A new Minnpost Article from the Citizens Utility Board (CUB) unveils the start findings.
A typical CenterPoint customer, for example, can expect to pay an extra $85 each month in delivery fees by 2040 – more than triple the current amount. And that does not even include any potential increases in the cost of the gas itself.
CUB’s excellent more in-depth report on the same issue, is here.
1 CenterPoint is essentially wanting to invest in outdated infrastructure (for fossil gas). This presents a huge opportunity cost when our energy dollars should be invested into decarbonized alternatives to heating and cooling such as networked geothermal.
* The Citizens Utility Board, together with several other groups, have hired Synapse Energy Economics to do a study that examines (1) the best pathway(s) to decarbonize the gas utilities and (2) the policy/regulatory actions that will be needed to make sure that it is equitable.
2) Investor-owned gas utilities in general are incentivized to make these odd decisions since those are the types of investments that they can get guaranteed profits off.
3) Ratepayers (you and me!) will be expected to cover the costs of these annual capital additions on our monthly bills if state regulators (the Minnesota Public Utilities Commission) finds them to be “reasonable & prudent”. The MN PUC have the final say in demanding that CenterPoint invest in these decarbonized heating and cooling alternatives rather than the business-as-usual investment.
4) There is some evidence for all of the above in what CenterPoint is telling their investors and nothing that would indicate CenterPoint is seriously considering a different business model.
* If anything, they seem to be most excited about renewable natural gas and hydrogen, which is unlikely to be able replace fossil gas 1-to-1 in their system. But electrification, geothermal and waste heat recovery, and efficiency will all help.
5) That all sets us up for an affordability crisis. If half of the population electrifies the gas end uses in their homes, then the other half of the population still on the fossil gas system will be considered on the hook to cover the entire fixed costs of that system. This is the big question. but step one when you're in a hole is to stop digging.
The Minnesota Public Utilities Commission are typically the final deciders on whether to allow these investments through multiple channels: #1 rate cases, #2 Gas Utility Infrastructure Cost rider proceedings, and #3 proceedings called TIMP and DIMP (Transmission and Distribution Integrity Management Programs -- replacing leak-prone materials). Soon, the gas distribution utilities like CenterPoint will also be required to do integrated resource plans like Xcel and other electric utilities.
While plans created under a recently passed new state law called the Natural Gas Innovation Act (NGIA) should take this into account, we have yet to see how much the MN PUC agrees.
The new law requires 50% of the utility's NGIA spending to be on renewable fuels, which does not appear to be a feasible replacement for natural gas if we're going to get to net zero. So, a greater starting point is needed.
The Future of Gas docket is basically on hold at the moment. If the MN PUC believes that much of that topic will be discussed in integrated resource plans, it is uncertain if they intend to have more activity in the Future of Gas docket or not.