Power utilities are now taking more ambitious strides on decarbonizing their electric generation business through setting mid-century net-zero GHG emissions targets and implementing major rollouts of solar and wind resources. But the net-zero proclamations for electric generation only cover part of many utilities’ total emissions.

Hybrid utilities, which also provide natural gas for heating and cooking in buildings, are not comprehensively addressing emissions from their gas distribution business arm. Approximately 20 percent of the publicly disclosed emissions from DTE Energy and 30 percent of those from Dominion Energy come from gas distribution. The climate impact from this business is significant and should be incorporated into net-zero strategies.

Natural gas generates considerable climate impacts through methane leakage across the supply chain and from direct combustion emissions. Gas combustion for heating and cooking is a primary reason commercial and residential buildings account for 12.3 percent of GHG emissions nationwide. Companies annually invest billions of dollars to build and support natural gas infrastructure in buildings, tying millions of homeowners to the fossil fuel. This investment locks in building sector emissions for decades, exacerbates climate impacts, exposes citizens to harmful air pollution, and increases stranded asset risk.

Electrification is an increasingly cost-effective solution to achieve net-zero emissions for the built environment. Experts and policymakers see it as one key way to reach net-zero emissions. Already, 42 cities in California have passed legislation incentivizing building electrification, and many states are taking steps to support it, too. Ambitious building electrification development is not just reserved for milder climate geographies, either, since electric technologies like heat pumps can operate effectively in cold regions.

Unfortunately, instead of embracing building electrification, many utilities are offering fanciful solutions to maintain the current gas system, such as renewable natural gas (RNG) and hydrogen. These strategies are wildly lacking, fail to reduce distribution emissions substantially, and have prohibitively high costs at scale, plus fuel supply limitations.

As You Sow’s 2021 building electrification shareholder resolutions with DTE and Dominion Energy ask them to disclose whether and how they could reduce distribution emissions through support for building electrification within their service areas. In particular, the resolutions point to the need for clear information on the provision of incentives for electrification efforts, support for policy that would accelerate electrification, and targets for supportive actions. As electrification becomes more cost competitive, policies will gain traction, and utilities will continue to face pressure to reduce GHGs. Hybrid power and gas utilities clearly face transition challenges and opportunities for their gas distribution businesses. Only through aiding the building sector reach net-zero emissions with strategies such as electrification can hybrid utilities such as DTE and Dominion assure investors they are reducing their outsized contribution to the material risks that the climate crisis poses.