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About this blog: Climate change, despite its outsized impact on the planet, is still an abstract concept to many of us. That needs to change. My hope is that readers of this blog will develop a better understanding of how our climate is evolving a...  (More)

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Which homes should lose gas service first?

Uploaded: Dec 10, 2023

As hard as it may be to imagine, the day is coming when utilities will start turning off the gas to our homes. Not right away, but certainly in the coming years. The reason is that we cannot keep burning gas in our buildings if we expect to meet our climate goals. Multiple studies have shown that the most cost-effective way to eliminate emissions from our homes is to electrify (1), and as we do that our utilities will disable parts of the gas system. The topic of this blog post is not when this is going to happen, but how this is going to happen. In particular, which homes do we pick first?

The “unmanaged” approach to decommissioning the gas system would be to let households electrify when they choose and then shut down each segment of the gas system when it’s not needed. That approach would leave the gas distribution system largely intact for a long time. The resulting high maintenance costs combined with low usage would cause gas rates to shoot up. In 2023, gas distribution costs in PG&E’s territory amounted to $510 per customer. Imagine how high they would get if usage drops off but infrastructure costs do not.


Gas distribution costs for various investor-owned utilities in California. Source: California Public Utilities Commission staff report, 2022.

If the households forced to pay those high rates are those who can least afford it (e.g., because they couldn’t afford to electrify their homes), then this is a serious equity issue. So the state has been looking at fairer ways to transition off of gas. (I love the phrase “mindful decommissioning”.) At the end of last year, the California Public Utilities Commission (CPUC) drafted a framework for thinking about the process.

They propose five tranches for decommissioning the gas system. The first and earliest tranche represents about 5% of customers in each utility’s base. It would consist of those sites that would benefit most from removing gas and that would find it relatively easy to do so. Areas with pipelines in need of repair could allocate some of the maintenance funds for electrification, making it more affordable. Areas with high levels of asthma and ozone might benefit most from improved air quality. Sites with local organizations that would champion this effort would streamline things. The earliest movers would have all of those characteristics. (2) The next tranche would be the 20% of homes who score next highest on these criteria. After the first 25% of buildings, the technology and skills needed to transition buildings away from gas will be more mainstream, and areas that were not as cost-effective in the early days can be pursued. This continues for five tranches, with the last one containing buildings that are difficult to electrify (e.g., industrial facilities) and/or that might be targets for hydrogen or biomethane.

What would this look like in practice? Do the economics make sense, even for the first set of buildings? A few years ago, the California Energy Commission asked GridWorks, Energy and Environmental Economics (E3), and Ava Community Energy (3) to answer that question in the context of the East Bay. Could they identify neighborhoods in the East Bay for early, proactive gas shut offs that made good economic sense while meeting the needs of the communities?

The basic idea was to prioritize shutting down gas on segments that would otherwise need expensive maintenance. In PG&E’s East Bay planning division, the costs of gas main and service replacement are about $4.72 million per mile of gas main, so there is substantial opportunity in avoiding these costs. The team looked at those segments that would need work in three or more years, and further refined the selection to those segments that could be safely shut off without disrupting the rest of the gas distribution network. They ended up with eleven different sites around the East Bay, as shown below. (4)


Key characteristics of the 11 candidate sites. Source: Gridworks blog post, 2023

Once these sites were selected, they did a “benefit-cost” study to look at the economic feasibility of turning off gas in each one. They evaluated a wide range of costs and benefits.


Types of costs and benefits for decommissioning gas to a site. Source: Energy and Environmental Economics report, 2023

The biggest sources of benefits were found to be the avoided pipeline maintenance, avoided end-of-life appliance replacement (new appliances replaced older ones), and greenhouse gas reductions. The biggest sources of costs were electrification and service and panel upgrades, as you might expect. It turns out that benefits exceeded costs for each one of the sites, but to varying degrees. (5)


Benefits compared with costs for decommissioning gas at each of the eleven sites. Source: Energy and Environmental Economics report, 2023

One of the observations the team made early on was that since electrification costs are higher in denser areas (there are more households to retrofit), it is harder to offset those costs with avoided gas maintenance. In this case, sites C, I, J, and K are less dense. You can see in the table near the top of the post that the avoided costs per customer (second to last row) are higher in these areas. It’s a better deal to electrify these less dense areas. If the team prioritized sites based purely on what made the most economic sense, the areas with fewest buildings per mile of gas line, often wealthier areas, would win. Because they wanted an equitable approach, they did not prioritize savings per customer above all else.

The team also found that commercial sites can be considerably more expensive to electrify than residences. They believe this is due not only to size, but also to the fact that these buildings tend to vary a lot and be unique, so design and implementation are more complicated and require more expertise. Again, they did not choose to avoid these sites, preferring to opt for diversity.


Average upfront cost to fully electrify a customer, not including incentives or panel and service upgrade costs. Note that some customers were partially electrified to begin with, so the cost in those cases is for just the incremental work needed. Source: Energy and Environmental Economics report, 2023

So the overall system benefits look good, but what about for individuals? Are there winners and losers? Yes, there are. Utility customers tended to benefit because rates improved. The electric rates decreased because greater usage led to economies of scale. And the gas rates did not go up as much as they otherwise would have due to avoided maintenance. The main group that did worse off were the customers who were required to electrify -- it is not cheap to retrofit, even with incentives. (6) In addition, about 25% also ended up with slightly higher bills. (7)


Utility bills decreased for 75% of customers and increased for 25%. Source: Energy and Environmental Economics report, 2023

The report recommends using some of the system-wide benefits (e.g., from avoiding gas maintenance) to help these customers. However, using too much would lead to very high gas rates, which could be problematic. So the authors suggest looking to outside sources of funding as well, especially for these first sites until electrification costs come down more.

