 All right, good afternoon. Welcome to our 1 p.m. Session of the February 18th 2020 studies session And I would like to ask the clerk to please call the roll. Thank you, Mayor Councilmember is Watkins here. Matthews is currently absent Brown here lever here Cron here Vice Mayor Meyers is absent today and Mayor Cummings here We only have one item on our agenda today Which will be the building electrification study session item Order will be a presentation of the item by staff followed by questions from the council We will then take public comment and then return for deliberation And so I'd like to turn it over to Tiffany wise West sustainability and climate action manager and Kurt Hurley green building specialist Thank you, Mary. Good afternoon council members and mayor as the mayor stated I'm Tiffany wise west the sustainability and climate action manager and Seated to my right right here is Kurt Hurley our green building specialist And we have been working since you directed us to do so on bringing back some options for you to consider So let's jump right into that We have a lot of material and we're very thrilled to be able to share with you our progress today and Also to bring into the conversation some stakeholders in our community So in terms of what we would like to cover today, we do have as I said quite a bit to cover We have a presentation that will take place by our curtain. I will present to you We will also hear from Monterey Bay community power as they are a key player in building electrification We also have a me writer who is the acting direct policy director of the building Decarbonization coalition who will be talking about what other jurisdictions have done in the state trends We have a couple builders and designers that will be here to talk from their perspective about building all electric buildings and their cost Effectiveness and then we'll bring it back to really talk in detail about the policy options that we've developed for your consideration Based on all of this research what other jurisdictions have done speaking with other jurisdictions and understanding What their challenges were what they might have done differently at this time in place? And then we will have time for Q&A from you the council as well as public comment And then we would like to get clear direction from you on which option or options You would like to see us bring back For a public hearing which we're anticipating will be March 24th. So with that said We have four key objectives that we'd like to achieve through this study session First of all, we want to provide an overview on building electrification concepts and their drivers this topic can get Difficult very quickly complex and we want to make sure that you have a full understanding of why we'd like to do this and What the considerations are? We will share two policy options For you to consider And the background as to how they were developed as well as a timeline for potential adoption of one or more options As we said, we'd like to receive feedback from City Council and the public and answer questions As you'll see later in the presentation, we have been doing extensive outreach with the community on this particular point To refine and hone what we're doing and then again, we want to receive direction from council on how you would like to proceed So to start, you know There have been a number of Resolutions that have been adopted recently Including the climate emergency resolution from 2018 as well as the Green New Deal from 2019 that really call for accelerated action and priority in greenhouse gas emissions reduction This building electrification effort really aligns with both of these policy positions and Also, as you will see later on because we are public in addition to greenhouse gas emissions We are pointing to public safety and indoor air quality Truly, this is an operationalization of our new health and all policies framework as well where we are prioritizing equity public health and sustainability and so you will see Us touch upon those points throughout the presentation One thing I think that's really important to mention at this point is that you know Some jurisdictions have gotten questions as to why not wait for the next code cycle, which would happen in three years or in six years But as we know and as articulated in these various resolutions and in our IPCC Intergovernmental Panel on Climate Change We know that we have ten years or less to really get things under control So waiting three to six years in our opinion delays Our action whereas we can take action right now. So I think it's it's important to mention that so What are the drivers as to why we're exploring? electrification council you all directed staff to bring back options last fall and Align our timeline with Monterey Bay Community powers roll out of support incentives And we have done that and you're going to hear more about that shortly MBCP's electrification strategic plan also calls for transportation and building electrification is key emissions reduction strategies for our region And the incentives that they are coming to also, although we have not adopted a carbon neutrality Target year in our jurisdiction. We are working under the assumption that it will be 2045 or earlier as per the state's Target for carbon neutrality This piece will certainly be a major component of us being able to achieve our contribution to the state's carbon neutrality target And I've already mentioned a couple of these resolutions incidentally Well, this will be the next slide. I think yeah Okay, and speaking to California's goals, you know over time California has Adopted a number of aggressive goals and targets if you see look in the lower left-hand corner AB 32 32 specifies a 40% emissions reduction in buildings So this building electrification effort gets to the heart of that in addition to a number of these other policies that the state and targets I should say that the state has adopted one other incident incidental policy that has been adopted is that California State law has provided national leadership in the fuel efficiencies of vehicles and buildings and for the first time the International Civil Aviation Organization instituted civil aviation fuel efficiency standards for 2020 for new aircraft in 2023 for aircraft designs already in production. So we're going to speak a little bit towards transportation But our focus today really is on building electrification and we'll show you why in just a moment with that I'm going to hand it off to Kurt Hurley Good afternoon mayor Cummings and council and I'd also like to extend a warm welcome to the members of our community that are Here for this study session on building electrification I'd like to begin with a quick review of the city's existing green building program It's served our community for over 13 years since 2007 It's a program of considerable breadth It allows for the reduction of water use improved indoor environmental quality of buildings Reduction in the supply chain impacts of construction materials and reduced maintenance costs With the updated program that was just published last month. There's a new emphasis so there is a opportunity to educate our design professionals and Designers to create optimum all electric designs and those Existing structures also to guide them in the path of fuel switching towards electric appliances I'd like to spend a few moments reviewing the building codes and the process by which our city adopts building codes so generally we begin with a national model code and Those are adopted by counties and cities Today, we're going to be talking about our California's title 24 part 6 and part 11 Part 6 pertains to the energy performance of buildings Part 11 has a broad environmental coverage and has content regarding building to vehicle connectivity or Not also known as B to V What's the process for building code adoption? Well, there's triennial updates to the International and national model codes and our city adopted the 2019 building code cycle in November of last year The next code update will be the 2022 code update and that will go into effect January 1st of 2023 so Cities have the opportunity to adopt the codes as they exist and Also to make local revisions as deemed fit to the climactic geological and topographical conditions in their regions We'll touch a little bit more about the process later, but revisions to the energy code must be required approved by the California Energy Commission and those amendments filed with the Building Standards Commission to become enforceable Finally at the bottom of this slide in Brown will mention the Municipal code of our own city title 6 health and sanitation will be discussing a possible amendment to that So now let's drill down a little bit into the Cal Green part 11 and the energy code part 6 and look at how Those codes changed from the last cycle the 2016 cycle to the 2019 cycle which is in in place today on The far left we see the in the for the rows we see a building electrification Electric vehicle charging infrastructure and solar PV. So coming out to the middle column for 2016 those those two codes had really no content Towards building electrification if we move down now to electric vehicle charging infrastructure the 2016 Cal Green that's part 11 had the provision to For designers to designate parking spaces is EV capable and an empty conduit through which an electrical conductor could be placed at a future time to serve electric vehicles and finally provisions for solar in the 2016 Cal Green code and energy code required solar readiness. So that would That would be defined as a certain area on a rooftop that was designated and available for solar access at a future time Now switching to 2019. There's a change We now have not a requirement for an electric water heater, but readiness in the building Electric delivery system and other components. So at some point in time a building owner in the future could readily Switch fuels and use an electric water heater The electric vehicle charging infrastructure the B to V has remained the same and finally in the lower right Square or rectangle. I should say more correctly is a big change. So our energy code for 2019 has a requirement for photovoltaic panels for low-rise residential defined as three stories or less There are some exemptions exemptions relative to solar access and otherwise So that gives us a good overview of the immediate past history So let's talk a little bit about a reach code before we talk about a reach code Let's let's quickly review the definition and the the purpose behind the California building code Which is to determine the minimum requirements to protect? Public health safety in the general welfare. So if a region a city or a county goes beyond those requirements That would be known as a reach code Now there are many categories or requirements that a reach code can pertain to Our own in our own city through through a parking public works Effort we actually augmented the EV charging requirement that was specified by cow green so that there's actually infrastructure and a greater Percentage of space is available. So our city already has Made some efforts in this fashion and it was actually done in a way that the Cal green code was not amended So we covered the base code and in some of the categories water efficiency energy efficiency Building electrification our topic this afternoon and renewable energy. I Want to cover in this slide the legal requirements for a local jurisdiction To create an energy reach code so an amendment to the code that we adopted in November of 2019 There are three legal requirements The amendment must prove to be cost effective based on the energy commission's own economic analysis There must be at least one path provided which does not preempt federal appliance efficiency standards and lastly The amendment may not allow building designs which exceed The energy budget for the base code Right, so we can't we can't actually create an amendment that says well We can do worse than what the state requires in the in the in the base or vanilla code Now before we move on to the next slide, let's Take an opportunity to understand the cost effectiveness Determination that the energy commission uses So for the last 15 years corresponding the lax last six code cycles there is a Life-cycle analysis of saved energy versus the incremental cost for building efficiency It has to show that those incremental measures actually pay for themselves over that 30-year period now in the case of the 2016 energy code those features that were required by the code Were an additional incremental cost of $2,700 but save the homeowner $7,400 over a 30-year period I don't know about anyone else, but I've certainly made some investments that didn't do as well as that so Just just wanted to give you that example We're now going to review the code adoption process And I'm gonna direct you down to the the purple arrow on the bottom of this slide So we begin with Analyzing the cost effectiveness studies that have been performed on various types of structures and conducting outreach understanding what other jurisdictions have done understanding the Scope in our own city and how that can compares and contrasts with other jurisdictions Preparing a staff report and supporting documents Then the process would move from a first reading to the adoption of the ordinance in a second reading and then as I mentioned earlier There is approval. We have to submit our Documents and our our basis and findings the California Energy Commission for our code amendment and finally after that approval The California Building Standards Commission we would file it with that for it to be enforceable If I might interject here You'll see that the last two items on the far right hand side of the Purple arrow are kind of swapped out in the bullets and actually at that phase in the process It doesn't matter if the city adopts first and then it goes to the CEC or the CEC Approves first and then it goes to the city for adoption So I just want to clarify in case you noted that there is a little bit different order in those last two Well at this time, I'd like to hand this off to JR Killigrew. He's director of communications and energy programs at Monterey Bay clean power Thank you very much Kurt. It's an honor to be here city of Santa Cruz It's still Monterey Bay committee power, but I do have to note that We soon could be central coast community energy as we are expanded down to San Luis Obispo and Santa Barbara So we have now Unified the central coast under one banner community choice energy agency I just like to acknowledge council member Brown has been servicing on our on our policy board as well as city manager Bernal on our operations board, so it's great to be here and to discuss why electrification For folks in the room who may be puzzled by us or haven't heard about us Hopefully at this time you have heard about us, but still to this day There are questions about who we are we are your default electric service providers? So we partner with PG&E. We go out and source the electricity on your behalf and then PG&E does the Delivery and the billing We have been hugely successful the last two years since we launched and I know the city of Santa Cruz still maintains one of the highest enrollment Rates out of all of our service area about 97 percent. So we applaud the city of Santa Cruz for all your leadership But most importantly We're here to advocate for this transition to electrification As a as a public agency that's here to to serve the public to provide resources and opportunities Based on our joint powers authority goals We truly believe that electrification is that course of action that every city or county has to take as well as every individual Rather your resident or business to move us towards this carbon-free society that we're all striving towards So we really see this as paramount But we also have to do this in an equitable and cost effective way This isn't something that is just for folks with means we have to make sure that this electrification happens for constituents from all income levels, so I just want to make that make that known that As we develop programs and we invest in the in the Central Coast We want to do that through