Environmentalists and the state’s public advocate, looking for another tool to cut greenhouse gas emissions, have proposed legislation that would scale back expansion of natural gas in Maine.

Gas utilities, business advocacy groups and Republican lawmakers quickly pushed back, arguing that the measure would limit consumer choice, undermine business investment and drive up housing costs.

In what’s shaping up as the next battle in Augusta over energy policy and climate change, the Legislature has scheduled a public hearing on the legislation for Tuesday. As written, it would prohibit gas companies from charging ratepayers for construction and expansion of gas service mains and gas service lines beginning Feb. 1, 2025. Instead, only business and residential customers that benefit from new gas mains and service lines would pay the costs.

However, one of the bill’s sponsors, Sen. Mark W. Lawrence, D-York, co-chair of the Legislature’s Energy, Utilities and Technology Committee, expects the measure to be reworked.

Jack Shapiro, the climate and clean energy director at the Natural Resources Council of Maine and a backer of the measure, said its intent is to require gas users to “pay the true cost,” rather than “subsidize hookups on the backs of others.”

If passed, the legislation would bar the Maine Public Utilities Commission from approving gas utility proposals to provide service or serve a customer in a municipality outside of its service area, beginning Jan. 1, 2025. A gas utility also would not be authorized to offer or provide a promotional allowance to customers or potential customers without notice or approval from the PUC.

In addition, the legislation considers neighborhood-scale alternatives, authorizing the PUC to report on the potential for geothermal heat districts and alternative thermal technologies.

Public Advocate William Harwood said the legislation will protect Maine’s 50,000 gas customers. Environmental and consumer advocates say that the legislation will keep gas utility customers from paying for an “overbuilt” natural gas system that will become redundant as reliance on gas declines due to tightening limits on greenhouse gas emissions and increasingly electrified heating and cooling of buildings.

“If gas utilities are going to be making any more investments, they should do so at the risk of shareholders,” Harwood said. “I don’t want to see low-income or small-business customers holding the bag.”

The industry, however, says consumer interest in natural gas is high, and the network of pipes and mains can be used for other forms of energy, such as hydrogen and steam methane.

COMPANIES SAY DEMAND RISING

Alec O’Meara, a spokesperson for Unitil, which serves 35,000 gas customers in Maine, said it’s “seeing growth, not a decline” in the number of customers. It has increased in the past five years by an average of 400 customers annually, accounting for new customers and attrition.

“Questions exactly like this are why we believe that before any legislation action, there should be a robust study at the Public Utilities Commission that looks in detail at both these stranded cost concerns as well as how using gas infrastructure to deliver decarbonized fuels factors into any future growth projections,” he said.

“Demand is only growing,” said Lizzy Reinholt, a spokesperson for Summit Natural Gas of Maine, which serves 5,000 customers. “We have yet to see a decrease in demand. In contrast, more and more customers hope for service.”

Solar and wind power, as well as improved energy efficiency, are not enough to reach emissions reduction goals, she said. The legislation would ban natural gas infrastructure without addressing cost or improving the reliability of energy systems and resilience against frequent storms, Reinholt said.

Andrew Barrowman, a spokesman for Bangor Natural Gas, said natural gas can be a “bridge” to renewable energy because it emits less carbon than heating oil, a more common heating source in the state.

“Renewable electricity advocacy at the expense of natural gas customers will mean low reliability and high electric costs in Maine,” he said in an email.

Lawrence, the bill’s sponsor, said he does not favor expanding natural gas in Maine because of its volatile cost and impact on consumers’ utility bills.

“However, I’m keeping an open mind,” he said. “I don’t think this bill will pass as is. I would expect significant changes.”

Harwood said natural gas utilities continue to seek “double- and triple-digit rate increases.” He and the Natural Resources Council of Maine, the Conservation Law Foundation and the Sierra Club say gas utilities have an incentive to expand pipeline systems and pass the costs on to customers even though expansions are expensive and inconsistent with the state’s climate goals. A law passed in 2019 requires Maine to reduce greenhouse gas emissions by 45% from 1990 levels by 2030 and 80% by 2050.

However, an opponent of the legislation says it contradicts state policy outlined in the Maine Climate Council’s four-year plan released in 2020.

Peter DelGreco, president and chief executive officer of Maine & Co., which works with businesses looking to move to Maine or expand in the state, cited a provision in the plan that said some “fuel-switching opportunities can be both cost-effective and reduce greenhouse gas emissions, such as converting from oil to natural gas.”

BUSINESSES, REPUBLICANS OPPOSED

In a recent letter to Senate President Troy Jackson and House Speaker Rachel Talbot Ross urging a quick rejection of the legislation, DelGrecco said the measure “sends the wrong message” to businesses that Maine fails to follow its own climate plan, “let alone attracting new investment.”

DelGreco did not respond to an email Friday seeking additional comment.

The Maine State Chamber of Commerce also is urging members to oppose the measure, saying it will increase construction costs and housing affordability, and discourage new manufacturing.

“Natural gas has been an essential lifeline to America’s manufacturing growth and this legislation would put Maine, a heavily manufacturing-based economy, in a severe competitive disadvantage for new investment,” it said in a statement.

Legislative Republicans have lined up in opposition, too. Sen. Matt Harrington, R-York, a member of the Energy, Utilities and Technology Committee, called the legislation misguided and a “whatever-it-takes approach to climate change.”

“This is about removing choice,” he said at a news conference Thursday.

Rep. Steven Foster, R-Dexter, the House lead on the Energy, Utilities and Technology Committee, compared the legislation with a proposal before the state Board of Environmental Protection to phase in electric vehicles in Maine and limit the sale of new gas-powered cars and SUVs.

“The role of the Office of the Public Advocate is to protect Maine ratepayers, not harm them, as (this legislation) does by limiting choices and increasing costs,” he said. “Yet this legislation originated in that office, following the trend of unelected bureaucrats advancing policies that hurt Mainers, like the pending electric vehicle mandate.”

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