A New Gas Line Or Cash To Electrify? California Lets Households Choose.
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California’s Home Energy Choice Act requires utilities to offer households scheduled for gas service-line replacement an alternative: financial support to electrify instead of a new gas line. The state Public Utilities Commission still must set program rules, including incentive amounts, and utilities’ proposed programs must be approved by Jan. 1, 2028.

California has enacted the Home Energy Choice Act, Assembly Bill 2313, requiring gas utilities to offer households facing a service-line replacement a choice: install a new gas line or receive a financial incentive to electrify. The policy could reduce spending on gas infrastructure, but customers will not know the final incentive amounts or program details until state regulators establish rules.

The law applies when a utility is preparing to replace the gas service line that connects a home to the distribution network. Rather than automatically installing a new line, the utility must offer the customer an alternative incentive to switch to electric appliances, such as a heat pump, induction stove or heat-pump water heater. The incentive is intended to be less than the cost of replacing the line, allowing savings to be shared among gas customers.

The Natural Resources Defense Council calculated that PG&E customers could collectively save $20 million if 1,000 households received incentives of $17,500 instead of having their service lines replaced. That is an estimate from the organization, not a statewide savings forecast. PG&E replaces about 15,000 service lines each year, according to the report. In PG&E’s service area, a replacement typically costs $20,000 to $30,000, with additional interest and operating and maintenance costs recovered from gas customers over time.

The law’s final version is narrower than the proposal initially introduced. Brandon García, California director at Advanced Energy United, said the program is capped at 1% of a utility’s customers and is scheduled to expire on Jan. 1, 2035, unless renewed. The California Public Utilities Commission must now set the detailed framework, including incentive levels; utilities then have until Jan. 1, 2028, to secure approval for their individual programs.

At a glance
announcementWhen: Enacted; utility program rules and prop…
The developmentCalifornia enacted AB 2313, requiring gas utilities to offer an electrification incentive as an alternative when a household’s gas service line is due for replacement.

A Choice Before Gas-Line Spending

The policy changes the decision point for households whose gas pipes are due for replacement. Under the previous approach described in the report, a utility could replace a line even if the homeowner planned to stop using gas soon. The new offer is designed to let residents weigh electrification against a replacement that may continue to be paid for through gas rates.

That matters beyond the household receiving the offer. Supporters say avoiding some new gas infrastructure can reduce costs shared across a utility’s customer base and help California move toward its 2045 carbon-neutrality goal. The potential savings depend on how many eligible customers take the offer, the cost of their replacements and the program’s final design; the state has not published an overall savings estimate in the source report.

Utilities San Diego Gas and Electric and SoCalGas opposed the bill, arguing that if some customers leave the gas system, those who remain could face a disproportionate share of its maintenance costs. The dispute reflects a broader challenge in the shift away from fossil fuels: how to manage a gas network as demand changes. The law addresses the economics of a specific replacement decision; it does not resolve the wider question of how remaining system costs will be allocated.

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From One Berkeley Line to State Policy

The report describes how Merrian Borgeson, the Natural Resources Defense Council’s California policy director for climate and energy, asked PG&E not to replace her aging line. She was electrifying her Berkeley home and planned to replace its last gas appliance, a stove, during a kitchen remodel. PG&E replaced the line that week. Borgeson said the new pipe later went unused after the home stopped using gas, while customers around her continued paying for the infrastructure.

“Now, I have no gas in my house,” Borgeson said. “But the customers all around me are paying for that pipeline for the next 50 years.” She advocated for AB 2313 and described it as a signal that the state would consider the future of gas infrastructure before investing in it.

California is the third jurisdiction identified in the report to authorize an alternative to replacing a gas line, and the first to do so statewide. New York utility Con Edison began an Energy Exchange Program in 2024 offering eligible households up to $20,000 to electrify. In July, Colorado’s Public Utilities Commission authorized Xcel Energy to create a similar program. The report says other states are considering related legislation.

“When homeowners opt to electrify, the utility avoids additional investments in fossil fuel infrastructure that will eventually become a stranded asset, and this saves all ratepayers money long-term.”

— Assemblymember Marc Berman, author of AB 2313

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Incentives and Notice Still Pending

The law does not yet establish the final dollar value of incentives, how households will qualify or the practical steps utilities must follow. The Public Utilities Commission is to define those rules, including larger incentive amounts for customers in disadvantaged communities. The timing of notice to households whose lines are scheduled for replacement also remains undecided.

Borgeson warned that residents could learn about the offer too late to make a considered decision. The report says RMI recommends notifying households one to five years before replacement, when utilities schedule the work. It does not say that California has adopted that recommendation. It is also unclear how many customers will choose electrification, what the programs’ total costs and savings will be, or how the law’s customer cap will be applied.

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Regulators Set the Program Rules

The California Public Utilities Commission’s next task is to create a detailed framework for utilities, including incentive levels and provisions for customers in disadvantaged communities. Utilities must submit individual program proposals for approval by Jan. 1, 2028. Those decisions will determine when offers begin, how customers are notified and what support is available for replacing gas appliances with electric equipment.

The program is due to expire on Jan. 1, 2035, though the Legislature could renew it. Until regulators and utilities complete their plans, households cannot rely on a specific incentive amount or notice period. The resulting rules and early participation figures will show how widely the option is used and whether avoided line replacements produce the savings supporters anticipate.

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Key Questions

What choice does California’s new law give households?

When a gas utility plans to replace a household’s service line, it must offer the customer a choice between a new line and a financial incentive to electrify instead. Program details and incentive amounts are still pending.

How much money will households receive?

The law does not set a final amount. The California Public Utilities Commission must establish incentive levels. The report cites $17,500 as an example used in an NRDC estimate, not as a guaranteed payment.

When will the programs start?

The state commission must first set a framework. Utilities have until Jan. 1, 2028, to obtain approval for their proposed programs; the source report does not give a start date for offers to households.

Could the law raise costs for customers who keep gas service?

San Diego Gas and Electric and SoCalGas argued that customers who remain on the system could bear a larger share of its costs as others leave. Supporters say avoiding a scheduled line replacement can save money for gas customers. The overall effect will depend on program participation and how remaining system costs are handled.

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