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California’s Home Energy Choice Act requires gas utilities to offer households scheduled for a service-line replacement an incentive to electrify instead. The program’s rules and payment amounts still need to be set by state regulators, and utility proposals must be approved by Jan. 1, 2028.
California’s Home Energy Choice Act will require gas utilities to offer households scheduled for a service-line replacement a choice: install a new gas line or receive a financial incentive to switch to electric appliances. The law, Assembly Bill 2313, aims to avoid some gas infrastructure spending and help customers leave the gas system, but regulators have yet to set the program details or incentive amounts.
The offer applies when a utility plans to replace the gas service line connecting a home to the distribution network. Customers can opt for the replacement or take an incentive to electrify, potentially covering equipment such as a heat pump, induction range or heat-pump water heater. Under the law, the incentive must be lower than the cost of replacing the line, leaving a potential saving for gas customers collectively.
The Natural Resources Defense Council estimates that PG&E customers could save $20 million across 1,000 households if each received a $17,500 incentive instead of having a service line replaced. That is an estimate, not a confirmed statewide savings figure. PG&E replaces about 15,000 service lines a year, but the law’s programs are capped at 1% of a utility’s customers.
The California Public Utilities Commission must establish a framework, including incentive levels and larger amounts for customers in disadvantaged communities. Utilities then have until Jan. 1, 2028, to obtain approval for their individual proposed programs. The law is scheduled to expire Jan. 1, 2035, although lawmakers could renew it.
A Choice Before Gas Pipe Spending
The policy changes what happens when a household’s gas service line is due for replacement. Rather than automatically directing investment toward a new pipe, utilities will have to present an electrification alternative with financial support. That may reduce spending on infrastructure that could become unused as residents switch appliances.
The cost question extends beyond the household receiving an offer. Gas infrastructure is paid for through customer bills, so spending on a replacement line can affect other ratepayers. NRDC climate and energy policy director Merrian Borgeson described that dynamic after PG&E replaced the line to her Berkeley home, even though she was preparing to remove her last gas appliance. She said the new line now sits unused while other customers pay for it.
The law does not settle the broader challenge of maintaining a gas network as some customers leave it. San Diego Gas and Electric and SoCalGas opposed the bill, arguing that remaining gas customers could shoulder an unfair share of system costs. The California program is limited in scale, and its eventual effect will depend on the rules, participation and costs regulators approve.
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From Berkeley Pipe to State Policy
Borgeson’s experience helped illustrate the issue behind the legislation. She told Canary Media that PG&E replaced her aging service line despite her request not to do so, because she was planning to electrify the home and shut off gas service. She said the replacement was not a direct charge to her, but the cost is recovered from gas customers over time. A PG&E service-line replacement typically costs $20,000 to $30,000, before interest and ongoing operation and maintenance costs, according to the report.
Assemblymember Marc Berman authored AB 2313. The enacted version is narrower than the bill originally introduced: Brandon García, California director at Advanced Energy United, said revisions capped programs at 1% of utility customers and set the 2035 expiration date. California is the third jurisdiction to authorize this kind of alternative, and the first to do so statewide, according to the report. Con Edison began an Energy Exchange Program in New York in 2024, offering eligible households up to $20,000 to electrify; Colorado regulators also authorized a similar Xcel Energy program.
“It’s this huge signal of where the state is headed.”
— Merrian Borgeson
Rules, Payments and Customer Notice
The law does not set a final dollar amount for the incentive. The Public Utilities Commission must determine payment levels, eligibility details and how utilities should run the programs. It is also not yet clear how far ahead a household will be notified that its service line is scheduled for replacement. Borgeson warned that customers could otherwise hear about the offer at the last minute; the Rocky Mountain Institute recommends notice one to five years in advance, according to the report.
The scale of customer uptake and resulting savings is also unknown. The NRDC’s $20 million estimate is based on a specific scenario involving 1,000 PG&E customers, not a forecast of statewide results. Utilities’ concerns about costs for remaining gas customers raise a wider policy question that the new law does not resolve.
Regulators Set the Program Terms
The California Public Utilities Commission’s next task is to create the framework utilities will use, including incentive levels and larger payments for households in disadvantaged communities. Utilities must then submit programs for approval by Jan. 1, 2028. The timing and design of customer notices will help determine whether residents have enough time to weigh electrification against a new gas connection.
Other states are considering similar policies. Velez told Canary Media that advocates and officials in Illinois, Maryland, Minnesota, Oregon and Washington have shown interest. California’s first program proposals and the commission’s rules will indicate how the law works in practice before its scheduled 2035 expiration.
Key Questions
What does California’s Home Energy Choice Act let households choose?
When a utility schedules a gas service-line replacement, the household must be offered a choice between a new gas line and a financial incentive to switch to electric appliances.
How much money will households receive?
The amount has not been set. The California Public Utilities Commission must establish incentive levels; the law requires the incentive to be lower than the cost of replacing the line.
When will the programs begin?
The commission must first develop the rules, and utilities must have their proposed programs approved by Jan. 1, 2028. The source material does not provide a confirmed launch date.
Why did some gas utilities oppose the law?
San Diego Gas and Electric and SoCalGas argued that customers who continue using gas could be left paying a disproportionate share of the costs of maintaining the system as others leave.
Does the law apply to every California household?
No. The offer is tied to a planned gas service-line replacement, and programs are capped at 1% of a utility’s customers under the enacted version described in the report.
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