2024-04-02 00:00:00 - Senate Committee on Global Warming and Climate Change
2024-04-02 00:00:00 - Senate Committee on Global Warming and Climate Change
SEN CREEM - Thank you all for coming today. And I thank you, Senator Comerford and Senator Barrett, and I know there'll be other members who said they would be joining shortly. And thank181 you for hearing on the Department of183 Public Utilities 20-80 order, recommendations of the GCEP Working Group, and the future of clean heat. Transitions from gas to clean forms of heat is a difficult task but one we have to accomplish. Buildings account for 35% of greenhouse gas emissions in Massachusetts and a majority of households heat their homes with gas. Slashing those emissions is essential to reaching net zero by 2050. Today, we will learn about215 the Commonwealth's nation leading efforts to plan and execute the transition from gas to clean E and the role that the Legislature must play in supporting this.
Almost two years ago to the day, this committee met to discuss largely the same issue. At that point in time, consultants hired by the utilities had put forward their initial 28 report and the gas companies had submitted net zero enablement plans that lean heavily on bio, methane, hydrogen and hybrid heating. And although the gas companies were spending billions in GSEP funds on gas pipes that were at odds with our climate obligation, major reforms of the GCEP program were not under consideration seriously. Those who testified before this committee two years ago expressed grave concern about the direction in which 20-80 investigations was heading. And they questioned feasibility, affordability, and climate280 impacts of the gas company. And Secretary Tepper, then the chief of energy environmental bureau at the Attorney General's Office highlighted concerns about GCEP and the need to investigate changes. It was a moment when it seems as if things were heading in the wrong direction.
But, oh, what a difference two302 years makes. Following the hearing, the Senate included several provisions relating to the 28 investigations and the gas system in the 2022 climate law. We slowed the process down ensuring that the previous administration would not approve any gas company net zero plans until they were further scrutinized. We created a working group to reimagine the GCEP and recommend regulatory and statutory changes. Since332 then, thanks to leadership and vision of Governor Healey's administration and the new DPU chair, Jamie Van Nostrand, things have moved in an overwhelmingly positive direction. In December, DPU issued its groundbreaking order, a model for the rest of the nation that sets the Commonwealth on a course for equitable, affordable, and orderly transition from gas to clean forms of heating and cooling.
366 The366 order also identified several areas where legislation intervention is necessary to accomplish these goals. Then in January, GCEP's working group put forward concrete recommendations how the Legislature can transport GCEP and reorient it towards investment and network geothermal, neighborhood scale electrification and retirement of segments of the gas system, all of which two years ago were just a hope. Today, Chief Van Nostrand will walk us399 through that 20-80 order and the working group's recommendation. As the 20-80 and GSEP process unfold, work was underway on network geothermal demonstrative projects in Framingham and Lowell, and demonstration projects has been announced for the Boston Housing Authority complex in Dorchester.
We're going to hear about the progress of these projects, we're going to hear about gas transition initiatives happening in other states. We're going to hear about the US Department of Energy study about the benefits of network geothermal for the electric grid. And we're going to hear from local advocates and stakeholders about their remaining questions about the Commonwealth's approach to gas transition. Gas transition is one of the most important climate issues before us449 as legislators and we can't shy away from my duty to confront it. This afternoon's hearing will equip us to tackle the issue this legislative session to ensure a clear path to the future of clean heat in the Commonwealth. SHOW NON-ESSENTIAL DIALOGUE
Thank you. And with that, I would like to have, Jamie Van Nostrand do a presentation so I can have at least, our important senator Barrett here, what he's going to say, and give him a chance to ask some questions. So thank you very much,
chair Nostrand.488
JAMES VANNOSTRAND - DPU - Thank you, Chair Creem, and good to see you again, Vice Chair Barrett. Nice to meet you, Senator Comerford.496 I met with Chair Creem, I believe last summer, and then senator Barron and I, of course, have worked together over the last several months on both the GSEP working group and the Clean Energy Transmission Working Group. Let me just start off by saying how excited I am to be working in the Healey Driscoll administration and to be part of secretary Rebecca Tepper's team at EEA. I've got a history of addressing climate change for the last decade and a half or so. I spent 12 years in West Virginia taking on big coal, and I'd much rather be in Massachusetts where we don't debate climate change, we're constantly pressed on how we can move more quickly to address it.
While I don't think I'm telling this committee anything it doesn't already know about climate change, I do want to share with you the evidence that gives me543 a sense of urgency about addressing climate change. As you all know, the year 2023 was549 the warmest year since global records began in 1850 at 1.18 degrees Celsius above the 20th century average. 2023 also marks559 the first time on record that every day561 within a year has exceeded one degree Celsius above the 1850 to 1900 pre industrial level567 for that time of year. Close to 50% of the days were more than 1.5 degrees Celsius warmer than the 1850/1900 level, and two days in November were for the first time more than two degrees Celsius warmer. For those of you who keep track of cCO2 concentrations in the atmosphere, that number as of last Friday was 424.75 parts per million, which is up about 2.35 parts per million from a year ago. As the climate scientists will tell us, we need to get that number down to about 350 parts per million, but we're still moving in the wrong direction.
Over the past year, we've had deadly wildfires in Hawaii and Canada with adverse air609 quality impacts on cities throughout the United States due to smoke from wildfires. The US now experiences on average $1 billion weather or climate disaster every three weeks. According to the National Climate Assessment here in New England, extreme precipitation has increased by about 60% in the region, the largest increase in the United States and Hawaii. Here in Massachusetts, since I've been in the Commonwealth since last May, we had extreme flooding in the western part of the state last July, causing about $15 million in crop damages. And then one week in September, we had the flooding in Leominster after 11 inches of rain fell in less than five hours, and then Hurricane Lee narrowly missed Boston a few days later on September 16th. So this recent history makes a compelling case for taking action across the board and reducing greenhouse gas emissions in Massachusetts.
As this committee is well aware, Massachusetts has long been a national leader in adopting state policies to address climate665 change. The Commonwealth set a target of net zero greenhouse gas emissions by 2050 in the Global Warming Solutions Act in 2008. And in 2022 EEA established sector specific emissions reduction targets for 2025 and 2030680 in the Clean Energy and Climate Plan. And so that provides some context for what we're going to discuss this afternoon, the efforts of the DPU with respect to managing the transition of the natural gas industry. We're going to talk about two different proceedings.694 The first is the future of gas proceeding, which I renamed to698 the beyond gas proceeding. Our order in 20-80B issued last December, and then we're going to talk about the outcome of the GSEP working group.
First, on order 20-80B, given the statutory directive of the Global Warming713 Solutions Act and the setting of sector specific sub limits in 2022, what we tried to do in our December order in 20-80 was implement the policies to put the gas local distribution companies, or the LDCs, on a pathway that will achieve the required reductions in greenhouse gas emissions. In my mind, there really shouldn't be any surprises in the order. We're either serious about addressing climate change in Massachusetts, and I think we very much are serious about that, and that means we need to be serious about meeting the sector sub limits for greenhouse gas emissions. The question that we had to address was what is the DPU's role? One of the things I wanted to point out at the outset is, one thing we did not do in the orders, we intended not to do anything in the order to jeopardize the rate recovery of the billions of dollars of existing investments in natural gas infrastructure by the LDCs operating within the Commonwealth.
But in a beyond gas future, we're seeking to minimize additional investment in pipeline and distribution mains and achieving decarbonization in the residential, commercial and industrial sectors. As I'll talk about in a minute, there are exceedingly complex issues that we had to deal with in this proceeding and that we will continue to be dealing with in 20-80 over the next several months. So some of the key findings. One, we wanted to discourage the further expansion of the natural gas distribution system. We're going to do that in a number of different ways. One is to reexamine the line extension policies. While we didn't do anything specifically in the order, we teed it up that this was something we need to look at, making sure they're consistent with climate compliance plans, which I'll talk about in a minute, and the greenhouse gas sub limits that we need to achieve.
We also need to evaluate the appropriateness of the existing public interest825 standard. Under Section 30, the department had a policy of interpreting that public831 interest standard as avoiding adverse impact on existing customers. So if a natural gas company wanted to extend837 to a new area, as long839 as those new customers in that new area covered their own cost and it didn't cause adverse impact on existing customers, that met the public interest standard. While we didn't do anything in 20-80 to address that, we need to850 await till we have a case in front of us. I think we did send a strong signal that we will probably redefine that public interest standard to look at whether it is consistent with the greenhouse gas sub limits that we need to achieve, or whether it's consistent with the LDC's climate compliance plans, which I'll talk about in a minute.
Another big takeaway from 20-80 was a clear prohibition on rate recovery of any costs associated with marketing geared towards promotion or expansion of gas service. Utilities have a First Amendment rights to spend money the way they want to. All we can do is say you're not gonna recover them from the rate payers, and we have sent that message loud and clear in 20-80. And probably one of the biggest elements of the order was requiring the consideration of non gas pipeline alternatives, and we'll talk about that in the context of the GSEP Working Group. But basically, it's this notion that we want to require the utilities before they make any additional investment in natural gas infrastructure, did you consider whether there was a non gas pipeline alternative that might achieve that objective? Whether that's through electrification, or whether it's through energy efficiency, or whether it's through network geothermal with ground source heat pump, but require that to be part of the analysis before the utilities spend any more money on natural gas distribution system.
Another thing was the encouragement of demonstration projects, which I think Zeyneb will be talking about. But looking at the partial, the opportunities to have a partial decommissioning of a natural gas service territory in favor of electrification, network geothermal with ground source heat948 pumps. And I think we'll hear about the Eversource project in Framingham, the National Grid project in Lowell, and recently National Grid announced a project in Franklin Field Apartments here in Boston. Another element of the order that we discussed is a new work stream964 in terms of joint gas electric planning. Because if we're968 going to think about decommissioning a portion970 of a gas service territory, we have to972 make sure the electric system has the capability to take on that additional load, additional electrical load. And that's978 something that utilities aren't used to doing, and frankly, the DPU has not had experience with that, but that's going to be a new work stream going forward.
So some of the, and probably the biggest, driver in terms of getting where we need to go is requiring the filing of climate compliance plans every five years. And that's going to start pretty much a year from yesterday, April 1, 2025. We expect all the LDCs to file their first climate compliance plans to show us how they're on a pathway to achieve these greenhouse gas sub limits in 2025 and 2030. So as I look at some of the big picture issues that we wrestled with in 20-80, some of the key considerations, maintaining the safety and reliability of the gas system. As long as there's gas going through the ground, we need to make sure that it's delivered safely.1032 So we can't do anything to compromise the safety of the natural gas distribution system. Another related challenge is to maintain the continued financial viability of the LDCs. That's one of our biggest roles as regulators is to balance the interest of ratepayers and shareholders to make sure that companies have an opportunity to earn a reasonable profit so that they can raise capital.
It's a capital intensive business, so we need to make sure that the LDCs, so long as they're in the business of delivering gas, preserve their ability to raise capital on reasonable terms. Another big consideration is1066 affordability of energy service and1068 the concern about those customers who can afford to get off natural gas distribution system by investing in electric heat pump. Potentially, the throughput volumes will go down for the remaining customers and so, potentially, forces up the cost on those customers who remain on the system, so there's huge affordability associated with this transition. We need to be very mindful of that. In that regard, the DPU, in January of this year, we commenced a new docket on energy burden and affordability, DPU 2415, where we're looking at how can we address these affordability issues.
Are there things we can do differently with the design of our discounts, whether it's scaling the percentage discounts, so higher discounts at the lower end, lower discounts at the upper end, and there's also percentage of income possibilities. But we need to address the affordability issue. Again, but for the reasons I said before about the urgency to address climate change, I don't think we can really slow down in terms of how quickly we need to move to address climate change, but we have to address affordability, so we opened a separate docket to consider that. Another consideration, environmental justice and the disproportionate distribution of negative impacts of this gas infrastructure, maybe being mindful that those disparate impacts. In that regard, just last week, the department appointed its first director of environmental justice and public participation, so we're really scaling up our efforts in that regard.
Another key consideration, workforce issues that just transitioned for gas industry. Employees, making sure that as we transition to this clean energy future, that everyone is participating with particular mindfulness of those employed currently in the gas industry. And in that regard, Secretary Tepper, just a couple weeks ago, announced the creation of a new office of energy transformation. Melissa Lavinson will be taking over that job on May 1 as the director of office of energy transformation. I think that will be a key component of helping us manage these workforce transition issues. Another consideration as we look at this transition, whether it's network geothermal or electrification. In the case of electrification, we have to be mindful of the affordability of these electrification solutions.
