HomeMy WebLinkAbout09-03-2019 Item 18 - Clean Energy Policy
Department Name: Community Development
Cost Center: 4006
For Agenda of: September 3, 2019
Placement: Public Hearing
Estimated Time: 90 Minutes
FROM: Michael Codron, Director, Community Development Department
Prepared By: Chris Read, Sustainability Manager
SUBJECT: CONSIDERATION OF A RESOLUTION ESTABLISHING A CLEAN
ENERGY CHOICE POLICY AND IMPLEMENTATION MEASURES
INCLUDING AN ORDINANCE APPROVING LOCAL AMENDMENTS TO
THE ENERGY CODE; AND AN ORDINANCE IMPLEMENTING A CARBON
OFFSET REQUIREMENT WITH AN IN-LIEU FEE OPTION
RECOMMENDATION
1. Adopt a Resolution entitled “Clean Energy Choice Policy,” establishing a policy framework
in support of (1) local amendments to the California Energy Code, and (2) a proposed carbon
offset program for new buildings with natural gas (Attachment A); and
2. Introduce an Ordinance implementing an Energy Reach Code entitled “Local Amendments
to Part 6 (Energy) of the 2019 California Building Code” adding Chapter 15.04.110, entitled
“Amendments – California Energy Code”, to the City’s Municipal Code (Attachment B); and
3. Introduce an Ordinance implementing a carbon offset requirement entitled “Clean Energy
Choice Program,” adding Chapter 15.50 to the City’s Municipal Code (Attachment C); and
4. Direct staff to develop an implementation plan for the Clean Energy Choice Policy to include
1) identification of appropriate in-lieu fee amounts for various building types, 2) community
education and outreach, 3) development of a program making professional consultation and
design services available to property owners, and 4) identification of a series of incentives,
such as permit streamlining and property development standard allowances (for example,
parking reductions and building height allowances) in exchange for all-electric development
and return to the City Council for approval (currently scheduled for November 5, 2019); and
5. Direct staff to submit the approved local amendments to the California Energy Commission
to initiate the Reach Code review and approval process; and
6. Direct staff to submit a letter to Monterey Bay Community Power to drive support for energy
programs that support all electric development.
REPORT-IN-BRIEF
In September of 2018 and February of 2019, Council directed staff to develop a proposal to
avoid generating new greenhouse gas emissions as the result of energy use in new buildings. Due
to rapid improvements in electric appliances, a better understanding of how natural gas
contributes to the climate crises, changes to the California Energy Code, and the City obtaining
its electricity supply from carbon neutral resources via Monterey Bay Community Power , staff is
seeking to formalize Council direction through a resolution establishing a Clean Energy Choice
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Policy. This report further identifies programs to implement the proposed Council policy.
The staff recommendations to achieve Council direction include three components, collectively
referred to as the Clean Energy Choice Program:
1) A Resolution establishing a “Clean Energy Choice” policy that new buildings should be all-
electric and that energy use in new buildings should not cause net additional greenhouse gas
emissions (Attachment A).
2) A “Reach Code” ordinance establishing local amendments to the California Energy Code
requiring solar panels on new nonresidential buildings, requiring new buildings with natural
gas to be built to a substantially higher performance standard, and requiring new residential
buildings with natural gas to include “retrofit ready” requirements (Attachment B).
3) An ordinance establishing a “Carbon Offset” requirement wherein new buildings with natural
gas would be required to offset the proposed natural gas use by directly retrofitting existing
buildings, or in-lieu of that, by paying a fee to support a retrofit program implemented by a
City partner, such as Community Action Partnership of San Luis Obispo’s Energy Services
Program (Attachment C).
Using the 2019 Statewide Cost Effectiveness Studies completed by the California Statewide
Codes and Standards Program, which was vetted through a public process including PG&E and
SoCal Gas, the City of San Luis Obispo must find that the proposed building code amendments
related to building energy performance are cost effective and use less energy than the standard
State Code and the CEC must agree with the City’s analysis before the Reach Code can go into
effect. The cost effectiveness studies are provided as Attachment G (low-rise residential) and
Attachment H (nonresidential, high-rise residential, and hotels).
In addition to the Reach Code, the Clean Energy Choice Program includes a carbon offset
requirement that would apply to all new buildings that choose to use natural gas and requires that
the new fossil fuel use is offset either by retrofitting an older building or by paying an in -lieu fee.
The carbon offset requirement is the mechanism that allows the City to offer choice to property
owners, while also not increasing greenhouse gas emissions from natural gas used to power new
buildings.
The offset requirement would apply to residential and nonresidential construction that is subject
to the California Energy Code, but would exempt additions, alterations, certain uses including
natural gas used for cooking appliances in commercial kitchens, attached accessory dwelling
units, essential services for public health and safety, and residential subdivisions in process of
permitting or constructing initial public improvements (for any phase of a final map recorded
prior to January 1, 2020), unless compliance is required by an existing Development Agreement.
Staff has worked with Economics and Planning Systems (EPS) on a study (Attachment E) to
confirm the cost basis for the in-lieu fee. To determine the in-lieu fee, EPS uses Energy Savings
Assistance (ESA) program data for natural gas energy efficiency programs administered by
SoCal Gas.
Overall, the Clean Energy Choice Program is an incremental approach to avoid the generation of
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new greenhouse gas emissions as the result of new development. At build-out of the City’s
General Plan (2035), the Clean Energy Choice Program would be expected to avoid 7,800 Metric
Tons of CO2 equivalence (MTCO2e) per year. For scale, this would prevent community
emissions from natural gas from growing by approximately 15 percent and total community
emissions by approximately 2 percent relative to 2016 levels. The annual amount of avoided
emissions would be equivalent to taking 1,600 passenger vehicles off the road or planting nearly
130,000 trees to sequester carbon.1
The Clean Energy Choice Program was developed with input from local developers, electricians,
architects, builders, designers, technical consultants, the California Energy Commission, peer
cities, utility partners, and community members.
Should Council move forward with staff’s recommendation, the second reading of the
Ordinances would occur on September 17, 2019. An implementation plan, to include appropriate
in-lieu fee amounts for various building types, administrative guidelines for the program, and
incentives is planned to return to the City Council for review and approval on November 5, 2019.
The program in its entirety would go into effect on January 1, 2020, concurrent with the rest of
the 2019 California Building Code.
DISCUSSION
Background
Due to decades of rapidly increasing global greenhouse gas
(GHG) emissions and insufficient climate action at all levels of
government, atmospheric GHG concentrations have reached a
level that guarantees substantial and unavoidable impacts for the
foreseeable future. California’s recent historic wildfires,
droughts, floods, and mudslides are representative of the “new
normal” with respect to extreme weather conditions. These
impacts threaten to make all the substantial challenges currently
faced by the city (e.g., the housing crisis, homelessness,
affordability, sustainable water supply) critical, challenging, and
expensive. Depending on global emissions rates over the next 30
years, global temperatures could exceed a 1.5° Celsius increase
over pre-industrial levels, which would result in catastrophic impacts. In order to limit global
warming to 1.5° Celsius, annual global emissions need to decrease 45 percent by 2030, and be
“net zero” by 2050.2
San Luis Obispo residents and businesses routinely rank climate change as an important issue.3
In 2019, thousands of people in San Luis Obispo contributed to the City’s budget process that
1 Equivalencies are provided by the Environmental Protection Agency at: https://www.epa.gov/energy/greenhouse-
gas-equivalencies-calculator
2 Intergovernmental Panel on Climate Change. 2019. “Special Report: Global Warming of 1.5 ° C
https://www.ipcc.ch/sr15/
3 For example, in 2018, a statistically significant survey conducted by the SLO Chamber of Commerce found that 82
percent of registered voters identified climate change as an important issue : https://slochamber.org/were-not-as-
divided-as-it-seems-survey-shows/.
San Luis Obispo
residents rank climate
change as an
important issue for the
City to address and the
City Council has
responded by making
Climate Action a
Major City Goal.
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resulted in City Council adopting Climate Action as a Major City Goal for the second straight
budget cycle. The Climate Action Major City Goal Work Program seeks to actively create
economic opportunity and ensure the community remains a dynamic, high quality place to live
and work, while protecting and stewarding the natural environment within and surrounding the
City. The Work Program provides tasks to vet and establish the 2035 carbon neutrality target and
to continue implementation work that establishes the foundations for a low carbon future with a
focus on civility, sustainability, diversity and inclusivity, regionalism and partnership, and
resiliency.
In addition to the reach code and carbon offset program presented in this Council Agenda Report
(Climate Action Major City Goal Task 14), some of the other key components of the Major City
Goal work program include:4
• Monterey Bay Community Power Board Participation and Program Launch
• 2019 Climate Action Plan
• Transportation Electrification Strategic Plan
• Municipal Operations projects including electric vehicle charges, lighting retrofits, onsite
solar photovoltaic systems, and energy efficiency and generation projects at the Water
Treatment Plant, and waste reduction efforts.
• Building Electrification Program Development
• Comprehensive Community Climate Vulnerability Assessment and Safety Element of the
General Plan Update
Policy Approach – Clean Energy Choice Program
The proposed policy approach is to allow all-electric buildings
to comply with minimum state law standards while requiring
buildings that use natural gas (defined as “Mixed-Fuel
Buildings) to offset their natural gas use and be substantially
more efficient than the 2019 baseline code currently requires.5,6
Residential development would be required to include “electric
ready” measures to facilitate fuel switching through a future
retrofit project. In addition, nonresidential buildings would be
required to include solar panels for onsite energy generation.
Figures 1 and 2 illustrate the proposed pathways for obtaining a
4 The Climate Action Major City Goal Workplan appears in its entirety in the 2019 -21 Financial Plan:
https://www.slocity.org/Home/ShowDocument?id=23630
5 As identified in Attachment B, an “All-Electric Building” is defined as a building that has no natural gas plumbing
installed within the building and that uses electricity as the source of energy for all space heating, water heating,
cooking appliances, and clothes drying appliances. An All-Electric Building may be plumbed for the use of natural
gas as fuel for cooking appliances in a commercial kitchen. A “Mixed-Fuel Building” is a building that is plumbed
for the use of natural gas as fuel for space heating, water heating, cooking or clothes drying appliances.
6 The 2019 California Energy Code is substantially different the its 2016 predecessor for several rea sons including
the inclusion of 1) an all-electric compliance pathway for single family residential and multi-family residential
buildings shorter than four stories (collectively referred to as “low-rise residential); 2) a new metric for evaluating
low-rise residential building performance called the “Energy Design Rating” (described in detail in footnotes 9 and
10); 3) requirements to include solar panels on all low-rise residential buildings, and 4) “electric ready”
requirements for future electric water heaters.
The “Clean Energy Choice
Program” would allow
the City to support
housing growth and offer
energy choice to its
residents and businesses
while aggressively
lowering greenhouse gas
emissions attributable to
new buildings in the City.
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City building permit through compliance with the adopted components of the Clean Energy
Choice Program.
The components of the Clean Energy Choice Program include 1) nonresidential solar
requirement, 2) additional building performance standards for mixed-fuel buildings, 3) pre-
wiring “retrofit ready” requirements for residential buildings, and 4) the carbon offset
requirements.
Two key definitions of terms used throughout this report and in the attached resolution and
ordinances, follow.
1. “ALL-ELECTRIC BUILDING” is a building that has no natural gas plumbing
installed within the building and that uses electricity as the source of energy for all
space heating, water heating, cooking appliances, and clothes drying appliances. An
All-Electric Building may be plumbed for the use of natural gas as fuel for cooking
appliances in a commercial kitchen.
2. “MIXED-FUEL BUILDING” is a building that is plumbed for the use of natural gas
as fuel for space heating, water heating, cooking or clothes drying appliances.
Figure 1 – Low-Rise Residential and Single-Family Residential Policy Approach
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Figure 2 – Nonresidential Policy Approach
1. Building Code – Energy Requirements
Residential and commercial development in California is
regulated under the California Building Standards Code,
Title 24, California Code of Regulations. It is made up of
thirteen parts, which exist as a guide for local
municipalities to update building codes. Energy use and
conservation is addressed in Part 6 (California Energy
Code), and additional green building measures, including
measures designed to reduce greenhouse gas emissions,
are covered in Part 11 (California Green Building
Standards Code, also known as CalGreen). The
California Energy Code contains energy efficiency
standards for residential and nonresidential buildings,
new construction, remodels and additions.
The simplest way to
comply with the City’s
“Clean Energy Choice
Policy” would be to build
all electric and benefit
from the City’s
membership in Monterey
Bay Community Power,
which will purchase carbon
free energy for the City
beginning January 1, 2020.
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Public Resources Code Section 25402.1(h)(2) and Section 10-106 of the Building Energy
Efficiency Standards establish a process that allows local adoption of energy standards that
are more stringent than the statewide standards.7,8 Under this process, the CEC requires any
local amendments to the California Energy Code that affect energy use in regulated buildings
to be cost effective and use less energy than the standard requirements. In the proposed Clean
Energy Choice Program, the City finds that all proposed amendments (increasing building
performance requirements for mixed-fuel buildings and requiring solar on nonresidential,
high rise hotel, and residential buildings) are “cost effective” and use less energy than the
standard state requirements. Cost effectiveness and energy use considerations and findings
are provided later in this report and in the Reach Code Ordinance (Attachment B).
Under the Reach Code, new buildings with natural gas (e.g. mixed-fuel building) would be
required to have substantially enhanced building performance. As noted in Table 1, single-
family and low-rise multifamily residential buildings would be required to exceed the
standard design Total Energy Design Rating (EDR)9 score by at least 9.5 and 9 points,
respectively. Table 1 also identifies performance requirement for non-residential buildings
(15% better than code for office/retail, 9% better for hotel/motel, and 5% better for other
nonresidential uses). The enhanced EDR requirements and nonresidential compliance
margins reflect the maximum cost-effective compliance margins as reported in the statewide
cost effectiveness studies.10,11 Attachment D includes a legislative draft version of the
proposed local amendments for reference.
7 Public Resources Code Section 25402.1:
http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PRC§ionNum=2 5402.1.
8 Building Energy Efficiency Standards: https://ww2.energy.ca.gov/2018publications/CEC-400-2018-020/CEC-400-
2018-020-CMF.pdf
9 Total Energy Design Rating (EDR): The 2019 Energy Code includes EDR as a new metric for measuring the
relative efficiency of a building.
10 In the 2019 California Energy Code, low-rise residential buildings (single family housing units and multi -family
buildings under three stories), solar use and battery storage receive credit towards compliance with energy use
standards. To include these credits, the CEC developed a new metric for residential energy performance called the
Energy Design Rating. As described in the 2019 State wide Cost Effectiveness Study, the EDR score is on a scale or
0 to 100, with a 2006 International Energy Conservation Code (IECC) compliant building having a score of 100 and
a zero-net energy (ZNE) home having an EDR score of zero. The EDR score is calculated by summing the
efficiency score of a building with the generation/storage score of the building. In Climate Zone 5 (San Luis
Obispo’s Climate Zone), the Total EDR for mixed-fuel single family residential buildings is 22.2, for mixed-fuel
low-rise residential buildings it is 24.2. To reduce the scores by 9 and 9.5 respectively, additional efficiency, solar,
and storage measures would be added to the building design. Nonresidential, high rise residential, and hotel
buildings do not receive performance credit for solar or storage. The method for establishing additional standards in
these buildings, is much more straightforward and is a simple percent reduction in building energy use using the
CEC’s Time Dependent Valuation Assessment (TDV) metric. The percent reduction is referred to as a “compliance
margin”
11 Staff originally proposed higher compliance margins for residential and nonresidential buildings to comply with
CalGreen standards. The proposal in this Council Agenda Report have been reduced to the maximum cost-effective
EDR and compliance margins for Climate Zone 5, as identified in the 2019 Cost Effectiveness Studies to avoid
issues related to potential violation of federal appliance efficiency regulations.
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Table 1. Proposed Improved Energy Performance Standards
Building Type Performance Requirement Requirement Justification
Single-family Exceed the standard Energy
Design Rating by at least 9.5
points
Maximum cost-effective Total
Energy Design Rating
Low-rise multifamily Exceed the standard Energy
Design Rating by at least 9
points
Maximum cost-effective Total
Energy Design Rating
Office/retail 15% compliance margin Maximum cost-effective
compliance margin
Hotel/motel and high-rise residential 9% compliance margin Maximum cost-effective
compliance margin
Other nonresidential with indoor
lighting & mechanical
5% compliance margin Maximum cost-effective
compliance margin
Other nonresidential with indoor
lighting or mechanical, but not both
5% compliance margin Maximum cost-effective
compliance margin
It should be noted that the definition of an all-electric building includes an allowance for a
natural gas line to be installed to serve a commercial kitchen. In other words, a commercial
kitchen that is plumbed for natural gas cooking appliances does not trigger the Reach Code
or Carbon Offset requirements. This provision is provided based on public feedback, the
relatively small number of new commercial kitchens that would otherwise be subject to the
Clean Energy Choice Policy, and input from restauranteurs that commercial scale appliances
for some cooking techniques in San Luis Obispo require natural gas. In addition, while
residential buildings can use free-standing outdoor grills, this is not an option for most new
restaurants.
2. Nonresidential, High-Rise Residential, and Hotel Solar Requirements
The 2019 California Energy Code requires all new low-rise residential buildings to include
solar photovoltaic panels and requires non-residential, high-rise residential, and hotel
buildings to be “solar ready”.12 Given that the design and supporting components will
already be completed as a requirement of State Law, the proposed amendment to the Energy
Code would require the additional step of installing solar panels on the entire solar zone of a
nonresidential, high-rise residential, or hotel building.13
12 Section 110.10 of the California Energy Code provides standards for single family, low-rise residential, high-rise
residential, hotels, and nonresidential buildings to be ready to easily incorporate solar, including requirements for
minimum solar zones (area for installed or future solar panels), interconnection pathways, and electrical service
panels : https://ww2.energy.ca.gov/2018publications/CEC-400-2018-020/CEC-400-2018-020-CMF.pdf
13 Section 110.10(b) of the California Energy Code describes the solar zone as follow: The solar zone shall be
located on the roof or overhang of the building or on the roof or overhang of another structure located within 250
feet of the building or on covered parking installed with the building project, and shall have a total area no less than
15 percent of the total roof area of the building excluding any skylight area. The solar zone requirement is applicable
to the entire building, including mixed occupancy.
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3. Building Code – “Electric Ready” Requirements
To minimize future retrofit or energy transition costs,
residential buildings that choose to include natural gas will
be required to pre-wire to be “retrofit ready.” Proposed
requirements for each natural gas or plumbed propane
appliance include: 14
1. Minimum space requirements for a future electric
requirement
2. A dedicated electrical circuit that is able to be connected
to the electrical panel
3. A double pole breaker in the electrical panel labeled
with the name of the appliance
Based on analysis provided by the City’s consultant (TRC
Companies, Inc.), using RSMeans data from 2018 (a standard construction cost database), the
pre-wiring costs (in 2018 dollars) for all appliances (not including those already required by
the 2019 California Building Code) is approximately $740 for single family units, and $435
for multi-family units. An occupant wishing to retrofit at a later date would require additional
estimated construction costs of $960 for single family units and $560 for multi-family units.
