Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S2105 Compare Versions

Only one version of the bill is available at this time.

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2	2	SENATE DOCKET, NO. 2330 FILED ON: 1/20/2023
3	3	SENATE . . . . . . . . . . . . . . No. 2105
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Cynthia Stone Creem
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act relative to the future of clean heat in the Commonwealth.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :Cynthia Stone CreemNorfolk and MiddlesexSteven Owens29th Middlesex1/25/2023Vanna Howard17th Middlesex1/31/2023James K. Hawkins2nd Bristol2/8/2023James B. EldridgeMiddlesex and Worcester3/5/2023Jack Patrick Lewis7th Middlesex3/8/2023 1 of 24
16	16	SENATE DOCKET, NO. 2330 FILED ON: 1/20/2023
17	17	SENATE . . . . . . . . . . . . . . No. 2105
18	18	By Ms. Creem, a petition (accompanied by bill, Senate, No. 2105) of Cynthia Stone Creem,
19	19	Steven Owens, Vanna Howard, James K. Hawkins and other members of the General Court for
20	20	legislation relative to the future of heat in the Commonwealth. Telecommunications, Utilities
21	21	and Energy.
22	22	[SIMILAR MATTER FILED IN PREVIOUS SESSION
23	23	SEE SENATE, NO. 2148 OF 2021-2022.]
24	24	The Commonwealth of Massachusetts
25	25	_______________
26	26	In the One Hundred and Ninety-Third General Court
27	27	(2023-2024)
28	28	_______________
29	29	An Act relative to the future of clean heat in the Commonwealth.
30	30	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
31	31	of the same, as follows:
32	32	1 SECTION 1. Chapter 23J of the General Laws, as amended by chapter 179 of the acts of
33	33	22022, is hereby amended by inserting after section 9 the following section:-
34	34	3 Section 9A. (a) There is hereby established and placed within the center a separate fund
35	35	4to be known as the thermal transition trust fund. The center shall hold the thermal transition fund
36	36	5in an account or accounts separate from other funds. There shall be credited to the thermal
37	37	6transition fund; (i) revenues collected pursuant to section 20(b) of chapter 25, and (ii) any other
38	38	7funds directed to the thermal transition trust fund. All amounts credited to the thermal transition
39	39	8trust fund shall be held in trust and used solely for activities and expenditures consistent with the
40	40	9permitted purposes of the thermal transition trust fund as set forth in subsection (b), including the 2 of 24
41	41	10ordinary and necessary expenses of administration and operation associated with the thermal
42	42	11transition trust fund. Unless otherwise specified, all monies of the thermal transition trust fund,
43	43	12from whatever source derived, shall be paid to the treasurer of the center. Such monies shall be
44	44	13deposited, in the first instance, by the treasurer in national banks, in trust companies, savings
45	45	14banks and cooperative banks chartered under the laws of the commonwealth, or in other banking
46	46	15companies in compliance with section 34 of chapter 29. Funds in these accounts shall be paid out
47	47	16on the warrant or other order of the treasurer of the center and the director of the thermal
48	48	17transition trust fund or other person that the board may authorize to execute warrants. Any
49	49	18unexpended balance in the thermal transition trust fund at the close of a fiscal year shall remain
50	50	19in the thermal transition trust fund and shall be available for expenditure in the following fiscal
51	51	20year; provided however, that the thermal transition trust fund shall not be in deficit at the end of
52	52	21any state fiscal year.
53	53	22 (b) The center may make expenditures from the thermal transition trust fund for the
54	54	23following purposes, giving priority to low- and- moderate-income customers:
55	55	24 (i) to replace any gas appliance with an electric appliance including but not limited to an
56	56	25electric heat pump, to upgrade electric service as needed and to mitigate any pre-weatherization
57	57	26barrier as needed in the building to enable a customer to connect to a non-emitting renewable
58	58	27thermal infrastructure project as provided in section 145A of chapter 164 or to other non-
59	59	28combusting sources of thermal energy. The Massachusetts clean energy technology center shall
60	60	29be responsible to determine the maximum cost per appliance, to ensure any necessary upgrade of
61	61	30an electric service, to ensure any necessary mitigation of any pre-weatherization barrier, to
62	62	31ensure the installation of such electric appliances, and to ensure that the building has been
63	63	32insulated pursuant to the energy efficiency program established by section 19 of chapter 25. Any 3 of 24
64	64	33remaining cost not covered for such work shall be attached to the meter to be paid off by savings
65	65	34over time on the customer’s energy bill, with the amount of such bill maintained at the same
66	66	35level as for the calendar year previous to such upgrades, adjusted for inflation, energy rates and
67	67	36number of degree days. The secretary of energy and environmental affairs shall, within 12
68	68	37months of enactment of this section, promulgate regulations or directives for the implementation
69	69	38of this requirement.
70	70	39 (ii) to retrain existing employees who work on gas pipeline infrastructure to support the
71	71	40transition from a job working on gas infrastructure to a comparable job working on thermal pipes
72	72	41or other aspects of a non-emitting renewable thermal infrastructure project or other non-
73	73	42combusting sources of thermal energy. The center shall oversee such retraining programs and
74	74	43may allocate funds to a training facility or a gas company for the retraining of existing
75	75	44employees.
