Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Daily Briefing

California’s New Gas Pipeline Alternative: Just Paying You

A bill awaiting Governor Gavin Newsom’s signature would require utilities to at least offer to subsidize home electrification.

•
Gas pipes.
Heatmap Illustration/Getty Images

Going into this final stretch of the summer, I’m keeping an eye on California. Today is the last day for the state legislature to pass bills as part of its 2026 session, and lawmakers have already sent some interesting clean energy proposals to Governor Gavin Newsom’s desk.

On Friday, the legislature passed the Home Energy Choice Act, a bill supporting the transition to all-electric homes in the state, which builds on a growing set of policies and programs I’ve been writing about called “non-pipeline alternatives.”

Natural gas companies are constantly replacing and expanding the pipelines that deliver gas to people’s homes, but these kinds of investments are starting to look less prudent in states that are trying to transition off of fossil fuels. Utilities recover the costs of pipelines over decades through the rates their customers pay; but as people start to electrify their homes, there will be fewer customers to absorb those expenses, risking ballooning energy bills. Non-pipeline alternative programs typically require utilities to consider options for deferring or even avoiding these investments.

Sign up to get Heatmap Daily in your inbox:

Several states have created pilot programs that enable utilities to take the money they would have spent replacing an aging pipeline and instead use it to help customers go electric. Two years ago, California lawmakers authorized such a pilot focused on decarbonizing entire neighborhoods, but the implementation has been slow. The deadline for utilities to submit proposals for the first round of pilot projects isn’t until next April.

The Home Energy Choice Act would complement that program. Whereas the pilots are designed to work around replacing gas mains, the larger pipes that run down the middle of streets, the new bill would target gas service lines, the smaller pipes that connect individual homes to the mains.

In some ways, the new bill is more aggressive than the existing pilot program. In the case of the pilots, the utility has to get 67% of a neighborhood onboard before seeking approval from the utility commission to decarbonize. The new program would set no such threshold. Every time a utility identifies a service line that needs to be replaced, it will have to offer the customer at the end of the line a financial incentive to electrify instead. If Governor Newsom signs the bill, it will be the first law in the country to require investor-owned utilities to offer their customers non-pipeline alternatives.

Still, it’s entirely up to the customer whether or not to accept the incentive, so it’s unclear how effective it will be. The bill doesn’t specify how much money the utility has to offer, punting that decision to the state’s regulators. But it does say the incentive has to be lower than the average cost of a service line replacement so that it creates net savings for the utility — and therefore for the utility’s ratepayers. Service line replacements average $35,000 to $55,000 in California, according to an evaluation of the Home Energy Choice Act by University of California, Los Angeles, researchers. Earthjustice and the Natural Resources Defense Council, the environmental groups that backed the bill, propose a base incentive of $15,000 per home, with a bump to $20,000 for homes in disadvantaged communities.

While that might sound substantial, it’s not going to be enough, in many cases, to cover the entire cost of heat pumps, an electric water heater, an electric or induction stove, and an electric clothes dryer. The UCLA study pins average costs for whole-home electrification in California at upwards of $25,000.

Homeowners will be able to combine the incentive with other state subsidies, but that can get complicated. One of the biggest challenges with these kinds of programs is that planning a whole-home electrification project is essentially a full time job.

Last fall, I wrote about an incentive program run by the utility Con Edison in New York State called Electric Advantage. It’s similar to California’s neighborhood pilots, in that it targets gas mains instead of service lines. If all the homeowners served by a main agree to go electric, ConEd will cover 100% of the cost of replacing their gas-powered appliances with electric versions, plus installing insulation and air sealing. My story was about Julie Liu, a contractor the utility hires to manage these projects. Liu fronts the cost of the retrofit and handles all of the scheduling and coordination between electricians, plumbers, insulation specialists, and other building professionals. She braids together various incentives to get the job done for as little money as possible. And what I learned in writing about her is that she was basically one of a kind — ConEd hadn’t been able to find anyone else to do what she did.

