While politicians are scrambling to get a handle on electricity bills that are soaring due to wildfires and extreme weather, they are paying little attention to a second energy crisis: natural gas bills. Rising gas costs could be contained through proactive government action, but politicians don’t seem to see the urgency.
The Bay Area’s exorbitant electric bills are a harbinger of an impending energy crisis. Electric bills have increased over 20% in the last year, and we’re already seeing monthly PG&E bills of over $300. But reducing our individual gas usage is like putting a Band-Aid on a bullet hole, as utilities spend millions of dollars on natural gas infrastructure and make their customers foot the bill.
Renters and low- to moderate-income communities will be hit hardest. Imagine this: Wealthy Californians, frustrated by rising and fluctuating gas prices, choose to replace their gas appliances with lower-cost electric ones. This leaves fewer customers to bear the cost of maintaining the state’s gas infrastructure. This creates a vicious cycle that leaves the most vulnerable – renters, low-income residents, and retirees on fixed incomes – with no choice but to pay ever-increasing gas bills.
This “death spiral” is already underway. The California Energy Commission predicts that without intervention, the last customers still connected to the gas grid could see their gas bills rise to over $600 a month by 2050. Yet too much money continues to be spent on fossil gas pipelines. Last year, PG&E customers paid nearly $400 million to replace gas pipelines that may only last 10 to 15 years but will be paid back in electricity bills for decades.
Fortunately, some solutions are being explored here in the East Bay. Oakland and San Leandro have launched pilot projects to demonstrate how neighborhoods can be equitably electrified and eventually off their gas service. These pilot projects have shown that converting neighborhoods to gas is possible, but they also highlight legal obstacles that state lawmakers must urgently address to achieve an equitable transition.
State politicians are aware of this problem but have been slow to act. Since 2020, the California Public Utilities Commission has been debating solutions, but a recent report acknowledged that “no process currently exists to coordinate gas planning among utilities” and called on state agencies to implement such a process.
It is baffling that no action has been taken despite a report from state agencies calling for coordination to implement solutions. Such recommendations from state officials who know what is at stake demonstrate a lack of leadership at the top to drive meaningful action.
Fortunately, there is still time to act. Senate Bill 1221 builds on the Bay Area pilots and enables lower-cost decarbonization projects in individual neighborhoods nationwide. These broader pilots can serve as a blueprint for a comprehensive and equitable gas transition and inform future approaches to managing affordability as our energy system evolves.
SB 1221 is just the beginning. What is really needed is a coordinated long-term gas planning process. Gas utilities should submit comprehensive long-term gas infrastructure plans that align with the state’s affordability and climate goals. These plans should also consider alternatives to pipelines such as electrification, energy efficiency, and “gas demand response” programs to compensate customers for reducing their gas use when the system is under stress. Such measures would help minimize investments in new fossil fuels.
California lawmakers must make affordable, reliable, clean energy a priority for their citizens. Governor Newsom and legislative leaders must act decisively to avoid a second energy crisis. The future of California’s energy system – and the well-being of its most vulnerable citizens – depends on managing this transition quickly and effectively.
Leah Rubin Shen is executive director of Advanced Energy United, a national trade association committed to accelerating the transition to clean energy and mobility. Shen is based in Oakland and oversees the organization’s legislative and regulatory advocacy in California and the West.