Net-Zero Methane Emissions by 2035

MGE Targeting Emissions from Natural Gas Distribution System

Building upon our long-standing commitment to providing affordable, sustainable energy, MGE has set a goal to achieve net-zero methane emissions from our natural gas distribution system by 2035.

MGE was one of the first utilities nationwide to establish a goal of net-zero carbon electricity by 2050. We’ve said since introducing our carbon reduction goals for our electric generation and distribution that if we can go further faster by working together with our customers, we will. By 2030, the electricity used by MGE electric customers will have 80% fewer emissions compared to 2005.

If the company can accelerate its plans to achieve net-zero methane emissions from its natural gas system—through the evolution of new technologies, such as renewable natural gas—we will. We are working to reduce overall emissions from our natural gas distribution system cost-effectively as quickly as possible.

MGE is committed to providing safe, reliable, affordable and sustainable energy to our communities.

Understanding MGE’s Greenhouse Gas (GHG) Emissions

MGE has completed an in-depth analysis and inventory of all our GHG emissions associated with our electric generation and distribution, purchase and distribution of natural gas, and other sources. Our inventory documented MGE’s GHG emissions from the following sources.

Scope 1 emissions are direct emissions from MGE facilities and operations. These are the only emissions under our direct control and management. They include emissions from:

MGE’s fossil-fueled electric generation facilities
MGE’s natural gas distribution system
Other sources accounting for less than 1% of our Scope 1 GHG emissions

MGE already has replaced in our natural gas distribution system all piping made of cast iron, bare or unprotected steel, and other material considered to be leak-prone. In addition, the company’s leak inspection and repair schedules exceed federal requirements.

More than half of MGE’s total GHG emissions come from sources already included in the company’s goal of net-zero carbon electricity—our fossil-fueled electric generation facilities (Scope 1) and purchased power for resale (Scope 3)—explained below.

Scope 2 emissions include indirect emissions from MGE facilities and operations. Most of MGE’s Scope 2 emissions come from transmission line losses from purchased power to serve our customers.

Scope 3 emissions are indirect emissions caused by what are considered “value chain” activities, such as purchases of materials, the creation of waste, employee travel and how a company’s product is used by its customers. Most of MGE’s Scope 3 emissions result from:

Purchased power for resale to customers
Upstream natural gas (emissions from our gas suppliers)
Downstream natural gas (emissions from gas use by our customers)

Further study of our Scope 3 emissions resulting from upstream and downstream natural gas is ongoing; however, as noted above, our inventory and analysis documented that more than half of MGE’s total GHG emissions come from sources already included in the company’s goal of net-zero carbon electricity—our fossil-fueled electric generation facilities (Scope 1) and purchased power for resale (Scope 3). MGE is working aggressively to transition its electric generation fleet cost-effectively to achieve our goal of reducing emissions at least 80% by 2030 (from 2005 levels) and reaching net-zero carbon electricity by mid-century.

Building on Our Energy 2030 Framework:
Achieving Net-Zero Methane

In 2015, MGE introduced our Energy 2030 framework to create a more sustainable future. The framework to reduce emissions associated with our electric service established foundational objectives to guide our work with customers toward a just, equitable and cost-effective transition to cleaner energy for the benefit of all those we serve.

As we turn our attention toward a deeper analysis and understanding of all our emissions, MGE is building on our Energy 2030 framework to achieve net-zero methane emissions from our natural gas distribution while ensuring we continue to serve our customers safely, reliably and affordably. Methane, which is a primary component of natural gas, is more than 25 times as potent as carbon dioxide. It can be emitted during the production, transmission and distribution of natural gas.

