Regulators halt expensive gas pipeline replacement programs
The United States has more than 3 million miles of gas pipelines, and some of those pipelines are shockingly old — dating back to the 19th century in some cases. And as those pipes age, they become more prone to leaks and explosions that are always destructive and often deadly.
While it’s vital that the gas industry address the health and safety threats of their product, they’ve been all too eager to spend billions of dollars to fully replace pipelines — costs they can almost always pass on to the public through higher rates on their monthly energy bills.
These expensive pipeline replacement programs have turned into financial boondoggles — costing billions of dollars but doing next to nothing to reduce the amount of methane leaking from the gas system. As more and more Americans make the switch from polluting gas appliances to cleaner, more efficient all-electric ones, these expensive pipeline replacement programs risk tying us to fossil fuels for decades to come.
But recently there’s been promising signs that the gas industry may be forced to slow its spending spree. After years of rubberstamping pipeline replacement projects, regulators across the country have recently begun to put the brakes on these wasteful programs.
Illinois says “No” to Peoples Gas spending
Peoples Gas, which sells gas in Chicago, launched a huge pipeline replacement effort in 2011. Since then, costs have skyrocketed far past initial projections — nearly 10 times more than the $1.14 per month the utility promised the state legislature. By last year, the average customer was paying more than $17 a month for the program, in addition to the cost of gas to heat their homes.
The Illinois Commerce Commission, which regulates utilities in the state, recently voted unanimously to pause the program and began an investigation into the utility’s spending on pipeline replacement.
Even as Peoples Gas charged customers higher rates for the program, there’s little evidence that it was doing much to reduce methane leaks. A 2020 analysis of the program found that Chicago’s pipeline system is aging so quickly that the billions of dollars spent on pipeline replacement programs wasn’t enough to keep up with pipeline failures.
Washington Gas forced to halt DC Project Pipes program
It’s a similar story in Washington DC. This month the city’s Public Service Commission refused to let Washington Gas charge their customers $57 million for Project Pipes, a multi-decade plan to rebuild the city’s leaky gas system. The commission asked Washington Gas for more data on its spending on pipelines.
Local advocates at Beyond Gas DC note that spending billions on new pipelines that will be around for decades makes it more difficult for DC to meet its commitment to be carbon neutral by 2045. The city is also considering legislation that would help low-income residents transition their homes to get off Washington Gas’s polluting methane and power their homes with cleaner, safer electric appliances.
Tim Oberleiton, a senior attorney for the nonprofit Earthjustice, told Public News Service that the program was raising bills without meaningfully reducing methane leaks.
“Despite spending hundreds of millions of ratepayer dollars on this program, leaks are not moving down in a meaningful way. In fact, last year in D.C. the Beyond Gas campaign measured leaks across the city [and] found hundreds of active leaks across all eight wards.”
Industry profits while digging the fossil fuel hole deeper
It’s no surprise that gas utilities love massive pipeline programs. They generally get to charge customers a 10% premium on major investments — extra profit that is delivered to shareholders and executives. When it comes to new pipelines, bigger is always better for the industry, regardless of the long-term costs.
The fossil fuel industry is also using pipeline replacement as a Trojan Horse for the continued expansion of the fossil fuel system. Documents obtained by the Energy and Policy Institute show that the American Gas Association has been involved in a coordinated push to use pipeline replacement programs to expand gas utilities’ service territory.
The cost of maintaining the gas pipeline system continues to escalate — researchers at RMI found that annual expenditures roughly tripled between 2009 and 2017 and is now upwards of $15 billion per year. Instead of extending the life of the fossil fuel system, what if we invested that those billions in our power grid and helping people make their homes more energy efficient by switching to cleaner, safer all-electric appliances? It’s time to stop throwing good money after bad.