76	76	45 (c) The center shall provide a report to the secretary at the end of each fiscal year that
77	77	46summarizes results and expenditures from the thermal transition trust fund over the prior 12
78	78	47months. The secretary shall report annually, no later than October 1, on the expenditures from
79	79	48the thermal transition bond fund and on the results achieved by the programs established by this
80	80	49section to the governor and to the clerks of the house of representatives and the senate, who shall
81	81	50forward such report to the president of the senate, the speaker of the house of representatives,
82	82	51and the chairs of the house and senate committees on ways and means.
83	83	52 SECTION 2. Section 19 of chapter 25, as amended by chapter 179 of the acts of 2022, is
84	84	53hereby amended by inserting after the words “demand side management programs” the
85	85	54following:- 4 of 24
86	86	55 “and non-emitting renewable thermal energy programs, including but not limited to heat
87	87	56pumps for heating and cooling”
88	88	57 SECTION 2. Said section 19 of said chapter 25, as amended by chapter 179 of the acts of
89	89	582022, is hereby amended by inserting after the word “practicable” the following:-
90	90	59 ; and provided further, that the programs maximize to the greatest extent possible the use
91	91	60of non-emitting renewable thermal energy, including but not limited to heat pumps for heating
92	92	61and cooling, to reduce greenhouse gas emissions pursuant to the mandates of chapter 21N.”
93	93	62 SECTION 3. Section 20 of said chapter 25, as appearing in the 2020 Official Edition, is
94	94	63hereby amended by striking out subsection (a) and inserting in place thereof the following:-
95	95	64 (a) The department shall require a mandatory charge of 15 mills per therm for all gas
96	96	65consumers and a mandatory charge of 0.5 mill per kilowatt-hour for all electricity consumers,
97	97	66except those served by a municipal lighting plant which does not supply generation service
98	98	67outside its own service territory or does not open its service territory to competition at the retail
99	99	68level, to support the development and promotion of renewable energy projects. All revenues
100	100	69generated by the mandatory charge for electricity consumers shall be deposited into the
101	101	70Massachusetts Renewable Energy Trust Fund, established under section 9 of chapter 23J. All
102	102	71revenues generated by the mandatory charge for gas consumers shall be deposited into the
103	103	72thermal transition trust fund within the Massachusetts Renewable Energy Trust Fund, established
104	104	73pursuant to section 9A of chapter 23J.
105	105	74 SECTION 4. Section 1 of chapter 164, as appearing in the 2020 Official Edition, is
106	106	75hereby amended by striking out the definition of “Gas company” and inserting in place thereof
107	107	76the following definition:- 5 of 24
108	108	77 “Gas company”, a corporation organized for the purpose of making and selling or
109	109	78distributing and selling, gas or utility-scale non-emitting renewable thermal energy within the
110	110	79commonwealth, even though subsequently authorized to make or sell electricity; provided
111	111	80however, that gas company shall not mean an alternative energy provider.
112	112	81 SECTION 5. Said section 1 of said chapter 164 is hereby further amended by inserting
113	113	82after the definition of “Mitigation” the following three definitions:-
114	114	83 “Networked geothermal system”, a utility-scale non-emitting renewable thermal energy
115	115	84infrastructure consisting of underground distribution pipelines that connect distributed thermal
116	116	85sources and or thermal storage, including geothermal boreholes and non-combusting electric heat
117	117	86pumps, to provide a customer or network of customers with thermal energy for heating and
118	118	87cooling.
119	119	88 “Non-emitting renewable thermal energy”, thermal energy that provides heating or
120	120	89cooling without combustion and that does not release greenhouse gas emissions as defined in
121	121	90section 1 of chapter 21N.
122	122	91 “Non-emitting renewable thermal infrastructure project”, a utility-scale project that
123	123	92replaces natural gas distribution infrastructure with distribution infrastructure that supplies non-
124	124	93emitting renewable thermal energy. A non-emitting renewable thermal infrastructure project may
125	125	94include, but is not limited to, a networked geothermal system.
126	126	95 SECTION 6. Section 1I of said chapter 164, as appearing in the 2020 Official Edition, is
127	127	96hereby amended by inserting after the first paragraph the following paragraph:- 6 of 24
128	128	97 A gas company shall include in its annual service quality standards report submitted to
129	129	98the department under this section the percentage and amount of funds allocated to each factor in
130	130	99the local distribution adjustment factors fund, including the following: energy efficiency, non-
131	131	100emitting renewable thermal energy, environmental response, consultants for the office of the
132	132	101attorney general under section 11E of chapter 12, residential assistance, and any other factor
133	133	102included in such fund. Such report shall also include the cost of political or promotional
134	134	103advertising as defined by section 33A of this chapter, and the cost of repairing, upgrading or
135	135	104replacing gas infrastructure with new gas infrastructure or non-emitting renewable thermal
136	136	105infrastructure under sections 145 and 145A of this chapter.
137	137	106 SECTION 7. Said chapter 164 is hereby amended by striking out section 30 and inserting
138	138	107in place thereof the following:-
139	139	108 Section 30. The department may, after notice and a public hearing, authorize a gas or
140	140	109electric company to carry on its business in any town in the commonwealth other than the town
141	141	110named in such gas or electric company’s agreement of association or charter, subject to sections
142	142	11186 to 88, inclusive, and such company may purchase, hold and convey real and personal estate in
143	143	112such other town necessary for carrying on its business therein. In rendering an authorization
144	144	113pursuant to this section, the department shall make written findings, considering the priorities of
145	145	114the department as provided in section 1A of chapter 25, including public health and the impact
146	146	115on indoor air quality, safety, potential for stranded assets, and evaluating any non-emitting
147	147	116alternatives to expansion of gas distribution infrastructure.
