One of the thorniest issues facing Massachusetts in the transition to a fossil-fuel-free future is what to do about utilities that have billions of dollars invested in their natural gas systems, and the millions of customers who rely on them for heating and cooking.
The Massachusetts Legislature is deep into trying to figure that out, drafting legislation that would encourage — or prod — natural gas utilities into abandoning their traditional business model for cleaner energy sources to help the state achieve zero net emissions by 2050, as required by law. Other aspects would, for example, shelter low-income families from bearing disproportionate costs of the transition.
Not only must lawmakers, policy makers, and regulators contend with the possibility of putting gas utilities out of business, but they must also decide how to retire the massive system of pipes, pipelines, and compression stations — and who should pay costs that are likely to reach into the billions.
“Even in the most optimistic scenario, most of those natural gas mains are going to have to be decommissioned,” said Matt Rusteika, director of market transformation at the Building Decarbonization Coalition, which advocates for clean power. “Ratepayers of these utilities are going to be on the hook.”
One of the leading bills, co-sponsored by state Senator Cynthia Stone Creem, a Newton Democrat, would lift restrictions on the commercial activities that natural gas utilities can pursue, allowing them to sell and install heat pumps that run on electricity and develop geothermal systems that tap natural sources of heat.
The bill, called the Future of Clean Heat, would also provide an estimated $40 million each year to help customers replace gas appliances with electric appliances and retrain gas company employees to work on clean heating equipment and infrastructure, such as heat pumps and thermal pipes. The money would come from a small surcharge on monthly heating bills, similar to what electric customers pay to support renewables and energy efficiency programs.
It would add between $1.50 and $2 a month during the heating season to the average gas bill, according to the state.
“Gas companies need to be open to new climate-friendly lines of business if they want to survive,” said Creem, who is the majority leader of the state Senate. “We want to plan and we want to work with the utilities. The future of heat looks to join the gas company as our partner, not close them off.”
Another bill would push gas companies to cleaner heat by setting emissions limits on existing buildings to preclude the use of natural gas.
More than half the homes in Massachusetts heat with natural gas, accounting for about 17 percent of the state’s greenhouse gas emissions, according to the Executive Office of Energy and Environmental Affairs. Once considered a clean-burning fuel that would provide a bridge to a renewable energy future, natural gas fell out of favor among environmentalists and policy makers as the pace of climate change accelerated.
As a result, some municipalities are banning new natural gas hookups. The state has approved a pilot program to allow 10 communities, including Brookline, Cambridge, and Arlington, to prohibit new natural gas hookups. Other communities, including Boston, are seeking to join the program. In July, Mayor Michelle Wu signed an executive order banning fossil fuel hookups in new city-owned buildings.
Among the issues yet to be addressed are what happens to the nearly 22,000 miles of pipes distributing gas throughout the state, and who pays the costs of abandoning them. The Future of Clean Heat legislation, for example, only calls on the state Department of Public Utilities to consider these potential costs as it structures rates and reviews projects proposed by utilities.
Even now, gas utilities are replacing and repairing pipelines under 2014 legislation called the Gas Leaks Act, which requires utilities to replace old or leaky pipes. Dorie Seavey, a research economist at Groundwork Data, a clean energy consultancy in New York, estimates Massachusetts ratepayers will cumulatively pay about $30 billion from now until 2039 if the leak law remains in place.
Some environmental advocates say customers have paid enough and provided utilities with sizable profits to fund the costs of shutting down distribution networks and unwinding their gas businesses. Last year alone, Eversource, one of the state’s largest utilities, reported a profit of $1.4 billion. Natural gas accounted for almost 20 percent of those earnings.
“It’s their infrastructure, and I’m sure they have the funding that would be necessary,” said Jamie McGonagill, media and messaging director at Extinction Rebellion Boston, a climate activism group. “At the end of the day, utility companies are more invested in holding to the status quo than they are to changing to sustainable methods.”
Utilities say they want a fair and cost-effective energy transition, but the state first needs to develop a clear roadmap for adopting clean technologies before discussing the fate of existing infrastructure. Eversource adds that it generally supports such initiatives because they provide a framework for what utilities can do under DPU regulations.
“It gives customers an opportunity to transition to clean energy options and have choices,” said Nikki Bruno, Eversource’s vice president of clean technologies, who added utilities can’t change their business models without the government first defining what is permitted. Utilities want the Legislature to establish such parameters and authorize regulators to oversee utilities’ transition to clean energy.
One bill, for example, would establish a new agency called the Department of Energy Transformation Planning, which would determine which clean energy sources, such as air source heat pumps and networked geothermal, would be best for different communities. The new agency would also determine how to protect customers who remain on gas from exorbitant price increases.
Although anyone who is eligible can retrofit their own homes with heat pumps through programs such as Mass Save, utility-scale change must be approved by state regulators.
The market for heat pumps, meanwhile, is growing. Heat pump sales in Massachusetts increased nearly sixfold between 2013 and 2021, according to Rusteika of the Building Decarbonization Coalition. In 2021, more air-source heat pumps were sold in Massachusetts than either gas heating systems or air conditioners.
Another option for utilities may be geothermal networks, which connect so-called ground source heat pumps that extract heat from the earth rather than the air. Utilities, with approval from regulators, have already launched geothermal pilot projects that could mark the first steps toward utility-scale clean heating systems.
Eversource recently began construction on a geothermal pilot in Framingham, which will run for 24 months in 37 buildings, including 32 homes, according to the company. National Grid is scheduled early next year to break ground on a geothermal pilot in Lowell that will run for two years and service 20 to 40 residential and commercial customers.
Massachusetts, along with the rest of the country, has changed energy sources many times. From the 1700s to the mid-1800s, Americans used whale oil for lighting and wood for heating before turning to kerosene, then electricity for lighting, and coal, petroleum, and natural gas for heating.
The transitions rarely came easily. In New Bedford, the whaling industry that made the city one of the richest in America collapsed. Coal-dependent economies in West Virginia and other states have been battered by the rise of natural gas and wind and solar energy.
Avoiding or minimizing economic dislocation during this energy transition will require utilities, political leaders, and environmentalists to work together, said Zeyneb Magavi, co-executive director of HEET, a Boston-based nonprofit that finds solutions to lowering carbon emissions. Simply putting gas utilities out of business is not the answer, she said.
“There’s multiple historical incidents of our utilities evolving to meet the needs of the time and the future. And that’s what we need to do again,” Magavi said. “We need to permit the utilities to evolve to meet our needs for today and the future.”