As politicians scramble to address soaring electricity bills driven by wildfires and extreme weather, they’re paying little attention to a second energy affordability crisis: natural gas bills. Rising gas costs can be managed with proactive state action, but lawmakers do not appear to see the urgency.
Exorbitant utility bills in the Bay Area are a harbinger of a looming energy affordability crisis. Utility bills increased over 20% in the last year, and we are already seeing monthly PG&E bills over $300. However, reducing our individual gas consumption is like putting a Band-Aid on a bullet hole as utilities overspend millions of dollars on natural gas infrastructure, making their customers foot the bill.
Renters and low- to moderate-income communities will be affected most. Picture this: Affluent Californians, frustrated with rising and volatile gas prices, opt to switch out their gas appliances for more cost-effective electric appliances, leaving fewer customers to bear the cost of maintaining the state’s gas infrastructure and creating a vicious cycle that leaves the most vulnerable — renters, low-income residents and fixed-income seniors — with no choice but to pay ever-rising gas bills.
This “death spiral” is already underway. The California Energy Commission projects that without intervention, the last set of customers remaining on the gas system could see their gas bills soar to over $600 per month by 2050. Despite this, excess expenditures in fossil gas pipelines continue. Last year, PG&E customers paid nearly $400 million for replacing gas pipelines that may last only 10-15 years but will be paid back over decades via utility bills.
Fortunately, some solutions are being explored here in the East Bay. Oakland and San Leandro have initiated pilots to demonstrate how neighborhoods can electrify, and eventually cease, their gas service in an equitable way. These pilots have shown that transitioning neighborhoods away from gas is possible, but they also reveal legal barriers that state lawmakers must urgently address for an equitable transition.
State politicians are aware of this problem but have been sluggish to act. Since 2020, the California Public Utilities Commission has debated solutions, yet a recent report acknowledged that “no process currently exists to coordinate gas planning across utilities” and called for state agencies to implement such a process.
It’s perplexing that despite a report from state agencies calling for coordination to implement solutions, no action has begun. Such recommendations from the state’s civil servants, who understand what’s at stake, speak to the lack of leadership at the top to drive significant action.
Fortunately, there is still time to act. Senate Bill 1221 builds on the projects piloted in the Bay Area by enabling more cost-effective neighborhood decarbonization projects statewide. These broader pilots can serve as a blueprint for a comprehensive and equitable gas transition, informing future approaches to manage affordability as our energy system evolves.
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SB 1221 is just the beginning. What is truly needed is a coordinated long-term gas planning process. Gas utilities should file comprehensive long-term gas infrastructure plans that are aligned with the state’s affordability and climate goals. These plans should also consider non-pipeline alternatives such as electrification, energy efficiency and “gas demand response” programs to compensate customers for reducing gas use when the system is stressed. Such actions would help minimize new fossil fuel investments.
California lawmakers must prioritize affordable, reliable and clean energy for its residents. Gov. Newsom and legislative leaders need to take decisive action to avoid a second energy affordability crisis. The future of California’s energy system — and the well-being of its most vulnerable residents — depends on the swift and effective management of this transition.
Leah Rubin Shen is a managing director at Advanced Energy United, a national business association working to accelerate the transition to clean energy and transportation. An Oakland resident, Shen oversees the organization’s legislative and regulatory engagement in California and the West.