At the end of the process, weighing not only economic feasibility but also factors like equity, ease of transition, and diversity of building stock, they ended up selecting three sites (C, F, and I):


Three sites with different characteristics were ultimately selected for a potential decommissioning pilot. Source: California Energy Commission presentation, 2023

It remains to be seen how the communities respond to this opportunity. The reports to date indicate that the public engagement has been somewhat challenged (8), but it is critical to do it well since utilities probably will not be allowed to shut off gas if most customers object. (9) The results of the public engagement will be published this spring. In the meantime, I’d be curious to hear what would lead you to take your utility up on this offer. For me it would be a sense that this transition is inevitable and this is the best offer I am likely to get, that someone else will snap it up if I don’t take it. What about you?

Notes and References
1. District heating is another option in addition to electrification. If you are interested, E3 cites the following studies:
- The Challenge of Retail Gas in California’s Low-Carbon Future - Technology Options, Customer Costs, and Public Health Benefits of Reducing Natural Gas Use, California Energy Commission
- 2022 Scoping Plan Documents, California Air Resources Board
- Net-Zero America Project, Princeton University
- 2023 US ADP, Evolved Energy
- Decarbonization pathways for the residential sector in the United States, Nature Climate Change

2. This tranche cannot be very big because only a limited number of pipelines are planned for replacement in the coming years. One statistic in this E3 report says that PG&E’s distribution mains and services have an authorized service life of 57 years, suggesting that in any given decade, around 15% are replaced. The report cites another statistic that, at the rate PG&E is replacing pipelines recently, only about 10% would be replaced by 2045, which is significantly slower.

3. Ava Community Energy is the energy provider in the East Bay that used to be called East Bay Community Energy.

4. Although they looked at all customers in Ava’s territory that receive gas from PG&E, no candidate sites were identified in Albany, Dublin, Emeryville, Piedmont, Pleasanton, or unincorporated Alameda County.

5. The analysis was pretty thorough. They looked at the historic gas and electricity use of each of the 1500 customers to determine how they were heating their space and water, what rates they were paying, and how old the buildings were. This was used to determine which appliances would need updating, whether panel upgrades were needed, and so forth. It’s interesting to see what they found.


Some characteristics of the 11 candidate sites. Source: Energy and Environmental Economics report, 2023

6. The E3 team found that two-thirds of the appliance retrofit was due to space heating, with the remaining to water heating, cooking, and clothes drying.

7. Fewer CARE customers saw bill increases (14%) than non-CARE (34%).

8. One of the findings published so far is that outreach efforts need to be slow and comprehensive in order to establish trust. This is hard in part because people are busy. Even when offered $150 for two hours, plus free food and child care, only 45 people of about 9000 contacted showed up for focus group discussions. Without care, administration costs could hurt the overall economics of the program.

9. Currently utilities have an “obligation to serve”, so if any one customer insists on having gas, they would need to comply. A pending bill would require only a 67% opt-in for these pilot programs to enable gas shutoff. So the engagement process would need buy-in from most of the customers in the affected area.

Current Climate Data
Global impacts (October 2023), US impacts (November 2023), CO2 metric, Climate dashboard

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Comments

Posted by MichaelB, a resident of Pleasanton Meadows,
on Dec 10, 2023 at 11:11 am

MichaelB is a registered user.

"As hard as it may be to imagine, the day is coming when utilities will start turning off the gas to our homes. Not right away, but certainly in the coming years. The reason is that we cannot keep burning gas in our buildings if we expect to meet our climate goals."


As hard as it may be to imagine, "our" climate goals may not be realistic - if you want to provide a reliable, abundant, and low-cost energy source to both businesses and residents. And to have freedom of choice/movement vs. government micromanaging behavior.

If leaders continue to pursue the current "shut up and take it" approach of energy shortages, rolling blackouts, surcharges for "peak hours", mandatory retrofits/shutoffs, bans on combustion engines, etc. to rely on unreliable energy sources (wind and solar), then expect more businesses and residents (and their corresponding tax revenue) to simply leave the state. Or not bother coming here at all because of the additional expense, hassle, and uncertainty.


Posted by Fetterman, a resident of Menlo Park,
on Dec 10, 2023 at 11:12 am

Fetterman is a registered user.


Sherry: I appreciate your hard work and thorough research into the issue of climate change and the nuts and bolts of of its practical implications on our daily lives here on the Peninsula.

That said, you seem about as self-aware as the three lady presidents of Ivy League colleges who testified before Congress last Tuesday (Magill of Penn, Gay of Harvard, Kornbluth of MIT). These women seemed to have spent all of their only talking with like-minded people in their progressive academic circles, and were surprised to find that their nuanced answers were totally at odds with the sentiment of much of the country.

Good luck to you!


Posted by Bystander, a resident of Another Palo Alto neighborhood,
on Dec 10, 2023 at 12:04 pm

Bystander is a registered user.

There's quite a bit that can be said on this and the above two comments cover some of this.

Unfortunately, taking away our gas is not something that anyone wants for the simple reason that it is too reliable as opposed to our power supply which is not.

We cannot go backwards until or unless there is an efficient alternative. Already we have too many power outages, too many safety cut offs, too many brownouts and too many times when we are told to not use power until after 9pm. When governments give us rewards for going electric or driving EVs that adds to the drain on our power supply. California is not rich in power like it's not rich in water. California has people leaving the state because of rules like this. Then again, perhaps that is really the goal.


Posted by Eddie, a resident of Fairmeadow,
on Dec 10, 2023 at 2:59 pm

Eddie is a registered user.

Sherry - interesting as always.

I have posted about this before, but one thing you don't cover is the lack of space that certain houses have to retrofit. I've posted about my frustrations with Palo Alto's program to help homeowners install heat pump water heaters. No one could help me figure out where the tank could fit. So for me, the issue would not be cost; rather, the concern that I would have a water heater in the middle of my living room (seriously, the best answer I got was to expand the tool shed, which means expanding into the living room).

