California needs an equitable strategy for transitioning to all-electric buildings

Tens of millions of Californians live and work in buildings that burn natural gas to power their air heating and cooling, hot water and cooking equipment. This energy use in turn causes about 10% of statewide greenhouse gas emissions and substantial amounts of harmful indoor air pollution. 

To improve California’s indoor air quality and fight climate change, some state and local leaders are now starting to consider ways to transition these buildings to all-electric energy sources in the coming decades. More than 40 California local governments have already answered the call with ordinances to phase out building natural gas use, from all-electric new construction mandates in Oakland, San Francisco and San Jose to electric-ready requirements in places like Richmond and San Luis Obispo. 

But a patchwork of state initiatives and local ordinances may result in a slow or incomplete electrification transition, with wealthier Californians the first to benefit from new construction and retrofits. Lower-income communities, which face significant barriers to adopting efficient and electrified building technologies, could be left behind. 

Despite the state’s ambitious commitment to statewide carbon neutrality by 2045 and concerns for ensuring that all residents benefit from climate progress, California lacks a clear, strategic state timeline to phase out the use of this fossil fuel in our homes and offices. 

The time is ripe for state leadership. Electric heat pumps, electric water heaters and induction cooktop appliances are widely available and becoming increasingly affordable. And newly proposed bills would direct local governments, state facilities and state incentive dollars to promote building electrification.

To avoid inequitable outcomes and maximize the benefit of public expenditures while ensuring California is on a pathway to carbon neutrality by 2045, state leaders should develop a systematic strategy for the long-term phase-out of natural gas in our buildings. 

Policymakers should begin with high-priority communities, targeting incentives and programs for lower-income communities with the least financial resources and the most to gain from improved air quality; areas with new construction and/or aging gas infrastructure already in need of replacement; communities with an expressed willingness to transition; and areas rebuilding from wildfire damage. 

This strategy should include a firm timeline for the transition to complete electrification, in order to limit the risk of developing stranded assets in the natural gas distribution network. Otherwise, these assets could increase costs for a shrinking group of customers who can’t afford to make the switch quickly and could undermine the long-term viability of utility investments and system maintenance. 

State leaders should also develop a structured plan for a just transition for gas system workers, including funding and retraining support in fields that pay sustainable wages.

The task won’t be easy. California has millions of pre-1990 homes, and although all-electric appliances can reduce energy bills in the long term, the upfront costs of retrofitting existing buildings can still be prohibitively high. The challenge is greatest in lower-income communities, which have more renters, more multifamily buildings and older construction. And a range of stakeholders, from utilities operating under decades-old business and regulatory models to residents wary of loss of service, may resist the transition.

State leaders can begin to address some of these barriers by clarifying utilities’ legal “obligation to serve” to ensure that electrical service can be substituted for gas service, limiting expansion of the existing gas system, and better communicating the air quality benefits and long-term savings of electric appliances. But to ensure a timely and equitable transition, the Legislature, Public Utilities Commission, Energy Commission, local governments and others will need to craft a comprehensive and coordinated approach.

As California works to decarbonize its electrical grid through increasing deployment of renewable energy, with a mandate for zero-carbon power by 2045, this all-electric transition will help the state meet its long-term climate goals. Equally importantly, it will spare residents significant indoor air pollution while making our neighborhoods safer from vulnerable infrastructure, particularly in high-priority communities. It’s time that state leaders take the steps needed to make it happen.

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Ethan Elkind and Ted Lamm co-authored the new report Building toward Decarbonization: Policy Solutions to Accelerate Building Electrification in High-Priority Communities.