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California Removes Incentive to Use Natural Gas in New Buildings

Utilities will no longer be able to pass along part of costs for new gas lines to residential, commercial customers.

Above-ground storage tanks at the Honor Rancho natural gas storage facility in Santa Clarita, California.

Above-ground storage tanks at the Honor Rancho natural gas storage facility in Santa Clarita, California.

Photographer: Bing Guan/Bloomberg

California regulators on Thursday took away a key incentive for builders to use natural gas in new homes and commercial buildings as the state seeks to reduce greenhouse gasses and reach its climate goals.

Utilities won’t be allowed to bill customers for part of the cost of extending a natural gas line to a new residential or commercial building starting in July, according to a decision by the California Public Utilities Commission. The regulation is designed to discourage the use of gas in buildings, which accounts for 10% of the state’s overall emissions.