Strategic Pathways and Analytics for Tactical Decommissioning of Portions of Natural Gas Infrastructure in Northern California
Energy & Environmental Economics, Inc.
Recipient
San Francisco, CA
Recipient Location
11th
Senate District
17th
Assembly District
$883,910
Amount Spent
Completed
Project Status
Project Result
This project team determined that targeted electrification and gas decommissioning can provide net benefits to the state and both gas and electric ratepayers, and if successfully implemented, would help to support a managed transition for the gas distribution system. However, upfront cost barriers, customer preferences, and regulatory challenges would need to be addressed and a number of policy and regulatory changes, along with higher levels of community and customer interest and support, will be necessary for targeted electrification and gas decommissioning to achieve the scale needed to provide significant reductions in gas system costs. Project materials are available here: https://gridworks.org/initiatives/gas-decommissioning/
View Final ReportThe Issue
Electrification of homes and businesses is an essential component of California’s plan to achieve net zero greenhouse gas emissions. However, building electrification will significantly challenge the funding and cost recovery mechanisms for California’s gas distribution system. Policymakers and regulators in California are beginning to think strategically about how to pursue a managed transition for the gas system amidst declining gas usage driven by electrification. This managed transition will need to include strategies for reducing gas system spending and for managing rates for gas customers who have not or cannot make the switch to electric building equipment.
This project aims to address the question: How can targeted building electrification paired with tactical gas decommissioning provide net gas system savings while promoting equity and meeting the needs of local communities? Targeted building electrification refers to a strategy of targeting building electrification upgrades in a specific site with the goal of avoiding costs the gas system. By electrifying an entire site, as opposed to electrifying individually buildings or device in a fragmented manner, we may be able to decommission local gas infrastructure, leading to savings from avoiding gas pipeline replacements.
Project Innovation
This project aims to identify three pilot projects for targeted electrification and gas decommissioning in the East Bay region of the San Francisco Bay Area. Pilot size will range from 50-200 customers per site, which is a considerable step up from targeted electrification efforts so far, which have been limited up to five residential customers. This project will serve as an opportunity to learn how gas decommissioning can be scaled up in the near term as we set the stage for much larger decommissioning projects that may ultimately be needed in the long term. The project has developed a replicable site selection framework to identify potential pilots, explored various community engagement strategies, and has developed a benefit-cost analysis to evaluate candidate sites. All of these efforts will be helpful to support future gas decommissioning projects.
Project Benefits
This project will lead to technological advancement and breakthroughs to overcome barriers to the achievement of the State of California's statutory energy goals by: 1) developing the analytical and data framework necessary to test opportunities for targeted decommissioning of gas infrastructure, and 2) by identifying and working with at least three promising locations within PG&E's service territory, including at least one disadvantaged community, to develop and deploy targeted gas retirement pilots.
Affordability
The principal benefit of the project is to reduce cost challenges associated with decreased utilization of California's gas system. Gas decommissioning may be a means of reducing the cost of operating and maintaining the gas grid. Reducing gas system costs will support reducing gas customer gas costs and/or can be used to provide funding to support building electrification.
Environmental Sustainability
Transitioning to electrified buildings not only mitigates the presence of indoor and outdoor pollutants stemming from gas-powered appliances but also leads to notable improvements in overall health. This shift away from gas combustion also plays an important role in reducing greenhouse gas emissions, aligning with our state's overarching climate goals.
Equity
Two of the three sites identified in this project are in disadvantaged communities based on CalEnviroScreen. Equity issues are front and center in this project, as we need to ensure that these communities are not left behind as the state transitions to electric buildings .
Key Project Members