MGE’s goal is to achieve net-zero methane in our natural gas distribution system by 2035. If we can go further faster, we will. MGE’s strategies for achieving net-zero methane emissions include:

Enhanced Leak Detection and Repair: MGE will explore strategies, practices and/or commercially available technologies that help us to meet or exceed current federal and state regulatory requirements surrounding leak detection and repair methods. We continue to gather data to improve our inventory of emissions data throughout our distribution system and to inform reduction efforts and strategies.
Implementation of Cost-Effective Technologies and Processes: Improved monitoring of our system and estimated emissions will inform priorities for reduction opportunities. Consistent with those priorities, MGE will implement cost-effective technology to improve the detection, measurement, mitigation and/or reduction of emissions from the operation and maintenance of our natural gas distribution system.
Renewable Natural Gas (RNG) to Offset Residual Emissions: MGE will explore the use of RNG in our natural gas system to offset any remaining emissions that cannot be directly controlled by MGE. New technologies, such as carbon capture, green hydrogen (zero-carbon hydrogen) and potentially other alternative fuels, continue to emerge and to evolve. MGE supports the research and development of these new technologies and will explore their potential use as they become available.

Reducing Overall GHG Emissions from Our Natural Gas Distribution Service

MGE is committed to advancing sustainability throughout our operations, to working with those we serve to achieve our goals and to demonstrating support for a transition to a net-zero carbon energy economy.

MGE continues to invest in our natural gas distribution system to operate and maintain a safe, dependable system. We have replaced piping considered leak-prone, and our leak inspection and repair schedules exceed federal requirements. Safety is our top priority. Our ongoing efforts and partnerships to prevent damages help to advance safety and reduce emissions.

Carbon dioxide is released when natural gas is burned, for example, for electric generation or for household appliances, such as stoves, furnaces and water heaters. It will take a variety of solutions to reduce all GHG emissions, including those upstream and downstream of our natural gas distribution. It will take working with and participation from our suppliers, customers, regulators and other industry stakeholders and harnessing the power of new and emerging technologies as they evolve and become commercially available and cost-effective.

Our framework to address these GHG emissions includes the following strategies:

Renewable Natural Gas (RNG): By working with our customers, MGE continues to grow our use of renewable resources in electric generation. MGE will explore similar opportunities to partner with customers to advance RNG projects in our service territory. RNG is considered a net-zero carbon biogas that can be used in place of conventional natural gas. RNG projects capture methane from food waste, animal manure or wastewater sludge and redirect it away from the environment, repurposing it as a clean energy source that acts like conventional natural gas. RNG projects also can help reduce the impacts of managing organic solid waste.

MGE also will explore the use of RNG in our natural gas system to offset any remaining emissions that cannot be directly controlled by MGE in our distribution system, such as emissions from gas use by our customers.

Enhanced Leak Detection and Monitoring, Measurement and Repair: MGE will explore any strategies, practices and/or commercially available technologies that meet or exceed current federal and state regulatory requirements surrounding leak detection, measurement and repair methods. MGE already has replaced all piping made of cast iron, bare or unprotected steel, and other material considered to be leak-prone. The company’s leak inspection and repair schedules for our natural gas distribution system also exceed federal requirements. When notified of a potential natural gas emergency, MGE crews earn high marks. In 2021, our response time ranked in the top 11% of a nationwide industry survey and was 23% faster than the national average. Our record in these rankings is reflective of our commitment to operational excellence, which helps to ensure the safety, efficiency and sustainability of our system.

We continue to explore ways to improve leak detection, monitoring and measurement to reduce emissions in our system.

Supplier Engagement: MGE will work with our natural gas suppliers and pipeline operators to ensure we are serving our customers with cost-effective, environmentally responsible sources of natural gas. We will work with our suppliers and pipeline operators to gain an understanding of their leak detection and prevention efforts and GHG emissions goals and how they align with our framework to reduce GHG emissions.

MGE contracts with two natural gas transmission companies, Northern Natural Gas, a Berkshire Hathaway Energy Pipeline Group Company, and ANR Pipeline Company, owned by TC Energy. Both of these companies, as part of their sustainability commitments, are part of the ONE Future Coalition. ONE Future is the trade name for “Our Nation’s Energy Future Coalition, Inc.,” which is a voluntary group of companies working together to reduce methane emissions across the natural gas supply chain to 1% or less by 2025. In its 2021 report, ONE Future cited a methane intensity of less than one half of one percent, beating its 1% goal.

