New Utah Gas Utility Settlement Advances Methane Transparency and Customer Protections

By: Logan Mitchell, Climate Scientist & Regulatory Manager, Utah Clean Energy and Veronica Ung-Kono, Attorney, U.S. Clean Energy, Environmental Defense Fund

When Utah Clean Energy learned about an expedited request before the Utah Public Service Commission (PSC) to approve a new large-scale natural gas supply acquisition in Colorado, we had concerns and questions about how such an investment would impact energy affordability for Utah ratepayers, as well as climate change and air quality. To get answers, our team of experts moved swiftly to coordinate with other parties and intervene in the docket and ultimately negotiate a settlement with Enbridge Gas and Wexpro. This week, the PSC issued an order approving the settlement, detailed below, which we consider a positive first step in improving transparency and reducing risks and costs associated with natural gas.

Natural Gas is a Potent Greenhouse Gas and Major Contributor to Air Pollution

Natural gas – used widely in Utah’s homes and commercial buildings for heat and cooking – is approximately 95% methane, a potent greenhouse gas that also contributes to Utah’s indoor and outdoor air pollution problems when combusted.

In addition, methane leaks from gas production and distribution are pervasive throughout industry, posing a serious climate problem while also wasting valuable energy resources.  Due to methane’s higher global warming potential (which is up to 87 times more potent than carbon dioxide over a 20-year time span), reducing leaks offers a critical opportunity to slow near-term warming. To help address these challenges, Utah Clean Energy worked with Environmental Defense Fund (EDF) and other regulatory stakeholders to negotiate a settlement with Enbridge Gas, Utah’s sole gas distribution utility, and Wexpro, a gas production company owned by Enbridge, regarding their proposed acquisition of a new gas production area in Colorado, Piceance III. The settlement agreement includes important commitments to improve transparency, reduce waste, and help protect Utah gas customers.

Wins for Utah Ratepayers and the Climate

One of the most significant achievements of the settlement is a requirement for new reporting on methane emissions and leak detection efforts from Wexpro’s gas production operations. Under the agreement, settlement parties along with Utah’s utility regulators will receive regular reports on methane emissions, leak detection and repair activities, and well-level methane leakage intensity measurements. This information will provide a much clearer picture of Wexpro’s methane emissions and help inform future methane reduction efforts.

The settlement also requires Wexpro to conduct a first-of-its-kind economic analysis of its methane mitigation efforts. The study will examine methane emissions reductions, avoided gas losses, preserved revenues, mitigation costs, and the financial payback of investments made since 2011. The findings will help quantify the economic value of reducing methane leaks and show how minimizing waste can benefit both customers and the environment.

In addition, Enbridge agreed to work with Utah Clean Energy, EDF, and other stakeholders to explore gas demand forecasting, long-term system planning, and opportunities to reduce customer costs and risks. These processes are essential to help inform future decision-making around gas production and expansion efforts in Utah and the West. The settlement also establishes a process to explore improvements to Enbridge’s ThermWise gas efficiency and conservation programs that can help customers reduce gas consumption and lower their energy bills.

While no single settlement can address every challenge facing Utah’s energy system and climate emissions, this agreement is an important first step in improving transparency around large-scale gas utility investments. With additional data, information, and analysis, Utah can make more informed decisions about the costs and risks to ratepayers and future generations who will ultimately be paying for these long-lived assets. The settlement lays the groundwork for a more affordable, resilient, and climate-friendly energy future for Utah households and businesses.