A crackdown on emissions from the delivery of natural gas to homes is part of the state’s push to rein in overall greenhouse-gas pollution, but one company questions whether it will mean a ban on new gas lines in Colorado.
The Public Utilities Commission is holding public meetings across the state on proposed rules requiring the state’s larger gas utilities to write “clean heat” plans to reduce the emissions of heat-trapping gasses that cause climate change. A 2021 law requires the utilities to reduce emissions from their distribution systems 4% below 2015 levels by 2025 and 22% by 2030.
The plans are part of the goal to cut overall statewide emissions, compared to 2005 levels, by at least 26% by 2025; 50% by 2025; and 90% by 2050. Utilities are closing coal-fired power plants and adding more renewable energy sources to their mix to hit the targets.
But to meet those goals, emissions from fossil fuels used by the building sector will have to be reduced as well, said Meera Fickling, a senior climate policy analyst at Western Resource Advocates, a Boulder-based conservation organization. The group is a party to the PUC’s consideration of the new rules.
“Buildings are going to have to pull their weight in meeting the overall target in order for the emissions reduction math to work,” said Fickling.
And that likely means electrifying buildings, or switching from gas-powered space and water heating and cooking to electric appliances, Fickling said.
“In order to achieve building emissions reductions on the scale that we need to meet science-based targets by 2050, we’re really going to have to see a reduction in gas consumed,” she added.
The rules for gas utilities would apply primarily to residential and commercial buildings. A law approved this year addresses buildings by requiring local governments updating their building codes to adopt standards to make new structures and homes more energy efficient and less polluting.
In some parts of the country, cities have banned natural gas hookups for new buildings to try to curb greenhouse-gas emissions. In response, several state legislatures have passed laws prohibiting cities from approving gas bans.
The Colorado PUC’s proposed rules would require gas utilities with at least 90,000 retail customers to reduce emissions from their delivery systems. Possible strategies include fixing leaks on the system; increased energy efficiency; and different fuel sources, such as hydrogen or methane from wastewater treatment plants or landfills.
But a ban on new gas hookups isn’t included in the law or rules, Fickling said.
Sen. Chris Hansen, a Denver Democrat and one of the bill’s sponsors, said he considers Colorado’s effort to be a national model with its focus on reducing emissions on the gas-distribution side. The legislation was meant to be technology-neutral to give utilities flexibility, he said.
However, a section of the proposed rules could result in a “de facto gas ban,” Xcel Energy-Colorado said in a filing with the PUC. Xcel Energy, Black Hills Energy and labor unions have raised concerns about a section dealing with new gas hook-ups that would shift more of the costs to developers.
Utilities currently cover some of the cost of line extensions to new developments. The PUC has proposed that “the full incremental cost associated with new development and growth shall be borne generally by the customers that cause those incremental costs.”
Now, utilities pick up a portion of the cost to extend lines, which means utility customers ultimately pick up the cost, Fickling said. “A portion of the cost is socialized among all of the gas ratepayers.”
Line of departure
Requiring developers to pay the full cost of extending lines would support limiting emissions and avoid leaving rate payers on the hook for the bill for infrastructure that might eventually not be necessary, the Colorado Energy Office said in comments filed with the PUC.
But municipal officials have joined utilities and labor unions in arguing that eliminating what’s called a line extension allowance could boost housing prices and threaten jobs. The utilities said it’s important to maintain diverse power sources and have suggested a separate proceeding to discuss the matter.
Electrification of buildings is an important part of the future, but can be expensive and will require adoption customer by customer in a way that cutting emissions on the electric generation side does not, Xcel Energy said in its comments. The company has 1.5 million electric customers and 1.4 million natural gas customers in Colorado, with overlap between the two.
Xcel Energy is expected to file it clean-heat plan in 2030.
The Laborers’ International Union of North America Local 720 is involved in the PUC proceedings because a large number of its members work for construction contractors serving gas utilities, said union representative Aubrey Newton.
“It’s not that we’re against” the rules, Newton said. “But we’ve seen a lack of information on the numbers of gas-distribution jobs that will be eliminated. It will significantly impact minority communities that rely on these jobs.”
Newton said it’s also unclear what the impact will be on homeowners who might end up having to switch out gas-fueled appliances for electric ones.
The union belongs to a coalition called Coloradans for Energy Access, which says it supports access to natural gas in homes and businesses. Xcel Energy, Black Hills Energy and Atmos Energy, one of the country’s largest natural-gas distributors, are members.
Colorado Public Radio in March reported that it obtained a recording revealing that Coloradans for Energy Access is led by Atmos Energy and FTI Consulting, a communications firm. Sara Blackhurst, the coalition’s vice president, said in an email Thursday that the group was started by its members, who hired FTI Consulting as a facilitator.
Blackhurst, CEO of Action 22, a southeast Colorado policy organization, said the coalition wasn’t founded to support or oppose any legislation or regulations, but believes that electrification efforts should be voluntary.
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