I've had a couple of meetings with Senator Barrett on this issue when we encourage customers to do the right thing in terms of helping us with this clean energy transition, which is investing in heat pumps and investing in electric vehicles. We need to address the impacts of the higher bills that associated with the fact that we recover a lot of the revenue requirement through those commodity charges or the energy charges. Right now, we have a couple of dockets in front us where the utility is proposing separate heat pump rates to address this issue. We're going to be opening a broader proceeding to look at rate design to address how we can design rates in a manner that avoids penalizing the customers who are doing the right thing to participate in the energy transition.
Bottom line, one of the things that I emphasize when we meet with the LDCs is that everyone needs to be at the table as we address these issues in subsequent proceedings, that we need to have active participation in developing innovative solutions by all the stakeholders being involved. So in terms of future actions, I think the 20-80 order, 20-80B in December of 2023 was a first step. The future actions, we need to provide further guidance on the development of that non-gas pipeline alternative's data analysis. Second, we teed up the fact that the line extension1285 policies need to be examined to make sure that we're eliminating subsidization. We don't want to be continuing to encourage expansion. So we need to have the utilities come in and share with us how they're going to revise their line extension policies.
I think we need to provide some direction on the elements of those climate compliance plans. These utilities are going to1303 be coming in a year from now. What we need to see in those plans, what's gonna pass muster with us because that's where we're going to take the serious look at are you on a pathway to achieve these greenhouse gas limits. That's the document by which we will measure some of these other standards such as that public interest standard. And I think as I1323 mentioned before, addressing that public standard for extending service to new areas, which we will do when a proceeding presents itself with an opportunity to do that. So just this morning we issued an order in response to the utilities motion for clarification that was filed in late December. One of the things we did in that order, a lot of the discussion in the order focused on the non gas pipeline alternatives.
The utilities came forward and said, gee, we'd like to develop a feasibility screen before we do a complete non-gas pipeline alternative analysis. Can we develop a feasibility screen? We pretty much rejected that notion as that's where you're really asking for reconsideration, not clarification. But a feasibility screen probably is part of a non-gas pipeline alternative. But the direction that we provided the utilities was get together, work it out with the stakeholders, come to us with what your proposal is, and feasibility screening can be part of it. But you can't develop that on your own, it needs to be developed in consultation with the stakeholders. I think my takeaway from what the utilities were asking for, I think they were trying to make the non gas pipeline alternatives issue probably more complicated than it needs to be.
In my mind, and we've said this in our order on clarification today is, it's a matter of the utilities burden of proof. When you come in for a rate case to recover investments, we think you have an obligation to show that the solution you pursued was the lowest cost option for customers. And that a non gas pipeline alternative is pretty much the same thing, when before you make that investment, can you demonstrate to us that you considered alternatives that might be cheaper for the customers? And I think in the context of greenhouse gas limits, we're also looking at, is there a solution that might be better in terms of achieving these reductions, these greenhouse gas limits. But I think it's not that complicated really.
The utilities were also raising the issue of, well, what about GCEP? What about if there's leak prone pipe? What about if there's safety issues that needed to be addressed? How's a non gas pipeline analysis dealing with that? And we would say, well, the safety issue needs to be addressed, but that doesn't mean that a non-gas pipeline alternative couldn't be a means of addressing that. But, yes, that's the consideration is the safety issue but there could be situations where a non-gas pipeline alternative in the form of decommissioning a portion of a service territory rather than putting more steel in the ground or more pipe in the ground is a lower cost or better solution. So I think we provided some additional guidance in that order that we issued today.
I want to just spend a little bit of time talking about the GSEP Working Group. The 2022 Climate Act basically required the DPU convene a stakeholder working group to revisit the 2014 Gas Leaks Act and to recommend revisions to that statute to bring it into line with our current objectives regarding greenhouse gas emissions. It was kind of a different era back in 2014, the focus was on safety issues, recognizing that gas utilities had to comply with certain federal guidelines in terms of safety. So the Gas Leaks Act basically provided, what I would call enhanced or preferential rate making treatment that would encourage the utilities to spend the money necessary to fix, you know, to address the leaks and address the safety issues. At a point of the 2022 Climate Act was shouldn't we revisit that? Do we still want to be encouraging the utilities to spend the money on GCEP when we're now more focused as well on achieving greenhouse gas limits? So that was really the charge that was given to the DPU to that working group under the 2022 Climate Act.
So Senator Barrett and Representative Roy worked along with, probably, 18, 20 members of that group, representatives from state agencies, so we had DOER, we had Department of Environmental Protection, the Attorney General's Office, as well as the DPU. All the LDCs were present, unions, nongovernmental organizations such as CLF, HEET. I see Audrey Schulman's on the call today. Audrey was a very active participant. National Consumer Law Center, Power Options. So we debated these issues from beginning in April of 2023, and we filed our final report with the legislature in January. Some of the key findings and recommendations that we ended up in those proposed revisions, again,1589 we1589 brought in the required consideration of non gas pipeline alternatives. That needs to be part of the analysis. You need to address the safety issues associated with leak prone pipe. But it may be that a non gas pipeline alternative is a better way of doing that than replacing or repairing existing pipes. So we made that part of the consideration.
We also modified the criteria for this eligible infrastructure investment to include the additional criteria of consideration of greenhouse gas reduction limits, and consideration of limiting stranded assets, and the requirement that you consider non gas pipeline alternatives. So there are a number of elements when the utilities come into1628 the DPU and they make their annual filings, they say, here's all the miles of pipe that we repaired. Here are the criteria that we examine in order to decide whether to approve that. We're proposing to add those additional criteria to make sure that we can take into account, is this investment consistent with our need to achieve greenhouse gas limits? Is this investment consistent with our need to avoid stranded costs? And were there non gas pipeline alternatives that might have been a lower cost path for customers?
And I want to point out, another thing that we ended up addressing is this obligation to serve issue, and it comes up in the context of a non gas pipeline alternative. When you look at the possibility of potentially decommissioning part of a gas service territory, I guess I can give an example of, say, you have a subdivision at the end of a distribution line, 30 houses in that subdivision, and the utility may come forward and say, well, we've looked at this and we have to spend x thousands of dollars on repairing this leak prone pipe by putting more pipe in the ground, or we could potentially go the network geothermal with ground source heat pump, or we could go electrification.
But in order to do that, you pretty much have to have all 30 customers to go along with1706 that because any one of them could really pretty much destroy the economics of the project. You can't actually decommission the the the gas system, then you're not going to achieve those savings that makes that cost effective. So that requires us to consider that obligation to serve and basically allowing an LDC to replace the service of natural gas with thermal. It's basically just1730 defining what is the service that the utility is providing. So it could be thermal in the form of network geothermal with ground source heat pump, it could be electrification. But to have, and it will be subject to DPU oversight, so we created a defined term called a decommissioning plan.
So the DPU would have to approve that happening, but we just felt in order to make these non gas pipeline alternatives really feasible, we need to address that obligation to serve issues. So we put that in the recommendations from the GSEP working group as well. And finally, I just want to note that, EEA, our legislative package included many of the same things that we developed in connection with the GSEP Working Group in terms of non gas pipeline alternatives, decommissioning plans, consistency with greenhouse gas targets. So with that, I'm happy to answer any questions. Thank you for the opportunity to to testify. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you very much. I have some questions, but I'm gonna start with senator Barrett, because he has more of a time commitment, and I I want him to have an opportunity.
Unless you have no questions, senator Barrett, you're you're muted. You're muted.
SEN BARRETT - I do have a question or two. That's very kind of you, thank you very much. First of all, I just want to raise the chair. That was a extraordinary review. You've only been on the job, what, 15 months, 16 months?
VANNOSTRAND - 11 months. 11 months, Senator Barrett., 11 months yesterday.
BARRETT - Well, first of all, happy anniversary.
VANNOSTRAND - Oh, thank you.
BARRETT - But you've done an exceptional amount of work, and I know your efforts aren't limited to gas. So, you're blowing our minds in a good way.
VANNOSTRAND - Well, like, as I mentioned, these are exceedingly complex issues, but I'm kind of a rate making wonk. I've been doing this for 40 plus years, and these are, I mean, these are really, really challenging. It involves a lot of, you know, as I mentioned, at the outset, you know, making sure the utilities, they're not afraid that we're going to be not allowing them to recover their existing investment, At the same time, going forward with the rules, the rules need to change, and we need to manage this transition and keep the utilities financially viable, but also addressing affordability and equity. So it's the perfect little playground for a regulatory wonk like me, I guess, is the way I would put it.
BARRETT - Let me ask you about the advantages or disadvantages of something that exists in Massachusetts but not everywhere else, and that's that our major gas providers are also our major electricity providers. One thing that struck me, and this is just an aside, about the ESMPs that were filed recently, electric sector modernization plans, is that gas electric planning in those long documents was given relatively little attention. It's disappointing because you've got this handy, convenient, existence under a single corporate roof of electric and gas. How can we make that duality work for us?
VANNOSTRAND - I think that's one of the follow on activities coming out of 20-80, is we need to really encourage these demonstration programs. So we've got the network geothermal projects, the Eversource one in Framingham, and the National Grid in Lowell, and wanted to come in Franklin Field Apartments. But I don't think we've done similar efforts on the electrification side and I think we need to be encouraging those sorts of demonstration projects. And you're right, Senator Barrett, the utilities will acknowledge that need for joint gas electric planning, and and they at least see it. But, you know, we've really got to start pushing them. And what does it actually look like, how do those numbers work out? I think the transition is easier if you're a combination utility serving both gas and electric.
We also have two LDC only utilities, Berkshire and Liberty in Massachusetts. And we also have, you know, the utility service areas don't overlap very neatly. It's very complicated. One of the things we said in this order was the LDCs need to do this joint of gas electric planning, and you need to bring the EDC in with you. Now maybe the same company may not be the same company, but I think we just need to start pushing, encouraging demonstration projects. I think the ESMPs will start to look at that issue of, do we have the electrical capacity to accommodate electrification? They're at least teeing up that issue, but it's just on the surface. We need to do a deeper dive and actually get some projects to see how it's going to work much like, you know, I think Zeyneb will talk about the Framingham project, what we've learned for network geothermal. I think we need to learn the same lessons from electrification.
BARRETT - I've just got a couple of, follow on questions if the chair will indulge me. Thank you. First of all, consider this in the nature of a question, if you wish to comment on it. We always stress that in many communities in Massachusetts, National Grid will provide gas or electric2052 and Eversource will provide the other fuel.2054 I actually had occasion to ask Eversource and National Grid executives whether that was really the rule or whether we were overlooking the number of instances in which one of these companies provides both to the same population.
As I recall what they told us, more than 50% of the time, Eversource does both in the same communities, which should really facilitate electric gas, and then National Grid, similarly. So we always tell ourselves, I don't know why, it's a meme, a foot in the land. The meme is that, Eversource does one and National Grid does the other, making cross planning more difficult. In truth, it seems, in many cases, the opportunity exists to work on one company that does both. Why don't we ever observe that oftentimes one company does both and in those instances, gas electric planning would be particularly feasible?
VANNOSTRAND - I haven't2120 looked at the numbers in detail, but, I2122 mean, I think we're well aware of the substantial number of situations where there is overlap in the same company serving both. And I think they would tell you that our gas division doesn't talk to our electric division. So just as here at the DPU, we're going to have to create a new team to analyze that. I think the utilities are going to have to be looking at, and you see some of that stuff in the ESMPs where they're mentioning that. But I mean, I think there2153 are opportunities. We just need to put and I think they are, I mean, I think it's just a matter of identifying, you know, where is a logical you you know, you've got to find the right situation where you can decommission portion of a gas service2168 territory, then you got to look at, okay, on electric system capability. And the SMPs will help with that in terms of do we have the capacity in this particular area to2176 do that and then just do it.
Try it out. And you got to see how the numbers work. You know as a regulator I'm always looking at, you know, trying to recognize that the utilities probably have an incentive to sell both gas and electric to a customer, are they going to make money putting the pipe in the ground, and they're also going to make money. And it's got to figure out, well, what, how do we recognize the fact that we're asking them to2203 pursue a less profitable path, and how can we hold them harmless with some sort of a regulatory mechanism? Because we don't have enough bodies to do a prudence review, enough staff to do a prudence review to figure out, oh, you didn't go down the least cost path.
I'd rather focus on trying to design a mechanism that recognizes what the bias a utility might have and then figure out, okay, how can we, kind of like decoupling with energy efficiency. I think you're familiar with that, Senator Barrett. But, you know, recognizing a utility doesn't have an incentive to promote energy efficiency and conservation if its profits are going to go down. So 20, 30 years ago, we created this thing called decoupling that decouples sales from profits. So your sales can go down, but we're going2243 to make sure that you're not penalized. It's kind of the same thing recognizing, gee, if utilities don't make more money serving both gas and electric, how do we address that bias and align their interest with our interest in achieving this clean energy transition?
BARRETT - Let me ask you a question about line, I just have two more. Amplify a little bit, one hears the phrase line extension policy. Could you describe what2272 those are and what a line extension2274 is so that we can better understand the issues?