148	148	117 SECTION 8. Section 33A of said chapter 164 is hereby amended by inserting after the
149	149	118word “agency” the following:- 7 of 24
150	150	119 ; provided, however, that any such advertising that promotes the use of natural gas,
151	151	120renewable natural gas, or hydrogen must disclose the impacts on public health, including indoor
152	152	121air quality, and public safety hazards of natural gas, renewable natural gas or hydrogen and their
153	153	122effects on greenhouse gas emissions and the mandates pursuant to chapter 21N
154	154	123 SECTION 9. Said chapter 164 is hereby amended by striking out section 75B and
155	155	124inserting in place thereof the following section:-
156	156	125 Section 75B. Any person, partnership, corporation or any other legal entity, organized
157	157	126under the laws of the commonwealth which shall desire to construct and operate a natural gas
158	158	127pipeline or non-emitting renewable thermal infrastructure situated wholly within the
159	159	128commonwealth may qualify to do business within the commonwealth as a natural gas pipeline
160	160	129company or as non-emitting renewable thermal energy corporation after hearing upon a petition
161	161	130filed with the department and after the department has determined that such facilities are
162	162	131necessary for the purpose alleged and will serve the public convenience and is consistent with
163	163	132the public interest. In the case of a petition for a non-emitting renewable thermal energy
164	164	133infrastructure, the department may approve the petition if the person, partnership, corporation or
165	165	134other legal entity demonstrates there are a sufficient number of customers to connect to such
166	166	135infrastructure and that such proposed infrastructure will meet the priorities of the department as
167	167	136provided in section 1A of chapter 25, including reduction of greenhouse gas emissions, impact
168	168	137on public health including indoor air quality, safety, potential for stranded assets, and
169	169	138affordability; provided however, that a legal entity proposing to construct such renewable
170	170	139thermal infrastructure wholly on private land shall be exempt from the requirement to qualify
171	171	140under this section. In the case of a petition for gas facility, any person, partnership, corporation
172	172	141or any other legal entity, organized under the laws of the commonwealth or of any other state or 8 of 24
173	173	142of the United States which holds a certificate of public convenience and necessity issued under
174	174	143the provisions of chapter 15B of the United States Code which may be cited as the federal
175	175	144''Natural Gas Act'' authorizing it to construct a natural gas transmission line and appurtenant
176	176	145facilities within the commonwealth, shall be considered as a natural gas pipeline company within
177	177	146the meaning of this chapter upon filing with the department a certified copy of such certificate.
178	178	147 SECTION 10. Said chapter 164 is hereby amended by striking out section 76 and
179	179	148inserting in place thereof the following section:-
180	180	149 Section 76. The department shall have the general supervision of all gas and electric
181	181	150companies and shall make all necessary examinations and inquiries and keep itself informed and
182	182	151report publicly on the condition of the respective properties owned by such corporations and the
183	183	152manner in which they are conducted with reference to the public health, including indoor air
184	184	153quality, safety and convenience of the public, the reduction of greenhouse gas emissions
185	185	154pursuant to chapter 21N, and as to their compliance with the provisions of law and the orders,
186	186	155directions and requirements of the department and the commonwealth; provided, however, that
187	187	156any alternative energy producer shall not be considered to be a municipality, manufacturing
188	188	157company, corporation or other person engaged in the manufacture, sale, distribution or
189	189	158transmission of gas or electricity and shall be exempt from regulation by the department.
190	190	159 SECTION 11. Section 76C of said chapter 164 is hereby amended by inserting at the end
191	191	160thereof the following sentence:-
192	192	161 In establishing such rules and regulations, the department shall prioritize safety, security,
193	193	162reliability of service, affordability, equity and reductions in greenhouse gas emissions to meet 9 of 24
194	194	163statewide greenhouse gas emissions limits and sublimits established pursuant to chapter 21N, in
195	195	164accordance with section 1A of chapter 25.
196	196	165 SECTION 12. Said chapter 164 is hereby amended by striking out section 92 and
197	197	166inserting in place thereof the following section:-
198	198	167 Section 92. On written petition of any person, having a residence or place of business in a
199	199	168town where a corporation is engaged in the manufacture, transmission or sale of gas or the
200	200	169distribution of electricity, aggrieved by its refusal or neglect to supply him with gas or electricity,
201	201	170the department may, after notice to the corporation to appear at a time and place therein named to
202	202	171show cause why the prayer of such petition should not be granted, issue an order directing and
203	203	172requiring it to supply the petitioner with gas or other thermal energy, as determined by the
204	204	173department pursuant to the priorities of section 1A of chapter 25, or electricity, upon such terms
205	205	174and conditions as are legal and reasonable; provided, however, that if such corporation is
206	206	175engaged in such town solely in the transmission of gas such order shall not be made where it
207	207	176appears that compliance therewith would result in permanent financial loss to the corporation. A
208	208	177gas company may meet any obligation to serve by providing a customer with non-emitting
209	209	178renewable thermal energy, including but not limited to networked geothermal infrastructure or an
210	210	179electric heat pump.