the lens of equity as much as possible The one great thing that I do like to note is that we now deliver a savings on a monthly basis So if you're consuming electricity, you're saving about three little over three dollars a month for an average residential customer And that increases every month based on consumption. The great thing is is our our discounts have Increased year-over-year since we started service. I think this year in 2020 We're estimating delivering almost 20 million dollars of bill savings in 2020 to date We delivered about 18 million dollars of bill savings in 2018 and 2019 So when folks are worried about is electrification going to be more expensive Well, if the status quo was you just had PG&E for your full bundled service and you were moving towards electrification It would be more expensive But now that we're here we're helping to drive down that cost on a monthly basis So we wait when we make that switch you're going to be paying less than you would be with the incumbent utility As staff has mentioned we embarked on an electrification strategic plan And again, this is more or less a roadmap for us to kind of get our bearings about what is the central coast look like in terms of Housing stock vehicle stock you name it and our real core focus was on the built environment and the transportation sector Because those are the two sectors of our economy where we can have kind of significant influence as you call it You know we not so much around waste and other kind of forms of monitoring greenhouse gas emissions But as an electric utility our basis is all about kilowatt hours So we want to focus on that in the built environment in the transportation sector so we had this great plan that we had adopted late last year and All the tasks kind of roll into this kind of guidebook for to inform how we're going to invest our program dollars So right now 4% of our annual revenue gets carved out and allocated to our programs And so as our revenue increases that program Budget increases so right now we have got about four point three million dollars available for energy programs that we've already had Kind of deliberation about where the money is going towards but as we start expanding resources that will become even more and more We're trying to just get out the gate deploy our resources Effectively get some success and then start increasing that budget so we can kind of deploy these resources across our service area But what we did find in the in the electrification strategic plan was that you know while 82% of the emissions that come from whether the built environment of the transportation sector come from vehicles We still found a lot of fair amount coming from the built environment and that comes from whether it's propane use or Natural gas use in the built environment and you'll see the the pie chart that's even more broken down We actually analyze all the different types of kind of uses of of energy in the built environment And we saw a very interesting mix of where the consumption of natural gas or propane is coming for so it's a pretty kind of equitable Split in that sense But what it does allow us is visibility into where we can kind of dive in and start Investing in in programs to really make this change the other thing that we also notice in this report That's not here is the opportunity of propane to electrification is huge because that's one of the most cost of way Cost-effective ways to do it We've actually identified the pockets of Santa Cruz County that have a high saturation of propane use and that could be another Opportunity for us to make that transition to electrification especially in those hard to reach areas So what I did want to mention is right now in our in our budget for programs We focus on kind of three core tenants or sectors transportation electrification building electrification and then community resiliency But we're here to discuss about reach codes and building electrification So right now we have we have three programs that we're developing that we have approved budget for One is actually really exciting. The first one is to provide incentives to our member agencies so right now we have 21 member agencies across Santa Cruz Monterey San Benito and now the cities of San Luis Obispo and Morro Bay We actually have 11 more Member agencies on our respective boards, but we haven't enrolled those customers yet and we're going to do so in 2021 but the point of this Reach code incentive is to provide an incentive for our member agencies to bring forth and adopt a reach code And so what we're evaluating is it's kind of based on the housing stock How much housing stock are you going to bring online over the next kind of 10 to 20 years? And what are the avoided emissions that come from an all-electric building stock because one of the most effective and affordable ways to Reduce emissions in the built environment is to not put any of the gas lines in or anything like that from day one It's extraordinarily Expensive and and challenging in the existing built environment to get into people's homes to do panel upgrades all that kind of stuff So we want to approach it from two perspectives Which is one supporting our member agencies to galvanize and support reach codes at the municipal level and then help with incentives to move The market and get it moving that way This one I'm I'm super excited about this had been kind of a dream of mine I actually came from the first CCA that started up in Marin, MCE And I had all this wild ideas about why not do grants for Developers whether they're affordable or market rate so that they don't put any gas lines in their new construction and Gratefully enough NBCP kind of saw that as a good opportunity. So right now we are developing the program We're getting dangerously close to providing the incentives So we'll have incentives for affordable housing developers and incentives for market rate developers So the total budget will be one point two million dollars, and it'll be a grant program basically developers whether you're Eden housing Midpen Chispa, we've talked to a lot of the great developers in our region to kind of understand and help inform the program As well as market rate developers So we're we're kind of tracking for if not in April, but maybe very early May launch So that's when the grant application would go live and the developers would apply and then hopefully we would have those funds Reserved within this year so that they can move towards and it basically what it does is we found that a lot of the developers We're still entertaining, you know hybrid New construction systems so it would have gas lines and electric an electric So it'd be a hybrid system and what we found with even with this incentive Which isn't going to amount to a huge amount of money But at least it got them thinking about redesign and thinking about going all electric So we do believe that incentives will help kind of guide the developer community in the right direction And and the goal for us is to have this program go on for a few years and to expand maybe the volume or the amount of money But maybe reduce the the incentive each year as you get more uptake because what we're seeing is there's a lot of development That's not only happening in the Monterey Bay region But also down in San Luis Obispo and as well as Santa Barbara in our our service area will be 8,000 square miles 32 jurisdictions and 400 there 430,000 customers by mid next year So we've got a lot to do But we also truly believe in the leadership of the city of Santa Cruz that help kind of move this Approach forward because we can replicate the model that's being done here We can certainly take that to our other jurisdictions and and stand you folks up as that leader to kind of galvanize the central coast around building electrification Last but certainly not least I did want to mention that while we're focusing on reach codes and new construction We are going to look at helping homeowners To electrify their homes and the first shot is going to be a package program where we'll provide incentives for heat pump Outwater heaters home EV chargers, and if you need a panel upgrade some funding to help that that is the biggest Challenge to a homeowner right now is having adequate space on their panel or an adequate panel to get the new appliances There also is the challenge of the transformer, but at least we can identify and help lower the cost for adoption At the at the customer level and if there are those added kind of infrastructure needs Then at least the cost is being mitigated to some extent, but I think the benefits again safer and healthier homes I don't think we can talk about that enough the fact that with electric homes electric appliances They become safer better air quality, especially with some of the issues that we're dealing with from time to time about air quality Why not make your home as safe and healthy and that is the most important thing no matter what like to be able to have an Electrified home that becomes a safer and better environment for yourselves and your kids or your pets or whoever else is living there And on that note, I think I can turn it back to staff Thank you so much chair. We really appreciate that Okay, we're going to continue on a little more specifics on why electrification as this slide shows over 70 million homes and businesses in the US Burn fossil fuel on site for space heating and water production. So hot water production So that's really what we're talking about here in California 25% of overall emissions are from buildings and as we saw in our region when we're talking just about Transportation and built environment about 18% So that's really the thing that we're going after here through building electrification and just to show you this is California in California gas use in homes and how that is Proportioned out and again, you really see what we're trying to go after here, which is water heating and space conditioning And there are alternatives to natural gas and Kurt's going to be talking a little bit more about that in a moment But another thing that we want to point out is not only is there on-site? Combustion that we're concerned about and we're going to talk about some of the indoor air quality issues, but there is also leakage across the Supply chain for natural gas from extraction, which you can see on the right-hand side all the various Repositories of natural gas and fracking the leakage rates that accompany those and that leakage is meant that methane methane is significantly More stronger of a greenhouse gas than carbon dioxide so The leakage is a big point here and you can see in the graph on the left-hand side, which is the US greenhouse gas emissions inventory the far right-hand graph shows that there's a 24% increase in Carbon dioxide equivalent that's released simply from that leakage so that is substantial Okay, some of the benefits of a look electrification are not just around emissions and we're going to go over some of these in more detail than others in in terms of superior of comfort Occupants of buildings have found that electrified buildings that are heated by Heat pumps for space conditioning are Superior in that they are very quiet. They provide constant heat and They are not intermittent blasts of hot and cold like conventional gas furnitures of furnaces excuse me We're going to go over some of these other ones in a little bit more detail With respect to public safety You know as I mentioned this leakage is already happening That was the cause of the San Bruno fire where an ignition spark ignited leaks and so we have seen that across the US and Eliminating natural gas infrastructure or minimizing natural gas infrastructure will eventually mitigate this legacy Infrastructure that Utilities like PG&E have that caused these kinds of catastrophes also with respect to indoor air quality there are a number of toxins and chemicals that are released through combustion and Air pollution levels in 55 to 70 percent of homes would actually be illegal if they were outdoors There is no indoor air quality regulation But if that air quality was outdoors, which is regulated it would actually not be in compliance And really to hit that point home We Discuss this supper smog when folks are are everyone's cooking and you can see on the on the right-hand scale If you're if you're preparing one dish and then on an electric cook stop cook stove rather You are below 2017 outdoor air quality standards But as you look at preparing one dish in a natural gas fired stove or or Cooktop or a full meal you are far exceeding outdoor air quality standards and There have been a number of studies Including in the lower-ranked hand corner California's Air Resources Board That finds that indoor air Can but due to combustion is of poor quality I'm gonna hand it over to Kurt to talk about the the dollars Cost effectiveness. Thank you, Tiffany. I just want to add she's wrapping up the health Concerns about combustion appliances in the last five years. There was peer-reviewed medical research that indicated that for women in a late-term pregnancy up to a 60% increase in the in the probability of a miscarriage with one acute carbon monoxide exposure So I I've shared some of that information with colleagues and as I visit projects So just also wanted to add that so in this slide. We're going to take a look at The transformation in the built environment on the left. We see our two Trends and how together they're going to Result in a lower energy intensity in the built environment Now the numbers at first are a little bit puzzling because we're suggesting here on the far left an increase in electricity consumption of say 30% resulting in overall Say in the high teens reduction in total energy intensity and you might ask well, how is that possible that math doesn't seem to add up It has everything to do with this The appliances that are on the market today even just five years ago are such better performance and using An electric approach for either heating water or heating the air in our buildings that that they are really driving this transformation Fundamentally the gas appliances in of legacy that we are used to use of combustible fuel to create heat energy Where it's needed either to warm water or the interior air of our buildings So with the new electric technologies, no new heat is created simply the ability to take existing heat energy from the interior and bring it inside or take Unwanted heat energy from the interior and remove it to the exterior at will so that's really the the transformation in the Appliances in the engineering that has achieved these milestones that is allowing this Overall reduction by fuel switching away from fuels which create new heat towards heat pump technology Which simply conveys heat from interior to exterior or vice versa So I'd like in this slide to go through Four different windows through which we can look at the the cost the cost effectiveness of electrification and and just before we start in the next two slides We're reviewing the cost effectiveness of the structure on its own The avoided costs when we look at the infrastructure the utility connections Which would be the structure plus the site and then we can drill in in the third and fourth windows on the present price of fuel And the projected future price of fuel and so as we move through this slide I just want to remind that that we have those four windows to look at the economic implications of what we're proposing So let's begin with sort of the broader Pitcher which is this the cost of the structure and the services that are Required and again, we're we're confining ourselves to newly constructed buildings So say we have a lot it's going to require new electric and gas service if we pursue an all-electric approach We still need the electric service more of it But we avoid Which according to PGD's own information up to 15 in excess of $15,000 for a new gas meter and a new gas lateral Now the California Energy Commission's primary investigator for their cost Metric also studied the cost impacts of electrification for San Jose There was a $12,000 net savings for an all-electric design new single-family dwelling versus mixed fuel And let's also pause for a moment and building our definitions for