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Blog Post | November 1, 2023

Utilities Are Increasingly Passing Premiums for “Certified” Gas Onto Consumers Across The Country 


Our recent inquiry into whether utilities around the country are paying premiums for purchasing “certified,” “differentiated,” or “responsibly sourced” natural gas—and if so, whether they are passing on those higher prices to customers—has uncovered a significant uptick in utilities seeking these gas options and passing on the costs to ratepayers. You can find our research document here.

Our research found that utilities in New York, Vermont, New Jersey, Michigan, and Virginia have already purchased certified gas at a premium and been approved to pass on that additional cost to customers. Utilities in Massachusetts and Colorado are also seeking to purchase certified gas at a premium and pass on those costs; Xcel Energy in Colorado is aiming to purchase 100 percent certified gas by 2030, and anticipates passing on millions of dollars in premiums to customers annually by the end of this decade.

We also found that utilities in Pennsylvania, Washington, Oregon, South Carolina, and California have purchased or sought to purchase certified gas at prices competitive with non-certified gas, and indicated interest in procuring more certified gas. In all corners of the country, utilities are looking to greenwash their continued combustion of natural gas, and are proving themselves all too willing to pass on the costs to customers for purchasing gas from purportedly lower-emitting producers, despite a lack of verifiable evidence for the claims of private-sector certifiers, and despite the fact that combusting natural gas still releases methane, the potent plant-warming gas.

I previously reported on “The Unholy Alliance Between ‘Certified’ Clean Natural Gas Producers and the Certifying Companies” for The American Prospect. This piece dug into gas producers’ latest play to sell their polluting product at a premium, even as a major report from Oil Change International and Earthworks researchers this spring cast doubt on the credibility of a major gas certifier. I concluded that “as EPA and DOE endeavor to standardize a novel, more direct approach to monitoring methane emissions from oil and gas infrastructure, they must bake in rigorous, multi-layer, transparent, and verifiable steps to measuring the planet-warming gas. And as certified gas proponents work to carve out a reputation as the ‘good guys’ within the gas industry, let’s not forget that the real and unequivocally necessary good would be industry players committing to phase out fossil fuels—not seeking to expand the market for the kind of gas that fetches them the highest price.”

Today, utilities from coast to coast are buying into certified gas proponents’ self-serving arguments, and failing to prioritize decarbonization and electrification in their sustainability plans. (Unsurprisingly, many of the biggest certified gas producers are vocal lobbyists against state-level climate initiatives.) As long as utilities adopt the gas industry’s latest greenwashing tactic to justify slow-walking their energy transitions, customers will continue to face the compounding costs of procuring expensive fossil fuels, with all their dangerous trappings, from localized air pollution to the destabilization of our global climate.

For more information on utilities currently engaged in procuring certified gas, see our research document here.


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