Illinois to consider the ‘Future of Gas’ in unprecedented regulatory proceeding

Between electric vehicles and all-electric buildings, electrification has emerged as a leading tool in the fight against climate change. But if we start to plug everything into the grid, where does that leave Illinois’ extensive natural gas system?

It’s a question the Illinois Commerce Commission is looking to answer. The regulatory body, which oversees Illinois’ investor-owned utilities, initiated what’s called a “Future of Gas” proceeding this March. The process will “evaluate the impacts of Illinois’ current decarbonization and electrification goals on the natural gas system,” according to the commission website.

The undertaking originally grew out of rate-case decisions that the commission doled out to Illinois’ four major gas utilities — Ameren Gas, Nicor Gas, Peoples Gas and North Shore Gas — in November. After slashing the utilities’ requested rate hikes by a combined total of $240 million, the regulatory body directed its staff to develop a plan for the sweeping proceeding.

“We're at this tipping point in the way much of the world is viewing a lot of these different legacy technologies and where we're going,” said Illinois Commerce Commission Executive Director Jonathan Feipel. “We've been doing this model of electric and gas for the last 100 years, and it seems like we're at a review of, ‘Are we doing the best approach? Are we providing Illinois citizens with utility service at its most effective, most affordable, least cost, (most) reliable and safe? Are we truly doing that?’ We call it the Future of Gas, but really it's the future of utility service.”

The effort, which mirrors similar attempts in other states, is especially significant here. Illinois is the eighth-largest natural gas-consuming state in the nation, with almost eight in 10 households using the greenhouse gas for heating. All in all, Illinois holds more than one-tenth of total U.S. natural gas underground storage capacity.

The ongoing proceeding includes two series of workshops: The first began in April and will determine a range of issues, and the second will address potential solutions and recommendations.

Throughout the process, the commission is looking to tackle enormous questions such as, “Can our existing gas system be decarbonized?” and “How can we protect people who don’t electrify their homes from taking on a disproportionate cost of the gas system?”

On the other side of those questions, a detailed action plan for Illinois gas utilities’ and their future infrastructure investments — complete with recommendations for any future commission action or necessary legislative changes — will emerge no later than July 1, 2025.

Among the topics the proceeding will explore is the need for future integrated planning between gas and electric systems. That’s because as more houses get off gas, the burden on the electric system will grow.

Along with both gas and electric utilities, the proceeding invites a wide range of stakeholders to participate, including community representatives, environmental advocates and state and federal agencies. There are currently more than 800 participants involved in the workshops.

Robert Kelter, a senior attorney with the Chicago-based Environmental Law and Policy Center, said the idea behind the proceeding is to give all interested parties an opportunity to participate — but to do so in a thought-out, structured process rather than “trying to fight it out in Springfield.”

“My hope is, rather than people going to the legislature and lobbying and trying to convince legislators what to do, that we rely on the commission's expertise and that we let the commission come up with the best plan possible for this transition,” Kelter said. “Because there is no perfect solution to these problems. There's too many variables there. It's very difficult, but it definitely can be done.”

As Illinois heads toward its goal of reaching 100% clean energy by 2050, the state will also be faced with what to do with its sprawling gas infrastructure.

Nicor Gas spokesperson Jennifer Golz said the company believes natural gas and its infrastructure are essential to reaching Illinois’ climate goals.

“Our distribution network, availability of storage fields and portfolio approach to decarbonization particularly positions Illinois to leverage natural gas as a part of its clean and affordable energy economy in a faster, less expensive pathway to reducing GHG emissions than policy-driven mandatory electrification,” she said in an email.

With just 38 customers disconnecting their natural gas service for electrification last year alongside the addition of 11,000 new meters, Golz added “it’s important to note that the demand for natural gas in our service area continues to grow.”

Limiting new investment in that system to prevent stranded assets — for example, pipes that become obsolete before the end of their economic life — has been a major point of contention for advocates.

With Illinois’ gas utilities spending more than $1 billion each year on gas system infrastructure, one recent study out of electrification advocacy group Building Decarbonization Coalition projected unrecovered gas system assets are projected to reach $80 billion by 2050.

Kiki Velez, an equitable gas transition advocate for environmental nonprofit Natural Resources Defense Council, said Illinois is among a handful of states leading the nation in addressing the issue.

“We've seen a lot of states across the country really kick-start this transition to all-electric buildings. But regardless, we have to take a closer look at gas infrastructure, which nowadays is typically approved in really opaque gas rate cases,” she said. “We need to start really questioning, ‘Is this infrastructure going to serve us well into the future? And are there more cost-effective, zero-emission alternatives that we could be pursuing instead?’”

Slightly ahead are California and Colorado, Velez said.

Both states have begun implementing strategies to transition away from gas, such as reducing utility incentives for gas appliances and eliminating subsidies for developers to connect new properties to the gas system.

Further, in a transparency move that will also begin in Illinois next year, Colorado gas utilities must file long-term gas infrastructure plans that provide greater insight into proposed investments, including a consideration of “non-pipeline alternatives” to investing in the gas system.

• Jenny Whidden, jwhidden@dailyherald.com, is a climate change and environment writer working with the Daily Herald through a partnership with Report For America supported by The Nature Conservancy. To help support her work with a tax-deductible donation, see dailyherald.com/rfa.