Priya Gandbhir is a senior attorney at the Conservation Law Foundation.
Massachusetts’ winter heating crisis has begun to abate. Over the past few months, natural gas prices soared to record heights as elected leaders, consumer advocates and nonprofit organizations scrambled to help residents keep their homes warm in the coldest months of the year.
One lesson is already crystal clear. This reckoning should train a microscope on what’s included in our gas bills — and what should be removed. It must also bring fresh focus to a Federal Energy Regulatory Commission investigation into how gas utilities use ratepayer dollars to fund trade associations, lobbying and other political activities.
In November, customers received a shocking example of the type of political activity their sky-high gas bills are helping support. The Boston Globe revealed that utilities and their lobbyists funded and directly edited a faulty study by the University of Massachusetts at Lowell propping up hydrogen for home heating, which directly benefits the gas industry’s business model. Numerous credible analysis prove electric heat pumps are the most efficient and affordable way to heat and cool your home. The utilities and a trade association, the Associated Industries of Massachusetts, hoped some of this new study’s findings would provide support for the expansion of the gas system throughout New England, and for an energy system heavily reliant on hydrogen and renewable natural gas for decades to come.
In December 2021, FERC launched an inquiry into utility lobbying on the customer’s dime. New rules could halt customer-funded campaigns that spread disinformation about gas and electrification. With the midterm election over, the gas industry is gearing up to deploy its army of lobbyists, front groups and allied trade associations in Congress, state legislatures, regulatory commissions, city halls and zoning boards across the U.S. in an all-out blitz against building electrification. Republicans in Congress, with the backing of the American Gas Association's lobbyists, aim to undermine the Inflation Reduction Act’s historic climate programs by unleashing a blizzard of oversight hearings, ginned up economic studies, junk science and phony controversies.
The AGA reaps tens of millions of dollars in funding annually from member utilities, including Massachusetts' and Connecticut’s largest gas companies, Eversource, National Grid and Avangrid. This funding makes up the overwhelming majority of the AGA’s budgets, according to the Energy and Policy Institute. It’s also just one slice of a larger pie. In 2021, utility holding companies spent at least $91.6 million on trade association dues, according to estimates.
So much of the activity funded by these dollars is obscured from the public’s eye. In February 2022, then-Massachusetts Attorney General Maura Healey joined a coalition of 14 states in submitting testimony to FERC in support of tightening the rules regulating customer-funded political activities. These activities have had a particularly pernicious effect on state regulatory and local government policymaking processes in Massachusetts. In 2020, Healey prompted state regulators in the Department of Public Utilities to begin a Future of Gas investigation to map the phaseout of gas. CLF and our partners were deeply engaged in this proceeding, but the utilities disregarded almost all stakeholder input and requests to focus on pathways to electrification.
They focused instead on plans that featured widespread use of “alternative gasses” like hydrogen and biomethane. While this was happening, gas utilities were funding and directly influencing the UMass Lowell study, in an attempt to greenwash the use of hydrogen in home heating. Clearly, gas utilities are not planning a future of non-polluting heat or working to change policy to evolve their businesses beyond gas. Based on faulty data and flawed assumptions, they’re proposing a future that would hook homes to hydrogen, despite a vast body of independent research illustrating that hydrogen for home heating is impractical, prohibitively expensive and dangerously explosive.
By the spring of 2022, it was obvious that the gas industry lobbyists’ messages had driven the conclusions of the Future of Gas proceeding, favoring short term gas industry profits over a healthy climate or an affordable energy future. Healey has called on the state to reject the resulting blueprint. As more states launch or are considering similar investigations into the future of gas, including Rhode Island in October, Massachusetts’ experience is evidence for why FERC must act to keep customers from paying for this political activity.
Some utilities also use the cover of trade associations like the AGA or front groups to fight electrification, promote gas, spread disinformation, and even oppose reasonable limits to gas in new construction. The utilities’ prolific activities and nebulous accounting methods make it difficult to track spending. Their networks and business interests sprawl across state lines. While it’s impossible for one state’s regulators to adequately address this problem, FERC has the proper scope and legal authority.
National Grid and Avangrid are two examples. At the same time they were working to undermine clean energy solutions in New England, the companies joined a fossil fuel front group called New Yorkers for Affordable Energy. In late 2021, as the New York City Council was preparing to vote on a proposed ordinance requiring all-electric new construction, the front group flooded the airwaves in New York City with false claims stating that the proposal would force New Yorkers to spend thousands of dollars on retrofitting their homes. National Grid occupies two seats on the front group’s executive committee, signaling the company made significant contributions to the advertising campaign.
FERC can change all this. It can implement accounting rules that increase transparency. It can require utilities to demonstrate that customer funds are only used to benefit customers. If FERC provides a level playing field, we have a chance to enact policies that are in our best interest, use science, follow the math, and implement non-emitting energy solutions.