While Berkeley, California’s gas ban has been stopped cold, eighteen states are turning up the heat with legislation, regulatory action, and subsidies.
The disruption is substantial. For the first time in thirty-six years, the EIA has paused the production of its “Annual Energy Outlook” for a year to recalibrate its forecasting model to incorporate these changes and those from the Inflation Reduction Act.
Utility regulatory proceedings
State regulatory bodies are increasingly scrutinizing the future nature of the gas system, according to a new report published by LaReg Corp. In utility regulatory proceedings, over 18 states acted in one or more of the following six areas:
- Incentives: Providing incentives and subsidies for heat pumps
- System Replacement: Piloting electrification or geothermal district energy
- Renewable Fuels: Mandating renewable fuels, such as renewable natural gas, to decarbonize the gas delivery system
- Operational: Imposing more restrictive permissions and requirements before constructing new gas infrastructure
- Cost of Service: Examining cost recovery by changing the terms and conditions of gas interconnections, making it more expensive to opt for gas
- Planning: Requiring long-term gas plans to be publicly available.
Reduce greenhouse gas emissions
The 76-page report analyzes the future of gas activities in states with economy-wide goals to reduce greenhouse gas emissions established through statutory action. Of the states examined, the planning requirements were the most prevalent. The actions taken by the regulatory agencies have implications for gas utilities, electric utilities, investors, other energy distribution companies, environmentalists, regulators, and equipment service providers.
“One of the most important things to watch going forward is the impact of over $8 billion in heat pump subsidies entering the market, along with the clean heat standard pioneered in Vermont and gaining traction in Maryland,” says Christine Vaughan, the CEO of LaReg and one of the report’s authors. It is one of the most comprehensive on the subject and does advocate for any specific interest group.