According to this analysis, it is expected to cost approximately $740 to pre-wire a single-
family home; it would cost approximately $1,700 to retrofit that same home at a future date.
4. Carbon Offset Requirement
The carbon offset requirement is the policy mechanism that for a property owner to choose
their preference for energy, while also not increasing greenhouse gas emissions from natural
gas used to power new buildings. When a property owner or developer decides to introduce
natural gas during construction of a new building and follows the mixed-fuel pathway for
code compliance, they would be required to offset the carbon introduced into the
environment.
The offset may be accomplished through a project to retrofit an existing building, or payment
of an in-lieu fee. This program is intended to further the City’s intent to be carbon neutral by
2035. Fees collected through the program would be used to help fund retrofits of existing
buildings within the City.
Establishing the In-Lieu Fee and Administrative Guidelines
Staff has worked with Economics and Planning Systems (EPS) on a study (Attachment E) to
confirm the cost basis for the in-lieu fee. The study describes the relationship between the
baseline reach-code requirements, how the fee revenue could be used to mitigate the
14 Staff originally considered including retrofit ready requirements for nonresidential buildings, but due to project
variability and the high potential for inaccurately system sizing, they have been removed. Staff recommends that
these additional considerations are reconsidered as part of the 2022 California Building Code update.
When a property owner or
developer decides to
introduce natural gas into
a new building, they would
be required to offset this
use by retrofitting older
buildings or paying an in-
lieu fee to support energy
efficiency programs that
will help make housing
more affordable in the City
by reducing energy costs.
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greenhouse gas emissions that occur in instances where the applicant does not pursue full
electrification and calculates the amount of the in-lieu fee. As described in the EPS report,
the in-lieu fee is calculated to be $27.33 per therm generated.15 The therms generated will
vary by application, depending on the type and size of the development.
To determine the in-lieu fee, the City worked with EPS to identify average retrofit costs
using Energy Savings Assistance (ESA) program data for natural gas energy efficiency
programs administered by SoCal Gas. The Energy Savings Assistance (ESA) program is an
efficiency program administered by all of California’s Investor Owned Utilities under the
auspices of the California Public Utilities Commission (CPUC). Like other CPUC programs,
ESA is funded through a small surcharge placed on every ratepayer’s energy bill. As a
steward of ratepayer dollars, participating program administrators must closely track the
labor and materials costs and energy savings from each measure in the program.
Because extensive data is available from ESA on retrofit measures, the cost of those retrofits,
and the number of therms reduced or eliminated, the data source provides a strong metric for
estimating the average investment per therm.16,17
The calculated fee has also been tested for feasibility using the same analysis applied by EPS
to the City’s AB 1600, Mitigation Fee Act program for transportation, water and wastewater,
parks and recreation, and public safety impact fees. If the City Council moves forward with
the offset requirement as recommended, staff will return on November 5, 2019, with a
resolution to establish the fee, administrative guidelines, and a package of incentives to
further encourage development of all electric buildings. Some examples of the associated in-
lieu fee are highlighted in the table below.
Building Type Average Therm Usage Calculated In-Lieu Fee
Single Family Residential 220 therms per year $6,013
Multifamily Residential 120 therms per year $3,280
Medium Retail (25,000
s.f.)
1,746 therms per year $47,718
Large Office (54,000 s.f.) 3,240 therms per year $88,549
Similar to the City’s development impact fee pr ogram, if the Council would like to levy a
lesser fee for certain priority building types (e.g. multi-family units under 600 square feet in
size), then they have the authority to do so and a variety of options will be considered prior to
returning to the City Council on November 5th with a recommendation.
15 A therm is a unit of heat energy equal to 100,000 British thermal units (Btu). It is approximately the energy
equivalent of burning 100 cubic feet (2.83 cubic meters) – often referred to as 1 CCF – of natural gas.
16 California Public Utilities Commission. (2019). Income Qualified Assistance Program. State of California.
Retrieved from: https://www.cpuc.ca.gov/iqap/
17 The ESA dataset includes expenditures for furnace repair, outreach and assessment, and in-home education. These
measures reflect substantial expenditures but do not have therms savings associated with them. To be conservative,
these measures were not included in the per therm cost calculation. If they had been included, the cost would
increase to $39.23 per therm.
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5. Applicability and Exemptions
The components of the Clean Energy Choice Program, including the local amendments to the
California Energy Code and the offset requirement, would apply to all new residential and
nonresidential construction that is subject to the State Energy Code. The use of natural gas
for certain industrial and medical uses are not governed by the Energy Code for buildings
and would not be subject to the Reach Code or carbon offset requirement.
There are also specific exemptions to the program requirements. For example, the definition
of an all-electric building includes an allowance for the use of natural gas in a commercial
kitchen.
All-Electric Building. A building that has no natural gas plumbing installed within
the building and that uses electricity as the source of energy for all space heating,
water heating, cooking appliances, and clothes drying appliances. An All-Electric
Building may be plumbed for the use of natural gas as fuel for cooking appliances
in a commercial kitchen.
In addition, the following building project types are specifically exempted:
1. The extension of natural gas infrastructure into an industrial building for the purpose of
supporting manufacturing processes (i.e. not including space conditioning).
2. Accessory Dwelling Units that are attached to an existing single-family home.
3. Essential Service Buildings including, but not limited to, public facilities, hospitals,
medical centers and emergency operations centers).
4. Temporary buildings.
5. Gas line connections used exclusively for emergency generators.
6. Any buildings or building components exempt from the California Energy Code.
7. Residential subdivisions in process of permitting or constructing initial public
improvements for any phase of a final map recorded prior to January 1, 2020, unless
compliance is required by an existing Development Agreement.
This list of exemptions was developed based on feedback from members of the public and
through consideration of other City goals and objectives. In addition to these exemptions, the
proposed offset program Ordinance includes a Public Interest Exemption that is intended to
allow for exemptions in relation to unforeseen circumstances where the extension of natural
gas infrastructure would benefit the public interest and serve orderly development. The
exemption includes specific examples of circumstances where the cost to deliver sufficient
electric power to the project would be prohibitive due to major infrastructure limitations, or
where a project on its own would use a de minimis amount of natural gas that could be offset
in other ways, such as through a sequestration project. In these cases, the entity that is
approving the entitlement for the project can approve such an exception.
Cost Effectiveness
In the context of the Clean Energy Choice Program, “cost effectiveness” has a technical
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definition per the California Energy Commission, and a more common use definition.
1. Cost Effectiveness for California Energy Commission Review
As described above, Section 10-106 of the Building Energy Efficiency Standards establishes
a process that allows local adoption of energy standards that are more stringent than the
statewide standards. Under this process, the CEC requires any local amendments to the
California Energy Code that affect energy use in regulated buildings to be cost effective and
use less energy than the standard requirements.
The cost effectiveness test can be passed in two ways: 1) the “On-Bill Customer Lifecycle
Cost” metric and 2) the “Time Dependent Valuation” or “TDV” method. The on-bill metric
evaluates the total first costs, replacement costs, estimated site energy usage and customer
on-bill costs using electricity and natural gas utility rate schedules ov er a 30-year duration
accounting for discount rate and energy cost inflation. The TDV method captures the
“societal value or cost” of energy use including long-term projected costs such as the cost of
providing energy during peak periods of demand and other societal costs such as projected
costs for carbon emissions and grid transmission and distribution impacts.
The CEC requires that cost effectiveness be proven to the satisfaction of the local adopting
government through the adoption of the determination that the standards are cost effective by
the local agency at a public meeting. The determination must subsequently be filed with the
Energy Commission.
In support of code development, the California Statewide Codes & Standards Program,
which includes the State’s Investor Owned Utilities (PG&E, SoCal Gas, SDG&E, and SCE,
under the auspices of the California Public Utilities Commission) developed the 2019
Statewide Cost Effectiveness Study for Nonresidential Development (including
nonresidential, high-rise residential, and hotel buildings) and the 2019 Statewide Cost
Effectiveness Study for Low-Rise Residential New Construction (including single family
homes and multi-family buildings under four stories), which are provided as Attachments G
and H. Both of these attachments are highly detailed and are included in the record to
support the Council’s findings and policy decisions.
Attachments G and H document cost-effective combinations of measures that exceed the
minimum state requirements. The analysis includes evaluation of both mixed fuel and all-
electric buildings, documenting that the performance requirements can be met by either type
of building design. The studies provide a cost-effectiveness analysis in all sixteen California
climate zones and for each Investor owned Utility. These studies are the basis for the City’s
cost effectiveness findings; the City finds the studies sufficient to illustrate compliance with
the requirements set forth under California Administrative Code Chapter 10-106. Based on
these studies, the City finds the proposed local amendments to the 2019 California Energy
Code that affect building energy use to be cost-effective and consume less energy than
permitted by Title 24, Part 6. SoCal Gas has provided additional information about offsite
infrastructure costs, which does not affect the City’s cost effectiveness findings related to the
proposed local amendments to the California Energy Code as described below.
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It is important to note that the 2019 California Energy Code includes an all-electric
compliance pathway for low-rise residential buildings, meaning that the compliance option
exists via the California Energy Commission rule making process. Additionally, all-electric,
non-residential buildings are attainable using the standard building energy baseline.
The Clean Energy Choice Program has multiple implementing actions, including the code
amendments as provided in Attachment B. The actions presented in staff’s recommendation
and in Attachment B that are required to pass the cost effectiveness and energy reduction
tests are limited to the following:18:
1. Per Figures 17, 24, and 31 of the 2019 Nonresidential New Construction Reach Code
Cost Effectiveness Study (Attachment H), the City’s amendments to require additional
efficiency compliance margins for energy performance in nonresidential (nonresidential,
high-rise residential, and hotels) mixed-fuel buildings reduce energy and are cost
effective.
2. Per Figures 38, 39, and 40 of the 2019 Nonresidential New Construction Reach Code
Cost Effectiveness Study (Attachment H), the City’s amendments to require solar on
nonresidential (nonresidential, high rise residential, and hotels) buildings reduce energy
and are cost effective.
3. Per Table 57 and Table 58 of the 2019 Cost-effectiveness Study: Low-Rise Residential
New Construction (Attachment G), the City’s amendments to require a lower Energy
Design Rating score in low-rise residential mixed-fuel buildings (single family residential
and multifamily buildings three stories and shorter) reduce energy and are cost effective.
2. Common Usage of Cost Effectiveness
The more common understanding of cost effectiveness is how builders and building
occupants will face lower or higher costs as the result of the proposed requirements. First
costs, financing, replacement costs, and utility costs all affect housing affordability and cost
of living. Building costs are highly variable dependent on-site conditions, selected materials,
building design, and appliance selection.
On-Site First Costs
The 2019 Cost-effectiveness Study: Low-Rise Residential New Construction (Attachment G)
statewide cost effectiveness study provides high, low, and typical costs to build all-electric
and mixed-fuel residential units. According to the study, onsite construction costs including
increased rough electrical work, avoidance of costs associated with natural gas plumbing and
venting, and comparable appliances, for a typical 2,400 square foot single-family home
would be $421 cheaper to build than a standard natural gas building and a 780 square foot
multi-family unit would be approximately $221 cheaper to build. When using comparable
appliance comparisons, the range of costs included in the statewide study are consistent with
anecdotal evidence from local builders.
1818 Based on discussion with CEC Energy Division staff, pre-wiring requirements do not affect the building’s
energy use and therefore are not subject to the requirements of Section 10-106.
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Offsite Infrastructure Costs
Offsite infrastructure, including extension of gas mains, lateral tie-ins, and new meter costs
are also highly variable. The 2019 Cost-effectiveness Study: Low-Rise Residential New
Construction (Attachment G) statewide cost effectiveness study provides high, low, and
typical offsite costs associated with new construction including the costs experienced by
developers and costs experienced by developers and the ratepayers more broadly. According
to the statewide cost effectiveness study, California natural gas utilities provide allowances to
developers to cover part of their infrastructure costs. The allowances are then paid for by rate
payers over time. For single family units, the study provides a typical cost of estimate of
$5,750 direct cost to the developer and $11,836 in total costs to the developer and the rate
payers.
On August 9, 2019, SoCal Gas provided a letter contesting this amount, noting they expected
an average of $4,400 average per “Work Order”. City staff has requested additional
information from SoCal Gas. A response was received late in the day on August 26, 2019,
and additional analysis based on this cost information will be provided to the City Council
via memo. Although this is an important point to resolve, and it would be beneficial to
understand how much more savings occur as the result of all-electric buildings, it is not
relevant for CEC review (as mentioned above) and it does not substantively change the
findings in this report.
Operational Costs
Operational costs are also highly variable based on building design, appliance selection, and
occupant behavior. Projected utility costs are highly uncertain and in addition to the variables
described above, also depend on predictions of 30 years of utility rate escalation for
electricity and natural gas utilities, as well as economy-wide inflation rates. The 2019 Cost-
effectiveness Study: Low-Rise Residential New Construction (Attachment G) estimates a net
lifetime (30 year) utility cost increase from a mixed-fuel standard construction building to an
all-electric standard construction building to be $11,034 for a 2,400 square foot single family
home and $3,573 for a 870 square foot multi-family home. Based on this analysis, and
assuming the same escalation rates used in the statewide cost effectiveness study, a 2,400
square foot single family home could experience a first year monthly incremental cost
increase of $16.85 and an 870 square foot multi-family unit could experience a first year
monthly incremental cost increase of $5.45 if no additional solar panels are installed.
According to the 2019 Cost-effectiveness Study: Low-Rise Residential New Construction,
modest additions of solar in the 1 to 2 kW range could turn lifetime utility costs into lifetime
utility savings, even when including the upfront costs of the additional panels.
It is important to note that the above mentioned utility cost assessments are conservative in
that they do not factor in lower generation rates provided by Monterey Bay Community
Power, potential bill savings that could be experienced through future time of use rates and
using heat pump appliances in off-peak periods, nor the value of solar panels in insulating
households from potential future rapid grid energy (natural gas and electricity) cost
escalations.
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Natural Gas Prohibition
Due to complicated federal law and local regulatory considerations, the City may not simply
require that all buildings be electric through the building code without also providing a separate
pathway for mixed fuel development (i.e., electricity and natural gas). In June of 2019, the City
of Berkeley adopted an ordinance restricting natural gas infrastructure in buildings through the
entitlement process. Staff has not conducted an assessment on the appropriateness or feasibility
of a similar approach for San Luis Obispo.
What Other Jurisdictions Are Doing
The City of San Luis Obispo is joined by over 50 California cities currently pursuing emissions
reductions in new buildings concurrent with the 2019 California Building Code Update. In June
of 2019, the City of Berkeley banned natural gas in new buildings. By October of 2019, it is
expected that nine (9) other cities (San Mateo, San Francisco, Burlingame, Santa Monica,
Portola Valley, San Jose, Mountain View, Los Altos, and Morgan Hill) will have completed first
readings of Ordinances that encourage all electric buildings in a manner similar to the Staff
recommended proposal contained in this report.
Tools for Existing Buildings
The City has a wide variety of policy and program options for
addressing greenhouse gas emissions from energy use in existing
buildings. During the public outreach and engagement process,
staff heard from many community members and organizations
that incentives were key to help people transition to building
electrification. The following is a short list of options that staff is
asking the City Council to direct staff to further evaluate.
1. Free or discounted retrofit work generated by the offset
program: If a developer wants to build a new building with
natural gas they will first have to offset the proposed fossil
fuel use. This will mean that there could be a “market” in
town for retrofit projects created by developers that are
looking for offsets.
2. City retrofit program participation: Funds collected by the City in-lieu of direct offsets will be
used to support retrofit projects within the City. The City will work with other agencies in this
arena, such as the Community Action Partnership of San Luis Obispo and the Tri-County
Regional Energy Network to fund this work with a focus on making housing more affordable
for eligible households.
3. Education and Outreach: City staff will pursue a program of education and outreach to help
property owners in the City understand both the cost-savings potential and environmental
benefits of building electrification.
The Clean Energy
Choice Policy does not
apply to existing
buildings. For property
owners that want to
make the switch,
incentives and other
resources will be
available.
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4. Professional Consulting and Design Services: For smaller projects, energy code compliance
can be a daunting and expensive task. The City could support this effort by making
professional consulting and design services available to assist property owners with their
projects. This service could also be supported by a guidebook created by the City in close
partnership with local builders and building industry professionals that would assist with the
identification of, design for, and installation of heat pumps for water heaters and space
conditioning.
5. Incentives: Staff is recommending that the City Council provide direction to develop an
incentive program to assist property owners in the City that want to electrify their buildings.
This could mean a small height increase, a density bonus, a parking reduction, or a variety of
other concessions that might make the difference between a fuel-switching project being a
boom versus a burden. As part of this recommendation, staff is asking the City Council for
direction to develop a specific package of proposals with implementation guidelines for
adoption along with the in-lieu fee on November 5, 2019.
Previous Council Action and Policy Context
On October 3, 2017, the City Council adopted Ordinance
1639 approving a Development Agreement for the Avila
Ranch project. On August 21, 2018, the City Council
adopted Ordinance 1649 approving a Development
Agreement for San Luis Ranch. Because the City Council
was already contemplating aggressive climate action
strategies, both of these Development Agreements include
prospective requirements to ensure compliance with any
city-wide policy adopted for the purpose of reducing
greenhouse gas emissions. On September 18, 2018, City
Council unanimously gave staff direction to update the
City’s climate action plan and pursue a greenhouse gas
emissions reduction target of carbon neutrality by 2035. The
City is currently assessing specific strategies on how best to
achieve this goal, but it is generally understood that this will
require virtually zeroing out existing emissions sources such
as gas emissions generated from the consumption of energy
(e.g., electricity from carbon-based sources and natural gas).
At the same meeting, City Council provided unanimous direction to research the possibility of
requiring carbon neutral buildings as part of the City’s building codes. This direction ensures that
carbon neutral development can be accomplished in the Avila Ranch and San Luis Ranch
subdivisions (1,300 homes total), which are required by the Development Agreements for each
of those projects only if a City-wide program is adopted first. In a Study Session on February 19,
2019, Council unanimously reaffirmed the direction to develop an approach to carbon neutral
development.
On September 18, 2018, City
Council unanimously gave
staff direction to update the
City’s climate action plan
and pursue a greenhouse
gas emissions reduction
target of carbon neutrality
by 2035. Joining Monterey
Bay Community Power was
a recent step. The next step
is to ensure that greenhouse
gas emissions do not
increase from energy use in
new development.
