The California State Legislature passed Senate Bill (SB) 1221 by Senator David Min before they adjourned on August 31, delivering a major win to California utility customers and the climate. Now, Governor Newsom must sign the bill into law.
SB 1221 will help ensure that utility spending is aligned with an affordable, clean energy future by increasing transparency into gas utilities’ planned fossil fuel investments and authorizing thirty, cost-saving “zero-emission alternative” pilot projects to take place across the state. With this bill, California will join a growing list of states that are closing the chapter on gas pipeline investment and setting out toward a clean and affordable energy future.
Neighborhood-Scale Clean Energy
SB 1221 enables thirty zero-emission pilot projects that will reduce utility spending by giving communities the opportunity to replace an expensive, gas pipeline replacement project in their neighborhood with a more affordable alternative that transitions households to clean, electric appliances. These pilots will:
- Reduce Energy Bills: The pilot projects must replace a planned, higher-cost gas pipeline replacement project with a less expensive neighborhood decarbonization project, thereby delivering cost savings to utility customers.
- Deliver Climate and Health Benefits: The projects will redirect funds that would otherwise be spent on gas infrastructure towards community-approved and neighborhood-scale clean energy alternatives, like building electrification. Projects will cut climate emissions, transition households off of fossil fuels, and improve air quality.
- Support Energy Equity: SB 1221 prioritizes investment in disadvantaged and low-income communities across California.
Modern and Transparent Energy Planning
Beyond the pilots, SB 1221 will also help put California on a path to more transparent energy planning. Gas utilities currently plan to spend an estimated $43 billion on fossil fuel infrastructure through 2045. Without intervention, these investments could raise households’ gas utility bills as much as 900% by 2050, as Californians transition away from fossil fuels like gas and towards clean, electric alternatives.
SB 1221 will help reduce costs by directing utilities to develop modern system maps that plot out planned gas pipeline investments and identify areas where zero-emission projects provide a viable alternative. At scale, zero-emission alternative projects like the pilots enabled by SB 1221 could save utility customers huge sums of money. Through 2045, Energy + Environmental Economics estimates that such projects could save utility customers more than $20 billion in avoided gas pipeline costs, all while advancing California’s climate goals.
SB 1221 will put Californians on track to realize significant energy bill savings and climate benefits. It will also help ensure our utilities are investing in clean energy infrastructure that will serve us long into the future – not in fossil fuel infrastructure that drags us back. With Governor Newsom’s signature on SB 1221, California will become the first state to enable neighborhood scale electrification across all of its investor-owned gas utility territories – and we will be one step closer to putting gas in the past.
