March 22, 2021

Next Steps Announced in Massachusetts Department of Public Utilities Proceeding To Evaluate Natural Gas Distribution Industry Evolution

Holland & Knight Energy and Natural Resources Blog
Dianne R. Phillips | Maria de la Motte | Mark C. Kalpin | Saqib Z. Hossain
Energy and Natural Resources Blog

As the Commonwealth of Massachusetts awaits Gov. Charlie Baker's decision whether to sign the revised landmark climate bill on his desk, the investigation by the Massachusetts Department of Public Utilities (DPU) (Docket DPU 20-80) into the role of natural gas in the Commonwealth's transition toward its goal of net-zero greenhouse gas (GHG) emissions by 2050 continues to proceed, with stakeholder opportunities to become involved expected to pick up.

Last June, the attorney general filed a petition requesting that the DPU initiate an investigation to assess the future of local gas distribution company (LDC) operations and planning in light of the Commonwealth's net-zero goal. The DPU opened a formal investigation on Oct. 29, 2020. In its order, the DPU directed the LDCs to issue a joint request for proposals (RFP) for an independent consultant to conduct a study that would help the DPU to develop a plan to guide the evolution of the Commonwealth's natural gas industry in light of the Massachusetts 2050 Decarbonization Roadmap and the Massachusetts Clean Energy and Climate Plan (CECP) for 2030 (together, the Roadmaps). Each LDC was required to submit a proposal to DPU on or before March 1, 2022, that includes the LDC's recommendations and plans for helping the Commonwealth achieve its 2050 climate goals, supported by the data and analysis in a report of the independent consultant. For further information on the Roadmaps, see the authors' earlier blog post, "The Road to Net Zero is Paved With Numerous Policy Initiatives" (Jan. 22, 2021).

The attorney general's office filed a motion for clarification on Nov. 6, 2020, requesting that DPU clarify its order with respect to the issuance of the LDC's joint RFP, the development of the consultant's report, and stakeholder involvement. The LDCs filed a joint response, and the Environmental Defense Fund, the Sierra Club, the Conservation Law Foundation (CLF) and others also filed responses. CLF supported the attorney general's motion and requested that DPU task the attorney general, Massachusetts Department of Energy Resources (DOER) or another public entity with identifying and convening a stakeholder group to participate in drafting the scope of work for the independent consultant, create broader opportunities for public comment and convene conferences examining how to maximize benefits and minimize burdens for environmental justice populations, all as described in an accompanying report.

The LDCs' joint response to the motion detailed the benchmarks and stakeholder engagement required under DPU's order to argue that it needed no clarification. Specifically, the consultant will be required to present a forecast of the costs and GHG emissions reductions involved in transitioning the natural gas system and develop recommendations to reduce GHG emissions from the sale and distribution of natural gas to meet goals in relation to the Roadmaps, outlining specific actions and milestones. DPU denied the motion for clarification on Feb. 10, 2021, agreeing with the LDCs that the original order was not ambiguous.

On March 1, 2021, the LDCs released their first required update (another will be required on Sept. 1, 2021), which summarized the process followed by the LDCs to identify the required consultant. Specifically, the LDCs began developing a draft RFP in November 2020, shared their initial draft RFP with the Executive Office of Energy and Environmental Affairs (EEA), DOER and the attorney general's office on Dec. 11, 2020, and conducted virtual meetings with these stakeholders, resulting in a new draft RFP being issued on Jan. 26. On Jan. 27, the LDCs shared the draft RFP with CLF and other interested stakeholders, accepted further comments and sought to address feedback received, issuing a further revised draft on Feb. 5,. According to the March 1 update, the LDCs expect to execute a contract with the selected consultant by the end of March, at which time the LDCs will deliver a presentation to stakeholders on the results of the competitive solicitation. 

The newly selected consultant will work with the LDCs to review the Roadmaps, identify any additional pathways not examined in the Roadmaps and perform a detailed study of each LDC that analyzes the feasibility of all GHG reduction pathways. Prior to filing the March 1, 2022, report and proposals, the LDCs will engage in an additional stakeholder process to solicit comments and suggestions on the report and proposals.

Holland & Knight's Energy and Environment Team, a multidisciplinary team of lawyers and professionals who are well informed on emerging environmental issues, will continue to monitor these developments as they progress. For questions about this article or for legal counsel about a specific situation involving your organization, please contact the authors.

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