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On November 13, 2018, Council unanimously approved a resolution requesting membership in
Monterey Bay Community Power (MBCP). On December 5, 2018, MBCP approved the
membership request and will begin procuring more affordable and carbon neutral electricity for
all electric accounts in the City of San Luis Obispo starting January 2020.
On June of 4, 2019, Council unanimously adopted the 2019-21 Financial Plan. The adoption of
the Financial Plan was the culmination of over six months of public outreach. As an outcome of
that outreach, Climate Action was included in the Financial Plan as a Major City Goal and
developing local amendments to the 2019 California Energy Code was identified in the Major
City Goal Work Program as a task to be completed by Fall of 2019.
Greenhouse Gas Emissions and the Built Environment
1. Methane and Greenhouse Gas Emissions
Natural gas is between 92 and 98 percent methane. It is commonly known that combusting
natural gas causes methane to yield carbon dioxide, a greenhouse gas, and water (the
greenhouse gas emissions inventory above presents this basic accounting). New scientific
studies suggest that in addition to combustion, there are significant additional greenhouse gas
emissions occurring as the result of the direct leakage of methane into the atmosphere along
the natural gas drilling, transmission, and distribution system. In the atmosphere, methane is
one of the most potent greenhouse gases despite its short lifespan. According to the EPA,
“[p]ound for pound, the comparative impact of CH4 [methane] is more than 25 times greater
than CO2 [carbon dioxide] over a 100-year period.”
Methane is even more potent in the first two decades of its lifespan—20 years after it is
release, methane has a global warming potential of 84 times that of carbon dioxide.
Methane’s enhanced potency, particularly in the short term, results in more immediate
warming and thus warrants greater urgency. The Environmental Defense Fund estimates that
“[a]bout 25% of the manmade global warming we're experiencing is caused by methane
emissions.”
Substantial methane gas is released into the atmosphere through hydraulic fracking and other
drilling methods. A 2018 Environmental Defense Fund study estimated that the equivalent of
2.3% of total annual domestic gas production leaks into the atmosphere each year from
across the gas supply chain. This leakage rate does not include additional leaks at and behind
the residential or commercial meter located on building premises.
2. Existing Emissions
On September 18, 2018, staff presented the findings of the communitywide greenhouse gas
emissions (GHG) inventory report update. The inventory, which is measured in metric tons
of carbon dioxide equivalence (MTCO2e), includes emissions from transportation, energy
used in buildings and for lighting for residential and nonresidential uses, methane from solid
waste decomposing in Cold Canyon Landfill, direct emissions from certain wastewater
processes, and off-road sources (e.g., lawn and garden and construction equipment). Since
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that presentation, staff has updated the inventory to reflect more accurate transportation
modelling.
As illustrated in Table 2, emissions overall decreased by approximately 9 percent, with large
decreases in nonresidential and residential energy (-8 percent and -21 percent respectively).
In 2016, energy use accounted for approximately 29 percent of all emissions in the City. As
previously mentioned, to achieve carbon neutrality, the emissions from each sector in Table 2
will need to be as close to zero as possible, which means a combination of decreasing energy
use and waste, as well as transferring all existing technologies (e.g., vehicles, home heating
and cooling, water heating, etc.) to carbon free sources of energy.
Table 2. Community Greenhouse Gas Emissions, 2005-2016 (MTCO2e)
Sector 2005 2005 % of
Total
2016 2016 %
of Total
% Change
Transportation 234,660 63% 221,750 65% -6%
Nonresidential Energy 57,800 15% 53,410 16% -8%
Residential Energy 55,190 15% 43,580 13% -21%
Solid Waste 15,540 4% 13,880 4% -11%
Off-Road 10,810 3% 8,230 2% -24%
TOTAL 374,000 340,850 -9%
Table 3 provides additional detail of communitywide GHG emissions in 2016. Of energy
related emissions, electricity accounted for approximately 47 percent of emissions; natural
gas accounted for approximately 53 percent emissions.
Table 3. 2016 Community Greenhous Gas Emissions, Energy Detail (MTCO2e)
Sector Energy Type Emissions (MTCO2e) % of Total
Residential
Electricity 14,650 15%
Natural Gas 28,930 30%
Nonresidential
Electricity 31,310 32%
Natural Gas 22,100 23%
Total 96,990
3. Future Emissions and Applicability to Current Development Agreements
Table 2 and 3 report the emissions from the built environment as it existed in 2005 and 2016,
respectively, and for 2016, includes approximately 21,155 units of housing and
approximately 19,000,000 square feet of nonresidential space.19 The City’s Land Use
Element of the General Plan anticipates a total of 4,607 additional units and a total of
5,170,000 square feet of additional nonresidential space by 2035.20 Although this
development will be increasingly efficient due to regular improvements in California
19 Source: 2016 General Plan Annual Report
20 Source: Land Use and Circulation Element Environmental Impact Report
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Building Code, they still represent one of the most significant potential sources of GHG
emissions growth in the community. Based on a recent conservative analysis, natural gas use
in new buildings built in 2020 or later is expected to generate approximately 7,800 MTCO2e
per year at build out.
Of immediate interest, in 2017 and 2018, two major developments were approved by City
Council: San Luis Ranch and Avila Ranch. Combined, the developments will add up to 1,300
new housing units and approximately 265,000 square feet of commercial and office space.
This additional development represents approximately 28 percent of all available residential
buildout and 6 percent of all available commercial buildout in accordance with existing Land
Use and Circulation Elements of the General Plan.
As part of both approvals, individual “Development Agreements” were negotiated to provide
public benefit beyond what is required as part of the standard approval process. In both cases,
the Development Agreements include specific provisions to
be consistent with any net-zero carbon policies in place at
time of building permit application (See Ordinance #1639
(2017) and Ordinance #1649 (2018)). Specifically, Section
7.07 of the Avila Ranch Development Agreements requires:
(a) Avila Ranch shall provide for accelerated compliance
with the City' s Energy Conservation Goals and its Climate
Action Plan by implementing energy conservation measures
significantly above City standards and norms by providing
for solar PV energy generation for 100 percent of onsite
electrical demand as described in Section 13 of the Design
Framework of the Development Plan. The Project shall also
include energy efficiency standards in excess of the current
Building Code.
(b) Developer shall provide sustainability features as
described in Section 13 of the Design Framework of the
Development Plan, including: (i) housing that meets the 2019 net zero building and energy
codes or, if the 2019 building and energy codes are not yet adopted upon building permit
application, the equivalent to the satisfaction of the Community Development Director, (ii)
implementing any future city-wide policy regarding carbon emissions reduction, (iii) solar
electric panels, (iv) integrated power outlets for electric vehicles and electric bicycles, (v)
building design that maximizes grey water usage, and (vi) work -at-home options with high-
speed internet connectivity.
Section 7.06 of the San Luis Ranch Development Agreement requires:
(a) Developer shall provide for accelerated compliance with the City’s Energy Conservation
Goals and its Climate Action Plan by implementing energy conservation measures
significantly above City standards and norms by providing for solar PV energy generation
for 100 percent of onsite electrical demand at build-out. The Project shall also include
San Luis Ranch and Avila
Ranch have provisions in
their Development
Agreements that requires
them to implement any
future city-wide policy
regarding carbon emissions
reduction. As a result, the
proposed Clean Energy
Choice Policy will apply to
over 1,400 homes to be
constructed over the next 10
years in these new
neighborhoods.
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energy efficiency standards in excess of the Building Code in effect in the City on the Vesting
Date and implement the feasible strategies set forth in Section 5.4.2 of the SLR SP.
(b) Developer shall provide sustainability features including: (i) housing that meets the 2019
net zero building and energy codes or, if the 2019 building and energy codes are not yet
adopted upon building permit application, equivalent energy features shall be provided to
the approval of the Community Development Director, (ii) implementing any future City-
wide policy regarding zero carbon emissions, (iii) solar electric panels, (iv) integrated power
outlets for electric vehicles and electric bicycles, (v) building design that maximizes grey
water usage, and (vi) work-at-home options with high-speed fiber-optic connectivity.
4. Decarbonized Electricity and Built Environment Implications
The emissions presented in this report were arrived at using factors
to estimate the greenhouse gas emissions generated per unit of
energy consumed. The electricity factor uses 2016 PG&E grid
average carbon intensity. Starting in 2020, the community will
begin receiving electricity service from Monterey Bay Community
Power, which through its carbon free electricity supply, has an
effective emissions output of zero.21 This means that starting in
2020, the primary source of greenhouse gas emissions coming
from existing and new buildings will be from the combustion of
onsite fossil fuels, primarily natural gas. The most direct path to
carbon neutrality in the built environment is to transition from
natural gas to carbon free electricity.
A carbon neutral electricity supply, coupled with an-all electric building, would provide a cost-
effective way to ensure that the energy use of a building is carbon neutral while also providing
healthier indoor environments, energy bill savings potential, and the capacity to better manage
grid energy demands. As the City continues towards buildout, based on standard accounting
protocol, all electric new buildings would save approximately 7,800 metric tons of carbon
dioxide (MTCO2e) per year in 2035, and a total of over 55,000 cumulative MTCO2e by 2035.
Based on an updated understanding of methane’s contributions to climate change and of
leakage rates along the natural gas extraction, transmission, and distribution process, the total
avoided emissions are expected to be significantly higher.
21MBCP procures energy from eligible renewable (wind, solar, geothermal, biogas) and non -eligible renewable
(large hydroelectric generators) resources mostly within California but also within states associated with the
Western Energy Coordinating Council (WECC). MBCP does not directly procure any resources from fossil fuel
power plants but there are months where MBCP may need to procure additional resources to meet demand from the
greater unspecified California energy mix. On an annual basis, MBCP contracts with enough carbon neutral
resources to meet the annual demand of its customer base. The California Independent Systems O perator balances
the majority of the California electrical grid which does have imported electricity as well as in -state natural gas
plants for reliability and grid stability. MBCP recently contracted for two solar plus battery storage projects to be
built by 2021 with goal of providing additional carbon free resources on the grid during peak hours of the day to
assist in reducing the grid-wide need for natural gas plants. MBCP will continue to increase its sourcing from
renewable resources on an annual basis in order to continue to meet the state’s goals as well as ensure a diversified
power mix. More information is available at https://www.mbcommunitypower.org/understanding -clean-energy/.
The opportunity to
transition away
from natural gas in
new development
comes at a time of
significant
advances in
electrical
appliances.
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The opportunity to transition away from fossil fuels comes at a time of significant advances
in electrical appliances including electric ceramic and induction cooktops and air source heat
pumps for space conditioning and water heating. Switching from natural gas for space
conditioning and water heating to electric air source heat pumps are a critical tool for
achieving California’s deep decarbonization goals due to their efficiency and ability to ensure
that electricity consumption is occurring during times of peak onsite solar production or at
times when the grid has the most amount of renewables on it.
The primary new electrical load from an all-electric building comes from space heating and
water heating. In a building built under the 2019 code, using a highly efficient heat pump (up
to 300+ percent) efficient, the load is less significant than from a traditional electric water
heater. As the utilities push Time-of-Use rates, these electric heat pump appliances can be
programmed to operate at times where there is excess (and cheaper) power. This translates
the electrical energy into thermal energy, which is stored in the water tank and in the
conditioned space. In that way, an all-electric building can work as a battery and can help
manage grid health.
The issue of grid outages as the result of wildfire or other reasons is very serious, and
resilience to that issue is something that the City and PG&E are actively working on. A
common misconception is that gas appliances can run when electric appliances cannot. For
safety and performance reasons, new appliances all require electricity to operate. A modern
furnace and water heater require electricit y and are disabled without it; bypassing these
safety features would be dangerous. All primary lighting sources are electric. The one
appliance that can be operated is the stove top, and that’s if the pilot is manually lit. A
propane grill or cooktop for emergency use could serve a similar function. Given the critical
importance of public health and safety, critical facilities and buildings require back-up
generation are exempt from the program.
It is also important to note that the proposed amendment is for the 2019-22 code cycle (which
confusingly applies to years 2020-22) and in that time, much of the new residences being
built will be in subdivisions that will have new electric infrastructure built to support it.
Public Engagement
The initial conversation regarding building decarbonization occurred at the publicly held
September 18, 2018 and February 19, 2019 City Council meetings. Since then, staff has worked
closely with expert technical consultants (TRC Companies and EPS) the local building
community, Monterey Bay Community Power, the SLO Climate Coalition, and peer cities
throughout California to identify and pursue resources and develop the potential approach
discussed in this report. The City has led or supported the following public engagement events:
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Event Date Description
Energy code
workshop #1
May 1, 2019 Staff held a kickoff workshop for developers, builders, and
design professional to review the City’s approach to the code
amendments, early feasibility and cost effectiveness funding
findings, and to discuss potential concerns and issues.
Following the meeting, staff met directly with the developers
and builders of San Luis Ranch, Avila Ranch, and Righetti
Ranch
Builders
Roundtable
May 13, 2019 Staff presented the initial building code concept to the
Developer’s Roundtable for feedback.
Planning
Commission
May 22, 2019
and
July 24, 2019
Staff met with the Planning Commission on two occasions to
explain the reasoning behind the development of local
amendments to the energy section of the building code and to
present proposed code language. The items were
informational at both meetings.
Chamber of
Commerce
Legislative
Action
Committee
July 11, 2019 Staff presented the reasoning behind the development of
local amendments to the energy section of the building code
and proposed approaches to the Chamber of Commerce
Legislative Action Committee. City staff has been working
closely with Chamber staff to respond to comments.
Energy code
workshop #2 –
Code and Offset
Program Review
July 24, 2019 Staff held an open workshop for developers, builders, and
design professional to review the code and offset program.
The event was attended by 35 individuals representing and
led to additional revisions to the proposed code language and
approach.
Public Comment
Period
August 9, 2019 On July 22, 2019, the City posted draft building code
amendment language for a public comment period, which
closed on August 9, 2019. The City received 93 comments
from over 15 individual commenters including residents,
architects, electricians, statewide experts, and the California
Energy Commission. Attachment F provides the received
comments and how they were incorporated into the final
policy proposal.
Electrification
Expo
August 22, 2019 The City partnered with the Tri-County Regional Energy
Network and the Climate Coalition to host a half day training
for design professionals on the 2019 California Building
Code, a panel discussion for residents and businesses to
better understand the potential benefits and challenges of all
electric/carbon free buildings, and an electrification expo
hosted at the Downtown Association Farmer’s Market.
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Utility Interaction
The City of San Luis Obispo has a successful history working closely with energy utility
partners. The City has partnered with PG&E and SoCal Gas on large scale efficiency projects at
numerous facilities. To ensure orderly development, to maintain infrastructure as it ages and the
City becomes denser, and to continue to thrive as a community, it will be critical to m aintain and
enhance close working relationships between all partners. Over the course of this project, staff
has worked with PG&E, SoCal Gas, and MBCP staff.
Pacific Gas & Electric
In August, staff contacted PG&E to discuss grid interconnection questions raised during the
outreach process. PG&E staff confirmed that there is sufficient grid capacity for electrification as
generally described in the City’s Clean Energy Choice Program. On August 21, PG&E provided
a letter supporting the City’s electrification initiatives when cost effective.
SoCal Gas
In July, staff-initiated contact with SoCal Gas and requested a meeting to discuss coordination
and collaboration on the City’s climate targets, including pilot biogas (also referred to as
“renewable natural gas”) projects, energy efficiency programs, and proposed local amendments
to the California Energy Code. The City spoke with SoCal Gas staff about these topics on July 9
via phone.
As a follow up to the conversation, in early August, City staff spoke wit h SoCal Gas staff
responsible for biogas development. The existing sources of biogas in the City and biogas
generated by activity in the City were discussed (Cold Canyon Landfill, the Hitachi-Zosen
Anerobic Digester, and the Water Resource Recovery Facilit y). Based on the discussion, it was
agreed that the existing sources of local biogas are already allocated to existing projects that
generate electricity.
On August 9, 2019, SoCal Gas submitted a letter to the City opposing the proposed local
amendments to the California Energy Code. The letter claims that the data and methods used in
the 2019 Cost Effectiveness Studies are flawed, primarily that incremental costs in the study are
higher than those commonly experienced in SoCal Gas service territory. The letter also claims
the rate forecasting method and how TDV is operationalized are insufficient. As mentioned
above, the 2019 Cost Effectiveness studies were completed in a transparent public process
including public review and involving all Investor Owned Utilities (i.e, San Diego Gas and
Electric, PG&E, SoCal Gas, and Southern California Edison). Staff understands that the final
reports were routed within each Investor Owned Utility for review and SoCal Gas did not
provide any comments on the issues contained in the letter they provided to the City.
Monterey Bay Community Power
Staff has been advocating on the City’s behalf to support programs that incentivize all-electric
buildings. In May, staff travelled to Monterey to attend the Monterey Bay Community Power
Electrification Plan Workshop. At the workshop, staff advocated for incentives for all electric
developments with a special focus on multifamily and affordable units. Staff’s recommendation in
this Council Agenda report is to continue to advocate for incentives for all-electric multi-family
and affordable housing units and directs staff to submit a letter communicating this preference.
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Schedule and Next Steps
Should Council approve staff’s recommendations, work would proceed on the following
timeline:
Task Timeframe
Adoption of “Reach Code” and submittal to the California
Energy Commission; Council approval of the Carbon Offset In-
Lieu Program
September 2019
Receive approval from the California Energy Commission November 2019
Return to the City Council with a fee resolution and approving
an implementation plan to include education and outreach,
development of a program making professional consultation and
design services available to property owners, and identification
of a series of incentives that would allow the City to relax
property development standards (such as, but not limited to,
parking requirements, setback reductions, or building height
allowances) in exchange for all-electric development
November 2019
Building Code goes into effect January 1, 2020
Clean Energy Choice Program goes into effect January 1, 2020
CONCURRENCE
The Office of Sustainability, Community Development, Fire Department and Utilities
Department concurs with the recommendations in this report.
ENVIRONMENTAL REVIEW
These ordinances are categorically exempt from CEQA because they constitute actions taken by
a regulatory agency for the purpose of protecting the environment (CEQA Guidelines Section
15308). In addition, these ordinances are exempt from CEQA under the general rule,
15061(b)(3), on the grounds that these standards are more stringent than the State energy
standards, there are no reasonably foreseeable adverse impacts, and there is no possibility that
the activity in question may have a significant effect on the environment.
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FISCAL IMPACT
Budgeted: Yes Budget Year: 2019-20
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current Funding
Request
Remaining
Balance
Annual
Ongoing Cost
General Fund $50,000 0$ $0 TBD
Total $50,000 $0 TBD
Presenting the Clean Energy Choice Program is a 2019-21 Climate Action Major City Goal work
task and staff time is included in the 2019-20 budget to develop this proposal, submit to the
CEC, and have it in place to begin implementation on January 1, 2020. $50,000 is the estimated
amount the program implementation will come from the budgeted resources. The Climate Action
Major City Goal also includes $50,000 for developing a building retrofit program. It is
anticipated that this program will be developed by 2021. Should Council direct staff to return
with additional information on incentives, including staff support, further fiscal analysis would
be provided. The proposed incentive program would also have ongoing costs that currently are
not budgeted. Fiscal impacts of proposed incentives will be evaluated and presented as part of
the implementation plan recommendations, scheduled to return to the City Council on November
5, 2019.
