Policy

Policy
Dividing RuleOpening New PathwaysAGF report identifies methods to encourage the production of low-carbon gasimg4In an effort to identify opportunities for natural gas utilities to advance their low-carbon gas resources, the American Gas Foundation recently released a report assessing policies that could be used to incentivize the resources’ production and use.The report, Regulatory Pathways for Advancing Low-Carbon Gas Resources for Gas Distribution Companies, which can be found at gasfoundation.org, also determined that gas utilities have a critical role to play in educating regulators, legislators and the public on the benefits of these lower-carbon alternatives.Currently, state-level barriers in the regulatory landscape are impeding the advancement of low-carbon resources at scale, according to the report. These include a lack of clear regulatory authority for enacting policies that promote low-carbon fuels at scale; the cost of low-carbon fuels compared to natural gas; concern over the viability of low-carbon fuels to reach commercial scale; the need to remove regulatory disincentives for investment in low-carbon fuels; how to determine a fair cost allocation among customer bases; and technical considerations regarding quality standards, infrastructure and transportation.Several enabling activities and mechanisms were also identified that could spur development of low-carbon gases in the distribution system. Among them:

Producing industry-led initiatives to develop legislative guidance.

Articulating policies and goals that provide clear guidance to regulators and eliminate uncertainties in the regulatory process.

Pursuing the relaxation of least-cost mandates where possible and pricing carbon to close the gap between the cost of carbonemitting and low-carbon resources.

Educating regulators and customers on the benefits of lowcarbon resources.

Providing support for pilot programs, innovative funding programs and other incentives.

Encouraging infrastructure replacement programs and the rate base treatment of interconnection costs.

Education is where utilities can take a leading role. According to the report, regulators interviewed for the study said gas companies should engage in education and outreach efforts regarding the technologies and approaches they can deploy.“This study leaves no doubt that low-carbon gas resources and natural gas infrastructure can be a powerful tool in lowering carbon while keeping energy affordable for customers,” said Karen Harbert, president and CEO of the American Gas Association and Foundation trustee. “Taking full advantage of these promising fuels will require clarifying regulatory authority and aligning incentives for utilities with policy objectives. AGA will work with policymakers to ensure that these barriers do not prevent utilities from providing customers with all benefits that these fuels can provide.”CoverGTIMastheadJanaA Clearer PictureCustomer ServiceWorkforcePolicyPeopleJomarAbove the NoisePlasti PanelThe Right Move