Thanks

Any attempt to attack climate change by focusing on one thing - whether gas, cars, airplanes, ... is problematic, as it impacts different people differently. IMHO, a carbon fee and dividend - such as the one proposed here:
Web Link
is the best way to go. Personally, if I have to remodel to my house to install a tankless water heater, I would prefer to:
- be forced to pay a premium for airplane tickets
- have my electric bill go up
- be forced to only use appliances during off hours
- all of the above
But that's exactly what a carbon fee and dividend does. Give everyone a financial incentive to choose how they want to cut back on their climate footprint. If full electrification is really hard for my house, I can choose many other ways to offset the fact that I still use gas to heat water. Eliminating gas is really important - and I'm glad municipalities are working on it - but like anything else, I believe people should be incentivized - not forced.


Posted by Paly Grad, a resident of Leland Manor/Garland Drive,
on Dec 10, 2023 at 6:27 pm

Paly Grad is a registered user.

If the benifits are greater than the costs, then the utility companies should pay for the panel upgrades.


Posted by Chris Dewees, a resident of Leland Manor/Garland Drive,
on Dec 11, 2023 at 8:30 am

Chris Dewees is a registered user.

Until we have a reliable, affordable alternative to gas, this is a really bad idea. I could say a "pipe dream."


Posted by Joseph E. Davis, a resident of Woodside: Emerald Hills,
on Dec 11, 2023 at 12:18 pm

Joseph E. Davis is a registered user.

This is madness of the highest order. What's worse is that it is being done, however misguidedly, for our benefit.

"Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience." - C.S. Lewis


Posted by Local news junkie, a resident of Charleston Meadows,
on Dec 11, 2023 at 12:50 pm

Local news junkie is a registered user.

Sherry:
I am a late-comer to this issue, so I'm sure you have discussed the following in previous columns. But -- who is paying to retrofit private homes? I paid a bundle to convert to a gas stove when it was all the rage. Now do I have to pay to return it to electric? Also, I have heard that installing some electric equipment may be a challenge if you have a small house, which I do. Not to sound too belligerent, but at my age I refuse to take on the disruption and cost of a remodel. Thank you for any information you can provide.


Posted by Sherry Listgarten, a Mountain View Online blogger,
on Dec 11, 2023 at 2:31 pm

Sherry Listgarten is a registered user.

@All, thanks for the comments, and for the restraint, especially since the title was a little inflammatory.

Before I respond, I want to point you to 200+ comments on a reshare of this article, which you can find here. There is certainly some rudeness and ignorance, but also passion, humor, and some themes. Here’s how I’d summarize it.

First, a lot of people directly answer the question in the title, namely who should lose their gas first. The answers are largely:
- Biden, Newsom, Kerry, Democrats, people who believe in climate change, the wealthy, government officials, big donors, big business, “Hollyweird elitists” and “Bezerkely”.

Examples of answers to the questions of who should lose their gas first:
- “Every single politician and person that believes climate change is man-made should lose their gas first. Let them lead by example.”
- “The governor's mansion. And I hope it gets very cold in there and he has to wear double socks.”
- “It should start with the politicians and big donors who pushed for it. While Kamala is posting pics at Thanksgiving next to her gas stove.”

There were a lot of comments about the lack of reliability of electricity, and also some about the cost of electricity.
- “People on board with shutting down the gas lines must have never lived through weeks long power outages. Just having articles nonchalantly ask or state who should lose their life line first is insidious. Cooking, Sanitation, and Heat are the three things gas provides in a power outage.”
- “No one should lose their service. Electricity is extremely expensive.”

There was also concern about where the electricity would come from. I thought this exchange was pretty funny.
- “You have to generate the electricity somehow. Do they plan to hook up dozens of gerbils to little wheels to produce the electricity?” “No. Hamsters generate 38.61% more power than gerbils.”

There were a lot of comments pushing back against mandates in general. There were also some suggestions. Here is a sampling.
- “We should have an option and not be forced.”
- “I thought that a portion of our payments was allocated for repairs. So why are they saying they need more money for repairs?”
- “First of all, all apartment owners would have to convert to electricity, and the costs are overwhelming . All new housing builds should be converted to all electric.”
- “Why go after gas? What about needless wood burning or cattle ranching? What about gas-powered lawn mowers. Heck, my next-door neighbor just runs their vehicle for hours every week in the driveway going nowhere. What about taxing pleasure boating fuel?? Seems like the low hanging fruit is hitting the ground, but nothing is being done there first.”
- “Areas of the country most dependent on gas for heat because of freezing winters should be last and areas with more moderate climates first. And I say this as someone who lives in a very moderate climate. There should be income based subsidies for electric bills and permanent incentives for alternative energy.”

Anyway, thanks again for the comments. I’ll share a few thoughts in a bit.


Posted by Mondoman, a resident of Green Acres,
on Dec 11, 2023 at 3:24 pm

Mondoman is a registered user.

It seems parochial to limit the opportunities for greenhouse gas emission reduction to the PA city boundaries. Surely we could get more bang for the buck by e.g. funding coal power plant replacement with gas plants.


Posted by Holger, a resident of Another Mountain View Neighborhood,
on Dec 11, 2023 at 3:52 pm

Holger is a registered user.

Quote:
> the costs of gas main and service replacement are about $4.72 million per mile of gas main

Looks like PG&E "forgot" to list the costs for electric underground lines of comparable capacity. And I mean underground lines not the current cheap, outdated and fragile overheard lines they mostly use.

A quick search shows this comparison with the result of gas underground lines having half the costs of overhead electric lines:
Web Link

For underground electric lines the cost efficiency for gas will be even larger.


Posted by Jake Waters, a resident of Birdland,
on Dec 11, 2023 at 5:41 pm

Jake Waters is a registered user.