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ALTERNATIVES
1. No Action. The City Council could decide to take no action on the proposed Clean Energy
Choice policy and implementing ordinances. If the Council chooses this option, direction
should be provided to staff for follow up and resolution. The staff recommendation ensures
that the reach code and carbon offset program would go into effect together with a larger set
of building code updates on January 1, 2020. Depending on the scope of changes directed, a
delay in implementation would likely delay adoption of the reach code past January 1, 2020.
2. Adopt One or Other Adopting Ordinance. If the City Council chooses to move forward with
approval of the Clean Energy Choice Policy, it can choose to further implement the policy by
adopting one or the other recommended implementing ordinances. The Reach Code and
Carbon Offset Program may be implemented completely independent of one another.
3. Adopt with Modifications. The City Council could choose to modify various aspects of the
staff recommendation to accommodate more precise application of the Clean Energ y Choice
Policy. Staff is working to be prepared for a wide variety of potential changes that the City
Council may wish to pursue in response to public testimony or new information brought to
light prior to the hearing. Some of the areas where staff will be prepared to discuss
alternative methods of implementation include:
a. Applicability of the reach code and offset requirement
b. Exemptions from the requirements of either code
c. Possible update to the reach code recommendations based on ongoing conversations with
stakeholders
d. Adoption of the Reach Code only
e. Adoption of the offset requirement only
Attachments:
a - Clean Energy Choice Resolution
b - Reach Code Ordinance
c - Carbon Offset Program Ordinance
d - Reach Code Legistlative Draft
e - EPS In-Lieu Fee Report
f - Public Review Comments
g - Council Reading File - 2019 Residential Cost Effectiveness Study
h - Council Reading File - 2019 Nonresidential Cost Effectiveness Study
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RESOLUTION NO. _____ (2019 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, ESTABLISHING A “CLEAN ENERGY CHOICE
POLICY” TO GUIDE THE REDUCTION OF GREENHOUSE GAS
EMISSIONS AND USE OF FOSSIL FUELS FOR BUILDINGS AND
TRANSPORTATION.
WHEREAS, greenhouse gas accumulation in the atmosphere as the result of human
activity is the primary cause of the global climate crisis; and
WHEREAS, in California alone, the initial impacts of climate change have resulted in
unprecedented disasters with tremendous human, economic, and environmental costs and;
WHEREAS, the Intergovernmental Panel on Climate Change estimates that global
emissions need to be reduced by 45 percent from 2010 levels by 2030, and 100 percent by 2050 to
prevent global catastrophe; and
WHEREAS, the State of California enacted Senate Bill (SB) 32 to require greenhouse gas
emissions to be reduced to 40 percent below 1990 levels by 2030; and
WHEREAS, Governor Brown issued Executive Order B-55-18 establishing a statewide
target of carbon neutrality by 2045; and
WHEREAS, City of San Luis Obispo residents and businesses have repeatedly identified
climate action as a top community priority; and;
WHEREAS, the City of San Luis Obispo City Council has directed staff to evaluate
strategies and options to achieve community-wide carbon neutrality by 2035; and
WHEREAS, the inventoried greenhouse gas emissions in the City of San Luis Obispo
come from a variety of sources, primarily transportation and energy use in buildings and facilities;
and
WHEREAS, as of January 2020, the community will have access to carbon neutral
electricity procured by Monterey Bay Community Power; and
WHEREAS, the remaining source of greenhouse gas emissions from energy use in
buildings will come from the onsite combustion of fossil fuels, primarily natural gas; and
WHEREAS, the direct global warming impact of natural gas is considerably higher than
previously thought; and
WHEREAS, in order to achieve carbon neutrality, new sources of greenhouse gas
emissions need to be substantially reduced or eliminated;
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NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. The recitals set forth above are hereby adopted as the findings of the City
in adopting the policies herein.
SECTION 2. It is the policy of the City that new buildings should be all-electric.
SECTION 3. The Community Development Department should only issue a building
permit for a new building if it is an all-electric building or if the applicant meets the City’s current
Reach Code and Carbon Offset Program requirements.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2019.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, 2019.
____________________________________
Teresa Purrington
City Clerk
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ORDINANCE NO. _____ (2019 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, ESTABLISHING THE CLEAN ENERGY
CHOICE PROGRAM BY AMENDING THE CITY OF SAN LUIS OBISPO
BUILDING CODE TO REQUIRE HIGHER ENERGY PERFORMANCE
FOR NEWLY CONSTRUCTED STRUCTURES
WHEREAS, greenhouse gas accumulation in the atmosphere as the result of human
activity is the primary cause of the global climate crisis; and
WHEREAS, in California alone, the initial impacts of climate change have resulted in
unprecedented disasters with tremendous human, economic, and environmental costs and;
WHEREAS, the Intergovernmental Panel on Climate Change estimates that global
emissions need to be reduced by 45 percent from 2010 levels by 2030, and 100 percent by 2050 to
prevent global catastrophe; and
WHEREAS, the State of California enacted Senate Bill (SB) 32 to require greenhouse gas
emissions to be reduced to 40 percent below 1990 levels by 2030 and Governor Brown issued
Executive Order B-55-18 establishing a statewide target of carbon neutrality by 2045; and
WHEREAS, City of San Luis Obispo residents and businesses have repeatedly identified
climate action as a top community priority; and;
WHEREAS, the City of San Luis Obispo City Council has directed staff to evaluate
strategies and options to achieve community-wide carbon neutrality by 2035; and
WHEREAS, the inventoried greenhouse gas emissions in the City of San Luis Obispo
come from a variety of sources, primarily transportation and energy use in buildings and facilities;
and
WHEREAS, as of January 2020, the community will have access to carbon neutral
electricity procured by Monterey Bay Community Power; and
WHEREAS, the remaining source of greenhouse gas emissions from energy use in
buildings will come from the onsite combustion of fossil fuels, primarily natural gas; and
WHEREAS, the direct global warming impact of natural gas is considerably higher than
previously thought; and
WHEREAS, in order to achieve carbon neutrality, new sources of greenhouse gas
emissions need to be substantially reduced or eliminated; and
WHEREAS, Public Resources Code Section 25402.1(h)(2) allows more stringent local
amendments to the energy conservation provisions in the California Energy Code; and
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WHEREAS, the California Statewide Codes and Standards Program, has determined
specific modifications to the 2019 State Energy Code for each climate zone that are cost-effective;
and that such modifications will result in designs that consume less energy than they would under
the 2019 State Energy Code; and
WHEREAS, staff has reviewed the “2019 Nonresidential New Construction Reach Code
Cost Effectiveness Study” and “2019 Cost-effectiveness Study: Low-Rise Residential New
Construction” developed for the California Energy Codes and Standards Program and find them
sufficient to illustrate compliance with the requirements set forth under California Administrative
Code Chapter 10-106 ; and
WHEREAS, based on these studies, the City finds the proposed local amendments to the
2019 California Energy Code that affect building energy performance to be cost-effective and
consume less energy than permitted by Title 24, Part 6; and
WHEREAS, the 2019 California Energy Code offers compliance options that were
established through the public rulemaking process of the code update; and
WHEREAS, the Council expressly declares that the proposed amendments to the Energy
Code are reasonably necessary because of local climatic, topological, and geological conditions;
and
WHEREAS, the requirements specified in this Ordinance were reviewed via public
comment, through a robust outreach process, and through a publicly noticed public hearing
process; and
WHEREAS, Resolution No XX establishes a policy preference for all-electric buildings
and resolves that new buildings in the city shall not cause a net increase in community greenhouse
gas emissions as the result of on-site energy use.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Purpose. It is the purpose and intent of this Ordinance to establish the Clean
Energy Choice Program, including standards for new buildings to exceed minimum 2019 Title 24
Part 6 requirements.
SECTION 2. Adoption. The 2019 California Building Code, Title 24, Part 6, is hereby
adopted by the City of San Luis Obispo with local amendments to be codified under Chapter 15.04
as specified in Exhibit A. The Council hereby adopts the recitals herein as separate and additional
findings of fact in support of adoption of the ordinance.
SECTION 3. Severability. If any word, phrase sentence part, section, subsection or other
portion of this amendment or any application thereof to any person or circumstance is declared
void, unconstitutional, or invalid for any reason, then such word, phrase, sentence, part, section,
subsection, or other portion, or the prescribed application thereof, shall be severable, and the
remaining provisions of this amendment, and all applications thereof, not having been declared
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void, unconstitutional or invalid, shall remain in full force and effect. The City of San Luis Obispo
hereby declares that it would have passed this amendment and each section, subsection sentence,
clause and phrase of this amendment, irrespective of the fact that any one or more sections,
subsection, sentences, clauses or phrases is declared invalid or unconstitutional.
SECTION 4 - Findings. The City Council finds that each of the changes or modifications
to measures referred to therein are reasonably necessary because of local climatic, geological, or
topographical conditions in the area encompassed by the boundaries of the City of San Luis
Obispo, and the City Council adopts the following findings in support of local necessity for the
changes or modifications:
1. As a city located on the California Central Coast, San Luis Obispo is vulnerable to
the effects of sea level rise and resultant flooding within the San Luis Creek
watershed, and human activities releasing greenhouse gases into the atmosphere
cause increases in worldwide average temperature, which contribute to melting of
glaciers and thermal expansion of ocean water –resulting in rising sea levels.
2. San Luis Obispo is already experiencing the repercussions of excessive greenhouse
gas emissions as rising sea levels and severe weather events threaten the City’s
nearby shoreline and infrastructure and cause significant erosion leading to
infrastructure failures including the Mud Creek slide resulting in closure of
Highway 1 for repairs, and economic impacts to surrounding communities.
3. San Luis Obispo is situated along a wildland-urban interface and has been identified
as a Community at Risk from wildfire and is extremely vulnerable to wildfires and
firestorms, and human activities releasing greenhouse gases into the atmosphere
cause increases in worldwide average temperature, drought conditions, vegetative
fuel, and length of fire seasons—all of which contribute to the likelihood and
consequences of fire.
4. The City of San Luis Obispo is situated at the base of a watershed of the Santa
Lucia Mountains and flooding of San Luis, Chorro, Stenner, Old Garden,
and Brizzolara Creeks results in conditions rendering fire department vehicular
traffic unduly burdensome or impossible, as witnessed in major floods that occurred
in 1952, 1961, 1969, 1973, 1978, 1982, and 1995. Furthermore, flood conditions
described above create the potential for overcoming the ability of the fire
department to aid or assist in fire control, evacuations, rescues and other emergency
task demands inherent in such situations. The resulting overburdening of fire
department personnel may cause a substantial or total lack of protection against fire
for the buildings and structures located in the City of San Luis Obispo. The afore-
described conditions support the imposition of fire protection requirements greater
than those set forth in the California State Building Standards Code and, in
particular, support the imposition of more restrictive requirements than set forth in
the California Energy Code for the purpose of reducing the City’s contributions to
Greenhouse Gas Emissions resulting in a warming climate and related severe
weather events.
5. The aforementioned flood and rain events result in conditions wherein stormwater
can inundate the wastewater treatment system as witnessed in major floods that
occurred in 1952, 1961, 1969, 1973, 1978, 1982, and 1995. Furthermore, rain
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events and flood conditions described above create a condition referred to as Inflow
and Infiltration (I/I) that allow rain and flood waters to flow and/or seep into the
wastewater system and overcome the ability of the wastewater collection system
and Water Reclamation Facility (WRF) to convey and treat sewage. The resulting
overburdening of the wastewater system can result in threats to public health, public
and private property and water quality and violations and fines from the State of
California, the Environmental Protection Agency (EPA) or others. To the extent
that climate change has the potential to make these conditions worse, more
restrictive Energy Code requirements to achieve reduced greenhouse gas emissions
are necessary.
6. The City of San Luis Obispo is situated near three major faults each capable of
generating earthquakes with a magnitude of 7.5. These are the San Andreas to the
east of the City, the Nacimiento-Rinconada that crosses Hwy 101 north of the City
then parallels the City to the east, and the Hosgri to the West. Other faults of
importance are the Huasna and West Huasna to the Southeast of the City, the San
Simeon to the Northwest, and the Edna and Edna Extended faults which enter the
southern areas of the City. In as much as these faults are included as major
California earthquake faults, which are subject to becoming active at any time, the
City of San Luis Obispo is particularly vulnerable to devastation should such an
earthquake occur. The potential effects include isolating the City of San Luis
Obispo from the North and South due to the potential for collapsing of freeway
overpasses or a slide on both the Cuesta and Ontario Grades and the potential for
horizontal or vertical movement of the Edna fault rendering surface travel across
the southern extremities of the city unduly burdensome or impossible. Additional
potential situations inherent in such an occurrence include loss of the City's two
main water sources (the Salinas and Whale Rock reservoirs), broken natural-gas
mains causing structure and other fires, leakage of hazardous materials, the need
for rescues from collapsed structures, and the demand for first aid and other medical
attention to large numbers of people. As a result, the City is pursuing a policy to
discourage additional natural gas extensions and the related, expanded risk of gas
leaks and explosions during seismic events for the protection of human life and the
preservation of property in the event of such an occurrence.
7. That seasonal climatic conditions during the late summer and fall create numerous
serious difficulties in the control and protection against fire situations in the City of
San Luis Obispo. The hot, dry weather in combination with Santa Lucia
(offshore) winds frequently results in wildland fires in the brush-covered slopes on
the Santa Lucia Mountains, San Luis Mountain, and the Irish Hills areas of the City
of San Luis Obispo. The aforementioned areas surround the City. When a fire
occurs in said areas, such as occurred in 1985 when the Los Pilitas fire burned six
days and entered the City and damaged many structures, the entirety of local fire
department personnel is required to control, monitor, fight and protect against such
fire situations in an effort to protect life and preserve property and watershed
land. The same climatic conditions may result in the concurrent occurrence of one
or more fires in the more populated areas of the City without adequate fire
department personnel to protect against and control such a situation. Therefore, the
above-described findings support the imposition of measures to increase the
efficiency of new buildings in the City and reduce Green House Gas emissions from
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carbon, and support reducing the amount of natural gas distributed and used
throughout the City.
SECTION 5 CEQA. This ordinance is categorically exempt from CEQA because it is an
action taken by a regulatory agency for the purpose of protecting the environment (CEQA
Guidelines Section 15308). In addition, this ordinance is exempt from CEQA under the general
rule, 15061(b)(3), on the grounds that these standards are more stringent than the State energy
standards, there are no reasonably foreseeable adverse impacts, and there is no possibility that the
activity in question may have a significant effect on the environment.
The following findings are made in support of these determinations:
1. The purpose of the City’s Clean Energy Choice Policy and the implementation of
a Reach Code is to reduce the amount of greenhouse gas emissions in the City of
San Luis Obispo that are produced from buildings.
2. All electric buildings constructed in the City of San Luis Obispo consistent with
the Clean Energy Choice Policy and implementation of a Reach Code will reduce
greenhouse gas emissions, improve indoor air quality, and reduce the risk of
catastrophic infrastructure failure, including explosions and fires caused by breaks
and leaks in the natural gas distribution system as a result of upset conditions due
to deferred maintenance or following an earthquake.
3. The Reach Code approval process requires that City determine it is cost effective
and that the local standards will require buildings to use no more energy than
current statewide. Furthermore, the CEC approval process requires that the City
make the findings as part of its approval process. Therefore, the Reach Code
standards can only go into effect if they protect the environment by making
buildings more efficient and in a cost-effective manner.
4. The City’s Clean Choice Energy Program enables property owners and developers
to take advantage of a statewide effort to build a clean, efficient, and reliable grid
to serve expanding energy needs across the State of California.
5. The Intergovernmental Panel on Climate Change estimates that global emissions
need to be reduced by 45 percent from 2010 levels by 2030, and 100 percent by
2050 to prevent global catastrophe. However, due to the lack of coordinated action
or a comprehensive plan to address this threat at a national level, cities and states
across the United States must lead the way.
SECTION 6. Violations. Violation of the requirements of this Ordinance shall be
considered an infraction of the City of San Luis Obispo Municipal Code, punishable by all the
sanctions prescribed in Chapter 1.12.
SECTION 7. Effective Date. This Ordinance shall be effective as of January 1, 2020.
SECTION 8. A summary of this ordinance, together with the names of Council members
voting for and against, shall be published at least five (5) days prior to its final passage, in The
New Times, a newspaper published and circulated in this City. This ordinance shall go into effect
at the expiration of thirty (30) days after its final passage.
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INTRODUCED on the 3rd day of September 2019, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the ____ day of ____, 2019, on the following vote:
AYES:
NOES:
ABSENT:
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, 2019.
______________________________
Teresa Purrington
City Clerk
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Ordinance No. XX Exhibit A
Section 15.04.110
AMENDMENTS - CALIFORNIA ENERGY CODE
A. Adoption of Codes and Applicability.
The City of San Luis Obispo hereby adopts the 2019 California Code of Regulations, Title
24, Part 6 (California Energy Code) with local amendments. The provisions of such are
hereby referred to, adopted, and made a part hereof as if fully set out in this Chap ter
except as modified hereinafter. These regulations will be known as the City of San Luis
Obispo Energy Reach Code.
The effective date of this ordinance shall be January 1, 2020 and is applicable to new
construction buildings including those that are built after a demolition. The amendments
contained in 15.04.110 do not apply to Additions, Alterations, or Attached Accessory
Dwelling Units. Residential subdivisions in process of permitting or constructing initial
public improvements for any phase of a final map recorded prior to January 1, 2020 are
exempt, unless compliance is required by an existing Development Agreement. Additional
exemptions and exceptions are identified below.
B. Amend Section 100.1(b) by adding the following definitions:
ALL-ELECTRIC BUILDING is a building that has no natural gas plumbing
installed within the building and that uses electricity as the source of energy for
all space heating, water heating, cooking appliances, and clothes drying
appliances. An All-Electric Building may be plumbed for the use of natural gas as
fuel for cooking appliances in a commercial kitchen.
MIXED-FUEL BUILDING is a building that is plumbed for the use of natural gas
as fuel for space heating, water heating, cooking or clothes drying appliances.
ACCESSORY DWELLING UNIT, DETACHED is an Accessory Dwelling Unit
(see City of San Luis Obispo Municipal Code 17.156.004) that provides new
residential square footage not attached or sharing any walls with the primary
existing single-unit dwelling.
ACCESSORY DWELLING UNIT, ATTACHED is an Accessory Dwelling Unit
(see City of San Luis Obispo Municipal Code 17.156.004) that is either attached
to (by a minimum of one shared wall), or completely contained within, the primary
existing space of the single-unit dwelling unit or existing accessory structure..
