Newsom Signs Bill to Help California Neighborhoods Ditch Gas and Go All Electric

Gov. Gavin Newsom signed a bill that will allow some neighborhoods in need of new gas lines to go all-electric instead — with new electric appliances provided at no cost to residents.

The legislation, Senate Bill 1221, was celebrated by environmental advocates as one of the first in the U.S. to allow gas utilities to end service without risk of penalty for electrification projects. It will cover up to 30 pilot projects over four years, starting in 2026.

It also aligns with the state’s climate goals of reaching carbon neutrality by 2045 and installing 6 million heat pumps — electric appliances that can warm or cool a building’s air by 2030. But most homes in California are still powered by gas, a source of planet-warming emissions.

The state’s energy code encourages utilities to provide customers with both gas and electricity, even though you can cook, dry your clothes and heat your home with just one or the other. Updating gas lines costs utilities billions of dollars and conflicts with California’s long-range climate goals.

SB 1221 requires the state’s utility regulator to identify neighborhoods up for gas line replacement, which can then become “neighborhood decarbonization zones.” As long as two-thirds of neighbors agree to the project, the entire community would get free electric appliances to replace those formerly powered by gas. The gas utility would be relieved of providing gas service in this area and would not replace the grid of gas lines underground.

These projects would only go forward if the cost of swapping out gas appliances for electric ones would be cheaper than replacing the gas line infrastructure itself.

Proponents of the bill have pushed for something similar for years, not only to reduce emissions but also to address energy affordability in California. Demand for natural gas is declining in the state, but it’s largely wealthier Californians who are electrifying their homes. That leaves a smaller group of people — mostly lower-income — to pay for the state’s gas system, which increases their bills.

“The passage of SB 1221 is a critical piece to solving California’s energy affordability crisis for the long-term,” said Sen. Dave Min (D-Irvine), who authored the legislation. “It allows the state to make smarter investments in the energy infrastructure we need now and for generations to come.”

Min introduced a similar bill in a past legislative cycle that ultimately died.

“SB 1221 will lower utility bills while ensuring California’s utilities are investing in clean energy infrastructure that will serve us long into the future — not in fossil fuel infrastructure that drags us backward,” said Kiki Velez, who focuses on the transition away from gas at the Natural Resources Defense Council. “With Governor Newsom’s signature on this bill, California will become the first state to enable neighborhood scale electrification across all of its investor-owned gas utilities, and we will be one step closer to putting gas in the past.”

Gas and electric utility PG&E supported the bill and has completed more than 100 similar projects. The bill “enables cost-effective, targeted electrification projects which will help avoid more expensive gas pipeline replacements, reducing gas system operating costs, and support the state’s and PG&E’s decarbonization goals,” wrote company spokesperson Lynsey Paulo in a statement. “The bill creates a framework that contributes to an affordable and equitable energy transition.”

Washington and Colorado have also passed bills allowing for various forms of decommissioning gas lines this legislative cycle.