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On Biden’s 2024 tightrope, climate lawsuits, and flood insurance
On a major EV joint venture, livestock taxes, and tipping points
On a Minnesota dam, a California utility, and a Utah railway.
On Equatic’s big news, heat waves, and the Paris Olympics
On the cost of staying cool, battery passports, and orange crops
Inside episode 17 of Shift Key.
On the question insurers are asking, UAW’s Mercedes vote, and childhood asthma
Current conditions: Flooding killed nearly 100 people in Afghanistan over the weekend • Streets turned into rivers in southern Germany after heavy rain • It’s 110 degrees Fahrenheit in Delhi today, and the rest of the week will be hotter.
Hail damage accounted for between 50% and 80% of the $64 billion in insured storm costs worldwide last year, according to international reinsurance firm Swiss Re. As storms become more frequent and more severe due to climate change, insurers are beginning to factor hail into their risk assessments on policies, Bloombergreported. Such a move could result in higher rates for policyholders. Other customers could lose insurance altogether. Some insurers are “nervous to touch big solar farms” because of the incredible damage hail can do to solar panels. One insurer has started testing the durability of various panels by pummeling them with “industrially produced hail” and seeing how well they hold up.
Mercedes-Benz workers at a plant in Alabama voted last week against joining the United Auto Workers union. Just 2,045 workers out of about 5,000 voted in favor of unionizing, marking what Reuterscalled a “stinging loss” for the UAW, which has been pushing hard to expand membership across southern states after its contract deals with the Big Three in 2023. UAW also has its eyes on Tesla as a target for unionization. Last month the UAW found victory at a Volkswagen plant in Tennessee, where 73% of workers voted to unionize. But the results in Alabama are “a big setback,” explained NPR. Mercedes ran an aggressive anti-union campaign to convince workers to vote no, and Alabama politicians “framed the union vote as a threat to the state’s economic success.”
A new study suggests extreme heat is leading to more hospital visits for children who have asthma. The researchers had access to hospital admission data for young asthma patients within the University of California, San Francisco Benioff Children’s Hospitals. They looked at whether the children who were admitted lived in an area that was experiencing a heat wave when they got sick, and found that “daytime heat waves were significantly associated with 19% higher odds of children’s asthma hospital visits, and longer duration of heat waves doubled the odds of hospital visits.” More than 4.5 million children have the lung condition in the U.S.
A report from The Washington Post confirms what many drivers of electric vehicles probably already know: Public charging infrastructure in the U.S. isn’t growing fast enough. For every public charging point in the country, there are more than 20 EVs. Compare that to 2016, when there were seven EVs for each charging point, and it becomes clear charger installations aren’t matching growing demand. “As Americans purchase more and more EVs, public chargers will be essential to support long road trips, help apartment-dwellers go electric and alleviate overnight pressure on electricity grids,” the Post reported. President Biden has a goal of installing half a million charging stations by 2030 and the Bipartisan Infrastructure Law allocated $5 billion for states to kickstart that effort, but as of March, only seven stations had been built in four states as a result of the program.
First Solar recently became the world’s most valuable solar company, Bloombergreported. This is the first time in six years a U.S. firm has claimed the position over Chinese rivals. Stock gains on Friday helped the company overtake Sungrow Power Supply, which saw its shares fall at the same time. First Solar is the biggest U.S. manufacturer of solar panels. While its valuation is up, and U.S. solar firms will get a boost from higher tariffs on Chinese clean tech goods, “by most other metrics, including the vital one of being able to produce enough clean energy to fight climate change, First Solar still has a way to go to catch up with its Chinese counterparts,” Bloomberg said.
“The chances of politicians acting swiftly are probably better than they have been in the past. Not because of new scientific findings, but because solar, wind, and batteries have become so cheap so fast that the amount of pain involved in the transition to clean energy is far less than it would have been a decade ago. We could actually do this.” –Bill McKibben on remaining optimistic, even as the goal of limiting warming to 1.5 degrees Celsius seems further out of reach.
Knock knock, it’s your local power provider. Can I interest you in a heat pump?
Natural gas utilities spend hundreds of millions of dollars each year on pipelines and related infrastructure — costs they typically recoup from ratepayers over the course of decades. In the eyes of clean energy advocates, these investments are not only imprudent, but also a missed opportunity. If a utility needs to replace a section of old pipeline at risk of leaking, for example, it could instead pay to electrify all of the homes on that line and retire the pipeline altogether — sometimes for less than the cost of replacement.
Utilities in climate-leading states like New York and California, under the direction of their regulators, have started to give this a shot, asking homeowners one by one if they want to electrify. The results to date are not especially promising — mainly because any one building owner can simply reply “no thanks.” The problem is that, legally, utilities don’t really have any other option.
All states have anti-discrimination laws that require utilities to provide service to anyone who requests it, known as the “obligation to serve.” Utilities have long exploited these statutes to justify spending on gas infrastructure — but now that they are pursuing alternatives to that increased spending, the same provisions are holding them up. To avoid investing in a section of the gas system that requires expensive maintenance, for example, a utility would need to get 100% of the customers served by that section off gas. It only takes one customer with an attachment to their gas stove to derail a whole project.
