The Gap Between Fantasy and Reality

Written on: August 9, 2023

Author: Joe Uglietto
State regulators are quickly approaching a fork in the road when it comes to developing Clean Heat Standards and compliance markets. They will either choose the pathway that is based on pure fantasy, and although politically rewarding will be doomed to fail. Or they’ll choose a pathway that is rooted in science, that is realistic and that can achieve carbon reduction targets without destroying industries in the process.

The MA Department of Environmental Protection (DEP) is at that point as I write this. In the first discussion document of the CHS Program, the DEP would mandate that all heating fuel suppliers convert 3% of their customer base annually to expensive air-source heat pumps or face a large fine. In this scenario, whether the customer wants to switch to heat pumps or not is irrelevant. Building upon this fantasy, the DEP has also considered treating electricity as carbon-neutral. The fuel used to power our electric grid would be irrelevant and all electricity would be considered to be renewable. This despite the reality that more than half of winter electric generation would continue to come from natural gas. And to cap off this make-believe scenario that could potentially become all too real, heating fuel suppliers would be required to either reduce the carbon intensity of their fuel or lower their sales by 29% in 2025 and by 49% in 2030. There would be no time built-in for capital investment or to affect a transition as was afforded to the power and transportation sectors.

The problems with a fantasy approach like this are myriad. Tracking fuel from out of state, regulating out of state entities, accurately carbon-scoring each fuel and a large compliance obligation in year one are just a few issues that come to mind. Not to mention the harm brought to the end-user or consumer. They will bear the financial burden of these programs and they’ll be stripped of the ability to choose how best to heat and cool their home.

It is absolutely a possibility that science and reason will lose out. But this story is far from over. DES – along with other stakeholders like the Massachusetts Energy Marketers Association and individual fuel dealers – has been deeply engaged in the process. It will be critical that the industry continues to shine a light on the deeply negative outcomes brought about by “fantasy-land” plans. Only then can we convince regulators that the greatest promise for effective Clean Heat Standards are ones that embrace reality.

Renewable Energy Insights is a regular column by Joe Uglietto, president of Diversified Energy Specialists, a leader in the renewable energy markets and consultant to the industry with a focus around emissions reductions and renewable energy innovation.