Clean Heat Standard Momentum
In the past few years, discussion about implementing a Clean Heat Standard (CHS) has quickly gained steam around the country. In 2021 Colorado passed legislation requiring the development of Clean Heat Plans. Just this week, the Vermont Senate overrode Governor Phil Scott’s veto of a CHS bill, and the House appears to be poised to do the same. In Massachusetts, a CHS was first seriously considered several years ago as the state developed its clean energy and climate plans for 2025 and 2030. Later, as part of its Final Report, the Massachusetts Commission on Clean Heat endorsed developing a CHS. The Massachusetts Clean Energy and Climate Plan for 2050 later adopted the CHS framework outlined in the Clean Heat Commission’s report. With all this momentum in place, you may be left with one question: what exactly is a Clean Heat Standard?
What is a Clean Heat Standard?
As identified by the Regulatory Assistance Project (RAP) in a paper prepared for the Massachusetts CECP, a CHS is a “credit-based performance standard that would be applied to suppliers of heating energy in Massachusetts, notably gas utilities and providers of heating oil and propane, and possibly electricity suppliers.” These parties would then be obligated to provide gradually increasing amounts of low- or zero-emissions fuel to consumers. The concept is similar to a Renewable Portfolio Standard. In Massachusetts, the goal would be to decarbonize the building sector at the speed and scale necessary to support the state in achieving its building sector emissions reduction target of 47% below 1990 emission levels by 2030 and 93% by 2050.
However, while the basic concepts are simple enough, the actual details of such a program and its implementation are a bit trickier. If properly designed, a CHS could serve as another valuable decarbonization policy tool for cost-effectively electrifying and improving the efficiency of buildings in a state without driving up costs to electric ratepayers. However, if poorly implemented, a CHS could serve to potentially undermine decarbonization goals. One critical area to get right is understanding the actual lifecycle emissions of certain alternative heating fuels, such as biofuels. Vermont’s proposed CHS is extremely friendly to biofuels, but biofuels can produce significant emissions. Another key issue surrounds the future of fossil gas as a heating fuel. Neither the RAP report nor the Massachusetts Clean Heat Commission report for example provide detailed recommendations on how the most complicated (and important) elements of a CHS should be designed. For example, what is the long-term vision to phasing out fossil gas for heating and for the future of the natural gas distribution system? How can a CHS be designed to support achieving that vision? Further, if certain biofuels are deemed eligible within the CHS, what specific methodology should the Commonwealth use to accurately account for lifecycle emissions from these fuels? These are the types of make or break decisions that can cause the policy to sink or swim. Therefore, it is absolutely crucial that states looking to adopt a CHS get the details of its proposal correct.
Acadia Center and Colleague Input
In Massachusetts, the Department of Environmental Affairs (DEP) initiated a stakeholder process in April 2023 regarding the development of a CHS for Massachusetts, to little fanfare or attention. This process included a stakeholder discussion document in which DEP requested information on program design input, recommendations for further input, and suggested topics, locations, and formats for stakeholder meetings and hearings. In response, Acadia Center worked with a number of stakeholders, including Conservation Law Foundation, Green Energy Consumers Alliance, Home Energy Efficiency Team, and Pipe Line Awareness for the Northeast to develop a response document on to which over 35 organizations signed. Acadia Center with our colleagues produced a comprehensive 22-page document responding to the DEP’s questions and outlined our vision for a successful CHS for Massachusetts. These top priorities include a CHS that ensures adequate equity protections and an electrification-only compliance program, particularly for gas utilities.
On equity and energy justice, the document asks DEP to design the program to focus direct and indirect benefits on customers with the highest energy burdens. We also ask DEP to coordinate closely with the Department of Energy Resources and the Department of Public Utilities on complimentary strategies, including rate design, the Alternative Portfolio Standard, and a managed transition off gas.
Acadia Center and its colleagues further ask DEP to design the CHS in a manner that best supports the most cost-effective long-term emissions reduction pathway. This concept centers around focusing compliance pathways on non-combustion technologies rather than biofuels or hydrogen blending, particularly for gas. The document asks DEP to utilize the 2025/2030 CECP’s High Electrification Scenario as opposed to the Phased Scenario, as the High Electrification Scenario emphasizes higher levels of near-term full-building electrification and a more rapid phase down of gas heating systems, better positioning the state to achieve 2050 climate goals at similar costs.
On stakeholder input, we urge DEP to balance different tracks of stakeholder processes for different types of stakeholders. We also urge the development of technical sessions on key design topics, such as coordination with the Mass Save energy efficiency programs, hybrid heating system credits, and calculation of credits by technology.
While many details remain to be worked out, Acadia Center is encouraged by the positive first steps taken by the Commonwealth. We look forward to working with the Administration as these proposals move forward.
For more information:
Kyle Murray, firstname.lastname@example.org, 617-742-0054 ext. 106