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California’s Home Energy Choice Act will require gas utilities to offer households scheduled for a service-line replacement an incentive to electrify instead of installing a new line. The state Public Utilities Commission must set program rules and incentive levels; utility programs need approval by Jan. 1, 2028.
California’s Home Energy Choice Act will require gas utilities to offer eligible households a financial incentive to electrify when their gas service line is scheduled for replacement, rather than automatically installing a new line. The option, created by Assembly Bill 2313, is intended to avoid some gas-infrastructure spending while helping households pay for electric appliances; the incentive amounts and program rules have not yet been set.
Under the law, customers whose service lines are due for replacement will be able to choose between a new gas line and an incentive to switch to electric equipment. That could include appliances such as a heat pump, induction range or heat-pump water heater. The incentive is to be set below the cost of replacing the line, with the resulting savings shared among gas customers, according to the report.
The Natural Resources Defense Council estimated that PG&E gas customers could save $20 million in total if the utility offered 1,000 households $17,500 each instead of replacing their lines. That is an estimate, not a statewide savings projection. PG&E replaces about 15,000 service lines a year, according to the report; the new law’s programs are capped at 1 percent of a utility’s customers.
The California Public Utilities Commission will develop the framework, including incentive levels and larger amounts for customers in disadvantaged communities. Utilities then must have their individual proposed programs approved by Jan. 1, 2028. The law is scheduled to expire on Jan. 1, 2035, unless renewed.
Replacing Pipes Without Rebuilding Gas Use
The law changes what happens when a household’s gas service line needs replacement: customers are to receive an alternative to another investment in gas infrastructure. That matters because the cost of a replacement is not necessarily limited to the property where the pipe is installed. In PG&E’s service area, the report says a typical replacement costs $20,000 to $30,000, plus interest and operating and maintenance costs, which are paid by gas customers over the infrastructure’s life.
For a household already planning to electrify, a new line could become unused equipment while customers continue paying for it. The incentive is meant to help cover the shift to electric appliances and avoid some of that shared cost. Actual household benefits will depend on the final incentive, equipment costs and eligibility rules, which are not yet known.
The policy also connects household decisions with California’s carbon-neutrality goal for 2045. It does not require customers to give up gas; it gives eligible households a choice when a replacement is planned. The wider question of how to pay for a gas system as customers leave it remains unresolved, and the law does not settle that issue across the state’s gas network.
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From One Berkeley Line to State Policy
The report describes how Merrian Borgeson, California policy director for climate and energy at the NRDC, asked PG&E not to replace her aging service line in Berkeley. She was electrifying her home and expected to replace its remaining gas stove with an induction range. PG&E replaced the line that week; Borgeson later shut off gas service, leaving the new pipe unused.
“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. Assemblymember Marc Berman, who authored the bill, said by email that the law would give Californians a chance to choose what powers their home and provide financial support if they leave natural gas.
The final legislation was narrower than the original proposal, according to Brandon García, California director at Advanced Energy United. It limits programs to 1 percent of a utility’s customers and includes the 2035 expiration date. The report says California is the third jurisdiction to authorize this type of pipeline-replacement alternative, and the first to do so statewide. Con Edison began a similar New York program in 2024, offering eligible households up to $20,000, while Colorado regulators authorized Xcel Energy to create a comparable program.
““It’s this huge signal of where the state is headed.””
— Merrian Borgeson
Incentives and Notice Still Undecided
The Public Utilities Commission has not yet set incentive amounts or completed the framework utilities must follow. The law calls for larger incentives for residents in disadvantaged communities, but the criteria and dollar values remain pending. It is also unclear how much advance notice residents will receive before a planned replacement, a detail that could affect whether households have time to compare options and arrange work.
Utilities San Diego Gas & Electric and SoCalGas opposed the bill, arguing that customers who stop using gas could leave those who remain with an unfair share of system costs. The report notes that this cost-allocation concern extends beyond this program; the law’s effects on bills and gas-system costs are not yet established. The NRDC’s $20 million estimate applies to a specific example involving 1,000 PG&E customers, not a confirmed saving.
Commission Sets the Program Rules
The next step is for the California Public Utilities Commission to establish detailed rules, including incentive levels and provisions for disadvantaged communities. Utilities will then submit individual program proposals for approval by Jan. 1, 2028. The law allows the programs to operate only within the 1 percent customer cap and is set to expire at the start of 2035 unless lawmakers renew it.
How early customers will learn that their lines are scheduled for replacement remains open. Borgeson said the worst outcome would be learning about the incentive at the last minute. The Rocky Mountain Institute recommends notice one to five years ahead, according to the report. The timing and final notice requirements are matters for regulators and utility plans to resolve.
Key Questions
Who can choose an electrification incentive?
The law applies to households whose gas service line is scheduled for replacement. Eligibility details will depend on rules from the California Public Utilities Commission and each utility’s approved program.
How much money will households receive?
The amount has not been set. The commission will establish incentive levels; the report says they are intended to be below the cost of replacing the line, with larger amounts planned for customers in disadvantaged communities.
Does the law require Californians to stop using gas?
No. It creates a choice for eligible households facing a service-line replacement: accept a new gas line or pursue financial support to electrify. It does not require all gas customers to switch.
When will utility programs be available?
The commission must first set the framework, after which utilities will submit proposals. Those proposals must be approved by Jan. 1, 2028; the report does not provide a confirmed launch date for individual programs.
Why did some utilities oppose the law?
San Diego Gas & Electric and SoCalGas argued the policy could leave remaining gas customers paying an unfair share of system costs as others leave. The eventual effect on customer bills is not yet known.
Source: rss
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