State policy and regulatory frameworks play a critical role in determining how networked geothermal and thermal energy networks (TENs) can be planned, funded, owned, and operated. Because utility regulation varies by state, approaches to networked geothermal are evolving in different ways across the country.
This page provides an overview of common policy themes and regulatory considerations relevant to utility-led networked geothermal, along with examples of how states are beginning to address these issues.
State Policy & Regulatory Landscape
Utility Authority & Ownership Models
How utilities may be authorized to own, operate, or manage networked geothermal infrastructure.
State regulatory frameworks differ in how they define utility authority related to networked geothermal and thermal energy networks (TENs). In some states, utilities may be explicitly authorized to own or operate thermal infrastructure, while in others additional clarification or regulatory approval may be required.
These distinctions can influence system design, financing, governance, and long-term operations. Understanding how authority is defined helps utilities assess feasible ownership and operating models within their regulatory context.
In several states, legislation or regulatory action has created pathways for utilities to explore networked geothermal through pilot programs. Some states – including Massachusetts, New York, and Washington – have enacted laws enabling TENs pilots and utility participation, providing early insights into regulatory models and implementation approaches.
Cost Recovery & Rate Design
How regulators evaluate cost recovery and rate structures for shared thermal infrastructure.
Cost recovery is a central regulatory consideration for networked geothermal systems. State commissions may evaluate whether investments in shared geothermal infrastructure can be treated as utility assets and how costs are allocated among participating customers.
Regulatory approaches may explore different rate design options, including pilot-specific mechanisms, to balance affordability, equity, and long-term system value while protecting customers.
Pilot Programs & Demonstration Projects
How states are enabling early-stage testing of networked geothermal systems.
Many states are supporting networked geothermal through pilot or demonstration programs that allow utilities to test system designs, customer models, and regulatory approaches on a limited scale. These pilots provide valuable learning opportunities while managing risk.
Pilot frameworks often emphasize data collection, performance evaluation, and stakeholder engagement to inform future regulatory decisions and potential system expansion.
Customer Protections & Participation
Considerations related to customer eligibility, participation, and affordability.
State policies may address how customers participate in networked geothermal systems, including eligibility criteria, opt-in or opt-out structures, and consumer protections. These considerations are important for ensuring transparency, affordability, and fairness.
Regulators may also examine how long-term costs and benefits are communicated to customers and how utilities maintain accountability over the life of the system.
Planning, Siting & Permitting
How planning, siting, and permitting requirements affect deployment.
Networked geothermal systems are influenced by state and local rules governing infrastructure planning, drilling, and construction. These requirements may include environmental review processes, permitting timelines, and coordination with municipal authorities.
Clear and coordinated permitting pathways can help reduce project uncertainty and support efficient deployment while ensuring environmental and community considerations are addressed.
Climate & Energy Policy Alignment
How networked geothermal fits within broader state energy and climate goals.
In some states, networked geothermal is being considered as part of broader strategies related to decarbonization, building electrification, and long-term energy planning. These policy contexts can influence how projects are evaluated and prioritized.
Alignment with state climate and energy goals may shape regulatory support, pilot authorization, and integration with other clean energy initiatives.
How UNGC Supports Utilities
UNGC supports utilities by creating opportunities for shared learning around state policy and regulatory considerations related to networked geothermal. Through peer exchange and collaboration, utilities can better understand how different regulatory approaches are being explored across states.
UNGC does not advocate for specific policies, but instead helps utilities learn from one another as regulatory frameworks for networked geothermal continue to evolve.
For reports, regulatory filings, and additional state-level materials, visit the Additional Resources page.