today's Study session when we refer to mixed fuel We mean a new building design that still pursues the use of natural gas with Electricity for plug loads all electric would of course be everything electric I think JR use the term hybrid and I'll continue to use the term mixed fuel So as we're reflecting on this first cost avoidance, I want to just reflect also on a statistic from the National Association of Homebuilders which indicates that Across our country for every $1,000 increase in the price of a home That's another 9,800 families that can't afford it. So there's considerable cost sensitivity. So All electric designs for the opportunity to potentially create more affordable housing in the supply of new buildings that are available Now let's let's move on and consider something that is incredibly intriguing when we reflect on the absence of this information if we're going into a rental agreement or we're looking to buy our first home or Maybe our second home and that is the projected on-bill utility savings based on the design of the home So in the cost effectiveness studies that I have been Analyzing and I've shared with my colleagues the energy commission has a Methodology which uses a metric on his TDV. We look at a 30-year period We look again at the incremental cost a slightly more efficient water heater better windows more insulation a Radiant barrier in the attic to reflect the infrared energy that normally would escape When we look at the analysis, we look at the cost of those features and also the savings and any maintenance cost of Applying that slight change in that building system. So With the reach codes We have even a higher bar to reach which is not only using the TDV metric But looking at exactly on utility bills, which is what we're talking about here so all of the measures that we'll be talking about later today are Specific for our climate zones demonstrated to be cost effective Which is to say that both using the TDV metric and the utility bill metric over a 30-year period The savings exceed the incremental costs to make the building more efficient either through an envelope measure or a more efficient appliance Now before I move on to the next window I I want to reflect on the fact again that for a renter or for a home buyer This disclosure of energy use intensity is really a black box and it's it's extraordinary because you know If we were to go out and buy a vehicle even a used vehicle We would have some inkling as to the fuel efficiency in the built environment We're slowly getting there, but particularly for residential structures It's just not something that the consumer has as a disclosure Now With the addition of solar solar PV, there's an there's an additional savings and why is that the case? Generally a high-quality photovoltaic array is going to last in excess of 20 years It pays itself off at approximately year seven meaning that for every dollar spent We're going to get that dollar back and another two dollars, so its net present value would be two dollars So for an average home with the average size of ray. There's an additional yearly savings of approximately five hundred dollars so I want to move on now to the Third and fourth windows. I was talking about which we're looking at the fuel comparing the price of fuels, so First of all when I spend some time looking forward so again E3 the primary investigator for the energy commission has done an update to their life cycle impacts metric So if we look at the projected compound annual growth rate for electricity versus gas huge difference 2.7 percent for electricity and 4% for natural gas, so if we fast forward to the year 2030 The thousand dollars that I'd be spending today in this year 2020 Would would would be over thirteen hundred dollars for the electricity, but approaching sixteen hundred dollars for the natural gas So again, if if we're creating particularly new rental units There's going to be a increased erosion of disposable income with Staying with the fuel design now I Also have a story. I've been reading a lot of cost-effectiveness studies But sometimes, you know, you're you're just you're digesting a lot of economic and technical and Policy or legal information. I have a story to tell you Part of my work with the city as I'm a field inspector in the last 12 months. I've Performed over 120 inspections. It was just last month that I learned something quite extraordinary that relates to the cost-effectiveness Study session that we're conducting today and that is that for multifamily new developments the utility provides the developer a per-unit credit towards the Labor the materials and the non-recurring engineering so I mean the engineering that would look at the adequacy of the Distribution electric circuits and the and the the nearby large gas lines And so sometimes it's going to depend on the location There's a very minimal cost or maybe it's entirely free. It's going to depend on the location of the development So this is information that I didn't encounter anywhere in any of the cost-effectiveness studies that looked at the Avoided cost so the whole site with the new building and it's quite significant and quite interesting so I'd like to move on now and I was talking about the projected annual growth rate in the different types of fuel I now want to take a moment to reflect back on six years of data between 2012 and 2018 over that time period Gas the gas the price of a therm of natural gas increased by over 20% Compared to the rate of increase for electricity and you can see that on an annual basis And it's interesting looking at this graph that primarily that divergence occurred in the years 2013 and 14 and Similarly for the next three years we Anticipate a steep increase in the price of natural grass relative to electricity, but nonetheless over the decade those compound annual growth rates that I quoted of what e3 estimates so the trend that I've Sighted that will likely occur in the future We can see has already been occurring in the past and there there's a suite of complex reasons for this But part of it is ensuring the safety of the infrastructure Now in this next graph we look at a scenario in which building electrification proceeds at a high penetration rate But there is a poor transition strategy in terms of the maintenance and delivery for those customers that remain And as a result the price appreciation for a mixed fuel home, which is shown in yellow Diverges quite steeply from the all-electric home now. This is this is not certain how this will actually occur But but this is a possible risk I now like to reflect for a moment on the operations of our residential red till inspection Program and some of these photos actually pertain to electrical safety issues But many of them pertain to gas appliances and particularly one of the top three is the seismic strapping on gas-fired tanked water heaters so if We as other municipalities enact an electrification Ordinance of some sort it would take decades really to probably see a noticeable reduction, but but these are pressing issues today With with the gas appliances, so I just wanted to remind counsel of this, you know operations So at this point I'd like to invite Amy Amy Ryder she's the acting Director of policy at the building decarbonization Coalition and I'm just gonna advance that I'll let you take it away Thank You Curt. Thank You counsel Again, I'm Amy Ryder with the building decarbonization coalition You may not have heard of us. We're actually a fairly new entity about just under two years old and we are a membership-based broad coalition of Many many stakeholders with regard to buildings so that includes local governments Utilities certainly our CCA is included as well as manufacturers and builders And so we look at how do we get carbon out of buildings and what I wanted to share with you today really relates to The company that you will keep if you continue to move forward with reach codes In particular this has become a movement and there are When we started let's see it is now February So since February of last year when the first local government took action There are now 27 local governments in the state of California who have adopted some form of zero-emission buildings electrification preferred or electrification only building code in their jurisdiction and So you'd be among friends if you continue to proceed and I'm just wanted to kind of drill down into what that looks like Because there are a few different options out there and certainly staff will be presenting you their Kind of suite of options, but there are lots of different approaches that cities have taken So this this list gives you kind of a glimpse into what folks have done Number one here the electric preferred and all electric buildings are the two options. You'll be considering today All electric retrofit buildings actually is not terribly popular Most cities are actually opting to go Slightly more aggressively when it comes to new construction in particular Many cities more than half have chosen to expand solar requirements for commercial buildings And and there's also the option of a in-loofy if you were to do an electric preferred strategy where there's actually a financial penalty For anyone using mixed fuel construction And then the one that gets all the press the gas prohibitions like the city of Berkeley and Now residential construction for San Jose as well, which has moved forward with a natural gas prohibition So that's that's the one we hear about in the news most often because it is the most Progressive I guess you could say and then number five on this list is really about electric vehicle charging requirements and again I Think about a third of the cities who have moved forward have had some additional requirements for electric vehicle integration with with the built environment So here's Berkeley very excited they were the second in the state and they went out charging the front But It's not just Berkeley This is this is a list that breaks down by type. So we have the the infrastructure moratoriums The all electric reach codes, which is definitely the largest group and the group that is growing the fastest and the electric preferred one thing that this graph does not show you is that there's a time mechanism to this and Electric preferred was much more popular when we started this effort and all electric has become increasingly popular Especially in the fall of last year when the lion's share of these were passed more and more cities are choosing to grow electric as the Education and awareness of what that looks like and how it operates in in your homes in your offices in the buildings around you It's becoming increasingly popular And this is just a that same data set broken down by how many jurisdictions So again, the all electric reach is not quite half, but it's it's a growing number electric preferred is certainly a large Chunk as well, and then the the Berkley's of the world or are the the smallest group on this graph. So We don't yet have any jurisdictions in Santa Cruz County But what we've seen across the state is one one jurisdiction in a region takes action many other jurisdictions are likely to follow so Thank you for listening. I'm happy to answer questions as we get to that part of the of the day, but I'm Curious to see what you all say. Thank you Thank you, Amy. Thank you So I'd now like to spend some Opportunity here to Look at the appliances as we're calling the red circle in the earlier slide where we were adding up the increased electric consumption with newer appliances And reducing overall energy intensity of our built environment. How is that possible? In the top we're going to look at the energy consumption of legacy natural gas appliances 0.95 that's an energy factor. It means for the energy input What is the effective rate of energy transfer for which the purpose of the appliance was created? So whether we're heating water or air if we take the energy content of the fuel We can actually Exceed 95 6 maybe 97 0.95 0.96 0.97 So from an engineering standpoint that looks quite extraordinary We can we can do recovery of the the combustion heat and Pre-cool or the air or the water that's heading into the appliance and so it looks like we've done a great job There's two problems with that The first is is that molecule for molecule? We have CH4 is our primary fuel methane becomes a co2 molecule It's changing the chemistry of our atmosphere and particularly the ability of our planet to lose infrared Energy that's causing a temperature rise That's compounded by the problem that there's a whole Set of supply chain impacts due to leakage So we first have to find a mineral reserve where natural gas exists We we have to store it seasonally. We have to use large pipes to transmit it and smaller pipes to distribute it to our users in the case of the utility now The average leakage is somewhere between two and five percent. Let's call it three percent So with a global warming potential of 32 that three percent now becomes 96 so we've we just about doubled the impact because we have very close to a perfect system But there's a small amount of leakage which is potentially economically acceptable from the from the aspect of delivering a product and having it Be profitable operation, but in terms of the environmental impacts There's serious consequences. So even if we were to somehow achieve a perfectly 100% efficient natural gas appliance those two other problems would remain So that sets the stage for why we want to pursue electrification switch fuel away from creating New heat using a combustible fuel and use electricity So now let's let's go down to the bottom to the electric resistance So this represents a family of legacy appliances that use the current circulating through an electric circuit To heat either water or air There's always a portion of the circuit that has nothing to do with the heating for which the appliance was created the control circuitry We can never reach a hundred percent efficiency. So let electric resistance again We we we have this barrier. We can't really tunnel through this one and we actually never achieve it And as I mentioned earlier with heat pumps, it's a complete New approach to what we're trying to do to create comfort or maintain comfort in our buildings And that's to not create any new heat but to move it around and that's why it seems to defy logic But the efficiency of a heat pump can exceed 350 percent Why and how is that the case? Well, the electricity is being used to move heat energy from the inside to the outside or the outside of the inside It has to do with the universal property of all fluids When they condense they release heat when they evaporate they consume heat And so we can manipulate that with the proper Engineering to create appliances as are now available commercially on a widespread basis to achieve our electrification goal So before we move on I want to talk a little bit about how a number can become a reality I mentioned that between two and five percent leakage. So last week while I was actually working on this presentation I came home and My spouse told me and I have something really important I have to tell you about the work that you're doing right now and That morning when I had left I had heard a saw blade cutting through the sidewalk across the street and into the street in front Of my house my neighbor was having their sewer line replaced because it was having a problem And it turned out that the contractor heard a hissing noise after they removed some of the coverage And it turned out that was a leaking gas line to on our street and our fire department shut down my street and PG&E came out and subsequently they fixed that leak and they they went through and they went through the whole street and look For these things so you know the three percent can become not a number, but Reality so just wanted to share that story with you All right, so we're now going to take a look at what are the replacements for these appliances look like We're going to start with the left column on space conditioning So we have examples of residential and commercial heat pumps Heat pumps can operate in the cooling or the heating mode and we see a larger Form factor for a commercial unit that's conditioning a larger volume of area