ANALYZING THE GAS SYSTEM: A FRAMEWORK TO REDUCE CONSUMER COSTS AND RISKS

This report provides a framework for conducting a Gas System Analysis (GSA) to help regulators and decision-makers evaluate the prudence of gas utility infrastructure investments, reduce consumer costs, and align utility operations with climate and public health goals.

• U.S. gas and electric utilities are pursuing massive infrastructure investments that threaten consumer affordability. Investor-owned electric utilities are projected to spend $207.9 billion in 2025, with over $1.1 trillion planned through 2030. Gas utility construction expenditures rose from $32.7 billion in 2022 to $49.1 billion in 2023, and total spending could exceed $1.4 trillion by 2050.
• A Gas System Analysis (GSA) is proposed as a tool to provide transparency and data to regulators and stakeholders. It consists of three primary functions: depicting current system conditions (including infrastructure and customer base), exploring assumptions for various future scenarios (including business-as-usual and decarbonized pathways), and forecasting gas demand and infrastructure needs to compare costs and benefits.
• The framework recommends that GSAs include a 'business-as-usual' (BAU) scenario based on current policy as a baseline, alongside alternative pathways. These alternatives should model various technology packages, such as full electrification, hybrid electrification with fossil fuel backup, thermal energy networks, and the potential use of renewable natural gas (RNG) or green hydrogen.
• Economic evaluations within a GSA should specifically address the risk of 'stranded assets'—investments that may become redundant or unrecovered as customers shift to electrification. The analysis should evaluate impacts on average customer rates and energy burdens, considering the full range of energy expenditures including electricity and delivered fuels.
• The report suggests that GSA findings can catalyze several regulatory actions to reduce consumer risk and emissions. These include requiring regular capital investment plans, initiating joint gas-electric utility planning to find redundancies, requiring clean heat or gas decarbonization plans, and reforming pipeline extension policies or depreciation methods.
• Market trends indicate a shift toward electrification in the U.S. In 2024, air-source heat pumps outsold gas furnaces by 32 percent. Additionally, residential electric storage and heat pump water heaters have outsold gas versions for three consecutive years, showing 11 percent growth between 2022 and 2024.

APA

Baldwin, S., & Poulson, T. (2025). ANALYZING THE GAS SYSTEM: A FRAMEWORK TO REDUCE CONSUMER COSTS AND RISKS. Energy Innovation. https://energyinnovation.org/wp-content/uploads/Analyzing-the-Gas-System-A-Framework-to-Reduce-Consumer-Costs-and-Risks.pdf

Chicago

Baldwin, Sara, and Tyler Poulson. ANALYZING THE GAS SYSTEM: A FRAMEWORK TO REDUCE CONSUMER COSTS AND RISKS. Energy Innovation, 2025. https://energyinnovation.org/wp-content/uploads/Analyzing-the-Gas-System-A-Framework-to-Reduce-Consumer-Costs-and-Risks.pdf.

Wikipedia

{{cite report |last1=Baldwin |first1=Sara |last2=Poulson |first2=Tyler |title=ANALYZING THE GAS SYSTEM: A FRAMEWORK TO REDUCE CONSUMER COSTS AND RISKS |publisher=Energy Innovation |date=December 2025 |url=https://energyinnovation.org/wp-content/uploads/Analyzing-the-Gas-System-A-Framework-to-Reduce-Consumer-Costs-and-Risks.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{baldwin2025analyzing, author = {Baldwin, Sara and Poulson, Tyler}, title = {{ANALYZING THE GAS SYSTEM: A FRAMEWORK TO REDUCE CONSUMER COSTS AND RISKS}}, institution = {Energy Innovation}, year = {2025}, month = dec, url = {https://energyinnovation.org/wp-content/uploads/Analyzing-the-Gas-System-A-Framework-to-Reduce-Consumer-Costs-and-Risks.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }