Massachusetts agencies need to root out utility pilot projects that depend on natural gas to avoid a costly net-zero transition for ratepayers, Natalie Karas, senior director and lead counsel for the Environmental Defense Fund, said on Thursday.
Projects that blend hydrogen with natural gas or claim to service renewable natural gas are going to force ratepayers to cover the cost of pipelines that will have a short usage life under Massachusetts’ new climate law, Karas said.
It is up to the Department of Public Utilities (DPU) to factor out pilot programs that go against the state’s climate goals, she said during a Massachusetts Attorney General’s office-led think tank on ratemaking for gas utilities.
The state needs to update forecasts and supply plans to build in GHG reductions, according to Karas, who advocates before FERC on ways to harmonize the wholesale natural gas and electricity markets.
DPU opened an investigation last year into the role of local gas distribution companies under decarbonization plans, acknowledging a need to modernize the electric grid. But moving forward, new ratemaking plans that support electrification are needed in the state, said senior adviser in energy strategy for the Analysis Group Susan Tierney at the think tank.
Energy policies in Massachusetts, including the state’s landmark climate law, which goes into effect June 25, prioritize electrification over other forms of decarbonization that the state’s two main utilities, Eversource Energy and National Grid, are pursuing.
Enbridge, the international pipeline company that owns the controversial natural gas compressor station in Weymouth, Mass., is looking into renewable natural gas from captured methane emissions.
Net metering and other specialized rate designs can make it “harder to price things properly,” Tierney said.
But the categories for determining utility rates for different customers are too simplistic, according to Mark LeBel, an associate focused on rate design and regulatory reform with the Regulatory Assistance Project.
“People should be paying the costs they are causing,” and energy prices should reflect that, LeBel said. If customers choose to continue using oil or natural gas for cooking or heating their homes, they will have to pay a higher price.
The long-term effects of ratemaking decisions now demonstrate the need for a clear plan from DPU on how its regulations will change to reflect the state’s climate law.
“If this transition happens in an unplanned, haphazard way, there will be real consequences,” said Sherri Billimoria, a manager for RMI’s Carbon-Free Buildings program. Low-income communities will face higher, unjust rates as they unwillingly become responsible for keeping gas companies afloat.
If it is left up to utilities, there is a chance there will be too much reliance on natural gas going forward, Billimoria said.