When one of the nation’s largest investor-owned utilities, Pacific Gas and Electric, wanted to replace Merrian Borgeson’s aging gas service line in Berkeley, California, she asked the company not to do it. Borgeson, who serves as the California policy director for climate and energy at the nonprofit Natural Resources Defense Council, explained that the costly repair was completely unnecessary. She was already in the process of fully electrifying her home and planned to replace her kitchen stove—the last remaining gas appliance in the house—with an induction version during an upcoming home remodel. At that exact point in her renovation, she intended to officially request that the gas line be shut off permanently.
However, PG&E informed her that it could not wait for her remodeling timeline. That very week, utility crews dug up her front yard and swapped in a brand-new metal pipe designed to send gas from the distribution main line directly to her home. Borgeson was not charged directly for the service on her monthly bill. Instead, the infrastructure upgrade—which in PG&E’s service area typically costs between $20,000 and $30,000, not including interest, operational expenses, and ongoing maintenance costs—was absorbed by the broader pool of gas customers over the long projected lifespan of the hardware.
A few years later, that brand-new pipe sits completely unused and dormant underground.
Reflecting on the situation, Borgeson noted the financial irony of the outdated utility model. Now, she has no gas running into her house whatsoever, yet the surrounding utility customers are stuck paying off the cost of that unused pipeline for the next 50 years.
Soon, however, homeowners across California will finally have the regulatory choice that Borgeson was denied. A newly enacted piece of legislation, the Home Energy Choice Act, officially designated as Assembly Bill 2313, will require utilities to give households scheduled for a routine service line replacement a meaningful choice. Instead of automatically digging up yards to install new gas infrastructure, utilities must offer customers the option of getting the new line or accepting a financial incentive potentially worth several thousand dollars to transition away from gas entirely.
Crucially, the math behind the law is designed to benefit the entire customer base. The financial incentive offered to households to switch to all-electric equipment—such as efficient space-heating heat pumps, advanced induction ranges, and heat-pump water heaters—will be kept lower than the actual cost of replacing the physical gas line. This creates an immediate net savings that will be shared among all remaining gas ratepayers, preventing unnecessary investments in fossil fuel infrastructure that risks becoming obsolete.
Advocates say the policy marks a major turning point for the state’s energy landscape. Borgeson, who actively advocated for the passage of the bill, noted that it sends a very clear message that California is no longer going to invest millions of dollars in gas infrastructure without seriously considering the future. She described it as a massive signal indicating where the state’s energy policy is ultimately headed.
The Natural Resources Defense Council has calculated substantial potential savings under the new framework. According to their estimates, PG&E’s gas customers could save a collective total of $20 million if the utility simply provided 1,000 households with an incentive of $17,500 apiece rather than funding the physical replacement of their service lines. To put that figure into perspective, PG&E routinely replaces roughly 15,000 service lines on an annual basis across its expansive service territory.
If similar regulatory programs were instituted across the country, clean energy experts suggest the financial savings could rival major federal investments in home electrification, such as those seen under Biden-era legislation. According to data from the clean energy nonprofit RMI, utilities nationwide spend upward of $7 billion every single year on routine service line replacements alone.
The new policy will help push California closer to its overarching statutory goal of achieving a carbon-neutral economy by 2045. However, industry observers note that the version of the bill that ultimately crossed the finish line was considerably less ambitious than the original proposal introduced to lawmakers. Brandon García, the California director at the industry association Advanced Energy United, pointed out that compromises were necessary to secure legislative approval. These revisions included capping the alternative replacement programs at 1% of a utility’s total customer base and setting an expiration date for the law on January 1, 2035, though the program could theoretically be renewed by lawmakers before that deadline arrives.
Assemblymember Marc Berman, who authored the legislation, acknowledged the legislative hurdles in an email statement, expressing excitement over the outcome. He noted that AB 2313 was a very difficult bill to get through the Legislature, but emphasized that it will soon give Californians the opportunity to decide what energy powers their homes while providing necessary financial support if they choose to transition away from natural gas. When homeowners opt to electrify instead of renewing gas service, Berman explained, the utility successfully avoids making additional capital investments in fossil fuel infrastructure that will eventually become a stranded asset, ultimately saving all ratepayers money in the long term.
Not all utility stakeholders welcomed the change. Major investor-owned utilities, including San Diego Gas and Electric and SoCalGas, opposed the bill during the legislative process. Their primary argument was that the policy would result in an unfair cost shift. They contended that as more customers voluntarily stop using natural gas, the remaining ratepayers could be left bearing outsized, disproportionate costs to maintain the sprawling distribution system.
While utility transition experts acknowledge that the shrinking customer base is a legitimate broader issue for the state’s transition off fossil fuels—and one that California regulators will eventually need to address comprehensively—advocates argue that this specific law addresses the problem from the right angle. Kiki Velez, the equitable gas transition lead at the Natural Resources Defense Council, explained that the law is not causing the transition problem, but is instead trying to encourage people to leave the gas system at the exact moment when their departure actually saves money for everyone else remaining on the utility’s books.
With the enactment of this legislation, California becomes the third jurisdiction in the United States to authorize a pipeline replacement alternative approach, and the very first to do so on a statewide level. Earlier examples emerged at the utility level: in 2024, New York utility Con Edison launched its own initiative known as the Energy Exchange Program, which offers eligible households up to $20,000 to electrify their homes. Velez noted that other New York utilities are now following suit. Furthermore, in July, the Colorado Public Utilities Commission officially authorized Xcel Energy to create a comparable program, which is widely expected to launch within a few months.
The next procedural phase in California requires the Public Utilities Commission to establish a detailed regulatory framework for utilities to follow. This framework will need to outline specific incentive levels, ensuring larger financial amounts are directed toward customers living in disadvantaged communities. Once the commission finalizes these rules, utilities will have until January 1, 2035—or rather, individual proposed programs must be submitted and approved by January 1, 2028—to implement their offerings.
One critical detail that remains to be determined by regulators is how much advance notice utilities will be required to provide to residents whose aging pipes are scheduled for replacement. Borgeson warned that the worst-case scenario would be a process where homeowners do not hear about the electrification incentive until the very last minute, disrupting their long-term home improvement plans. To prevent this, RMI recommends that utilities alert residents anywhere from one to five years ahead of time, aligning the notification with the initial scheduling phase of the service line replacement cycle.
Interest in the policy is already spreading beyond California’s borders. Velez pointed out that lawmakers and advocates in other states, including Illinois, Maryland, Minnesota, Oregon, and Washington, are actively looking to emulate California by introducing similar bills of their own. She noted that people are already reaching out frequently to figure out how they can adapt the framework to bring it to their home states.
In California, the incorporation of larger electrification incentives tailored for disadvantaged communities will provide a much-needed boost to clean energy equity, García noted. Having grown up in those kinds of neighborhoods as a low-income resident, García emphasized his personal commitment to ensuring that cutting-edge, all-electric technology is accessible and attainable for everyone, regardless of their zip code or income level.