All-Electric Forcing in the “Inflation Reduction Act” (up to $14,000 per home)

From MasterResource

By Mark Krebs — August 9, 2022

“It seems that the only people who could claim a $14,000 [home electrification] rebate have well above average income.  If so, like $7,500 electric vehicles (EV’s) rebates, this is an incentive that primarily will benefit the already well-to-do; except nearly twice as much as EV’s.”

“Without gas utilities to serve heating demand, electric utilities will become winter peaking, requiring massive investments of generating capacity and/or battery storage.”  

Searchable text of Inflation Reduction Act is here.

The American public has been sold out in energy and climate just when the opposite seemed to be at hand. This bill is about bigger government, more spending, greater deficits, and more monetary inflation (federal counterfeiting) to make it all work (see Concerned Economists letter).

Hidden in the Bill are innumerable special-interest government interventions, one of which is very anti-consumer that no one is talking about. That provision would eliminate competition to electricity in the residential sector under the guise of reducing carbon. Specifically, the provision is Sec. 50122 titled “HIGH-EFFICIENCY ELECTRIC HOME REBATE PROGRAM.” 

This article is my attempt to shed some light on this travesty. Correcting that massive oversight. Sec. 50122 starts at page 583. The following italicized text are excerpts from page 587 that show rebate amounts:

(A) APPLIANCE UPGRADES.—The amount of a rebate provided under a high-efficiency electric home rebate program for the purchase of an appliance under a qualified electrification project shall be—

(i) not more than $1,750 for a heat pump water heater;

(ii) not more than $8,000 for a heat pump for space heating or cooling; and

(iii) not more than $840 for— (I) an electric stove, cooktop, range, or oven or (II) an electric heat pump clothes dryer.

There are more incentives on page 588:

(i) not more than $4,000 for an electric load service center upgrade;

(ii) not more than $1,600 for insulation, air sealing, and ventilation; and

(iii) not more than $2,500 for electric wiring.

(C) MAXIMUM REBATE.—An eligible entity receiving multiple rebates under this section may receive not more than a total of $14,000 in rebates.

Considering the financial resources available to the average consumers, it seems that the only people who could claim a $14,000 rebate have well above average income.  If so, like $7,500 electric vehicle (IEV) rebates, this is an incentive that primarily will benefit the already well-to-do; except nearly twice as much as EV’s.  

Peak Demand: Electric vs. Gas

Traditionally, both electric utilities and gas utilities designed peak capacity for worst-case scenarios plus a safety margin of around 10 percent. Electric utilities were summer-peaking due to cooling demand, while gas utilities were winter peaking due to heating demand. 

In terms of maximum Btu demand, winter peaks tend to be much higher than summer peaks. The reason is largely a matter of inside to outside temperature differences between summer peaks and winter peaks.  For example, assuming a winter design temperature of -10 deg F. and an interior thermostat setpoint of 75 deg. F, the difference is 85 deg. F. Assuming a summer design temperature of 110 deg. F. and the same interior thermostat setpoint of 75 deg. F, the difference is less than half the winter difference.

Without gas utilities to serve heating demand, electric utilities will become winter peaking, requiring massive investments of generating capacity and/or battery storage.  The worst-case scenario would then be a prolonged “polar vortex” with no wind (a.k.a., “wind drought”) coupled with snow covered photovoltaics. During such periods, all the heat from a typical electric heat pump will be in the form of electric resistance that is built into it; that’s just how typical heat pumps work.

If your local electric utility has “transitioned’ to all renewables, they will need several days’ worth of battery storage. Also, battery capacity drops sharply in extreme cold. That’s just how batteries work. Altogether, this equates to astronomical costs that get passed on to consumers.  In short, if you are “all-electric,” you will need to fend for yourself and should at least consider investing in your own emergency generator system, assuming you can afford it.

Enemy Collaboration: Bad Consequences

The electric utility industry deserves much of the blame for these travesties. Leading electric utility industry trade associations support HR 5376.  This was documented by an S&P Capital IQ on July 28th in an article (behind a paywall) titled “US climate package contains ‘robust’ clean energy tax incentives.”  

Specifically, S&P interviewed Jim Matheson, CEO of the National Rural Electric Cooperative Association and Edison Electric Institute President Tom Kuhn.  Both praised the numerous energy efficiency tax incentives.

