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California becomes first state to end fossil fuel subsidies for new buildings

For Immediate Release
September 16, 2022
Contact: Robin Tung, Building Decarbonization Coalition

Sacramento, CA – The California Public Utilities Commission (CPUC) voted yesterday unanimously in favor of ending subsidies connecting new buildings to the gas system. This first-in-the-nation decision that goes into effect on July 1, 2023 will help California move towards all-electric construction and reduce the state’s reliance on fossil fuels. Additionally, it will provide bill relief to California gas customers, who have been paying an estimated $164 million each year for gas line extensions. This critical ruling will avoid increasing what is already a quarter of the state’s greenhouse gas emissions.

“This decision helps California transition to a decarbonized future for its homes and buildings,” said Jose Torres, California Director at the Building Decarbonization Coalition. “By ending gas subsidies it will be more affordable to build all-electric homes while also making homes safer and healthier for all Californians. This vote is a monumental step in the fight against climate change.”

The decision comes on the heels of key actions and investments for building electrification in California this year. In July, Governor Newsom set new climate targets for 3 million climate-ready homes and 6 million heat pumps by 2030 and 7 million climate-ready homes by 2035. Following this announcement, state legislators approved a $1.4 billion investment in the California budget to decarbonize buildings and expand access to efficient, life-saving cooling for households, prioritizing low-income and environmental justice communities. The state’s investment along with the CPUC’s decision will help California meet Governor Newsom’s climate targets.

The Building Decarbonization applauds the CPUC and advocates for this bold action, which brings the state closer to reaching its clean air and climate goals.