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