this seems to be an easy solution for them tbh. Change focus away from banning or providing alternatives, and focus more on dissuasion. allow the service but have a carbon tax placed on those types of heat systems. People find alternative when services are expensive to operate. Could even avoid having it phrased as a customer tax by giving it to the company, and then when it's passed down its a "well it's a buisness tax that they passed down, complain to the company"
Like it sounds like the main issue in this at the moment is utility companies saying that you need to have customers want those type of services, You need to make it so customers no longer want those type of services, which generally means increase the price for those services. Focus on removing existing infrastructure when demand for said services are no longer present. You can try having alternatives installed as well, but a straight out ban, like what seem to be talking about there, I don't think should be done.