AB 2313

AB2313:v94#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 2313

An act to add and repeal Section 785.3 of the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL'S DIGEST

AB 2313, as amended, Berman. Gas corporations: gas distribution service line replacements: alternatives.

Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including gas corporations. Existing law requires, until January 1, 2031, gas corporations to submit to the commission an annual map that includes, among other things, the location of all potential gas distribution line replacement projects identified in its distribution integrity management plan and any foreseeable gas distribution pipeline replacements.

This bill, the Home Energy Choice Act, would require the commission, in a new or existing proceeding, to solicit proposals for, and require each gas corporation to offer, a Gas Distribution Service Line Replacement Alternatives Program, on or before January 1, 2028, to provide certain residential gas customers served by a gas distribution service line that will be replaced with a monetary incentive to deploy gas distribution service line replacement alternatives, as defined, and cease gas service to avoid the gas distribution service line replacement, as specified. The bill would require the commission to exempt from the program the emergency replacement of a gas distribution service line. The bill would require the commission to annually review the program to determine whether adjustments should be made to program design to increase program participation. The bill would require the commission, on or before January 1, 2029, and annually thereafter, to report to the Legislature on the progress of each implemented program, as provided.

The bill would repeal its provisions on January 1, 2035.

Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because a violation of a commission action implementing the bill’s requirements would be a crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Digest Key

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

This act shall be known, and may be cited, as the “Home Energy Choice Act.”

SEC. 2.

(a) The Legislature finds and declares all of the following:

(1) Natural gas demand is already declining as California transitions away from natural gas to zero-emission electric alternatives to achieve the state’s energy efficiency, climate, and air quality objectives.

(2) Without active planning and management, reduced demand for natural gas will result in higher gas rates, with a disproportionate burden on vulnerable customers.

(3) Alternatives that avoid new capital investment in the gas system should be pursued where safe, feasible, and cost effective.

(4) California gas corporations replace thousands of gas distribution service lines each year, with the significant majority connected to a single gas meter.

(5) Gas distribution service line replacement costs are paid by all gas customers as capital costs over a period that often exceeds 50 years.

(6) Gas customers are currently not given a choice regarding the replacement of service lines connected to their homes.

(b) It is the intent of the Legislature that the Public Utilities Commission establish a program requiring gas corporations to offer residential gas customers the choice to cease gas service and electrify as an alternative to a planned service line replacement through a monetary incentive to support this transition.

SEC. 3.

Section 785.3 is added to the Public Utilities Code, to read:

785.3.

(a) For purposes of this section, all of the following definitions apply:

(1) “Disadvantaged community” means a community identified pursuant to Section 39711 of the Health and Safety Code.

(2) “Eligible gas customer” means the owner of a residential property receiving gas service that is served by a gas distribution service line planned or forecasted for replacement during the next five years, or served by a gas distribution service line with characteristics identified by the commission as prioritized for replacement, such as the age or material of the gas distribution service line. years.

(3) “Emergency” has the same meaning as defined in Section 21060.3 of the Public Resources Code.

(4) “Gas distribution service line” has the same meaning as “service line” as set forth in Section 192.3 of Title 49 of the Code of Federal Regulations.

(5) “Gas distribution service line replacement alternatives” means measures to provide residential gas customers with energy service that does not require gas use.

(6) “Program” means the Gas Distribution Service Line Replacement Alternatives Program.

(b) (1) In a new or existing proceeding, the commission shall solicit proposals for, and require each gas corporation to offer, a Gas Distribution Service Line Replacement Alternatives Program on or before January 1, 2028. The program shall provide eligible gas customers with a monetary incentive to deploy gas distribution service line replacement alternatives and cease gas service to avoid a gas distribution service line replacement.

(2) A gas corporation that offers a program that is substantially similar to the Gas Distribution Service Line Replacement Alternatives Program and has been approved by the commission on or before January 1, 2028, shall not be required to update its program to meet the requirements of this section until January 1, 2031.

(c) In developing the program, the commission shall establish at least all of the following:

(1) An incentive level for eligible gas customers based on both of the following:

(A) The avoided cost of the gas distribution service line replacement, not including any cost associated with the gas distribution main line.

(B) A mechanism to ensure gas customers benefit from the reduction in capital spending on gas distribution service lines that would otherwise have occurred in the absence of the program.

(2) An enhanced incentive level for eligible gas customers located in a disadvantaged community.

(3) A mechanism to ensure that customers transitioning to electrical service bear an equitable share of unrecovered gas infrastructure costs attributable to their departure, so that customers remaining on the gas distribution system are held indifferent to their departure.

(4) A process for program design, development, and implementation, including, but not limited to:

(A) (i) The timeframe by which a gas corporation shall do both of the following:

(I) Notify eligible gas customers of their eligibility for the program.

(II) Reach agreements with eligible gas customers regarding participation in the program.

(ii) The timeframe shall provide adequate time for outreach and implementation of the gas distribution service line replacement alternatives while ensuring gas distribution service line safety, consistent with the gas corporation’s safety-related priority, and all state and federal compliance timelines for service line replacement are addressed.

(B) Notice requirements for eligible gas customers. Notice shall include information about the climate and health benefits of zero-emission buildings and the potential availability of any additional incentives from other programs, including programs offered by community choice aggregators and regional energy networks.

(C) Potential use of a third-party program administrator.

(D) Development of a list of contractors.

(E) Development of a means through which gas customers can determine their eligibility for the program.

(F) Communication of measures to prevent unnecessary electrical service or panel upsizing.

(G) Coordination and information-sharing requirements with electrical corporations, local publicly owned electric utilities, load-serving entities, and local governments.

(H) A requirement for gas disconnection and gas meter removal as a condition of program participation.

(I) An acknowledgment from the participating customer that waives their the gas corporation’s obligation to be served by the gas corporation. serve their property.

(J) Additional outreach requirements for gas distribution service line replacements in disadvantaged communities.

(K) Coordination with low-income energy efficiency and electrification programs to maximize available incentives for low-income customers.

(L) Tenant protections and requirements to ensure any tenants living in the eligible gas customer’s property receive adequate notification and engagement.

(5) An exemption for emergency replacement of a gas distribution service line.

(d) Subject to commission approval, a gas corporation may propose to limit the program to specific gas distribution service line replacement programs or specific geographic areas based on criteria criteria, including, but not limited to, the avoided average cost of gas distribution service line replacements and readiness to electrify.

(e) A gas corporation shall not receive ratepayer funds for the costs of the program that are covered by incentives provided by federal, state, or local programs.

(f) The commission shall annually review the program to determine whether adjustments should be made to program design to increase program participation. On or after January 1, 2028, the commission may determine, with input from each gas corporation and interested parties, whether each gas corporation’s program should continue and whether any changes should be made to the incentive amount or other program details.

(g) (1) On or before January 1, 2029, and annually thereafter, the commission shall report to the Legislature on the progress of each implemented program, including the number of customers that have participated, program implementation costs, and impacts to nonparticipating gas customers.

(2) A report to be submitted pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code.

(h) This section does not modify a gas corporation’s safety and compliance requirements under state or federal law.

(i) This section shall remain in effect only until January 1, 2035, and as of that date is repealed.

SEC. 4.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.