VANNOSTRAND - It's typically in a utilities tariff, which is is written, you know, it's approved by us, but it's pretty much the contract between the utility and its customers. But it says, if you're at the end of the street and you want to get a natural gas hookup, the utility will come in and say, well, you're 160 feet from where our distribution system ends. And so we need to figure out what's it gonna cost to hook you up, and the utilities will then look at what's that investment going to be, how long is that investment going to be in place, and importantly, what is the throughput? Because utility will figure out what kind of allowance can we give you so you're not paying all those up front costs? And so2323 what happens is, assumptions are made in terms of the life of2327 the investment and the throughput, all the gas they're going to sell to this customer. And as a result, they tend to get subsidized. There tends to be a generous allowance made, and what we want to do is bring the utilities in and say, look at all these assumptions because we don't want to be subsidizing additional line extensions.
I mean, New York has 100 foot rule that they're dealing with in their statute this year. They passed, the governor's proposing a natural gas affordability or natural gas transition affordability piece, but they actually have 100 feet free that's in there. We don't have that, but you can get there depending upon what assumptions the LDC makes when it decides how much we're going to charge you for this line extension, because they're going to try to do all they can to make it as cheap as possible. And so they're going to make all these assumptions2372 and that's a follow on action item that we need to have, is bring the LDCs in and say, you need to relook these, get on the same page, follow a consistent practice. But the goal for us is eliminate those subsidies. We don't want to be encouraging additional gas hookups.
I mean, a big takeaway I didn't really mention is, we just need to stop business as usual. There's just, they're still growing at one and a half to 2% a year and their compounded annual growth rate in their recent gas supply and forecast plans. I mean, it's just, they're still hooking up new customers. I'm sorry, sir. Look at these2408 greenhouse gas sub limits and tell me how achieving those is consistent with still hooking up new customers, but, you know, there's profits there, right? I mean, they get to earn a return on all that additional investment they put in the ground. They're still selling electricity. So.
BARRETT - Mr. Chairman, here's my last question, although it may be a question cluster, who knows. You've suggested, and I thought it was very creative of you, you and your fellow commissioners suggested that within the GCEP construct, which has to2443 do with leaky pipes, that there'd be a definition of decommissioning plan.
VANNOSTRAND - Yeah.
BARRETT - But I'm looking at Section 92 of Chapter2453 164, which relates instead to the2457 customer's right to demand gas service, which probably has to do with these, to some extent, with these line extension activities. You mentioned Section 30 and that's the town of Douglas situation where, but Section 92 gives the consumer, it could be a homeowner, I think it probably could be a business, a unique right that no other competing sources of heat in Massachusetts have. And that's the right to demand not that I be warm, but that you extend2490 gas specifically to me as the means of my staying2494 warm.
Here's my question, couldn't the Legislature introduce the public interest concept that you alluded to earlier with respect to Section 30, defining the public interest to include an interest in emissions reduction pursuant to Chapter 21N? And might we also2514 include your definition of decommissioning plan as a part of this right to service so that along with the right to stay warm, replacing the right specifically to have gas, the Legislature could also say, and by the way, well, maybe decommissioning doesn't have a role with 92, but, certainly, the enlarged public interest concept does, right? And that right specifically to have gas seems to be misplaced and a relic of a earlier era.
VANNOSTRAND - Well, the right to have that essential utility service, its heat. You know, and that's the some of the things we incorporate in the legislation was substitutable service. So you're just redefining what is that essential service that the utility is providing. It's not natural gas, it's heat through electric heat pump or ground source heat pump with network geothermal. But, no, I think the same thing would apply in that section you're mentioning, 92, to just redefine what is it that you can demand. Well, you can demand essential utility service, but it doesn't need to be natural gas, but something a product capable of substituting and and providing that essential service.
CREEM - Sounds like the beginning of a bill. Are you
BARRETT - I know. Thanks to you, Senator Creem and Senator Comerford, I've been working on this too. It is likely that the House and Senate will move on climate. And I think the Senate, I'm hearing today from Senator Creem, and from others of our colleagues that if we're going to see the electric service increase significantly to build out the grid as we must, we probably should pair it with some attempts to constrain natural gas so that the rate payer isn't hit on both fronts at once.
CREEM - Senator Barrett, thank you. I think you've heard from me about that for a long time, not just today. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER3 - You've been terrific. So I'm gonna I'm gonna repair I'm I'm gonna recuse myself. Thank you. I'm sorry I can't hear the rest of the witnesses. Thank you, senator Crane, for having this hearing today.
SPEAKER1 - Okay. Thank you, senator Barrett.
SPEAKER2 - Thanks, senator Barrett.
CREEM - Okay. So I just have a couple and I don't know if, Senator Comerford is still here or if she has some questions, but. So balancing emission reductions, equity, and affordability is obviously a challenge. Are there regulatory tools that are available to help the DPU promote the equity and affordability to the transition? What are they, and how do we avoid disincentivizing electrification in the name of maintaining affordability? In other words, we're always in a balance, and how do we get that balance?
VANNOSTRAND - Yeah. I think part of it is what we're looking at in our 2415 that energy and affordability energy burden and affordability docket, where we're trying to see, are there, and that's just for the utility bills themselves in terms of how can we better match the ability to pay with the levels of discounts. Like I say, higher discount at the lower end and lower discounts at the upper end or percentage of income. But it seems to me we need to do the same sort of analysis2731 when we're looking at those transition issues of affordability to, you know, facilitate installation of heat pumps or network geothermal with ground source heat pumps to move away from natural gas. I think, the equity issue is big. It's a challenge, which is why we opened that docket because some of these issues are going to be expensive, and we need to make sure that everyone can participate in this clean energy transition and has, you know, that we assist with the means to pay for it.
CREEM - So are there things that we could do, legislation that you might have in mind that we could be helpful to make this transition quick?
VANNOSTRAND - I have not given much thought to that. The folks over at EEA usually help us with those legislative initiatives. Like I say, we took a lot of the things that we did in the GCEP Working Group2795 and2795 ended up in the EEA proposals.2797 I would defer to the legislative folks at EEA, but, yeah, we we can give some thought to that, whether we need, and like I said, in this energy burden affordability docket, I've had conversations with Senator Barrett about that before. Do we need legislative changes in order to accommodate what we end up wanting to do? Because we do a percentage of income program, that's a little bit different than, you know, what we have now is you either get a discount or2827 you don't get a discount, and a cap agency signs off on whether or not you're eligible. And if we2833 go a different direction and do a percentage of income,2835 that's going to be a whole different sort of scheme in terms of how to implement. And there may be legislative2844 fixes2844 necessary for that. And I think the conversation that we've also had about the rate design piece, there may be things that we need legislation to once we decide on the direction we want to go, making sure we have the statutory authority to get there.
CREEM - And I don't need the answer today, but just keeping that open. We're here if there's an opportunity for recommendations, that we might be helpful. I have one more question then, Senator Comerford. So there was a creation of the office of, Healey announced creation of the office of the energy transformation and it will assist many of the goals laid out by your 28 order. Do you have a sense of how the DPU and this new office will work together and the divisions of responsibility might be between the two? And again, if you don't, that's alright. It's new and it's just happening.
VANNOSTRAND - Melissa Lavison will start in that new job on May 1. I mean, I think one thing that comes to mind are the workforce transition issues that come into play. And I think another place their expertise is2920 going to come into play, as Senator Barrett mentioned, these electric sector modernization plans. Some of the challenges of, could be supply chain issues associated with making sure we have enough transformers. We're talking billions of dollars of investment over the2934 next five to 10 years in substations to scale up to integrate solar and battery projects and accommodate heat pumps and electric vehicle. And, you know, making sure the utilities are out in front of2948 that in terms of supply chain issues. But I think one of the, but the workforce transition issues are big as as well. And I think that's her background in the utility industry, I think, will be really helpful in helping us manage that.
CREEM - Okay. I'm going to see if Senator Comerford, if she has any questions. But again, Legislature sometimes moves slowly, but we're capable of taking swift action when we necessary. So if, you find some way that we, we've been pushing all of this, but if you find some way that we can work together, that would be great. SHOW NON-ESSENTIAL DIALOGUE
Good. Senator Thank
SPEAKER2 - you, chair. Thank you, chair Cream.
SEN COMERFORD - Okay. Thanks, Chair Creem for this opportunity. And thank you, Chair VanNostrand for your really excellent work, and for your testimony here today. Some of this you've covered, but I wanted to start with workforce because I was really happy that you, not happy, I was mindful, that you've raised workforce, both the consideration of the more fossil fuel focused workforce, but then the consideration of the 21st century workforce that we need. And from your perspective, what more could we be doing to help workers transition and to train the new workers? Again, this is from your perspective. And I'll just say as a sort of a sidebar to this, I really appreciate Governor Healey's attention to the workforce skills cabinet. I think it's really sharpened under her leadership.
And right now has the healthcare secretary, so Secretary Walsh, has joined that, which I think is3049 very appropriate, right? So Secretary Jones, Secretary Tutwiler, Secretary Howe, and now Secretary Walsh. And listening to you today, I thought, wow, Secretary Tepper could have a seat at that workforce skills cabinet to help, again, these two sides of the conversation that you've raised today. And I guess, I just wonder, I wonder from your perspective, how could we be doing better for the workers here and3075 for the businesses wanting to transition, you know?
VANNOSTRAND - Yeah. I just came from a meeting over at EEA with Secretary Tepper today, and we had a presentation from the folks at MassCEC on workforce development. And I'm really impressed with, you know, looking at where we're going. How many people are going to need down the road, where are we going to get them, and what training do they need, and how we how do we roll out those training opportunities? I mean, I think they're really I mean, we spent a little bit of time talking about offshore wind, but it was also, you know, you look at just the number of electricians we're going to need. And in HVAC, I mean, it's just the HVAC installed with all these electric heat pumps.
Then there's huge opportunities, but then you also got to look at it from the, you know, the gas company workers. And that's one of the things, you know, that Zeyneb will talk about it. But when I toured the project out in Framingham, you look at well, what are they doing to install a network geothermal with ground source heat pump? They're laying pipe down the middle of the street and running laterals out to houses, which looks a lot like what LDCs do. And so that workforce transition, which was one of the reasons I think the network geothermal, those demonstration projects are pretty attractive. It's going to be interesting to see how the numbers come out because electrification, it's more electricity. Do you have the same opportunities for the gas company workers.
But if it's a combination utility, then that utility can be involved in retraining the gas workers to be, you know, to be electricians. But it's going to be just making sure that we have those training opportunities to transition that workforce. But, you know, MassCEC is doing a great job. I think we don't have that much direct control over, you know, what we can tell the utilities to do, but I think we are mindful of which pathway, which option is going to do the best at addressing workforce transition issues and that's why I think network geothermal is so attractive. It's so much, a better fit for what our existing LDCs just transform themselves into being thermal companies from gas companies, right?
COMERFORD - That's very interesting. That's a really interesting perspective and I think your interest in it is notable. I agree the CEC folks are doing a great job. I also think that the governor and the Legislature have made a pretty significant commitment to public higher Ed. And if we can translate that down, I mean, I think it's a math problem, right? How many graduates from how many campuses, and how many fields? And, you know, we can, I think, through public dollars, incentivize that, you know, in partnership with, of course, with
VANNOSTRAND - And I think that's what Mass EEC is doing. There's a lot of partnerships. Providing that seed money, providing that overall encouragement and programmatic advice, I think. I mean, I'm just mindful that as you haven't come from West Virginia for 12 years, I was all about the just transition. And I got so disappointed in the political leadership in western. I ended up writing a book called the coal trap, but it's not providing, not recognizing that transition was necessary and just still, you know, we're just going to ride this coal industry into the ground because we could have done so much more. But the political leadership leadership has to step up and say, we're going to have this transition now. Let's manage it. And so, but, you know, the number of coal miners that needs to be, you know, there are fewer than 12,000 coal miners now in West Virginia so it's a big issue in that state in terms of retraining fossil fuel workers, and less, because we have so much opportunity in Massachusetts, so it's much more exciting place to be. But, boy, you look at the amount of investment necessary in these electric sector modernization plans, and just the number of electrical engineers to do all that design and engineering work, you know, we've got to get the programs in place to turn out that number of graduates.
COMERFORD - I agree, I totally agree. And, Madam Chair, I also wanted to talk about what more we could be doing to support municipalities in making the transition, especially to geothermal. I represent some communities that are really actively engaged in going fossil fuel free, and I'll say they're small, but they're scrappy. And, you know, I wonder and I know there are other speakers here, and so perhaps I should just mindful of your time, Mr. Chair, I should not, burden you with this question. But if you had any quick thoughts about what we as a Legislature and you as the DPU can and should be doing, and of course, utility companies can and should be doing to help communities make what is for them, especially smaller ones, a monumental transition. But we want them to make it, and I do agree geothermal is an interesting alternative. The city of Northampton is looking at geothermal right now very aggressively but it's lean and mean, you know, in the city of Northampton. They're no short of vision, and capacity, but they are pretty short on dollars and and the technical skill.
