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Natural Gas January 27, 2021 01:30:48 AM

Utilities Warn Natural Gas Ban will Raise Rates, Threaten Grid

Anil
Mathews
OilMonster Author
A similar warning was made by Association of Washington Business (AWB) Energy Director Peter Godlewski.
Utilities Warn Natural Gas Ban will Raise Rates, Threaten Grid

SEATTLE (Oil Monster):  State lawmakers have introduced a bill that would ban the use of natural gas in all construction projects starting in July while also requiring new construction to reduce space and water heating energy consumption by 70 percent. However, utilities and business advocates testifying on HB 1084 during its Jan. 22 public hearing in the House Environment & Energy Committee warned it would raise energy costs and encourage certain industries to move their facilities out of Washington.

Dan Kirschner is the executive director of the Northwest Gas Association (NWGA), whose members serve 3.5 million customers in Washington state. He told the committee that the bill “is not the right approach” to reducing carbon emissions in the state. “Unnecessarily raising energy costs, eliminating energy choices, and ultimately abandoning a reliable energy system aren’t necessary to achieve meaningful decarbonization.”

Among NWGA’s members is Cascade Natural Gas, which serves 220,000 Washington residents. President Nicole Kivisto told the committee that utilities like Cascade are already reducing carbon through energy saving innovations such as smart thermometers. She added that they should be “enhancing rather than abandoning” natural gas. “What we support is building upon energy efficiency programs.”

Sponsored by Rep. Alex Ramel (D-40), HB 1084 would also have the state Department of Commerce create state energy requirement benchmarks for certain commercial buildings, while establishing a statewide clean heat standard shifting existing natural gas use toward electricity. Ramel’s district includes the city of Bellingham, which last year contemplated a ban on natural gas in new construction and also requiring older buildings with natural gas to convert to electricity.

Ramel told colleagues that a statewide transition can occur without rate spikes or threatening the system reliability. “We don’t need magic. We don’t need austerity. We don’t need undiscovered technology. We just need to roll up our collective sleeves.”

He added that the bill has utilities fully participating in the process. “We’ve been listening carefully. We’re not talking about the cost of going out tomorrow and retrofitting every building in Washington. What we’re talking about is a 30-year plan.”

Also in support of the bill is Dave Danner, chair of the Utilities and Transportation Commission. He told the committee “this bill sets us on the right course,” adding that it “ensures gas utilities are in the driver’s seat when it comes to planning. UTC will work to ensure utilities have flexibility as they develop their plans and to ensure the transition from gas is achieved at the lowest cost possible.”

Yet, Puget Sound Energy (PSE) State and Federal Affairs Director Janet Kelly testified against the bill, noting “particular concerns about reliability and cost impacts. (It’s) not the preferred pathway to achieve carbon reduction.” PSE serves 850,000 natural gas customers and has invested in renewable natural gas projects in the state. 

Kelly also noted that an E3 study released in December concluded Washington faces a capacity shortage of up to 7,000 megawatts (MW) by 2025 and that new planned energy sources won’t be able to fill that gap.

Kirschner warned that added electricity use would only make this capacity gap greater and double demand during peak hours. “The natural gas system is an energy delivery system. The energy delivery can and will change.”

With some of the cheapest energy rates in the country, Kirschner said that this gives Washington a strong competitive advantage for industries such as food processors that rely on natural gas.

“The bottom line is those food processing facilities in Central Washington rely on low-cost energy,” he said. “If they go up, it’s entirely possible…that they’ll be looking for options where to shift that production to lower-cost states.”

A similar warning was made by Association of Washington Business (AWB) Energy Director Peter Godlewski, who told the committee if energy rates go up it would amount to “still yet another reason businesses leave Washington state. We cannot take a healthy grid for granted.”

No further action is scheduled for HB 1084.

Courtesy: www.thelens.news


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