California Is Done Paying for Pipelines That Residents Don’t Want

The California State Legislature just took a major step to cut utility bills and climate pollution by passing Assembly Bill 2313 (Assemblymember Marc Berman): The Home Energy Choice Act. Now Governor Gavin Newsom has until September 30 to sign the landmark legislation that will avoid wasteful spending while giving Californians the option and funds to electrify their home rather than have their old gas pipeline replaced by default.   

Gas utilities are pouring our money down the drain 

U.S. gas utilities currently replace aging pipelines to the tune of billions of dollars a year. In California alone, gas bills have increased 72 percent over the past decade, leaving customers responsible for more than $14 billion per year in gas system costs. Each pipeline is replaced by default, without regard to customer preferences or the urgent need to reduce climate pollution, and they are paid for by all gas customers on their utility bills for more than five decades.  

What does this look like in practice? Imagine your home is served by an old gas pipeline. It is connected to the rest of the fossil gas network by a pipe that is known as a service line; the service line is on your property, but it is owned by the utility. Today, the utility comes out with minimal notice, digs up your yard to replace the service line, and charges everyone for that cost on our bills. Even if you barely use gas today or plan to switch to an electric heat pump tomorrow, the gas utility will replace your pipeline by default—flushing ratepayer money down the drain for long-lived investments that are likely to be underutilized or abandoned in the future. Importantly, AB 2313 takes into account when gas lines may need to be urgently replaced for safety reasons.   

Californians deserve a home energy choice 

The Home Energy Choice Act, cosponsored by NRDC and Earthjustice, addresses shortsighted gas utility spending by offering customers a simple choice: have your pipe replaced as usual or use a portion of the money to switch to clean, all-electric appliances instead. Selecting the electrification option will improve air quality and reduce climate emissions while also cutting costs for all gas customers.  

The bill would require your utility to reach out in advance of a potential pipeline replacement and offer you a voluntary incentive to electrify instead of proceeding with the pipe replacement. In PG&E territory, the incentive amount might range from $15,000 to $17,500 for home electrification—which is significantly less than the lifetime cost of a typical gas service line replacement. This ensures that every electrification project reduces utility costs for all other gas customers. In PG&E territory alone, NRDC’s analysis finds that a pilot-sized program would save gas customers at least $20 million in avoided gas investment costs.  

If signed into law, California will become the third jurisdiction to adopt this commonsense policy that is sweeping the nation and the first to adopt it statewide. It will follow Colorado, whose Public Utilities Commission recently directed Xcel Energy, the state’s largest gas utility, to implement a program proposed by NRDC that would offer customers approximately $6,000 to avoid a gas pipeline replacement. The incentive can be layered with electrification incentives from the state’s Clean Heat Plans. The pipeline avoidance program will save Xcel’s gas customers a projected $3.5 million on their bills while advancing Colorado’s goal of reducing gas utility emissions 22 percent below 2015 levels by 2030. Likewise, Consolidated Edison in New York implements the Energy Exchange Program, which offers up to $20,000 for home electrification and has generated energizing success stories. The Washington Utilities and Transportation Commission is presently considering a similar NRDC proposal in Puget Sound Energy’s ongoing rate case.  

As the Trump administration rolls back climate protections, sends energy costs skyrocketing, and lines the pockets of fossil fuel executives, states can still take a stand. By signing the Home Energy Choice Act, Governor Newsom can hold outdated infrastructure costs in check while giving Californians a choice in how they heat their homes and what kind of world they want to leave their children. 

You can urge Governor Newsom to sign AB 2313 here.