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California’s Home Energy Choice Act requires gas utilities to offer eligible households a financial incentive to electrify instead of replacing a gas service line. The Public Utilities Commission must still set program rules, and utility proposals are due for approval by Jan. 1, 2028.
California’s Home Energy Choice Act will require gas utilities to offer households facing replacement of a gas service line a choice: install a new line or take a financial incentive to electrify instead. The law, Assembly Bill 2313, is intended to avoid some new gas infrastructure spending while helping residents cover the cost of electric appliances.
The incentive is meant for households scheduled to receive a replacement service line — the pipe that connects a home to the gas distribution network. Customers who choose to leave gas could use the support for electric equipment such as a heat pump, induction range or heat-pump water heater. The payment is designed to be lower than the cost of replacing the line, allowing a utility to avoid some spending and share resulting savings across gas customers.
The Natural Resources Defense Council estimates that PG&E gas customers could save a total of $20 million if 1,000 households received an incentive of $17,500 each rather than having service lines replaced. That is an estimate, not a guaranteed saving under the law. PG&E replaces about 15,000 service lines a year, according to the report. Replacing a line in its service area typically costs $20,000 to $30,000, before interest and ongoing operation and maintenance costs.
The legislation’s reach is limited. Programs are capped at 1% of a utility’s customers and the law is set to expire on Jan. 1, 2035, unless renewed. The California Public Utilities Commission must first establish a detailed framework, including incentive amounts; the report says larger incentives are expected for customers in disadvantaged communities. Utilities then have until Jan. 1, 2028 for their individual program proposals to be approved.
A Choice Before New Gas Spending
The law changes what happens when a utility plans to replace a home’s gas connection: the customer must be offered an alternative to receiving another gas line. That matters as California pursues a carbon-neutral economy by 2045 and considers how to manage existing gas infrastructure as households electrify.
Supporters say avoiding replacement can save money for customers who remain on the gas system as well as those who leave it. Merrian Borgeson, a California policy director at the Natural Resources Defense Council who advocated for the bill, described having a new line installed shortly before she planned to stop using gas. She said other customers would pay for the unused pipe over time. The law is intended to give eligible households the choice she did not have.
Utilities San Diego Gas and Electric and SoCalGas opposed the bill, arguing that customers who continue using gas could face a greater share of the costs of maintaining the system as others leave. That concern extends beyond this program: California still has to determine how to pay for gas infrastructure during a broader shift to electric appliances. The law offers one targeted alternative at the time of a planned service-line replacement; it does not resolve that wider cost question.
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From One Berkeley Home to State Policy
The issue arose for Borgeson when PG&E replaced the aging gas service line to her Berkeley home, despite her request not to install a new pipe. She was electrifying the house and planned to replace her last gas appliance, a stove, during a kitchen remodel. The utility completed the work that week; she later said the new line was unused after she shut off gas service.
The legislation creates a policy option for similar situations. California is the third jurisdiction to authorize this type of alternative and the first to do so statewide, according to the source report. Con Edison in New York began its 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.
Assemblymember Marc Berman, the author of AB 2313, said the measure gives Californians the opportunity to choose what energy powers their homes and receive financial support if they leave natural gas. Advanced Energy United California director Brandon García said the version that passed was less ambitious than the original proposal, citing the customer cap and 2035 expiration date.
“It’s this huge signal of where the state is headed.”
— Merrian Borgeson
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Incentive Rules Still Pending
The law establishes the choice, but the amounts and operating rules are not yet set. The Public Utilities Commission must determine incentive levels and other details before utilities can put forward programs. It is also not yet clear how much advance notice residents will receive before a planned replacement, leaving households’ time to compare options uncertain.
Utilities’ cost-shift concern remains unresolved at the broader system level. The report does not specify how many households will take the incentive, the final value each customer will receive, or the total savings that programs will produce. The NRDC’s $20 million figure is a calculation based on 1,000 households receiving $17,500 each, not a confirmed outcome.
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Regulators Set the Program Terms
The California Public Utilities Commission is the next decision-maker. It must create the framework utilities will use, including incentive amounts and provisions for larger support in disadvantaged communities. After that framework is established, utilities must submit program proposals for approval by Jan. 1, 2028.
Notice periods will also shape whether customers can make a practical choice before construction is scheduled. The report says the timing has not been determined. Borgeson said a late offer would be the worst outcome; RMI recommends notifying residents one to five years ahead, when line replacements are being scheduled. The law is set to expire on Jan. 1, 2035, although lawmakers could renew it before then.
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Key Questions
Who can choose the electrification incentive?
The law applies to households scheduled for a gas service-line replacement. Program eligibility and application details will depend on the framework the California Public Utilities Commission sets and the utility plans it approves.
How much money will a household receive?
The final incentive amounts have not been set. The NRDC’s example uses $17,500 per household, but that is part of a savings estimate, not a confirmed payment amount under the law.
When will the programs begin?
The Public Utilities Commission must first establish program rules. Utilities have until Jan. 1, 2028 for their program proposals to be approved; the source report does not give a confirmed start date for household offers.
Why did some utilities oppose the law?
San Diego Gas and Electric and SoCalGas argued that customers who stay on gas could be left with a larger share of system-maintenance costs as other customers electrify. How California will address that broader cost issue remains unsettled.
Source: rss
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