VANNOSTRAND - Well, Zeyneb can help with the technical skills, Zeyneb and and Aubrey Schulman can help with that.
CREEM - They're very good at that, they've been talking to me about that for a long time. SHOW NON-ESSENTIAL DIALOGUE
Yes.
SPEAKER5 - We're not a question this question and save save, chair Van Norstrom the time. But
SPEAKER2 - Yeah. Yeah. Thank you.
SPEAKER1 - Thank you.
SPEAKER2 - Me to start a call my friend.
SPEAKER1 - Thank you.
SPEAKER5 - Thank you so much, mister chair. I really appreciate it.
SPEAKER1 - Thank you very much, chair. Appreciate, the opportunity to hear from you. And again, I'm leaving that door open to come and tell us what we can do to to partner. That's what we wanna do. We wanna partner with you. Okay. Thank you. The the next group, panel 2, a vision for the future in national trend. And now we're gonna hear what we can everybody can do. So, I think, Audrey Schulman goes first. And thank you, Audrey.
AUDREY SCHULMAN - HEET - Thank you. And I got to say it's it's just an honor to go after, Chair VanNostrand. Okay, hold on, I'm going to share screen share. There we go. Hopefully, you're seeing the presentation now. Thank you to, Chair Creem and to the committee for the honor of presenting. I'm Aubrey Schulman, cofounder of HEET. HEET's the nonprofit that came up with the idea of gas utilities moving to networked geothermal. It's a method of providing non emitting renewable heating and cooling, it's safer than gas, and it's predicted to result in lower energy bills than gas. So, in Massachusetts, as part of the gas system enhancement plan or GSEP, the gas utilities are currently replacing over 250 miles per year of old leak prone gas pipes with new gas pipes. The economist, Dorie Seavey, calculated that the total cost to customers from 2022 to the end of the program would be over $34 billion, and that cost would not be paid back until 2098, long after the state's net zero emissions mandates would have been, you know, enacted. So that means that a lot of the pipes being installed today would not be used or useful long enough to be paid back.
The second problem facing the gas system is that electric heat pumps are now more popular than gas furnaces. So, one by one, buildings are moving off the gas system to electric heat pumps. This means fewer and fewer gas customers remaining on the system shouldering the system's fixed costs. It hasn't gotten any smaller or less expensive to operate those pipes. Each person leaving raises the costs for the rest. At some point, there'll be an inflection point hit where heating with gas becomes more expensive than heating with air source heat pumps. From that point on, gas customers will flee faster increasing costs further. In the end, the3579 only ones left are going to be renters and those who cannot afford a new heating system. The Germans call this the last grandma problem, where they imagine one last3587 low income grandma on the whole, you know, national grid system.
That's not going to be a just transition, and it also wouldn't be safe because that last grandma probably won't be able to afford a lot of safety maintenance through the gas workers. So, the future of clean heat is a systematic set of changes to avoid that potential future. First off, it allows the gas utilities to install non emitting renewable thermal infrastructure and to sell that non emitting thermal energy. Such infrastructure could be networked geothermal or other types of thermal networks using heat pumps to pull temperature from bodies of water, the ground, or from waste heat from3630 other buildings or industries. Secondly, it allows them to meet that obligation to serve, that Section 92 that Senator Barrett was talking about a moment ago, to serve a customer with non emitting thermal energy, as well as with gas. It also means that, it would also allow gas utilities to decarbonize whole streets at a time. If these gas and geothermal customers or thermal customers were kept in a combined single rate base, then the ratio of customers to infrastructure is always maintained. That would mean that energy bills aren't rising as customers leave the system. This allows us to decarbonize faster and equitably.
The bill also mandates that gas workers must be retrained keeping their livable pay and benefits. The retraining isn't hard, as was mentioned earlier, because the horizontal pipes for the networked geothermal or thermal networks are exactly the same as the gas pipes. The bill requires that before installing new gas pipes, the utility must consider3711 every other option from advanced leak repair, to installing non emitting renewable thermal infrastructure, to retirement of the gas main while moving those customers to air source heat pumps, any of those options before installing a new gas pipe. The bill requires the department to create performance based incentives for gas utilities to reduce the miles of gas infrastructure per year through the GCEP program.
And as a proposed amendment to the bill, it could require that GCEP funds are increasingly allocated to non emitting renewable energy infrastructure. This would mean that the state would be meeting its emissions targets faster every year and building the infrastructure needed far into the future. It would require, also, that the gas utilities create street segment based phased plans to convert their entire system to non emitting renewable thermal. And, personally, I would recommend that not only the gas utilities have to do that, but they have to do it together with the electric utilities so that those, you know, local electric grid constraints can be dealt with at the same time because networked geothermal and thermal networks would be the most efficient method of transitioning the buildings to electricity. Finally, the bill would stop gas service3802 extensions to new areas, such as what happened in the town of Douglas last year. This is something that Chair VanNostrand discussed also. These pipes generally take 50 years to pay off. They will end up being stranded assets, so let's not install any more of them. And, thank you very much, that's the end. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Okay. Any questions? Thank you. As usual, great presentation. The next, Zaineb. Hi.
SPEAKER8 - Yeah. Hi. Lovely to be here. Thank you so much, senator, and I am going to attempt to share as well. Hopefully, that will go quickly.
And here we go.
Are you able to see that?
SPEAKER7 - Yes.
ZEYNEB MAGAVI - HEET - Okay, wonderful. My name is Zeyneb Magavi and I'm an executive director at HEET which is a nonprofit committed to driving systemic change through an equitable and efficient thermal energy transition, and I'm honored to be here and speaking after such amazing speakers. Thank you, Chair VanNostrand, for that incredible summary. I am tasked with giving us, kind of, high level image of what our future could look like, and I always think that's relevant to start by looking at the past. And this image on the screen is our existing gas system, which was, of course, quite cutting edge in the 1800s. And, you will hear more about several parts of this, but just some quick images to put us in the maps of now. Of course, HEET's been mapping gas leaks since 2015, the3933 methane emissions from this gas system, and, began mapping gas pipe replacement, which was already mentioned, and the billions we're spending on that.
What we really imagine, though, is when looking at this map of the next five years of gas pipe replacement is seeing that each of these dig sites as an opportunity to decarbonize street by street in an equitable way and in a true just transition. And that is why we developed the opportunity to go from gas to geo using geothermal networks, and proposed that in 2017. So I'm going to do a minute of clarification that geothermal, the word, is like the last name of a family of technologies. And it provides stable nonintermittent energy, but we're only talking about the geothermal network, not geothermal power or anything that is hot coming up from far below. This kind of geothermal is build anywhere there is density and the kind of infrastructure that existing gas workforce can build. And I'm going to take it apart for a second so that geothermal network has the buildings, which is what we're trying to decarbonize and using a ground source heat pump, which is the most efficient form of a heat pump.
And then it's got the network in the street, which was already mentioned as being incredibly similar to install to a gas network, and that adds this efficiency of moving energy between buildings. And then it's got the thermal sources and sinks or mostly geothermal boreholes, but this replaces all of our gas fracking and production and transmission system by generating, and using, and capturing local energy. And it adds the efficiency of using and having the opportunity to use a lot of wasted or otherwise, underutilized energy in our communities. And all of those efficiencies together, and I promise there's only two graphs, all of those efficiencies together really give us a kind of system scale opportunity to design this transition as our state is4072 so wonderfully leading the process of, to use the most efficient technology in the correct location and the right time to kind of optimize this path forward.
And the idea of this graph is just that the efficiency of the technology that we electrify a building with determines the impact on the electric grid. And that sounds pretty straightforward but it has an enormous cost impact. And you are4103 going to be hearing about that from a4105 DOE speaker later, Sean Poors. And then if you go out from that giant scale of the whole system, our whole energy system to our own buildings and lives, of course, the cost of, the energy bill for an individual is another critical part that has been mentioned already, and that inflection point and the way that, individual choice drives this change. And this is a projection only trying to look forward and say, well, what are the costs going to be? What we really can say for certain is that today, a ground source heat pump has a lower monthly bill, even though it has a higher upfront infrastructure cost. And so understanding the relationships between these upfront infrastructure costs and the monthly bills, and the impact and the equity, and the access, it's a critical and complex issue, and that is part of why we really want to best understand how to optimize.
And we've launched a research team called the learning from the ground up team, thanks to funding from the Mass Clean Energy Center, that is collecting data from all the projects mentioned, which you are going to hear about from Eversource and National Grid. And looking at how those projects and that data can inform kind of an optimization between all of the different costs and impacts. So I'm going to go back to mapping. And this shows, in the blue stars, the approved gas installations. Framingham will be turned on soon, Lowell, and others. And you'll hear again from the utilities on those, though I love to talk about them, and it's an exciting amount of learning happening on the ground here in Massachusetts, and the whole country is watching. You'll hear more about the whole country watching and all that is happening from BDC and Ania Camargo.
But the orange is a very exciting development for Massachusetts. Again, thanks to MassCEC funding, HEET was able to award 13 project teams for community and technical feasibility studies for a geothermal network, where we are attempting to model the inclusion of community voice, of workforce considerations, design best practices, and data collection and transparency. We have a national data bank launching in June for this technology. And I really see these projects as not just learning, and thankfully, a large number of environmental justice communities, but also as the seeds from which we will grow our future energy system. And we, again, we'll hear more about those all over the country later.
And so that brings us to this last map, which, you know, I wish I had an actual picture, but we're not in 2050 yet. So instead, this is an imaginary future non emitting safe and healthy energy infrastructure. It is a synergistic thermal and electric grid providing us resilience and affordability and a just transition. And to actually put the details on that street by street and understand where we have a geothermal network, where we have air source heat pumps, where we have other solutions over time, we're not just going to have to be collecting the data, guiding regulation and legislation, but also coming together, and including, this potential pathway and all of the beyond gas planning. As the chair has, thoroughly reviewed the regulating, the rate making, the decision making and complexity, and legislative change. And together we can build a successful path to the future. And the QR code is for you to add your name to4345 a launch geoservice map. Thank you.
CREEM - Thank you both. Great presentation. I have a question and perhaps Senator Comerford has one as well. So this was a good lead in because you gave me the question, but the GCEP Working Group and the legislation you mentioned include dozens of proposed policies. Which of the potential legislative changes would be the most impactful in hastening the gas transition, and what are the must have reforms? So you both talked about legislation. I don't know if either one of you want to answer that question.
MAGAVI - I can start with one and then turn it over to Audrey. I think that one of the critical ones is the explicit legislative permission for gas utilities to sell thermal energy, non emitting thermal energy. And I think this is critical because of the challenge, for example, of workforce planning that we have unions and gas workers that are ready to invest in learning and building these, but need some way to have surety that this is a business model they can invest in, and so I think that's a really critical one. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Audrey, did you wanna add or not? That's fine. Okay.
SCHULMAN - Yeah. I would just say go in order of the recommendations, the priorities that I thought. So, absolutely, I totally agree with Zeyneb. That would be the biggest, and there's a variety of others that would help an enormous amount.
CREEM - So we need both affordability and equity. And my understanding is that network geothermal can help prevent a gas system's death spiral so lower income customers wouldn't be in the lurch. I think you mentioned before that the rates are lower, so, but can you explain how that would work?
MAGAVI - Oh, just to be very clear, we don't make rates. The chair gets to try that but, no, what I was saying is that the monthly cost to operate a ground source heat pump is lower, it's lower today. How we determine the rates is still up in the air, of course. And if we determine them similarly to how we look at gas infrastructure payback, then there is the potential and expectation that we could have bills for customers that could be lower. But every single word I've said has a qualification because, of course, there is so much to learn and there is the entire rate making process that is in the hands of the Department of Public Utility. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Oh, Senator Senator Commerford, did you have any questions?
COMERFORD - Well, it's was my question left over from Chair VanNostrand. What more can we be doing to help communities grapple with this? I thought your maps, Zeyneb, were fascinating. And, you know, I'm further west, right? But we're doing the same kind of pipe replacement infrastructure upgrades, different different scale. But out west, you know, let's think of Worcester West, so perfectly half the Commonwealth, there's a lot of interested communities just not having the same kind of capacity or money to make this happen. So how are we, as we envision this and build the workforce transition and all of this stuff, all of the work that you're doing, how are we thinking about helping communities make this leap? And I'll just say right now, willing communities that want4586 to go early, which are the4588 people I represent, so?
