Why Line Extension Policies Matter for the Northwest’s Energy Future

Natural gas “line extension” policies determine how and when utilities connect new homes, businesses, and industries to their systems. Though technical in nature, these policies shape community growth, affordability, and reliability across the energy grid.

The American Gas Association (AGA) recently published The Current State of Natural Gas Utility Line Extension Policies and a companion one-pager outlining how states balance cost recovery and fairness. Line extension rules define the portion of construction costs covered by the utility (the “allowance”) and what developers contribute when costs exceed that limit. The goal is simple: ensure new connections are priced fairly so existing customers aren’t subsidizing growth.

AGA’s national review found wide variation in how states handle these rules, but a consistent commitment to fairness and transparency. Well-designed policies support customer choice, economic development, and energy planning that keep pace with community needs.

However, some states are now restricting new gas connections as part of electrification initiatives. AGA cautions that such bans can reduce energy reliability, limit consumer options, and increase costs—especially in regions such as the Pacific Northwest, where cold winters and strained power grids demand multiple reliable energy sources.

For Northwest utilities, modern line-extension frameworks are essential to integrating renewable natural gas (RNG) and clean hydrogen—low-carbon fuels that leverage existing infrastructure to reduce emissions while maintaining service reliability.

As Oregon and Washington debate new energy codes and decarbonization pathways, policymakers should preserve flexible, fuel-neutral extension policies that reflect evolving technology rather than lock in one energy source.

Line extension policies may not make headlines, but they underpin fairness, choice, and reliability for every community. Modernizing—not eliminating—them is key to achieving the Northwest’s vision of an affordable, resilient, and lower-carbon energy future. For more information, go HERE.