DC Utility Regulators Need to Stop Repeating Gas Utility Talking Points

Testimony of Mark Rodeffer
Sierra Club
Performance Oversight Hearing on the Public Service Commission
Committee on Business and Economic Development
January 31, 2024

Councilmember McDuffie and members of the Committee, thank you for the opportunity to testify today. My name is Mark Rodeffer. I am the co-lead of the Sierra Club's national building electrification campaign. The Sierra Club is America’s largest and most influential grassroots environmental organization, with about 3,000 dues-paying members in DC. Our top priority is combating climate change.

This is the fifth straight year I’ve testified at this hearing. In 2020, in what I believe was the last in-person DC Council hearing at which I testified, I was the sole public witness. In more recent years and today, there are many more witnesses because as the climate crisis worsens, there’s much greater attention on the responsibilities of the Public Service Commission in ensuring that DC’s two monopoly energy utilities comply with DC’s climate commitments and end their reliance on fossil fuels by 2045. Unfortunately, over that same period of time, there has not been a commensurate increase in the Commission's understanding of and action on its responsibilities in the transition off fossil fuels.

For years, the Commission has allowed Washington Gas to waste hundreds of millions of DC residents’ dollars on spending plans to replace fossil fuel pipelines. DC’s climate commitments will require us to stop using these gas pipelines by 2045. Despite the pipes’ short shelf-life, the upfront cost of the spending plan, which Washington Gas has dubbed Project Pipes, has been estimated by the Department of Energy and Environment to be $3 billion to $4.5 billion.[1] The economic consulting firm Synapse Energy Economics found that using a conservative estimate of the upfront cost, up to $14 billion in total costs would be foisted on DC residents once debt service and corporate profits are added, with a total cost to DC ratepayers of up to $14 billion.[2] If averaged across DC's approximately 315,00 households, the total cost works out to about $45,000 per household ($14,000,000,000 / 315,000 = $44,444.44). Washington Gas wants to charge DC residents these costs over about 50 years into the future, meaning a cost of almost $1,000 a year. That’s on top of regular utility bills.

A year ago at the Commission’s performance oversight hearing, Councilmember McDuffie, you asked the Commission’s chair, Emile Thompson, whether charging DC residents for the costs of Project Pipes was inconsistent with DC’s climate commitments. Mr. Thompson’s reply, in part, was:

Yes, so Project Pipes is an accelerated pipe replacement program. We’ve had two phases thus far, and the Commission so far has authorized roughly $291 million dollars for the repair of either leaking or very vulnerable pipe replacement. This not only goes to the goal of reducing greenhouse gas emissions, but also the very issue of safety. We’ve seen places across the country where faulty infrastructure has led to gas explosions, with multiple fatalities. I don’t want to be alarmist. But I think the last thing we want is a gas system that we have to be leaking gas and to pose some type of harmful, harmful threat to our residents.

You can see a transcript of the full exchange in an attachment to my testimony. Mr. Thompson’s answer to your question is concerning for two reasons.

Mr. Thompson stated that the Commission so far has authorized hundreds of millions of dollars in Project Pipes spending “for the repair of either leaking or very vulnerable pipe replacement,” which he said “goes to the goal of reducing greenhouse gas emissions.” These statements are not true. Claims that Project Pipes is about reducing climate pollution are nothing but a talking point by Washington Gas in an attempt to greenwash its greedy multi-billion dollar money grab. Project Pipes does not find gas leaks and fix the leaks. Project Pipes is wholesale gas pipe replacement with no regard for whether a pipe is leaking.

In fact, Washington Gas has a wholly separate program to repair and replace leaky pipes. The utility’s leaky pipe repair and replacement program is called “Integrity Management Program,” or “IMP” (Washington Gas sometimes calls it “DIMP” for “Distribution Integrity Management Program”). The IMP program is funded completely separately from Project Pipes. What is most troubling is that data submitted by Washington Gas itself, and analyzed by DOEE in a filing made last week before the Commission, shows that Washington Gas has practically abandoned its “normal” repair and replace programs of actual leaking pipes in favor of advanced replacement of potentially leaking pipes.[3] And there is a clear reason for this–Washington Gas can collect an advanced surcharge on customers’ bills for advanced replacements under Project Pipes, and the company’s underlying obligation to find and repair existing leaks simply isn’t profitable enough for them. Claims by anyone that Project Pipes is designed to identify and repair leaky pipes are inaccurate. It’s deeply disappointing that the chairman of DC’s utility regulator would repeat the gas utility’s greenwashing talking points at a DC Council oversight hearing. I ask Mr. Thompson to offer at the oversight hearing any evidence he has that a single dollar spent on Project Pipes was spent because the utility had identified and documented a pipe found to be leaking that was then replaced it as part of Project Pipes.

The way to end climate pollution from leaky gas pipes is to electrify our homes and other buildings so we longer use the deadly product sold by Washington Gas.