MAGAVI - I really appreciate the question. We actually just met with some folks from Northampton yesterday, and it's a wonderful site for a gas capacity constraint project. And I think we are attempting to answer your question on a more thorough basis with the kick start program. However, in New York, there is a program for feasibility studies and that level of engagement that has been ongoing annually and is now up to 50 feasibility projects in the pipeline. In Massachusetts, HEET has launched that kick start with MassCEC funding, but it is a one time only. So we're really hopeful that we can continue that process, possibly turn it over to MassCEC so that there can be the community engagement and feasibility study pipeline for these projects. Because it is a lot of education and learning and also, it's so critical to have community engaged4650 and in the process from the beginning.
And I would say there's one other thing that would4656 really be critical that we have only recently learned in the process of the first project, and that is that there is no driller training school or source of geothermal drillers. And even without geothermal networks, there aren't enough geothermal drillers for the schools that want geothermal. And that is becoming maybe one of the biggest barriers. So we're hoping to launch a driller training for Massachusetts for geothermal and a center of excellence to try to make this a more efficient and inclusive work stream. And I think that's a critical piece is to pay attention to that, workforce element. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER2 - Wow.
SPEAKER8 - And,
SPEAKER7 - can I add for sorry? Can I add a second to that? Sure.
SPEAKER5 - I have a 100 things, but I'll I'll cap it, Mara.
SCHULMAN - I think one of the wonderful things, about utilities, and it's uncommon to sort of start a sentence that way, but I will, is that4718 they exist to pay for expensive4720 infrastructure that we all need to socialize that cost across all of us and over decades. So by having the utilities do this work, then we can deliver energy to everybody that's renewable and affordable, etcetera. And so that's part of the reason why, you know, this bill is so important. And the thing that I think the state could do, aside from letting the gas utilities move forward in this way, is to come up with a method or encourage a method for customer retrofits to be paid for.
And that can be done in a variety of different ways. Everything from potentially having the electric utilities move potentially avoided costs towards those customer retrofits. Because it might be cheaper to pay for customer retrofits on a street than to pay for a new substation, which also would probably be hard to cite, right? And so that's one possible way. There's money from a loan program office that is, you know, millions of dollars available now. And there's a variety of other methods, but I would strongly recommend that the state consider that part because that's the way that we can move forward equitably, quickly, and for the least disruption.
COMERFORD - This is very, very helpful. So can I just ask a clarification? So your kick start program is one year funded, so the pilots, and I saw Deerfield there, of course, I know that you were Deerfield, and that's exciting. The pilot doesn't have any more fun or the exploratory work has no more funding unless the Legislature and the administration work to re up it.
SCHULMAN - Yeah.
COMERFORD - Okay, that's very, very helpful.
CREEM - Now we4829 have to find the money. It's helpful though.4831
COMERFORD - Oh, Madam Chair, I know, but it's helpful to know. And thank you for working with Northampton. I'll say that Eversource has also come to the table as a very well informed interested party. You know, I'm hopeful that we can help rural communities explore this because it is a different animal than a Framingham. You know, there's different challenges, different opportunities, I think, for us to, you know, lots to learn from. And then the drilling school is actually thrilling, like thrilling and interesting. UMass Amherst is, as you probably know, is trying to do a massive geothermal project and their mandate is to teach and learn. And I do wonder about reaching out to UMass Amherst because that is what they want to do. They want to take their whole campus geothermal, and then tell everybody about it, right? Teach about retrofitting these crazy old buildings. And they probably would be super interested in training drillers, right? Because how many boreholes do they need? A lot. Anyway, thank you, Madam Chair. Thank you both very much.
CREEM - So I just have one more, so it sort of follows. We've talked a lot about transforming gas companies into thermal energy companies. What role would other kinds of companies or even municipal energy entities be given in the transition?4911
SCHULMAN - I hope that, one of the things that would be lovely is if we had a4917 thermal marketplace in the future so that municipalities could potentially install what they wanted now and then get ongoing revenue stream for the infrastructure that they've already put in, the boreholes, etcetera. I think it's, is it Troy New York that's doing that with National Grid?
MAGAVI - It is Troy, it is Troy, yes. It's a wonderful model and this is part of what this learning phase is about. We know the technology works, but there's all kinds of ways to tweak the distribution of benefits. And so in Troy, New York, National Grid is building the infrastructure in the street and the city is investing in the borehole field and then selling the thermal energy to the utility. And that is a really wonderful way to think about the idea that once we've built, as Audrey said, a thermal network, we've really created a thermal market. And all of these resources in communities become assets that can be sold on to the market. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Okay. Thank you. As usual, thank you for your presentation. We're gonna move on to the next group. The next panel is network, geothermal oh, no. Sorry. Anya, I didn't oh, I'm I'm so sorry.
SPEAKER6 - No problem. No problem. No worries.
SPEAKER1 - I I missed you. No, please, Anya. Go ahead. He's now. So we're still on a vision for the future in national trend. Could never forget you. Sorry. Okay.
SPEAKER6 - Thank you. I'm trying to share my screen. Can you see that or not yet?
SPEAKER1 - Yes.
SPEAKER6 - You can. Fascinating. Okay. Because I can't
okay. Well, so, good afternoon,
SPEAKER7 - Cherokee. And you should5032 put it in slideshow, mode if possible.
SPEAKER6 - Thanks. There we go. Better? Okay. Alright.
ANIA CAMARGO - BDC - Good afternoon. I'm the thermal network senior manager of Building Decarbonization Coalition, which is a national nonprofit that unites stakeholders to decarbonize buildings. So I will be providing a sort of a national perspective of what's going on with the gas transition. And first, I'm happy to report that, thanks to your work and our pilots, and the DPU 20-80 order, Massachusetts is definitely leading the country. However, states are working really, really hard to catch up and to pass. So here is what's happening nationally. Like Massachusetts, states across the country have serious climate commitments and are trying to figure out how to decarbonize as quickly as possible. Not surprisingly, this has led to 13 states and the District of Columbia to open future of gas proceedings similar to ours and at the same time, states are pushing really hard for electrification.
So last fall, Massachusetts was one of 25 states that committed to quadrupling the number of installed heat pumps to 20 million by 2030. And in February, it was one of 9 states that agreed to make heat pumps 90% of residential HVAC sales by 2040. So what does this mean? It's been primarily an appliance by appliance or a house by house approach with lots of different actors. This unmanaged approach is super costly because the gas system has continued to be invested while people are adding heat pumps. And it means that those left on the gas system the longest are those who can't afford the new heating system, which is what Audrey was talking about. So what we really need is a neighborhood scale coordinated, managed transition that's going to help ensure equity.
And, there are primarily two approaches as were proposed in the DPU 20-80 order where the gas appliances on a street can be replaced with electric ones. And then the heating and the cooling, would be provided by either air source heat pumps, which you can see in the left diagram and this is sometimes called targeted electrification or an electric network diagram or by network geothermal, which is on the right, and it's also known as thermal energy networks. And this targeted electrification is already in practice in California by PG&E. They have done over 100 projects and retired 22 miles of pipe. And you can see in the picture that it would have cost them 1.2 million to replace the gas pipe. And they, instead, electrified two homes for the cost of a 156,000. So they saved the rate payers $1 million by electrifying those homes.
And the main issue raised was what Chair VanNostrand brought up and was that they are asking for a change amendment to the obligation to serve so that the utilities are mandated to provide heat and not a specific energy source like gas. Because if one of those two homes says, no, they don't want to go electric, they want to stay on gas, then the ratepayers would be on the hook to pay the whole the extra cost of replacing the pipe. So on the second way is thermal energy networks or network geothermal, which we've been talking about. This approach is gaining incredible traction across the country, and so here's a map of legislation. Five states have passed legislation allowing or mandating the gas utilities pilot thermal networks with Washington passing legislation just last week. And New York and Colorado are really interesting cases because they added important labor provisions that include5267 the existing utility workers in that transition.
Seven other states, the states in green, are currently proposing similar legislation that we're hoping will pass. And then Massachusetts is striped because, as you've known, we've passed legislation that allows these pilots but we now have the future of clean heat bill, which is key for us to be able to really advance network geothermal here. So this technology is not new, the states in green have operating geothermal systems like the ones being proposed here in Massachusetts. The oldest one is in Colorado Mesa University in Colorado, which was built in 2,008. And then the states in blue are states where the utilities have proposed pilots. As you know, Massachusetts has approved five pilots and two are currently being installed. Minnesota has proposed two and New York has actually filed 13 pilots.
And as you heard a little bit about Troy, New York, they're exploring different designs, energy sources, different models, and we're going to be able to learn a lot from the different things that they're exploring there. And then the states in orange are where there are site feasibility studies currently being conducted. 11 of these are federal Department of Energy grants. So now I'm going to move on to utilities. Utilities are also really, really interested. States in blue are for Utility Network Geothermal Coalition. There's 23 utilities. And what this means is that at least one utility that operates in that state in blue is in this coalition and they're exploring thermal networks. Many of these people came5368 to visit us in Massachusetts to see what the work in Framingham. And so moving forward, this is, I loved your question, Senator Creem. What can we do?
Number one is funding. Going back to what we were just talking about, the funding for pilots, I mean, for towns across the Commonwealth to be able to look at thermal networks. And then on the legislation, the things that I'm hearing and I'm seeing across legislation, across the country is really what's needed is to allow utilities to become thermal, to sell thermal energy, amending that obligation to serve so that one house doesn't, basically, affect the whole transition in a neighborhood. And then very important is for us to include the existing labor force in this transition and in our language in the bills. And then finally, the joint and electric planning that Chair VanNostrand raised. And that is it for me, thank you so much. SHOW NON-ESSENTIAL DIALOGUE
I can stop sharing. Okay.
SPEAKER5 - Oh, Lidre Cream. Your mic may be off.
CREEM - Yep. So I have a question for Ania, sorry. So for instance, in California, who owns and pays for the electric infrastructure and how are the costs recovered?
CAMARGO - So actually, that's interesting. PG&E raised this issue. They pay for all of the changes to electrify the home. They paid all of the utilities, all of the upgrades, everything for decommissioning the pipe, the whole works. The thing that they said5472 that was a bit of a bummer was5474 that they had to pay for those costs out of their operating budget versus their capital budget. And so they couldn't depreciate it over 50 years the way they would a gas infrastructure. And so for them financially it wasn't as attractive. And so they would like to see that these changes, if you're going to go in and do neighborhood scale transition, that you're really trying to depreciate it over a longer period of time so that the costs aren't ballooning and so that the incentives are aligned with the utility business model.
CREEM - And how are other states addressing the obligation to serve problem?
CAMARGO - So Washington DC was the first in their bill last week to change it. Most of the bills right now that are being proposed are asking for changing the obligation to serve. And Washington state, last week, what it changed is that, if a gas company is allowed to sell, thermal energy it's through thermal energy networks, and that's how the bill was changed and language too.
CREEM - Okay. And do other states have programs similar to GSEP?
CAMARGO - Many have programs similar to GCEP interestingly, and the bills we are leading the way on our allowing, GCEP funds to pay for thermal networks, you know, that passed in the 2022 Massachusetts, so that has not passed in any other state. And I actually, having read the bills, I haven't seen anyone else try to pay for them that way, but they do prioritize that they would like thermal networks in locations where there is leak prone pipe.
CREEM - And these electrification neighborhood scale, it isn't in Massachusetts.
CAMARGO - This is a question for the utilities. I imagine that they may have done some of these, I don't think it's a known program. Like PG&E, this is an established program where they they are really looking at, okay, where can we, it's a financial decision. If it costs more money to, we don't do that. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you.
SPEAKER6 - No problem.
SPEAKER1 - Senator cut Senator for Cabbra first. If not, we'll move on to Sean.
SPEAKER5 - No. Let let's move on. This was very, very
SPEAKER1 - Okay. Sean. Chair.
SEAN PORSEE - DOE - Thanks, Chair Creem, and, yeah, really pleased to be here to testify on behalf of the US Department of Energy's work to quantify the impacts and the benefits to a future US clean energy system, through the Mass deployment of geothermal heat pumps or GHPs. So I come from a part of the department, we are focused within the geothermal technologies office. I run the analysis program for our office. And when we and the analysis shop set out with our5646 national laboratory partners to pursue this5648 topic, the value of geothermal heat pumps, we already knew about their intrinsic benefits that they offer to decarbonizing, building, heating, and cooling across the US. Audrey, Zeyneb, Ania, they've all done a wonderful job sort of narrating to that fact.
The resulting analysis in the report that we came out with, also known as the GHB impacts report, was released last December. And what we found was not only do GHPs offer that intrinsic benefit to clean heating for buildings of all sizes and shapes, there is a massive value story to tell for the national grid cost reductions and decarbonization technologies, and the proceeding portfolios that the US can plan towards and better accelerate towards with the use of GHPs. So the5694 report considered three distinct modeling scenarios through 2050. We included, within those scenarios those that looked at decarbonizing with and without GHPs. And what we found is that the most significant impacts clearly come from adding geothermal heat pumps to the nation's decarbonization plans. If we achieve a future of mass deployment of GHPs, we can deliver $5 trillion in value to US energy consumers through 2050.
