When one of the nation’s largest investor-owned utilities, Pacific Gas and Electric, wanted to replace Merrian Borgeson’s aging gas service line at her home in Berkeley, California, she made a straightforward request: 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, knew that the repair was entirely unnecessary for her household’s future. She was already in the process of fully electrifying her home. Her plan was to replace her kitchen stove—which happened to be the very last gas appliance left in the house—with an induction range during an upcoming kitchen remodel. Once that transition was complete, she intended to officially request that the utility shut off her gas supply entirely.
However, PG&E informed her that the utility’s operational schedule could not accommodate a delay. That same week, work crews arrived at her home, dug up her front yard, and swapped in a brand-new pipe designed to transport fossil gas from the street distribution main line directly to her property.
Borgeson was not billed directly for the disruptive service. Instead, the costly upgrade—which typically ranges between $20,000 and $30,000 in PG&E’s service territory alone, not including ongoing interest rates and long-term operation and maintenance expenses—was quietly absorbed by the broader base of gas customers, who will pay for the infrastructure over its multi-decade lifespan.
A few years later, that freshly installed pipe sits completely idle and unused beneath the soil of her property.
"Now, I have no gas in my house," Borgeson reflected on the absurdity of the situation. "लेकिन the customers all around me are paying for that pipeline for the next 50 years."
Soon, however, property owners across California will be granted a legal choice that Borgeson was denied. A landmark piece of legislation known as the Home Energy Choice Act, officially designated as Assembly Bill 2313, is set to reshape how utilities handle aging infrastructure. The new law will legally require utility companies to provide households scheduled for routine service line replacements with a critical alternative: they can either proceed with the standard installation of a new gas pipe or choose to accept a substantial financial incentive—potentially worth several thousand dollars—to disconnect from the gas system entirely.
Crucially, the financial incentive offered to homeowners to switch to modern, all-electric equipment such as high-efficiency heat pumps, induction cooking ranges, and heat-pump water heaters will be carefully calibrated to cost less than the actual price of replacing the physical gas line. This economic design ensures that every time a household chooses electrification over a pipe replacement, immediate net savings are generated, which will then be shared among all remaining gas ratepayers.
Supporters of the legislation argue that it marks a fundamental shift in how the state manages its energy transition. Borgeson, who actively advocated for the passage of the bill, noted that it sends a powerful and unmistakable signal. The law communicates clearly that California is no longer willing to invest tens of millions of dollars into fossil fuel infrastructure without critically evaluating the long-term future of the grid.
To illustrate the potential magnitude of these savings, the Natural Resources Defense Council calculated that PG&E’s gas customers could collectively save up to $20 million if the utility simply redirected funds by offering 1,000 households an average incentive of $17,500 apiece, rather than moving forward with routine service line replacements. To put that scale into perspective, PG&E routinely replaces roughly 15,000 service lines every single year across its extensive service territory.
If similar regulatory programs were to be instituted on a national scale, the resulting financial and environmental savings could easily rival major federal investments in residential home electrification, such as those introduced during the Biden administration. According to research from the clean energy nonprofit RMI, utility companies across the United States spend upwards of $7 billion every year exclusively on residential service line replacements.
The enactment of the Home Energy Choice Act will help propel California steadily closer to its ambitious statutory mandate of achieving a fully carbon-neutral economy by the year 2045. Nevertheless, the version of the legislation that ultimately crossed the finish line and was signed into law is noticeably less sweeping than what its initial proponents originally envisioned. Brandon García, the California director at the industry association Advanced Energy United, pointed out that lawmakers introduced several key compromises during the legislative process. These revisions included capping the alternative replacement programs at just 1% of a given utility’s total customer base. Additionally, the law includes a sunset provision, meaning it is scheduled to expire on January 1, 2035, though state legislators retain the option to renew and extend the framework before that deadline arrives.
Despite these legislative guardrails, the path to enactment was fraught with political challenges. Assemblymember Marc Berman, who authored the bill, expressed deep satisfaction with the outcome despite the strenuous legislative battle.
"AB 2313 was a very difficult bill to get through the Legislature, so I’m very excited that it will soon give Californians the opportunity to decide what energy is powering their home and provide financial support if they choose to transition away from natural gas," Berman said in an email statement. He added that when homeowners proactively opt to electrify, the utility successfully avoids making additional, unnecessary capital investments in fossil fuel infrastructure that would otherwise eventually morph into expensive stranded assets, ultimately protecting all ratepayers from long-term financial burdens.
Unsurprisingly, the legislation faced organized resistance from major utility providers. Investor-owned utilities including San Diego Gas and Electric and SoCalGas formally opposed the bill throughout the legislative process. Their primary argument centered on the structural challenge known as the cost shift: as gradual waves of customers stop consuming gas and drop off the network, the shrinking pool of remaining customers could theoretically be left bearing disproportionately high financial burdens to maintain the safety and operation of the aging physical system.
While utility experts acknowledge that managing the long-term contraction of the gas grid is a complex systemic challenge that California and other states must intentionally address, clean energy advocates emphasize that AB 2313 represents a targeted solution rather than a compounding problem. Kiki Velez, the equitable gas transition lead at the Natural Resources Defense Council, explained that the law is specifically designed to encourage people to exit the gas system precisely at the historical moment when their departure actually saves money for everyone else remaining on the network.
With the official passage of this new legislation, California establishes itself as the third jurisdiction in the nation to authorize a pipeline replacement alternative approach, and notably the very first to implement the policy on a statewide level. The movement began taking root elsewhere in recent years; in 2024, New York utility Con Edison launched its own pioneering initiative known as the Energy Exchange Program. That program offers eligible residential households up to $20,000 in financial assistance specifically to transition their homes to full electrification, and other utility providers across New York are actively working to follow suit, according to Velez. Furthermore, in July, the Colorado Public Utilities Commission officially authorized Xcel Energy to develop and implement a remarkably similar program, which Velez anticipates could launch publicly within a matter of months.
In California, the immediate next procedural step requires the California Public Utilities Commission to establish a comprehensive and detailed operational framework for utilities to follow. This regulatory process will define specific incentive structures, including provisions to ensure that larger financial amounts are directed toward customers residing in historically disadvantaged communities. Once the framework is finalized, individual utilities will have until January 1, 2028, to submit their tailored program proposals for official state approval.
One critical detail that remains to be determined by regulators is the precise amount of advance notice utilities will be required to provide to residents whose aging pipes are scheduled for routine replacement. Without adequate notification, homeowners might miss the window to opt for the clean energy incentive. Borgeson noted that the worst-case scenario involves a resident learning about the electrification alternative at the very last minute when construction crews are already scheduled to arrive. To prevent this, RMI recommends that utilities establish a notification timeline of one to five years in advance, coinciding with the initial scheduling phase of the service line replacements.
As California moves forward with implementation, policymakers and advocates in other states are closely watching the rollout and looking to emulate the model with legislation of their own. Velez noted that stakeholders in states such as Illinois, Maryland, Minnesota, Oregon, and Washington have already initiated discussions. People are frequently reaching out to inquire how they can successfully bring similar legislative frameworks to their respective states.
In California, the integration of enhanced electrification incentives tailored for disadvantaged communities will provide a critical and long-overdue boost to clean energy equity. García emphasized the personal significance of this aspect of the law, reflecting on his own upbringing. As someone who grew up in low-income neighborhoods, he stressed the importance of ensuring that the benefits of modern, all-electric technology are accessible to everyone, regardless of their economic background.