The Energy and Policy Institute also discussed electric utility involvement in an online article published on August 4, Utilities that support Inflation Reduction Act are members of trade groups attacking it.  This title is just as misleading as calling HR 5376: “The Inflation Reduction Act.” 

What the article inadvertently documented is that the electric utility industry doesn’t like how they too may see income tax increases, and they aren’t holding back their disapproval of such provisions. But, on the other hand, the Federal government is essentially transferring the energy delivered by gas utilities over to electric utilities, and they will  be collecting more revenue from increasingly captive consumers as their size at least doubles.

The electric utilities are not complaining about that. Maybe that will change in time as electric utilities realize their product is no longer reliable or affordable.  But that may not matter since they became “the only game in town.”

Some of us saw this coming. Electric utility interests have been aligned with those of “all renewables all the time” advocates for several years.  This alliance was announced in 2018 at a national conference of utility regulators, which I wrote about: Warring Against Natural Gas: Joint EEI/NRDC Statement to NARUC (crony environmentalism at work). Their efforts are largely being augmented by the Federal government subsidies and DOE’s “national labs,” since the Biden (mis)Administration took control or the lack thereof).

The Forgotten Consumer

 Politicians and pundits from both parties appear reluctant to question obvious restraint of trade issues and reduced consumer choice impacts. Why?

  • For politicians, it’s because their interests lie elsewhere, like using “other peoples money” to trade with vested interests in return for campaign donations and insider information. It’s also because they don’t want to risk a reduction in generous campaign contributions from electric utility interests. [1]
  • For pundits, it’s because most of them cater to environmental interests that are “in on it.” They even have their own trade association: The Society of Environmental Journalism. The one thing they do best is to “stick to the script.”

But who wrote the script? Globalists abd global warming activists along with electric utility-oriented organizations like the “nonprofit” Rewiring America boast about their role in drafting these provisions. This is further evidenced by the following yahoo finance article: Inflation Reduction Act would lead to $1,800 in savings for average household, analysis finds.

We have recently begun to witness how Green New Deal variants are failing within the EU. We are also witnessing how the inherent intermittency of renewables put lives at risk. Now “reimagine” the combination of “all renewables all the time” and a major cold weather emergency event (a.k.a., “polar vortex”) like what happened in Texas last year. Further “reimagine” being without coal or natural gas for electric generation as well as natural gas and propane for home heating. 

People will die at a far great pace than the 247 that  died in Texas last year from Winter Storm Uri. This vicious cycle will just get worse the more reliant our society becomes upon on supposedly “clean” (but unreliable) energy sources. And yet, most politicians are reluctant allow for an opportunity for healthy/democratic debate. Instead, most House and Senate hearings have become infomercials for monied interests.

What Now?

Even if there is new management in the House and/or Senate, such problems may persist if public service remains secondary to self-enrichment. Maybe it will take more people dying to get their attention.  Or maybe such loss of life will just be dismissed as “collateral damage” in the ongoing propaganda war against carbon.

Assume there will be meaningful changes in the House and/or Senate after the midterms, along with a new willingness to NOT pull punches regarding the complicity of electric utilities within an increasingly socialistic central planning of energy, what then?  Then, hopefully, we can truly debate the alternatives about what is best for consumers and the environment.  Maybe the debate can move closer the best way to maximize benefits at the least societal cost; taking every effort to minimize the economic damage to consumers.

The Biden Administration is apparently willing to “bet your farm” (or at least your 401K) that the electric grid can, in the time allotted, absorb everything that is now served by the direct use of gaseous fuels AND simultaneously transition away from “dirty” fossil fueled generation WHILE reducing overall utility bills.

Renewables Forcing: How Much, How Far

 The following EIA based graphic from a recent Washington Post article portrays the magnitude of transforming (perhaps unwittingly) the present energy generation mix to renewables. But be reminded, they are also planning to transfer the energy requirements presently served by the direct use of natural gas over to electricity. This could easily double or triple electric generation requirements. That effect isn’t shown in the following chart.