C. Amend Section 140.0(b) to read as follows:
(b) The requirements of Sections 120.0 through 130.5 (mandatory measures for
nonresidential, high-rise residential and hotel/motel buildings):
1. The entire solar zone of newly constructed buildings, as specified in Section
110.10, shall have a solar PV system installed that meets the minimum
qualification requirements as specified in Joint Appendix JA11, subject to
the exceptions in Section 110.10.
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D. Amend Section 140.0(c) to read as follows:
(c) Either the performance compliance approach (energy budgets) specified in
Section 140.1 or the prescriptive compliance approach specified in Section
140.2 for the Climate Zone in which the building will be located. Climate zones
are shown in FIGURE 100.1-A.
Exception to 140.0(c): Mixed-Fuel buildings shall use the performance
compliance approach (energy budgets) specified in Section 140.1
E. Section 140.1 is modified as follows:
SECTION 140.1 – PERFORMANCE APPROACH: ENERGY BUDGETS
A newly constructed All-Electric Building complies with the performance approach
if the energy budget calculated for the Proposed Design Building under
Subsection (b) is no greater than the energy budget calculated for the Standard
Design Building under Subsection (a).
A newly constructed Mixed-Fuel Building complies with the performance
approach if the energy budget calculated for the Proposed Design Building under
Subsection (b) has a compliance margin, relative to the energy budget calculated
for the Standard Design Building under Subsection (a), of at least the value
specified for the corresponding occupancy type in Table 140.1 -A below.
Table 140.1-A MIXED FUEL BUILDING COMPLIANCE MARGINS
Occupancy Type Compliance Margins
Office / Retail 15%
Hotel/motel and High-rise residential 9%
All other occupancies in buildings with both indoor lighting and mechanical
systems 5%
All other occupancies in buildings with indoor lighting or mechanical systems
but not both 5%
(a) Energy Budget for the Standard Design Building. The energy budget for
the Standard Design Building is determined by applying the mandatory and
prescriptive requirements to the Proposed Design Building. The energy
budget is the sum of the TDV energy for space -conditioning, indoor lighting,
mechanical ventilation, service water heating, and covered process loads.
(b) Energy Budget for the Proposed Design Building. The energy budget for
a Proposed Design Building is determined by calculating the TDV energy for
the Proposed Design Building. The energy budget is the sum of the TDV
energy for space-conditioning, indoor lighting, mechanical ventilation and
service water heating and covered process loads.
(c) Calculation of Energy Budget. The TDV energy for both the Standard
Design Building and the Proposed Design Building shall be computed by
Compliance Software certified for this use by the Commission. The processes
for Compliance Software approval by the Commission are documented in the
ACM Approval Manual.
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Note: Authority: Sections 25213, 25218, 25218.5, 25402 and 25402.1, Public
Resources Code. Reference: Sections 25007, 25008, 25218.5, 25310, 25402,
25402.1, 25402.4, 25402.5, 25402.8, and 25943, Public Resources Code.
Exception 1 to 140.1: The following buildings and uses shall comply with the
performance approach if the energy budget calculated for the Proposed Design
Building under Subsection (b) is no greater than the energy budget calculated for
the Standard Design Building under Subsection (a):
A. Essential Service buildings and public facilities where natural gas is
necessary to meet the requirements of other permitting agencies or is
demonstrated to be necessary for the purpose of protecting public health,
safety and welfare.
F. Amend Section 140.2 to read as follows:
To comply using the prescriptive approach, a building shall be designed with and
shall have constructed and installed systems and components meeting the
applicable requirements of Sections 140.3 through 140.9.
Note: Authority: Sections 25213, 25218, 25218.5, 25402 and 25402.1, Public
Resources Code. Reference: Sections 25007, 25008, 25218.5, 25310, 25402,
25402.1, 25402.4, 25402.5, 25402.8, and 25943, Public Resources Code.
Exception to 140.2: Mixed-Fuel Buildings, except those buildings and uses
identified in Exception 1 to 140.1, shall only use the performance compliance
approach (energy budgets) specified in Section 140.1.
G. Amend the first two paragraphs of Section 150.0 to read as follows:
SECTION 150.0 – MANDATORY FEATURES AND DEVICES
Low-rise residential buildings shall comply with the applicable requirements of
Sections 150(a) through 150.0(s).
Note: The requirements of Sections 150.0(a) through 150.0(s) apply to newly
constructed buildings. Sections 150.2(a) and 150.2(b) specify which
requirements of Sections 150.0(a) through 150.0(s) also apply to additions or
alterations.
H. Add Subsection (5) to Section 150.0(h) to read as follows:
5. Systems using gas space heating equipment shall include the following
components:
A. A designated exterior location for a future heat pump compressor unit with
either a drain or natural drainage for condensate from possible future
operation as cooling equipment.
B. For equipment serving individual units, a dedicated 208/240 volt, 30-amp or
greater electrical circuit that is able to be connected to the electric panel with
conductors of adequate capacity, terminating within 3 feet from the
designated future location of the compressor unit with no obstructions. In
addition, all of the following:
i. Both ends of the conductor shall be labeled with the word “For Future Heat
Pump Space Heater” and be electrically isolated;
ii. A double pole circuit breaker in the electrical panel labeled with the words
"For Future Heat Pump Space Heater"; and
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iii. Other electrical components, including conductors, receptacles or blank
covers, related to this section shall be installed in accordance with the
California Electrical Code.
Exception to Section 150.0(h)5.B: If a 240 volt 30 amp or greater electrical
circuit and compressor unit location exists for space cooling equipment.
C. For equipment serving more than one dwelling unit, electric capacity,
determined at 240 volts, in the form of raceway and service and subpanel
capacity installed with a termination point of no more than 3 feet from each gas
outlet. Capacities shall be determined to be sufficient for heat pump space
heating equipment to provide the same heat output as the gas equipment.
Exception 1 to Section 150.0(h)5: If centralized space cooling equipment is
installed for all the affected dwelling units.
Exception 2 to Section 150.(h)5: Systems serving Accessory Dwelling Units,
Attached to an existing single-family home.
I. Amend Section 150.0(n) to read as follows:
(n) Water Heating System.
1. Systems using gas or propane water heaters to serve individual dwelling units shall
include the following components:
A. A dedicated 120/240 volt, 30 amp receptacle that is connected to the electric panel
with a 120/240 volt 3 conductor, 10 AWG copper branch circuit, within 3 feet from
the water heater and accessible to the water heater with no obstructions. In
addition, all of the following:
i. Both ends of the conductor shall be labeled with the words “For Future Heat Pump
Water Heater” and be electrically isolated;
ii. A single pole circuit breaker space in the electrical panel adjacent to the circuit
breaker for the branch circuit in A above and labeled with the words "For Future
Heat Pump Water Heater";
iii. Other electrical components, including conductors, receptacles or blank covers,
related to this section shall be installed in accordance with the California
Electrical Code.
Exception to 150(n)1.A: Systems serving Accessory Dwelling Unit, Attached to
an existing single-family home.
B. A Category III or IV vent, or a Type B vent with straight pipe between the outside
termination and the space where the water heater is installed; and
C. A condensate drain that is no more than 2 inches higher than the base of the
installed water heater, and allows natural draining without pump assistance, and
D. A gas supply line with a capacity of at least 200,000 Btu/hr.
E. Located in an area that is both:
i. At least 3 feet by 3 feet by 7 feet high; and
ii. Has a minimum volume of 760 cubic feet or a ventilation plan that includes the
equivalent of one 16 inch by 24 inch grill for warm supply air and one 8 inch duct
of no more than 10 feet in length for cool exhaust air.
Exception to 150.0(n)1.E: Located in Accessory Dwelling Units, Detached
2. Water heating recirculation loops serving multiple dwelling units shall meet the
requirements of Section 110.3(c)5.
3. Solar water-heating systems and collectors shall be certified and rated by the Solar
Rating and Certification Corporation (SRCC), the International Association of Plumbing
and Mechanical Officials, Research and Testing (IAPMO R&T), or by a listing agency
that is approved by the Executive Director.
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4. Instantaneous water heaters with an input rating greater than 6.8 kBTU/hr (2kW) shall
meet the requirements of Section 110.3(c)7.
5. Systems using gas water heaters to serve multiple dwelling units and/or common
areas shall:
A. Be located in a space that can accommodate a heat pump water heating system of
equivalent capacity and performance; and
B. Have electrical capacity installed for a heat pump water heater(s) in the form of
raceway and service and subpanel capacity, with a termination point of no more
than 3 feet from each gas outlet. The electrical capacity shall be determined at
208/240 volts and shall be sufficient to power a heat pump hot water heater of
equivalent capacity and performance. Plans shall include calculations and
installations for equivalent capacity and performance, electrical power, conductors,
raceway sizes and panel capacities in accordance with the California Electrical
Code.
J. Add Subsection (s) to Section 150.0 to read as follows:
(s) Clothes Drying and Cooking. Buildings plumbed for natural gas clothes
drying or cooking equipment shall include the following components for
each gas terminal or stub out:
1. Clothes Drying.
A. A dedicated 208/240-volt, 30 amp or greater electrical receptacle that
is able to be connected to the electric panel with conductors of
adequate capacity, within 3 feet of the appliance and accessible with
no obstructions. In addition, all of the following:
i. Both ends of the conductor shall be labeled with the word “For Future
Electric Clothes Dryer” and be electrically isolated;
ii A double pole circuit breaker in the electrical panel labeled with the
words "For Future Electric Clothes Dryer"; and
iii. All electrical components including conductors, receptacles or blank
covers, related to this section shall be installed in accordance with the
California Electrical Code.
2. Cooktop or Range
A. A dedicated 208/240-volt, 40 amp or greater circuit and 50 amp or
greater electrical receptacle that is able to be connected to the electric
panel with conductors of adequate capacity, within 3 feet of the appliance
and accessible with no obstructions. In addition, all of the following:
i. Both ends of the conductor shall be labeled with the word “For Future
Electric Range” and be electrically isolated;
ii. A double pole circuit breaker in the electrical panel labeled with the
words “For Future Electric Range”; and
iii. All electrical components, including conductors, receptacles, or blank
covers, related to this section shall be installed in accordance with the
California Electrical Code.
3. Stand Alone Cooking Oven
A. A dedicated 208/240-volt, 20 amp or greater receptacle that is able to
be connected to the electric panel with conductors of adequate
capacity, within 3 feet of the appliance and accessible with no
obstructions. In addition, all of the following:
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i. Both ends of the conductor shall be labeled with the word “For
Future Electric Oven” and be electrically isolated;
ii. A double pole circuit breaker in the electrical panel labeled with the
words "For Future Electric Oven"; and
iii. All electrical components, including conductors, receptacles or
blank covers, related to this section shall be installed in accordance
with the California Electrical Code.
K. Amend Section 150.1(b) to read as follows:
(b) Performance Standards. A building complies with the performance
standards if the energy consumption for the Proposed Design Building is no
greater than the energy budget calculated for the Standard Design
Building using Commission-certified compliance software as specified by the
Alternative Calculation Methods Approval Manual. Mixed-Fuel Buildings must
additionally reach an EDR threshold beyond the Standard Design in order to
comply with performance standards.
L. Amend Section 150.1(b)1 and 2 to read as follows:
1. Newly Constructed Buildings. The Energy Budget for newly constructed
buildings or newly constructed Detached Accessory Dwelling Units is
expressed in terms of the Energy Design Rating, which is based on TDV
energy. The Energy Design Rating (EDR) has two components, the Energy
Efficiency Design Rating, and the Solar Electric Generation and Demand
Flexibility Design Rating. The Solar Electric Generation and Demand Flexibility
Design Rating shall be subtracted from the Energy Efficiency Design Rating to
determine the Total Energy Design Rating. The Proposed Building shall
separately comply with the Energy Efficiency Design Rating and the Total
Energy Design Rating.
A. An All-Electric Building complies with the performance standards if both the
Total Energy Design Rating and the Energy Efficiency Design Rating for the
Proposed Building are no greater than the corresponding Energy Design
Ratings for the Standard Design Building.
B. A Mixed-Fuel Building complies with the performance standards if:
i. The Energy Efficiency Design Rating of the Proposed Building is no
greater than the Energy Efficiency Design Rating for the Standard Design
Building; and
ii. The Total Energy Design Rating of the Proposed Building is less than the
Total Energy Design Rating of the Standard Design Building by at least 9
for a single-family dwelling unit and 9.5 for a multi-family dwelling unit.
Exception to Section 150.1(b)1.B.ii. Buildings with limited solar access are
excepted if all of the following are true:
1. The Total Energy Design Rating for the Proposed Building is no greater
than the Total Energy Design Rating for Standard Design Building; and
2. A photovoltaic (PV) system(s) meeting the minimum qualification
requirements as specified in Joint Appendix JA11 is installed on all
available areas of 80 contiguous square feet or more with effective annual
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solar access. Effective annual solar access shall be 70 percent or greater
of the output of an unshaded PV array on an annual basis, wherein shade
is due to existing permanent natural or manmade barriers external to the
dwelling, including but not limited to trees, hills, and adjacent structures;
and
3. The Energy Efficiency Energy Design Rating for the Proposed Building is no
greater than the respective value for the Standard Design Building by the
EDR margin in Table 150.1(b)1 below.
Table 150.1(b)1 Energy Efficiency EDR Margins
Building Type Energy Efficiency EDR Margin
Single Family 2.5
Multifamily 0.5
Exception to Section 150.1(b)1.: A community shared solar electric generation
system, or other renewable electric generation system, and/or community shared
battery storage system, which provides dedicated power, utility energy reduction
credits, or payments for energy bill reductions, to the permitted building and is
approved by the Energy Commission as specified in Title 24, Part 1, Section 10 -
115, may offset part or all of the solar electric generation system Energy Design
Rating required to comply with the Standards, as calculated according to methods
established by the Commission in the Residential ACM Reference Manual.
M. Amend Section 150.1(c) to read as follows:
Prescriptive Standards/Component Package. All-Electric Buildings that
comply with the prescriptive standards shall be designed, constructed, and
equipped to meet all of the requirements for the appropriate Climate Zone shown
in TABLE 150.1-A or B. In TABLE 150.1-A and TABLE 150.1-B, a NA (not
allowed) means that feature is not permitted in a particular Climate Zone and a
NR (no requirement) means that there is no prescriptive requirement for that
feature in a particular Climate Zone. Mixed-fuel buildings shall comply with
requirements of section 150.1(b). Installed components for All-Electric Buildings
shall meet the following requirements:
NOTE: The rest of the Section 150.1(c) applies without modifications but is not
reproduced here for brevity.
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ORDINANCE NO. _____ (2019 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, IMPLEMENTING THE CLEAN ENERGY
CHOICE PROGRAM BY AMENDING THE MUNICIPAL CODE TO
ESTABLISH A CARBON OFFSET PROGRAM FOR NEW BUILDINGS
WHEREAS, greenhouse gas accumulation in the atmosphere as the result of human
activity is the primary cause of the global climate crisis; and
WHEREAS, in California alone, the initial impacts of climate change have resulted in
unprecedented disasters with tremendous human, economic, and environmental costs and;
WHEREAS, the Intergovernmental Panel on Climate Change estimates that global
emissions need to be reduced by 45 percent from 2010 levels by 2030, and 100 percent by 2050 to
prevent global catastrophe; and
WHEREAS, the State of California enacted Senate Bill (SB) 32 to require greenhouse gas
emissions to be reduced to 40 percent below 1990 levels by 2030 and Governor Brown issued
Executive Order B-55-18 establishing a statewide target of carbon neutrality by 2045; and
WHEREAS, the City of San Luis Obispo City Council has directed staff to evaluate
strategies and options to achieve community-wide carbon neutrality by 2035; and
WHEREAS, the inventoried greenhouse gas emissions in the City of San Luis Obispo
come from a variety of sources, primarily transportation and energy use in buildings and facilities;
and
WHEREAS, as of January 2020, the community will have access to receive carbon neutral
electricity from Monterey Bay Community Power; and
WHEREAS, the remaining source of greenhouse gas emissions from energy use in
buildings will come from the onsite combustion of fossil fuels, primarily natural gas; and
WHEREAS, the direct global warming impact of natural gas is considerably higher than
previously thought; and
WHEREAS, in order to achieve carbon neutrality, new sources of greenhouse gas
emissions need to be substantially reduced or eliminated; and
WHEREAS, Resolution No. ______ establishes a policy preference for all-electric
buildings and resolves that new buildings in the city shall not cause a net increase in community
greenhouse gas emissions as the result of on-site energy use.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis Obispo
as follows:
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SECTION 1. Purpose. It is the purpose and intent of this Ordinance to establish the Clean
Energy Choice carbon offset program to achieve energy savings and reduce greenhouse gas
emissions.
SECTION 2. Carbon Offset Program. The City of San Luis Obispo Municipal Code is
amended to add new Chapter 15.50 as specified in Exhibit A.
SECTION 3. CEQA. This ordinance is categorically exempt from CEQA because it is an
action taken by a regulatory agency for the purpose of protecting the environment (CEQA
Guidelines Section 15308). In addition, this ordinance is exempt from CEQA under the general
rule, 15061(b)(3), on the grounds that these standards are more stringent than the State ener gy
standards, there are no reasonably foreseeable adverse impacts, and there is no possibility that the
activity in question may have a significant effect on the environment.
The following findings are made in support of these determinations:
1. The purpose of the City’s Clean Energy Choice Policy and the implementation
of a Carbon Offset Requirement is to reduce the amount of greenhouse gas
emissions in the City of San Luis Obispo that are produced from buildings.
2. All electric buildings constructed in the City of San Luis Obispo consistent with
the Clean Energy Choice Policy and implementation of a Reach Code and
Carbon Offset Program will reduce greenhouse gas emissions, improve indoor
air quality, and reduce the risk of catastrophic infrastructure failure, including
explosions and fires caused by breaks and leaks in the natural gas distribution
system as a result of upset conditions due to deferred maintenance or following
an earthquake.
3. The City’s Clean Choice Energy Program enables property owners and
developers to take advantage of a statewide effort to build a clean, efficient, and
reliable grid to serve expanding energy needs across the State of California.
4. The proposed Carbon Offset Requirement ensures that new buildings subject to
the requirement that include natural gas will offset the new use of natural gas
by performing a direct retrofit project of an existing building or pay an in-lieu
fee to support energy retrofit programs within the City of San Luis Obispo.
5. The Intergovernmental Panel on Climate Change estimates that global
emissions need to be reduced by 45 percent from 2010 levels by 2030, and 100
percent by 2050 to prevent global catastrophe. However, due to the lack of
coordinated action or a comprehensive plan to address this threat at a national
level, cities and states across the United States must lead the way.
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SECTION 4. Violations. Violation of the requirements of this Ordinance shall be
considered an infraction of the City of San Luis Obispo Municipal Code, punishable by all the
sanctions prescribed in Chapter 1.12.