That leads me to one of my big questions about this California bill: Will the gas companies manage the retrofits themselves, contract with third parties like Liu, or just give the money directly to homeowners? The bill doesn't specify, so that’s something utility regulators will have to work out if Newsom signs it into law.

I also wonder about relying on utilities to sell the idea of electrification to customers, especially since not all natural gas companies in California offer electricity service. How hard will they try to lose business? The bill does contain some safeguards to ensure the companies make a concerted effort, such as requiring that they notify customers of the climate and health benefits of going electric and of additional incentives they might be eligible for. The UCLA report recommends that regulators create additional incentives to get utilities on board, such as giving them a generous rate of return on the cost of the program.

Despite these questions, the bill looks well-suited for this moment of concerns about energy affordability, with its focus on reducing capital spending and maintaining customer choice. Newsom has until September 30 to veto it or sign it into law.

Green

You’re out of free articles.

Subscribe to access Heatmap's exclusive climate and energy polling, award-winning journalism, and subscriber-only events. Save $57 on an annual subscription, just $156 $99/year.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Politics

Senate Permitting Deal Wins First Vote

BAAJA survived its first test, but Trump says the bill “hasn’t been fully negotiated.”

Donald Trump, energy, and the Capitol.
Heatmap Illustration/Getty Images

The Senate on Monday night moved to open debate on the Bipartisan American Affordability and Jobs Act — just after the president bizarrely threw cold water on the deal he struck for the bill.

Senators agreed to invoke cloture on a motion to proceed to the bill by a vote of 73–25, a forceful bipartisan tally that could bolster momentum behind the bill. Up next comes what Senator Sheldon Whitehouse, the Democrat from Rhode Island and one of the key sponsors of the bill, called a “healthy amendment process” at a press conference Monday morning. This will constitute the last remaining opening for senators and outside constituencies to try and change provisions they disagree with. How many amendments will make it to a vote, however, is not publicly known. Nor is how fast debate on the bill will move along, so best be patient.

Keep reading...Show less
Climate Tech

Geoengineering’s Closed-Door Coming-Out Party in Iceland

Researchers, advocates, and funders gathered to discuss intervening in the global climate on purpose.

Scientists.
Heatmap Illustration/Getty Images

For decades, deliberately intervening in the Earth’s climate system was something most scientists and policymakers didn’t dare talk about. But last month, more than 250 people from six continents gathered in Reykjavik, Iceland for a three-day summit devoted entirely to willfully tinkering with the climate to make it more resilient.

The gathering served as a purposeful, if hesitant, coming out party for a field so controversial that just a few years ago, hundreds of researchers signed the Solar Geoengineering Non-Use Agreement, which called for an end to public funding for scientific research into the field. But this summit revealed that the sector — while still deeply divided over questions of money, governance, and deployment — is beginning to emerge from the shadows.

Keep reading...Show less
AM Briefing

BAAJA Blast

On COP31, France’s antinuclear left, and Paraguay’s crisis

The Capitol.
Heatmap Illustration/Getty Images

Current conditions: Another atmospheric river is deluging the West Coast, this time in the Pacific Northwest • Dozens of U.S. cities notched record high temperatures in October • At least 11 of Thailand’s southern provinces are under emergency warnings for flooding and nearly 7-foot waves amid a surge of monsoon conditions.


THE TOP FIVE

1. The UN climate summit begins in Turkey

The 31st annual global climate summit kicked off this morning in Antalya, a Turkish resort city on the country’s southern Mediterranean coast. Known as the 31st Conference of the Parties to the United Nations Framework Convention on Climate Change, or COP31, the event marks the second year in a row that virtually every nation on Earth will gather except the United States, after President Donald Trump withdrew the country from both the landmark 2015 Paris Agreement and from the larger global body shortly after his return to office last year. The biggest item on this year’s agenda, reports my colleague Emily Pontecorvo, is the “35x35” pledge, Turkey’s proposal to electrify 35% of the world’s final energy use by 2035. Today the world uses electricity for just 21% of end-use energy. As I reported last week, the latest projections from the Rhodium Group put the likely electrification rate worldwide at 28% by 2035.

Keep reading...Show less
Blue