Massachusetts Just Took a Big Step Away from Natural Gas. Which States Might Follow?

Natural gas may be on the way out in Massachusetts.

State utility regulators on Wednesday issued a sweeping ruling that sets a framework for reducing the use of gas for heating as part of a larger strategy to address climate change.

The Massachusetts Department of Public Utilities rejected arguments from utilities and the gas industry that had urged the use of “renewable natural gas” and hydrogen as lower-carbon alternatives to natural gas. Instead, the department ruled that the state should encourage a transition to using electricity for heating and other functions gas currently serves.

Massachusetts is the first state to take such a clear step to phase out natural gas, but it likely won’t be the last. At least 11 other states (California, Colorado, Illinois, Maryland, Minnesota, Nevada, New Jersey, New York, Oregon, Rhode Island and Washington) as well as Washington, D.C., have ongoing regulatory cases that are exploring the future of natural gas.

Environmental and clean energy advocates view the ruling as a victory and, they hope, the beginning of a broader shift away from gas. For gas utilities and their industry groups, the decision is a major defeat.

“As far as I know this is the first time a utility has been required to decarbonize,” said Matt Rusteika, director of market transformation for the Building Decarbonization Coalition, a group that includes clean energy companies and unions, among others. “So it’s a big deal. To take a step so clear and so deliberate is truly a first.”

One thing all sides agreed about is that a shift away from natural gas will have costs that could disproportionately affect low-income consumers who are unable to pay to convert their homes to electric heat or other alternatives. The ruling acknowledges the potential harm and has said the department will begin a separate proceeding to monitor and reduce the energy cost burden.

Natural gas is the heating fuel for 1.4 million, or 51 percent, of Massachusetts households, according to the Census Bureau, so a transition away from it is a significant change. The other leading fuel sources are kerosene or fuel oil, heating 24 percent of households, and electricity, which fuels 18 percent of homes. The state now says that it will encourage a shift to electricity, while also implementing energy conservation measures.

Under the ruling, gas utilities will need to submit climate compliance plans every five years starting in 2025, outlining how they intend to make a transition to clean energy.

The ruling says gas utilities are required to consider non-gas alternatives to gas expansion projects. Companies will no longer be able to make consumers pay for programs that promote the use of natural gas.

The alternatives could include electrification, geothermal heat and programs that reduce energy use.

The larger goal is for Massachusetts to be on track to meet its previously adopted goal of net-zero emissions by 2050.

Clean Energy Advocates Celebrate

The decision is a victory for clean energy advocacy groups that had recommended an approach similar to what the department is now requiring.

Caitlin Peale Sloan, Massachusetts vice president at the Conservation Law Foundation, said the department’s actions show an embrace of the reality of what’s needed and a rejection of options put forth by the gas industry that were not practical.

She credits Massachusetts Gov. Maura Healey, a Democrat who took office this year whose appointees to the Department of Public Utilities steered the process.

Healey’s willingness to embrace electrification is in contrast to her predecessor, Charlie Baker, a Republican, who was much more cautious about making changes that would affect home heating.

“It really is a matter of the times changing, the climate science becoming clearer and now a governor appointing commissioners with a reality-based lens,” Sloan said.

The decision “has the potential to be one of the most transformative decisions in Massachusetts climate history,” said a statement from Kyle Murray, director of state program implementation at Acadia Center, a Maine-based environmental advocacy group.

A Bad Day for the Gas Industry

Companies involved in the natural gas economy had urged the department to allow for the use of alternatives such as hydrogen and renewable natural gas, a form of methane made from feedstocks that include waste from landfills and livestock manure.

“Our industry stands ready to deploy renewable gas technologies which will reduce methane emissions, displace fossil fuel supply, improve organic waste management, produce useful soil amendments, and ultimately sequester carbon in Massachusetts,” said an Oct. 14 filing from the Renewable Natural Gas Association, a California-based trade group.

A spokesman for the association said the ruling “ignores emissions data and climate strategies upholding RNG’s importance as a gas decarbonization tool.” He added that a diverse portfolio of resources will be needed and “the future is not electric versus renewable gas.”

Eversource, a utility company with subsidiaries that provide electricity and gas in Massachusetts, proposed a plan with a series of initiatives to reduce emissions from gas. The throughline was a continuing use of the gas distribution system, with various projects to explore alternatives that would include hydrogen, renewable natural gas, geothermal energy and the deployment of hybrid systems that could run on electricity and natural gas.

Critics of Eversource’s plan argued that renewable natural gas and hydrogen may be important resources for reducing emissions in heavy industry and other parts of the economy, but are not well-suited to replacing gas for home heating.

“Reliance on these alternative gasses is illogical and counterproductive, and the analysis supporting them in this docket is inconsistent with reality,” said Ezra Hausman, who runs an energy policy consultancy in the Boston area, in testimony submitted in October. (He specified that he was speaking on his own behalf as a scientist, and not for a client.)

He said gas companies are engaging in “magical thinking” when they say that renewable natural gas and hydrogen can replace natural gas.

The department rejected most of the utilities’ suggestions, with some of the only agreement coming on the idea that the companies should explore greater use of geothermal energy.

Asked for a response to the department’s decision, an Eversource spokesman sent this statement: “We are working every day to help the commonwealth achieve its nation-leading decarbonization goals and we remain fully engaged with other utilities and stakeholders to define a practical path forward to reach them. We are currently reviewing the order and are thankful to the Department of Public Utilities for bringing together all stakeholders in an open and transparent process.”

Consumer Costs to Be Scrutinized

As Massachusetts moves away from gas, some customers won’t be able to afford to switch to other fuels.

Testimony in the case acknowledged this concern, but the ruling doesn’t offer a solution other than a commitment to open an additional case to explore the issue.

The National Consumer Law Center participated in the case, and its attorney, Jenifer Bosco, said she is pleased that the department is taking the cost concerns seriously.

“Low-income consumers already experience high energy burdens, paying a higher percentage of their household income for home energy costs than their neighbors pay,” she said in an email. “Without a focus on affordability, low-income consumers could be left stranded on an increasingly unaffordable gas system, bearing more than their share of the cost to keep the system operating.”

Her group was critical of utility proposals for hydrogen because of the potential for high costs that consumers would be forced to pay.

Will Other States Follow?

For clean energy advocates, one of the most exciting aspects of the Massachusetts ruling is the possibility that regulators in other states may follow suit.

Illinois was the most recent state to initiate a probe into the future of gas, which the Illinois Commerce Commission did alongside a ruling in November that rejected a rate increase for the gas utility Ameren.

“As the state embarks on a journey toward a 100 percent clean energy economy, the gas system’s operations will not continue to exist in its current form,” said Doug Scott, the commission chairman, in a statement. “Identifying how our gas and electric systems can adapt to meet these goals, and what specific actions should be taken to achieve them, will be an important task for the commission moving forward.”

The Building Decarbonization Coalition is tracking the cases across the country, and provided the list of states earlier in this story. Rusteika said his hope is that other states take a close look at how Massachusetts reviewed the evidence and came to its conclusions.

“This order sets a strong precedent that (regulators are) going to stop skirting the science and start asking the hard questions,” he said.

But he emphasized that the Massachusetts ruling was just one step, and that implementing it will be a long and complex process.

“We paused just enough time to high five, but we’re back in it today,” he said.