211	211	180 SECTION 13. Section 106 of said chapter 164 is hereby amended by inserting after the
212	212	181word “chapter” the following:-
213	213	182 ; provided, that the department shall restrict the injection in any amount of a substitute
214	214	183fuel from any source into a gas distribution system that delivers thermal energy to a building
215	215	184unless it determines that such substitute fuel: (i) is non-emitting in its lifecycle; (ii) does not pose 10 of 24
216	216	185a safety hazard to persons or property; and (iii) has reliable sources of supply that ensure
217	217	186affordability for customers; and provided further, that the department shall prohibit the injection
218	218	187of any amount of hydrogen into a gas distribution system that delivers thermal energy to a
219	219	188residential, municipal, commercial or other building, except as provided in subsection (d) of
220	220	189section 141 of this chapter.
221	221	190 SECTION 14. Said chapter 164 is hereby amended by striking out section 141 and
222	222	191inserting in place thereof the following section:-
223	223	192 Section 141. (a) In all decisions or actions regarding rate designs, the department shall
224	224	193consider the impacts of such actions on: (i) on-site generation; (ii) the replacement of gas
225	225	194infrastructure with utility-scale non-emitting renewable thermal energy infrastructure or non-
226	226	195combusting alternative sources of thermal energy; (iii) the reduction of greenhouse gases as
227	227	196mandated by chapter 21N to reduce energy use; (iv) efforts to increase efficiency and encourage
228	228	197non-emitting renewable sources of energy; (v) the findings of utility-scale non-emitting
229	229	198renewable thermal energy pilots approved by the department of public utilities pursuant to
230	230	199section 99 of chapter 8 of the acts of 2021; (vi) data collected related to the design and operation
231	231	200of networked geothermal demonstration projects approved by the department of public utilities
232	232	201pursuant to chapter 102 of the acts of 2021, including data on any reduction of lost and
233	233	202unaccounted for gas as defined in section 147; and (vii) the use of new financial incentives to
234	234	203support energy efficiency efforts.
235	235	204 (b) To aid the department in its determination of the public interest under this section, a
236	236	205gas company seeking approval by the department of a contract that requires the construction or
237	237	206expansion of gas infrastructure after January 1, 2025, shall within 90 days issue a request for 11 of 24
238	238	207proposal and shall hold a competitive solicitation for non-combusting alternative thermal energy
239	239	208solutions that reduce greenhouse gas emissions, as a condition of approval of such contract by
240	240	209the department; provided further, that the department shall approve such alternative thermal
241	241	210energy solution if it finds that it is in the public interest as compared to the contract proposed by
242	242	211the gas company.
243	243	212 (c) In a rate design or other plan for non-emitting renewable thermal infrastructure filed
244	244	213pursuant to section 145 of this chapter, the department shall approve a merger of the rate base of
245	245	214such infrastructure with the rate base of gas infrastructure and shall permit cross-subsidization
246	246	215between gas and non-emitting renewable thermal energy rate payers.
247	247	216 (d) After January 1, 2025, in all decisions or actions regarding a rate design or other plan
248	248	217submitted by a gas company, the department shall not approve a rate design or other plan that
249	249	218expands the gas distribution infrastructure other than extension of a service line to a customer
250	250	219from an existing main pipeline, or that includes the distribution of hydrogen in a pipeline that
251	251	220provides thermal energy to a residential or commercial building; provided, however, the
252	252	221department may approve a rate design or other plan which expands or includes the distribution of
253	253	222non-emitting renewable thermal energy to any building; and provided further, that a rate design
254	254	223that provides distribution of gas or green hydrogen to an industrial process that is difficult to
255	255	224decarbonize may only be permitted if such distribution of gas or green hydrogen meets
256	256	225applicable state and federal public health and safety standards.
257	257	226 (e) In any decision or action regarding a rate design, the department shall make written
258	258	227findings stating the basis for its decision, considering the priorities of the department in section
259	259	2281A of chapter 25 and including but not limited to, impacts on the following: (i) the estimated 12 of 24
260	260	229average energy bill by customer type and rate class for both heating and cooling; (ii) greenhouse
261	261	230gas emissions from combustion of fuel and from gas leaks; (iii) best available scientific research
262	262	231on outdoor air quality; (iv) indoor air quality from combustion of fuel and from gas leaks; (v)
263	263	232safety incidents; (vi) availability of cooling to be provided by alternative systems; (vii) the
264	264	233potential for stranded assets; (viii) the energy burden for low income customers; (ix) single point
265	265	234failures; (x) energy sources produced and purchased within the commonwealth; and (xi) any
266	266	235other factor relevant to the decision or action by the department.
267	267	236 (f) The department shall not approve a rate design or other plan that includes payment by
268	268	237a gas company or an electric company of fees or other costs associated with membership in a
269	269	238trade association or similar associations whose purpose is to promote natural gas, renewable
270	270	239natural gas, or hydrogen as sources of clean energy, nor shall the department approve a rate
271	271	240design or other plan that includes costs for an advertising or promotional advertising campaign
272	272	241that promotes natural gas, renewable natural gas, or hydrogen as sources of clean energy without
273	273	242such campaign disclosing the public health impacts, including the impact on indoor air quality,
274	274	243and safety hazards of natural gas, renewable natural gas or hydrogen and their components, and
275	275	244their effects on greenhouse gas emissions and the mandates of chapter 21N.
