On August 31, 2024, the Assembly passed Senate Bill 1221 (Min), which aims to move California closer to carbon neutrality. This bill, if signed by Governor Newsom, will authorize thirty Neighborhood-Scale Decarbonization projects. This pilot program will transition select neighborhoods with existing mixed-fuel homes to all-electric (zero-emission) homes and will discontinue natural gas service to those customers.
Crucially, this bill allows utility companies to cease gas distribution to pilot neighborhoods as long as two-thirds of the customers agree to participate. Prior rules required 100% customer agreement to relieve the utility companies of their obligation to serve. This will pave the way for greater electrification of entire neighborhoods despite any potential holdouts wanting to keep gas service. Neighborhood decarbonization, if done at scale, could save ratepayers billions over the next decade by avoiding costly gas pipeline replacement projects. More details will be available over the next two to three years as the pilot neighborhoods are selected, program requirements are developed, and projects are completed.
As more customers voluntarily shift toward electrification, gas customers will see higher rates to support the maintenance of an aging gas system. Studies predict up to a 900% increase in gas bills by 2050. As fewer customers use gas, those who stick with gas should expect to pay more for service in the future because the cost for maintenance and distribution will be shared by an increasingly smaller number of customers.
EFCA has supported this bill and would like to recognize the hard work of agencies like the Building Decarbonization Coalition (BDC) and the National Resources Defense Council (NRDC), which have championed this cause. EFCA will continue to follow this legislation and urges you to show your support. Governor Newsom must sign or veto all bills by late September.