SECTION 5. Effective Date. This effective date of this Ordinance shall be January 1,
2020.
INTRODUCED on the 3rd day of September 2019, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the ____ day of ____, 2019, on the following vote:
AYES:
NOES:
ABSENT:
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of ______________, 2019.
______________________________
Teresa Purrington
City Clerk
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Ordinance No. XX Exhibit A
Chapter 15.50
CLEAN ENERGY CHOICE PROGRAM
Sections:
15.50.010 Purpose.
15.50.020 Definitions.
15.50.030 Applicable building projects.
15.50.040 Carbon offset in lieu fee.
15.50.050 Eligible uses of in lieu fees.
15.50.060 Public Interest Exemption.
15.50.070 Effective date and program review.
15.50.010 Purpose.
The purpose of this chapter is to establish and set forth methods of compliance to
implement the carbon offset component of the Clean Energy Choice Policy. The City of
San Luis Obispo has determined that the reduction of greenhouse gas emissions
generally, and the elimination of carbon-based fuels in indoor environments specifically,
will reduce harm resulting from the effects of climate change, including severe weather,
sea-level rise, infectious disease, and other negative outcomes. Further, electrification of
buildings will assist the City in becoming more resilient in the face of these challenges.
15.50.020 Definitions.
A. All-Electric Building. A building that has no natural gas plumbing installed within the
building and that uses electricity as the source of energy for all space heating, water
heating, cooking appliances, and clothes drying appliances. An All-Electric Building
may be plumbed for the use of natural gas as fuel for cooking appliances in a
commercial kitchen.
B. Carbon Offset Requirement: The calculated amount of therms that must be offset, in
a manner consistent with the provisions of this ordinance, by a new mixed-fuel building
before a building permit can be issued.
C. Cost per Therm. The amount of the in-lieu fee established by resolution of the City
Council representing an average retrofit cost to obtain reductions in per therm use in
a fuel switching project.
D. Demolition. The act of reconstructing, removing, taking down or destroying all or
portions of an existing building or structure, as defined by the City’s Zoning
Regulations.
E. Fuel Switching Project, or Offset Project. A project to retrofit an existing building from
natural gas to electricity as the sole (or exclusive - whichever) fuel source for various
purposes including space heating and cooling, water heating, and/or cooking.
F. Mixed-Fuel Building. A building that is plumbed for the use of natural gas or propane
as fuel for space heating, water heating, cooking or clothes drying appliances.
G. Temporary Building. Any building installed with a building permit for a limited term that
is specified in a temporary use permit or other conditional approval issued by the
Community Development Department.
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H. Therms. Unit of measure of the amount of heat energy used to condition a space with
natural gas.
15.50.030 Applicable building projects.
A. The provisions of this chapter, including the carbon offset requirement, shall apply to
the following types of building projects for which a building permit is required:
1. New residential and nonresidential construction of a mixed-fuel building, including
reconstruction of a demolished building, and excluding building additions and
alterations of any type that do not meet the definition of demolition.
B. The following building project types are exempted from the provisions of this
chapter:
1. All-electric buildings.
2. The extension of natural gas infrastructure into an industrial building for the
purpose of supporting manufacturing processes (i.e. not including space
conditioning).
3. Accessory Dwelling Units that are attached to an existing single-family home.
4. Essential Service Buildings including, but not limited to, public facilities, hospitals,
medical centers and emergency operations centers).
5. Temporary buildings.
6. Gas line connections used exclusively for emergency generators.
7. Any buildings exempt from the California Energy Code.
8. Residential subdivisions in process of permitting or constructing initial public
improvements for any phase of a final map recorded prior to January 1, 2020,
unless compliance is required by an existing Development Agreement.
15.50.040 Carbon Offset Requirement.
A. This chapter establishes a one to one (1:1) carbon offset requirement for all applicable
building project types as defined in Section 15.50.030.
B. All new buildings subject to the carbon offset requirement shall offset the projected
amount of annualized carbon use in the building, measured in therms, prior to a permit
being issued for construction.
C. The carbon offset requirement shall be met in one of two ways:
1. Through completion of a fuel switching project at another location within the City;
or
2. Through payment of an in-lieu fee equal to the cost per therm multipl ied by the
annualized amount of therms projected to be used to fuel the building.
D. Prior to the effective date of this ordinance, the City Council shall, by resolution, adopt
an in-lieu fee and shall establish the dollar cost of offsetting one Therm for the
purpose of calculating the in-lieu fee.
1. Projects undertaken to accomplish direct carbon offsets (“fuel switching or offset
projects”) shall demonstrate compliance in a report prepared by a qualified
professional, to the approval of the Chief Building Official. The report shall
calculate the therm reductions created by the offset project and verif y that the
savings are sufficient to offset the proposed annualized therm use of the building
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project that is subject to the offset requirement.
E. Projects that opt to meet the carbon offset requirement through payment of an in -lieu
fee shall:
1. Provide a preliminary calculation of the in-lieu fee based on the currently
published price per therm as part of a complete building permit application.
2. Pay the in-lieu fee in full at the time of building permit issuance.
15.50.050 Carbon Offset In-Lieu Fee Administration.
The carbon offset in-lieu fee shall be collected by the Community Development
Department as part of the building permit process and shall be reserved in a Clean Energy
Choice Program Fund for use by the City for carbon reduction projects and program
administration.
A. Guidelines for the use of the carbon fund are as follow:
1. Funds may be used to supplement existing funding allocated to building energy
efficiency, fuel switching, or similar programs.
2. New or retrofit projects or programs that support low-income households and/or
affordable housing shall be given funding priority.
3. Funds shall not be used to supplant funding already allocated to an energy
conservation project.
4. Funds should be aligned with the priorities identified in the Climate Action Plan.
15.50.060 Public Interest Exemption.
A. Nothwithstanding the requirements of this Chapter and the Council’s Clean Energy
Choice Policy, and other public health and safety hazards associated with natural
gas infrastructure, natural gas may be allowed in a building otherwise subject to the
requirements of this ordinance if the authority responsible for entitling or permitting
the project makes any of the following findings:
1. That current limitations of electric power infrastructure in the vicinity of the project
site make it impossible to serve the project without significant upgrades, such as
to transformers or other distribution equipment, that are outside the scope of the
proposed project and would render it economically infeasible.
2. The proposed project would result in a de minimis use of natural gas that could
be offset in other ways, such as through a sequestration project or other proposal
directly tied to the development project.
3. Consistent with the purpose and intent of these regulations, the authority granting
approval to a project may permit the use of natu ral gas without requiring
compliance with the offset requirement if it is determined to be necessary to
serve public health, safety and welfare.
15.50.070 Effective Date and Program review.
A. The provisions of this ordinance shall go into effect on Janua ry 1, 2020 or following
City Council adoption of administrative guidelines for the program to include the
amount of the in-lieu fee, whichever is later.
B. The City Council shall review this chapter along with any future local amendments
to the California Code of Regulations, Title 24, to ensure consistency of application
of this requirement and to determine if any modifications are necessary.
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Amendments to Definitions
Section 100.1(b) is modified by adding the following definitions:
ALL-ELECTRIC BUILDING is a building that has no natural gas plumbing installed within
the building and that uses electricity as the source of energy for all space heating, water
heating, cooking appliances, and clothes drying appliances. An All-Electric Building may
be plumbed for the use of natural gas as fuel for cooking appliances in a commercial
kitchen.
MIXED-FUEL BUILDING is a building that is plumbed for the use of natural gas as fuel for
space heating, water heating, cooking or clothes drying appliances.
ACCESSORY DWELLING UNIT, DETACHED is an Accessory Dwelling Unit (see City of San
Luis Obispo Municipal Code 17.156.004) that provides new residential square footage
not attached or sharing any walls with the primary existing single-unit dwelling.
ACCESSORY DWELLING UNIT, ATTACHED is an Accessory Dwelling Unit (see City of San
Luis Obispo Municipal Code 17.156.004) that is either attached to (by a minimum of one
shared wall), or completely contained within, the primary existing space of the single -
unit dwelling unit or existing accessory structure.
Amendments for Nonresidential Solar Requirements
SECTION 140.0(b) is modified as follows:
(b) The requirements of Sections 120.0 through 130.5 (mandatory measures for
nonresidential, high-rise residential and hotel/motel buildings):
1. The entire solar zone of newly constructed buildings, as specified in Section
110.10, shall have a solar PV system installed that meets the minimum
qualification requirements as specified in Joint Appendix JA11, subject to the
exceptions in Section 110.10.
Amendments for Nonresidential Energy Performance
Section 140.0 (c) is modified as follows:
(c) Either the performance compliance approach (energy budgets) specified in Section
140.1 or the prescriptive compliance approach specified in Section 140.2 for the
Climate Zone in which the building will be located. Climate zones are shown in
FIGURE 100.1-A.
EXCEPTION to 140(c). Mixed-Fuel buildings shall use the performance compliance
approach (energy budgets) specified in Section 140.1
SECTION 140.1 is modified as follows:
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SECTION 140.1 – PERFORMANCE APPROACH: ENERGY BUDGETS
A newly constructed All-Electric Bbuilding complies with the performance approach if
the energy budget calculated for the Proposed Design Building under Subsection (b) is
no greater than the energy budget calculated for the Standard Design Building under
Subsection (a).
A newly constructed Mixed-Fuel Building complies with the performance approach if the
energy budget calculated for the Proposed Design Building under Subsection (b) has a
compliance margin, relative to the energy budget calculated for the Standard Design
Building under Subsection (a), of at least the value specified for the corresponding
occupancy type in Table 140.1-A below.
Table 140.1-A MIXED FUEL BUILDING COMPLIANCE MARGINS
Occupancy Type Compliance Margins
Office / Retail 15%
Hotel/motel and High-rise residential 9%
All other occupancies in buildings with both indoor lighting and mechanical
systems 5%
All other occupancies in buildings with indoor lighting or mechanical
systems but not both 5%
(a) Energy Budget for the Standard Design Building. The energy budget for the
Standard Design Building is determined by applying the mandatory and prescriptive
requirements to the Proposed Design Building. The energy budget is the sum of the
TDV energy for space-conditioning, indoor lighting, mechanical ventilation, service
water heating, and covered process loads.
(b) Energy Budget for the Proposed Design Building. The energy budget for a Proposed
Design Building is determined by calculating the TDV energy for the Proposed Design
Building. The energy budget is the sum of the TDV energy for space-conditioning,
indoor lighting, mechanical ventilation and service water heating and covered
process loads.
(c) Calculation of Energy Budget. The TDV energy for both the Standard Design Building
and the Proposed Design Building shall be computed by Compliance Software
certified for this use by the Commission. The processes for Compliance Software
approval by the Commission are documented in the ACM Approval Manual.
NOTE: Authority: Sections 25213, 25218, 25218.5, 25402 and 25402.1, Public Resources
Code. Reference: Sections 25007, 25008, 25218.5, 25310, 25402, 25402.1, 25402.4,
25402.5, 25402.8, and 25943, Public Resources Code.
EXCEPTION 1 to 140.1. The following buildings and uses shall comply with the
performance approach if the energy budget calculated for the Proposed Design Building
under Subsection (b) is no greater than the energy budget calculated for the Standard
Design Building under Subsection (a):
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A. Essential Service buildings and public facilities where natural gas is necessary to
meet the requirements of other permitting agencies or is demonstrated to be
necessary for the purpose of protecting public health, safety and welfare.
Section 140.2 is modified as follows:
To comply using the prescriptive approach, a building shall be designed with and
shall have constructed and installed systems and components meeting the
applicable requirements of Sections 140.3 through 140.9.
NOTE: Authority: Sections 25213, 25218, 25218.5, 25402 and 25402.1 , Public
Resources Code. Reference: Sections 25007, 25008, 25218.5, 25310, 25402,
25402.1, 25402.4, 25402.5, 25402.8, and 25943, Public Resources Code.
EXCEPTION to 140.2. Mixed-Fuel Buildings, except those buildings and uses
identified in Exception 1 to 140.1, shall only use the performance compliance
approach (energy budgets) specified in Section 140.1.
Amendments for Electric Appliance Retrofit Readiness
SECTION 150.0 is modified to change the first two paragraphs as follows:
SECTION 150.0 – MANDATORY FEATURES AND DEVICES
Low-rise residential buildings shall comply with the applicable requirements of Sections
150(a) through 150.0(rs).
NOTE: The requirements of Sections 150.0(a) through 150.0(rs) apply to newly
constructed buildings. Sections 150.2(a) and 150.2(b) specify which requirements of
Sections 150.0(a) through 150.0(rs) also apply to additions or alterations.
SECTION 150.0(h) is modified to add a new subsection (5) as follows:
5. Systems using gas space heating equipment shall include the following
components:
A. A designated exterior location for a future heat pump compressor unit with
either a drain or natural drainage for condensate from possible future operation
as cooling equipment.
B. For equipment serving individual units, a dedicated 208/240 volt, 30-amp or
greater electrical circuit that is able to be connected to the electric panel with
conductors of adequate capacity, terminating within 3 feet from the designated
future location of the compressor unit with no obstructions. In addition, all of
the following:
i. Both ends of the conductor shall be labeled with the word “For Future Heat
Pump Space Heater” and be electrically isolated;
ii. A double pole circuit breaker in the electrical panel labeled with the words
"For Future Heat Pump Space Heater"; and
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Page 4 Septepmber 3, 2019
iii. Other electrical components, including conductors, receptacles or blank
covers, related to this section shall be installed in accordance with the
California Electrical Code.
EXCEPTION to Section 150.0(h)5.B. If a 240 volt 30 amp or greater electrical circuit
and compressor unit location exists for space cooling equipment.
C. For equipment serving more than one dwelling unit, electric capacity,
determined at 240 volts, in the form of raceway and service and subpanel
capacity installed with a termination point of no more than 3 feet from each gas
outlet. Capacities shall be determined to be sufficient for heat pump space
heating equipment to provide the same heat output as the gas equipment.
EXCEPTION 1 to Section 150.0(h)5. If centralized space cooling equipment is
installed for all the affected dwelling units.
EXCEPTION 2 to Section 150.0(h)5. Systems serving Accessory Dwelling Units,
Attached to an existing single-family home.
SECTION 150.0(n) is modified as follows:
(n) Water Heating System.
1. Systems using gas or propane water heaters to serve individual dwelling units
shall include the following components:
A dedicated 120/240 125 volt, 30 20 amp receptacle that is connected to the
electric panel with a 120/240 volt 3 conductor, 10 AWG copper branch
circuit, within 3 feet from the water heater and accessible to the water
heater with no obstructions. In addition, all of the following:
i. Both ends of the unused conductor shall be labeled with the
words “spare For Future Heat Pump Water Heater” and be electrically
isolated;
ii. A reserved single pole circuit breaker space in the electrical panel
adjacent to the circuit breaker for the branch circuit in A a bove and
labeled with the words “For Future 240V Use” "For Future Heat Pump
Water Heater";
iii. Other electrical components, including conductors, receptacles or blank
covers, related to this section shall be installed in accordance with the
California Electrical Code.
EXCEPTION to Section 150.0(n)1.A. Systems serving Accessory Dwelling Unit,
Attached to an existing single-family home.
A Category III or IV vent, or a Type B vent with straight pipe between the
outside termination and the space where the water heater is installed; and
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A condensate drain that is no more than 2 inches higher than the base of the
installed water heater, and allows natural draining without pump assistance,
and
A gas supply line with a capacity of at least 200,000 Btu/hr.
Located in an area that is both:
i. At least 3 feet by 3 feet by 7 feet high; and
ii. Has a minimum volume of 760 cubic feet or a ventilation plan that
includes the equivalent of one 16 inch by 24 inch grill for warm supply air
and one 8 inch duct of no more than 10 feet in length for cool exhaust
air.
EXCEPTION to Section 150.0(n)1.E. Located in Accessory Dwelling Units,
Detached
2. Water heating recirculation loops serving multiple dwelling units shall meet the
requirements of Section 110.3(c)5.
3. Solar water-heating systems and collectors shall be certified and rated by the
Solar Rating and Certification Corporation (SRCC), the International Association
of Plumbing and Mechanical Officials, Research and Testing (IAPMO R&T), or by
a listing agency that is approved by the Executive Director.
4. Instantaneous water heaters with an input rating greater than
6.8 kBTU/hr (2kW) shall meet the requirements of Section 110.3(c)7.
5. Systems using gas water heaters to serve multiple dwelling units and/or common
areas shall:
Be located in a space that can accommodate a heat pump water heating
system of equivalent capacity and performance; and
Have electrical capacity installed for a heat pump water heater(s) in the form
of raceway and service and subpanel capacity, with a termination point of no
more than 3 feet from each gas outlet. The electrical capacity shall be
determined at 208/240 volts and shall be sufficient to power a heat pump
hot water heater of equivalent capacity and performance. Plans shall include
calculations and installations for equivalent capacity and performance,
electrical power, conductors, raceway sizes and panel capacities in
accordance with the California Electrical Code.
SECTION 150.0 is modified to add a new subsection (s) as follows:
(s) Clothes Drying and Cooking. Buildings plumbed for natural gas clothes
drying or cooking equipment shall include the following components for each gas
terminal or stub out:
1. Clothes Drying.
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Page 6 Septepmber 3, 2019
A dedicated 208/240-volt, 30 amp or greater electrical receptacle that is able
to be connected to the electric panel with conductors of adequate capacity,
within 3 feet of the appliance and accessible with no obstructions. In
addition, all of the following:
i. Both ends of the conductor shall be labeled with the word “For Future
Electric Clothes Dryer” and be electrically isolated;
ii. A double pole circuit breaker in the electrical panel labeled with the
words "For Future Electric Clothes Dryer"; and
iii. All electrical components including conductors, receptacles or blank
covers, related to this section shall be installed in accordance with the
California Electrical Code.
2. Cooktop or Range
A dedicated 208/240-volt, 40 amp or greater circuit and 50 amp or greater
electrical receptacle that is able to be connected to the electric panel
with conductors of adequate capacity, within 3 feet of the appliance and
accessible with no obstructions. In addition, all of the following:
i. Both ends of the conductor shall be labeled with the word “For Future
Electric Range” and be electrically isolated;
ii. A double pole circuit breaker in the electrical panel labeled with the
words “For Future Electric Range”; and
iii. All electrical components, including conductors, receptacles, or blank
covers, related to this section shall be installed in accordance with the
California Electrical Code.
3. Stand Alone Cooking Oven
A dedicated 208/240-volt, 20 amp or greater receptacle that is able to be
connected to the electric panel with conductors of adequate capacity, within
3 feet of the appliance and accessible with no obstructions. In addition, all of
the following:
i. Both ends of the conductor shall be labeled with the word “For Futur e
Electric Oven” and be electrically isolated;
ii. A double pole circuit breaker in the electrical panel labeled with the
words "For Future Electric Oven"; and
iii. All electrical components, including conductors, receptacles or blank
covers, related to this section shall be installed in accordance with the
California Electrical Code.