As this world goes forward we are learning more and more about the Climate Hoax that has taken a grip in this country. The adult thing to say is “It's an interesting pursuit and somewhere in the distant future it may provide some benefits. But not today, and certainly not in 2030." Adults would tell you that the lack of any electricity grid isn't there to support this experiment. As it is the car chargers are assisted by fossil fuels and gas. But the bigger picture is we are losing the fix for energy by not allowing nuclear plants to be built. The Green New Deal is a ‘get rich and richer scheme for the elites.' Lastly, when you watch the lack of effort India and China (the two largest contributors to CO2) to play along you kinda get that it's futile, in your world, to make us spend our money only and comfort to live out a dystopian dream. Remember, C02 is an essential gas of life.


Posted by Sherry Listgarten, a Mountain View Online blogger,
on Dec 11, 2023 at 8:19 pm

Sherry Listgarten is a registered user.

There’s a lot to think about here, but I’ll start with just two things.

First, it makes total sense that people prefer to make their own decisions than to have decisions made for them. I remember when the motorcycle helmet law was passed, I was tweaked. Why couldn’t I decide, I reasoned, if it was just my risk? But we have a helmet law. On the other hand, we don’t have a cigarette law, though I expect those do a lot more harm. I don’t understand this. Even if I did, climate mandates seem even harder for people to swallow because the government is taking choice away from a person for a kind of vague planetary good than for a “We don’t want you to die” good. And home retrofits are no small thing, even in some cases when paid for (see @Eddie's example). I’d love to understand more what precedents/reasoning there are for preserving choice but making things more expensive (ala cigarettes) vs not allowing choice (ala motorcycle helmets). Does anyone know anything?

Second, I think it’s useful to think through the choice scenario, which the blog post refers to as “unmanaged decommissioning”. Let’s say new construction and major remodels are all-electric, since in those cases it’s no extra cost (and in many cases cheaper). Let’s say that state and federal incentives, along with concerns about climate and health, encourage some people to electrify some or all of their appliances. That will probably include wealthier people, government institutions, wealthy companies with climate goals, people who care about climate change, and some disadvantaged households who are being prioritized by state and utility policies. As they leave the gas system, rates will go up for remaining gas customers to cover costs. We can forecast some of that, and warn people, but rates will go up. That will largely hit poorer people, people who don’t care about climate change, small businesses, at least until they also convert. So the question is, is that fair? Is that fairer than the managed decommissioning in the analysis, which costs less overall but does restrict choice of fuel?

What’s another option? You could raise rates on people leaving the gas system, so they pay for some of the costs. That is what happens when customers switch from PG&E to a CCA (the PCIA fee or exit fee). But doesn’t fining people for electrifying discourage the behavior we want to see? We could proactively raise gas prices, before people leave, to help cover the costs. But I keep hearing people say that we are pretty restricted in how we can raise gas prices. (I’d like to understand more about that.)

I don’t think the proposal in this blog post is crazy. It is trying not to leave any money on the table. It is looking for big sources of funding to cover electrification costs until innovation and economies of scale bring the costs down on their own. But it does restrict choice, which people don’t like, and it also to some extent pits neighbors vs neighbors. (If two-thirds of people opt in to electrifying, then everyone is opted in.) I don’t love programs that do that. For people who don’t like the proposal, what kinds of things do you suggest, short of “keep using all the gas we want”?

I’d love to hear your thoughts on this.


Posted by Eddie, a resident of Fairmeadow,
on Dec 11, 2023 at 8:46 pm

Eddie is a registered user.

Sherry -

I disagree that poorer people, who don't have the means to electrify, need to have their gas rates go up significantly. There are ways to look at the entire electrical and gas use of the municipality together and structure costs to make sure this does not happen. I'll go back to the idea of a carbon fee and dividend:
Web Link
If done naively, some poorer people will be unduly hurt economically (think of someone who works in a coal mine, with no other choice of employment). But lots of thought has been put into how to structure the fee and dividend such that this does not occur. The same could be done to make sure that the last / poorest people to electrify aren't paying a fortune for gas.

Thanks


Posted by Anne, a resident of Mountain View,
on Dec 11, 2023 at 8:49 pm

Anne is a registered user.

I finished electrifying my home in 2021 and it took me quite a bit of wrangling with PG&E to have them remove the gas meter. They initially made me create a project and asked me to submit my engineering plans, but in the end I submitted some photos and one day I came home and the gas meter was gone. I hear the process has gotten better since then :)

My solar panels, heat pump furnace/AC, heat pump water heater, electric dryer, old coil electric stove/oven (I'm not much of a cook!), electric car, and car charger are humming along. I didn't buy battery storage because we haven't had many outages where I am and I decided it would be better to wait until I can get an electric car that can feed electricity back to my home - my electric car battery holds 70 kilowatt hours while a Tesla wall holds only 13.5 kilowatt hours of electricity - so in the long run I am betting on bidirectional charging.

I electrified because that was one clear step I could take to decrease fossil fuel usage. There is a finite amount of fossil fuels on this planet and I think the sooner we move to new power sources the better off we will be. I will freely admit that the transition was expensive (though it would be less expensive now with the rebates!) but in my mind there was no better way to spend my money.

There's a huge amount of complexity and expense involved in switching communities from gas appliances to electric ones, and I'm glad people are thinking about how to make it happen in the most orderly, least expensive way possible. Thank you, Sherry, for bringing up the topic!


Posted by MichaelB, a resident of Pleasanton Meadows,
on Dec 11, 2023 at 9:40 pm

MichaelB is a registered user.

"I don't think the proposal in this blog post is crazy. It is trying not to leave any money on the table. It is looking for big sources of funding to cover electrification costs until innovation and economies of scale bring the costs down on their own."


I do.

Wind and solar are not reliable energy sources and the state insists on using them (renewables) exclusively for electricity generation. No nuclear and/or natural gas. That means chronic shortages/unreliability/rationing. Big sources of funding? From where? Another tax increase on top of some of the highest income/sales/gasoline taxes in the nation? Keep raising taxes and more people will just leave. More borrowing/spending with the state projecting a $68 billion-dollar deficit?


