The Problems with California GHG Policy

Grid Capacity and Load Demand:

The state has done a poor job of ensuring that its electrical grid can handle an exponential increase in demand resulting from the implementation of its GHG policies. This has been compounded by the emergence of AI Data Centers, which consume an enormous amount of electricity every hour of every day. This has resulted in a significant rise in electrical rates, which shows no signs of slowing down and is in direct conflict with efforts to encourage a switch from gas to electricity.

Federal Preemption Issues:

Among other things, the Federal Energy Policy Act of 1992 establishes a national preemption of state and local mandates for appliance efficiency levels for certain common appliances. In short, the Department of Energy (DOE) is charged with developing minimum appliance efficiency levels for the entire country. State and local jurisdictions cannot require efficiency levels that are more stringent than the national standards.

An example of a violation of this federal preemption is the City of Berkeley's ban on gas use in new homes enacted a few years ago. This ban was successfully challenged in court, and the ordinance was withdrawn. The City of San Jose voluntarily withdrew its similar ordinance requiring all-electric construction.

Lastly, the California Apartment Association is suing the South Coast Air Quality District (SCAQMD) over its plan to effectively ban gas usage in its district. While CAA lost the initial round, the case has now moved to the Appeals Court, where a much different outcome is expected.

AB 2313 (Berman) - Gas Distribution Service Line Replacements: Alternatives

Summary: The 4/13 version of the bill would require gas utilities to offer customers (whose gas line extensions are up for replacement) a monetary incentive to end their gas service and make their homes all-electric.

The incentive would be equivalent to 85% of the average lifetime cost of the avoided gas distribution service line replacement.

Sempra strongly opposes the bill, arguing that it would create a statewide mandate before the legislature receives the CPUC's report on its pilot program.

Problems:

It is not easy for a mixed-fuel home to just switch to all-electric appliances. Assuming that the home currently has a gas appliance for water heating, space heating, and cooking, switching to all-electric will almost certainly require:

• A very expensive upgrade of the electrical panel to provide the additional capacity needed for the increased load.
• If enough homes in the neighborhood choose to go all electric, the utility will probably have to make major upgrades to the electrical infrastructure, which is an enormous expense.
• Lastly, there is the issue of the cost of replacing these appliances.

In addition, it can be assumed that the incentive money would be provided through a change in the existing rate structure… meaning some or all of the utilities' ratepayers will pick up this cost, in addition to the costs associated with utility infrastructure upgrades.

Status: Assembly Utilities & Energy Committee passed the bill on a 10-4-4 vote with amendments pending. Next stop: Assembly Appropriations Committee. 

Click here to view the bill language.

SB 1359 (Stern) - Natural Gas Transition Responsibility & Electrification Act

Summary: The author thinks the state is moving too slowly in its efforts to eliminate gas usage. So, SB 1359 would speed things up by:

• Requiring the PUC to review all gas line infrastructure projects costing more than $10 million to ensure they align with state GHG emission reduction goals.

• Requiring utility stakeholders to fund a gas infrastructure decommissioning trust fund.

Problems:

• First off, almost all gas infrastructure projects will exceed $10 million in cost.

• Secondly, since any new gas line infrastructure projects would likely be inconsistent with the state’s GHG reduction goals, isn’t this a mandate for the PUC to reject all new gas line infrastructure projects?

• Lastly, all investor-owned utilities (IOUs) have a longstanding “obligation to serve” their customers. This bill would appear to delete that obligation for customers who need or use gas.

Status: Senate Energy, Utilities, and Communications Committee passed the bill on a 10-4-3 vote with no amendments. Next stop: Senate Appropriations Committee. 

Click here to view the bill language.

2024 Chaptered Bill: SB 1221 (Min) - Gas Use: Ceasing Service & Priority Neighborhood Decarb Zones

Summary: The author thinks the state is moving too slowly in its efforts to eliminate gas usage. So, SB 1359 would speed things up by:

Summary:

Among other things, this bill requires the PUC to:

• Implement a pilot program in July of 2026 that creates thirty (30) “neighborhood decarbonization zones”.

• In these pilot program zones; utility customers can voluntarily replace their existing gas appliances with electric appliances.

• Provide the Legislature with annual progress reports, with the final report due in 1/1/29.

• This law sunsets on 1/1/31.

• NOTE: This bill specifically states the intent NOT to terminate the utility's obligation to serve gas customers.