Dairy farms such as this one are ideal for methane-to-gas projects.

NW Natural this week launched a program aimed at customers that want to offset the carbon dioxide emissions associated with their energy use by supporting renewable energy projects.

The Portland-based company, the first U.S. natural gas distribution company to implement a carbon offset program, says funds from its new Smart Energy program will be used to support methane-to-gas projects in the region.

NW Natural customers can either pay a $6 monthly flat fee or pay a "per Therm" rate to offset their exact energy usage. "Customers like to have choices," says Bill Edmonds, NW Natural's director of environmental policy and sustainability.

He notes that before creating the program, NW Natural conducted a survey that demonstrated customers' interest in such a product. Portland-based Pacific General Electric achieved a 6.5 percent customer participation rate in its renewable energy program, one of the highest in the nation, according to the National Renewable Energy Laboratory. Edmonds says NW Natural has set a modest goal of a 4 percent customer participation rate, which over the next five years would raise $3 million. All of the funds raised through the Smart Energy program will go to Portland-based Climate Trust, which plans to work with regional farmers to develop farm-scale methane-to-gas projects, according to NW Natural.

"A typical cow produces 120 pounds of waste a day," Edmonds says. He says it currently costs about $2.4 million to build a biodigester, which converts manure into biogas, creates a fertilizer and produces renewable energy credits that can be sold in a voluntary or regulated carbon market. "You need all three pieces of the pie to make this happen," Edmonds says. He also notes that NW Natural is working to educate its customers about energy-efficiency.

NW Natural is offsetting the carbon dioxide emissions created by the natural gas used to heat all of its facilities over the next five years. Shareholders are paying nearly 25 percent of the program's costs.