that's occupied We move over to the second from the left the column shows electric heat pump water heaters and A different approach in the bottom with commercial Later we'll see several examples, and I'll show you some of the differences on the water heating approach As we move over to the Third from the left we have cooking appliances for residential and commercial in the case of commercial or kitchens the electric steam cookers are very readily available option for restaurants that are interested in electrifying either partially or completely their food Preparations for their clientele finally on the far right. We have clothes drying With electricity. This is achieved through what we refer to as a condensing dryer So rather than using heat to evaporate the moisture in our clothing that we've washed We alter the humidity in the vessel in which the clothes are rotating and we pull the moisture out if we add a heat pump to that it becomes even more efficient and There are choices for both condensing and heat pump condensing dryers in the marketplace So let's put this all together. What does it look like? This is the example of a new Valley home in Sunla, California in the top We see the photovoltaic array on the roof of the new structure on the bottom left We see the Condensing unit for the heat pump which is either cooling or heating the interior air and Bottom center we see a closer view of the heat pump water heater and in the far lower right We see a pie chart which examines the Electric consumption by segment so starting with the light blue and going clockwise. We have cooking We have the heat pumps operation We have the cooling mode as opposed to the heating mode of the same appliance We then in green have the water heating We have in purple all of our electric loads and we have lighting and finally our food refrigeration In this slide we look at a very economical Example of an appliance that's all electric that can complete that can replace a very low-cost gas mount wall furnace now in the past a gas mount Wall furnace was one of the most economical ways of heating and dwelling unit because it didn't require any ducting and again with this wall mounted Heat pump it has a peak load less than a higher dryer on high So 1200 watts and it uses 120 volts. So it's a very economical Option for conditioning a space it has an additional advantage over a legacy gas Wall mounted furnace in that it has a small electric fan which circulates there actively so it improves the Thermal uniformity the temperature gradient if you will from top to bottom or left to right of the rooms being conditioned In this slide Spend a moment taking a look at different heat pump water heaters The four product offerings on the on the right so excluding the the left unit Labeled as sand and co2. These are all hybrid heat pump water heaters So they provide a backup circuit if it gets extremely cold outside We can no longer operate in the heat pump mode and we switch to electric resistance Which was what I was talking about early the legacy now in the last four to five years heat pumps that are hybrid have improved tremendously in terms of the The temperature at which they can operate in terms of exterior temperature and still remain in the heat pump mode Best of all these however is the heat pump on the far left It uses a different refrigerant referred to as r7 44 What's remarkable is it's actually co2 that's taken out of our atmosphere So not only does it have the highest performance to the to with the coldest coldest ambient temperature at the end of life of this appliance it has a Null environmental impact because we're all already creating medical grade oxygen or nitrogen or other exotic gases And have to liquefy the components of our atmosphere So here there's a new market for liquid carbon dioxide as a high as the highest possible performance refrigerant for an electric heat pump water heater Now there's an additional advantage of the sand and in that it's one of the few product offerings that come in two sizes So if we have a very constrained mechanical room and an all-electric design might potentially be adding cost the sand and comes in both 43 and 83 gallon offering and No, it's just that this particular company has all those advantages obviously the city does not endorse any Manufacture model it turns out that in Japan sand and has nearly half a dozen other competitors They're using the same type of refrigerant, but there they'll be hopefully coming to North America So we'll have competition in these higher performance heat pump water heaters Before I leave this slide. I want to reflect. It's it's quite interesting the American Gas Association has published its own study on building electrification and some of the peculiar assumptions in that study are that Electric heat pump water heaters don't have the performance of the models that you see here Before you and that they switch over to the electric resistance mode at a much higher ambient temperature and ignore entirely the new family of offerings Such as the R 74 on the far left. So some of the conclusions of that studies you might imagine You know basically Challenge some of the benefits that we're telling you today, but I just wanted to to mention that You know, there's there's other studies out there and some of the assumptions might be questionable This how many how many folks have seen these these these labels before anyway, what else in the audience? Okay, I got a couple folks there So this is a a federal certification for appliances as it as it turns out water heaters have been receiving this appliance for several years It turns out the dryers have just Been eligible to receive this What's interesting here this gas appliances you'll notice that on the The bar graph. It's all the way over Plugged on to the far left. So it's one of the most efficient possible gas Appliances and yet the electric is still has a lower cost So you can see the energy star label here on the lower right. It's there's a little arch with the black square in a star Jr. Killigrew mentioned one of the challenges with our existing built environment and and some of the incentives that Mara a clean power is considering Surrounding electric service panels. So there are some innovative product offerings that can allow the existing built environment to Transition and not trigger that by sharing the load so that there's an active Governing circuit so that we don't exceed the amperage rating of our our existing building So there's some very clever Enabling things that can help us with this transition the focus primarily today is on the newly built environment But I did want to share this Here are the dryers that I was talking about earlier Some of them use a heat pump with the condensing approach and others are purely condensing and Finally, I want to show this picture of a resort. It's an ocean side resort and it's pool And it's far heated with a heat pump So it's not only an all-electric resort, but that that specific Amenity for its guest clientele was achieved with an all-electric approach So with that I would like to invite Taylor Darling of Santa Cruz Green Builders to share a very valuable perspective from Someone whose Project manager and working with plans are cities approved and actually creating structures and and your take on Electrification the challenges and the benefits Thank You curd My name is Taylor. How's everyone doing today? So I'm a builder and we actually put these technologies into our homes and So I'm kind of here to give you a little presentation on The nuts and bolts how it actually works. We've built three all lecture. Well two all electric homes and one electric adu So it's not rocket science. It's actually fairly easy The technology is all here as Kurt just showed with the Water heaters the heat pumps are really the big item there and the technology is not that new It's been around a long time They were installing heat pumps in Japan and Europe long before the US and we've been installing heat pumps for about 12 years so it's it's tried and true technology and it works and There are plenty of subcontractors in town that install them. So it's it's pretty easy Let me give you a couple examples of how in One of the adu that we did that was all electric how we were able to do that we Did a solar hot water heating system that preheated the heat pump water heater and that that can be a solution that can even increase the efficiency more Just by preheating the water going into the tank style heat pump water heater You can do that on any system if you've got the space to do it And that just makes it way more efficient and a lot of times you don't even need the heat pump feature to turn on and then We did two mini splits which are Smaller heat pumps that are used to heat smaller spaces. They're ideal for ad use The only downside to them is that they have this interior head That's kind of like this Wide plastic head that some people don't like but you can hide them creatively and make a bookshelf around it or something like that You are mentioning efficiencies for water heaters that are like three point five So it's you know the efficiencies for the heat pumps are For space heating for air heating is about the same. It's about three point five. So that's three hundred fifty percent efficient versus You know the best condensing gas water heaters that we've been putting in or 97% efficient So the jump here is enormous 350 to 97% so huge huge gains and efficiency by by doing electric and then We've been adding solar onto our homes to also power these Appliances grid tied solar arrays. So we do you know you draw from the grid at night when the sun's not out And you give back during the day, right? So That basically makes these houses just zero out if you size them correctly and Then for for cooking a lot of people are kind of hung up on on the cooking losing your gas to cook with because people love gas flame to cook on I think it's In our our DNA or something to cook on flame, but The induction cook tops are really great. They're very efficient They are the really the best of both electric and gas. They're more powerful than gas and they're very easy to control it It's basically a glass surface. I don't know you guys have seen these but it's a glass surface with an electric Electromagnet that flips the polarity and the The iron molecules or atoms are flipping Thousands of times and creating heat in the pan itself through electric resistance So it's it's a pretty amazing technology You're able to get a lot more efficiency when you're cooking and you're heating the pan only the heat with gas mostly goes around the pan but They're they're really nice to cook on They're they're more powerful. They're more controllable than gas. They've got you know 20 different like heat settings so You can boil water in 30 seconds a cup of tea or something. So they're really really nice actually the other big hang-up that people have is With going all electric is losing the gas fireplace. That's a that's a big one and That's a big one for me, too I understand that like it's having a gas fireplace is pretty nice to have that source point of heat, but I think there's already some Decent electric fireplace options out there if you're looking for like a radiant source of heat and People will get creative if this becomes the you know, this is the future so One day there's gonna be like a TV screen of a fire with Blowing heat or something right people people are gonna come up with these things so The other house that we built was a large house. It was you know good-sized house 2400 square feet the whole house has a Pretty normal forced air heating system But with a heat pump heater and a heat exchanger inside that forced air heater So you basically got the big outdoor kind of fan that you guys have seen more in Commercial buildings, but you hide it somewhere and that brings the the heat in through the coils and Then there's a heat exchanger within the the forced air heater that distributes the heat out through the duct work into the house and That's a pretty easy approach. It's pretty Easy for the the contractors to install it's not that different from conventional systems there's just a couple extra steps and This is already the main way that commercial buildings are heated and cooled So it's it's just kind of applying more commercial technology to residential Electric dryers we put them in all these of course the heat pump dryers are Are definitely better even just a regular electric dryer Can work to or just putting your clothes out on the line More solar on this house we we did about eight kilowatts on this house to offset larger house larger needs and They've got electric car as well Induction cooktop all LED lighting that's something that we do in in every house that we build all LED lighting That's a really easy one LEDs use one sixth the amount of Energy of incandescent lightbulbs and then energy star appliances are Really easy to buy these days. So basically every manufacturer Mostly produces energy star appliances these days So Yeah, those are a couple Example homes that we've done as far as what appliances we use and how to achieve it and it's also pretty easy to do a few extra things when you're building the house that don't cost a lot and Reduce the overall load on The solar like the heating and the heat pump heaters for instance if you wrap the whole house all the walls in An inch of rigid insulation or even to you know two inches is even better that Significantly reduces the amount of energy you need to produce. I wanted to talk a little bit about cost implications You you gave some rough numbers about Potential savings for not doing gas and in our own work We've seen those those numbers are are really similar to what we've seen for not doing a new PG knee tap in underground in the street you save Well including the trenching to the house and and the plumbing to the house for the gas And not doing the gas piping in the house you save between 12,000 to $20,000 That's based on projects that we've done and So that savings you can put right back into other Components that will be a little bit more expensive the heat pump water heater the heat pump space heater Art they are more expensive than the gas counterparts and So you're gonna spend an extra Six to $8,000 on those appliances in most cases depending on the size of the house and everything but That's a good ballpark number and then The stove your you know an induction cooktop is gonna cost about a thousand dollars more than its gas counterpart So overall what we've seen is that you save about five to ten thousand dollars by not doing gas at all and You can put that savings directly into a solar array that will make you money over time so As far as cost, I don't I don't think there's a cost burden to go electric and I think it makes sense for people It's an investment that pays off Some challenges that that we have seen One is in order to get plans approved there's a step that you have to take which is a title 24 energy modeling for all new homes and That's a it's a California state law to do the modeling and It has penalized electric even heat pump very efficient appliances, so There is a new code cycle that just started January 1st, and it supposedly doesn't penalize the heat pumps as much I Think that was like legacy stuff that was in there when heat pumps were not very good or something many years ago So hopefully that's gonna change because that's really been the main reason that we don't do all of our homes all electric we basically do as much electric as we can and then we do high efficiency gas water heater and furnace for most of our projects because The tile 24 number and you get a huge credit if you do gas appliances so that to me is the biggest roadblock to Have everyone do all electric homes. There's really not much reason not to do it and so I'm an expert in the tile 24 modeling and it's it's pretty complicated. So I know it's supposed to have improved January and we haven't done a new home that was permitted with the the new code yet. So we'll see Another challenge is For homes that will be built in the trees, you know in the forest with with shading To do all electric means that You can't do solar There's a lot of new options Coming up some I think are are happening now where you can buy into like community solar But for those people that are in shady areas and Or if your roof just does not is just so many angles that you can't do solar You will spend Might spend more on electric than if you had gas But as Kurt showed that the gas prices keep on going up and You know, you're still gonna spend money on on gas so It's not it's not a huge burden But that is something that I can see as being a little bit of a challenge is just dealing with Some you know, they're around here up in Felton and Venloam and Boulder Creek There's a lot of big trees and a lot of people will not be able to do solar So you can still do all electric, but then you're gonna be basically forced to buy from PG&E or Perhaps you could buy into one of these community electric programs Another challenge that I see is some of these technologies are still fairly new and We've had a few issues with The heat pump water heaters Those are the newer ones the the heat pump space heaters Or they've been around longer. They're better. We haven't had issues with them But the water heaters I think that's just you know, they're still working out in some kinks there But they're they're pretty good most of the ones we've put in and we haven't had issues with and Yeah, just one last kind of piece of just a reflection, I guess is that Right now high efficiency wood fireplaces are still allowed and it seems like Part of this would be Possibly outlawing them completely which I'm not sure I'm a Proponent of necessarily they are dirtier, you know fireplaces emit a lot more Particulates and they're they don't burn as clean as natural gas fireplaces and that's why natural gas part of the reason natural gas has become so popular but that just seems like that needs to be figured out a little bit and Maybe there should be an exception still for them Because one of the things with green building is like building and resilience and if there's gonna be all these power outages potentially for a while For people to be able to have some source of heat with a high efficiency wood fireplace could be Anyone have any questions Or builder It's Taylor We do have two other folks that we would like to speak and then we can certainly open up the conversation to questions Is that alright if we just wait? Thank you so much Taylor We appreciate it. Thank you Taylor And we will also share with you some of the points that Taylor made are in the options that we'll be presenting to for example Fireplaces is not something that we're looking to regulate So we will give you more clarity on what that looks like in just a moment I next want to invite up Pete Kennedy from bright green strategies He's going to give you the designer and hers Raider perspective a little bit different than Taylor from Santa Cruz Green Builders and I'll ask you Pete if you wouldn't mind keeping your your comments to under five minutes And then we have Rob nicely from Carmel builders also No problem. Hi everybody. Nice to see you all Walking in I was like, oh, this is great. All of Santa Cruz can agree on this the climate stuff the environmental We always always agree. So that was a nice feeling for me Great news the title 24 software is fixed This is what I do in my day job and essentially the state Switched from energy to carbon the minute they did that it became very clear They can't keep burning natural gas even really efficiently and meet any of our climate goals I mean the graphs are amazing with this technology and without it So that was really good news. It's a game changer What we're working on now in our office We do about 40% affordable housing capital a subsidized affordable housing So I was thinking of a couple projects. I've worked on one is the Riverwalk apartments That was five or six years ago. It's right down by Bank of America And that one has a huge solar hot water system, which is not what we're talking about That's a pretty good solar technology relies on a lot of moving parts a lot of pumps. It's great It's better than nothing But I remember the plumber out there Commissioning that system for like a week, you know getting everything working getting all the parts to talk to each other And it works. It's still there. It saves about half the total energy of that building So that's what for affordable this all electrification does is replaces all that with solar panels and electronics that are much more reliable Then a hokey, you know Old solar thermal system. There are still places for solar thermal. It does offset gas But that's what I was thinking about the second project is actually in the county But it was st. Stevens senior housing. It's up at the church there. It was a great project That's half and half, you know, you have little you don't need much heating and cooling. So there's little p-tax they're called in the units and We had this huge roof and you had to give half of it over to the solar thermal So I can speak for our affordable clients midpen Eden housing all the people we want to be building in this town This is not only a great idea for carbon saves money to window developers ever get anything that saves them money I mean, it's just unheard of so the numbers on the next affordable project 1500 Capitola Looking to be about a 30% cost savings by skipping the gas. That's great. That's direct money. It goes right back into the project What else can I say? For the single-family homeowners, I think it's important to keep in mind This is a new construction thing. So, you know, it's your one big chance to invest in a new house That will be there for a long time a lot different in Retrofit or existing and I appreciated that the proposed policy kind of makes, you know, set those lines and treat it the different sectors differently. It's a big difference I mean, I have a gas fireplace in my house and it's our sole source of heat and you know I hate the bill, but we crank it up in the winter. So we need to be reasonable The other thing I've studied and to finish up here is all the other barrier jurisdictions in classic California fashion Everyone got this idea and just started passing laws really fast It's been really cool to see what different jurisdictions are doing first Berkeley nice and pure just outlaw gas And then I believe Menlo Park in Atherton left an exemption for your big gas stove, you know Which tells you something about Menlo Park in Atherton? San Jose has a really good model. They did a really good job with it in my opinion And so I'm happy to see that this follows that That approach to electrification. I don't see any downsides I'd say voted voted in as quick as possible and let's build some housing that's going to get cleaner every day It's open because the grid is getting cleaner cleaner Thanks. Thank you Pete. Thank you Pete and then finally I'd like to invite up Rob nicely from Carmel builders Rob not only does all electric but passive house design and has really been An advocate in our region for these electric reach codes Hi everybody Just want to say I really appreciate the opportunity to be in this room at this time it's really a pleasure to be in a room where this is being contemplated and Yeah, I'm a general contractor. I've been in building trades for 35 years the last 20 something years I've been a general contractor in this area and for about 20 years I've been doing my very best to understand what is reasonable behavior in the trade of building things and So Tiffany said it in the beginning but just to reinforce a point if you believe in the IPCC and the United Nations environmental wing and Reports they put out then per the 2018 gap report What it says is is that if we want to have a 50-50 chance of avoiding climate catastrophe We need to drive down greenhouse gas emissions globally by 55% and I listened to a talk by a good name Ed Masria who's who's the founder of architecture 2020 and He said that 50-50 is not a very good There's nothing to be proud of and what we should really be shooting for is a 70% chance of avoiding climate catastrophe By driving out climate emissions by 65% globally over the next 10 years so that's the backdrop of what we're dealing with and I've thought a lot about this and I spent a lot of time studying and trying to have some Facility and what that means what a person should go out and do if you believe in that and Broadly speaking there's three parts to it electrification is the first and it's probably the low-hanging fruit extreme Efficiency or in other words driving down the demand for energy in the built environment and Then in body carbon which is sort of the new kid on the block and it's the thing that people are thinking about the most right now but by and large People that think about this a lot more or less agree that we're not going to make it We're not going to avoid climate catastrophe unless we deal with those three things So the state of California has has come to the conclusion that the easiest and quickest thing to do is to focus on electrification and I certainly agree with that In the built environment the things that use the most that create the most greenhouse gas emissions are water heating and space heating and cooling and Then there's other things that are smaller contributors, but the upshot is is that Heat pump appliances are work phenomenally well And I I've been doing residential construction for a long time now And and there's no there's not a lot of pushback to using a heat pump appliance Nobody cares where their heat comes from as long as it comes from somewhere as opposed to Taylor was pointing out that it's a lot harder to talk a person out of their gas Cooktop and there's the issue of fireplaces, but the I've been swapping out combustion appliances for heat pumps in both space heating and water heating for about five years It's very easy to do there The appliances are on the market that are of sufficient quality that you can do that in good conscience And really the only thing you have to concern yourself with is that you're gonna need to bring make sure there's adequate electrical supply So you might need to run a new circuit And then there needs to be enough air around them that there's someplace for them to grab that energy So sometimes if the appliances in a closet you need to put a louver door on the closet But but we're not talking Somebody said already then there's nothing about this. That's rocket scientists. These are very very simple things to do and I've been again. I've been doing Construction since actually my pre-teens if the truth be told and We are we It's hard to get us to do anything new I've spent the last 20 years As a general contractor, I basically run a preschool of sorts and I'm trying to get people to do anything That's not the most common thing is not it's not easy to do so what what You're proposing or what one would have to do to create an all-electric built environment These are not complicated things and the all the infrastructure is out there already. It's just a matter of implementing so Like I said, water heating and space heating are two big things Time in use does matter. There is in the big electrical grid There is there's you guys probably already of know about there's there's a Peak demand in the evening where the dirtiest power is made and so Efficiency, which is one of the other parts of this Is about driving down demand and consequently Load shaping or decreasing that peak demand so that on aggregate and and the grid we're on as the western states grid There's there's less dirty power being produced. So there's there's you know, there's we have to deal with all these things but with regard to electrification per se I Sent some stuff to Tiffany is about an exercise who went through with the city of Palo Alto a couple years ago and basically we Partnered with them. Oh, I didn't mention a few things, but I'm I'm the past president of pass vows, California which is an industry group that is associated with pass vows international again a group that is focuses on energy efficiency and We partnered with the city of Palo Alto in 2018 to help them Incentivize the use of heat pumps and at that time actually all the manufacturers that Kurt showed showed up and Brought their products and talked to the community about what it would take to switch over to their products and something that I think is relevant for this group is that the manufacturers relate that If it's your intention to incentivize and that's the one that you're one of the ways that you're going to get people to Do this you need to have an incentive that runs through the Distributorship in other words, nobody ever wakes up in the morning and goes this is a great day to buy a new Water heater what happens is that a water heater breaks and then they call a plumber and the plumber goes to the parts house and buys a new water heater and If you let things play out the way they would naturally play out They're going to go get another gas appliance and slap it in and that will be their water heater for the next 10 years So if you can create an incentive program and have the people at the Distributorship and in your case you have a Ferguson's and a slaky brothers, and I don't know Taylor probably knows better than I do I know that everyone uses Ferguson down where I live but Here it could be one of the other but that's where everyone's buying these appliances from all the plumbers and sheet metal guys around here so if you had a program where You were involving the distributor and they were the ones that actually would fill out the paperwork and send in to get the incentives rather than asking the plumbers and sheet metal guys or the homeowners who Energy upgrade California when it came out and showed us that no homeowner or general contractor is ever going to fill out any paperwork If it means that it's going to cost them money or time. So so that's something that I would definitely suggest Yeah, so probably the main thing is just if you have any questions I I Have done both new constructions that are all electric. I have At this point I'm I finally after 20 years of sort of beating my brains out in the last year or two I finally have clients that are coming to me wanting both very energy efficient buildings and all electric buildings Which this is the first time that's ever happened and it's really really a good sign But I've done both new constructions and retrofits. I don't there is any time you're retrofitting anything It's more complicated and then when you have a nice clean slate, but I don't think you should be afraid of retrofits it's not at the end of the day this all just boils down to a certain amount of work and Conceiving of what needs to be done although a little bit more complicated in a retrofit situation. It's not fundamentally different It's just a little stickier, but that's true of everything when you're when you're renovating a building rather than Building a new building, but the thing to bear in mind is is during this period if you buy into the idea that we need to Do a lot of things right and be very aggressive over the next 10 years Most of the building stock that's going to be in service during that time already exists So you can't really not consider the existing building stock. We need to think about both of them I think that's everything I can offer and obviously more than happy to answer any questions Thank you so much Rob. We really appreciate it now We recognize that we're behind schedule. I just want to acknowledge that fact yet We are to the part where we would like to share with you what the policy options are that we would like for you to consider And what our recommendation as staff is that really takes into account all these conversations that we have had And I think gives you some really good options that are aggressive on greenhouse gas emissions So Kurt's going to take you through that and we're going to finish up with sharing with you the rest of the timeline and Outreach that we've done and we can hopefully get through that in about 10 10 more minutes Thank You Tiffany. So before we go into the slides I want to talk a little bit about what we're going to see we're going to see Flow charts for two options and for those same two options We're going to see a tabular presentation of the data with a little more detail and we'll also briefly discuss some other