Two New Jersey gas utilities owned by South Jersey Industries, SJI,— South Jersey Gas and Elizabethtown Gas — are petitioning the New Jersey Board of Public Utilities, BPU, for approval to be acquired by JP Morgan-backed investment firm IIF. The companies’ proposal relies on a business model of continued expansion of the natural gas distribution system, and suggests that decarbonization can be achieved by blending hydrogen and biomethane into gas pipelines. But increasing gas use is not aligned with state climate policy, and the proposed blending options are not assured climate solutions. The BPU should impose conditions on the proposed transaction to ensure consistency with state climate goals. Additionally, all New Jersey policymakers must recognize the importance of avoiding wasteful investments in gas system expansion — in particular, legislation promoting gas utility spending on biomethane and hydrogen raises serious concerns.
Energy Exchange
Proposed Acquisition of New Jersey Utilities Must be Consistent with Climate Goals
The New York Utility Commission institutes a climate planning framework
The New York Public Service Commission is taking decisive action to orient the state’s utilities towards a clean energy future, consistent with the Climate Leadership and Community Protection Act. In two new orders, the commission established a collaborative long-term planning process for gas utilities, put in place a framework for greenhouse gas emissions reporting for all New York utilities and directed a statewide study to assess the impacts of transitioning away from the use of natural gas.
New research shows Boston methane emissions continue, despite pipe replacement efforts
New peer-reviewed research published this week in the Proceedings of the National Academy of Sciences finds that methane emissions from natural gas infrastructure and buildings in the Boston area have remained consistently high over the last eight years, despite multiple programs aimed at reducing methane pipeline leakage.
This study indicates that more action is needed in Massachusetts and around the country to tackle the urban methane problem.
A potent greenhouse gas and the primary component of natural gas, methane has at least 80 times the warming power of carbon dioxide during the first 10-20 years after release. Emissions from oil and gas operations, livestock and other industries are responsible for at least 24% of current global warming.
Climate planning is key for New York’s gas infrastructure
Next month, the New York Public Service Commission will be deciding whether a rate case settlement proposal between National Grid’s upstate gas and electric utility (Niagara Mohawk) and other groups is in the public interest, and whether the proposal is consistent with New York’s Climate Leadership and Community Protection Act. This is the first major utility rate case to be conducted fully under the CLCPA as effective law, and makes clear the need for commission action to implement standards to achieve state climate goals.
But there is a cloud hanging over this proposal: the utility rate case paradigm guiding this proceeding is outdated and inconsistent with New York’s climate goals.
There is no question that to achieve the CLCPA targets — to reduce New York greenhouse gas emissions 40% by 2030 and 85% by 2050, below 1990 levels — natural gas use and combustion must decrease significantly. But the commission has not set clear standards to require that gas utilities plan for this transformational future, or to ensure utility rate applications and outcomes are consistent with the law. Decisive action is needed to address this disconnect.
New York regulators must act on Con Edison’s contract with Mountain Valley Pipeline
The CEO of New York gas utility Con Edison recently made the bold statement that natural gas is “no longer…part of the longer-term view” in the transition to a clean energy economy, and that he does not expect the company to make additional investments in natural gas pipelines. Many of the company’s actions — from its clean energy commitment, to its framework for pursuing non-pipe alternatives — place it on a path toward meeting that vision. But Con Ed’s investment and contract with Mountain Valley Pipeline call into question that bold statement and demand further scrutiny from the New York Public Service Commission.
In 2016, Con Ed signed a 20-year contract for service on Mountain Valley Pipeline, a planned 300-mile pipeline in West Virginia and Virginia. Mountain Valley would connect with other pipelines on the East Coast to transport natural gas from the Marcellus Shale for ultimate delivery to the New York region. Since Con Ed entered the contract, the pipeline has been plagued by environmental and economic risks and significant legal challenges, and it is still not in service.