Maryland Commits to Clean and Efficient Buildings, Now Must Commit to Long-Term Gas Planning

Posted by Nick Bibby and Shawn Kelly on Jul 8, 2024 10:00:00 AM

New Maryland Executive Order Needs Thoughtful Implementation

On June 4, Governor Wes Moore cemented his place among clean energy champions when he announced that he intends to double down on Maryland’s commitment to 100% clean energy by 2035. Moore’s Executive Order, carrying the full force of law, created a Governor’s Subcabinet on Climate and directed all state agencies to develop Climate Implementation Plans that align with the state’s Climate Pollution Reduction Plan, identify funding and funding gaps to fully implement their plans, and consider how to advance environmental justice and address disproportionate impacts of climate change on underserved and overburdened communities. The order impacts the power sector, the transportation sector, and critically: the building sector.  

The building sector is notoriously difficult to decarbonize, with each individual home, business, and industry requiring a unique solution depending on its inhabitants’ needs and preferences, and its current energy usage and structural conditions. And choices made today will affect us for the next 20 years.  

That’s why it was so significant that Governor Moore directed the Maryland Department of the Environment to propose 1) a zero-emission heating equipment standard that phases-in requirements to reduce carbon pollution and improve air quality, and 2) a clean heat standard that expands the state’s existing renewable portfolio standard to the thermal energy system.  

These standards provide two major benefits. First, by giving a long-term direction to the clean appliance and energy efficiency markets, the industry can invest and grow in the state with confidence. That means Marylanders will get the best products and most choices among clean technologies, and in-state jobs can grow to meet growing, guaranteed demand.  

Second, standards make us think ahead and plan wisely. If we know that most new HVAC and water heating equipment will use heat pump technologies by 2035, 2040, and 2050, we can better forecast how much clean electricity we will need to reliably and efficiently deliver to customers in any given area of the state. We can then make early decisions to invest in policies, programs, and technologies that will better manage reliability, like data collection, energy efficiency, load management, distributed energy resource programs, ground source heat pumps and thermal energy networks, and rates that support long-term grid efficiencies and customer affordability. These conversations are aligned with Maryland’s ongoing distribution system planning work as the Public Service Commission (PSC) considers how to prepare the grid for this new electrification load, though that work remains incomplete.  

Notably, Maryland does not yet have a complete plan to consider how these standards will affect the state’s electric or gas infrastructure needs. On the electric side, Maryland needs an air-tight plan to make sure that the distribution system is clean, reliable, resilient, and affordable as we add new building and transportation load. It needs effective and iterative processes that accurately forecast when, how, and where load patterns will change – down to the household and appliance level – and robust programs that prioritize load flexibility and distributed energy resource solutions before we spend ratepayer dollars on more expensive poles and wires. While some progress has been made via the PSC’s Distribution System Planning Work Group, more is needed for the grid to be truly ready for a highly-electrified future.  

Regarding gas infrastructure, the problem is more extreme. Collectively, Baltimore Gas & Electric, Washington Gas Light, and Columbia Gas of Maryland are planning $20 billion of fossil fuel infrastructure investment between 2024 and 2045. This is $20 billion to be spent on pipes that will be in the ground for the next half century or longer, and passed on to Maryland ratepayers for nearly the same amount of time. But as customers install electric appliances, the number of gas customers, and many remaining customers’ gas use, will decline. As the growing costs to maintain the pipeline system are spread over fewer units of gas and fewer customers, gas bills will spiral upward, reaching levels two or three times higher by 2035 and up to 10 times higher by 2050. These unthinkable bills will hit our most vulnerable community members – renters, low-income homeowners, and fixed-income seniors – the hardest.  

Alarmed by these findings, the Office of People’s Counsel (OPC) filed a petition on February 9, 2023 asking the PSC to establish long-term planning for gas utilities and identify near term actions that the Commission could take to begin addressing this problem, like eliminating public subsidies to hook up new customers to fossil fuels. Long-term gas planning can offer states significant benefits, including cost and risk mitigation, transparency, compliance with climate goals, and inter-utility coordination. They can also serve as a platform to conduct non-pipeline alternative analyses, and to coordinate with electric utility planning processes for more comprehensive system-wide energy infrastructure and resource optimization.  

Unfortunately, in the last year and a half, the Commission has taken no significant action on the petition, only asking interested parties to offer their opinions in writing by October 2023 and in person in July 2024. But long-term planning is such a sensible place to start that states as politically diverse as Colorado, Nevada, Georgia, Illinois, Missouri, Minnesota, Washington, Oregon, and New York have all adopted it within the last several years. It’s time for Maryland to join them.  

With every passing year, status quo pipeline spending increases the risk of sky-high bills for Marylanders and openly contradicts the state’s own climate goals. Those goals were just reaffirmed by the Executive Order, making it even more imperative to start curtailing risky fossil fuel infrastructure investments to save the state’s ratepayers from financial harm. We hope the PSC takes corrective action swiftly and soon.  

Topics: Maryland, Nick Bibby, Building Decarbonization, Shawn Kelly



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