DC Climate Laws Obligate Utility Regulators to Oversee Transition Off Dirty Energy

Testimony of Mark Rodeffer
Sierra Club DC Chapter
Oversight Hearing on the Public Service Commission
Committee on Business and Economic Development
March 1, 2023

Councilmember McDuffie, and members of the Committee, thank you for the opportunity to testify today. My name is Mark Rodeffer and I am testifying on behalf of the Sierra Club, America’s largest and most influential grassroots environmental organization, with millions of members and supporters nationwide. We have about 3,000 dues-paying members in DC, and our top priority is combating climate change.

About three quarters of DC's climate pollution comes from the two monopoly utility companies regulated by the Public Service Commission. DC has pledged to eliminate all climate pollution by 2045, which will require the Public Service Commission to take a leading role in ensuring the utilities it regulates end all fossil fuel combustion over the next 22 years.

Proactive Leadership Needed from Commission

For years the Sierra Club has called for the Commission to end its decades-long tradition of merely reacting to proposals from the monopoly utilities and instead take proactive leadership to ensure DC meets its climate commitments. Since the last DC Council oversight hearing on the Commission, the Council and Mayor Bowser have codified DC’s climate commitments into law, requiring that DC cut its climate pollution 45% below 2006 levels by 2025, and thereafter cut climate pollution 60% by 2030, 70% by 2035, and 85% by 2040, and eliminate all climate pollution by 2045. The commissioners each took an oath to faithfully execute all laws of the District of Columbia. Fulfilling that oath will require the commissioners to ensure that DC’s energy utilities are on a pathway to end all reliance on fossil fuels by 2045, even if the utilities themselves propose continued reliance on fossil fuels past 2045. It’s no longer just the Sierra Club calling for proactive leadership from the Commission – faithfully executing recent laws passed by the Council and signed by the Mayor will require a new approach from the Commission.

In the last year, the DC Council and Mayor Bowser have provided specific guidance on how DC will end its reliance on fossil fuels in DC’s buildings. In addition to the Climate Commitment Act, last year DC enacted the Clean Energy DC Building Code Act, which requires all newly constructed and substantially renovated buildings to be net zero energy by 2026, which means the buildings would be highly energy efficient, generate renewable energy on-site, and use no fossil fuels. DC also passed the Greener Government Buildings Act, which requires the District government’s new and substantially renovated buildings to be net zero and not use fossil fuels starting later this year. Last month, 11 of 13 members of the DC Council wrote to the DC Construction Codes Coordinating Board asking it to approve an all-electric building code proposal this year, three years ahead of a similar requirement in the DC Building Code Act. The DC Council and Mayor Bowser have been crystal clear that DC is transitioning off fossil fuels in buildings. The Public Service Commission’s orders must be consistent with DC’s climate statutes.

Business as Usual vs. Climate Leadership

Washington Gas has submitted a number of proposals to the Commission that are not consistent with DC’s climate laws. In Formal Case 1175, Washington Gas has asked the Commission for permission to charge DC residents $672 million dollars from 2024 to 2028 to replace gas pipes.^[1] It’s part of the gas utility’s larger plan to force DC residents to pay $4.5 billion over roughly 40 years to replace its gas piping system.^[2] Washington Gas wants to charge DC residents billions of dollars for this fossil fuel infrastructure, which would remain in place for decades past 2045, when DC law requires DC to achieve carbon neutrality and end fossil fuel combustion.

DC’s climate laws obligate the Commission to reject the Project Pipes proposal in its entirety and end accelerated pipeline replacement altogether. We are concerned that the Commission has readily approved Washington Gas’s earlier requests of millions of dollars for earlier increments of Project Pipes. Spending hundreds of millions or even billions of dollars on fossil fuel infrastructure in the coming years and decades is inconsistent with DC's statutory requirements to phase out fossil fuel combustion and achieve carbon neutrality by 2045. Gas pipeline repair or replacement should only occur in instances where a gas leak presents a health or safety threat. Wholesale replacement of gas pipes – whether they are leaking or not – is a wasteful and imprudent use of ratepayer dollars given that DC law requires those pipes to stop carrying fossil fuels by 2045. A dollar not wasted on fossil fuel infrastructure is a dollar that could be invested in non-pipes alternatives for providing clean heat to buildings. As an example of a more climate-friendly system, in California, pipes are being strategically decommissioned in areas that are electrifying instead.