276	276	245 SECTION 15. Section 144 of said chapter 164 is hereby amended, in subsection (f), by
277	277	246inserting at the end thereof the following two sentences:
278	278	247 As part of such oversight and monitoring, the department shall require an annual audit of
279	279	248gas leaks reported to the department by a gas company, such audit to be conducted by a qualified
280	280	249independent contractor chosen jointly by the department and the attorney general. Such audit
281	281	250shall include a statistically significant random selection of reported leaks and shall include for 13 of 24
282	282	251each leak (i) the leak classification; (ii) the leak extent measurement; and (iii) the success of any
283	283	252repairs of such leak. The department shall make such audit available to the public by July 1 of
284	284	253each year.
285	285	254 SECTION 16. Said chapter 164 is hereby amended by striking out section 145 and
286	286	255inserting in place thereof the following section:-
287	287	256 Section 145. (a) "Eligible infrastructure replacement'', a replacement or an improvement
288	288	257of existing infrastructure of a gas company that: (i) is made on or after January 1, 2015; (ii) is
289	289	258designed to improve public health, including indoor air quality, and public safety or
290	290	259infrastructure reliability; (iii) does not increase the revenue of a gas company by connecting an
291	291	260improvement for a principal purpose of serving new customers or increasing gas pipeline
292	292	261capacity; (iv) reduces, or has the potential to reduce, lost and unaccounted for natural gas
293	293	262through a reduction in natural gas system leaks; and (v) is not included in the current rate base of
294	294	263the gas company as determined in the gas company's most recent rate proceeding; (vi) shall,
295	295	264whenever feasible, include use of advanced leak repair technology approved by the department
296	296	265to repair an existing leak-prone gas pipe to extend the useful life of the such gas pipe by no less
297	297	266than 10 years; (vii) shall, whenever feasible, include replacing gas infrastructure with utility-
298	298	267scale non-emitting renewable thermal energy infrastructure; and (viii) shall, whenever feasible,
299	299	268include zonal electrification projects through programs approved under section 145B of this
300	300	269chapter.
301	301	270 (b) A gas company shall file with the department a plan to address aging or leaking
302	302	271natural gas infrastructure within the commonwealth and the leak rate on the gas company's
303	303	272natural gas infrastructure in the interest of public safety, reducing greenhouse gas emissions 14 of 24
304	304	273pursuant to chapter 21N, and reducing lost and unaccounted for natural gas through a reduction
305	305	274in natural gas system leaks. In accounting for any reduction in lost and unaccounted for natural
306	306	275gas, a gas company shall rely on data specific to the commonwealth related to the loss of gas in
307	307	276transmission, storage, distribution, and use by consumers. Each company's gas infrastructure
308	308	277plan shall include interim targets for the department's review. The department shall review these
309	309	278interim targets to ensure each gas company is meeting the appropriate pace to reduce the leak
310	310	279rate on and to replace the gas company's natural gas infrastructure in a safe and timely manner
311	311	280and to reduce greenhouse gas emissions according to applicable sublimits pursuant to chapter
312	312	28121N. The interim targets shall be for periods of not more than 6 years or at the conclusion of 2
313	313	282complete 3-year walking survey cycles conducted by the gas company. The gas companies shall
314	314	283incorporate these interim targets into timelines for reducing greenhouse gas emissions and
315	315	284removing all leak-prone infrastructure filed pursuant to subsection (c) and may update them
316	316	285based on overall progress. The department may levy a penalty against any gas company that fails
317	317	286to meet its interim target in an amount up to and including the equivalent of 2.5 per cent of such
318	318	287gas company's transmission and distribution service revenues for the previous calendar year.
319	319	288 (c) Any plan filed with the department shall include, but not be limited to: (i) eligible
320	320	289infrastructure replacement of mains, services, meter sets and other ancillary facilities composed
321	321	290of non-cathodically protected steel, cast iron and wrought iron, prioritized to implement the
322	322	291federal gas distribution pipeline integrity management plan annually submitted to the department
323	323	292and consistent with subpart P of 49 C.F.R. part 192; (ii) an anticipated timeline for the
324	324	293completion of each project; (iii) the estimated cost of each project; (iv) rate change requests; (v)
325	325	294a description of customer costs and benefits under the plan; (vi) the relocations, where practical,
326	326	295of a meter located inside of a structure to the outside of said structure for the purpose of 15 of 24
327	327	296improving public safety; (vii) infrastructure proposed to be replaced or repaired, including
328	328	297replacement of gas infrastructure with utility-scale non-emitting renewable thermal energy
329	329	298infrastructure or non-combusting electric heat pumps; (viii) work plans including location by
330	330	299street segment with cross streets or street numbers showing where the segment of leak-prone
331	331	300infrastructure scheduled to be replaced or repaired begins and ends; (ix) capacity of existing
332	332	301infrastructure, including but not limited to, diameter and pressure of pipes; (x) how the
333	333	302replacement infrastructure complies with the mandates of chapter 21N and section 1A of chapter
334	334	30325 to reduce greenhouse gas emissions; (xii) repairs of grade 3 leaks having a significant
335	335	304environmental impact as defined by section 144 (c); provided, however that such repairs shall be
336	336	305cost effective and shall comply with applicable state and federal safety regulations related to
337	337	306pipeline infrastructure; (xiii) number of customers per street segment expressing a desire to
338	338	307transition to non-emitting renewable sources of thermal energy; (xii) for each replacement
339	339	308project, an explanation, with reference to the standards developed pursuant to subsection (k), of
340	340	309why replacement of the infrastructure is appropriate, taking into account the cost to ratepayers
341	341	310and the reduction of greenhouse gas emissions as required by chapter 21N; and (xiii) any other
342	342	311information the department considers necessary to evaluate the plan.