Another observation to be made from the above chart is that there is still a lot of black (coal) and orange (natural gas) in them. Basically, this means that switching to all-electric may have little if any carbon reduction benefits in such states. It is likely that in at least some states, fuel switching to electricity will increase carbon emissions.  So “buyer beware” (in terms of both carbon savings and utility bill savings).

Clearly, the electric utility industry stands to profit from doubling (or more) in size and rate-basing much more expensive renewable technologies, all with the increased cost of “monopoly rents.”  The environmentalists also get what they’ve craved: economic control. Together, they can achieve social control; awarding energy compliance and punishing energy disobedience; like how the system presently works in China.

Summary & Conclusions

For whatever reason, the gas utility industry has not been very effective in countering these threats. I really don’t have an explanation why, but most gas utilities are owned by electric utilities. This fact is also reflected within gas utility trade associations.

All I know for sure is complacency kills and gas utilities will either capitulate or litigate.  I also know that the “Inflation Reduction Act” will cause $billions in stranded gas utility assets. 

My advice to gas utilities:

  • Assuming there is still “fight in the dog,” it’s time to start fighting like your livelihoods (and those of your customers) depend on it, because they do.
  • Also study up on the takings clause in the constitution and find a way to live with the long-term liability of safeguarding our country’s abandoned gas pipes.

My advice to consumers:

  • Be prepared to fend for yourself by investing in a natural gas or propane-fueled emergency generator system (if you can afford one).  But note that if you have an electric heat pump, you’re going to need a much larger generator than if you didn’t.

 I also have some closing advice to regulators:  Do your job.  Integrated Resource Planning (IRP) should not be Institutionalized Revenue Plundering and Demand-Side Management (DSM) should not be Deceptive/Strategic Marketing. Instead, reconsider Least-Cost Planning that was the standard before it was hijacked by corrupted IRP and DSM.  

UPDATE August 4th, 2022: Ben Lieberman, Senior Fellow with the Competitive Enterprise Institute, wrote an article titled Think Handouts to Rich Electric Vehicle Buyers Are Unfair? Check Out the Inflation Reduction Act’s Homeowner Tax Breaks.  Please read it for his perspectives on this issue.


Mark Krebs, a mechanical engineer and energy policy consultant, has been involved with energy efficiency design and program evaluation for more than thirty years. He has served as an expert witness in dozens of State energy efficiency proceedings, has been an advisor to DOE and has submitted scores of Federal energy-efficiency filings. 

His many MasterResource posts on natural gas vs. electricity and “Deep Decarbonization” federal policy can be found here.

Mark’s first article was in the Public Utilities Fortnightly and titled “It’s a War Out There: A Gas Man Questions Electric Efficiency” (December 1996). For more of Krebs’s analysis, see his MasterResource archive.

Recently retired from Spire Inc., Krebs is forming an energy policy consultancy with other veteran analysts.

[1] Increasingly, fear mongering environmentalists have raised sufficient funding to also contribute and/or fund negative political advertisement in efforts to control political narratives.

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Tom Halla
August 14, 2022 6:20 am

Wind works really well in freezing rain and still air./s

Reply to  Tom Halla
August 14, 2022 6:28 am

Go gas or go cold.

mega weld
Reply to  Scissor
August 14, 2022 7:32 am

I am buying a gas range for my kitchen and selling the electric range the house came with. I have a gas fireplace and furnace. I keep the heat a 68 during the winter and my bills never go over 70 a month as the house on sunny days is warmed by the sun.

Tom in Florida
Reply to  mega weld
August 14, 2022 8:41 am

Be sure to get the proper ventilation system over the gas range. Check for minimum CFM requirements as well as make up air requirements in light of the other gas uses. Codes are different in different places so check yours out carefully so as not to get into an expensive upgrade situation.

Reply to  Tom in Florida
August 15, 2022 4:27 am

And get a CO Detector to go along with your Smoke Alarm.

August 14, 2022 6:22 am

IRS jackboots with authority to use deadly force promise to reduce some people’s carbon footprint.

Steve Case
Reply to  Scissor
August 14, 2022 6:49 am

First chuckle of my day. Uh, I guess (@^@)

August 14, 2022 6:38 am

Dennis Moore, Dennis Moore
Riding through the land
Dennis Moore, Dennis Moore
Without a merry band
He steals from the poor
And gives to the rich
Stupid B***h.

