State order seeks to limit natural gas pipelines, mains - The Recorder

The Recorder - State order seeks to limit natural gas pipelines, mains

Published: 12/8/2023 5:09:49 PM

Modified: 12/8/2023 5:09:37 PM

BOSTON — After more than three years of considering the future of the natural gas industry in Massachusetts and what role it can play in the state’s efforts to significantly reduce its greenhouse gas emissions over the next three decades, the Department of Public Utilities issued an order Wednesday meant to signal to gas utilities that it won’t be business as usual going forward.

With Order 20-80, DPU aims to “guide the evolution of the natural gas distribution industry to clean energy” with an eye toward the state’s goal of getting to net-zero greenhouse gas emissions by 2050 while still protecting ratepayers and ensuring energy reliability. It is the culmination of a process that got underway in October 2020 and included input from dozens of “institutional and individual stakeholders.”

The policy aims to discourage gas system expansions by requiring gas distribution companies to evaluate whether there are non-gas alternatives — things like electrification, networked geothermal or targeted energy efficiency — available that would make additional gas infrastructure investment unnecessary. In order for a gas utility to receive full cost recovery for a gas system expansion, it will “bear the burden of demonstrating that [non-gas alternatives] were adequately considered and found to be non-viable or cost prohibitive,” DPU said in the order.

“It is fair to say that a different lens will be applied to gas infrastructure investments going forward. The Department will be examining more closely whether such additional investments are in the public interest, given the now-codified commitment toward achieving Commonwealth’s target of achieving net-zero GHG emissions by 2050 and the urgent need to address climate change,” the order says. “In this ‘beyond gas’ future, we will be exploring and implementing policies that are geared toward minimizing additional investment in pipeline and distribution mains and achieving decarbonization in the residential, commercial, and industrial sectors.”

DPU is also going to require distribution companies to file Climate Compliance Plans every five years (starting in 2025) to outline their plans for transitioning to clean energy and to ensure their compliance with the state’s emissions limits, and the agency also will no longer allow gas distribution companies to recover costs for the promotion of natural gas use.

“As Massachusetts moves towards net zero emissions by 2050, the DPU must develop a regulatory structure for the gas sector befitting that requirement,” DPU Chair James Van Nostrand said. “We are pleased to unveil a forward-thinking framework that charts a path for moving toward clean energy and enhancing the state’s ability to achieve its climate goals while ensuring a fair, equitable, and orderly process.”

The home construction industry and others, including former Gov. Charlie Baker, have cautioned for years that restricting natural gas could stall housing production — one of Gov. Maura Healey’s main priorities — and add unnecessary expenses for residents.

DPU said its Wednesday order shouldn’t have major impacts on housing affordability, but conceded that it could make it slightly harder for customers to install natural gas furnaces in new housing. But, the department said, that’s the direction Massachusetts needs to go if it is going to achieve its greenhouse gas reduction targets.

In general, the order that DPU issued Wednesday does not directly address affordability. Instead, the department said it plans to launch another proceeding by the end of this year focused specifically on affordability and “energy burden,” or the amount of a household’s income that is spent on home energy bills.