Next arriving at Amtrak’s 30th Street Station: A PGW natural gas controversy

Philadelphia Gas Works has snatched another big customer away from the Center City district steam system, and climate activists say the deal between the city-owned utility and Amtrak’s William H. Gray III 30th Street Station is at odds with public commitments to reduce climate emissions.

The Clean Air Council, an environmental advocacy group, has asked U.S. Transportation Secretary Pete Buttigieg to block Amtrak’s switch to onsite gas boilers during a renovation of 30th Street, saying the change would undermine President Joe Biden’s commitment to accelerate a transition to clean energy. Buttigieg is a board member of Amtrak, whose stock is owned by the federal government.

“Clean Air Council urges Amtrak to pause this ill-advised conversion and publicly disclose the reasoning underlying this decision,” the group’s executive director, Joseph Otis Minott, said in a March 17 letter to Buttigieg. “When it comes to combating the existential crisis of climate change, we have no time to stumble into decisions that could lock in greater carbon and methane pollution for decades.”

» READ MORE: Biden urged to block gas boilers at Independence Historical Park

Minott’s complaint echoes a protest the Clean Air Council lodged last year when it learned the National Park Service planned to install PGW-fueled gas boilers at Independence National Historical Park, abandoning service from Vicinity Energy’s district-heating system. PGW says the park service will save $750,000 a year in operating expenses. Minott said the park service has stymied its requests for documentation.

“If this was such a good deal, you would think the National Park Service would have sent me reams and reams of material showing me what a dummy I am for not understanding why this is such a good deal,” he said.

Vicinity and climate activists say that the city-owned utility’s aggressive efforts to expand its natural gas sales at the expense of the district heating system conflict with Mayor Jim Kenney’s promise to steer the city to net zero emissions by 2050.

They say Vicinity’s “steam loop” system, which distributes pressurized steam through underground pipes from a central power plant on Christian Street, is more efficient because it simultaneously generates electric power.

» READ MORE: Utility bills are soaring in the Philly region and so is customer outrage

They also say it’s easier to convert to climate-friendlier alternative fuels, as Vicinity is doing in Boston with the partial electrification of its plant there.

But PGW maintains that onsite use of natural gas is less expensive and more energy-efficient than alternatives, including electricity and steam.

“Converting to natural gas is an economically and environmentally responsible way to lower energy costs and reduce the city’s carbon footprint,” PGW said in an emailed statement. “Arguments to the contrary are misleading and ignore scientific evidence by often advocating for solutions dependent on technology that is currently in development and inapplicable.”

The squabble among climate activists, energy providers, and government agencies is a microcosm of the turbulence over the nation’s transition from fossil fuels to clean energy.

The city and the Biden administration have pledged to pursue an ambitious zero-emission target by 2050, a goal that climate activists say requires an immediate shift away from fossil fuels to renewable energy.

But skeptics say such goals can’t be achieved quickly without increasing costs, a hardship particularly for low-income residents who comprise about a third of PGW’s base of 500,000.

PGW has been in the crosshairs of climate activists on City Council who have pressed the utility to develop a plan to diversify its business model for a decarbonized future.

» READ MORE: Can Philadelphia’s gas utility survive in a climate where fossil fuels are shunned?

A study completed last year acknowledged PGW faces a “multi-dimensional challenge that lacks a silver-bullet solution,” but offered several near-term pilot projects to explore new ventures, such as replacing natural gas with methane produced from waste or the installation of “small-scale geothermal systems, " which are networks of several homes linked into a common heat pump.

PGW said it has embraced the city’s climate goals and is prepared to move ahead with the pilot projects. But in a Feb. 9 hearing about the diversification study, some Council members suggested that PGW seems to be following a path separate from City Council’s climate policy.

City Councilwoman Helen Gym complained at the hearing about PGW’s membership in the American Gas Association, which supports proposed legislation in the Pennsylvania Senate that would preempt municipalities from banning new natural gas hookups. She said that the state bill, which has not come up for a legislative vote, is “antithetical to the city’s interest” and that PGW’s communications with legislators over the bill’s language suggested it was not opposed.

Seth A. Shapiro, PGW’s chief executive officer, scrambled to explain the actions of his government relations staff, saying they were not lobbying for the bill. “The fact is we are not in favor of preemption,” he said.

But Shapiro also argued that natural gas is likely to be a major part of the energy mix for decades to come. He added that the nation’s conversion from dirtier coal and heating oil to natural gas was responsible for “the overwhelming majority of the reductions in greenhouse gas emissions” in recent decades.

“Folks keep seeing myopically one facet of the issue,” Shapiro said. “But when we’re making real decisions ... . We have to weigh all of the facets and we have to focus on real facts and we have to focus on the repercussions of the decisions we make.”

A spokesman for Councilwoman Gym declined to comment about the Clean Air Council’s complaint to Amtrak. Kenney’s office declined to address the 30th Street Station project but expressed support for “PGW efforts to reduce customer costs and energy consumption.”

“We are committed to working with PGW to implement the opportunities presented in the recently released diversification study,” the Mayor’s office said by email on Wednesday. “We anticipate this work including pilot projects that demonstrate a commitment to our carbon neutrality goals while protecting workers and maintaining affordability.”

PGW has expressed a desire to expand energy sales and to grow revenue in the face of flat residential sales. One of its biggest opportunities is to convert customers on Vicinity Energy’s district steam system, which heats 167 large buildings in Center City, including the Philadelphia Museum of Art, Thomas Jefferson University, and the University of Pennsylvania.

There is not much love between the privately owned district heating system and PGW, which supplies gas to Vicinity Energy’s central steam plant at 2600 Christian St. through a dedicated pipeline that connects directly to one of the big interstate pipelines that feed gas to the region.

In November, Vicinity, a French-owned company that acquired the Philadelphia district system in 2019, filed a complaint accusing PGW of predatory anticompetitive behavior for proposing a tenfold increase in the fees it charges to deliver gas to Vicinity. That complaint is pending before the Pennsylvania Public Utility Commission.

Amtrak, which last year hired Plenary Infrastructure Partners under a 50-year lease to renovate historic 30th Street Station, says that current plans call for switching part of the station to natural gas boilers, said Beth K. Toll, the passenger rail system’s regional spokeswoman. Financial details on Amtrak’s plan were not available.

“The planned system combines both the district steam heating currently in place as well as new energy-efficient boilers to be installed that will be dedicated to the office portion of the building,” Toll said in an email. The new systems will be sized for the existing building, and not for any new structures that may be built as part of the long-range 30th Street Station District Plan.

“The existing district steam heating source will be maintained for the main hall and concourse areas,” Toll said. “Utilizing new energy-efficient boilers dedicated to the office portion of the building will reduce water use and impacts on the sanitary sewer system. Diversifying the sources offers more reliable heating for the building.”

Toll said the formal description of the project was completed before Biden signed an executive order early last year directing government agencies to use their “full capacity” to implement a “Government-wide approach that reduces climate pollution in every sector of the economy.”

But she said that the selection of the heating system was “among a number of factors considered through the competitive procurement process that took into account a variety of technical and financial impacts, including supporting and advancing Amtrak’s sustainability goals.”

Climate activists and Vicinity have their doubts. Michael Krancer, former secretary of the Pennsylvania Department of Environmental Protection, who is now working as a Vicinity consultant, says that Vicinity was told that the greenhouse gas impact of the project was not considered by Amtrak.

“You’ve got to scratch your head and say, what on earth in the year 2022 would possess people making a decision like this, not to take carbon into account?” said Krancer. “How can that even happen in today’s world?”