343	343	312 As part of each plan filed under this section, a gas company shall include a timeline for
344	344	313repairing or removing all leak-prone infrastructure on an accelerated basis specifying an annual
345	345	314repair or replacement pace and program end date with a target end date of: (i) not more than 20
346	346	315years from the filing of a gas company's initial plan; or (ii) a reasonable target end date
347	347	316considering the allowable recovery cap established pursuant to subsection (f). The department
348	348	317shall not approve a timeline as part of a plan unless the allowable recovery cap established
349	349	318pursuant to subsection (f) provides the gas company with a reasonable opportunity to recover the 16 of 24
350	350	319costs associated with repairing or removing all leak-prone infrastructure on the accelerated basis
351	351	320set forth under the timeline utilizing the cost recovery mechanism established pursuant to this
352	352	321section; provided, however, that no cost recovery or depreciation associated with gas
353	353	322infrastructure shall be claimed by such gas company after January 1, 2050. After filing the initial
354	354	323plan, a gas company shall, at 5-year intervals, provide the department with a summary of its
355	355	324repair or replacement progress to date, a summary of work to be completed during the next 5
356	356	325years, a report of any leak-prone infrastructure remaining in the service territory of the gas
357	357	326company by street segment with cross streets or street numbers showing where the segment
358	358	327begins and ends, including the likely year of replacement of such infrastructure and the estimated
359	359	328cost of replacement at the current cost of replacement for the type of pipe in the location, and any
360	360	329similar information the department may require. The department shall require a gas company to
361	361	330file an updated long-term timeline as part of a plan if it alters the cap established pursuant to
362	362	331subsection (f).
363	363	332 (d) If a gas company files a plan on or before October 31 for the subsequent construction
364	364	333year, the department shall review the plan within 6 months. The plan shall be effective as of the
365	365	334date of filing, pending department review. The department may modify a plan prior to approval
366	366	335at the request of a gas company or make other modifications to a plan as a condition of approval.
367	367	336The department shall consider the costs and benefits of the plan including, but not limited to,
368	368	337impacts on ratepayers, reductions of lost and unaccounted for natural gas through a reduction in
369	369	338natural gas system leaks, compliance with the mandates of chapter 21N to reduce greenhouse gas
370	370	339emissions, and improvements to public health, including air quality, and public safety, and shall
371	371	340make written findings of factors considered. The department shall give priority to plans narrowly
372	372	341tailored to addressing leak-prone infrastructure most immediately in need of replacement; 17 of 24
373	373	342provided, however, that the department shall not approve a non-emergency repair or replacement
374	374	343of leak-prone infrastructure without an analysis of non-combusting alternatives such as non-
375	375	344emitting renewable thermal energy infrastructure or non-combusting electric heat pumps.
376	376	345 (e) If a plan is in compliance with this section and the department determines the plan to
377	377	346reasonably accelerate eligible infrastructure repair or replacement and provide benefits, the
378	378	347department shall issue preliminary acceptance of the plan in whole or in part. A gas company
379	379	348shall then be permitted to begin recovery of the estimated costs of projects included in the plan
380	380	349beginning on May 1 of the year following the initial filing and collect any revenue requirement,
381	381	350including depreciation, property taxes and return associated with the plan.
382	382	351 (f) On or before May 1 of each year, a gas company shall file final project documentation
383	383	352for projects completed in the prior year to demonstrate substantial compliance with the plan
384	384	353approved pursuant to subsection (e) and that project costs were reasonably and prudently
385	385	354incurred. The department shall investigate project costs within 6 months of submission and shall
386	386	355approve and reconcile the authorized rate factor, if necessary, upon a determination that the costs
387	387	356were reasonable and prudent. Annual changes in the revenue requirement eligible for recovery
388	388	357shall not exceed (i) 1.5 per cent of the gas company's most recent calendar year total firm
389	389	358revenues, including gas revenues attributable to sales and transportation customers, or (ii) an
390	390	359amount determined by the department that is greater than 1.5 per cent of the gas company's most
391	391	360recent calendar year total firm revenues, including gas revenues attributable to sales and
392	392	361transportation customers. Any revenue requirement approved by the department in excess of
393	393	362such cap may be deferred for recovery in the following year. 18 of 24
394	394	363 (g) All rate change requests made to the department pursuant to an approved plan, shall
395	395	364be filed annually on a fully reconciling basis, subject to final determination by the department
396	396	365pursuant to subsection (f). The rate change included in a plan pursuant to section (c), reviewed
397	397	366pursuant to subsection (d) and taking effect each May 1 pursuant to subsection (e) shall be
398	398	367subject to investigation by the department pursuant to subsection (f) to determine whether the gas
399	399	368company has over collected or under collected its requested rate adjustment with such over
400	400	369collection or under collection reconciled annually. If the department determines that any of the
401	401	370costs were not reasonably or prudently incurred, the department shall disallow the costs and
402	402	371direct the gas company to refund the full value of the costs charged to customers with the
403	403	372appropriate carrying charges on the over-collected amounts. If the department determines that
404	404	373any of the costs were not in compliance with the approved plan, the department shall disallow
405	405	374the costs from the cost recovery mechanism established under this section and shall direct the gas
406	406	375company to refund the full value of the costs charged to customers with the appropriate carrying
407	407	376charges on the over collected amounts.