options that we eliminated and Then we'll move on to the comparison between the options for greenhouse gas emission reduction And we'll also look at impacts to the operations by segment of planning building and planning division So that's sort of just prepping you on trying to move through this So here we have the flow chart version of option a Option a consists of two legal instruments a prohibition of all new natural gas Infrastructure along with an electric preferred energy reach code And I'll talk a little bit why about there why there's two of those But let's first of all follow through this flow chart from left to right for the process for an application for new the construction of a new newly built construction and So from the far left Square into the feature just to the right of it There's a determination if it's an exemption currently the exemptions being considered would include a restaurant a new facility that Utilizes industrial process heat an additional dwelling unit that is less than or equal to 750 square feet or a new structure that would be contrary to public interest To pursue an all-electric approach So if we answer this question as a yes, we move up or infeasible Or infeasible and we move up to the right and they're allowed to build a Mixed fuel as I mentioned earlier in the presentation. So continue to use natural gas Which would be a code compliant design to the 2019 energy code If moving back on the other hand the answer is no it is not an exemption all of the applications for building permits would create a all-electric design and as we move into the Vertical rectangle on the right side of this slide. There are various requirements of the basic 2019 energy code if we move to the top part for residential There's a difference depending on the height of the structure if the structure is Greater than three stories Solar is not required if it's three stories or less It's it's built to the code compliant all-electric case and that includes Solar and it just very briefly to reflect on Taylor's comment. There is an exemption if the solar access is Less than 70% then it would otherwise be without shading from trees or adjacent structures or geological features There is an exemption so the code already covers some of those worst-case scenarios Now moving down to the bottom of this rectangle for non-residential again, if it's not an exemption The applicant would submit an all-electric design and would be built to code With no extra efficiency requirement. No PV would be required Now we're going to look at the same Option a in a tabular format and discussed in a little greater depth the the two Two things that are going on in terms of legal instrumentation so If we move from the left column to the prohibition we see again the requirements the prohibition would likely This would be in Santa Cruz title six health and sanitation It would pertain to newly constructed buildings moving down to the covered buildings under the prohibition It would be those new structures that could either apply directly for building permit or had a Interaction with our current planning and then in any ad you that would be greater than 750 square feet Exemptions that I mentioned earlier would include a determination of infeasibility all existing buildings with alterations or additions would be exempt if the structure was contrary to public interest to pursue all-electric if it utilized industrial process heat or If it was a restaurant or an ad you less center equal to 750 square feet It would be exempt from the prohibition now if we draw a line through the center of this tabular presentation of option a There are two legal instruments on the left the prohibition eliminates the choice of fuel on the right There is a requirement for higher efficiency if mixed fuel Were still pursued and you might ask well. Why is that the case? So in the existing pre-draft for the prohibition there is a legal clause referred to as severability What that means is that if any legal challenge were to succeed into determination that that prohibition or part of it was legally Challenged successfully that the remaining portion of the prohibition would be in place but we've we've actually done here is we've improved the severability by Creating two legal instruments on the left the elimination of fuel choice on the right if that were challenged and overturned All all our work would still be in place in terms of quantifiable emissions reductions by having the The electric preferred reach code so in the electric preferred reach code the choice of fuel is preserved But higher efficiency standards are required for mixed fuel buildings So in a sense, there's two lines of defense here There is an option a the and we'll see this later with the emissions reductions the greatest impact on Emissions from the newly built environment, but also legal defensibility and sort of a second line of defense with the electric preferred reach code Before I move on to option be a quickly I just want to mention on the far right. We have our city's green building program some of the things that we've put in place last month help designers create structures that are ultra efficient and they can participate in something known as load shifting and in the case of some other utilities qualify for lower electric rates by making the envelope Extremely efficient so it can coast through temperature extremes without using energy to cool or heat Also, we have in better intelligence with regards to the hot water distribution system it's almost a no cost to create this at the design phase and the homeowner benefits from Minimum electric energy wasted heat water because the storage of a hot water is centrally located And there are many other examples where the green building program would help the architect or designer building professionals Actually design and create and install these systems that would optimize the electric design So I now would like to move on to option B And we're first going to look at option B in a tabular format. There's no longer a prohibition So starting on the left. We're moving through a box which determines if there's an exemption in the case of option B The exemption remaining is the additional dwelling unit less than or equal to 750 square feet if we determine that that that is the the scope of the Application, it's exempt the applicant can build a co-compliant mixed fuel design If it's no, there are two choices Doing an all-electric design or pursuing a mixed fuel design with higher efficiency requirements And so now we're down at the bottom in the center row of blue And we can see that this branches off above to residential and below to non-residential The 2019 energy code has a new metric for low-rise residential So if we go to the upper right portion of this slide, we see that there's something referred to as an EDR margin So we we have a reference building going back to 2006 which has a score of 100 our region We would ask for 10 points less than that for low low Residential structures three stories or less in the case of residential structures that are four stories or higher It's a different measurement. We would ask for five percent less of the energy consumption and moving down to not non-residential it depends on the occupancy Of or the design of the structure for office of retail, it would be 10 percent less than the standard budget and For all other occupancies which include lighting and mechanical five percent less So I've gone quickly through this and I want to add in the case of the Of the mixed fuel option for those structures that don't require solar by The energy code we would additionally have a requirement because of the continued use of Natural gas and its environmental impacts of installing either solar on the roof or The payment of a carbon in lieu of fee based on the projected use of that fuel over the occupancy in life of the structure So I've gone quickly But given it an overview now in the flow chart for option B So let's now move on to the tabular presentation for option B. You can see second in from the left that the prohibition column is blank because we have just the Electric preferred reach code that by the way, we've recycled from option a and We have the requirements Based on the type of structure and its occupancy the numbers that I mentioned ten five percent less ten percent less We have the covered buildings We have the exemptions for the ad use less than or equal to 750 square feet Also the same as we mentioned alterations and additions would be exempt and finally on the right the Benefits that the green building program provided an option a are almost precisely the same Some of them pertain to those measures which are only achievable in design so You know, there's there's there's an opportunity With in the case of an alteration addition that isn't covered by the the code also to voluntarily shift fuels So now I'd like to move on as I promised to The comparison for option A and option b on emissions reduction. Let's start on the left side of this bar chart So this is a projection based looking back on the last three years of development in our city looking at the mix of low-rise single family dwellings and multifamily dwellings We project 120 year units over the next per year over the next 60 months for 600 dwellings so the energy intensity is specific by type and so we've calculated and estimated Emissions that would relate to all of those structures being built and What would their emissions be over a year now this These graphs reflect what would happen after 2024 because The 120 units is an annual addition of dwelling units So we've aggregated all this together So you can see the composite effect and compare that between options a and b which we've proposed Now we've gone on to do sensitivity analysis for option b What would the uptake be for those where choice of fuel is preserved? so In the second bar chart from the left, we have option b such that 80 continue to employ mixed fuel whereas 20 Choose the all-electric design and you can see there's a considerable but not quite a 50 reduction In the second option for the second scenario for option b There's a 50 50 mix of all-electric versus mixed fuel and we can see there's as would be expected a A further increase in the emissions from that aggregate 600 dwellings They would be constructed over a five-year or 60 month period and lastly we get to the far right option a and because in the case of Monterey-Bakene powers generation mix either Entirely carbon-free or entirely all renewable. There are no emissions So this is the option a has the greatest impact And i'd like to frame this the average in the united states is that dwellings and buildings turn over approximately 1 per cent per year The climatic conditions in the city of santa cruz are such that wood frame construction has greater longevity So it's that that estimate is is not quite correct for our zone, but it would take a considerable amount of time So if we were to take this aggregate for 60 months and multiply it by five that Would you know be impacting something less than 25 percent of our existing building stock if we would look at the aggregate emissions So i'd now like to move on to my final slide which looks In the sense of a heat map so in the pink we see increase in activities by operational segment of building and planning and in green where we would project a decrease So first we're going to talk about current planning and compare that with option a and b So for current planning in option a there is an engagement with the design team at a very early stage And request that the architect or designer have an all a fuel Of a fuel gas free stamp on the cover page of their plans as they submit them so that so that they've as the designer or architect Of design have specified that on their plans as we intake that for submission there are also potentially impacts in the public right of way and In the potentially the floor area ratio based on the different land use districts in our city and those requirements So a slight increase similar with option b a little bit less But both in both option a and b there's an impact for current planning If we move down to building plan check and now in the column for option a We are no longer doing plan check for the gas supply line and the distribution within the structure. So there's a savings However, the electric Distribution is more intensive. So there's a potentially a slight increase in the plan check The net might often be positive. I've left that as gray because there's there's contrarian indications Now moving out to building plan check with option b You recall that in the case of a mixed fuel newly constructed building permit application The applicant can still use natural gas the energy compliance documents must demonstrate Either that five percent or ten edr margin. So there's there's a slight increase in our operations on plan check for b Finally moving down to the last row We look at our operations in building field inspection With option a new natural gas infrastructure is prohibited We no longer do the field inspections verifying the safety and code compliance of the gas piping So there's a moderate decrease So in aggregate the projected Impact on the building and planning department operations Uh is lighter for option a so considering the Three points the highlights that we covered legal defensibility The reduction in emissions from the built environment and the impact in operations My recommendation is option a Okay, what does that look like? So we're round in the corner. We just have two more slides here. Thanks for hanging with us So obviously the outreach has been key on this work as we're Hearing from builders and so forth. We've had one community workshop We will be having a second one on february 27th after we get direction from you on which Option to proceed with we have our study session today We will have our second developers round table also next week on february 26 And curt and I have been spending every tuesday morning from 8 30 to 9 30 At 11th hour coffee for Drop-ins random drop-ins With tradespeople vendors designers and builders and we've actually had people show up to each of them So far we will be doing that on tuesdays until march 10th We also will be doing some outreach to distributors and vendors as we're preparing Some resource guides In terms of the policy process depending on the direction you give us today We will be going to planning commission on march 5th for hearing And again depending on your direction today The earliest we can come back with the first ordinance hearing Would be march 24th And then the second hearing would be april 27th And we're also planning with ecology action for earth day a building electrification Expo at earth day down in san lorenzo park Where vendors can come and bring heat pump water heaters and other kinds of appliances To show that they're here. They're available And from there we will be submitting to the california energy commission for approval of any reach codes And then implementation, uh, we will make recommendations later on when implementation should begin So the final resources, um, we already have available at this website city of santa cruise dot com slash policy We have a frequently asked question sheet that we are continually updating including any questions You might have today our first community workshop slide deck and this slide deck from today will be going up We also didn't reinvent the wheel berkeley's got a great fact sheet on electric induction cooktops and heat pump water heaters That we're promoting and we have some other electrification resources On availability sourcing and so forth that are also in development And I just just very quickly I overlooked Uh, I wanted to mention that there was a potential for an option c or d which involved only a prohibition Or only an all electric reach code And the reason we passed over that is that in the case of just a prohibition if there were a challenge Say a constitutional challenge to the removal of fuel choice and the prohibition was removed The work of our staff would would be entirely reversed We'd have nothing as a second line of defense And in the case of the all electric reach code Although it's contained as an amendment to the energy code and