How is this value derived? It is done so through GHP's intrinsic efficiency to electrify heating and cooling across all climate zones. Something we were, I think, pleasantly surprised to find is that in almost every climate zone, whether it be the northeast to the southeast to the southwest to the northwest, you found that GHPs were a competitive technology from an efficiency standpoint, regardless of the climate that they existed in. When you scale that efficiency to a mass deployment effect, what happens is you greatly reduce the generation capacity, the storage infrastructure, the transmission expansion necessary to meet our nation's decarbonization goals. This is largely because GHPs lop off the peaks of what our electricity system will require in the future towards a mass electrification approach. So I want to talk a little bit about some numbers.
When I say that we are looking at some significant benefit opportunities, we're looking at possibly, you know, the potential to eliminate up to 43,600 miles of new interregional transmission infrastructure across the United States through 2050. This is equivalent to 44 SunZia in transmission projects, which is a prominent interregional wind energy transmission project in the US Southwest. We are also able to reduce up to5813 410 gigawatts of nationwide generation capacity. Reducing this overall need for generation capacity bolsters our ability to be seasonally resilient. We know about the summer peaks, we are becoming more and more cognizant and aware of winter peaking creations under mass electrification scenarios. Geothermal heat pumps, GHPs offer our ability to be resilient under all seasons.
And finally, along the way, we're removing more than seven gigatons of carbon. That is equivalent to all US emissions that were produced in 2022. It's important, and I want to point this out, that the findings that had assumed a linear GHB deployment rate. In other words, we did not consider technology advancements, cost improvements, supply chain improvements, a lot of the accelerating factors that a lot of the folks here are talking about today, certainly could increase that rate and scale of GHB deployment. So what we found in the report could certainly be considered the floor of the opportunity from a nationwide basis. I do want to zoom into the state of Massachusetts for a minute. The study clearly demonstrated large carbon reductions that are on hand and opportunities that can result from switching from traditional heating systems to GHPs. When we considered electrification, there could be some modest load and distribution reductions. You are switching from a non electrified system to an electrified system, so you're going to have an increase in that load.
But when you switch from other electrified heating technologies like an air source heat pump to GHPs, we found a 30% reduction in the load and distribution demand to meet Massachusetts contribution to our nationwide decarbonization goal as part of this study. In fact, Massachusetts ended up being one of the largest nationwide beneficiaries in making this switch. So the modeling results, the report, what we demonstrate here is there is an important value contribution GHPs can have to Massachusetts future as a decarbonized economy and grid. It's important to note we still need to build a lot of infrastructure to meet the moment here, but we are easing our pathway to success by investing in GHPs. That is really what the study tells, and that's the call to action I'd love to leave you all here with today. And with that, I'd like to take any questions you may have. Thanks for the time. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you, senator Comfort. Did you have anything?
SPEAKER5 - I don't. I'm just grateful for the testimony. Thank you.
SPEAKER1 - Mhmm. Thank you. And, hopefully, you can bring more money to Massachusetts. We could use that too.
Everybody would say that. Right? Yeah.
SPEAKER4 - Indeed. We're all we're all happy for our appropriators to make contributions.
CREEM - Right, just one question. Your model evaluated network geothermal that was paired with weatherization. Is that true?
PORSE - Yeah, actually, so we actually did not consider network geothermal. I think it's a good distinction to make here. The models that we considered did absolutely incorporate weatherization because that is a best practice that any ground source heat pump manufacturer and installer would provide. But we considered single building GHP installations. I think if you're considering and future work that we want to do is absolutely leaning into that network geothermal opportunity for this analysis. Again, I think you could see an increase in the efficiency, cost reductions, mobilization increases that, again, could lead to this, what we found in this initial phase one of our results, to be the floor of the opportunity.
CREEM - So you thought that without weatherization, we could lead to cost savings or emission?
PORSE - Well, I think it's, yeah, so they are certainly done in tandem, right, as a best practice. I think from a cost of benefit standpoint, they both offer the opportunity to lower your bill, lower energy consumer bills. I think from a from an overall investment standpoint, basically, what we're saying is that it's smart to do both if you want to maximize the benefits of a GHP system. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Okay. Thank you very much.
SPEAKER4 - Thanks so much.
SPEAKER9 - And I
SPEAKER1 - think that continues that panel. Panel 3, network geothermal demonstration projects. And I think the first person is Eric Bosworth.
Thank you.
ERIC BOSWORTH - EVERSOURCE - Afternoon, senator. Thank you for the chance to speak today. My name is Eric Bosworth, I'm the manager of Clean Technologies in the gas business here at Eversource. And I've had the pleasure of overseeing our network's geothermal pilot that's been going on in Framingham for a little while here. So I was hoping to just quickly give a little bit of background and current status on where we're at with the pilot today and hopefully share, you know, some of the lessons we've learned along the way and things that we can hopefully use to inform future deployment of network geothermal systems. So quickly on the background here, I'm sure as folks know, we began the project back in 20216118 with feasibility and site6120 selection work. We moved through detailed design and engineering, and then ultimately began construction on the loop in Framingham last June.
As it stands today, all of the buried assets have been installed. So our mains and services are all in, our three bore fields are all drilled, and we are finishing up work on the central pump house, which acts as sort of the heart of the system as well as moving into building conversion work here that we're expecting to take a few months before we're fully live on the system. Jumping into a few of the initial lessons that we've learned, the first thing that I really wanted to highlight going through this process is that municipal cooperation and buy in is absolutely key. The city of Framingham has been a wonderful host for the project and even things that seem routine for other utility work like permitting and citing and figuring out where you're going to locate these bore fields. When you have a cooperative municipality, it's just that much easier and you have that much higher a chance of success.
Secondly, similarly, customer engagement is extremely important. I can't emphasize enough how much it helped to get out into the community, speak with the potential participants on the pilot, and really educate them around what ground source heat pumps are, what networked geothermal is, and why we as a utility were looking to demonstrate the technology in their neighborhood. Once they had that information, they became much more comfortable with participating in the pilot and ultimately have become, you know, great supporters of the project thus far. Thirdly, I would like to recognize the efforts and the support from some of the NGO groups, specifically HEET. Having partners in that space that can get out and really bring key decision makers to the table for productive conversations has been tremendously beneficial to our work and our project.
So I think from a community standpoint, you know, those three key groups of people are very important to a successful project. And as I said, doing more of these in the future. Looking6251 at it from a more technical perspective, the news thus far has6255 been very positive. We're predicting that the system is going to perform as well as or better than we had initially hoped in terms of energy usage, emission savings, and ultimately customers' energy usage within6268 their homes. And so, obviously, we still need to start it up and actually6272 collect the data of it operating. But today, you know, they have either met or exceeded our expectations from a technical standpoint. On that similar vein, the impact on the electric grid is also looking like it's going to be very positive within the neighborhood.
I know previous testimony has touched on some of the impacts that we can have on the overall electric grid and build out as we electrify our building stock. And in this case, we're actually going to see a net reduction on annual electricity usage by converting all of these buildings in Framingham. I'll caveat that with the fact that the Framingham Housing Authority is currently on electric resistance heating, which is one of the major contributing factors. But I think it's extremely important to show that you can take an entire neighborhood, move it over to an electrified solution, and not necessarily have to build out any new wires or transformers. And I think we could potentially use that model throughout Massachusetts in the future if we pick our sites carefully.
Moving on to a few of the challenges that we've seen throughout the project. First and foremost, it shouldn't come as a surprise to anybody that building conversion work is challenging. And, you know, we've definitely found that through this process. Massachusetts has an extremely varied stock of buildings and housing, both from an age standpoint and from the existing systems that are used to heat our homes. Everything from baseboard hydronic, to steam, electric resistance, forced air furnaces. And so every building that we go into is almost like its own little puzzle to solve to figure out exactly how we can get a ground source heat pump in there and the best way to condition that space. So it's a challenge that we're working through. One thing I wanted to highlight around it, though, is that this is a challenge we're going to face no matter the electrification technology. This isn't something unique to ground source heat pumps, air source heat pumps as well involve an envelope conversion.
And so as we move forward with decarbonizing our building stock, we really do want to think about how we approach those conversions, how we potentially control the costs of them, and, you know, what the plan to address these in a timely manner is because it's going to be challenging. Secondly, in terms of challenges, workforce development has also been highlighted here on this hearing. I'd also like to reiterate that, you know, while we did find good qualified workforce for doing this project, a wider rollout of ground source heat pumps and networks geothermal specifically, you know, would need more drillers, more HVAC technicians, more people trained and willing to do this type of work.6437 And I think we should keep that in mind if we are going to really rapidly increase the number of these that we install. The last final thing I wanted to say on lessons learned from the project is just around incentives and funding. You know, the federal IRA legislation has been extremely helpful and important in terms of controlling costs and incentivizing the ability to put these systems in.
I'd just like to reiterate that, you know, similar incentives, similar subsidies to really get these systems off the6470 ground and going will probably be important6472 moving forward. An example that I like to use with this network's geothermal loop that we're putting in is that if you took a single substation and dropped it into a neighborhood and connected up the immediate neighborhood around it and then divided the cost of that system by the number of customers that you put in, it would be extremely high. But as you build these out and you scale them, you get efficiencies both on the construction and labor side of things, as well as the marginal cost per customer goes down very6503 rapidly. So I just wanted to leave you with that and say that, you know, this is the first, hopefully, of many. And as we start to build and scale these networked geothermal systems, the cost per customer will come down rapidly. And hopefully, we can get to a position where, you know, we are not net increasing the burden and energy costs on our customers. So with that, perfectly happy to take some questions or clarify anything that I may not have touched on. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER5 - Senator Commerford, anything? Sorry.
COMERFORD - No, no. Thank you. Eric, I don't know whether you heard me earlier. I6543 recognized that Eversource was on the ground in Northampton, you know, providing some, I think, really important counsel about the city's hoped for transition.
BOSWORTH - Yep. Absolutely. And and looking forward to continued conversation, senator.
COMERFORD - Yeah, yeah, I really appreciate it. I think it's again, I think one of the things I've said a couple of times is that a small community is really different than a big community. And we need them all to do this and so I'm interested in how we get the small ones enough capacity and help. So thank you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Okay. We're gonna move on to,
Juliet. Thank you. To research at National Renewable Energy Laboratory.
SPEAKER11 - Yes. Thank you. Let me get I have a few slides.
Let me know if you can see them.
SPEAKER1 - We're good.
JULIET SIMPSON - NREL - Great, okay. My name is Juliet Simpson. I am a mechanic engineer at the National Renewable Energy Laboratory, and I do research on these geothermal networks. So I'm going to give some background more on the research and modeling efforts happening here. Now I work at NREL, which is one of 17 of the national labs across the United States. Our main campus is located in Golden, Colorado. NREL is a Department of Energy National Lab under the Office of Energy Efficiency and Renewable Energy, and we're the primary lab for renewable energy research in the United States. Now, NREL is an applied research lab, and across NREL, we cover a wide range of renewable energy topics with just a few listed here. Now I specifically work mostly in the geothermal program as part of the Thermal Energy Systems Group. And NREL is working on HEET's leg up project funded by MassCEC, as we've heard discussed, by many people now. And we're working with a number of other institutions on that project to6664 study these geothermal networks.
Now, NREL brings expertise in modeling and technoeconomic analysis to this project and our goal is to create a model for fast simulation of these geothermal networks that's free for others to use and then simulate the geothermal networks, and, as a final note, investigate some grid impacts as well. Now, the geothermal networks overview has been kind of discussed a little bit. I'll still give a little bit, so that we're on the same page. Many of us are familiar with geothermal heat pumps shown on the left hand side. These provide heating and cooling to a single house via a heat pump in a loop which exchanges heat with the ground. While a geothermal network brings together many buildings shown on the right hand side here and potentially other heat sources as well and links them together with a thermal loop and then connects them with boreholes to exchange heat with the ground.
So this uses many of the same major components as a single home geothermal heat pump, but it shares a lot of that infrastructure and heat across many buildings in a community. Now, as we think about these networks on the leg up project, my job has been to create a model for the geothermal network that will allow us to track the movement of heat throughout the system and the use of electricity over time. So I've shown here in a simple schematic the major components that I'm capturing in my model, which include the building loads, the thermal loop, which connects those loads together, the borehole fields, and then your central pumping station. So we want to be able to better understand how the network operates and how6759 changes to the design can impact the total electricity usage of the network.
