Charlottesville’s Gas Decarbonization Study: A Real Path to Decarbonization or Business as Usual?
On Tuesday, January 21, Charlottesville Gas released its long-awaited Gas Decarbonization Study. Following Charlottesville's 2019 commitment to reach net zero by 2050, in 2022, the City engaged consultant Black and Veatch to complete a Decarbonization Study for City-owned Charlottesville Gas and investigate the use of gas under these emissions reduction goals. This was an important and welcome step, and C3 joined the climate advocacy community locally to celebrate this progress toward moving away from fossil fuel dependence and provide input and recommendations for the study’s direction.
Charlottesville’s Climate Action Plan (2023) described the purpose of the gas decarbonization study as the following:
“This technical study seeks to determine how the gas utility can be a part of the solution in achieving the City Council and [Albemarle County] Board of Supervisors adopted, community-wide greenhouse gas reduction goals and recognizes the University of Virginia’s fossil fuel free goal. The study aims to explore the feasibility and effectiveness of policy-driven electrification and alternative routes to achieve net-zero emissions. The results will address possible energy sources, prospective emissions reductions, impacts on City financials, potential economic burden to customers, and the legal ability the City of Charlottesville has to adopt certain actions within the purview of federal, state, and local laws.”
Unfortunately, the study released last week comes nowhere near meeting these original aims and was not responsive to community input from the listening sessions. It dodges exploration of what it would take to reduce the utility’s direct emissions and instead leans on projected fuel mix changes and carbon offset purchases. While the study acknowledges the relevance and importance of electrification, it defines it as out of scope for the analysis, along with energy efficiency impacts, networked geothermal, and other creative solutions.
Energy Efficiency: A Missed Opportunity
Instead of modeling potential impacts from energy efficiency programs, the decarbonization study assumes a 1% year-over-year decline in average usage per residential customer based on historical demand. The decarbonization study does make recommendations for expanding the utility’s energy efficiency programs, and engages in extensive benchmarking to show that Charlottesville Gas currently outperforms similar jurisdictions when it comes to methane leaks and energy efficiency efforts. This benchmarking effort reinforces the fact that Charlottesville Gas is well-run compared to many of its peers but fails to meaningfully advance the City in its efforts to decarbonize.
Low Carbon Fuels - Emerging Technology with Limited Analysis
The study analyzes six decarbonization pathways, which are nearly identical except for the type of hydrogen procured (green or blue) and quantity of carbon offsets. The study states that “all decarbonization pathways assumed the gradual replacement of natural gas with blue and/or green H2 [hydrogen] and RNG [renewable natural gas] fuel.” These assumptions about the future percentage mix of natural gas, hydrogen and RNG are based on a 2019 American Gas Foundation study. Hydrogen and RNG are still emerging technologies, which makes it very hard to predict long term availability and procurement costs. In part due to that high level of uncertainty, the decarbonization study’s financial modeling of the decarbonization pathways only accounts for cost differences in the quantity of carbon offsets purchased.
Greenhouse Gas Reduction Goals and an Overreliance on Carbon Offsets
Charlottesville’s climate targets align with the international scientific consensus that globally, net emissions must fall by 45% from 2010 levels by 2030 and reach net zero around 2050. The bulk of these emissions reductions can come from proven strategies and technologies that are already being deployed - things like transitioning to solar and wind, pursuing beneficial electrification, investing in dense cities and multi-modal transportation, and reducing consumption. Beyond that, there are “difficult-to-decarbonize” sectors (industrial processes, airlines, etc) where, until technology improves to make direct decarbonization feasible, carbon offsets can play a role in reducing net emissions. In general, carbon offsets should be considered after other options are exhausted, not as a primary solution to reducing greenhouse gas emissions.
The “full decarbonization” pathway modeled in the study assumes the continued use of 1,391,772 MMBtu of natural gas, a nonrenewable fuel source that can pose health risks when used in homes. That is the greenhouse gas equivalent of driving over 17,000 gasoline powered vehicles for a year. The study’s over-reliance on carbon offsets is disappointing and represents an enormous missed opportunity for the City to explore decarbonization options that directly benefit residents such as energy efficiency programs, beneficial electrification, and networked geothermal.
Figure 20 from the Charlottesville Decarbonization Study shows the modeled decarbonization pathway’s 2050 fuel mix, and highlights carbon offsets as the primary decarbonization strategy.
Planning for Electrification
Electrification was ultimately not included in the scope of this decarbonization study. However, it still needs to be considered by the City and the gas utility. UVA has committed to a goal of fossil free by 2050 and other major natural gas consumers are likely to follow their lead. As more consumers turn to electrification as a cleaner, lower-emissions alternative, those who remain on the gas system will be left to shoulder an increasing share of gas system costs. These costs will be even higher if the study’s modeled decarbonization path is followed, with a projected 9% year over year increase (potentially reaching $450 per month in 2050 assuming the same monthly customer usage). The earlier the City and utility begin to plan for transitioning away from natural gas, the more likely it is that it can be achieved in a cost-effective and equitable manner.
What now?
Charlottesville has positioned itself as a leader in climate action but this study fell short. What can the City do next to right the course?
Review and expand all existing energy efficiency/weatherization incentives available from the City of Charlottesville and Albemarle County.
Energy efficiency programs are highly effective at reducing energy costs and emissions. With federal funding at risk, the City needs to help fill the gap.
The City should understand who is most at risk from rising energy costs and design programs to address it.
Commit to the electrification of all municipal buildings in the City of Charlottesville and Albemarle County.
Natural gas is the third largest contributor to the City’s greenhouse gas emissions, representing an average of approximately 25% of emissions. Charlottesville’s municipal buildings accounted for nearly 3% of the City’s total gas usage as of 2021.
Charlottesville Area Transit has committed to ending fossil fuel bus purchasing by 2028 and achieving a 100% emission-free fleet by 2050, and UVA has committed to being fossil free by 2050. The City can follow their lead by committing to electrify municipal buildings.
Revisit the gas utility’s fee structure to disincentivize new gas connections.
The City’s decision to increase the fee for new gas connections and reinvest the money to fund energy efficiency programs was a step in the right direction, but the fee is not high enough to meaningfully disincentivize new connections.
Explore long term, creative solutions to reduce the utility service area’s dependence on natural gas, with a focus on technical feasibility, cost, and equity impacts.
As major consumers like UVA transition away from natural gas for climate, health, or other reasons, the burden of infrastructure and maintenance costs will increase for remaining natural gas customers. The City needs a long-term cost mitigation plan to ensure low-income households are not left footing the bill.
While Charlottesville is legally restricted in terms of decommissioning Charlottesville gas, the City should explore other more creative ways to offer clean energy options to its residents. For example, the City could consider piloting a geothermal network as part of the gas utility.
Charlottesville can look to other cities and major energy consumers that are leading the way. UVA has invested in thermal energy generation at the Fontaine Central Energy & Utility Plan, and cities like Washington DC and Ann Arbor have set a precedent for city-owned sustainable/renewable energy utilities.
Stay tuned for ways to get involved!