Aligning gas regulation with climate goals: A road map for state regulators

Abstract

Reduction in the usage of natural gas is critical to mitigate climate change. When combusted, natural gas usages can vary from home heating and cooking to large industrial processes to fuel for electric generation. While many states have adopted greenhouse gas (GHG) emissions targets and are conducting long-term planning for the transition away from natural gas, retail gas utilities and their regulators have generally continued to operate in a business-as-usual framework assuming static or increased natural gas usage. In most states, there is a lack of reconciliation between these two policy objectives. This paper presents recommendations for State Public Utilities Commissions (Commissions) and other regulators to align decision making regarding gas utility operations, rates and infrastructure with climate goals to drive reductions in GHG emissions. While this paper primarily focuses on states that have enacted climate laws, the recommendations are equally relevant for states without such laws, as they ultimately serve to improve regulatory oversight, protect customers from unnecessary costs, and support continued provision of safe, reliable and affordable service in an evolving industry.