Posted by Seth Neumann, a resident of Waverly Park,
on Dec 11, 2023 at 10:04 pm

Seth Neumann is a registered user.

If you want a big public blow back to migration to clean energy, this is a good way to get it! I think we all want a lot more confidence in grid reliability before anything like this happens, consider all the people who have natural gas-fired Generacs to protect against electrical power failures. On the contrary, small NG or Propane fired generators provide very affordable power backup compared to putting lithium battery bombs on people's homes.

The OP's views on this are way outside of the mainstream and some conservative politician is going to take notice and run successfully on it. That will set meaningful transition back by years or decades.


Posted by Bystander, a resident of Another Palo Alto neighborhood,
on Dec 11, 2023 at 10:55 pm

Bystander is a registered user.

Sherry. The helmet law and the fact that there is no smoking law is simply because of the power of the tobacco industry, political lobbying and the fact that tax can be generated from the sale of cigarettes. When someone comes off a bike, for whatever reason, a serious head injury takes up space and time in hospital ERs, health insurance, motor insurance, long term health providers, etc. etc. Sadly the cost of not having as many serious head injuries is financial as much as the welfare of motorcycle riders. The sale of tobacco and the sponsorship by the industry (which still happens even when it is not as visible as in time gone by) are incentives to keep laws at bay. The likelihood of any further bans on smoking will actually mean a black market situation along the lines of why prohibition failed in the 1920s. Even New Zealand has had to admit that its well publicized ban on increasing sales of cigarette on annual increase in age would not work and has abandoned the law.


Posted by Peter Carpenter, a resident of Menlo Park: Park Forest,
on Dec 12, 2023 at 10:30 am

Peter Carpenter is a registered user.

Use an auction mechanism to allow homeowners to bid on their price to give up gas to their individual homes.

1 - You will learn a lot from the bids that are made,
2 - both sides will be happy with the transactions that are made.
3 - there is nothing to lose by trying this!


Posted by West Menlo Mom, a resident of Menlo Park: University Heights,
on Dec 12, 2023 at 12:35 pm

West Menlo Mom is a registered user.

Thanks Sherry - another very interesting read. I hadn't progressed to thinking about a post NG world - I'm pleased E3 produced such a thoughtful report on different options for proceeding. The thought of all our NG pipelines running everywhere has always terrified me a bit, so thinking of a world without made me feel hopeful!
Sorry you had to take so much flak!


Posted by Sherry Listgarten, a Mountain View Online blogger,
on Dec 12, 2023 at 3:19 pm

Sherry Listgarten is a registered user.

Thanks for the continuing comments. I’ll respond to a few individual things…

Several of you mention concerns about reliability. Electricity has more outage-minutes than gas, so these folks prefer to stick with gas. I’ve written about reliability before, since it comes up often. I encourage people to read that post. It is ironic that the primary reliability issues stem from fire prevention (Public Safety Power Shutoffs and Enhanced Powerline Safety Settings) and from intense storms, both of which are more common because of climate change. That is why I disagree with those of you who say the answer is to continue to burn gas in our homes. I agree with the authors of this report that it makes sense to think about how best to transition away from gas, and I agree with the commenters who suggest that people in areas with especially unreliable electricity and cold temperatures (think mountain towns) would transition later.

I would make one comment about people who say that solar and wind are unreliable. They are variable power sources for sure, but are they unreliable? We grow crops that are affected by weather, seasons, etc. Are they unreliable? Or are they variable? Do we starve because of it? Or do we forecast it and plan for it? I honestly do not know of a single power outage in California that is due to “unreliable” solar or wind. It is also completely false to say that California is planning to rely exclusively on solar and wind. The grid operators understand better than any of us what is required to keep the grid up and running. They have storage resources to “firm up” variable power, clean-firm resources (e.g., geothermal) to buttress those, and yes, (extended) gas and nuclear to tide us over.

Several of you wonder how we will pay for electrification. That is a great question. @PalyGrad suggests that utilities should pay. That is a possibility, but to be clear, unless we lower their return on equity for this, it just means higher rates will pay for it. So, which rates? @Eddie suggests we should have a (federal) carbon dividend program. Okay, but we already have cap-and-trade at the state level and we aren’t using that money well. I agree this can work, but is there political will to make something with teeth rather than with holes? @MondoMan wonders about the cost per ton of remediating building emissions and wonders if there’s a more cost-effective way to reduce emissions. We’ve talked about this before. There certainly is, but it’s also the case that you need a head start on buildings because it’s not a quick fix. (And again, I believe we will have to remove gas from our residences at some point.) So the point of this analysis is to get that head start but in a cost-effective way. @MichaelB asks where the money is coming from, given the state’s budget deficit. As the blog post explains, it largely comes from avoided gas infrastructure maintenance. @LocalNewsJunkie says it’s not just the cost, it’s the disruption. No doubt. So initially it has to be worth it to people, either for the big discount, for the air conditioning, for the lower bills. PG&E recently electrified about 150 homes in the San Joaquin Valley that were using propane or wood, and people seem pretty happy with the outcome. It was opt-in, and about two-thirds opted in. So in those cases the disruption was fine. And HVAC tech/install is improving to be less disruptive. But it is a tradeoff.

@Peter suggests an auction, in which each customer declares the price they would require to shut off gas. I think that’s an interesting albeit incomplete idea. (There are lots of flavors of auctions.) I’d also worry about collusion, depending on the scale of the auction.

@WestMenloMom worries about the flak. Honestly, I think it made my daughter’s day. She’s studying for finals, and to be able to read hundreds of people making fun of her mom, well, as she said, “LMAO”.

Thanks again for sharing your questions and thoughts. I worry about letting the market dictate this, especially along the lines that many commenters seem to prefer. The Democrats and wealthy electrify, gas prices shoot up to cover unabated maintenance, and the poorer Republicans are left paying exorbitant prices and railing at the state that seems to hate them so much. That can't be the best we can do.


