Proposal to Eliminate Financial Incentives In 2020, the four large utilities provided a combined total of $95.5 million residential and $19.9 million commercial incentives for natural gas appliances $2 million residential and $603,000 commercial incentives for 10-year distribution extension refunds and $21.2 million residential and $4.9 million commercial with 50 percent discount incentives. The appliance incentives cover a wide range of uses, including space heating, water heaters, clothes dryers, ovens and ranges, pool and spa heating, and miscellaneous appliances. The utilities’ natural gas rules provide three types of incentives for developers: allowances for each natural gas appliance installed 10-year refunds of costs to extend gas distribution lines to new developments and 50 percent discounts on the cost to extend gas distribution lines. If adopted, the CPUC’s proposal will go into effect on July 1, 2023.Įxisting Natural Gas Financial IncentivesĬalifornia’s largest investor-owned natural gas utilities-Pacific Gas and Electric Co., San Diego Gas & Electric Co., Southern California Gas Co., and Southwest Gas Co.-are regulated by the CPUC. Because the largest portion of the financial incentives are tied to natural gas appliances, the CPUC’s proposal will impact a wide range of manufacturers, as well. The purpose of eliminating the financial incentives is to encourage developers to move toward all-electric buildings. On November 16, the California Public Utilities Commission (CPUC) issued a staff proposal in its ongoing building decarbonization proceeding (Rulemaking 19-01-011) that would eliminate approximately $145 million in annual natural gas-related financial incentives for developers of residential and commercial properties.