Climate change, stranded assets, electrification – What’s a gas utility to do? 

About a month ago, we wrote of a public hearing about PGW’s proposed rate hikes

Since then… 

  • the Environmental Stakeholders (Earthjustice for Sierra Club and Clean Air Council) submitted testimony by expert witness Dr Ezra Hausman.  PGW filed a motion to exclude Dr. Hausman’s testimony on the grounds that climate change is outside the jurisdiction of the PUC to consider.
  • PGW also filed objections to requests by the Environmental Stakeholders for any documents PGW may have in relation to city and state clean energy goals. This was followed by a hearing about PGW’s objections. The judges ruled for the Environmental Stakeholders (with the exception to their request about electrification of our gas utility).
  • Then on July 7th, the judges ruled for the Environmental Stakeholders again and rejected PGW’s motion to exclude Dr Hausman’s testimony (with the exception of electrification).
  • A July 9th filing by the Environmental Stakeholders concerning PGW’s requests goes over this procedural history with dates. 
image credit: Wikipedia

What’s all this mean? 

Our understanding is that PGW had petitioned the Administrative Law Judges to rule that Dr Hausman’s arguments related to climate and environmental impacts, stranded assets, and electrification were out of scope of the proceeding, and outside the jurisdiction of the Public Utility Commission. All these arguments are new in this type of case at the PUC.

The ruling made by the Administrative Law Judges has several key implications.

  • Climate change — In a precedent-setting decision, the Administrative Law Judges confirmed that the PUC has jurisdiction to consider climate change as part of rate cases, which was an issue of first impression in Pennsylvania. An issue of first impression means that this is the first time climate change has been brought up in a Pennsylvania court. Remember, the gas used by PGW customers accounts for 22% of our City’s greenhouse gas emissions.  And that there has been consistent under-accounting of greenhouse gas emissions from the extraction (fracking) and transportation (pipelines) of “natural” gas.
  • Stranded assets — The Administrative Law Judges ruled that we can still question the use of ratepayer funds for gas infrastructure replacement because it is an imprudent use of funds if the infrastructure will become a stranded asset. Stranded assets means infrastructure, like the gas distribution lines criss-crossing our city, would become unusable well before the planned lifespan, likely due to state and local climate policies. 
  • Electrification — The Administrative Law Judges ruled that electrification is out of scope for the current rate case, but not out of jurisdiction for the PUC. Electrification entails transitioning all gas customers (and their appliances) to electric. This is what climate-concerned customers are doing, one by one, and needs to be taken up as a new business model by PGW. 
image source: https://www.eia.gov/energyexplained/natural-gas/delivery-and-storage.php

Stay tuned! 


References

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