By MA Senator Will Brownsberger
On Tuesday, June 25th, the State Senate will take up the Future of Natural Gas in Energy Bill (S. 2829). Senator Will Brownsberger shares his analyses of two specific areas: alternatives to natural gas for heating and regulatory flexibility for heat pumps.
He adds, “I look forward to voting for the bill!”
Thank you, Senator.
GAS PROVISIONS IN THE ENERGY BILL
This post identifies the provisions of S.2829, the senate draft energy bill, that speak to the future of natural gas in the Commonwealth. I am prepared to vote for these provisions as written. I feel that Senators Barrett and Creem together with senate staff have done a careful job with this language and I support the direction they are moving in. However, of course, the senate will be carefully considering all amendments offered and the language may further evolve in the conference negotiation that will occur once the House also approves an energy bill.
In general, the thrust of the natural gas language in S.2829 is to authorize gas companies to sell networked geothermal systems as an alternative to gas service, and to require them to systematically consider doing so, without mandating that they do so. This posture balances emerging enthusiasm for networked geothermal systems with uncertainty about the feasibility and cost-effectiveness of these systems.
The sections below show the effects of S.2829 on the statutes governing gas companies.
Allow gas companies to provide networked geothermal
Chapter 164 of the General Laws governs gas and electric utilities. Currently, section 1 of that chapter defines gas companies in a way that limits their ability to engage in alternative energy production. The bill would revise the section as shown below to permit them to engage in alternative energy production and, in particular, to supply geothermal energy:
”Gas company”, a corporation organized for the purpose of making and selling or distributing and selling, gas within the commonwealth, even though subsequently authorized to make or sell electricity; provided, however, that a gas company may make, sell or distribute geothermal energy, including networked geothermal and deep geothermal energy.Chapter 164, Section 1 showing amendment proposed by Section 42 of S.2829
Require alternatives analysis for gas service territory expansion
S.2829 does not ban gas service territory expansion, but requires that before approving an expansion the department of utilities consider our greenhouse gas goals and whether there are alternative approaches (which could, of course, be networked geothermal). The bill would revise the service territory expansion statute as shown below:
The department may, after notice and a public hearing, authorize a gas or electric company to carry on its business in any town in the commonwealth other than the town named in its agreement of association or charter, subject to sections eighty-six to eighty-eight, inclusive, [these sections provide for local approvals] and it may purchase, hold and convey real and personal estate in such other town necessary for carrying on its business therein.
Notwithstanding any general or special law to the contrary, the department, in deciding whether to exercise its authority pursuant to this section, shall consider whether a request to the department to authorize gas distribution service is reasonable and in the public interest; provided, however, that in determining reasonableness and the public interest, the department shall consider factors including, but not limited to: (i) the commonwealth’s interest in complying with the greenhouse gas emissions limits and sublimits established pursuant to chapter 21N, including the statewide emissions limit set for 2050; (ii) the commonwealth’s interest in avoiding the stranding of assets and the likelihood of its costs being borne by ratepayers; and (iii) whether an alternative to gas service is available and likely to provide substantially similar service.Chapter 164, Section 30 showing amendment proposed by Section 46 of S.2829, bracketed explanatory phrase added.
Require alternatives analysis for gas service petitions
Under current law, if a gas company refuses service to a customer within their service territory, the customer has the right to petition the DPU for delivery of gas service. The petition must be granted if the costs of the new delivery connection can be recovered by the gas company. S.2829 would soften that right, allowing the DPU to consider whether the petitioner has adequate alternatives and whether the petition is in the public interest, including the public interest in reducing greenhouse gas emissions. The bill would revise the gas service statute as shown below:
On written petition of any person, having a residence or place of business in a town where a corporation is engaged in the manufacture, transmission or sale of gas or the distribution of electricity, aggrieved by its refusal or neglect to supply him with gas or electricity, the department may, after notice to the corporation to appear at a time and place therein named to show cause why the prayer of such petition should not be granted, issue an order directing and requiring it to supply the petitioner with gas or electricity, upon such terms and conditions as are legal and reasonable; provided, however, that if such corporation is engaged in such town solely in the transmission of gas such order shall not be made where it appears that compliance therewith would result in permanent financial loss to the corporation; provided further, however, that, notwithstanding any general or special law to the contrary, in determining whether to issue an order directing a corporation to supply a petitioner with gas service, the department shall consider: (i) whether the grant of the petition is in the public interest, including the public interest in reducing greenhouse gas emissions and complying with the limits and sublimits established pursuant to chapter 21N; and (ii) whether, in the totality of the circumstances, the petitioner can secure adequate substitutes for gas-fired services for space heating, water heating and cooking appliances, which, in the case of space heating, may include thermal energy that provides heating or cooling without combustion; provided further, that the department may, in order to advance the public interest in reducing greenhouse gas emissions and complying with the limits and sublimits established pursuant to said chapter 21N, order actions that may vary the uniformity of the availability of natural gas service in the commonwealth.Chapter 164, Section 92 showing amendment proposed by Section 74 of S.2829.
