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Mass. regulators open investigation into gas utilities' future in the state

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Mass. regulators open investigation into gas utilities' future in the state

Massachusetts regulators have ordered Bay State utilities to propose pathways to decarbonizing their natural gas distribution systems, warning that companies may have to overhaul their business models to help achieve state climate goals.

The Massachusetts Department of Public Utilities, or DPU, opened an investigation Oct. 29 to identify strategies to slash energy-related greenhouse gas emissions without compromising safety, affordability or reliability of gas service. The DPU said the investigation could recast the role of gas utilities in the state, citing Massachusetts' 2015 conclusion that the building sector must substantially reduce its use of fossil fuels.

"As the Baker-Polito administration has committed to an aggressive goal of net zero emissions by 2050, this investigation will analyze the future role of natural gas as part of Massachusetts' energy system," DPU Chairman Matthew Nelson said in an Oct. 29 press release. "The commonwealth continues to lead the nation on climate change mitigation, and this order will help assess how to best achieve deep emissions reductions while ensuring a safe, modern and cost-effective heating distribution system for Massachusetts ratepayers."

The order follows a steady drumbeat of pressure to reduce gas's role in home and commercial building heating in Massachusetts. Several Boston-area communities have attempted to replicate a movement in California to ban gas hookups in new construction. In November 2019, Brookline, Mass., became the first U.S. town outside California to adopt a gas ban, though Attorney General Maura Healey struck down the bylaw in July.

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However, Healey expressed support for building electrification even as she ruled that the bylaw conflicted with state law. Just several weeks before striking it down, Healey petitioned the DPU to open an investigation into state gas planning.

"Our office called for this natural gas investigation in June, with support from a chorus of clean energy advocates, because we know how critical it is to transition our state away from fossil fuels. We are grateful to the DPU for taking this necessary next step," Healey said in an emailed statement.

The order comes as several state agencies are developing a 2050 Decarbonization Roadmap to identify pathways to achieve the statewide zero-emissions limit. The DPU said it expects that report, along with the commonwealth's Clean Energy and Climate Plan for 2030, to establish policies that could affect ratepayers, utilities and the wider gas industry. Both reports are slated for release at the end of this year.

During its investigation, the DPU will determine how utilities can implement strategies identified in the reports in a cost-effective and safe manner. The department also ordered utilities to retain independent consultants to help them identify additional pathways.

The consultants will review state recommendations, analyze the feasibility of all identified pathways, and forecast their costs and actual economy-wide emissions reductions. The independent consultants must then compile their analyses of individual utilities into one comprehensive report for DPU review.

The DPU directed each gas utility to submit by March 1, 2022, its proposals, recommendations and plans for achieving state climate goals.

Eversource Energy's head of energy policy and strategy recently said renewable natural gas, or RNG, and green hydrogen must be part of the decarbonization solution to preserve system reliability. National Grid USA President Badar Khan similarly sees a limited role for building electrification and is banking on RNG and hydrogen blending.