408	408	377 (h) The department may promulgate rules and regulations under this section. Such
409	409	378regulations shall include a performance-based financial incentive to a gas company to reduce
410	410	379miles of gas infrastructure and to build utility-scale non-emitting renewable thermal energy
411	411	380infrastructure eligible under subsection (c)(2); provided, however, that such infrastructure
412	412	381complies with the mandates of chapter 21N to reduce greenhouse gas emissions. Such
413	413	382regulations shall be promulgated within 12 months of the effective date of this provision. The
414	414	383department may discontinue the replacement program and require a gas company to refund any
415	415	384costs charged to customers due to failure to substantially comply with a plan or failure to
416	416	385reasonably and prudently manage project costs. 19 of 24
417	417	386 (i) No less than 90 days before filing a plan with the department, a gas company shall
418	418	387notify each customer connected to leak-prone pipeline segments proposed to be replaced in such
419	419	388plan. Such notice shall include the available schedule of the next five years for replacement of
420	420	389pipeline infrastructure on the customer’s street, the expected duration, the anticipated cost for
421	421	390such replacement, the impact on public health including indoor air quality, public safety, the
422	422	391availability of cooling, and the estimated impact on the energy bill of such customer. The
423	423	392department shall convene a stakeholder engagement group including the department of
424	424	393environmental protection, the department of energy resources, the attorney general, and
425	425	394representatives of environmental justice communities, gas workers and environmental
426	426	395organizations to review and approve such outreach plan to inform customers of the pipeline
427	427	396infrastructure project. A gas company shall provide an opportunity to each customer connected
428	428	397to such leak-prone pipe to express any choice the customer may have that proposed funds be
429	429	398spent on installation of non-emitting renewable thermal infrastructure or non-combusting electric
430	430	399heat pumps instead of gas infrastructure.
431	431	400 (j) Within 3 days of any plan submitted to the department by a gas company for repair,
432	432	401replacement or improvement of any existing infrastructure pursuant to this section, a gas
433	433	402company shall send such plan to the municipality whose service territory is covered by such
434	434	403plan, as a condition of approval by the department of such plan. Within 30 days of receipt of
435	435	404such plan, such municipality may provide the gas company with comments and questions about
436	436	405the plan. Within 15 days of receipt of such comments and questions, the gas company shall
437	437	406respond to questions such municipality has about the plan. Within 3 days of approval of such
438	438	407plan by the department, the gas company shall send such approval to the municipality whose
439	439	408service territory is covered by the plan. 20 of 24
440	440	409 (k) The department shall develop standards to inform a decision by a gas company
441	441	410whether to repair or replace leak-prone infrastructure. The department shall require a gas
442	442	411company to repair rather than replace infrastructure when conditions it specifies are met and
443	443	412shall conduct audits to ensure compliance with any such requirement. If a gas company replaces
444	444	413infrastructure required by the department to be repaired, the gas company shall not be permitted
445	445	414to recover the cost of the replacement for such infrastructure.
446	446	415 SECTION 17. Said chapter 164 is hereby amended by inserting after section 145 the
447	447	416following three sections:-
448	448	417 Section 145A. (a) By December 31, 2025, a gas company shall file with the department a
449	449	418plan for the transition by January 1, 2050, of such company’s pipeline infrastructure from
450	450	419emitting sources of thermal energy to non-emitting renewable sources of thermal energy. Such
451	451	420plan shall include: (i) number of customers whose source of thermal energy is projected to be
452	452	421transitioned each year from emitting to non-emitting sources of thermal energy; (ii) number of
453	453	422miles of pipelines projected to be transitioned each year from emitting to non-emitting sources of
454	454	423thermal energy or which are retired from use; (iii) the thermal technology projected to be
455	455	424deployed by number of customers and miles of pipe transitioned including but not limited to air-
456	456	425source heat pumps, ground source heat pumps, networked geothermal, or other non-combusting
457	457	426thermal energy technology; (iv) the estimated amount of reduction in greenhouse gas emissions
458	458	427coming from the gas distribution system; and (v) the projected impact on a gas company’s
459	459	428workforce and on customers’ energy bills, affordability, and safety. Such plan shall be updated
460	460	429annually by December 31 of each year as provided in subsection (b) of this section. 21 of 24
461	461	430 (b) A gas company shall file annually by December 31 a update to the plan filed pursuant
462	462	431to subsection (a) which shall include: (i) the street segments and number of customers connected
463	463	432to such street segments which will transition from gas service to non-emitting renewable thermal
464	464	433infrastructure such as networked geothermal in the coming year; (ii) the plan in the coming year
465	465	434to retire gas infrastructure and to transition such customers to alternative sources of non-emitting
466	466	435renewable thermal energy such as non-combusting electric heat pumps; (iii) the estimated
467	467	436greenhouse gas emissions from existing gas infrastructure not yet scheduled for transition in the
468	468	437coming year; (iv) the plan to reduce greenhouse gas emissions from infrastructure determined to
469	469	438have no technical option to transition to non-emitting renewable thermal in the coming year; and
470	470	439(v) other such other information as the department may require.
471	471	440 (c) In any consideration of the cost effectiveness of transitioning from existing gas
472	472	441infrastructure to non-emitting renewable thermal infrastructure, a gas company shall consider the
473	473	442following factors: (i) the leak status of the existing infrastructure; (ii) the current depreciation,
474	474	443schedule of future depreciation, and potential for avoided costs; (iii) the impact on public health
475	475	444and public safety; (iv) the potential for avoided costs; (v) the customer cost and resulting energy
476	476	445burden; and (vi) the expected reduction of greenhouse gas emissions as required by chapter 21N.
