Massachusetts kicks off first pilot to shift gas utilities to clean heat

Gas utilities could be key to the effort to get fossil fuels out of buildings — but only if they stop investing in pipes that deliver fossil gas and instead start building pipes for clean energy.

This week, a groundbreaking project meant to test that proposition is going live in Framingham, Massachusetts — and utilities and regulators across the country will be watching closely to see how it works out.

On Tuesday, utility Eversource will flip the switch on the country’s first utility-operated underground thermal energy network. The $14 million project includes a one-mile loop of pipes that will connect to houses, apartments, commercial buildings, a community college campus, and a fire station. Those pipes will circulate a water-and-glycol solution through 88 boreholes that extend hundreds of feet into the earth, fetching the ambient temperature buried beneath the surface and shuttling it up into buildings.

“The pipe is in the ground, the boreholes have been drilled. We’re ready to turn the pumps on and get going,” said Eric Bosworth, Eversource’s manager of clean technologies.

Temperatures remain at about 55 degrees Fahrenheit deep underground, no matter how hot it gets in the summer or how cold it gets in the winter. The liquid flowing into and out of those boreholes, through the pipes, and into the 31 residential and five commercial buildings tied into the Framingham project is therefore cooler in the summer, and hotter in the winter, than the ambient air on the earth’s surface.

That makes it an ideal input for the electric ​“ground source” heat pumps that Eversource is installing to replace gas furnaces for the approximately 125 customers tied into the new system. Heat pumps are essentially two-way air conditioners that exchange heat and cold from outside to inside buildings, and ground-source heat pumps tend to be much more efficient than ​“air source” heat pumps that use outside air as a thermal exchange medium.

If scaled up across the country, ground-source heat pumps could dramatically reduce the amount of electricity needed to convert buildings from fossil fuels to electric heating and cooling, according to the U.S. Department of Energy. The problem is that the costs and complexities of drilling boreholes and circulating liquid underground are out of reach for most building owners.

But utilities are in the business of financing large-scale energy projects and paying them off over decades via monthly charges on their customers’ bills. This model should allow utilities to build the infrastructure for ground-source heat pumps at a much lower cost than individual building owners would pay, especially given utility expertise in creating pipeline networks.

That’s why the Massachusetts Department of Public Utilities agreed in 2021 to let Eversource carry out the Framingham project, and for fellow utility National Grid to conduct similar pilots in Lowell and Boston. The state’s climate plan calls for eliminating carbon emissions from buildings by 2050. Driving down the cost of converting buildings from using fossil gas to using electricity is crucial to meeting those goals.

At the same time, Massachusetts gas utilities are facing tens of billions of dollars in costs to maintain aging gas pipelines, all to keep delivering a fossil fuel that’s incompatible with the state’s climate goals. Advocates of thermal networks say it makes far more sense to channel that money into infrastructure that fits into a carbon-free future — a move that will help the planet and avoid saddling customers with the costs of stranded gas assets.

“We as a utility are well positioned to do this project — the pipes are in the warehouse, the skills are in the workforce,” Bosworth said. ​“Now we’re really interested in what the economics are” — and how they could allow the utility to scale thermal energy networks beyond a single neighborhood.

The thermal energy network movement 

There’s no question that thermal energy networks work, said Ania Camargo Cortés, thermal networks senior manager with the nonprofit group Building Decarbonization Coalition. Her organization has tracked municipal, corporate, and college campus systems in North America that have proved their long-term energy-efficiency and carbon-cutting value.

Whether the networks can be scaled up to replace the gas utility business model more broadly is another question, however.

The concept has gained traction in the past few years, with significant pilot projects happening not only in Massachusetts but also in New York state. Legislation allowing thermal networks to move forward has passed or been proposed in Colorado, Maryland, Minnesota, Vermont, and Washington state.

But right now, the effort faces serious regulatory hurdles.

Today’s regulatory structures require utilities to supply gas to all customers who want it. And regulators are likely to balk at asking customers to bear the cost of thermal energy networks on top of the cost of keeping gas networks up and running.

“College campuses and other communities can build thermal energy networks — but not gas utilities,” Camargo Cortés said.

For that to change, utilities and state regulators have to set up pilot projects like the Framingham thermal energy network loop to vet the engineering and economics, she said. The Building Decarbonization Coalition is one of a number of groups that have been working to create the legal and regulatory structures to make these pilots — and eventually larger-scale change — possible.

Time is of the essence, because the costs of investing in soon-to-be stranded gas pipelines are growing, Camargo Cortés said. In a report released last month, Cambridge, Massachusetts–based nonprofit Home Energy Efficiency Team (HEET), which commissioned the study that inspired the pilot projects in its state, tallied up $347 billion in U.S. utility investments into gas distribution pipelines that have already been ​“locked in” — meaning gas utility customers will have to pay them off over the next 50 years. If current plans by gas utilities continue unchecked, another $698 billion in future capital costs could be piled onto customers, the report found.

That’s a problem, because this costly infrastructure needs to be phased out over the coming years in order to combat climate change. Burning fossil fuels in buildings accounts for about 10 percent of total U.S. carbon emissions, and the majority of those emissions are from fossil-gas furnaces and water heaters. Methane, the leak-prone prime ingredient in fossil gas, is itself a powerful greenhouse gas and a safety and health risk for humans.

Utilities can’t just shut down their gas networks overnight. But neither can they continue with business as usual, investing more and more into a pipeline network that must be used less and less, driving up costs for gas customers. Those customers who can afford to do so will abandon gas for electric heating and appliances to avoid those rising costs, leaving fewer — and poorer — customers to shoulder increasingly high rates just to keep their homes warm.

To interrupt this negative feedback loop, policymakers and regulators must ​“give the gas companies a way to transition,” Camargo Cortés said. ​“How do we decommission all this gas pipe in a safe way and in a phased, managed way — one that takes whole neighborhoods at a time, so that it doesn’t become an equity issue?” 

Getting the customers on board 

Eversource’s pilot in Framingham is avoiding one big challenge for transitioning gas utilities to thermal energy network utilities: removing fossil gas from the equation. ​“We’re not touching any of the existing infrastructure,” Bosworth said. Buildings in the pilot are still receiving fossil gas for water heating, cooking, and other uses.

For thermal energy networks to serve the transformational role that groups like HEET and the Building Decarbonization Council envision for them, this problem will need to be confronted. Customers at large will have to agree to ditch fossil gas entirely.

That’s where ​“removing the ​‘obligation to serve’ becomes really important,” Camargo Cortés said, referring to the regulations in every state that require gas utilities to provide gas to any customer in their service territory. ​“For a gas utility to take one street’s pipes offline requires everyone to agree.”

That brings up the issue of how utility customers feel about switching from gas to electric — and what it’s worth to them. On this front, Eversource’s project in Framingham offers a special deal for its participants, one meant to smooth the way to getting enough customers on board to test the broader thermal energy network proposition.

For one, Eversource won permission from regulators to charge its customers at large to cover all the costs for Framingham pilot participants to switch from gas furnaces to heat pumps, Bosworth said. Those include costs that would normally fall to customers, such as heat pump equipment and electrical panel upgrades.

Eversource also set the customer cost of tapping into the thermal network at $10 a month — a low rate that doesn’t fully cover the capital and operating costs of the project.

Now that the network is built and ready to operate, the next step is getting all of the customers connected. So far, Eversource has completed or is in the process of extending pipes and installing heat pumps in seven of the 22 residential buildings involved, as well as about a quarter of the 108 apartments of the Framingham Housing Authority complex located along the northwest side of the milelong loop.