Now, this is the component that I'm working on but there are many other components coming together in this project. And just a few of those highlighting here, UC Berkeley is working on gathering data from the subsurface using distributed fiber optic sensing, and Lawrence Berkeley National Lab is working on subsurface modeling, which can help us to better understand the impact of more complicated underground effects like groundwater flow. And together, all of the researchers in the leg up project are trying to better understand the operation, performance, and impacts of these geothermal networks. Now, while none of the components of these geothermal networks are new technology, there is still a lack of information on how these components operate best together as a system.
So from that angle, we're working to be able to model these pilot installations and compare models against data from the installations, and then we can start to consider changes to the design, the operation, and control. And finally, we hope that we can learn from these initial demonstrations and these modeling efforts to improve the performance and reduce the cost for future installations. And finally, I'll note that at NREL, this is becoming an increasingly popular research topic, and we're working on multiple projects in this area with just a few noted here. And I will highlight as just one example, on the leg up project, we're not planning on completing a statewide potential study until more data has been collected, But I'm currently working on another project at NREL to do a more high level assessment of national potential, including Massachusetts, for these network6861 geothermal systems. We expect initial results later this year. And overall, I'm excited to be part of this impactful research area, and I'm happy to take any questions. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. I senator Cunford Wood on this. Yep. Thank you very much. The next person, is Juliet Simpson, Research National Renewable Energy. No. Joel Wolf. Sorry. How could I forget Joel Wolf? Deputy administration for Sustainability and Capital Transformation, Boston Housing Authority. Good to see you again, Joe.
JOEL WOOL - BHA - Good to see you and good afternoon, Madam Chair and Senator Comerford, as well. Thank you for the opportunity to testify before the committee today and for your longtime support of public housing communities. As you noted and for the record my name is Joel Wool, I'm three service deputy administrator at the Boston Housing Authority. BHA is thrilled to be selected as the 2nd networked geothermal pilot site in National Grid territory. For a little background, the BHA pilot includes seven buildings and 129 units at the Franklin Field Community in Dorchester. More specifically, it's seven federal public housing buildings, three story brick walk up structures built in 1954, comprising about 30% of the units on-site. The site is very special because it's perhaps the only or if not one of the only that has both federal and state public housing in the same location. It's actually three contiguous public housing developments.
Interestingly about this pilot, and this was spoken to a bit earlier in terms6963 of joint gas and electric planning, Eversource is the electric service provider for all of Boston and National Grid is the gas service provider for all of Boston except for Hyde Park. So in Dorchester, again, we have Eversource6978 as the electric provider, National Grid as the gas provider, and by nature, this means that coordinated planning must happen. As we're working most closely with National Grid on the project, I do want to thank their team for being flexible and responsive during the project to date. It's also worth just talking a little bit about the energy transition at the site of BHA's portfolio. At Franklin Field over the past decades, the BHA has shifted first from oil to gas and subsequently to more efficient gas systems. At the seven buildings in question, the BHA had been planning to decentralize a final old centralized gas boiler loop when in January of 2023, the mayor of Boston directed the Boston Housing Authority to go fossil free.
At such time, BHA canceled a multimillion dollar gas decentralization project and began planning for electrification. We were in a process for a number of months to see if we could be invited into the geothermal pilot, and we're successful in that endeavor, in collaboration with National Grid. So the project at Franklin Field is currently in design. As noted, the systems are currently heated by gas, the buildings are currently heated by gas. BHA is therefore seeking to coordinate its own plan and construction activities to do updates to the interior of the buildings, efficiency work through MassSave, and work with the partner utility. In order to accomplish this, the BHA is bringing HUD and other resources into the project as significant investments are necessary in order to upgrade electrical capacity, enhance ventilation on doors, and install deep efficiency measures which are not covered under the MassSave program.
And I'll just say that again in a different way. In order to make the most out of thermal energy networks, and to ensure low and moderate income communities can participate, resources need to be directed towards improving energy efficiency in multifamily rental properties, particularly much older properties like those at Franklin Field. This is an area where we think the state could be of continued support and perhaps provide some direction. While we've benefited tremendously from energy efficiency programs over the past years, what we need to do now, in order to switch off of gas and to electrify, in order to build systems that are sized properly and in order to build buildings or retrofit buildings such that they are both efficient and healthy, we really need to put substantial resources into older multifamily buildings including our public housing stock.
At Franklin Field, the BHA is seeking to construct this pilot and would like to scale it as feasible. This means that not7147 only are we hopeful that geothermal is authorized as a way of the gas companies proceeding, but that there's a pathway after we build this additional pilot to continue expanding at that side of the neighborhood as may be appropriate. Whereas a large portfolio owner, we are also interested in exploring other properties both in National Grid and Eversource Gas territory in the city of Boston, we know that not only are other housing authorities participating in the existing pilots, but many more are interested in both networked geothermal as well as, as I'd referenced, sort of a more targeted, directed, resourced, and, I'll also add, perhaps a regionally balanced energy efficiency program. And while we benefit from the concentration of entities delivering energy services in the eastern part of the state, we also are well in contact with housing authorities across the state that don't share in that. So I'll just, end there. And certainly, if you have any questions, happy to engage. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Any questions?
Thank you. Make keep it going. Hopefully, it'll be everywhere in the state. Great. Thank you. The next panel is a local advocates and stakeholders. And I think we're gonna start with Kyle Murray.
Kyle is the director of state program implementation, Acadia Center. Hi.
KYLE MURRAY - ACADIA CENTER - Hello, Chair Creem, members of the committee. My name is Kyle Murray and I'm the director of state program implementation and the Massachusetts program director for Acadia Center. Acadia Center is a nonprofit research and advocacy organization that works to advance bold, effective, and equitable clean energy solutions. The organization has a long history of advocacy for creating a fully integrated flexible low carbon energy grid. Addressing these issues will help the Commonwealth advance a future of lower ratepayer costs, more local jobs, fewer greenhouse gas emissions, and better public health. Unfortunately, I'm going to be a little bit repetitive with some of the things that the chair was mentioning, earlier today, Chair VanNostrand. As all of you are aware, in December, the DPU issued a groundbreaking order in docket 2080. This order focused on the role of gas utilities as the Commonwealth sets out to achieve its overarching climate target of net zero emissions by 2050, and was the culmination of more than three years of activity in the docket.
It is an impressively broad and groundbreaking order and the DPU should be incredibly proud of its work. However, such a result was only achievable thanks to an enormous amount of work and foresight from additional stakeholders, including environmental advocates, the AGO, governor, DOER, and others. In the most basic terms, the order represents a pivot point in the state's strategy for decarbonizing the building sector, which was responsible for 36% of Massachusetts' carbon emissions in 2020. It puts in motion a plan to transition away from natural gas distribution system that utilities operate today. However, it's important to note that this order only signals the beginning of our commonwealth's path to wean itself off of natural gas, not the end.
In my mind, I frame the results of this order as really falling into three buckets. The first, activities which the DPU has the authority to dictate and did so quite clearly. These include aspects such as the effective prohibition of RNG and hydrogen for home heating. The second, activities which the DPU has the authority to dictate, which will require further processes or implementation. These include aspects such as coordinated gas and electric planning and addressing energy burden. The third is activities on which the DPU cannot act unilaterally and will require legislative or other agency, actions. While one and two are incredibly important, and I would cover them at length if I had an hour or two, today I really want to focus on number three, as we are in front of members of the Legislature.
As part of this order, the DPU helpfully identified what it considers to be some of the most important needed changes outside of its control. I'm going to highlight a few of the top priorities that they identified that we also agree with need to be top priorities. For example, Section 3 of the Gas Leaks Act mandates that the department review and approve proposals designed to increase the availability, affordability, and feasibility of natural gas service for new customers. This section was enacted in 2014 when the concept of transitioning the Commonwealth off of natural gas was not as widely accepted as it is now. This provision is plainly inconsistent with the Commonwealth's greenhouse gas emission reduction targets and climate policies, and the DPU recommends repealing this section, which we agree with.
Similarly, in act relative to gas leaks also codified the uniform gas leaks classification and gas system enhancement plans. That's Chapter 164, Section 145. The GCEP program was developed to accelerate the replacement of leak prone infrastructure by 2039, and it is estimated to cost around $40 billion, as Audrey noted earlier and chair I am sure you are very well aware of. While well intentioned at the time, it is clear that with the benefit of hindsight, there could be better use of this funding, like electrifying the neighborhoods or devoting it to geothermal systems. The DPU did not provide specific recommendations on the changes needed to this statute, and instead deferred to the then forthcoming recommendations of the GCEP Working Group which were released on January 31, 2024.
The DPU also notes that it's not clear that it has the statutory authority to prohibit the addition of new gas customers. The DPU notes that it appears that it may be able to address this system through existing policies such as the DPU's longstanding policy that an LDC need not serve new customers in circumstances in which the addition of new customers would raise the cost of gas service for existing firm ratepayers. So while Acadia Center agrees with the DPU's interpretation on this matter, we also7551 know that updating statutes to clearly clarify the DPU's authority would be beneficial7557 on this subject. This could also include Chapter 164, Section 92, as Senator Barrett alluded to earlier.
Those are three of the top priorities that would really require legislative action that I think coming out of DPU Order 20-80. Chair Creem, we're also very supportive of the future of clean heat. And as many have noted i put the push in for additional funding for all of these measures because, you know, I'd love to recommend wonky solutions, but at the end of the day, a lot of this is just going to take a lot of money, and, you know, we need to be looking under the couch cushions everywhere to see where we can find it. Thanks again, and I'm happy to answer any questions on this. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Looking under the couch, finding money, you'll probably see7609 a lot of other people we know.
I don't have anything, senator Comerford. I think we're good. Thank you so much. The next speaker is Liz Anderson, chief of the energy ratepayer accuracy division of the AG's office. Thank you.
SPEAKER9 - Hello, Senator Creem and Senator Commerford. Thank you so much for having me here. I do have some slides that I I will share if I can figure out how to share them. I'm always, struggling with that.
So
let me see if that works.
SPEAKER7 - Do you
SPEAKER8 - see the slides?
SPEAKER1 - Yes. Perfect.
SPEAKER9 - Now woah. Now I've lost all of my other hold on 1 second.
SPEAKER1 - Sorry. A nice picture, though.
SPEAKER9 - But you have it. I Okay. Great. Well, that's that's the idea.
SPEAKER1 - We're good now.
ELIZABETH ANDERSON - AGO - Okay. So thanks again for having me. I wanted to first try to give a little overview of our division. And do you see that slide that says what is ERA?
CREEM - Yes.
ANDERSON - Okay. Great. So our division was created, by statute, to be the ratepayer advocate for customers of Commonwealth's regulated electric, gas, and water companies. We participate in proceedings at the state, regional, and federal level to represent ratepayer interests. So thank you for having me here today to talk about some of the AGO's priorities with respect to the ongoing transition away from gas into a clean energy future. And the slides that I have here today have a lot of details on them. I know I only have a few minutes here, so I'm not going to be able to get to all those details, but hopefully, you can look at the slides and come away with some of the specific details that we're recommending on some of these issues.
As we've discussed, the DPU's 20-80 order was groundbreaking, and it sent clear directives to the gas utilities that they need to move away from a business as usual approach, and provided a regulatory framework to do so. As the ratepayer advocate, our office is going to continue to push the LDCs to abandon this business as usual approach and pivot to proactively planning for the future of the gas system. This more proactive approach will help reduce overall costs to ratepayers. With the coming gas transition, the gas system enhancement plans, or the GSEPs, must be phased out to reduce cost to ratepayers. Significant GSEP investments may have been more appropriate when the expectation was for a future where gas use was going to remain steady or even increase. That is no longer the case in Massachusetts. The state's clean energy goals call for a move away from7780 gas to electrification, as articulated7782 by the DPU in its 20-80 order.
GSEPs will cost ratepayers billions of dollars if left unchanged. As part of the GCEP Working Group report, our team suggested changes to the GCEP statute, including the ones that you see on the slide, to align legislation with the Commonwealth's climate goals. One critical revision is to the provision that allows for accelerated cost recovery. This essentially incentivizes the gas utilities to invest more money in the gas system. We suggest phasing out accelerated cost recovery over a six year period so that it is gone after 2030. Our team is also looking at how to leverage the energy efficiency programs, commonly known as MassSave, to decarbonize the building sector in the most cost effective way for ratepayers. We want residents who rent their homes to have access to the same benefits as homeowners.
We also continue to strongly support weatherization initiatives, which will ensure reduction of overall costs. Finally, we are looking for a near term focus on converting delivered fuels customers to air source heat pumps. Successful decarbonization of the building sector and our economy, as a whole, however, will depend upon manageable electricity costs. The AGO will continue to advocate for lower costs, cost controls, and cost effective7865 investments in the clean energy transition to ensure bills stay manageable and do not discourage electrification. But I think it is worth understanding the scope of the costs that are facing ratepayers in the coming years. Residential customers in Massachusetts currently pay significant sums each month to fund the energy efficiency programs. This is just one component of ratepayers' overall bills.
