Full Title: Avoiding Gas Distribution Pipeline Replacement Through Targeted Electrification in California
Author(s): Sean Smillie, Dan Alberga, Aryeh Gold-Parker, and Dan Aas
Publisher(s): E3
Publication Date: June 1, 2024
Full Text: Download Resource
Description (excerpt):
The costs of maintaining California’s natural gas distribution system are steadily growing,
despite the state’s climate plans showing a clear need to dramatically reduce gas combustion to meet state climate targets. To support safety and reliability, gas utilities replace hundreds of miles of gas pipeline every year. Based on near-term plans and recent trends, California’s gas utilities are on track to replace 8,900 miles of gas distribution mains by 2045 at a projected total cost of $43 billion. A geographically-targeted building electrification program could fully electrify blocks or neighborhoods to avoid some gas pipeline replacement projects. At scale across California, we estimate that targeted building electrification and gas decommissioning projects, implemented where feasible, could avoid $20 billion in gas pipeline replacement costs by 2045 while only affecting 3% of current gas customers. In 2024, these savings would average approximately $32,000 per affected customer, which we expect would be enough to cover the upfront costs of electrification. However, these cost savings will be challenging to achieve if 100% opt-in is required from affected customers, as a single customer hold-out could prevent a project from going forward and capturing these cost savings. Achieving gas system cost savings at this scale would benefit from legislative or regulatory clarification that utilities may pursue these projects without requiring 100% opt-in from affected customers.