Better Alignment Between Electric And Gas Planning

COST CONTROLCOST DISTRIBUTIONCUSTOMER AGENCY

Last Updated September 22, 2025

AT-A-GLANCE

IMPACT TIME HORIZON

Medium Term (2–5 Years)

POTENTIAL COST SAVINGS

Variable

CONTEXT AND BACKGROUND

Electric and gas utilities have traditionally planned their systems separately, leading to higher costs and missed savings, but aligning their planning helps optimize investments, reduce duplication, and support an affordable transition to a more modern energy system through demand-side and distributed resources, along with targeted electrification.

Alignment also enables better targeted customer programs, like efficiency measures, varied electrification measures, and targeted distributed energy resource (DER) deployment that avoid costs associated with unnecessary capacity expansions of gas or electric systems, coupled with changing demand patterns. Alignment can take the form of or be benefited by initiating new or refining existing gas planning processes, coordination between electric and gas planning assumptions and results, and integration of state policy goals into planning processes.

Impact Time Horizon

How long it typically takes for changes to materialize in utility behavior or customer bills

MEDIUM-TERM (2–5 YEARS)

Policy and regulatory changes can be implemented within a few years, with cost impacts realized as new investments are approved and executed.

Potential Cost Savings

The level of cost savings that can reasonably be expected to result from this policy

variable

While cost savings will vary based on policy design and implementation, avoiding redundant infrastructure and optimizing investments across both systems can yield substantial long-term savings for utilities and customers, as well as more fairness in cost allocation across fuels and customers.

Target Cost Drivers

The policy can help to ease customer cost pressures created by these drivers

Aging grid infrastructureFuel price volatilityExtreme weather/wildfiresLoad growthMisaligned utility incentives

REAL-WORLD EXAMPLES

These state examples illustrate how states have put the policy into practice, highlighting different design approaches.

Massachusetts

In December 2023, the Massachusetts Department of Public Utilities (DPU) issued an order setting a new regulatory framework for the future of gas distribution. It requires local gas distribution companies to file Climate Compliance Plans and coordinate with electric utilities on targeted electrification and decarbonization strategies, and to consider non-gas alternatives to gas expansion projects. Massachusetts General Laws Chapter 25 authorizes the DPU to undertake a variety of activities, including issuing orders.

Minnesota

In October 2024, the Minnesota Public Utilities Commission (PUC) approved a new gas utility integrated resource planning framework that requires the state's three largest gas utilities to conduct long-term planning with stakeholder input and commission oversight. Under Minnesota state statute, the PUC is authorized to undertake a variety of activities, including approving such frameworks.

Washington

The Washington Utilities and Transportation Commission is required by state law to adopt rules for consolidated planning by large combination electric and natural gas utilities. The Commission must also establish a cost-effectiveness test for emissions reduction measures taken by these utilities to comply with Washington's energy and climate policies.