Progress Report: How States Are Kicking Gas

Tackling the climate crisis requires a rapid transition away from “natural” gas – a polluting fossil fuel – and onto emissions-free, efficient all-electric appliances. And yet, across the country, the gas system is a climate beast that is only growing. Nationwide, gas customers are on the hook for more than $150 billion in gas distribution system investments – and this amount is only increasing, as gas utilities continue to invest in their systems despite the climate emergency.  

With the transition to clean electric heating already underway, states have a responsibility to protect households from unchecked, unnecessary investments in a gas system that is on its way out. This blog tracks the progress of six leading states attempting to kick gas: California, Colorado, Illinois, New Jersey, New York, and Washington. While these states are making progress, more action is urgently needed nationwide to secure an affordable, equitable transition away from gas and toward clean, electric appliances.  

The future is all-electric  

When a gas utility invests in gas infrastructure, such as a pipeline, it expects to recover the cost from customers—plus a profit—over up to eight decades. Yet scientists overwhelmingly agree that we need to cut climate-warming emissions in half by 2030, and to net-zero by 2050, to avoid the worst impacts of climate change. For buildings, that means largely eliminating gas heating in fewer than three decades.  

Numerous studies demonstrate that transitioning from gas to efficient, all-electric appliances is the single, most cost-effective strategy for cutting emissions from buildings. In a national decarbonization model, the Net Zero America project at Princeton University found that cutting emissions will require electrifying most, if not all, water heating, space heating, and cooking in the United States by 2050. This would render virtually all new pipeline investments useless decades before their 80+ year expected lifetimes.  

The all-electric transition will come with numerous co-benefits, including cleaner, healthier air inside and outside buildings and independence from the political and price volatility of fossil gas. It also means our energy system will look markedly different in three decades—and our investments in it need to change accordingly. 

Customers deserve an affordable gas transition 

Gas utilities provide gas to homes and businesses through distribution pipelines. Customers pay for this service in two components.  

First is the “commodity cost” —the price of the gas itself, which is passed directly from the utility to the customer. Gas commodity costs can be volatile: with prices more than tripling in parts of the West last winter due to supply interruptions. 

More consequential for long-term gas costs, though, are gas infrastructure costs. Investing in infrastructure, such as pipelines, is gas utilities’ core business model: they pass the cost of the investment, plus an added profit, on to their customers as part of their gas bills. State regulatory commissions are tasked with ensuring that these investments are reasonable and necessary. 

As households transition from gas-burning appliances to all-electric ones, gas utilities should be scaling down their infrastructure investments. And yet, across the country, many utilities continue to propose expensive—in some cases, record-breaking—investments into the gas system. In Nevada, Southwest Gas is requesting a rate increase of nearly $70 million this year; Illinois gas utilities requested more than $900 million in increases last year; and Colorado’s largest gas utility requested $200 million more in rates last year while raking in record-high profits of $1.74 billion.  At the same time, customers in many areas saw their gas bills more than double due to high winter gas prices. 

Stakes are high, time is short 

These gas system investments are a ticking time bomb.  

In California, analysis found that a failure to cut investment into the gas system as customers depart will result in unthinkable rate increases for the remaining clients, with rates growing more than 900% by 2050 compared to today.  

Without intervention, it may be the customers least able to electrify, including “lower-income Black and Brown people and rural residents,” who are left paying for these bad investments. To avoid this, states must act now to minimize gas system investments and achieve a managed, least-cost transition off of gas. 

State progress 

States from coast-to-coast made progress toward a managed gas transition in 2023. Yet, across the country, much more is needed.  

Here is our tracker of state gas planning progress: 

Investing in new gas infrastructure today is like investing in a (super expensive) DVD player just before the dawn of streaming — except it’s our public dollars (the money of everyone who pays a gas bill) that are at play. With the climate clock ticking, our money should be going toward investments that will serve us long into the future—not into a fossil gas system that’s on its way out. Several states have begun to take significant actions to manage the transition off of gas, but much more is needed to secure an affordable transition to the clean energy future.