To improve air quality and meet state climate goals, California is relying heavily on its plan to decarbonize buildings through the installation of 6 million heat pumps by 2030. But transitioning buildings from gas heaters to these energy-efficient electric appliances will require legislative and regulatory support, as well as state funding. This year, the state authorized pilot projects to decarbonize whole neighborhoods, required shorter timelines to connect buildings to the electricity grid, and made changes to the building code to support electrification. SPUR has advocated for heat pump adoption with concrete recommendations and strategies that helped shape these legislative and regulatory wins.
Legislative Win
Governor Newsom signed into law Senate Bill 1221 (Min), which will begin the critical process of planning for a future without gas in California. The new law authorizes utilities to begin investing in pilot projects that will transition whole neighborhoods to zero-pollution appliances, a big step in moving California away from polluting and energy-inefficient gas infrastructure. In addition, the law requires utilities to provide maps of gas infrastructure and to be transparent about future fossil fuel investments.
One legislative disappointment was Newsom’s veto of Assembly Bill 2513 (Pellerin), which would have required a label on gas stoves warning of the appliances’ health-harming effects.
Regulatory Wins
A new grid connection ruling by the California Public Utilities Commission (CPUC) and a new building energy standard by the California Energy Commission (CEC) will accelerate building decarbonization.
CPUC’s Grid Connection Ruling
PG&E and other investor-owned utilities in California will have to reduce timelines to connect buildings to the grid thanks to a new ruling in the CPUC’s energization hearings (R.24-01-018). SPUR joined these proceedings and provided comments that informed the CPUC Commissioners’ decision. The new ruling, which stems from SB 410 (Becker), could reduce wait times for PG&E service connections by 7% to 47%. (Actual times will hinge on enforcement and on utilities’ good-faith efforts.) In addition, the ruling sets average and maximum wait times for main panel upgrades for existing buildings, ensuring faster responses when those upgrades are required by the installation of electric appliances. Finally, the ruling sets strong transparency and reporting requirements for the utilities.
The CPUC served up another win for building decarbonization earlier in the year when it implemented a decision that ends service-line subsidies for new buildings that burn gas. How to spend the money saved from these subsidies was debated in the Building Decarbonization Phase 4 proceedings (R.19-01-011), in which SPUR is participating. A decision is expected later this year. The proceedings tackle issues such as whether utilities should cover the cost of service-line upgrades related to building electrification, and they identify ways to help building owners avoid panel and service upsizing. CPUC staff recommendations made in the course of the proceedings have cited SPUR’s panel policy brief.
CEC’s Building Energy Standard
In September, the California Energy Commission (CEC) approved a new building energy code that will ensure that most new homes built in California will not be connected to gas by 2026. The Title 24 Building Energy Standards will encourage installation of heat pumps for home water and space heating. Additionally, the code will encourage replacing gas rooftop units on commercial buildings with heat pumps when the units fail and will encourage use of heat pumps for space heating in schools and office buildings.
Unfortunately, the CEC missed an important opportunity to move existing buildings to clean heating. Left out of the new code was a provision that would have encouraged households to replace existing air conditioning units with two-way heat pumps, which double as AC and heating systems. Installing two-way systems in existing residential and commercial homes is a no-brainer because it will save on costs to families and building owners. Once the California Air Resources Board finalizes regulations that will align with the Bay Area’s phaseout of gas furnaces in 2029, families could end up paying for two different air conditioning systems if they have not already switched to heat pumps.
State Funding Win
The Equitable Building Decarbonization program secured $525 million in state funding to low-income communities to pay for the installation of all-electric appliances starting in 2025. While this figure represents a reduction from previous funding levels, the investment remains a major milestone in the equitable transition to clean heating in California homes.