Yes, the Bay Area needs to ditch natural gas and go electric

By Sam Fishman

You’re paying more on your home gas bill this year than last year. And the year before that. And  the year before that.  

Californians are paying nearly 50% more per unit of gas than five years ago — even as the  average household uses 12% less. Demand is falling. Bills are rising. Something is very wrong. 

Part of it is obvious: methane gas is a volatile commodity. Californians learned this the hard way  in winter 2022-2023, when a perfect storm of unusually cold weather, low natural gas storage  levels, and pipeline infrastructure constraints sent prices soaring to five times the national  average. More recently, the Iran War has caused natural gas prices to spike in Europe and  Asia. 

But there's a hidden story that explains the majority of what you're paying for on your gas bill.  

California's three largest gas utilities doubled their pipeline asset from $27 billion to $57 billion — replacing pipes at $3 to $5 million per mile. Utilities get to recover all those costs by raising  rates, which means higher bills for Californians. Today, about 60% of your gas bill goes toward  pipelines, operations, and shareholder returns — not actual gas. Forty years ago, it was the  reverse. Californians are funding a pipeline empire that keeps growing, even as electric  appliances like heat pumps surge past gas. 

So, what can Bay Area residents do about it?  

Right now, the Bay Area Air Quality Management District (BAAQMD) is voting on rule  amendments for their gas water heater regulations. These rules require many households to  switch to efficient electric appliances — heat pumps and heat pump water heaters — when their  current units die (the rules were passed unanimously by the Air District Board in 2023). The  rules will start in 2027 for water heaters, 2029 for furnaces. 

This has generated some grumbling. Heat pump water heaters still sell at a significant price  premium over gas equipment. 

Luckily, state and local incentives can often offset this cost premium. On the Switch Is On,  residents can explore what incentives they have access to, with programs like San Francisco’s  Bill Credit Program, or a variety of other rebates offered by energy providers around the bay  cutting costs for thousands of residents, in many cases to below the cost of gas equipment.  

Other grumblings point to the challenge of fitting equipment on existing electrical panels–luckily  updated building science and changes to the national electric code, along with evolving power  efficient plugin heat pumps have made it possible for the vast majority of homes to fully electrify  on existing electrical panels. There are also Air District rule exemptions in the works for the  minority who can’t. 

Costs should be mentioned in tandem with benefits. The air quality case alone is staggering: the  Air District projects the rules will eventually lead to $890 million in annual health savings, 85  averted deaths, and 15,000 fewer asthma attacks. Every year. Forever. 

Heat pump HVACs also come with something most Bay Area homes desperately lack: air  conditioning. As wildfire smoke seasons grow longer and heat waves grow more brutal, that’s  not a luxury. It’s a necessity. 

But there’s another benefit nobody’s talking about loudly enough: every household that makes  the switch is a household that stops feeding the pipeline machine. 

Once you’re off gas, you stop locking yourself into a system where your bill goes up even as  you use less. While the electric system also required heavy investments necessitating rate  hikes, it is also fitting more and more electric loads onto existing infrastructure. According to a  January 2026 PG&E analysis, widespread building electrification is projected to exert downward  pressure on electricity rates over time because fixed grid infrastructure costs would be spread  across a larger customer base. 

Unfortunately, low-income households are the ones most exposed to rising gas costs, and least  able to cost-effectively electrify. These residents are likely to be offered generous exemptions by the Air District. But the Air District’s rules must be followed up with more direct financial  support — and the money for that support should come from avoiding unnecessary investments  in the gas system itself. Instead of paying to replace gas pipelines, or expanding a pipeline  network that will become stranded assets in the coming decades, we can choose to invest that  money in the electric system and provide residents with the same heating and cooking needs,  but without the pollution. 

Luckily, California has a rare opportunity to do just that. The California Legislature already  passed SB 1221, authorizing 30 pilot projects to electrify clusters of homes instead of replacing  aging pipelines. Now, AB 2313 would require gas utilities to offer households an electrification  buyout when their service line is up for replacement. SB 1359 would force regulators to  scrutinize gas infrastructure investments over $10 million and require utilities — not customers  — to fund eventual decommissioning costs. And SB 222, the Heat Pump Access Act, would cut  red tape making heat pump installations needlessly slow and expensive. 

The gas system isn’t going away tomorrow. But every year California delays its transition, more  money flows from Bay Area households into infrastructure that fewer and fewer people are  using. The bills go up. The pipes age. Gas continues to add to costly — and deadly — air  pollution. 

The next time you get your gas bill, look at it closely. That “delivery charge” line? That’s the gas  pipeline machine. And right now, we have a real chance to start turning it off. 

Sam Fishman is the Sustainability and Resilience Manager at SPUR