D.P.U. 20-80 (Future of Gas)

Back in June of 2020, Attorney General Maura Healey posed the question to the Department of Public Utilities – how does the business model of natural gas distribution utilities (or LDCs, as they’re called in industry parlance) need to change in order to allow the state to meet its climate goals of net zero by 2050?  The resulting proceeding, D.P.U. Docket 20-80, Investigation by the Department of Public Utilities on its own Motion into the role of gas local distribution companies as the Commonwealth achieves its target 2050 climate goals, is also known as the Future of Gas. In the last year, there have been several developments in the docket, including stakeholder input on scenarios and models produced by hired consultants, the LDCs developing Net Zero Enablement Plans based upon those models, and a comment period opened by the D.P.U. on alternative regulatory proposals. Acadia Center has been actively involved since the stakeholder process began in May 2021, and recently submitted comments in response to this request from the Department.

Modeling Issues

Acadia Center found multiple troubling flaws in the Energy and Environmental Economics (E3) analysis that underpinned the LDCs’ regulatory proposals. Ultimately, the LDCs asked the Department to adopt a lot of regulatory changes in line with the Efficient Gas and Hybrid Electrification scenarios that rely heavily on using “renewable” natural gas, hydrogen, and synthetic natural gas in LDC pipelines. But these scenarios that rely heavily on alternative gases are likely to emit far more GHG emissions, cost ratepayers billions more, and be far more difficult to implement than assumed in E3’s study. The difference between E3’s modeling assumptions and the expert consensus on topics including the GHG intensity of RNG, future availability of alternative fuel supplies, and the future cost of alternative fuels is so significant that it calls into question many of the conclusions – and the LDCs’ regulatory proposals to use these fuels in their pipes. Finally, even if RNG, SNG, and hydrogen can feasibly be used to perpetuate use of the LDCs’ systems into the future, as a policy matter, they should not be.

Fundamentally, the transition should center on technologies that we know are safe, effective, and available – in other words, electrification through air- and ground-source heat pumps and geothermal technologies. The Department should not begin to introduce gas alternatives into pipelines that serve consumers’ homes and businesses without substantial additional research into safety and health impacts. This docket is not just about scenarios, regulations, costs, and carbon. It’s also about how the people of the Commonwealth will be kept warm and safe by their government and trusted utilities in 2050 and beyond. We know that the use of methane (either natural gas or RNG) in homes, especially in cooking, is far more harmful to occupants’ health than previously understood. We know that hydrogen is a highly combustible fuel that poses a significant safety risk in the context of residential and commercial buildings. The Department must, as one of its first obligations, keep consumers and the Commonwealth safe. Pursuant to the precautionary principle, it is better to wait until RNG, SNG, and hydrogen technologies’ use indoors are firmly understood before we begin even pilots that allow them to be introduced in pipelines at the concentrations contemplated by the LDCs.

Acadia Center Proposal

As an overarching theme to Acadia Center’s comments, decarbonizing the economy of Massachusetts, and particularly our buildings, is not optional. We cannot fail. Nor can we afford to wait and put off decisions to future generations, especially given the rapid pace of climate change already observable in Massachusetts.  The transition may be expensive – but the cost is insignificant compared to the cost of the climate crisis itself.

This transition will require all players – utilities, regulators, government, businesses, advocates, and customers – to pull together and work towards a common purpose. It requires a strong central authority to keep everyone working together, and not at cross purposes. Acadia Center’s regulatory proposal follows our RESPECT concepts. RESPECT is an idea for utility planning reform that rests upon the idea that states should:

• 1) conduct independent and comprehensive distribution system planning that incorporates meaningful stakeholder input, including voices that have been ignored to date; and
• 2) separate “planners” and “owners” by creating a separate, neutral planning entity that is designed to look for solutions beyond utility boundaries and across fuels.

Acadia Center believes that an independent planning authority, responsible for coordinated planning to electrify and decarbonize, would be the best option for the Commonwealth to achieve its ambitious net zero greenhouse gas emissions reduction requirements, and would avoid the problems seen thus far in letting the LDCs propose their own future.

For more information:

Kyle Murray, Senior Policy Advocate-Massachusetts, kmurray@acadiacenter.org 617-742-0054 x106