In a separate case before the Commission, Formal Case 1169, Washington Gas is trying to gaslight the commissioners, arguing that DC residents should pay more money for fossil fuels in the name of climate change. Washington Gas is seeking approval for a misleadingly named  “Climate Progress” adjustment (CPA) fee, which would give Washington Gas a constant amount of revenue even when gas sales decrease. That’s right – Washington Gas wants DC residents to pay more money for less gas as we transition off gas. The proposal would impose higher financial burdens on customers who cannot afford to quickly switch to electric appliances, meaning that lower-income DC residents would pay increasingly higher costs if the proposal is approved.

In the same case, Washington Gas is offering a second false solution to climate change. The misleadingly named “Climate Action” Recovery Tariff (CART) would charge DC residents millions of dollars to mix a small amount of so-called “renewable” gas from sources like animal manure from factory farms into the gas utility’s fracked gas supply. Methane from fossil gas alternatives from animal manure and other sources is in limited supply and is extremely expensive. The gas industry’s own research found that after two decades of ramping up supply and production, fossil gas alternatives could replace only 13% of the existing demand for fossil gas.^[3] Because of limited supply and high production costs, fossil gas alternatives range from four to 17 times more expensive than traditional fracked gas.^[4] The “climate action” fee proposed by Washington Gas is a greenwashing attempt to gaslight the Commission into approving false solutions to climate change.

Charging DC residents billions of dollars for unneeded fossil fuel infrastructure, making DC residents pay more money for using less gas, and offering false solutions to climate change is inconsistent with DC’s statutory climate commitments. Faithful execution of DC law requires the Commission to reject proposals such as these. The Public Service Commission’s mandate is not to split the baby on utility proposals by providing utilities with some of the measures they requested, even if those measures are inconsistent with DC climate law. The Commission must implement DC’s climate commitments. If our gas utility refuses to propose realistic and prudent investments to provide clean heat to buildings in DC, the Commission must take proactive leadership to faithfully execute the law in DC.

Clean Energy Project Delays

At this hearing a year ago, the Sierra Club called for the Commission to end delays to clean energy projects identified by the Commission's Pilot Projects Governance Board, such as a district heat pump project, a renewable energy microgrid, and a virtual power plant using locally distributed energy sources. In the year since, the Commission has posted a request for proposals for the district heat pump project and has stated it plans to select an applicant soon. The district heat pump proposal was submitted to the Commission more than two years ago. We applaud the Commission for moving forward with the district heat pump proposal, but the slow process is disappointing and not on pace with the urgency of the climate crisis we face. A virtual power plant proposal before the Pilot Projects Governance Board is moving at a similarly glacial place. As glaciers melt in polar regions outside the jurisdiction of the Commission, we need faster climate action inside the Commision and across the globe.

Pepco’s Ongoing Solar Obstructionism

Pepco’s obstruction of solar expansion in the District has continued unabated for years. A complaint last year by the Attorney General and the Office of People’s Counsel detailed Pepco’s mishandling of billing and credit allocation for community renewable energy facilities and the Solar for All Program, leading to systematic overcharging of low- and moderate-income households in particular.^[5] In addition to the direct violations of District law outlined in the complaint, Pepco has continually demonstrated an unwillingness to improve the permitting or interconnection process, leading to high costs, uncertainty, and delays, which take resources away from actual solar capacity development and reduce the effectiveness of District-provided solar subsidies.^[6] The Commission has remained largely silent on these issues. That needs to change. The Commission should call for an updated and holistic plan to streamline the connection of distributed energy resources to the District’s grid, ensuring adequate support from data and billing systems.^[7] The Commission should provide more active oversight of Pepco’s administration of solar projects, offer support to customers waiting to have their solar panels connected to the grid, and explore outsourcing or instituting third-party compliance of solar interconnection, billing, and credit issues.

Ratepayer Advocacy

Lara Levison is testifying for the Sierra Club about the Office of People’s Counsel at today’s oversight hearing, but I want to include in my testimony appreciation for OPC’s commitment to ensuring that as we transition off fossil fuels in DC, the most vulnerable among us should be first in line to receive the benefits of clean energy so that they are not forced to bear the burden of the high costs of dirty energy.

Conclusion

Thank you again, Councilmember McDuffie, for allowing the Sierra Club to testify today. And thank you also for signing the DC Council letter to the Construction Codes Coordinating Board asking it to approve the all-electric commercial building code proposal. The climate commitments enshrined into DC law last year require greater leadership from the Public Service Commission. We hope that Chairman Thompson, Commissioner Beverly, and Commissioner Trabue are able to provide that leadership.