477	477	446In the interest of protecting ratepayers, a gas company may apply to the department to replace all
478	478	447gas appliances with electric appliances and to no longer provide gas service to the customer if
479	479	448cost avoidance is found to benefit ratepayers. If the department approves such application, a gas
480	480	449company may replace a customer’s gas appliances with electric appliances, and may provide
481	481	450necessary upgrades to a customer’s electric service, insulation and mitigation of pre-
482	482	451weatherization barriers. Funding for such upgrades may come from funds available from energy 22 of 24
483	483	452efficiency programs pursuant to section 19 of chapter 25 or from funds available from the
484	484	453thermal transition trust fund pursuant to section 9A of chapter 23J.
485	485	454 (d) The department shall make available for review by the public plans filed by a gas
486	486	455company under this section.
487	487	456 (e) The department shall, within 12 months of the enactment of this section, promulgate
488	488	457regulations or directives as needed to implement the requirements of this section.
489	489	458 Section 145B. (a) The department shall permit a gas company to sell, lease, install, and
490	490	459service air source heat pumps, ground source heat pumps, heat pump water heaters, induction
491	491	460stoves, electric clothes dryers, and other electric appliances and equipment that serve as non-
492	492	461combusting alternatives to gas appliances and equipment.
493	493	462 (b) No later than January 1, 2024, the department shall require a gas company to design
494	494	463and offer to each customer a plan which increases the availability, affordability, and feasibility of
495	495	464conversion of the customer’s gas appliances and gas equipment to electric appliances and electric
496	496	465equipment; provided, that the plan shall prioritize customers and zones of customers who are
497	497	466served by gas distribution infrastructure that is identified for replacement pursuant to section 145
498	498	467of this chapter; and provided further, that such plan shall seek, whenever feasible, to convert
499	499	468zones of customers living in contiguous locations, rather than individual customers.
500	500	469 (c) In approving a plan proposed by a gas company to convert a customer’s gas
501	501	470appliances and gas equipment to electric appliances and electric equipment, the department shall
502	502	471develop a methodology for determining rates payable by a customer to a gas company that
503	503	472facilitates conversion from gas to electricity, including but not limited to, charges applicable only
504	504	473to a customer who pursues conversion from gas to electricity through such plan. The department 23 of 24
505	505	474shall permit a gas company to recover the actual costs of conversion from gas to electricity from
506	506	475a customer through such plan, including recovery of such costs from a customer who no longer
507	507	476receives gas service following conversion from gas to electricity. Any costs to be recovered shall
508	508	477only include the actual costs of conversion and shall not include any cost to the gas company
509	509	478associated with revenue lost by a gas company from the conversion by a customer from gas to
510	510	479electricity as a source of thermal energy. The department shall approve in advance
511	511	480reimbursement for costs incurred by a gas company to ensure lowest feasible cost for such
512	512	481conversions. A plan by a gas company to convert a customer’s gas appliances and gas equipment
513	513	482to electric appliances and electric equipment shall include an option for the customer to choose
514	514	483appliances and equipment with a higher cost than those provided through a gas company, so long
515	515	484as the customer pays the difference in cost between standard appliances and equipment and
516	516	485higher cost models. The department shall establish guidelines outlining criteria and procedures to
517	517	486be used by the department for reviewing a proposal, including factors the department shall
518	518	487consider for plan approval.
519	519	488 (d) A gas company may petition the department independently or in coordination with the
520	520	489department of energy resources to approve: (i) a financing plan for the costs of conversion from
521	521	490gas to electricity to be repaid by a participating customer on such gas or electric bill of such
522	522	491customer; (ii) other financing plans developed by a gas company; or (iii) other cost-effective
523	523	492plans that reasonably accelerate conversion of customers from gas to electricity; provided, that
524	524	493such plans will not unreasonably burden customers who remain customers of a gas company.
525	525	494 (e) The department shall issue a decision on a plan filed by a gas company for conversion
526	526	495of customers’ energy supply from gas to electricity pursuant to this section within 6 months of 24 of 24
527	527	496the date of filing such plan. A gas company shall file appropriate tariff changes and otherwise
528	528	497implement any plan for conversion from gas to electricity approved under this section.
529	529	498 (f) Participation in a plan approved under this section shall not affect a customer’s
530	530	499eligibility for other energy efficiency or electrification incentives available under state or federal
531	531	500law.
532	532	501 Section 145C. In any plan or other action filed by a gas company under sections 145,
533	533	502145A, or 145B of this chapter that includes a plan to install a non-emitting networked renewable
534	534	503thermal infrastructure, such gas company shall include a plan to provide training and continued
535	535	504employment at pre-existing wages and benefits to workers employed by such gas company
536	536	505whose jobs would otherwise be eliminated or significantly changed by a transition from gas
537	537	506infrastructure to non-emitting renewable thermal infrastructure.
538	538	507 SECTION 18. Section 3 of chapter 149 of the acts of 2014 is hereby repealed.
539	539	508 SECTION 19. The department shall issue regulations within 12 months of the effective
540	540	509date of this section establishing an electric rate class for customers using air-source, ground-
541	541	510source and networked-geothermal heat pumps reflective of their pattern of use when determined
542	542	511to be of benefit to the electric grid load factor and thereby to the electric grid rate payer.