their cost effectiveness studies that show The cost effectiveness of all electric design still the same legal argument could potentially be made against an all electric Reach code and thus the options that were presented were a prohibition plus mixed fuel Plus electric preferred or electric preferred in isolation the options a and b which I presented And with that I know that's a lot of material that we shared with you We're happy to take any questions that you might have At this time and then you can open it up to public comment Council members questions at this time I was just wondering what kind of Pushback you that Berkeley and alameda and morgan hill in san francisco and san jose have received Sure, so I I can start that so Berkeley did have a challenge A legal challenge to their natural gas prohibition from the california restaurant association They did not exempt restaurants as we are suggesting if you recall from one of the initial pie charts Cooking the use of natural gas and cooking is a very low proportion compared to space heating and Water heating and so we feel in light of that and the challenge against Berkeley that that would likely not happen here. I think there was something that happened recently with Berkeley I don't know if mr. Candadi has followed that in terms of the Whether that challenge will stand or not I have not but i'm happy to look into that Question for taylor. I think On that thing. What do chefs say about the electric versus the gas, you know If if I might add a me writer also has an update on the Berkeley and and then we can certainly Talk to taylor as well. I just wanted to mention that So I actually don't have an update on Berkeley But there there have been a couple of legal challenges to the all electric codes as well that are in settlement negotiations at this point in time But neither of the recommendations that staff have put forward with the exception of the piece that Berkeley is being challenged on Have been impacted And if you don't feel like you can answer that about the chef's argument in favor of Gas over electric. Is there something that they put forward like an argument? I would just say that I think that's probably good choice to exclude it for restaurants because Of the hardship for restaurants to try to find Like large induction cooked-offs would be pretty difficult the induction cooked-offs are mostly made for home cooking and I think chefs like cooking on them, but Yeah, it's probably wise to exempt restaurants from the requirement Thanks, and um How much is the in-lu fee as there a standard in-lu fee for upping out or no There's only one other jurisdiction that has actually adopted an in-lua fee that san luso bispo And we're still in the process of determining what that might look like to cover the therms usage Do you want to explain how uh, they referenced? I think the utility and the cost per term Yeah, so in the past the investor on utilities have had programs that their rate base Could on a voluntary basis offset the environmental impacts of the fuel that was say designed into their home that they were renting a rental unit And so there's the usage actually from that rate payers bills and then some life cycle impact analysis That follows the methodology that's used for the time dependent valuation And then you know a payment to the utility which then Uses that money, uh to off, you know through various offsetting programs Thanks, we have we haven't we haven't uh looked at those models and come up with our own numerical yet And I would say part of that is due to we would like to see what direction council's interested in before Developing right now. I'll just I'll just quickly mention so in the in the options that were presented the Electric preferred reach code was used in both option a and b The development of the inlua fee would would only be staff resources in the event you directed us to pursue option b rather than option a Okay, thank you and um the addition electric vehicle charging requirement. What was that? We are not requiring any additional electric vehicle charging as part of these two recommendations However, do recall that um, the city did adopt through its parking ordinance. I would say back in 2018 Increased requirements overcode in that we required you actually install instead of just make ready Electric vehicle charging spots. So we already have in a sense a reach code with respect to ev charging. Okay. Thanks. You're welcome Looks like the Berkeley lawsuit was only filed in november. So it's probably premature to Really figure out what the status is but I can check in with their city attorney's office That's my matthews I first want to say this was an amazing presentation so much information in two hours and thank you to all the presenters It was a really great cross-section um something Listening to all this and I don't expect an answer right now, but just as this moves forward um I think you estimated something like 160 new units a year or something for the city. It was a number something like that Whatever it was doesn't matter. I think it was 125 whatever. So it's yeah 120 units looking back in the last three Years of development working with advanced planning and our planning director Uh, we you know, we made the most likely uh projection estimate. Yeah, um, but of course As some of the speakers mentioned most of our housing here is older And so the real potential is retrofit and um, some people alluded to the fact that it's not impossible But it's a little more complicated and to me just when we look at what we've done on water conservation A lot of it is voluntary. It is extra expense. And so as as you move forward with this, I'd be curious um for guidance uh and um Encouragement to For all those existing structures Um, how to take the next step and particularly I'd be curious Monterey power I think you said you were launching an incentive program for retrofits correct If you could just give us just a tiny description of how that would kick in What you what the reach is going to be et cetera Sure. Uh, thank you very much council member. Um, Matthew is again jr. Killigrew with Monterey Bay community power So it's a it'd be a it's going to be a summertime program and we'll probably have incentives for customers that are Other medical baseline or Karen Farah and then incentives for all other customers. So it'll be kind of income qualified We are going to have a an initial tranche of money. I think it's going to be about $300,000 collectively for heat pump hot water heaters ev chargers and then panel upgrades I would like to say that that money could get gobbled up very quickly and then I can go back to the board and ask for more We had something like $850,000 available for ev incentives to buy the cars We only helped incentivize 24 vehicles. So we basically had that money carry over So I think we're trying to calibrate to make sure that there's funding available for customers that take advantage And we'll have an outreach Plan developed to go after kind of especially the care and fairer customers medical baseline customers folks that Could possibly benefit from it from a higher incentive level so but again I think the point is is we could certainly have a tremendous amount of dollars Allocated for it, but if it's not going out the door, I'd rather kind of start small be Effective and then once the market responds and says hey, we need two million dollars for this then we have that business case And we can certainly promote in conjunction with the marketing that mbcp does which is quite extensive once those incentives do come out And then again just a couple things to to put out there I'm an ancient house. I try and upgrade what I can But again, I'm thinking what we did on water in the toilet switchouts and that sort of thing and and a number of you mentioned The technology is there, but it's still kind of in the evolving at least that was the message I got at least some aspects are evolving and just Help to the The smaller consumer of these upgrades as opposed to a builder Some credible information on reliability on performance Those were the questions we've asked on earlier improvements That's just one more thing that gets people over the next step to take the plunge and it's it's probably as much Just information as Financial incentive, but I think given our ancient housing stock here or older housing stock These will be important in helping us exceed our goals. And then this is an actual question What happens in terms of reliability when we have these PG&E type events where people are out of electricity for several days Excellent question Before we answer I just want to quickly also mention in the green building program updates of last month. We used to have A 10 points that was available for voluntarily building a zero net energy before it was required by code And now for alterations and additions if they switched all electric Or they can voluntarily go to zero net energy They would they would so I'm just showing that our voluntary program has already given a An allowance for that now Specifically, thank you for asking the question. This is extremely important public safety power shut offs a great concern that You know critical systems in the home are not available for a protracted period of time. So first of all For older gas appliances there is actually A Pilot light that is using natural gas that's burning all the time. So the heat that's available Is available on instantaneous basis, you know the the thermostat on the water heater can turn on immediately The the furnace can turn on immediately Those are no longer allowed for new appliances. So so You know if you if you lose your electricity and you you're not able to restart the appliance because those ignitions are now Not A pilot that's burning. It's an electronic ignition. So there's some misunderstanding around Oh, well why why would should we switch fuel if we're going to be losing electricity all time? Well with electronic ignition, there's there's not a There's no advantage to having a mixed a new mixed fuel Design and there's health impacts of that pilot and using the gas one of the most Concerning things comes back to that medical research that I was talking about Recently in the last five years So if you were an expecting mother during a public safety power shutdown, you figure I'm just going to use my natural gas appliance cooking inside And oftentimes bearing the weight of the fetus you can't Get you don't want to bend over far to the to the inner row of burners You're going to be using the outer one. So that Combustion byproduct is mixing more readily with the interior volume of the air So not having an electric exhaust right because exhaust is not on so there's there's all kinds of As we as we drill into this more deeply Yeah That actually though was not my question It was if the if you've gone all electric and the electricity's off for four days We all know after PG&E a whole lot of people went out and bought generators Etc. So system system-wide is that the Kind of unspoken add-on to all these you go all electric and you have some kind of Big tesla battery on your house or something councilmember matthews. I'd like to thank you for asking the question We were just having this discussion this morning in our outreach so for those individuals that have critical home medical devices there is a There's a middle ground which is you know a small capacity kw kw h lithium ion battery That can provide several hours depending on what the load is of those devices So that you know, it's not as if you Are preparing for the public safety power shut off with this tremendous generator Or a solar system with that's tied with a large lithium ion battery There's there's small portable devices if you ascertain For those loads that are critical during the public safety power shutdown for your household You can scale that So they're they're they're They are available They're they're not widely known of but that is that is an option that's sort of a middle ground And in terms of you say the tesla power wall and other Larger battery storage that is actually heavily incentivized right now by the state through sGIP the self generation incentive program To enable that kind of backup But again, I think the point here also is that regardless if you're on natural gas and electric or electric only When you have a public safety power shut off, you can't use either one of them So I think it's important to remember that. I'm certainly not the only one that has these questions. So yeah, certainly with that's why we had the backup slide One one other On the public safety power shops and one of the features that we've incorporated in the green building program And little known knowledge is that solar inverters string inverters A few of them have the ability to Provide power even when the utility grid power is shut off through an outlet That's directly on the inverter up to 2,000 watts of critical load. So a small refrigerator Charging your cell phone. They're they're made by one company in different sizes. So We're educating people about that through the updates in the green building program They may not work for everyone's our city is actually going to be retrofitting some inverters to of this exact nature that I just discussed potentially we we applied for the State allocation for a public safety power shut off grant And that is one of the line items that we requested is converting some of our older inverters To these sma inverters, which would give us a 110 outlet to utilize in Public safety power shut off, but we find out shortly if we got that grant. We have not yet Other questions Okay Well councilor matthews asked a lot of the questions that I had And especially in regards to how we're going to look forward in terms of the retrofitting of existing buildings So I appreciate the questions and of course the presentation and all the participants. I guess my question would be Maybe just more sort of topical and that if if you're not So what would a all-electric home would look like with a fire no fireplace a fireplace just centralized heating How how does that work given the technology was mentioned to not be there for for sort of fireplaces So again, this is just for new buildings I don't think that we are considering a fireplace unless it is the only source of heat and is fueled by natural gas That would not be something that's regulated as part of either of the options that we've presented to you The prohibition does not specifically Prohibit the use of wood as a fuel only what is termed as fuel gas in the plumbing and energy code which Which includes natural gas and manufactured liquefied petroleum But not wood. Okay But also to answer your question When when we have electric energy available, it's possible to create an appliance Which very efficiently converts it to infrared electromagnetic radiation or basically the light that we can't see the sun's light is 50 percent infrared It's invisible to our eyes. We can create appliances that very efficiently convert the electricity into that same Type in nature of light the same warmth that we feel from a fireplace burning wood Those appliances are under development. Well, I have to say Going along with Kurt's stories about his home. I actually retrofitted in my house just over christmas Costs me a hundred dollars. It's a heater and it's an electric plug-in and looks like a flame And it's fantastic. You can do it with heat or without heat if you just want the ambiance I stand corrected that these appliances are out there and and looking wonderful. I haven't seen one person. Yes, they are I guess my only other question would be and then and maybe it's more of a common suggestion In terms of the equity piece, it's nice to know about the different incentives or options through Monterey Bay community powers, but those who have Means are able to access some of the different sort of retrofitting options as well as backup storage options I think I mean generators are pricey. So as long as we're sort of just keeping an eye on that I think that's really important to think about yeah, and I think a big piece to that also is advocating Two mbcp on the rate design itself is an important piece and we continue to speak to Monterey Bay community power About that Thank you So I