California should help neighborhoods in need ‘decarbonize,’ leave natural gas

California is finally staring down an uncomfortable fact: we can’t keep pouring money into aging gas pipelines and pretending we’re on track for climate or affordability bills. 

PG&E alone plans to replace roughly 2,000 miles of distribution mains over the next decade, at an estimated cost of $10 billion. Statewide, gas utilities are projected to spend about $43 billion on pipeline replacements between now and 2045. 

Replacing a single mile of pipe can cost $3 million to $5 million dollars or more. That money lands in your gas bill.

Senate Bill 1221 passed in 2024 as a partial antidote. It tells the California Public Utilities Commission to approve up to 30 “neighborhood decarbonization zone” pilots, where a utility can shut off a local gas line and use the avoided pipeline money to pay for zero-emission alternatives, such as heat pumps, electric water heaters, thermal networks or efficiency upgrades — as long as the clean option is cheaper and the benefits flow first to low-income communities. 

This is not meant to be a feel-good climate side project. It’s supposed to be a cost-control program with a climate bonus.

Recently the commission issued a proposed decision taking the first step, designating 151 initial priority decarbonization zones across the state. Faced with more than 9,000 census tracts, the commission needed a screening rule. It chose to require that at least 10% of local gas mains be scheduled for replacement for a tract to qualify. (If they set the bar higher, the commission found, they’d exclude places like Los Angeles and Elk Grove that clearly have need and interest. Set it lower, and nearly every tract qualifies.)

On paper, that approach looks cautious and reasonable. But two problems arise.

The first is participation bias. The commission’s docket system favors communities with the resources to engage in regulatory processes. The result: a map dominated by coastal, civically organized neighborhoods — leaving higher-burdened, inland and Central Valley communities out. 

If wealthier coastal neighborhoods get ratepayer-funded electrification while inland renters stay on aging gas systems, California accelerates the death spiral SB 1221 was meant to prevent. As affluent households leave gas, pipeline costs are spread across fewer, poorer customers.

The second problem is utility incentives. Utilities earn guaranteed returns on gas pipelines but face uncertainty with electrification. PG&E walked away from Cal State Monterey Bay’s electrification project — despite its own analysis showing savings if they converted gas services to electric — because pipes were the safer financial choice for PG&E, climate goals be damned.

SB 1221 partly remedies this by requiring zero-emission alternatives only when they’re cheaper than gas, ensuring utilities are made whole, while empowering the commission to shut down gas segments when two-thirds of property owners agree to electrify.

Whether that achieves the bill’s intent for equitable decarbonisation depends entirely on how the commission uses its power. The commission’s update in 2026 should start with a community’s pollution and vulnerability, not with who manages to comment on an obscure docket. 

CalEnviroScreen is the tool the state uses to identify which neighborhoods are most susceptible to environmental harm. Its full data — and serious outreach to inland communities, the Central Valley, and California’s more than 100 tribal nations — should drive the next map. 

At the same time, utilities must be required to follow a transparent cost-effectiveness framework and disclose basic project data so the public can see where the billions are going.

SB 1221 offers a rare alignment of climate, affordability and equity. That promise will only be realized if regulators resist the path of least resistance and send neighborhood decarbonization first to the communities that need it most — and where it saves the most money.