~ Monty Python

Reply to  Redge
August 14, 2022 8:59 am

Redge, thanks for the reminder. I’ve been singing this today but with “Brandon Sucks” in place of “Dennis Moore”.


Reply to  Bob Tisdale
August 14, 2022 9:01 am

You’re welcome, mate

Reply to  Redge
August 14, 2022 2:02 pm

Your lupins or your life!

Steve Case
August 14, 2022 6:40 am

In short, if you are “all-electric,” you will need to fend for yourself and should at least consider investing in your own emergency generator system, assuming you can afford it.

And assuming your local climate zealots don’t ban emergency generators:

List of Equipment Affected by Gavin Newsom’s Ban on Small Engines
…items affected will include … backup generators.

Reply to  Steve Case
August 14, 2022 8:24 am

Salute Steve….
The California folks are leading the way. And banning gas landmowers and leaf blowers/trimmers on the way already.

The big grid failure in the Golden State is gonna be interesting to watch from the rational states. And the Texas experience is a great example of grid design.

Some how we have to “cancel” the nuclear hysteria if we truly wish to “cancel” the use of fossil fuels. Of course running and implementing the grid wires, substations and such for an all electric America will pale the $$$ we just authorized to subsidize the utopian vision our ignorant “ticks” wish to see.

Gums sends…
Definition: poly (as in many), tick (a blood sucking critter), hence, polytick

Steve Case
Reply to  Gums
August 14, 2022 8:45 am

Gums sends…
Definition: poly (as in many), tick (a blood sucking critter), hence, polytick

Love it: Politics = Poly ticks = blood sucking mites.
That one’s going into the file.

  Ticks are parasitic arachnids that are part of the mite superorder   Parasitiformes. Adult ticks are approximately 3 to 5 mm in length   depending on age, sex, species, and “fullness”.

And “Fullness” gotta love that description.

Dennis G. Sandberg
Reply to  Steve Case
August 14, 2022 9:54 pm

California already banned hydrocarbon small engines like generators, lawn mowers, leaf blowers.

lee riffee
August 14, 2022 7:36 am

I would add to advice for consumers (in addition to/or instead of having a gas powered generator if you can’t afford one) is to refuse to take the bait. Don’t convert your gas or oil fired furnace/boiler to electric, don’t convert your gas stove, dryer and other appliances to electric.
Everything in my house is electric except for my boiler (oil fired) and that’s the way it’s going to stay! That way, I can use a gasoline powered generator to run the oil burner and pumps and still have heat in the event of a power outage. For cooking I have a charcoal grill and a propane camp stove and one of those outdoor propane burners as well.
IMO that will be the ticker for many people – don’t take the subsidized cheese out of the gov’t mouse trap, no matter how tempting it looks. Chances are good you will come to regret it.

Coach Springer
Reply to  lee riffee
August 15, 2022 8:42 am

If I were wealthy enough to qualify for the $14,000, I’d buy myself some of your backups with it. Might have to disconnect from natural gas supply, but can always bury a 1,000 gal. propane tank out back.

Elliot W
Reply to  Coach Springer
August 15, 2022 10:46 pm

Like Obama. But his tank is bigger.

August 14, 2022 7:39 am

No one can screw things up like socialists except socialists on the take or ready for the nut house and the clueless seeking to be in the in crowd.

As the article states the people have been left out of the decision for the disaster as they were barred from elections.

Reply to  Olen
August 14, 2022 8:20 am

Those who believe in central planning just end up with a fragile supply chain administered by very few people….which has a significant probability of failure under duress….and for which the solution as presented by the failed managers will always be “more central planning is required”

Peta of Newark
August 14, 2022 8:08 am

Those he would destroy, he first makes mad.

Quote:”Without gas utilities to serve heating demand, electric utilities will become winter peaking, requiring massive investments of generating capacity and/or battery storage.”

And you really do not get any more insane than powering electric heaters from batteries.
Even hamsters running round and round inside wheels would make more sense

It doesn't add up...
Reply to  Peta of Newark
August 14, 2022 8:58 am

…or humans running on the spot in their homes.

August 14, 2022 8:10 am

I would also guess that many electrical concerns will switch to gas for cheaper, cleaner power, there may be more collaboration here than meets the eye.

