 goal for TOTAL GHG emissions and thus must be reduced significantly between now and 2030.
• Just over half of that pollution comes from commercial and industrial establishments.
• Methane cannot be “decarbonized” in the way that electricity can be by replacing fossil fuel generation with wind and solar.
• A relatively small number of industrial and commercial establishments are responsible for nearly half (40%) of the GHG pollution that comes from burning methane in Fort Collins.
• Fort Collins voters recently approved a ½ % sales tax increase to pay for climate initiatives and other city programs. It’s time for industry and other large polluters to step up, too.

Proposal

• Establish a “Large Methane User Fee” (LMUF) on all methane use exceeding a relatively high annual minimum.
• Use the revenue collected to set up a fund that could be accessed by businesses subject to the fee to implement projects that would reduce their methane use.
• A LMUF of 10 – 15% applying to all use exceeding 10,000 therms per year by individual businesses would raise $2.5 – $3.8 million per year.
• About 30 industrial establishments and 700 commercial buildings would be subject to this fee.
• Large Methane Users could apply for incentive payments to help them add insulation, improve building controls and purchase electric appliances to help them reduce their methane use.

Benefits:

• A LMUF would nudge businesses subject to the fee toward reducing their methane use, which they otherwise might not do.
• One way businesses subject to the LMUF could reduce their methane use would be to replace gas technologies with electric technologies.  Therefore, a LMUF would promote the City’s goal of building electrification.
• A LMUF would complement other City efforts by addressing GHG emissions and energy use in buildings not covered by Building Performance Standards and Zero-Carbon Building Energy Codes.
• A 15% LMUF on all methane use exceeding 10,000 therms per year would raise $3.8 million to help reduce climate pollution.
• This is comparable to the $5 million raised per year for climate programs by the recent ½ % sales tax increase.
• Making improvements to the 730 buildings paying the fee and eligible for incentives would generate construction jobs.
• Along with the recent sales tax increase, other City General Fund spending on climate programs, and more wind and solar electricity from the PRPA, a LMUF could help us reach our 2026, 2030, and 2050 climate pollution reduction goals.

More information on the LMUF proposal (slide deck and video of a presentation at “Salon duc Tape”) is available here.

The following community groups have expressed their support of the FCSG’s LMUF proposal to date:

• 350 Northern Colorado
• Community for Sustainable Energy
• Democratic Socialists of America – Fort Collins
• Larimer Alliance for Health, Safety, and the Environment
• League of Women Voters of Larimer County
• Northern Colorado Renewable Energy Society
• Sierra Club Poudre Canyon Group