Indeed, Massachusetts ratepayers already pay one of the highest all in electricity rates in the country. As we continue to pursue clean energy initiatives, including building decarbonization, we need to also prioritize manageable energy bills. In the DPU's energy affordability proceeding, our team put forth several recommendations to better tailor assistance programs to reduce energy burdens. But there is only so much that can be done at the DPU on this issue. Ratepayers, at the end of the day, still have to cover the cost incurred by the utilities to implement the clean energy transition and maintain reliability on their systems. The Legislature should consider explicitly allowing for assistance programs to expand to moderate income customers.7935 Policymakers should also explore creative ways to advance the clean energy transition without increasing ratepayer costs.
Finally, one of the key elements of an equitable clean energy transition will be meaningful participation in energy proceedings at the DPU and Energy Facilities Citing Board. Our team put together a framework for an intervener compensation program that will help fund participation by community groups and others impacted by proposals who would otherwise lack the resources to intervene. The key points of our framework include those listed on this slide. We are hoping to provide further details in the coming weeks as we continue conversations with stakeholders and the Legislature on this issue that will ultimately require legislation to implement. Thank you for your time today, and I'm happy to answer any questions.
CREEM - Thank you for your testimony. First off on, new proposals that you need the legislative help, we'll appreciate hearing back from you if you have some issues that you think we certainly can be helpful on. So in one of its 20-80 filings, the AG's Office called for8013 the DPU to open an investigation into the regulatory treatment of networked geothermal insulations. Do you still feel that is important?
ANDERSON - Yes. I do. I do feel like that's important. I think we're seeing what's happening with these networked geothermal pilots and collecting data, and seeing what the costs are versus the benefits that are provided. Obviously, the benefits, hopefully, will be significant. But, I think something that kind of, explores further how those should be treated in a regulatory setting would be appropriate here because it is a new technology.
CREEM - So does the AGO believe the investigation should be open now or wait until more data is collected from demonstration projects?
ANDERSON - That's a good question, not that I have an exact answer for you. I do think it would be good to have some more data to help inform that type of proceeding. So I think I would probably air towards that answer.
CREEM - So my colleagues and I are since here in our commitment to a just transition for gas workers, but the transition is a scary prospect to someone whose livelihood is on the line. How can we build that trust and show that our commitment is to supporting the workers? Do we have any ideas on how to do that?
ANDERSON - I mean, I think from our perspective as8099 a ratepayer advocate, we don't tend8101 to get too heavily involved in workforce development issues since that tends to be a little bit kind of down the line from a lot of the issues that we see when we're at the DPU and arguing over cost recovery and utility investment. I think, you know, ensuring that these, especially the gas workers, have something to transition to will be important the clean energy transition to be successful. And I also think I think as Chair VanNostrand talked about earlier, there's just significant need for more workforce here with a clean energy transition. We're going to need a lot of people working on this. So I don't think there will be lack of jobs, it'll be about how do we transition people into those clean energy jobs away from maybe some of the fossil fuel based jobs.
CREEM - Do you have any recommendations for how to protect low and moderate income customers during the energy transition?
ANDERSON - I think one of the things that we do, we did advocate for in in the 24-15 energy affordability proceeding is expanding the discount programs to include moderate income customers, that's the 60 to 80%, median income bracket, so that moderate income customers are kind of not hit with the cliff, if you will, where, energy burdens are reduced for everybody that's in the low income bracket, but the energy burden for the moderate income customers is abnormally high8188 because not only are they paying the full bill, but their full bill includes the subsidies for the low8194 income customers. So I think that's something that we would advocate for, which is a more gradual, kind of instead of having a cliff at the 60% median income, having something that kind of more gradually is tailored to energy burdens across the board, without respect to that cutoff.
CREEM - Taking the burden off of moderate income people has been overlooked, so thank you. I I don't have any other questions. Thank you so much for your work, and we'll look forward to, again, partnering with you on legislation. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER9 - Yes. We will be in touch. Thank you.
SPEAKER1 - Thank you. And, the next, person is Brian Murphy.
SPEAKER14 - Thank you, John.
SPEAKER1 - Is the director of state program implementations for the Acadia Center. Thank you, Ryan.
RYAN MURPHY - CLIMATE JOBS MASSACHUSETTS - Thank you, Chair Creem, and, good afternoon afternoon, Vice Chair Barrett and members of the committee. My name is Ryan Murphy, and I'm the executive director of Climate Jobs Massachusetts Action, which is a coalition of labor unions and organizations who are united around climate and energy issues, including the Massachusetts AFL-CIO. We represent tens of thousands of workers in different sectors from electricians, plumbers and pipe fitters, to teachers and service workers, to utility workers and natural gas technicians. I want to8282 start very briefly by just adding to8284 the network geothermal conversation, that's been going on a little bit. When it comes to training workers, our union training centers have lines out the door to get trained and to become electricians, and pipe fitters and drillers. Those training centers are training workers right now on skills that are necessary for thermal energy networks, like fitting pipes and installing ground source heat pumps.
What we're lacking is commitments to pay the prevailing wage and to use registered apprentices. So these training centers won't admit more apprentices until they know that they won't be unemployed at8320 the other end. We can solve this log jam by adding labor standards to these projects either through executive action or legislation. And that's8329 what happened in New York and several other states. And projects are being planned and8333 built there with increasing frequency, and it's been a huge success. Further, companies or municipalities that pay the prevailing wage and use registered apprenticeship programs can get between a 30% and a 50% tax credit under the Inflation Reduction Act. So we can train more workers and save companies and municipalities money by signing project labor agreements, and then the unions will be able to scale up their apprenticeship programs even more in very short order.
So just turning to Order8364 20-80, the order mentions the workforce transition and it supports an equitable transition in a broad sense, and we've heard more about that today. We're really glad that it's front and center, but if we want this transition to be successful and equitable, we need to require specific and collaborative workforce plans. First, it's important to keep our existing workers employed8388 long term. And second, we need to make serious commitments to training8392 and in house workforce utilization, and these two points go hand in hand.8397 I'll start with just keeping the existing workforce employed. As you know, the gas system requires highly skilled workers to keep it running. The last thing we want to do is deplete the workforce while8410 still running gas through the same length of pipe. It would make the system less safe and less efficient.
But while the existing workforce maintains the current system and we keep those workers employed, we should, of course, be training those workers to prepare for the future. The problem that we're hearing right now is that where the workforce is still maintaining the system full time, they're so tightly staffed that pulling them away to train on things like electrical skills or thermal energy networks is proving extremely difficult. So, we then need to hire more workers or plan this more thoroughly to allow the existing workforce to adequately train on other skills like thermal energy networks in order to prepare for the future. And the same concept goes for utilizing in house workers rather than contracting outwork to outside contractors.
One of the easiest ways to keep the existing workforce employed through this transition is to train them in new skills and utilize those skills to perform work for the companies rather than contracting out the work. All of this could be incorporated in requiring specific collaborative workforce transition plans, which is something that's not currently being done to the level that's necessary. The order strongly encourages companies to engage with stakeholders including labor unions, MassCEC, and workforce development programs. But our question is, what if these companies don't engage with the labor unions and other stakeholders?
Or what if the companies tell the department that they're engaging with the workers but they're really not engaging in a collaborative or substantial way? If we want to do what's best for the workers, we should ask the workers directly. Chair Creem, you just asked how can we build trust with the gas workers? And what I'd say to that is our gas workers unions in Massachusetts drafted and they support a bill which also has the strong support of our broad coalition of unions. It's H 4439, an act relative to a just transition to clean energy. In this bill, we have some of the things that the order loosely imagines, but it doesn't provide a clear road map for. The bill would create an office of just transition to create specific workforce transition plans with the involved companies and unions. And it would also include workforce considerations and transition planning in rate making.
I appreciated Chair VanNostrand's remarks about being mindful of the workforce, and we do look forward to the new office of the energy transition and the opportunity to provide input there. But it's unclear so far whether specific workforce transition plans will be part of that office's duties and exactly what they will entail. We need to get specific about workforce plans and the workers themselves have put forth a framework in the just transition bill. So through that bill or otherwise, we should require that these workforce plans are completed specifically and that they're completed collaboratively with the unions and the workers themselves. Thank you very much for your time. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Thank you very much. Any questions? I'm hearing none. The, next presenter is Sarah Graham, associate attorney of Sierra Club. Sarah, thank you.
SARAH KRAME - SIERRA CLUB - Thank you, Chair Creem, and thank you to the committee. I just want to note my colleague, Jess Nahigian, of the Massachusetts Sierra Club Chapter is joining me as well today. My name is Sarah Krame, and along with my colleague, Jess Nahigian, we are here representing the Sierra Club. The Sierra Club is a national non profit environmental organization with approximately 80,000 members and supporters in Massachusetts. Sierra Club's mission is to promote the responsible use of the earth's ecosystems and resources, and to protect and restore the quality of the natural and human environment, and to use all lawful means to carry out those objectives. Sierra Club works across sectors to mitigate the worst effects of climate change and transition away8659 from fossil fuels and toward clean energy.
As you've heard today, the 20-80 Order has set a course for the Commonwealth to transition away from fossil fuels in the building sector, which will be critical8671 to achieving the emissions reduction mandate of the Global Warming Solutions Act. As the order recognizes, meeting emissions reductions targets will require us to electrify home heating and reduce reliance on the fossil gas distribution system. To that end, Sierra Club urges that it is critical that Massachusetts stop digging the hole deeper. We must end gas system8696 expansion and stop adding new towns and large projects to the system. Also, we must stop GCEP enhancements8705 that are not necessary for safety. We cannot continue to pour money into the gas distribution system beyond necessary safety measures at the very moment we are planning a shift away from the system.
Sierra Club is also concerned about the false solutions the gas utilities continue to push to transition the system, namely RNG and hydrogen. These so called alternative fuels cannot deliver meaningful climate benefits, will not be available in sufficient quantities to meaningfully displace fossil gas, they'll be expensive, and in the case of hydrogen, they are unsuitable for distribution in the pipes. The 20-80 Order rightfully denied use of ratepayer money for these fuels. As recognized by the 20-80 Order, targeted decommissioning of the gas system and electrification is the primary path forward. We must enable an equitable transition by ensuring there's adequate funding so that low and moderate income customers are not left behind. I'll now turn it over to my colleague, Jess, to speak on the actions we need from the legislature to enable that transition. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Thanks.
JESS NAHIGIAN - SIERRA CLUB - Thank you, Sarah, and thank you, Senator Creem and Senator Comerford for having us here today. I'm going to speak to Sierra Club Massachusetts' priorities following 20-80. So as Sarah said, we must stop shoveling ratepayer money into a gas system that 20-80 has said we8789 must move away from. And there are several8791 immediate actions that the Legislature can take to do this. So others have already mentioned GSEP and so we agreed GSEP must be reformed. I'm going to focus on stopping the expansion of large pipes8804 and the expansion of gas service into new territories. So right now, the state is considering a $60 million gas pipeline project in Springfield and Longmeadow. And last year, as we've already heard, we saw a whole new gas system approved in the town of Douglas.
And a halt to large8821 gas expansion projects like these are8823 a simple fiscally responsible step, and there's legislation that can help us. S 2135 H 3237, would put a halt to large new gas expansions by8835 removing the ability to permit large high pressure pipes and the ability for gas utilities to expand into new territory. So as we move toward the future,8844 we must also end the obligation8846 to serve gas, which we've already spoken about at this hearing. The8850 policy was meant to prevent discrimination from a utility. It was not created to, give people universal right to one particular fossil fuel. Additionally, we should leverage funding opportunities as often as possible. Look under that couch and find some change.
I want to draw attention to a bill that's currently in conference committee, S 2554, that would increase the state's competitiveness for the8875 millions of federal dollars that we're applying for right now, including money for building decarbonization. And we recommend moving that swiftly out of committee and passing it soon. And one final item which is that this spring we collected stories from across the Commonwealth from people who are struggling to pay their energy bills. We are experiencing an energy affordability crisis. And the status quo is an unfair distribution of gas and electric system costs, not only for low income customers but also for medium income customers, and those shoulder more of a burden for our energy system than high income customers. And so as we transition off gas, we urge the Legislature to enact policies that will create a more equitable distribution8919 of utility costs. Thank8921 you. SHOW NON-ESSENTIAL DIALOGUE
SPEAKER1 - Thank you. Any questions?
Well, thank you all. This was a lot to take in. We've got a lot of work to do, and we're looking forward to doing it. So I wanna thank everybody who participated, and I think our phone's gonna be ringing off the hook because everybody's gonna call us with new great ideas. So thank you, and, I wanna thank the chair of public utilities. And, I know it's not been quite a year, but8956 it's 11 months. So we look forward to a birthday party at next month. So thank you all. Bye. Thank you, Jacqueline.
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