By Jess Nahigian, Political Director
On Wednesday morning, the Healey administration’s Department of Public Utilities (DPU) issued a transformative decision for the future of the Massachusetts energy system.
The top-line takeaway? For the first time in the 15 years since Massachusetts passed landmark decarbonization legislation, the state has definitively said that gas heating is not in our long-term future.
Moving off fossil fuels, including methane gas heat, will require the long-term decommissioning of our aging natural gas heating system in Massachusetts. But gas companies have continued to propose pouring ratepayer dollars into expansion projects. Last year, for example, Eversource set out to build a whole new gas system in the town of Douglas. They’ve also proposed a “redundancy” pipeline in Springfield and Longmeadow. And all the investor-owned gas utilities, like National Grid, have forecasted increased gas use in their long-term energy outlooks in the past year. They’ve tried to justify continuing to expand as usual by arguing they will need the system for their dubious “decarbonized” gases and “hybrid” systems, which do nothing but maintain the status quo. Yet this week, the state has finally declared that a widespread gas system is incompatible with our long-term climate targets. And it laid out the first required actions of many for gas utilities to change.
So what did the state say, and why does it matter?
In its decision, the state emphasized several principles that it will continue to use in future cases:
- Business as usual must end. Utilities can no longer propose new gas infrastructure as the only solution to a problem.
- The DPU is dedicated to mitigating the cost of the transition on ratepayers, particularly on low and moderate-income customers. It is also determined to prioritize new job opportunities in impacted communities and ensure a just transition for existing workers
- Given our decarbonization goals, utilities must make a solid financial case to approve new gas infrastructure.
- Utilities’ existing financial investments aren’t in jeopardy of not being paid back, but utilities must begin developing pilots and plans for decommissioning the system.
More specifically, here are some important provisions:
Utilities must prove “non-pipe alternatives” are non-viable and cost-prohibitive before using ratepayer money for new gas projects
The DPU chastised Eversource earlier this summer for not considering non-pipe alternatives in its Springfield-Longmeadow pipeline application. Thanks to excellent reporting, we also know that a non-gas alternative to meet Douglas’ growing energy needs was never seriously considered either. Non-pipe alternatives include electric heat, like heat pumps/mini splits, energy efficiency, and other demand management strategies. Non-pipe alternatives are the future. The DPU is now officially placing the burden of proof on utilities to show in every new gas proposal that there is no other feasible way to meet the energy needs they’ve identified.
The transition away from gas must protect ratepayers, include equitable workforce development, and ensure a just transition for existing workers
The state underscores the importance of keeping energy rates affordable. To that end, the DPU declined to adopt an “exit fee,” or penalty, that the utilities wanted to charge people for disconnecting from the gas system. There are also hints that the state intends to address energy burden and affordability by looking into policies already in use elsewhere, like capping energy bills by percentage of income or offering varying levels of low-income discounts. Finally, the state acknowledges that workforce development and a just transition are essential and that disproportionately affected communities should benefit most from newly created jobs. The order also recognizes the importance of developing future policies that ensure a just transition for existing workers.
The DPU says “Yes” to clean energy solutions
DPU is enthusiastic and optimistic about electrification and efficiency technologies, including geothermal districts. They will be encouraging these in pilots (read more below)
Ratepayers will not pay for false solutions like “renewable” natural gas (RNG) and hydrogen, except in hard-to-decarbonize cases
In order to justify continued investments in the gas pipe system, utilities have claimed the system is required for false solutions like “renewable” natural gas and hydrogen. “Renewable” natural gas is methane sourced from other processes, like landfills or cow manure. However, “renewable” natural gas, or biogas, is extremely expensive, and too scarce to heat buildings at scale. Hydrogen is an uncertain fuel source in the best of circumstances. A combustible element, it is produced by slicing the oxygen atoms from the hydrogen atom in water. Just like electricity can be created with fossil fuels or renewable energy, so too can hydrogen. Even assuming hydrogen is created with green energy, using that hydrogen would require replacing all our existing pipes and appliances, which are incompatible with hydrogen. There may be uses for hydrogen in hard-to-electrify circumstances, like industrial heating, where very high power energy is needed. But few people are manufacturing steel in their homes, so we don’t need this dangerous, highly explosive gas running under our streets. Ultimately, the DPU has stated that utility shareholders will be required to foot the bill for any pilots including these speculative gasses.
Ratepayers will not pay for other decarbonization “strategies” designed to keep the gas system alive or marketing for expanding gas
Utilities have also argued that “hybrid” heating solutions offer a viable pathway for decarbonization. Utilities wanted to allow buildings to receive incentives to change to electric heating and cooling while maintaining a connection to the gas system and continuing to heat a large percentage of the building with gas, under the assumption that one day, the gas could be eco-friendly. The DPU disagrees. Over time, the cost of maintaining the entire gas system while also installing electric heating will outweigh the benefits. Hybrid systems rely on assumptions and unproven claims about the potential utility of the gas system in the future. Given the high costs and dubious environmental benefits associated with them, the DPU rejects the use of ratepayer dollars toward hybrid electric pilot projects. The DPU is also prohibiting the use of ratepayer dollars towards marketing, direct promotion, or indirect efforts to promote gas expansion.
Utilities will be accountable for creating emission reduction plans and running pilots of targeted decommissioning projects
If we are to switch to a renewable energy system run on electricity, the gas and electric sides of the utilities must coordinate. To encourage this and hold utilities accountable, the state will require the utilities to file a “Climate Compliance Plan” every five years, starting in 2025, which will explain how they are reducing their emissions in line with state targets, piloting decommissioning projects, and doing it in an equitable, safe, and reliable way. By 2026, each gas utility company must also propose at least one pilot to decommission an area of its system with pressure/reliability issues, leak-prone pipe, and/or environmental justice populations.
What isn’t addressed?
The decision does not expressly ban utilities from adding new customers to the system or expanding gas infrastructure. And it declines to make a recommendation on how to address the Gas System Enhancement Plan that replaces aging pipes because there is other, ongoing work to fix the program. It also doesn’t offer recommendations on improving public participation in energy siting, which is being addressed in a separate docket at the DPU.
Final takeaways
This is a success of good governance and effective advocacy. Dedicated civil servants in this administration are utilizing the legal tools given by the legislature to fulfill their mandate to reduce emissions and maintain safety, security, reliability, equity, and affordability. This decision acts in the best interest of the people, not utility executives.
The grassroots are winning. This success was only possible because of the tireless efforts of local advocates. Whether pressuring for this docket to be opened, advocating for a pause on gas expansion and a future with cleaner heat, or pounding the pavement to elect leaders who will act in the interest of the people and the planet, grassroots power shines out strongly in this decision. Thousands have signed petitions, rallied, testified, and spoken with decision-makers. And we are winning.
This is a model for the country. This precedent-setting decision will reverberate well beyond Massachusetts. Sierra Club attorneys are actively participating in similar “Future of Gas dockets” in several other states for which this order will serve as an example, including California, Colorado, Minnesota, Nevada, New Jersey, New York, Oregon, Rhode Island, and Washington. We are also advocating that additional states also open Future of Gas dockets.
This is only the beginning. This decision sets up a framework for future deliberations around equity, rate structuring, asset management, and more. This is just one segment of a long, unfolding chain of progress.
Much work lies ahead to ensure the vision of “Beyond Gas” is implemented effectively and equitably. But for now, let’s celebrate.