Require alternatives analysis for and phase down Gas System Enhancement Plans
S.2829 makes deep revisions to the Gas System Enhancement Plans that the legislature mandated 10 years ago (Section 2 of an Act Relative to Natural Gas Leaks (Chapter 149 of the Acts of 2014) The GSEP program created incentives that have accelerated investment in gas line replacement. According to the Department of Utilities 2023 Annual Report, “During the 2022 [Gas System Enhancement Plan] construction year, the [gas companies] spent approximately $561 million to replace 276 miles of leak-prone mains and 17,598 associated services.”
The revisions proposed by S.2829 spring from several years of discussion and debate about the future of gas in the context of our efforts to decarbonized home heating. This discussion notably included a deep study conducted by the Department of Public Utilities, the 20-80 docket, and a working group on the Gas System Enhancement Plans.
At its heart, the GSEP program is a special funding mechanism designed to encourage utilities to repair leaks: It gives utilities accelerated cost recovery for eligible projects. The modifications to GSEP have the effect of broadening eligibility for accelerated cost recovery to other measures if those measures are cost-effective. At the same time, the phasedown of the recovery rates from ratepayers as mandated by new section (i) (shown below) has the effect of winding down the accelerated recovery to zero after 2030. Even without GSEP, utilities will retain their obligation to repair their pipes and will be able to recover their costs for doing so in the same way that they have historically recovered costs from ratepayers — through their normal rate-setting applications to the Department of Public Utilities. For pro’s and con’s to these changes, see discussion at pages 44-46 of the report of the GSEP working group and pages 2-5 of the minutes of the December 4, 2023 meeting of the GSEP working group.
HEAT PROVISIONS IN THE ENERGY BILL
The Senate’s draft energy bill (S2829) covers a lot of ground. It reinvents the siting of energy facilities, supports expansion of vehicle charging stations, and makes important changes that may help gas companies shift towards providing networked geothermal heat.
The bill makes little change to our current MassSave programs for home insulation and heat pump installation. I agree with the implicit conclusion that our MassSave programs are moving roughly in the right direction for now.
There is one statutory change proposed relative to heat pumps that is critical to adopt in the current calendar year. It is necessary to preserve availability of heat pumps in Massachusetts. We need to conform with evolving federal laws governing heat pump refrigerants. Section 41 of the bill adds a new section to the building inspection chapter of the General Laws (Chapter 143):
Section 101. Notwithstanding any provision of the state building code, specialized code or any other general or special law or municipal ordinance to the contrary, refrigerants identified as an alternative for use pursuant to, and in accordance with, 42 U.S.C. 7671k shall be acceptable for use in the commonwealth.
Here is the background: Refrigerants are the working fluids that heat pumps compress and circulate to transfer heat. Every heat pump contains several pounds of refrigerant which flow back and forth between the indoor and outdoor components. The current generation of heat pumps use a refrigerant known as R-410A which is a mix of two chemicals — R-32 and R-125. Both appear to be non-toxic for household occupants, even if they leak. R-32 is a good refrigerant — i.e., its physical properties make it suitable for use in heat pumps — but it is flammable. R-125 is a so-so refrigerant, but a good flame retardant and it is added to make the mixture non-flammable.
Unfortunately, R-125 is a potent greenhouse gas — over 2000 times more potent than carbon dioxide. So, pursuant to international treaty obligations the EPA is implementing rules to phase it out. Heat pumps containing R-125 may not be imported into or manufactured in the United States after January 1, 2025 and may not be sold after January 1, 2026. The ready alternatives to R-410A are refrigerants which are mildly flammable, notably pure R-32. Current Massachusetts building code language authorizes the use only of refrigerants that are both non-toxic and non-flammable. The building code update cycle will not lead to a timely revision, so the language above is necessary to allow use of R-32 and other mildly flammable refrigerants that have been deemed safe alternatives under the federal law that governs transition away from chemicals that are ozone depleting and/or have high global warming potential.
Eventually, our building code will catch up with the evolution of the heat pump industry. In the interim, we will, in effect, be relying on federal policy and industry standards to assure the safe use of mildly flammable refrigerants. At a later date, this section may become unnecessary.
Additional background appears in the following posts on my site:
- Coming improvements in heat pumps (refrigerant changes)
- Refrigerant leaks
- Toxicology of heat pump refrigerants
- Heat pump monitoring and leak experience survey results
