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California’s Home Energy Choice Act requires gas utilities to offer households facing a service-line replacement a choice: accept a new line or take financial support to electrify. The state Public Utilities Commission must still set program details, including incentive levels, and utility plans need approval by Jan. 1, 2028.
California has enacted the Home Energy Choice Act, Assembly Bill 2313, requiring gas utilities to offer eligible 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 policy is intended to avoid some new gas infrastructure spending and share resulting savings with gas customers, but the incentive amounts and utility program details have yet to be set.
A gas service line connects a home to a utility’s distribution network. Under the new law, when a utility plans to replace one, it must offer the household an alternative incentive to electrify rather than automatically installing a replacement. The incentive is expected to be lower than the cost of replacing the line, allowing the utility to avoid some infrastructure costs. The law does not itself establish a single payment amount for every household.
The Natural Resources Defense Council estimated that 1,000 PG&E customers receiving $17,500 each instead of replacement lines could save the utility’s gas customers a total of $20 million. The estimate is an example calculated by the group, not a statewide savings forecast or a figure guaranteed by the law. PG&E replaces about 15,000 service lines a year, according to the report.
California Public Utilities Commission staff must develop a framework for the programs, including incentive levels, with larger amounts contemplated for customers in disadvantaged communities. Utilities then have until Jan. 1, 2028, to obtain approval for their individual proposals. The law’s programs are capped at 1% of a utility’s customers and the law is set to expire on Jan. 1, 2035, unless renewed.
A Choice Before Gas Lines Are Replaced
The law changes the decision point for households whose gas lines are due for replacement. Instead of receiving a new line by default, customers will be offered support to consider electric appliances such as a heat pump, induction stove or heat-pump water heater. For households already planning to electrify, that could reduce the cost of making the change.
The policy also addresses who pays for gas infrastructure. The cost of a replacement line is generally recovered from gas customers over time, along with associated operating and maintenance costs. If a household leaves the gas system and a new line is avoided, advocates say the spending avoided can benefit remaining customers. The amounts, timing and distribution of any savings will depend on the approved programs and utility accounting.
Supporters connect the policy to California’s goal of a carbon-neutral economy by 2045, arguing that it can limit investment in gas assets that may be underused as homes electrify. The law is limited in scale, however: programs are capped at 1% of each utility’s customers, and it does not require all households to leave gas service.
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How the Policy Took Shape
The measure followed cases in which utilities replaced service lines even when a household expected to stop using gas. Merrian Borgeson, California policy director for climate and energy at the Natural Resources Defense Council, said PG&E replaced the line to her Berkeley home while she was preparing to remove her last gas appliance during a kitchen remodel. She said she later shut off gas service, leaving a new line 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.” Her experience helped frame the argument for offering an alternative before replacement work takes place. Borgeson also said the law sends “a very clear message” that California will consider the future of gas infrastructure before investing in it.
The version enacted was narrower than the original proposal, according to Brandon García, California director at Advanced Energy United. Changes included the customer cap and the 2035 expiration date. California is the third jurisdiction to authorize this type of pipeline-replacement alternative and the first to do so statewide, according to the report. New York’s Con Edison launched an Energy Exchange Program in 2024 offering eligible households up to $20,000 to electrify; Colorado regulators authorized a similar Xcel Energy program in July.
““I think the worst case is you don’t hear about [the incentive] until the last minute.””
— Merrian Borgeson
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Payments and Notice Still Undecided
The law sets the requirement for an alternative but does not specify the final incentive amounts, eligibility rules or payment process. Those details are to be addressed by the Public Utilities Commission’s framework and utility proposals. The report says the framework is expected to provide larger incentives for households in disadvantaged communities, but the precise amounts and criteria remain unsettled.
It is also not yet clear how much advance notice customers will receive before a planned replacement. Borgeson warned that households could learn about the option too late to plan. The Rocky Mountain Institute recommends notifying residents one to five years ahead, according to the report; that is a recommendation, not a requirement already established by the law.
Utilities San Diego Gas and Electric and SoCalGas opposed the bill, arguing that customers who stop using gas could leave those who remain with a larger share of the cost of maintaining the system. The broader challenge of managing that cost shift remains, and the practical financial effect of this specific law cannot be established until programs are designed and approved.
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State Rules and Utility Proposals
The California Public Utilities Commission must develop detailed rules, including incentive levels and program requirements. After that framework is in place, each utility will submit a proposal for review. The deadline for approval of those proposals is Jan. 1, 2028; the law does not mean every qualifying household can immediately claim an incentive.
Utility notification practices will be another point to watch as programs take shape. Residents will need sufficient lead time to weigh a new gas line against electrification, plan appliance purchases and determine whether the offered support meets their costs. Whether the programs produce the savings supporters project will depend on participation, payments and avoided infrastructure expenses.
The policy could also inform debates elsewhere. Velez said people in other states have asked about adopting similar legislation and pointed to Illinois, Maryland, Minnesota, Oregon and Washington. For now, California’s implementation process will determine what the choice looks like in practice and whether other jurisdictions follow its statewide approach.
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Key Questions
What choice does California’s new law give households?
When a gas utility schedules a household’s service line for replacement, it must offer an alternative financial incentive for the household to electrify instead of receiving a new gas line.
How much money will a household receive?
The final incentive amounts have not been set. The California Public Utilities Commission is to establish a framework, including incentive levels; the $17,500 amount cited in the report is an example used in an NRDC savings estimate, not a guaranteed payment.
When can customers apply?
The law requires further state rules and utility proposals. Utilities have until Jan. 1, 2028, to obtain approval for their individual programs, so the date when customers can use an incentive depends on that process.
Does the law require households to stop using gas?
No. It offers a choice when a service line is scheduled for replacement. A household may accept the replacement line or choose the incentive to electrify, subject to the approved program’s rules.
How much notice will households get?
The notice period has not been determined. The report says the state framework and utility programs will address implementation, while the Rocky Mountain Institute recommends notice one to five years before planned replacement.
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