Designing effective and equitable policies for natural gas phaseout in buildings

• In Event: Transition Toward Decarbonization: Cross-National Perspectives on Transformative and Collaborative Policy Approaches

Abstract

Natural gas use in buildings is a major source of greenhouse gas emissions. As policymakers pursue building decarbonization to meet ambitious climate goals, electrification offers a promising pathway. However, this shift raises critical questions about how to phase out the gas system – a system designed for expansion, not contraction. A key component is the network of distribution-level pipelines, which varies in age, material, dimensions, and leak risk. Households connected to these networks also differ in how readily they can electrify. Without coordinated planning, electrification may proceed inequitably, with higher-income households disconnecting first and leaving a lower-income customer base to bear rising gas costs. This utility death spiral dynamic risks worsening energy burdens in underserved communities. At the same time, continued investment in gas infrastructure may create stranded assets and divert resources from electrification. Coordinating simultaneous gas phaseout and building electrification is essential to achieve equitable, cost-effective outcomes aligned with global climate goals.

This paper explores the effects of different policy approaches to gas phaseout on overall system costs – and energy bills across populations. We model several representative networks using a graph-based approach that captures the flow of heating services from the gas and electric grid to end users. Using this model, we quantify the effects of a range of scenarios, beginning with a baseline of uncoordinated electrification and extending to more strategic approaches, such as the targeted retirement of leak-prone pipelines or electrification in low-income neighborhoods. We assess these strategies considering physical and design constraints of the energy system, including supply requirements, network connectivity, and the feasibility of pruning segments of the gas network. Our framework allows us to explore how different policy choices shape energy affordability outcomes and may lead to unintended consequences. We apply our framework to different representative gas and electric networks (i.e., with different properties, demand/supply centers, etc.). We investigate multiple pathways to enable a just transition, including opportunities for 'whole neighborhood' electrification via networked geothermal systems or air-source heat pumps as a cost-effective alternative to pipeline replacement.

 We conclude by offering insights to inform natural gas decommissioning policies and support city scale decarbonization in the U.S. and internationally. For instance, lowering installation and operational costs of heat pumps and innovative systems (e.g., networked geothermal) and increasing incentives at the state and utility levels (e.g., on-bill financing and electric heating rate structures) can help address gas decommissioning barriers and align with decarbonization goals. These insights can help natural gas stakeholders navigate business model transitions and strategically allocate funds to pilot projects. One such example is the geothermal network pilot program launched by a natural gas utility in Framingham, Massachusetts, which aims to build both technical and social understanding of neighborhood-scale networked geothermal systems. Our conceptual model helps identify feasible and cost-effective gas decommissioning opportunities while also explaining key barriers to home electrification. Building on this, our model can guide the design of incentive programs that prioritize underserved communities in the transition to clean energy systems and improve energy justice outcomes.

Authors

• Jaime Garibay Rodriguez
  Non-Presenting Co-Author

• Morgan Edwards, University of Wisconsin-Madison
  Presenting Author