Steve Case
Reply to  max
August 14, 2022 9:14 am

I would also guess that many electrical concerns will switch to gas …

California has already started to ban natural gas. Here’s some good news:

     Cities tried to cut natural gas from new homes.
     The GOP and gas lobby preemptively quashed
     their effort CNN

However, CNN doesn’t like that.

Reply to  Steve Case
August 14, 2022 6:41 pm

From that article:

Taking natural gas out of the equation and switching to electric appliances is one of the most effective ways cities can tackle the climate crisis and lower their emissions, multiple experts told CNN.

That is insane. The very best combined cycle plants are 62% efficient and you’ve still got to subtract transmission losses. The boiler in my house for the infloor heating is about 95% efficient. Going electric is doing the exact opposite of what the green pests say they want.

John Hultquist
August 14, 2022 9:02 am

 This is a very good informative statement. Thanks.

Because the USA covers a big geographically diverse area, let’s mention the map of colored squares – – geography:
Note the states OR, WA, & ID in contrast to NJ, RI, & CT.
I live in WA where rivers provide Hydro (blue) power. My house is “all electric” plus a wood stove for winter emergencies. A few places have piped gas (not me), but neighbors use propane. [Search-up ‘painted propane tanks’ if you need a fun break.]
Rhode Island, specifically, and other eastern states rely on gas. These areas ought to diversify electric generation before adding fleets of EVs and heat pumps. [Paul Homewood’s – Not a Lot of People … – has posts on the problems with heat pumps.] Older housing and apartments are poor candidates for heat pumps.

It doesn't add up...
August 14, 2022 9:16 am

I’ve a suspicion that the deaths caused by storm Uri and consequent energy shortages are grossly under-estimated. The report only really covers very clear direct linkages, whereas it should really look at excess deaths. It’s clear that under heated homes lead to many more deaths because people become much more susceptible to various illnesses when they can’t keep warm.

Dave Andrews
Reply to  It doesn't add up...
August 15, 2022 5:50 am

The UK Office for National Statistics (ONS) recently (Jan 22) published a report ‘Climate related mortality and hospital admissions, England and Wales 2001 – 2020’

“We found relatively little increase in deaths caused by warmer weather and a reduction in deaths caused by cold winters, leading to a net decrease in deaths”

It doesn't add up...
Reply to  Dave Andrews
August 15, 2022 6:02 am

They are looking at the wrong variable, as the article I linked to explains. It’s indoor temperatures that matter.

Gary Pearse
August 14, 2022 9:49 am

Our PM in Canada has his work cut out for him! No wonder the Demmunists are attacking Trump from 14 angles to put him out of politics. He is the only politician in America with the guts to turf it all out. I don’t trust the rest of Repubs, who have been drifting left for years. There is too much temptation for them in this conquest of America. Changing it halfway back is only an invitation to let gradualism finish the hijacking the job eventually.

It needs a Trumpian wrecking crew. Maybe Jr. could do his fathers job.

Reply to  Gary Pearse
August 14, 2022 10:51 am

And, failing Trump, there is always Ron de Santis or Greg Abbott – as we all know, in this world, nothing is certain except death and Texas!

2% Milk
August 14, 2022 9:58 am

Not sure about gas utilities in particular but gas in general stands to make armloads of profit when you consider the inefficiency of burning gas to make electricity to then put on transmission and distribution systems to make heat. That will drive limits in supply resulting in the high (carbon) prices the administration wants.

Matt Dalby
August 14, 2022 10:07 am

If the U.K. is anything to go by the (slightly) good news is that even with large government subsidies very few people want to install heat pumps, either because they know how useless they are or even with a huge subsidy they would still have to fork out thousands of pounds, possibly up to the equivalent of $12,000 which most people don’t have.
If the total government subsidies in the U.S. still leave homeowners having to pay a lot out of their own pockets then take up the grants will be low, and not much additional strain will be put on the electricity grid.
It’s also worth noting that in the U.K. those people that have installed heat pumps find that they only warm the house to 19 degrees (centigrade) so maybe 67 or 68 degrees. This is in a British winter where overnight temperatures in major towns and cities rarely drop below about 15 degrees farenhiet. Good luck to anyone who thinks they can keep warm with a heat pump in Northern U.S. states

Reply to  Matt Dalby
August 14, 2022 10:57 am

My neighbours, who have extensive grounds, have just sold off their old house and custom built a new house in their grounds around a heat-pump. Despite being built for this, their electricity bill has shot up to £600 a month. If this really triples over the next 6 months or so, they are in for a very nasty hit and are saying they may use their granny annexe for living over winter as it has a very effective wood-burning stove!

