PG&E Gets on Board with All-Electric New Buildings in California

Pacific Gas & Electric has become the first combined natural
gas and electric utility in California to express support for an
emerging plan to require “efficient, all-electric new construction”
in the state,telling regulators that it wants to â€œavoid
investments in new gas assets that might later prove
underutilized†under the state’s long-term decarbonization

Thursday’s letter from PG&E vice president Robert Kenney
to the California Energy Commission is a notable concession by the
state’s largest utility to the constraints its natural gas
operations will face under California’s push to attain
zero-carbon emissions by 2045. 

The CEC is considering a revision to state building code Title
24 that would ban natural gas for new buildings in the
state starting in 2022, the first such move by a state agency.
Kenney wrote that “PG&E supports state and local government
policies that promote all-electric new construction when it is
feasible and cost-effective.†

Switching buildings
from gas to electricity
for heating and cooking, along with
electrifying transportation, is considered a vital
step in cutting emissions
 outside of electricity generation.
California has taken a leading role in this effort, both at the
state and local level. 

Last year, the Northern California city of Berkeley became
the first
in the nation
 to ban gas lines for new residential
construction, with some limited exceptions. Since then, more than
30 cities and counties in the state have passed ordinances
prohibiting new natural gas hookups, requiring all-electric
appliances, or otherwise limiting the role of natural gas in
buildings, according to a June report by Rob Rains, analyst at
Washington Analysis. 

“California is obviously leading this,†Rains said in a
Friday interview. After California, “Massachusetts is dipping its
big toe in,†with the city
of Brookline
 approving a ban on natural gas for new
construction late last year which is awaiting approval from the
state attorney general’s office, and several other cities
considering bans.   

Utilities taking sides 

PG&E’s public support for such a move is a rarity among
utilities invested in natural gas infrastructure, Stephanie Greene,
a principal at the Rocky Mountain Institute, said in a Friday
interview. “As far as we know, they’re the first investor-owned
combined gas and electric utility that supports an all-electric
building code.†

But California’s mandate to reduce economy-wide carbon
emissions to zero
by 2045
 will require its natural gas utilities to drastically
reduce their reliance on the fuel. For PG&E, which just won
approval for its
$58 billion plan
 to emerge from bankruptcy, “the best thing to
do is to strategically manage a transition, acknowledging that gas
use has to decline significantly,†Greene said.

Gas industry groups and utilities are fighting against building
electrification. An American Gas Association study declared that
natural gas bans would be “burdensome to consumers and to the
economy†and result in a spike in peak electricity demand, a
conclusion challenged by clean energy groups. 

Southern California Gas Co., one of the country’s largest
natural-gas utilities, has funded a
advocacy group, Californians for Balanced Energy
Solutions, seeking to prevent local governments from enacting
all-electric building ordinances. 

Conversely, Southern California Edison, the state’s
only all-electric
investor-owned utility
, is well-positioned to find growth
opportunities in the state’s push for electrification. â€œWe
think it’s going to be very difficult to have a significant
amount of traditional natural gas powering building heating and
cooling, and water heating and cooling,† Drew Murphy, senior
vice president of strategy and corporate development at Edison
International, told GTM in February. 

The costs and benefits of going all-electric 

Around 70 million American homes burn natural gas, oil or
propane for space and water heating, according to Navigant
Research. But electric-powered heat
that shift hot and cold air to adjust indoor temperatures
are more efficient at both heating and cooling than fossil
fuel-fired furnaces or boilers, advocates say. 

“All-electric new construction is less expensive than natural
gas,†Greene said, as a recent report from
RMI found for new homes being built in the cities of Houston,
Chicago, Providence, R.I and Berkeley neighbor Oakland, Calif. Even
retrofitting of existing fossil-fueled space and water heating to
electric is cheaper in some circumstances, such as replacing
gas-fired heaters and air conditioners with heat pumps, or bundling
rooftop solar with electrification.   

Other California regulators are joining the state
electrification effort. The California Public Utilities
Commission has a $200
million program
 to provide incentives for low-carbon space and
water heating technologies in new and existing buildings, and
recently approved
another $45 million
 for heat pump water heater incentives
through 2025. The CPUC has also revised
outdated rules
 to make electric space and water heaters
eligible for billions of dollars in ratepayer-funded energy
efficiency program rebates. 

The role of renewable, synthetic gas

PG&E’s letter noted that it supports a “multi-faceted
approach†to meeting the state’s goals, including
electrification and “decarbonizing the gas system with renewable
natural gas and hydrogen.†

Renewable natural gas
 â€” methane captured from landfills,
dairy farms and other sources — could replace a small portion of
the fossil natural gas now filling pipelines. So could
synthetic gas
, whether hydrogen
 by renewable
 or methane created by combining hydrogen with
carbon captured from other emissions to reduce its greenhouse gas

But both replacements are highly unlikely to be able to grow to
the scale needed to replace the volume of fossil natural gas now
used in the U.S., according to a recent report from
the Natural Resources Defense Council. 

Instead, renewable or synthetic natural gas should be reserved
for highest-value uses such as industrial processes or aviation,
leaving buildings to rely on electricity increasingly powered by
renewable sources to replace lower-value uses like building heating
and cooking, Greene said. A recent report prepared
for the CEC found that “building electrification is likely to be
a lower-cost, lower-risk long-term strategy compared to renewable
natural gas.†

Source: FS – GreenTech Media
PG&E Gets on Board with All-Electric New
Buildings in California