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US utility association builds team to fight gas ban movement

The American Gas Association is working to form a coalition among industry, consumers, and construction and labor groups to push back against the sharp rise of cities banning natural gas for heating and cooking in new buildings.

The trade group, which represents more than 200 gas utility companies, sees partnering with organizations that represent interests such as restaurants and real estate to be critical in preventing more municipal ordinances that prohibit gas.

AGA said utilities could directly fight bans through lawsuits, or the association could pursue litigation on behalf of a member company. But AGA said utility-driven opposition would be a less effective approach.

"It appears a little too self-serving if we are the only party involved," said 2020 AGA Chair Scott Prochazka, who is president and CEO of CenterPoint Energy Inc. "Having the people who use this product not just us who deliver it, but the people who use it and see the value of it every day — having them speak loudly and en masse is more powerful than just having the utilities."

Prochazka spoke Dec. 5 at a briefing with reporters in Washington, D.C.

The gas industry and utility regulators have expressed surprise at the success of anti-fossil fuel advocates who have spurred cities to sideline gas as a way to reduce climate change and other environmental impacts. AGA has argued that the bans on gas in new construction deprive customers of choice without presenting a thoughtful alternative, and that a rapid shift to electricity could result in increased consumer costs and emissions impacts.

Top AGA officials said it was worth emulating an effort earlier this year in Seattle that halted a proposed gas ban. The ban was opposed by labor unions, real estate groups, appliance manufacturers and retailers, in addition to a local gas utility. AGA is coordinating with groups in Washington representing those interests.

"We are in the middle of doing that now," Prochazka said.

The AGA said it will make the case that natural gas plays a key role in reducing emissions while being an affordable and reliable form of energy.

"Our message has been more complicated against a message that is very single-lane oriented," Prochazka said. "And candidly, we find ourselves now having to change the way we are messaging ourselves so that people don't make decisions based on limited or erroneous information."

AGA President and CEO Karen Harbert said the association was closely watching a lawsuit filed in November by the California Restaurant Association against the city of Berkley, Calif., over what the restaurant group described as a "misguided and unlawful ban" on gas in new buildings. AGA did not work with the California Restaurant Association before the suit was filed, Harbert said.

Challenges on multiple fronts

Beyond municipal gas bans, the natural gas industry is contending with efforts to block pipeline development.

AGA blamed a high-profile dispute between the state of New York and National Grid USA on Gov. Andrew Cuomo, who had threatened to revoke the utility's license to operate there before the company agreed to lift a gas service moratorium. The conflict stemmed from New York's refusal to grant a critical water permit to a proposed pipeline that would run through New York Bay. In response, National Grid stopped processing applications for gas hookups in its downstate territories, arguing that it could not ensure reliable service to new customers until New York approved the pipeline.

"The situation in New York is directly attributed to the governor not permitting new pipeline infrastructure to go into and through New York to service other markets," Harbert said.

"And he doubled down on his decision by telling National Grid that, even though I made that decision, you have an obligation to hook up new customers," she said. "In order to do that, National Grid is in an unenviable position of having to resort to far less environmentally friendly ways of delivering this gas."

An increasing number of states are adopting ambitious emissions reduction goals and renewable portfolio standards, increasing pressure on the gas industry to demonstrate its place in a low-carbon future. A trade group representing large gas suppliers, the Natural Gas Supply Association, on Dec. 3 announced its support of a carbon price as a way to reduce carbon emissions in power markets.

AGA did not take the same step. "AGA supports the broadest set of options possible to reduce emissions," Harbert said. "That could include carbon pricing. It also should include increased efficiency, advanced technologies, innovation and a number of things that we are already investing in that are proving that we can reduce emissions."