Virginia Passes Legislation to Spur Low-Carbon Gas Blending into Natural Gas Systems

What’s the issue?

The Virginia legislature earlier this week passed legislation that would allow the state’s regulated utilities to include in their fuel portfolios supplemental or substitute forms of gas that reduce the emissions intensity of its fuel portfolio.

Why does it matter?

This legislation, which passed almost unanimously in an almost equally divided and very polarized legislature, may lead other states to adopt similar measures which could spur the growth of both renewable natural gas and producer certified low-carbon gas.

What’s our view?

The statute recognizes a number of substitute gasses that could be blended into a gas utility’s system and requires the state’s utilities to annually report to the utility commission the “imputed reduction in carbon dioxide equivalent resulting from such purchasing practices.” Such measures will likely spur the utilities to compete to show which is best able to reduce the methane intensity of their operations and are essential to building a sustainable market for such gasses.

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