EXCEPTION to Section 150.0(s). Accessory Dwelling Units, Attached do not
require the above mentioned components.
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Attachment D
City of San Luis Obispo - Strikethrough Edits to the 2019 California Energy Code
Page 7 Septepmber 3, 2019
3.2 Amendments for Energy Performance
SECTION 150.1(b) is modified as follows:
(b) Performance Standards. A building complies with the performance standards if the
energy consumption for the Proposed Design Building is no greater than the energy
budget calculated for the Standard Design Building using Commission-certified
compliance software as specified by the Alternative Calculation Methods Approval
Manual. Mixed-Fuel Buildings must additionally reach an Energy Design Rating (EDR)
threshold beyond the Standard Design in order to comply with performance
standards.
SECTION 150.1(b)1 and 2 are modified as follows:
1. Newly Constructed Buildings. The Energy Budget for newly constructed buildings or
newly constructed Detached Accessory Dwelling Units is expressed in terms of the
Energy Design Rating, which is based on TDV energy. The Energy Design Rating (EDR)
has two components, the Energy Efficiency Design Rating, and the Solar Electric
Generation and Demand Flexibility Design Rating. The Solar Electric Generation and
Demand Flexibility Design Rating shall be subtracted from the Energy Efficiency Design
Rating to determine the Total Energy Design Rating. The Proposed Building shall
separately comply with the Energy Efficiency Design Rating and the Total
Energy Design Rating.
An All-Electric Building complies with the performance standards if both the
Total Energy Design Rating and the Energy Efficiency Design Rating for the
Proposed Building are no greater than the corresponding Energy Design Ratings
for the Standard Design Building.
A Mixed-Fuel Building complies with the performance standards if:
i. The Energy Efficiency Design Rating of the Proposed Building is no greater
than the Energy Efficiency Design Rating for the Standard Design Building;
and
ii. The Total Energy Design Rating of the Proposed Building is less than the Total
Energy Design Rating of the Standard Design Building by at least 9 for a single
family dwelling unit and 9.5 for a multi-family dwelling unit.
EXCEPTION to Section 150.1(b)1.B.ii. Buildings with limited solar access are
excepted if all of the following are true:
1. The Total Energy Design Rating for the Proposed Building is no greater than the
Total Energy Design Rating for Standard Design Building; and
2. A photovoltaic (PV) system(s) meeting the minimum qualification requirements
as specified in Joint Appendix JA11 is installed on all available areas of 80
contiguous square feet or more with effective annual solar access. Effective
annual solar access shall be 70 percent or greater of the output of an unshaded
PV array on an annual basis, wherein shade is due to existing permanent natural
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Attachment D
City of San Luis Obispo - Strikethrough Edits to the 2019 California Energy Code
Page 8 Septepmber 3, 2019
or manmade barriers external to the dwelling, including but not limited to trees,
hills, and adjacent structures; and
3. The Energy Efficiency Energy Design Rating for the Proposed Building is no
greater than the respective value for the Standard Design Building by the EDR
margin in Table 150.1(b)1 below.
Table 150.1(b)1 Energy Efficiency EDR Margins
Building Type Energy Efficiency EDR Margin
Single Family 2.5
Multifamily 0.5
EXCEPTION to Section 150.1(b)1. A community shared solar electric generation
system, or other renewable electric generation system, and/or community shared
battery storage system, which provides dedicated power, utility energy reduction
credits, or payments for energy bill reductions, to the permitted building and is
approved by the Energy Commission as specified in Title 24, Part 1, Section 10 -115,
may offset part or all of the solar electric generation system Energy Design Rating
required to comply with the Standards, as calculated according to methods
established by the Commission in the Residential ACM Reference Manual.
SECTION 150.1(c) is modified as follows:
Prescriptive Standards/Component Package. All-Electric Buildings that comply with the
prescriptive standards shall be designed, constructed, and equipped to meet all of the
requirements for the appropriate Climate Zone shown in TABLE 150.1-A or B. In TABLE
150.1-A and TABLE 150.1-B, a NA (not allowed) means that feature is not permitted in a
particular Climate Zone and a NR (no requirement) means that there is no prescri ptive
requirement for that feature in a particular Climate Zone. Mixed-fuel buildings shall
comply with requirements of section 150.1(b). Installed components for All-Electric
Buildings shall meet the following requirements:
NOTE: The rest of the Section 150.1(c) applies without modifications but is not
reproduced here for brevity.
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Draft Report
Clean Energy Choice Program:
Carbon Offset In-Lieu Fee Study
Prepared for:
City of San Luis Obispo
Prepared by:
Economic & Planning Systems, Inc.
August 16, 2019
EPS #191040
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Table of Contents
1. EXECUTIVE SUMMARY .............................................................................................. 1
2. BACKGROUND AND METHODOLOGY ............................................................................... 4
Background ............................................................................................................ 4
Applicability ........................................................................................................... 4
Methodology .......................................................................................................... 4
Use of Fee Revenue ................................................................................................. 7
Conclusions ............................................................................................................ 7
List of Tables
Table 1 Illustrative Fee based on Average Therms Generated by Type of New Development .. 3
Table 2 SoCal Gas, 2018 Retrofit Measures and Costs ...................................................... 6
Table 3 SoCal Gas, Five-Year Average Cost per Therm Saved ........................................... 7
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1. EXECUTIVE SUMMARY
The City of San Luis Obispo is currently updating its Climate Action Plan (originally adopted in
2012) to achieve carbon neutrality by 2035.1 Because the built environment contributes
significantly to greenhouse gas emissions, the City is developing a Clean Energy Choice Program
for new buildings to support implementation of the Climate Action Plan.2, 3
As part of the Clean Energy Choice Program, the City has developed local amendments to the
2019 California Building Code (including the California Energy Code [“reach code”]) to encourage
all-electric new buildings. When paired with the decision to join Monterey Bay Community Power
and receive its carbon free electricity supply by 2020, the City notes that all electric new
buildings will be carbon free and will avoid health and safety issues associated with fossil fuels.
Additionally, the City is developing a complementary Carbon Offset Program wherein new
buildings that include fossil fuels are required to offset fossil fuel use elsewhere in the
community.4
Under the Clean Energy Choice Program, new buildings would either be all electric or mixed-fuel
(including the use of fossil fuels) and subject to additional requirements. These requirements
would include: (1) constructing mixed-fuel buildings to higher energy efficiency standards than
the baseline State efficiency requirements; and, (2) participating in the City’s Carbon Offset
Program and contributing to the offset of the additional greenhouse gas emissions. The offset
measures will include either retrofitting an existing building in the City or paying a fee in-lieu of
full electrification. In-lieu fee revenues would be used to offset project emissions elsewhere in
the City.
Economic & Planning Systems, Inc. (EPS) was retained to work with City staff to develop the
technical framework and technical estimate for the in-lieu fee that would apply under the Clean
Energy Program. As described above, there is a clear nexus between City goals and policies,
development options, the requirement for the carbon offset, and the in-lieu fee payment option.
As detailed below the level of the in-lieu fee is tied directly to the effects of developing a new
mixed-fuel building and the investments required to help offset the carbon emissions. The in-
lieu fee is expressed as a cost per therm and calculated at $27.33 per therm generated.5 The
1 https://www.slocity.org/government/department-directory/city-
administration/sustainability/climate-action-plan
2 https://www.slocity.org/government/department-directory/city-administration/office-of-
sustainability/climate-action/carbon-neutral-buildings/-fsiteid-1
3 The City has indicated that to address greenhouse gas emissions in existing buildings (as opposed to
new buildings), it will need to develop a retrofit program, with financial incentives and technical
support, to incentivize property owner shifts away from fossil fuels.
4 https://www.slocity.org/government/department-directory/city-administration/office-of-
sustainability/climate-action/carbon-neutral-buildings/-fsiteid-1
5 A therm is a unit of heat energy equal to 100,000 British thermal units (Btu). It is approximately the
energy equivalent of burning 100 cubic feet (2.83 cubic meters) – often referred to as 1 CCF –
of natural gas.
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therms generated will vary by development application, depending on the type and size of the
new building(s).
Table 1 illustrates how the total fee would vary based on therms generated for specific
development prototypes in consideration of the city’s current climate (referred to by the State of
California as Climate Zone 5) and based on a per therm cost of $27.33. As shown in Table 1,
Step 1 is the establishment of the therms generated by the proposed new building application;
Step 2 provides the “per therm” cost; and, Step 3 establishes the in-lieu fee amount, which is
the product of the therms generated and the cost per therm. To support adoption of this fee, the
City has prepared an ordinance that describes the program, establishes the applicability of the
offset requirement, and provides the different compliance options.
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Table 1 Illustrative Fee based on Average Therms Generated by Type of New Development
Steps Assumption Amount Unit Amount Unit Amount Unit Amount Unit
Step 1: Calculate Therms Generated
Step 1.a.Determine baseline emissions of full electrification (therms).0 therms 0 therms 0 therms 0 therms
Step 1.b.Determine project-specific emissions of mixed-fuel option
(therms). [1]220 therms 120 therms 3,240 therms 1,746 therms
Step 1.c.Calculate difference. This is what needs to be mitigated offsite
and what the fee will be based on.220 therms 120 therms 3,240 therms 1,746 therms
Step 2: Establish Mitigation Cost per Therm [2]
Step 2.a.
Five-year average annual cost per therm based on
expenditures and therms eliminated attributable to SoCal Gas
ESA Program (in 2019 dollars).
$27.33 $27.33 $27.33 $27.33
Step 3: Calculate Base In-Lieu Fee
Step 3.a.Multiply cost per therm (Step 2.c.) to amount that needs to be
mitigated (Step 1.c.)$6,013 $3,280 $88,555 $47,722
[1] Average therms generated will vary by project application. Estimates shown here are illustrative only, reflecting averages specific to Climate Zone 5 and based on typical prototypes.
[2] Data supporting the cost per therm calculation is provided by SoCal Gas based on typical retrofit improvements, costs, and therm savings.
Single Family Multifamily Office Retail
Sources: City of San Luis Obispo; 2019 Nonresidential New Construction Reach Code Cost Effectiveness Study, prepared by TRC; SoCal Gas Retrofit Improvements and Costs; Economic & Planning Systems,
Inc.
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2. BACKGROUND AND METHODOLOGY
Background
In California, cities and counties have the authority to adopt local ordinances, sometimes called
reach codes, that require projects to exceed minimum energy requirements established in the
California Energy Code (California Code of Regulations, Title 24, Part 6). The ability to adopt
these ordinances allows local jurisdictions to pursue their local Climate Action Plan goals. In
addition, these ordinances align with California’s related policy goals, such as Senate Bill (SB)
32, which requires greenhouse gas emissions to be reduced to 40 percent below 1990 levels by
2030 and Executive Order B-55-18, which establishes a statewide target of carbon neutrality by
2045. Senate Bill 1477 also provides funding to support innovations in the development of low-
cost, low emissions buildings.
Applicability
As part of the Clean Energy Program, the City’s Carbon Offset Program requirement would apply
only to new residential and nonresidential construction, with certain exemptions, such as for
critical facilities.6 While the City’s policy objective is for every applicable building permit
applicant subject to the Clean Energy Program requirements to choose the full electrification
option, there may be some applicants subject to the ordinance for whom full electrification is
undesirable or infeasible and who opt for the construction of mixed-fuel buildings. For these
applicants, offsetting the proposed carbon use is required, and the in-lieu fee is one compliance
option. If an applicant opts for full electrification, no offset or associated in-lieu fee is required.
Methodology
Step 1: Calculate Therms Generated
If an applicant opts for full electrification, consistent with the reach code, the baseline level of
therms-related greenhouse gas emissions is zero. If an applicant opts to proceed with mixed-fuel
construction, the annual number of therms generated needs to be provided. This estimate is
part of the information that would be established as part of a building permit application, and the
mechanism for establishing the estimate of therms generated will be described in the associated
Resolution. This estimate will represent the therm generation that will need to be mitigated
elsewhere in the City to maintain (i.e., not increase) the City’s baseline level of emissions.
To illustrate sample fee calculations, this report provides sample therm estimates for four
building prototypes in Climate Zone 5. While the therms generated will vary by the type and size
of the development, as well as appliance choices, these estimates provide a sense of scale for
buildings that use natural gas for space and water heating and all major appliances. The annual
therm generation for Single Family and Multifamily units is based on data reported in the 2019
6 The proposed ordinance includes a list of project/building types that are exempt from the carbon
offset requirement.
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Cost-effectiveness Study for Low-rise Residential Construction.7 The annual therm generation for
the office and retail land use categories are based on prototypes developed as part of the 2019
Nonresidential New Construction Reach Code Cost Effectiveness Study.8
Single Family Residential Unit 220 therms per year
Multifamily Residential Unit 120 therms per year
Office (approx. 54,000 sq.ft.) 3,240 therms per year
Retail (approx. 25,000 sq.ft.) 1,746 therms per year
Step 2: Estimate Mitigation Cost per Therm
Under the in-lieu fee option, the City will collect from mixed-fuel building developers the
estimated level of revenue required to invest in the retrofit of existing mixed-fuel buildings and
achieve the equivalent reduction in therm generation and associated greenhouse gas emissions.
Relevant retrofits could include: 1) supporting the cost of fuel switching to eliminate onsite fossil
fuel consumption (e.g., assisting with replacing a fossil fuel-based appliance with an electric
appliance, including required upgrades to electrical service capacity, panel upgrades, and the
running of new circuits); and/or 2) supporting the cost of energy efficiency retrofits to lower the
amount of onsite fossil fuel combustion (e.g., water heater blankets, low flow shower heads,
water pipe insulation, attic insulation, etc.).
Fuel Switching
Fuel switching includes replacing fossil fuel appliances with electric counterparts, running
necessary circuits, and potentially updating the electricity panel and upgrading electricity service
capacity. Fuel switching most directly leads to long term decarbonization, but due to the older
nature of the City’s housing stock, costs are expected to be highly variable. One established
electrification program administered by the Sacramento Municipal Utility District provides up to
$13,500 in rebates to homeowners that retrofit their entire home to run on electric appliances.
The Clean Energy Choice Program is intended to support a retrofit program in the City that will
incentivize all electric new development and fuel switching in a number of ways, including:
1. Working with Monterey Bay Clean Power to provide direct financial incentives to customers
that fuel switch; and
2. Developing educational materials and resources, including free consultations, to property
owners that are considering making the switch to all-electric.
Energy Efficiency
Energy efficiency programs are typically lower cost, but also have less of an impact on
decarbonization. California has a rich history of energy efficiency programming and as such, has
robust data on expenditures and energy savings.
7 2019 Cost-effectiveness Study: Low-rise Residential New Construction prepared by Frontier Energy,
Inc. and Misti Bruceri & Associates, LLC, August 2019.
8 2019 Nonresidential New Construction Reach Code Cost Effectiveness Study, prepared by TRC, July
2019.
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The City is using Energy Savings Assistance (ESA) program data for natural gas energy efficiency
programs administered by SoCal Gas. The Energy Savings Assistance (ESA) program is an
efficiency program administered by all of California’s Investor Owned Utilities under the auspices
of the California Public Utilities Commission (CPUC). Like other CPUC programs, ESA is funded
through a small surcharge placed on every ratepayers energy bill. As a steward of ratepayer
dollars, participating program administrators must closely track the labor and materials costs and
energy savings from each measure in the program.
Because extensive data is available from ESA on retrofit measures, the cost of those retrofits,
and the number of therms reduced or eliminated, the data source provides a strong metric for
estimating the average investment per therm.9,10 The data in Table 2 is for 2018 and provides
an indication of the types of measures taken, the relative therm savings, and the average cost
per therm saved. Because there is variability in retrofit costs, an inflation-adjusted five-year
average estimate of cost per therm is developed in Table 3 and used as the basis of the in-lieu
fee. As shown, the five-year average $27.33 per therm in 2019 dollars.
Table 2 SoCal Gas, 2018 Retrofit Measures and Costs
9 California Public Utilities Commission. (2019). Income Qualified Assistance Program. State of
California. Retrieved from: https://www.cpuc.ca.gov/iqap/
10 The ESA dataset includes expenditures for furnace repair, outreach and assessment, and in-home
education. These measures reflect substantial expenditures but do not have therms savings associated
with them. To be conservative, these measures were not included in the per therm cost calculation. If
they had been included, the cost would increase to $39.23 per therm.
SoCal Gas, 2018 Measures Therms
Saved Expenditures Average Cost Per
Therm Saved
High Efficiency Clothes Washer 156,747 $4,128,076 $26.34
Water Heater Blanket 5,393 $128,883 $23.90
Low Flow Shower Head 128,472 $3,975,023 $30.94
Water Heater Pipe Insulation 3,059 $38,027 $12.43
Faucet Aerator 265,731 $1,116,370 $4.20
Water Heater Repair/Replacement 6,885 $3,614,946 $525.05
Thermostatic Shower Valve 245,006 $4,519,900 $18.45
New - Tub Diverter/ Tub Spout 35,857 $481,878 $13.44
Air Sealing / Envelope 1 353,885 $19,554,717 $55.26
Attic Insulation 150,823 $7,798,100 $51.70
FAU Standing Pilot Conversion 84 $1,076 $12.81
Duct Testing and Sealing 13,292 $481,824 $36.25
New - Prescriptive Duct Sealing 18,557 $671,594 $36.19
Furnace Clean and Tune 191,718 $1,778,952 $9.28
Total Savings/Expenditures 1,575,509 $48,289,366 $30.65
Source: Energy Saving Assistance (ESA) program of California Public Utilities Commission (CPUC).
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Table 3 SoCal Gas, Five-Year Average Cost per Therm Saved
Step 3: Calculate In-Lieu Fee
The product of the number of additional therms generated because the applicant has opted for a
mixed-fuel development (Step 1) and the average cost per therm reduced associated with
retrofit projects (Step 2) is the amount of the in-lieu fee.
Use of Fee Revenue
Any in-lieu fee revenues received by the City will be used to support retrofit efforts to reduce
therm generation and greenhouse gas emissions. Given the presence of existing energy
efficiency programs (e.g., Community Action Partnership of San Luis Obispo administering the
Low Income Home Energy Assistance Program, the 3C-REN Energy Efficiency Direct Install
Program, etc.), the City intends to channel in-lieu fee revenues received into grants for these
organizations/ programs, especially where they benefit low and moderate income households. In
addition, the City has indicated that allocating any in-lieu fee revenues to existing program will
ensure that revenues are used most effectively and can be easily scaled up depending on the
amount of revenue collected. The City’s goal is for all new buildings to choose an all-electric
path and avoid the requirements of the Carbon Offset Program and any associated in-lieu fees.
As a result and due to the uncertainty of the future choices of builders/ developers, no revenue
estimates have been made.
