POWER May 2022 - 36

POINT
Natural Gas Bans Expensive,
and Would Impact Electric
Grid Reliability
Mary Hutzler
M
ajor cities including San Francisco, Seattle, Denver,
and New York have either enacted or proposed measures
to ban or discourage the use of natural gas in
new homes and buildings, just a few years after Berkeley,
California, passed the first such ban in 2019. In California,
some 40 communities have implemented bans or restrictions
on the use of natural gas, measures that have ignited
a backlash from some of California's prominent AfricanAmerican
and Latino leaders, who indicate that prohibitions
on the fuel are a form of regressive tax on low- and middleincome
residents.
Some 86% of homes in California use natural gas. Banning
the direct use of the fuel for cooking, home heating,
water heaters, and for appliances such as clothes dryers will
force consumers to instead use more electricity-which,
on an energy-equivalent basis, costs four times as much as
natural gas.
That ban would essentially result in a hidden energy tax
and a massive burden on consumers in California, which,
when accounting for the cost of living, has one of the highest
poverty rates in the U.S. Including the cost of living
in the equation brings the state's poverty rate to 18.1%,
meaning about 7 million of the state's residents live in poverty.
That's nearly equivalent to the population of neighboring
Arizona.
Further, the bans on natural gas are occurring at the same
time that California's electricity prices are increasing. Extreme
weather, among other factors, has shown the state's
power grid to be unreliable. California electricity consumers
have been impacted by rolling blackouts during heat waves,
and power shutoffs due to wildfires that at times have been
caused by older electrical equipment.
Blackouts Are Common
In fact, blackouts are so common in California that thousands
of the state's residents have bought small generators powered
by fossil fuels to assure reliable power. The state also
installed a handful of " temporary " natural gas-fired power
plants to help with rising demand for electricity.
California's residential electricity prices are already
among the highest in the U.S., behind only a few states, including
Hawaii and Alaska. In November 2021, the average
cost of residential electricity in California reached 23.76
cents per kilowatt-hour (¢/kWh), which was 68% higher
than the national average residential electricity price of
14.12 ¢/kWh.
Several factors will likely increase the cost of electricity
for the state's residents. The 2,256-MW Diablo Canyon
nuclear plant is scheduled to be closed in a few years. The
state has a goal to be carbon-free no later than 2045, which
36
Higher Electricity Demand, Higher Costs
The move to electric appliances would also increase demand
for electricity, which could result in more blackouts. More
than 120 localities already have passed resolutions against
the banning of natural gas.
The Consumer Energy Alliance (CEA) released a report,
" The Hidden Costs of a Virginia Natural Gas Ban, " which indicates
that a natural gas ban could cost every household in
Virginia as much as $26,000, if the ban was forced onto families.
The findings dovetail with previous research by the CEA,
which found that the cost to replace just major gas appliances
in homes nationwide would be more than $258 billion. The report
also found that attempts to " electrify everything " would
require a massive infrastructure buildout of more than $100
billion in the state.
With one in three Virginia households using natural gas for
home heating, banning natural gas would be financially devastating
to families. A recent CNBC survey found that only 41%
of Americans had enough savings to cover a $1,000 emergency,
much less than the amount needed to cover the costs
for a natural gas ban.
A ban on natural gas would also disproportionately
harm the 9.9% of Virginians who live at or below the poverty
level, along with those on fixed incomes, and businesses
still recovering from the economic hardships of
COVID-19. A study by the Dragas Center for Economic
Analysis and Policy at Old Dominion University in Virginia
reported that some 75% of the state's businesses were
negatively impacted during the first several months of the
pandemic in 2020.
Whether in California, Virginia, or elsewhere, banning the
use of natural gas for heating, cooling, and for use by appliances
means energy bills will inevitably increase. ■
-Mary Hutzler is a distinguished Senior Fellow at the Institute
for Energy Research. She spent more than 25 years with the U.S.
Energy Information Administration, where she specialized in data
collection, analysis, and forecasting, and for a time served as the
agency's acting administrator.
www.powermag.com
POWER | May 2022
will push more measures supporting electrification. Bans
on gasoline- and diesel-powered vehicles mean there will
be demand for an enormous amount of electricity that will
be needed to fuel several million new electric vehicles. It
seems clear that California will suffer blackouts, and escalating
energy prices, for years to come, a fate that could befall
other states pushing electrification.
Replacing natural gas appliances with electric appliances
is expensive. In California's Central Valley, buyers of new
homes would pay $250 more a year to operate an all-electric
home-and that is before a planned 30% increase in electric
rates over the next few years.
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POWER May 2022

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