The second reason for concern about Mr. Thompson’s comments at this hearing last year is his statement that “we’ve seen places across the country where faulty infrastructure has led to gas explosions, with multiple fatalities” and that “the last thing we want is a gas system that we have to be leaking gas and to pose some type of harmful, harmful threat to our residents.” Certainly, the Sierra Club agrees that the last thing we want to see are more deadly methane gas explosions. That’s precisely the reason to move away from methane gas, not to spend billions of dollars locking us into methane gas infrastructure. DC had a gas explosion earlier this month when a leaking gas pipe destroyed a store in Anacostia and damaged an adjacent building housing a daycare from which 16 children were evacuated moments before the explosion. No one in DC wants to see more methane gas explosions caused by the deadly product sold by Washington Gas.

The problem with Mr. Thompson’s statement is that Project Pipes is not designed to stop such explosions, nor will it do so. Gas explosions occur when a gas pipe is leaking in a confined space like a home or other building. When the gas mixes with the air, it increases the pressure in the confined space. When there is an ignition source like a spark or a flame, or sometimes even static electricity, the gas can explode. Methane gas explosions nearly always occur indoors, not outdoors, because outdoors, there’s enough air for the leaked methane gas to disperse. Washington Gas does not own and is not responsible for gas pipes inside people’s homes or inside other buildings. Project Pipes does not replace indoor gas pipes. So the idea that Project Pipes is going to prevent a gas explosion like the one we saw in Anacostia is complete folly. The best way to prevent such explosions is to electrify our homes and other buildings so we no longer use the deadly product sold by Washington Gas.

The Sierra Club asks Mr. Thompson and anyone else with the Public Service Commission to no longer state that Project Pipes is designed to reduce climate pollution nor to claim it will reduce the likelihood of indoor gas explosions. Those statements are not true, and it’s time to stop spreading misinformation from Washington Gas.

If the Public Service Commission is serious about reducing climate pollution from the gas utility and preventing methane gas explosions, it will end the wasteful spending of billions of dollars of DC residents’ dollars on Project Pipes. Instead, the Commission should proactively lead Washington Gas in transitioning its business model from providing fossil fuels to burn for  heating and instead toward clean and renewable heat sources like geothermal heat pump networks and clean energy district heating. Right next door, the Maryland Public Service Commission is exercising leadership by recognizing that gas volumes will necessarily decrease as Maryland moves towards its climate goals driven by electrification, and the Maryland Public Service Commission has initiated a comprehensive gas planning docket to chart the equitable winding down of the gas system. To continue to allow Washington Gas to waste billions of ratepayer dollars on outdated and dirty energy systems is to abrogate the Commission’s duties under the Climate Commitment Act and the Clean Energy DC Omnibus Act. It would also be a climate crime against future generations.

Thank you again for the opportunity to testify, and Councilmember McDuffie, I hope the Council will begin to provide meaningful oversight to ensure the Commission charts a new course to begin the transition of the District off fossil fuels.

ATTACHMENT: DC Council Committee on Business and Economic Development performance oversight hearing on the Public Service Commission, March 31, 2023

Video: http://dc.granicus.com/MediaPlayer.php?view_id=2&clip_id=8129

Transcript begins at 1:32:01 in the video.

McDUFFIE: In terms of Project Pipes, which is WGL, talk about where things stand and just really how you respond to critics who contend that this project is at odds, frankly, with the District’s climate goals.

THOMPSON: Yes, so Project Pipes is an accelerated pipe replacement program. We’ve had two phases thus far, and the Commission so far has authorized roughly $291 million dollars for the repair of either leaking or very vulnerable pipe replacement. This not only goes to the goal of reducing greenhouse gas emissions, but also the very issue of safety. We’ve seen places across the country where faulty infrastructure has led to gas explosions, with multiple fatalities. I don’t want to be alarmist. But I think the last thing we want is a gas system that we have to be leaking gas and to pose some type of harmful, harmful threat to our residents. So the Commission is certainly well aware of what our clean energy mandates are, but it’s also a balancing test in terms of providing a safe, reliable system. So the commission does that.

McDUFFIE: I want to push you a little bit more on the balancing aspect of the Commission’s work. The clean energy goals are the clean energy goals. And you have people who do feel like the work that Washington Gas is doing is at odds with the District’s clean energy goals. Do you feel like it’s at odds, or as you put it, it’s just a matter of balancing? Let me know whether you think the Commission struck the appropriate balance in terms of meeting the District's clean energy goals in the work that you all do in the filings that Washington Gas has had before the agency.

THOMPSON: I think the Commission has struck the appropriate balance. As I stated earlier, when the city Council and the Mayor signed the Clean Energy Act, it didn’t state that Washington Gas cannot be a fuel source. And so the Commission, again, has to give Washington Gas the opportunity to present a climate business plan to see if they can come into compliance. Now of course I’ve heard the comments about what different people feel about that plan and whether or not it’s actually feasible, but we have to do our independent analysis, based off of not only the comments that have been submitted, but using our own internal intelligence as well as our consultant. So these things, we have to undergo this process, we cannot prejudge anything. We are a quasi-judicial body so we have to do this determination. If it comes out that what has been proposed by Washington Gas in their climate plan is inconsistent with the District’s goals, it’s not feasible, it’s economically not realistic, then the Commission will take appropriate action. But I think for us to prejudge that on the front end, it does a disservice to all of us.

[1] Direct Testimony of DC government witness Edward Yim, page 11, Docket Number FC1154-115, June 15, 2020.

[2] DOEE Comments prepared by Synapse Energy Economics, page 8, Formal Case 1175, May 2, 2023.