New California law will have utilities fund home electrification

On Wednesday, California Gov. Gavin Newsom officially signed a bill that will require gas utilities to pay consumers who want to electrify their homes. 

That comes as Congress considers the Energy Choice Act, a bill that would prohibit state and local governments from banning or limiting access to specific types of energy sources, including natural gas. 

What’s happening: California lawmakers in late August passed the Home Energy Choice Act and presented it to the governor for approval earlier this month.

• Under the bill, gas utilities must offer residential customers a voluntary monetary incentive to electrify their homes when their gas service lines are scheduled for replacement, rather than automatically replacing the lines, as they do today. 
• Proponents argue that the legislation will bring down costs, as the “money that a homeowner receives through the program will be less than what their gas utility would spend replacing the gas service line to their home.”
• Of note: The new state law doesn’t specify the monetary incentive, but it requires the state’s public utilities commission to set that rate by 2028.

The other side: California gas utilities, alongside labor unions, have raised concerns during policy hearings that the legislation is premature, could disrupt safety funding and increase costs for those who cannot afford electrification, and might negatively impact pipeline maintenance jobs, according to Politico.

Zoom out: Across the country, other state legislatures are enacting energy choice-related legislation.

• In Massachusetts, for instance, the state senate this summer passed a bill incentivizing a shift from gas infrastructure to solar, while Nebraska became the 26th state to ban local governments from prohibiting or restricting access to any fuel sources.

The big picture: At the federal level, congressional Republicans are pushing in the opposite direction of California with the Energy Choice Act, which counts Republicans as 154 of its 157 cosponsors. 

• Between the lines: The Energy Choice Act’s text is brief, at around 150 words, and it’s unclear how it would impact statewide and local laws like California’s Home Energy Choice Act if both are enacted, as the latter legislation is a voluntary program.

In related news: Newsom on Monday signed a first-of-its-kind heat pump permitting bill into law. Catch up quick

Note: This story has been updated with the latest information following the Governor’s signature of the bill before the Sep. 30 deadline.