Posted by Peter Carpenter, a resident of Menlo Park: Park Forest,
on Dec 12, 2023 at 4:32 pm

Peter Carpenter is a registered user.

"@Peter suggests an auction, in which each customer declares the price they would require to shut off gas. I think that's an interesting albeit incomplete idea"

PG&E simply states that it would pay $X for any homeowner who wants to have their gas service removed. If the offer was high enough to pay the homeowner's cost of conversion plus an inducement bonus then PG&E would have a number of takers. If no one responded to the proposed price then PG&E could try again with a higher price. Repeated auctions would, in the economists' terminology, clear the market i.e. reduce the number of homes with gas service by as many homes as PG&E was willing to pay the "market price". Home owners unwilling to sell their gas service rights would do so knowing that the cost of their future gas service would be going up as the fixed cost of supplying gas (to fewer and fewer homes) would stay constant but the number of homes served would be less.


Posted by Eddie, a resident of Fairmeadow,
on Dec 12, 2023 at 7:57 pm

Eddie is a registered user.

Sherry -

I realize I might be sounding like a broken record, but regarding your comment:
--------
@Eddie suggests we should have a (federal) carbon dividend program. Okay, but we already have cap-and-trade at the state level and we aren't using that money well. I agree this can work, but is there political will to make something with teeth rather than with holes?
--------
The great thing about Carbon Fee and Dividend is that no municipality gets any money. While money is generated by paying for the real cost of carbon, any money that is generated goes directly to private citizens (that's the "dividend" part). The state, county, city don't get any money to to waste! As for your comment on "something with teeth" - yes, if there are too many exceptions (e.g. West Virginia doesn't count because Manchin is still senator until 2024), then we're in trouble.

Thanks


Posted by Maskedman, a resident of San Ramon,
on Dec 13, 2023 at 7:30 am

Maskedman is a registered user.

Meanwhile, China continues to build new coal power plants about every two weeks. And we do share the atmosphere with China.


Posted by MichaelB, a resident of Pleasanton Meadows,
on Dec 13, 2023 at 8:07 am

MichaelB is a registered user.

"It is also completely false to say that California is planning to rely exclusively on solar and wind. The grid operators understand better than any of us what is required to keep the grid up and running. They have storage resources to “firm up" variable power, clean-firm resources (e.g., geothermal) to buttress those, and yes, (extended) gas and nuclear to tide us over."


Do the grid operators really understand what is required? As Bystander pointed out earlier, there are still too many brownouts and reminders to use power after 9pm.

Unless there is a natural disaster such as an earthquake, tornado, flood, etc. there should be more than enough energy available - and all of the time. If the wind isn't blowing/sun isn't shining, there's no power being generated. Natural gas and nuclear energy sources operate all of the time, regardless of weather conditions. The United States has already significantly reduced emissions because of increased usage of natural gas vs. coal.

A reliable, low cost energy supply for consumers/residents (without costly mandates and retrofits) is more important than feel good (and economically damaging) proposals from activists/politicians for "net zero" and/or "saving the world".


Posted by Eduardo, a resident of Menlo Park,
on Dec 13, 2023 at 9:21 am

Eduardo is a registered user.

@maskedman -- Yes, China continues to build new coal plants. They are also building a huge amount of Solar, Wind and Nuclear. The share of coal went down from 77% in 200 to 63% in 2020 and continues to go down.

check - Web Link


Posted by local teacher, a resident of Menlo Park: Menlo Oaks,
on Dec 13, 2023 at 9:22 am

local teacher is a registered user.

we have lived in our house for over 20 years, and have never had a gas outage. (We have had it turned off ourselves when doing some construction, but we have never had it just "go out"). We routinely have electrical outages and they seem to be happening much more frequently (I would say we have had 10 this past year-- partially due to winds). The worst of those lasted days and meant that we lost some of our food (poor refrigeration and we were not willing to take the risk).

We have a hybrid vehicle but will have decided we cannot trust a fully electric vehicle for a variety of reasons, one of which is the increasing number of electrical outages.

Unfortunately, I can absolutely imagine going days with no way to drive (if we had a fully electric car and no ability to charge), no heat, no light, no ability to connect to the internet or charge phones-- all as a matter of routine-- because it has pretty much already happened. What will happen as the push towards getting everyone on an electric grid accelerates?




Posted by Eduardo, a resident of Menlo Park,
on Dec 13, 2023 at 9:31 am

Eduardo is a registered user.

re: MichaelB - The cheapest source of energy today in the US is PV - Web Link

Most (all?) of the brownouts have been due to transmission and distribution, not generation. Distribution outages are due to fires impacting transmission lines or trees downing distribution lines. We need to address those issues.

Storage (at the grid, distribution or local level) will help. So will bidirectional charging in cars.

Arguably all this is not so different to our food chains. We choose what to eat depending on the time of year, we build warehouses, we ship some foods. We don't insist in eating strawberries all year long.


Posted by Eduardo, a resident of Menlo Park,
on Dec 13, 2023 at 9:31 am

Eduardo is a registered user.

@sherry - Kudos to you for bringing up this difficult topic. Thanks


Posted by C. R. Mudgeon, a resident of Danville,
on Dec 13, 2023 at 10:05 am

C. R. Mudgeon is a registered user.

The fundamental flaw in the entire analysis lies in the assumption that reduction of natural gas usage in the Bay Area, or even in all of California, will have any impact on our climate. In part, this is because residential natural gas use is NOT as large a CO2 contributor as other sources, such as coal and fuel-oil burning (both in other parts of the US, as well as globally). Forced cut-off of natural gas access should be far down on the list of priorities for our utility companies, even if natural gas is “banned" for new construction.


Posted by BobB, a resident of Vintage Hills,
on Dec 13, 2023 at 10:45 am

BobB is a registered user.