As long as it’s illegal to take away someone’s gas stove, there won’t be any way to plan an orderly transition off gas. And that’s a problem because the scattershot, incentives-based transition that’s happening now — where early adopters are grabbing subsidies for heat pumps and induction stoves — is a recipe for vast inequity.
“If random homes are being taken off the gas system, the entire gas infrastructure continues to need to stay in place, and it needs to be paid for and maintained and reinvested in,” Nicole Abene, the senior New York legislative and regulatory manager for the Building Decarbonization Coalition, told me. “What you're doing is leaving the people remaining on the gas system to pay for the entire system.”
A report published in early May by National Grid, which operates both gas and electric companies in New York and Massachusetts, and the clean energy nonprofit RMI, chronicles how poorly efforts to implement “non-pipeline alternatives,” where utilities try to electrify homes instead of further investing in the gas system, have gone. It says that in one case, National Grid offered to pay the full cost of installing geothermal heating systems for 19 customers in rural upstate New York in order to avoid performing system upgrades. Just five showed interest, and only three moved forward with the installations. In another case, the company contacted nearly 400 New York customers by phone about the potential to electrify their homes in order for the company to avoid replacing leak-prone pipes. Only 149 responded, and just 18 expressed interest.
PG&E, in California, has seen slightly more success. Between 2019 and 2021, it approached 124 customers to negotiate agreements to disconnect their gas and convert them to electrified heating and cooking so that the company could decommission sections of the system. After spending more than $3 million on outreach, it got 68, or 55% of the customers to sign contracts. It has since signed up at least 37 more building owners for the program and decommissioned 22 miles of pipeline as a result.
I asked Mike Henchen, a principal on the carbon-free buildings team at RMI and one of the authors of the report, why we should trust any of this data. It doesn't seem like there's much incentive for the utilities to try that hard, I said. They could simply mail out a pamphlet, and then come back to regulators and say, “Well, we asked and they didn’t respond.”
Henchen had a few thoughts on this. For one, these companies have all made public commitments to decarbonization and showed at least some support for reducing gas consumption to help achieve state climate goals. “They’ve got to back that up and show that they’re serious,” he said. “I think it’s also true that within these companies, real humans are being tasked at their job to go do these projects. Those people, regardless of what the utility business model is, want to see success from their efforts.” Plus, regulators are also stepping up their oversight.
In New York, utilities have to report back to regulators on their efforts, providing a window into how aggressively they have conducted outreach. Last year, Con Edison, which also provides gas and electric service in the state, pursued 65 projects to avoid replacing risky gas infrastructure like leak-prone pipes through electrification. Public filings say that the company first tried mailing brochures to the buildings that explained the benefits of electrification, along with a letter explaining how the program would work if they opted in and including the program manager’s business card. Then Con Edison sent emails to the building owners once a month for three months. It also met in person with customers, though it did not say how many. After reaching out to the owners of the more than 150 buildings that would be affected, only five agreed to cooperate.
The filings also outlined why customers declined to participate, with the number one reason being that they had either recently installed a new gas stove or simply preferred gas cooking. Other concerns raised included worries about higher electric bills and vulnerability to power outages.
Henchen said that utilities are only just getting started learning how to sell electrification to customers, and there’s a lot of ideas about how to improve, including working with community partners and engaging with local contractors.
But outreach is just one piece of the puzzle. The bigger obstacle is the law. The exhaustingly named “Strategic Pathways and Analytics for Tactical Decommissioning of Portions of Gas Infrastructure in Northern California” report, written by several California-based energy research firms, notes that despite PG&E’s more than 100 successful conversions, each project has been relatively small and low-impact. That’s because the company has not been able to convince clusters of customers larger than five at a time to convert.
Lawmakers have started to act. In March, Washington State passed a law amending its statute, allowing gas companies to meet their obligation to serve by providing “thermal energy” through a network of geothermal heating systems.
Massachusetts legislators are considering a bill that would change the official definition of a “gas company,” adding that it can be a corporation organized for the purpose of selling “utility-scale non-emitting renewable thermal energy.” The bill would also change the obligation to serve to be inclusive of that definition.
In New York, where the current statute calls gas, among other energy sources, “necessary for the preservation of the health and general welfare,” a bill called the HEAT Act would strike the word “gas” altogether and allow utilities to discontinue service as long as a replacement plan has been approved by the utility commission. California is also considering similar legislation.
New York’s HEAT bill cleared the State Senate earlier this year. The Assembly refused to include the proposal in the state budget, but could still bring it to the floor before the legislative session closes in early June. Though neither Con Edison nor National Grid has come out swinging publicly for the bill, both companies have expressed support for many of the policies in it, including ending the obligation to serve. In the new report with RMI, National Grid concedes that changing the statute is necessary — and that not doing so threatens to balloon costs for customers.
“Utilities’ obligation to connect new gas customers upon request will require the construction of new gas infrastructure regardless of whether the expansion is economically viable,” it says. “This policy challenge requires designing a new process to enable projects driven by community needs or system economics rather than individual customer opt-in.”
In other words, without changes, these laws that were designed to prevent inequality could end up exacerbating it.
