Natural gas infrastructure discouraged under state order 20-80Date: 12/18/2023 Climate activists have reason to celebrate.
The state Deptartment of Public Utilities, or DPU, on Dec. 6 announced Order 20-80, which requires gas distribution companies, like Eversource and National Grid, to consider gas pipeline expansion projects only as a last option. Local distributors are also not allowed, under the new order, to recover costs for the promotion of natural gas use.
“This is if there are different municipalities or different areas in which there needs to be … new service,” said Alanna Kelly, director of communications for the DPU. “A gas pipeline, if there’s no other alternative, that’s the last resort.”
Kelly said Order 20-80 requires the costs of new gas infrastructure be paid by shareholders rather than ratepayers. The order insulates customers from rate increases because new gas pipeline costs will be paid by distribution companies. That may put downward pressure on profits and the dividends paid to stockholders, discouraging long-term investment in gas infrastructure.
Gas pipelines are still being laid. A pipeline for propane gas was recently installed in Douglas, an effort to transition out of coal, a dirtier fossil fuel. The new regulations do not affect existing pipelines or rates for delivery. Municipal gas companies are also unaffected because the DPU does not have jurisdiction over the processes they use to establish delivery charges.
The bad news may be an upward pressure on energy costs. The DPU acknowledged the transition away from natural gas may result in higher prices for energy. Department officials recognize the risk and want to know if and how consumers are further challenged.
“We are opening up what we call an affordability docket, to really see what are the solutions to the energy burden … that’s happening here in Massachusetts,” Kelly said. “We have some of the highest costs for energy.”
In the fall of 2020, the DPU began investigating how to eliminate greenhouse gas emissions while keeping energy prices low. Public hearings, written comments, sessions on the technical details and hiring consultants concluded in August 2022. Sixteen months later, Order 20-80 facilitates achieving the decarbonization and emissions reductions called for under the commonwealth’s target of zero emissions by 2050.
Order 20-80 also requires distribution companies to complete a Climate Compliance Plan every five years. Starting in 2025, distributors will be required to file a plan that shows how company efforts have contributed to reaching zero emissions by the middle of the century. According to a press release, that evolves the role of distribution companies into a closer partnership with the DPU for its information gathering, a change in the relationship.
A root finding of the DPU’s investigation was the goal for zero emissions will not be possible without a significant increase in the use of decarbonized fuels and electrification in heating homes and businesses. Gas use must be de-emphasized and alternative energies promoted. Electrification involves not only solar generation, but also non-gas appliances and battery-driven tools and vehicles.
Targeted energy efficiencies are another conservation effort promoted by the new order. Networked geothermal demonstration projects are underway in Framingham and Lowell. Distribution companies are also being pushed to set up electrification pilot projects, another expansion in their role under Order 20-80.
According to the department’s press release, Order 20-80 is an investigational effort that also puts forth ground rules for reaching the goal of no emissions in the commonwealth. It’s a long term strategy, Kelly said, and a shift away from the direction of previous administrations in the reduction of greenhouse gas emissions.
“As Massachusetts moves towards net zero emissions by 2050, the DPU must develop a regulatory structure for the gas sector befitting that requirement,” said James Van Nostrand, chair of the DPU. “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.”
|
