- Trends in Energy
- A More Expensive Winter
A More Expensive Winter
This Week's Trend In Brief:
As many Americans, particularly in more northern climes, adjust their dials to warm their homes for winter, regulators in Massachusetts have jumped to the front of regulators considering the future of natural gas with a first-in-the-nation ruling that will increase costs and imperil reliability for Bay State residents.
Environmentalist activists celebrated the ruling as a victory and a template for other states, even as the commissioners acknowledged a shift away from natural gas use could disproportionately affect many consumers, including the more vulnerable.
Indeed, the Massachusetts utility commissioners – who are not elected by the citizens but do claim their agency “is charged with” ensuring “utility companies are providing the most reliable service at the lowest possible cost” – dismissed “concerns about affordability for low- and moderate-income utility customers” as a matter for a different proceeding.
Still, at least eleven other states are exploring similar initiatives to reduce natural gas usage, among others undertaking broader “future of gas” proceedings, and energy industry public affairs professionals need to ensure consumers understand the impacts of these rulemakings before it is too late to shape the debate.
Last week, the Massachusetts Department of Public Utilities issued a ruling to reduce the use of gas for heating as part of a larger strategy to address climate change. Beginning in 2025, the order requires gas utilities to submit “Climate Compliance” plans outlining how they intend to transition to cleaner energy sources. The order is part of the state’s plan to reach net zero emissions by 2050, but it may cause headaches for residents who need the fuel to heat their homes every winter. According to the U.S. Census Bureau, natural gas is the heating fuel for 51 percent of Massachusetts households.
Even as environmentalists and clean energy advocates lauded the decision as a big step in a broader shift from gas, the commission’s order acknowledged the disproportionate affect it will have on low- and even moderate-income households. Environmentalists like Conservation Law Foundation of Massachusetts president Caitlin Peele Sloan celebrated the decision, explaining the ruling “tells utilities, ‘We're not messing around with renewable natural gas, and we're going to be transitioning most of your customers off of gas.’” However, the ruling did not address how that will be affordable for low-income residents. Instead, the commissioners at the Massachusetts Department of Public Utilities, who are appointed by a state cabinet member, argued, “Given the urgency of addressing the climate crisis, however, we are reluctant to slow the pace at which the transition must occur due to concerns about affordability for low- and moderate- income utility customers.” The comment seemed to belie the Massachusetts Department of Public Utilities’ stated mission to “ensure … utility companies are providing the most reliable service at the lowest possible cost.”
With the encouragement of environmentalists, at least 11 other states have ongoing regulatory cases that are exploring similar initiatives to reduce natural gas usage. For example, California announced a new framework to require utility applicants on natural gas projects to seek approval from the California Public Utilities Commission with the express goal of helping the state transition away from natural gas-fueled technologies. Minnesota announced a similar “future of gas” docket, joining California to “to evaluate changes to natural gas utility regulatory and policy structures needed to meet or exceed the state’s greenhouse gas emissions reduction goals.” So do Rhode Island, Maryland, and Washington, among others. Climate groups like RMI have been pushing for such measures from utility regulators for some time.
While activists laud the Massachusetts action as a prototype for regulators across the U.S., energy industry public affairs professionals need to ensure consumers understand the impacts of these rulemakings before it is too late to shape the debate. Industry public affairs professionals cannot wait for more decisions like Massachusetts to emerge from ongoing and potential gas transmission debates before regulatory commissions. Understanding who is bringing what pressure to bear on commissions to phase out gas, and what their true agenda is can make a difference. Particularly when it comes time to engage policymakers and potential allies about the impacts of these plans. While in many states these regulators are unelected, and as we noted last week are frequently from activist ranks (including in Massachusetts), ultimately elected officials can be held accountable for enabling or allowing decisions that put reliable and critical energy inaccessible to the most vulnerable in our society.
Trends in Energy is your weekly look at key trends affecting the energy industry, brought to you by the competitive intelligence experts at Delve. As the political and regulatory landscape continues to shift, reach out to learn how our insights can help you navigate these challenges.