How smart post-fire energy planning can save us billions

OPINION – The devastating LA-area wildfires are a stark reminder of how extreme weather is reshaping our state with no signs of slowing down. The cost of rebuilding is staggering—not just for families who lost their homes, but for every Californian who pays a utility bill. When disaster strikes, electric and gas infrastructure must be rebuilt, and that price tag doesn’t just fall on those directly impacted—it lands on all of us. Without changes to how we respond to these disasters, costs will keep piling up, driving utility bills even higher for Californians who are already struggling with high rates.

One of the biggest risks? Defaulting to the status quo without even asking the question: is this the lowest-cost option today, and for our future?

Unlike electric infrastructure, gas utilities in California face little oversight of their investments, which means that they’re likely to do what they ordinarily do in this extraordinary situation: build new and rebuild old fossil fuel pipelines in the affected areas. But here’s the problem: as more homes switch to electric appliances, gas demand is declining. Without intervention, gas utilities will leave a shrinking pool of customers, mostly renters, low-income families, and seniors – and now those recently affected by the fires with brand new gas connections – to foot the growing bill for a system serving fewer and fewer people.

This “death spiral” is already underway. The California Energy Commission warns that, without intervention, the last set of customers remaining on the gas system could see their gas bills soar to over $600 per month by 2050—and that’s before factoring in the unanticipated rebuilding costs from fires like those earlier this year, as well as future events. Meanwhile, a study by Energy and Environmental Economics (E3) estimates that California’s gas utilities are already planning to replace 8,900 miles of gas distribution mains by 2045, at a staggering cost of $43 billion. This projected investment is not only misaligned with our state’s climate goals but is also inherently at odds with the public interest and ongoing work on energy affordability.

A recent report by state regulators admitted that “no process currently exists to coordinate gas planning across utilities.” That means utilities can keep replacing, and even expanding, gas pipelines without oversight that asks them to consider the long-term implications for customers, or whether there are lower-cost alternatives.

While these projections are grim, there is still time to course correct. State lawmakers can require gas utilities to use common sense cost containment measures when planning their infrastructure investments in both the short and long-term—just like electric utilities have done for decades. This means creating a new process at the California Public Utilities Commission to make sure that utilities are actually doing their due diligence in seeking out cost-effective alternatives to infrastructure projects, like electrification and energy efficiency, and communicating with customers about the benefits and risks of the various choices available to them. This should be done in the near term to ensure that rebuilding efforts do not saddle ratepayers with unnecessary costs, but also in the long term for all of the projects comprising that hefty $43 billion price tag.

These measures are key to fulfilling the state’s climate goals, while also prioritizing the financial well-being of residents across the state. Ratepayers shouldn’t have to second guess that they are getting the most reliable and affordable service.

As State Senator Ben Allen, who represents the Palisades fire-affected region, said during a recent hearing: “What is our action plan in a future catastrophic fire that might lead to a more comprehensive destruction of the entire utility infrastructure? If that were to happen and the entire gas system were to effectively be rebuilt from scratch, would we want the gas company to go in at the tune of hundreds of millions of dollars potentially to replace that infrastructure, when there is an alternative for a less expensive all-electric plan?”

The answer should be obvious. Rebuilding shouldn’t mean doubling down on a broken system. California policymakers must take action now—before the next disaster locks us into another round of skyrocketing energy bills.

Callie McKenna of San Francisco, California, is a policy associate for national business association Advanced Energy United, supporting the organization’s policy advocacy efforts within California.