Northern Natural Gas and ANR Pipeline Company also are part of the U.S. Environmental Protection Agency’s Methane Challenge Program. Partners in this voluntary program report systemic and comprehensive actions to reduce methane emissions as part of efforts to enhance transparency in the industry.

Customer Partnerships: By engaging and partnering with our customers in new ways, we also will determine how best to fulfill this commitment to reducing GHG emissions associated with our natural gas distribution service. As new and emerging technologies evolve and become commercially available and other opportunities develop, we will continue to collaborate with customers to develop and advance our path forward.

Energy Efficiency and Conservation: MGE will explore ways to partner further with customers to promote the role of energy efficiency and conservation and the wise use of natural gas. Customer support for and participation in energy efficiency programs and investment in energy-efficient equipment and appliances will be critical to managing and reducing emissions associated with the use of natural gas.

Electrification: MGE will explore ways to partner with customers to promote the role of electrification of appliances and other equipment to achieve deep decarbonization.

In 2022, MGE launched our Smart Water Heater Rewards project, partnering with residents at a local multifamily property to test technology that allowed MGE to shift water heating—powered by electricity—without impacting customer comfort. The smart devices, which were installed on the electric water heaters, helped us shift heating to off-peak times or when renewable resources were generating the most electricity.

As part of our existing efforts to decarbonize our electric grid, MGE also continues to work with customers to grow the use of electric vehicles (EV) and to enable EV charging as part of our decarbonization efforts to achieve net-zero carbon electricity. Within our own fleet, MGE is targeting a goal of 100% all-electric or plug-in hybrid light-duty vehicles (LDV) by 2030. Our interim goal is 25% LDVs by 2025.

New Technologies: New technologies, such as carbon capture, RNG, green hydrogen (zero-carbon hydrogen) and potentially other alternative fuels, continue to emerge and to evolve. MGE supports the research and development of these new technologies.

We expect the cost-effective deployment and commercialization of new and emerging technologies, as well as supportive policy and regulation and the use of offsets, will be needed to achieve a net-zero carbon energy economy. It will require economy-wide transformational changes in producing, transporting, storing and consuming energy in all its forms. Expanded research and development are vital to achieving this target. All these considerations will factor into how MGE pursues decarbonization associated with our distribution of natural gas. MGE is constantly evaluating and analyzing our next steps to serve our customers reliably, cost-effectively and sustainably as technologies, policy and regulation, and consumer dynamics evolve.

Support for a Net-Zero Carbon Energy Economy

Natural gas has been and continues to be a critical resource for meeting our economy’s energy needs reliably, efficiently and affordably. It is used to generate electricity, to fuel industrial processes as well as commercial heating and cooling, and to meet residential needs, such as household heating, cooking and drying clothes. About half of households in the United States use natural gas for heating.

Natural gas also adds needed reliability and balance to our electric system as we continue to transition toward more renewable energy in our electric generation mix. The dispatchability and lower emissions associated with natural gas make it a powerful bridge fuel to ensure continued reliability and carbon reductions as technology continues to develop.

It will take all of us—from the public and private sectors, customers and investors, industry stakeholders and others—to address the challenges and seize the opportunities associated with transitioning our energy supply to cleaner sources and methods. MGE is supportive of and committed to working together to enable this transition.

Our framework for reducing emissions across our operations provides MGE a roadmap and flexibility as technologies improve and the energy landscape changes. We expect to take advantage of new technologies and other options in the future, and we expect, as your community energy company, to engage and to work together with those we serve to ensure the continued delivery of safe, reliable, affordable and sustainable energy.

MGE is committed to accountability and transparency and to reporting on our progress as we work toward our goals. More information about our ongoing clean energy transition is available in our annual Corporate Responsibility and Sustainability Report.