Tom Abbott
Reply to  IanE
August 14, 2022 1:48 pm

That’s what I’m doing. I’ll use the woodburning stove for my emergency heat. It has saved me on more than one occasion.

August 14, 2022 6:02 pm

For whatever reason, the gas utility industry has not been very effective in countering these threats. I really don’t have an explanation why, but most gas utilities are owned by electric utilities

Simple really. All premises require electricity but they can take or leave gas. The shift to all electric means guaranteed growth for the electron side of the business and you know damn well gas will always be required for perpetual ‘transitioning’ with weather dependents and rather than have to pipe it to all those premises you only need to get it to your gas fired electricity generators. What’s not to like?

August 14, 2022 6:18 pm

Come on Natalie there’s a planet to be saved. We all have to cough up for the grid shift from large centralized FF hub and spoke to spaghetti and meatballs unreliables-
Electricity retailers raise fixed charges to recoup costs after record highs in spot market (
There’s lots more to come with the Great Transmissioning dearie but always remember renewables are cheaper-
Renewable energy transmission lines are essential to reducing pollution, protecting climate and preserving nature | Climate Council

Reply to  observa
August 14, 2022 11:08 pm

I get that your post is tongue in cheek but I made the mistake of opening the links and it’s got me all fired up. Flim Flam and his mob talking up new transmission lines to roll out wind and solar and how wonderful it will be for everyone. There will be 180 kilometres of those lines skimming the outskirts of our town! They talk about saving the environment and the many species. What utter BS!

Reply to  Megs
August 15, 2022 6:12 am

Flim Flam isn’t just talking up new transmission lines but actually coughing up taxes which the likes of CleanCo and Acciona will no doubt enjoy dumping on-
Federal government will cover cost of connecting massive new Queensland wind farm to national grid – ABC News
That’s called ‘unlocking investment’. The Minister has the master key and he’s a generous caring sharing kinda bloke.

Reply to  observa
August 15, 2022 6:34 am

In what way are wind and solar investments? It’s the story of Robin Hood in reverse.

Reply to  Megs
August 15, 2022 10:06 am

Nibor Dooh, birth name of Dennis Moore.


August 14, 2022 7:40 pm

There is one simple and effective way to get utilities to act right. Consumers have an expectation and a right to dependable, consistent and affordable energy. If the utility fails to deliver energy on demand they should be brutally punished, especially if they fail to deliver at a time when the country has abundant resources. It is the utilities responsibility to have power sources available to them at all times to meet their customers needs. If they fail they are punished, by that I don’t mean fined. No punishment that the utility simply passes on to their customer is acceptable. If it takes punishing individuals within the utility I am okay with that. They need to know it is going to hurt them if they screw with their customers. It is that serious and these chuckleheads are getting off scot free. That has to end.

Reply to  Bob
August 14, 2022 11:10 pm

We need to send them all to a wind and solar only gulag! No backup allowed.

Reply to  Megs
August 15, 2022 5:02 pm

That’s a good idea Megs, I was thinking along the lines of having Mike Rowe from dirty jobs hook them up for employment.

Gerry, England
August 15, 2022 3:48 am

The late Robert of iceagenow and Texas resident put the big freeze death toll at over 700 due to all those who died because hospitals could not treat them.

August 15, 2022 10:26 am

Single/central/monopolistic solutions are first-order forcings of progressive prices.

August 15, 2022 1:37 pm

Also buried in the legislation is a happy piece stating electric cars fitted with batteries made overseas will not get a subsidy !

August 15, 2022 10:38 pm

Green energy looks good on paper, but not on the land.

August 18, 2022 11:17 am

From the bill looks like all the tax credits mentioned are income limited, some more than others, but ALL of them are income limited unless you are able to build your own wind or solar farm large enough to attract a utility attention/contract, then you can use or sell any tax credits.

Last edited 1 month ago by sch
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