Thank you for bringing up this an important topic. We will be electrifying our homes and businesses eventually and it's good to start planning now.

One point I'd make when you say "(extended) gas and nuclear to tide us over", is that I would expect nuclear from Diablo Canyon to last decades into the future, as many are saying. Also, looking further in the future, I would hope that new nuclear could replace some of the solar and wind being installed now, for some of the well-known advantages of nuclear over solar and wind, such as much less land use and more continuously available electricity, among other advantages.


Posted by Cheryl Lilienstein, a resident of Barron Park,
on Dec 13, 2023 at 11:49 am

Cheryl Lilienstein is a registered user.

what does the public care about most? a reliable source of energy.

Yet, Palo Alto's policy of NO LONGER undergrounding undermines the quest for reliable power. Counterproductive.

Another option for making the grid less expensive and more reliable comes from the state of Vermont. I have friends there whose 500 sf solar powered home generates monthly income for them by feeding power back into the grid...and...
:
"Green Mountain Power (Vermont) has proposed a plan to install battery energy storage systems in most of the 270,000 homes and businesses it serves. It's part of the Vermont utility's plan to ensure affordable reliable electric service moving forward. Just for the pilot program, which installed 500 powerwalls, "Green Mountain Power uses these devices to lower its total demand on monthly and annual peak-consumption hours. Those savings pass on to the whole customer population, and they aren't tiny " in recent years, the fleet has shaved off $3 million in annual peak costs."

and:
On August 18, the Vermont Public Utility Commission decided to remove the annual limit of about 500 customers receiving Tesla Powerwalls and 500 receiving credit for acquiring their own batteries (technically the cap was 5 megawatts per program). In just a few years, Green Mountain Power scaled from a small pilot test to an annual battery program, and now it has secured free rein to meet organic demand from customers, at least until the program goes up for renewal in three years.

Customers who opt for the Powerwall pay the utility $55 per month for use of the battery, with no money down. The payments stop after 10 years, at which point the household can use the system for free until it stops working; then the utility will pick it up for safe disposal via recycling. The ?“bring your own device" offering pays households that buy and install their own battery system up to $10,500, a substantial chunk of the cost for popular models.


Posted by Eduardo, a resident of Menlo Park,
on Dec 13, 2023 at 1:07 pm

Eduardo is a registered user.

@Cheryl -- GMP (Green Mountain Power) is very innovative. And so is the state of Vermont.

The ex-CEO of GMP (now CEO of SunRun) emphasized that, instead of "chasing the (power) peaks", they focused on "removing the peaks" (via well placed resources, including residential solar panels and batteries).

The state of Vermont has an Efficiency Agency. Unlike a traditional Public Utility Agency that emphasizes different ways to better generate energy, this one focuses on efficiency: "We help Vermonters live better while spending less on energy".


Posted by Mondoman, a resident of Green Acres,
on Dec 13, 2023 at 1:43 pm

Mondoman is a registered user.

@Eduardo

It doesn't matter how much carbon-free generating capacity China is building, as long as they are also building more coal plants and increasing their greenhouse emissions year after year.

As @C. R. Mudgeon alluded to and I have commented before, we are wasting our valuable money and resources trying to cut relatively trivial sources of greenhouse gas emissions just because they are inside PA's city boundaries. I suspect that funding a single coal-to-natural gas power plant conversion or replacement elsewhere in the US or even China would get us 10-100x the emission reductions we could ever achieve in PA residential conversions.

That also brings up the (willful?) hypocrisy of forcing residential conversion before commercial conversion even though the latter is the larger emissions source. This also happened with the recent decision to quickly sunset residential gas water heaters. The claimed reason was NOx emissions, even though cars are much bigger NOx sources, and emit directly where people breath, unlike home gas heating with its roof venting.

Such virtue signaling just builds resentment among those who have avoided the kool-aid :) and casts reasonable doubt on other claims of evidence-based climate policies.


Posted by CyberVoter, a resident of Atherton: other,
on Dec 13, 2023 at 5:55 pm

CyberVoter is a registered user.

Mondoman is correct:

Instead of punishing CA residents for no real C02 reduction, focus on exporting US LNG to Asia (India & China) & elsewhere. Replacing all coal power plants with natural gas/LNG, would make a quantum reduction in CO2.

Please take actions that actually provide results! Ban or heavily tax/tariff products that use coal as their power source, or use "slave labor" and you will make a real difference.


Posted by Ole Agesen, a resident of Menlo Park: Allied Arts/Stanford Park,
on Dec 13, 2023 at 6:32 pm

Ole Agesen is a registered user.

When (not if) we get another earthquake, I'll be glad that I don't have a pressurized methane pipe running into our house.

Odd to learn that so many people commenting on how fond they are of gas.

Ole, gas-free and happy (and using my real name)


Posted by Lynn, a resident of Birdland,
on Dec 13, 2023 at 9:47 pm

Lynn is a registered user.

Gas is reliable. Can't say PG&E electricity is As for going green, not all electricity is - what is used to produce the electricity we use? Yes, I agree with Sherry Listgarten, that politicians should be required first. Then anyone who has lithium battery cars. Those cars have more toxic waste than the green house effect of gas. Lithium is not renewable either.
I do prefer our gas range for cooking - easier to adjust temperature (those radiant ones are the worse). We do have electric ovens.
We did add solar and are still waiting for permits (months). If you don't want gas, don't get it or remove it. Let those of us who do want gas have it (furnace, dryer, water heater, cooking range). When you can do the same reliably and efficiently, we may be open to change. Having it thrust down our throats for a more expensive option that might not deliver based on weather or poor infrastructure is the problem.


Posted by Ed Kullick, a resident of Oak Hill,
on Dec 14, 2023 at 8:49 am

Ed Kullick is a registered user.

I am growing weary of the continued efforts by the political class to tell us how we should live here in our community. It started with Sacramento telling us what type of housing the city must approve. Now the climate change alarmists are taking away the only reliable source of power we still have. We don't have an abundant source of electricity in this state, and until we do, leave our natural gas supply alone.