just wanted to add on the affordable housing Connection with electrification that One of the primary ways that low income housing is financed in our state Is through a little known program that is administered by the state treasurer's office It's referred to as a low income housing tax credit It's a competitive system developers in all the counties of our state apply With a an admission form that's point-based and that currently that acknowledges Ultra-efficient design like passive house and also solar So really looking at the landscape of other jurisdictions doing something with electrification We might be behind applying for that tax credit Generally what happens is the tax credits awarded to the low income housing developer and then it's transferable to a savings and loan institution that might Then fund up to 70 percent of the cost of developing and building out the project Councilman brown. Yeah, thank you all for the presentations. This was really great. I've I've learned a lot and Thank you. I want to thank JR for being here to talk about the Monterey Bay community power incentive programs I have to say being on this board has been a really great experience for me I've learned so much and I'm gonna have a hard time letting go of The name Monterey Bay community power, but I have been it's been pretty cool to watch it grow and So that is one. Thank you. And then I also wanted to thank mr nicely for Raising the question about uh, kind of following up on the retrofit question Talking with suppliers. And so I'm wondering if that is something that's happening with your outreach. I it is So, okay, great. And then lastly um So we have these incentive programs through our own cca And I we talked a little bit Tiffany about You know other ways to kind of leverage money And I'm wondering if it sounds like the state is now getting out of the way in terms of obstacles to doing these kinds of reach codes and certification for through title 24 Are are there programs on the horizon with the state to provide some of those incentives as well? And if somebody could just tell us a little bit about that would be great I'm not aware of other incentives jr. Maybe more on the pulse of this I am not aware of other incentives that are coming out for retrofits However, one thing I will add is if you did indeed choose option b, which included the carbon and lua fee You could do as san luso bispo has done is that they were going to allocate the funds that came in from the carbon and lua fee for retrofits retrofitting existing buildings and incentives for new buildings because Without any if we took the natural gas prohibition There would likely be no revenue stream in order to fund incentives that the city could make So I think that's important for you to know and I don't know if anyone else yet. Amy or anyone has a comment on state incentives Yeah, just I'll just have to mention the big one, which is senate bill 1477. It's 200 million dollars to electrification Not all of it's too new construction invest most of it is for existing buildings. It's going through Uh Proceedings right now for approval and design of exactly how that money will be deployed and by whom? So it's a ways off yet, but it's certainly coming You have something you want to add Again, jara killer. I did want to highlight. Um, we also are seeking a budget amendment Next month at the policy board to add a million dollars For residential resiliency this so that's to provide backup supply for medical baseline and care and fairer customers in our service area So that will be working with a vendor to hopefully provide either 100 of the cost covered or maybe 80 or 90 of the cost covered Um and be able to build up kind of micro scale battery backups to be able to power medical devices Key key instruments in the home for a few days at a time and in addition to that We are establishing a revolving fund to support resiliency through the uninterruptible power supply fund We'll have 20 million dollars available for the public sector. That's health care Low city and county governments Schools as well as um, yeah, those are the three But we're trying to look at it from the full full full scope of the lens of what happens with psps I would also like to encourage us to think that If psps does stop the public safety power shut off There are other events that can happen in life that we seem to have kind of Been gobbled up by psps, but there are things that can shut down the grid as well So we're trying to think about it as resiliency from that lens of like regardless of whatever impacts the grid We can deploy our resources to help the customers in the in the central coast Thank you jr So what he was referring to actually is a metric in past years before the beginning of public safety power shutdowns the average Interruption that a customer say a pgne custer might have experienced over an annual period was almost two hours in the most recent metrics I'm gonna hold my comments until and maybe open the floor for public comment from the public So if anyone wants to speak to us on this item, you can line up to the left and You'll have two minutes to address the council on this item Step forward. Yeah. Hi. My name is dr. John Conway. I'm an environmental scientist A resident of the city of sander cruise and the senior research analyst at the romero institute in green power And first I would like to say thank you so much for your excellent presentation That was a tremendous amount of research and work and really appreciated as a member of the community and as a scientist And I strongly encourage you to adopt option a that was presented in all a trick Or a natural gas prohibition with some exceptions. I think is the strongest proposal that was made today. Thank you Next speaker Good afternoon city council members and community members. My name is jocelyn wolf I'm a lawyer with the romero institute and I would just like to second what john had to say the Option a is the strongest proposal before you and I would encourage you to vote that way. Thank you very much Good afternoon council members and staff such a pleasure to be here. My name is kirsten liskey I'm the vice president of community programs at ecology action Our mission currently focused is less emissions Since 1970 we've been a partner with the city to help make sander cruise a leading sustainability Jurisdiction in the nation. We currently have the second highest urban bike ridership as synthia mentioned We have some of the lowest water use in the state. We have some of the highest recycling rates The city has been a leader In what then becomes mainstream ways of doing business so our communities can thrive in harmony with nature The future is electric so adopting a reach code of some kind for building electrification is critical And adopting the most assertive one you can for Emissions reduction that is also a reasonable step that the community is not going to reject Is probably the best course of action and it seems like both the options have been very smartly developed And because emissions reductions and the time sensitivity of that is so critical We'd strongly recommend the most assertive emissions reduction option, which is option a so thank you and thank you to staff for ongoing Learning and this was a fantastic study session. I learned a lot even myself Thank you kindly I'm susan cavillieri, and I'd also like to thank everyone for all the work that has been done on building electrification I support the option a We have a climate emergency methane emissions are Methane in particular is a very potent greenhouse gas as was stated And it's driving the loss of biodiversity and ultimately the extinction of most life on earth We have a choice to change and we must change. Thank you. Thank you Next speaker Good afternoon city council and staff. That was was indeed an excellent presentation My name is Beverly desho. I'm the president of the electric auto association central coast chapter So I like the central coast change And um, I the 82 percent emissions coming from vehicles is alarming to me And so while I appreciate all the work with the buildings I would like to see more happening with regard to supporting the Transition to electric vehicles and specifically I'd like to see the city council Take a stand to have all only electric vehicles Being bought as as any any vehicle that the city buys would be electric only and All except for backers Are available in electric now and I'd be happy to consult with you if you Need any more information about where to access them Thank you Hi folks, I don't want to prolong the agony or or maybe it's the joy. There were great presentations It was really fun to listen to and appreciate everybody's contributions I'm joe jordan from the west side. I teach energy in particular renewable energy at caprio college In fact, we've had tiffani and to speak and we'll have to have kurt come in next next fall Yeah, it's a no-brainer seems to me You know, I'm something of an energy expert and the option a it looks really tight and great And so highly recommend that you go for it. Thanks thank you very much Is there any other member of the public who'd like to speak to us on this item? Okay Seeing none, I'll bring it back. I just wanted to say that I'm Echo my comments and appreciation for all the work that's been done on this. I think it's As it was expressed earlier really important that we start moving towards, you know reducing or continuing I should say our movement towards carbon reduction given everything we know about The potential for climate catastrophes and given that we've been doing a lot of work I think we're continuing that tradition of moving in this direction and becoming a more sustainable city So thank you all for the presentation. I think one of the things I would just like to comment Is with regards to I know it came up that there's some folks whose houses potentially Are shaded or they won't receive enough light if they're solar And I just wonder if there might be some point or some type of program that those people can enter into along You know further into the future they'll help them offset those costs since they don't have the ability to have solar and then one other thing to think about and consider is As we see new houses being built and as we see new developments If those developments result in shading houses that have solar What we can do is a city to make to offset those impacts of those residents who At one point might be you know Receiving a lot of solar energy and then a new development comes in and they completely outshade them. So I'll go ahead and take part of that question those questions. Thank you for those questions Number one. We do have a solar access Ordinance already on the books I'm not sure mechanically how that works and maybe kirk or Lee could speak to that but that is in place in terms of shading on buildings and an alternative Like a community energy Kind of a program Right now community energy only works with virtual net metering Which means that you need to sub meter with it on one site Oh, there is a very large bug. Luckily. I'm not afraid of bugs Yeah, that was huge Um So right now community solar isn't possible unless you can sub meter on a site We don't have a mechanism through our utilities to do that credit swapping across properties and accounts That is something we certainly have been watching though There I think there's been one place in california that's been able to figure that out Which was a jurisdiction that owned its own electric utility But believe me that is something i'm super interested in because I think we have a lot of people that would want to buy Into and potentially benefit from community solar. So point taken there. I don't think we're quite there yet technology wise and rate rate wise And then one other question as it relates to the pg and e power shutoffs Um, would micro grids or the construction of micro grids? How could that possibly help offset those impacts? Yeah, absolutely. I mean speaking to the incentives that monorabay community power has coming out the s-chip the self generation incentive program There are ample incentives right now if you can develop the micro grid project They aren't so easy to pick the put the pieces together It's a it's a complex endeavor, but it's completely feasible And that is one of the things that we also applied for in our public safety power shutoff city allocation grant Is to be able to isolate our SCADA, which is the brain of our water system and communications Be able to isolate those loads and then micro grid that as a critical facility So definitely micro grids and battery storage helps in the case of public safety power shutoff So I just add with regards to the micro grid that Tiffany was talking about When we combine an ultra efficient shell meaning the exterior of the building With a micro grid approach if we look at the entire project cost the structure press the micro grid assets being the generation and the storage It becomes more cost effective because we can build an ultra efficient design This is something that rob nicely has done for under Say seven or eight percent over what it would cost to create a co-compliant home But then the cost the reduced cost of the assets because that building can consume A fifth of the energy and in the case of now with this energy code Maybe maybe a third still the entire project can be extraordinarily cost effective compared to conventional construction with Larger batteries and larger solar arrays. So it's if you will the perfect Combination Thank you. And if there's anything we can do to help support micro grids moving forward let us know And so I'll move I'll go to councilmember Watkins I'll just um, I think this is as been says it's been a really great presentation really informative and I again want to thank all the presenters as well as our staff I feel we're really lucky to have such a really high caliber engaged Community and staff working on this and I know we've been talking about having this before us So it's a real pleasure to have it here today. So with that I'll go ahead and move the recommendation To direct staff to prepare option a policies and proceed To adoption along the timeline outlined in the presentation second. All right, so we have a motion made by councilmember Watkins seconded by councilmember Glover to Prepare option a that has been brought to us by staff And if I could just add a possible suggestion a couple of people mentioned legislation that's currently in the in the process and I think we'd probably all be interested in knowing what your priority legislation is So we could weigh in as a city and support that legislation as it moves forward So if we could maybe add to this and inform the Council of key legislation that would support these objectives accepted Do you have a question? I do have a question just for the sake of the minutes in the motion Option a policy but that language doesn't Cover it for the minutes. Oh, you need more detail than option a yeah How do we want to succinctly describe this? I was looking at that, but I couldn't All all electric new construction right natural gas natural gas prohibition. So it could be the phrase Don't want anything specific to a timeline Sure, uh, then that would be bring it back on September 24th for or I'm sorry March 24th for the first hearing Did you want something more specific than option a then did you want to know? It was the timeline. It was the timeline. Okay That's what Matthews just for clarity. So some people don't freak out. It's natural gas Prohibition with limited exceptions. Correct. Correct. I mean you might just want to put that Sure We'll go ahead and add that language Could you say what the exceptions were again? I know it was some restaurants. Sure. It's on the slide right here It's restaurants industrial process heat a to use less than or equal to 750 square feet new construction That's uh where natural not having natural gas would be contrary to public interest or it would be infeasible You're welcome Okay So is there any further questions Seeing none all those in favor, please say aye. Hi Any opposed the passage unanimously? Thanks. Thank you council council member really good Yeah With that given that this is our only agenda item of today. We'll adjourn our meeting