Raleigh to auction renewable fuel credits from bioenergy project to support water enterprise

Raleigh Water told the City Council on Jan. 6 that the city's new bioenergy recovery project at the Neuse River wastewater treatment facility produces pipeline-grade renewable natural gas that is being used in the Go Raleigh bus fleet and generates Renewable Identification Numbers (RINs), a tradable federal credit under the EPA Renewable Fuel Standard.

Erica Bailey, assistant director with Raleigh Water, said the project reduced biosolids truck shipments from roughly 75 to 25 per week and produces a high-quality soil conditioner that can be land applied. Bailey said staff have about a little over 500,000 RINs generated to date and that RIN market prices were approximately $2.45 per RIN in late November, making the current inventory roughly worth $1.29 million at that price. The proposed resolution would authorize the finance and procurement teams to design and hold an electronic public auction and direct proceeds to the water and sewer enterprise's operations and maintenance budget.

Councilors asked clarifying questions about how RIN markets work, who purchases credits, and how proceeds would be treated in rate planning; staff said proceeds would be embedded in water/sewer rate forecasting to help mitigate potential future rate increases. Council voted to adopt the resolution authorizing the first step of an auction process and noted that each future auction will require a separate resolution.

Why it matters: The project is one of the few municipal efforts in the country producing pipeline-quality RNG from wastewater and using it locally. Selling RINs represents a new revenue stream to offset utility operating costs. Staff emphasized the environmental and service benefits in addition to potential financial upside.

Next steps: Staff will develop electronic auction procedures, hold a public auction for a tranche of generated RINs, and return to council with sale results and use of proceeds.