Posted by staying home, a resident of Crescent Park,
on Dec 14, 2023 at 11:31 am

staying home is a registered user.

I get the resistance to removing existing gas hookups. Change is challenging especially when mandated by the city.

With the current restrictions for new gas and the proliferation of solar, battery storage, and non-gas appliances, I imagine the demand for Natural Gas will decline every year. At some point, we are doing to have a large amount of infrastructure for a small percentage of the city. Can we shift to a model where the PA Utilities charges only those who use gas for the cost of maintenance?


Posted by BDBD, a resident of Cuesta Park,
on Dec 14, 2023 at 1:08 pm

BDBD is a registered user.

I grew up in a home in the Pacific northwest that was built during the 1970s oil crisis. Perhaps related to that, or maybe because it was rural when built and infrastructure costs were high, it has been 100% electric from the beginning. My parents still live there, and the house stays warm, the water stays hot, and the clothes get dry just fine without gas. I understand that folks are reluctant to change, but I find the stiff resistance bemusing. In the end, your house will be the same as it ever was, just with (as some have noted) much lower risk of you developing asthma or the house catching fire after an earthquake.


Posted by CyberVoter, a resident of Atherton: other,
on Dec 14, 2023 at 1:38 pm

CyberVoter is a registered user.

No one can predict the future! Mandating a 100% electric home, with no back-up (Plan B) alternative is foolhardy at best. I you remove the ability to deliver natural gas to homes/businesses, you also remove the ability to deliver any gaseous fuel in the future.

Renewable Natural Gas (RNG) and fuels from many biomass waste stocks (yard waste, garbage, sewage, etc.) are advancing quickly and now being fed into the natural gas pipelines. Thus is very similar to feeding "Green Electricity" from wind farms & solar (although they are really NOT Green when the full supply chain is considered) into the current electrical grid.

Please don't let Gov't bureaucrats decide your future based on their personal beliefs.


Posted by Ole Agesen, a resident of Menlo Park,
on Dec 14, 2023 at 6:21 pm

Ole Agesen is a registered user.

A few comments for Lynn who writes:

"lithium battery cars. Those cars have more toxic waste than the green
house effect of gas. Lithium is not renewable either."

Lithium is element no. 3 (alkali group). It is not particularly toxic
(in fact used in drugs in measured doses). Compare with Pb (lead),
gas car starter batteries: Pb isn't used in drugs, is recycled. Compare
with gas/diesel: toxic pre-combustion, burned in use (producing climate
change and local air-pollution). Neither fuel is recyclable once burnt.
Compare with table salt: lethal in overdose (not unlike lithium,
potassium, sulphur, methane, you name it).

Perhaps it is OK not to worry too much about the lithium battery in your
pocket, and by extensino your future car?

We burn 1 cubic mile of oil each day and it's a one-way street: recycling
impossible (Crane, Kinderman and Malhorta's 2010 book.) Imagine lifting a
1x1x1 mile cube of black goop into the atmosphere every day, lighting one
corner, waiting for it to burn. NOx, PM2.5, soot, sulphur, ..., I wouldn't
want to be near it *but* we all are every day! I'd ratehr be near an EV.


Posted by Ole Agesen, a resident of Menlo Park,
on Dec 14, 2023 at 6:21 pm

Ole Agesen is a registered user.

Burned oil is gone, no value (in fact, negative value, in terms of health
and climate issues), no recycling possible.

In contrast, lithium is valuable, even in a spent battery, so all
indications are that Li-ion batteries will be recycled at the end of
their life. For example, Redwood Energy and Ascent Elements are betting
real money on battery recycling. Europe, too, is requiring battery "bar
codes" to facilitate recycling.

Finally, Lithium isn't a product that can only be obtained from so-so
autocracies with iffy human rights and decomracy records (let me refrain
from calling names). In fact, we Californians have one of the largest
reserves of Li in the world at the Salton Sea (search: "Lithium Valley")
and available in environmentally agreeable manners (no hard rock mining,
but direct extraction from geothermal brines).

What's not to like about a recyclable locally sourced battery material,
which you have in your pocket already, in your cell phone? And which
allows you to fill up your car at a quarter the cost of gasoline?

Seems alright to me, and not just barely.

Apologies for long reply. Just wanted to address a few facts of importance.

Happy Holidays!
Ole, glad we aren't discussing Pu.

P.S. Lynn, thank you very much for adding solar; hope permitting will
conclude soon! You deserve it!


Posted by LongResident, a resident of another community,
on Dec 14, 2023 at 6:49 pm

LongResident is a registered user.

Semms like electric rates should be subsidized in areas where gas is turned off.


Posted by Mondoman, a resident of Green Acres,
on Dec 18, 2023 at 7:03 am

Mondoman is a registered user.

Saddened to experience yet another power outage this morning in South Palo Alto.


Posted by Joseph E. Davis, a resident of Woodside: Emerald Hills,
on Dec 18, 2023 at 8:31 am

Joseph E. Davis is a registered user.

It is not a great idea to force people to spend enormous amounts of money to get rid of a more reliable energy delivery system when there will be no detectable benefit to the climate whatsoever.

Web Link


Posted by Bystander, a resident of Another Palo Alto neighborhood,
on Dec 18, 2023 at 8:38 am

Bystander is a registered user.

It rained. Palo Alto Utilities suspect rain caused another power outage.

Why is this still happening?


Posted by Anne, a resident of Midtown,
on Dec 18, 2023 at 9:56 am

Anne is a registered user.

Just yesterday the Mercury News reported that California has added new solar capacity and big batteries which reduces the likelihood of electricity shortfalls. Can't people understand that the renewable transition is a work in progress, there are going to be bumps in the road, and get behind it?

Really appreciate all of your incredibly detailed analysis, Sherry. We're lucky to have you.


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