LOUISVILLE, Ky. — Discussion topics during the National Association of Regulatory Utility Commissioners annual meeting Nov. 7-10 ran the gamut from affordable electrification to resilience investment, supply chain snarls and pipeline infrastructure in a decarbonized industry.

Is Electrification Affordable?

Andreas Thanos, a gas policy specialist at the Massachusetts Department of Public Utilities, said there’s not yet an answer as to how much residential ratepayers will shell out to electrify their homes and water heating.

“I’m still waiting on a good answer for that topic,” Thanos said during a panel discussion. “It’s a hot topic in many more ways than we admit.”

“Generally speaking, consumers are uninformed. They’ve heard about climate change; they know about electrification … but they know about it in this writ-large way,” said Charles White, with the Plumbing-Heating-Cooling Contractors Association. “They don’t have a good, clear understanding of what this means, today, tomorrow, a month from now.”

White said consumers don’t give much thought to replacing their natural-gas furnaces or purchasing a heat pump water heater and their steep costs. He said in many houses, heat pumps may need extra space. Consumers don’t understand electrification’s larger, upfront costs or its increased operating costs.

“They really can’t wrap their head around that reality,” he said. “We see a lot of burden coming down the road for these consumers … and us as contractors are in the crosshairs.”

National Energy and Utility Affordability Coalition Executive Director Katrina Metzler said that since the pandemic, she increasingly has become concerned about the affordability of electrification for limited-income residents.

She related the story of 60 families staying in a Florida motel and struggling to pay electric bills when its owners abandoned the property during the COVID-19 pandemic. She said the motel’s destitute inhabitants regularly faced shutoffs and thousands of dollars in past-due bills.

“I know that from your positions in your states, you’ve seen similar issues,” Metzler told regulators.

She said more than a quarter of the people who lost jobs in the pandemic reported skipping or delaying payment on utility bills. In some states, Metzger said, one in three households struggled to pay utility bills. Of those, two in five households were disconnected after the pandemic began.

At this juncture, the nation has $27 billion in late utility bills, she said.

Metzler said she foresees “a perfect storm” of increasing energy costs paired with a greater reliance on electrification. She also said she’s dismayed by the Biden administration’s apparent lack of concern for an affordable clean-energy transition.

“There has to be conversations about affordability,” Metzler said.

Determining Levels of Resilience Investment

Regulators asked themselves whether they’re placing an appropriate value on reliability risk management as capacity becomes more intermittent and weather grows more unstable.

New Jersey Public Utilities Board member Dianne Solomon said it’s difficult for states to gauge improvements from resilience investments. She said going forward, utilities should draft filings around the risks they are hoping to avoid.

Mishal Thadani, vice president of strategy and policy at artificial intelligence firm Urbint, said utilities and regulators should come together to discuss the most likely dangers from extreme weather events and identify which critical loads should be preserved at all costs.

Thadani said the Oregon Public Utility Commission is to be commended for opening a rulemaking docket to oversee utilities’ risk-based wildfire protection plans (AR 638).

He also said AI can assist utilities in deciding how to best invest in resilience. He said machine learning can identify at-risk utility poles with more accuracy than utility employees.

“Should you spend $5 million on vegetation management, or should you spend $10 million undergrounding lines?” Thadani asked rhetorically.

He also said AI collects data “agnostically,” keeping human biases out of investment processes that have long overlooked underserved communities.

Pipelines’ Place in the Transition

Summit Utilities CEO Kurt Adams predicted Americans will “be thinking about hydrogen today how we thought about solar 10 years ago” during a discussion of the future facing local gas distribution companies as energy is decarbonized.

He said hydrogen is ripe for a spike in popularity, with costs poised to drop. “We will need every single tool in the toolbox,” Adams said of decarbonization. “It is a mammoth undertaking.”

He said hydrogen-replacing-gas is a key component of keeping decarbonization affordable. Keeping existing gas facilities might avoid the need for some expensive transmission projects.

Adams said the nation needs 13 times its current solar and wind penetration to meet decarbonization goals. “That is an enormous challenge,” he said, noting that renewable curtailment rates currently hover around 5% of output and are rising.

Siva Gunda, vice chair of the California Energy Commission, said gas-usage patterns are expected to change unpredictably. He said the industry still doesn’t have a good idea on how affordable green hydrogen and other renewable gases will be and thus, how much current gas pipelines will be used into the future.

Dan Scripps, chair of the Michigan Public Service Commission, said 75% of Michigan currently relies on natural gas for heating needs. He asked whether commissions need to take a long-term examination of gas-system investments and make sure new facilities are hydrogen compatible.

Adams said regulators should focus on keeping bills reasonable while cutting emissions as quickly as possible. He said regulators now have an opportunity to avoid expensive past mistakes, referencing previous authorizations for nuclear and gas plants and Public Utility Regulatory Policies Act facilities.

Supply Chain Obstacles

Illinois Commerce Commission Chair Carrie Zalewski said ongoing supply chain and labor issues may threaten the clean-energy transition by delaying much-needed materials.

“We’ve all seen the ships sitting in port,” Zalewski said. She predicted that supply chain issues and difficulties securing labor will continue into the foreseeable future.

Center for Strategic and International Studies’ Nikos Tsafos agreed it won’t be an easy transition to net-zero emissions. He said climate change will likely further complicate the delivery of certain minerals. He pointed out that half of the world’s copper mines are in areas predicted to face water shortages in the coming years.

Project Canary’s Chris Romer said a solar panel manufactured in America has a carbon footprint different from the “maybe not as clean panel produced in China” and linked to coal-generated energy.

He said consumers can demand clean manufacturing for clean-energy sources. Businesses didn’t one day just stop offering blood diamonds or logs reaped from deforestation, Romer said.

“It’s the buy-side that stopped deciding to buy poorly harvested timber,” he said.

Romer also said utilities making pledges for 2040 or 2050 should be measuring carbon cuts now. Project Canary specializes in monitoring emissions.

“I’m going to lose weight by 2050. The problem is I should probably get on a scale to judge how much I need to lose,” he said. “You can’t lose what you don’t measure.”

Romer urged regulators to be more open-minded with what they’re willing to let utilities try in pilot programs because the energy sector needs to decarbonize quickly.