Conclusions
This analysis describes one approach to calculating the amount of the in-lieu fee associated with
the City’s Clean Energy Choice Program and is based on the City’s adoption of the proposed
reach code and current plans for how to invest the fee revenue. Based on this context, the cost
per therm is calculated to be $27.33. As the City’s program evolves, alternative approaches may
be developed to further incentivize the development of all electric buildings and fuel switching of
existing buildings.
Item 2014 2015 2016 2017 2018
Five-Year
Average
Therms Saved 3,144,894 1,565,091 1,152,700 1,552,610 1,575,509 1,798,161
Expenditures per Year $57,711,696 $44,577,345 $33,497,179 $44,100,685 $48,289,366 $45,635,254
Inflation-adusted to 2019 Dollars $64,489,874 $49,238,967 $36,299,553 $46,470,722 $49,236,763 $49,147,176
Average Cost per Therm Saved
(in 2019 dollars)$20.51 $31.46 $31.49 $29.93 $31.25 $27.33
Source: Energy Saving Assistance (ESA) program of California Public Utilities Commission (CPUC); Bureau of Labor Statistics, Consumer Price Index
(West, All Urban Consumers).
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Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 1
# Topic Section Comment Resolution
1 Residential:
Certified
Energy
Analyst
EXCEPTION
to Section
150.1(b)1.B.ii
A CEA should be required, do not give an EDR bonus The CEA requirement has been removed from
the proposal.
2 Residential:
Education
General Will City Staff such as inspectors, plan-checkers, building officials, etc.
be supported by training, open-forums, etc. so that consistent
application of these additional regulations may be applied?
The City is working with the Regional Energy
Network to provide trainings and open forums.
For example, on 8/22, they are hosted a 2019
Energy Code Training at the Library
Community Room and have additional
electrification support programming planned
for 2019 and 2020.
3 Residential:
Energy
Performance
150.1(b) Reworded language to make clear we are intending to exceed the
state's requirements
Accepted edits
4 Residential:
Exceptions
150.0(n)1.D
EXCEPTION
2
How does the ordinance apply to ADUs? The Ordinance applies to free standing ADUs,
but exempts attached ADUs.
5 Residential:
General
General This Ordinance seems to be written as more of a dis-incentive to move
forward with mixed-fuel buildings, not incentives to move forward with
all-electric buildings. Could the amendments proposed be written in
such a way to incentivize projects rather than dis-incentivize?
Staff anticipates presenting possible incentives
to Council, with a request to return in
November with a full proposal for incentives.
6 Residential:
Local Grid
Capacity
General In consideration of the proposed amendments generally, is this
Ordinance going to require that the electrical service equipment be
fully capable of carrying all loads, future and current? For example,
where a gas water heater is installed shall the corresponding electrical
load, under this Ordinance, be accounted for so that it may be added
at any point in the future? Will the Ordinance allow demand factors to
be applied to future electrical loads to prevent new/existing electrical
services from being pushed significantly higher? This will require more
copper, larger meters, larger transformers, larger conduits, larger
service equipment, potentially larger electric utility fees/services, etc. to
accommodate loads that may never be installed. Once installed,
service equipment must be replaced to "upgrade" for added load.
The Ordinance requires electrical service
equipment to carry future loads of like-for-like
code compliant appliances.
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Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 2
# Topic Section Comment Resolution
7 Residential:
Prescriptive
Path
150.1(c)15
and 16
We have a concern over the language in this section. Especially with
use of the term “prescriptive”. In terms of modeling for the performance
method, the baseline for any home is based on the prescriptive home
for that climate zone and the assemblies/equipment in the prescriptive
package. Many of these measures will not be able to be modeled
against the prescriptive baseline in energy modeling software. This
prescriptive baseline is pre-baked and can’t be modified. If these
measures are viewed as a necessity, the City should make them
mandatory, rather than prescriptive.
The prescriptive path has been removed.
8 Residential:
Prescriptive
Path
150.l(c)(l6)€ 150.l(c)(l6)(E) - For mixed-fuel, multi-family buildings, how will battery
storage and solar metering be implemented for multi-meter, multi-unit
implementations? This is a significant cost, space, logistics, lifecycle-
cost, and administrative (billing), time-of-use metering, etc. issue. In
addition, this section does not indicate that the energy storage needs
to be provided to offset the energy consumption of each dwelling unit,
only that it be provided. Please clarify the intention.
150.l(c)(l6)(D) - Proposed Ordinance language requires that PV
system be sized to offset 100% of
estimated site electricity load conflicts with 150. l ( c )(14) which is
prescriptive for solar array size based on dwelling units, conditioned
floor area, and applicable adjustment factors, and furthermore the
2019 Energy Code has six different exceptions to further clarify what
size PV array shall be installed. Which code section shall govern in the
City of SLO? Please consider modifying Section 150.l(c)(l4) instead of
providing new guidelines under 150.l(c)(16)(D).
o Additionally, SLO City's recently implemented (May 7, 2019)
Municipal Code Section
17.72.040 requires up to 50% of parking spaces to be EV capable -
meaning project electrical
capacity and distribution must be planned and budgeted upon
installation. Therefore, if
150.l(c)(16)(D) indicates that PV shall offset 100% of estimated site
electricity load (compared
to the language used in existing code Section 150 .1 ( c )( 14) ), the
added burden of future EV
chargers may increase size of the PV array to 200 to 300 percent of
what they may have been
otherwise, which may result in significant costs passed to tenants or
homeowners.
The prescriptive path has been removed.
Packet Pg. 287
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 3
# Topic Section Comment Resolution
9 Residential:
Prescriptive
Path
150.l The additional mandates required by Section 150.l(c)15 appear to add
significant construction cost to a mixed-fuel single-family building. The
proposed text in item B requires slab edge insulation, which is not
currently required in Climate Zone 5 (San Luis Obispo). Item E
requires installation of a battery energy storage system in conjunction
with the mandated solar PV system.
The prescriptive path has been removed.
10 Residential:
Prescriptive
Path
150.l The additional mandates required by Section 150. l(c)16 appear to add
significant construction cost to a mixed-fuel multi-family dwelling
project. The proposed text in item A requires slab edge insulation,
which is not currently required in Climate Zone 5 (San Luis Obispo).
Item D will require design of and installation of a solar PV system sized
to offset 100% of the electricity load. As pointed out in the analysis by
Thoma Electric, it may be prudent to modify the proposed language to
reference Section 150.l(c)14 in determining the required offset. Also,
clarification is needed to confirm if all site electricity load should
include electric vehicle charging amenities, as pointed out in the
Thoma Electric analysis. Item E requires installation of a battery
energy storage system in conjunction with the mandated solar PV
system.
The prescriptive path has been removed.
11 Residential:
Prescriptive
Path
150.1(c)15(B)-
150.1(c)15(e)
For New Section 150.1(c)15(B), the slab insulation requirement
normally applies to heated slabs. Is the intent of this section to apply
insulation also to unheated slabs? Floors/Slab Perimeter/ is listed as
NR in the existing Table 150.1-A. Or is this requirement already
covered by 150.1(c)(1)(D)? 150.1(c)15(E) seems like the real stinger,
since battery storage is still expensive. Do you know if the automatic
controls (for time of day charging/discharging) are commonly
available?
The prescriptive path has been removed.
12 Residential:
Retrofit Ready
General The proposed language for Mixed-Fuel Buildings (item 2) is confusing
in that a "receptacle" is required, but the "unused conductor" shall be
labeled and electrically isolated. Unclear how "receptacle" and "
unused conductor" are related. The same text occurs at Sections A for
Water Heating, B for Clothes Drying, and C for Cooktop or Range.
Additional background information should be provided for a heat pump
supporting these functions to clarify the code provisions.
Amended as suggested.
Packet Pg. 288
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 4
# Topic Section Comment Resolution
13 Residential:
Retrofit Ready
150.l The proposed new Section 150.0(s) contains similar confusing
language as indicated above for Mixed-Fuel Buildings (item 2)
regarding "receptacle" and " unused conductor". The additional text at
Section 150.l(b)lB ii provides Exception 2, but there is no Exception.
Exception 2 should be retitled Exception 1. The additional text added
to the first paragraph of Section 150. l(c) seems unnecessary since
added Sections 150.l(c)15 and 150.l(c)16 contain the necessary
applicability language for mixed -fuel buildings.
Amended as suggested.
14 Residential:
Retrofit Ready
150(n)(1)(D) For both commercial and residential… why require so much space and
ventilation air for future electric heat pumps? The room size (with grills
as an option) seems like a combustion requirement, instead of an
electric system element. Is the requirement to provide cooling for the
replacement heat pump, or does it fulfill another demand?
The space requirement and ventilation
requirement are for two purposes: 1) heat
pump water heaters have tanks; and 2) to
ensure the heat pump compressor has access
to warm ambient air to operate normally. The
warm ambient air is the heat source for
producing hot water.
15 Residential:
Retrofit Ready
l 50.0(h)(5)(B) l 50.0(h)(5)(B) Per section (i) a dedicated receptacle shall be
"connected to the electric panel" is interpreted that the conductors will
be physically connected to the circuit breaker in the e electrical panel,
thus considered to be "in-use". Per section (ii) "both ends of unused
conductor shall be labeled" which conflicts with section (i) which
implies unused conductor exist and shall be connected, please clarify
which conductor is unused in this scenario. These comments apply to
multiple sections in the entire amendment.
Amend "Connected to the electric panel" to
"Able to be connected to the electric panel"
16 Residential:
Retrofit Ready
150.0(n)(l)(A) 150.0(n)(l)(A)- It is advised that the 120V, 20A circuit not be removed
in gas applications, as this is required for the electric igniter. The
proposed change to provide 240V, 30A electrical circuit should be
additional to the 120V circuit where required. We suggest you revert
this section of the proposed code to the existing 2019 Title-24
language for clarity and consistency, as our interpretation is that the
existing 2019 code achieves the same goals as the proposed new
language.
Amended to maintain existing 2019 T24
requirement for 120V, 20A circuit
17 Residential:
Retrofit Ready
150.0(s) 150.0(s) - same comments from 140.0 regarding implementation
details and language to describe implementation details (see Section 2
comments above) .
The provisions will only be applicable to new
buildings (excluding additions and alterations)
18 Residential:
Retrofit Ready
General Requirements for additional circuit breaker spaces and additional
electrical loads will (by electrical calculations) push size of electrical
service significantly higher to each dwelling unit in residential and
multi-family residential applications. In our opinion, a panelboard size
could double as a result.
This comment was discussed in person and it
was clarified that electric vehicles are not
regulated under the California Energy Code.
Packet Pg. 289
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 5
# Topic Section Comment Resolution
19 Residential:
Retrofit Ready
150.0(h)(5) 150.0(h)(5)(C) - What is the application for this section, please clarify
when this is applicable (this scenario seems to have un-reconcilable
electric billing problems, i.e. - who pays for a common heat pump)?
This is especially confusing considering the exception proposed
This language applies to multifamily buildings
and systems, particularly regarding central
space heating systems such as multizone VRF
etc. There are many MF buildings being
constructed with these systems. This
requirement only applies if the building
designers/owners want a centralized system
and in this case they would need to address
whether the costs are divided up between the
various tenants or whether the landlord/owner
pays for the central heating costs. This is no
different than any other scenario involving
central systems.
20 Residential:
Retrofit Ready
150.0(s)2 Amend to "Cooktop or Range" Amended as suggested.
21 Residential:
Retrofit Ready
150.0(s)3 Amend to "Cooking/Electric" Amended as suggested.
22 Residential:
Retrofit Ready
Section
150.0(h)5.B.
Have you done any cost/benefit analysis on the installation of unused
electrical and drainage connections and extra space allocations held in
reserve for possible future use? Have the degree to which these cod
revisions will impact the cost of building been quantified? If so, please
supply links.
Under California Energy Commission
requirements, the pre-wiring provisions are not
subject to a formal cost effectiveness test. The
pricing information we are using comes from
the RSMeans database, as pulled by our
consultant. We found that the pre-wiring costs
for all appliances (not including those already
required by the 2019 California Building Code)
is approximately $740 for single family units,
and $435 for multi-family units. An occupant
wishing to retrofit at a later date would require
additional estimated construction costs of $960
for single family units and $560 for multi-family
units. Put differently, it costs ~$740 to pre-wire
a single family home; it would cost ~$1,700 to
retrofit that same home in the future. Whether
those costs are incurred now or later is the
policy question before Council. Please note
that nonresidential retrofit ready provisions
have been removed
23 Residential:
Retrofit Ready
150(n)(1)(D) For 150(n)(1)(D) I recommend rephrasing slightly:
A gas supply line with a capacity of at least 200,000 Btu/hr. Locate
water heaters in an area that is both:
Amended as requested.
Packet Pg. 290
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 6
# Topic Section Comment Resolution
24 Residential:
Solar
150.1 (b )(1
)(B)(ii)
150.1 (b )(1 )(B)(ii), Exception-2 (b) - If there exist multiple 80 sq.-ft
contiguous areas on a roof/eave shall solar be installed on all available
areas of 80 sq.-ft contiguous , regardless of whether they are
contiguous to each-other, or whether a smaller defined PV area is
sufficient to offset electric usage?
The exception is for limited solar access,
which assumes that sufficient roof area is not
available. If there is sufficient roof area then
this exemption does not need to be taken.
25 Residential:
Storage
Section
150.1(b)1
EXCEPTION
At this time, any requirement of battery storage for excess PV power is
in my opinion inappropriate. This technology is outrageously expensive
compared to its benefits, and producing it en masse is an earth-killing
activity no sustainability director should be encouraging. And that begs
the issue whether there are even enough earth resources (rare metals)
to enable such a system if widely deployed. That provision clearly
needs to go.
Battery storage will be a critical piece of the
state's ability to achieve its energy and
sustainability objectives. No changes made.
26 Residential:
Storage
150.1(c)(l6)(D) 150.1(c)(l6)(D) - offset of 100% of estimated site electricity load is an
ambiguous requirement. Designers for electrical systems need
practical design targets or best practice design requirements. The
concern here is that electrical systems will be overdesigned/overbuilt
for future loads that may never materialize, thereby incurring significant
additional cost and increased carbon footprint of project (material
usage, delivery, manufacturing, etc.). Furthermore, physical space to
offset 100% of electric load by PV generation may not be feasible on a
given property.
The prescriptive path has been removed.
27 Residential:
Storage
150. l(c)(l
5)(E) and
150.1(c)(l6)€
150. l(c)(l 5)(E) and 150.1(c)(l6)(E) - Mandate for battery storage inside
dwelling units is a major concern from a space planning, space-
conditioning, etc. We suggest the Fire Marshall review this
requirement.
The prescriptive path has been removed.
28 Residential:
Typographic
Error
150.0(s)(2)(A) For 150.0(s)(2)(A), there’s a missing footnote. The footnote should be
either defined or eliminated.
Footnote deleted.
29 Residential: 150.0(n)1.D
EXCEPTION
1
Removed exception to allow for larger requirements in case of future
demand shifting
Accepted edits
30 Nonresidential:
Applicability
140.1 Modification of Section 140 .1 includes reference to an addition to an
existing building. This issue should be considered in Section 141 as
discussed above.
Additions and alterations have been removed.
Packet Pg. 291
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 7
# Topic Section Comment Resolution
31 Nonresidential:
Applicability
140 On page 3, the intent to apply the code to additions and new
equipment to serve additions is clear, but amending 140.0(b) is less
clean than amending 140.0. Below is the suggested text:
Section 140.0, Performance and Prescriptive Compliance Approaches
Nonresidential, high rise residential, and hotel/motel buildings,
including additions and new equipment installed to serve additions
shall comply with the following:
The remainder of the alterations could then be added as new sections
140.0(d) 1 to 3.
Additions and alterations have been removed.
32 Nonresidential:
Applicability
140.0(b) 140.0(b) - Proposed changes noted here indicate that building
additions (and new equipment installed to serve additions) are required
to comply with the new language of this ordinance. Section 141.0 of
the existing CBC addresses additions, alterations and repairs to
existing facilities. Which section shall govern, and if 140.0(b) shall
govern, then please further define the term "additions" since these two
code sections will then be in conflict. For example, is a tenant
improvement or renovation considered an "addition"? Another example
is the code Exception for healthcare facilities under 141.0, does this
exception still apply if additions are considered under 140.0(b) under
the proposed language?
"Additions" have been removed.
33 Nonresidential:
Certified
Energy
Analyst
EXCEPTION
to Section
140.1
A Certified Energy Analyst should be a basic requirement and should
not receive additional allowances just for complying.
The CEA requirement has been removed from
the proposal.
34 Nonresidential:
Energy
Performance
140.2(a) 140.2(a)(4) and (5)- Meeting this restrictive requirement might not
allow the designer to meet the IES recommended lighting levels,
especially without allowing CEC defined Power Adjustment Factor
credits. As this 10 % additional requirement is then tied permanently to
Title-24 allowable lighting power density, we believe this requirement
will become increasingly unrealistic since the CEC has continued to
decrease the allowances at each code iteration.
• 140.2(b)(5) and (6)- same question/comments as above for
140.2(a)(4) and (5).
The prescriptive path has been removed.
35 Nonresidential:
Energy
Performance
Section 140.1 Why is Calgreen Tier 1 used in some cases; Tier 2 in other cases? Calgreen is no longer used for additional
efficiency requirements. Rather, the new
efficiency requirements reflect maximum cost
effective Delta Energy Design Ratings and
compliance margins.
Packet Pg. 292
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 8
# Topic Section Comment Resolution
36 Nonresidential:
Energy
Performance
Table 140.1-A Can we move the compliance margin for indoor lighting or mechanical
systems to 5%?
"All other occupancies" will reflect maximum
cost effective compliance margin.
37 Nonresidential:
Exceptions
Multiple Specific requirements for emergency power in order to remain in
operation with the ability to meet their mission requirements - public
health and safety. My concern is specifically for the following types of
uses; Hospitals Fire stations Police stations/EOC Outpatient clinics
performing surgery, dialysis, etc. - any procedure where back up
power is essential. Mixed use buildings that may contain any of the
above uses - particularly mixed use projects with a residential
component.
A specific concern is how the backup power source is fueled (currently
almost exclusively diesel or natural gas) and how this fits into the
Reach Code construction requirements, energy calculations, and need
for systems redundancy. Is there a need for a specific exemption for or
other language to address these uses/buildings?
The Ordinance has been amended to exempt
critical facilities.
38 Nonresidential:
Prescriptive
Path
140.2 The prescriptive items may provide issues with complying with
performance baseline.
Removing prescriptive pathway for mixed-fuel
buildings.
Packet Pg. 293
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 9
# Topic Section Comment Resolution
39 Nonresidential:
Prescriptive
Path
Section
140.2(a)1 and
(b)1
The provisions themselves are so opaque I question whether you or
any member of the council can understand them and their larger
implications. Sometimes I can't figure out where they take us. For
example, the SHGC window requirements. There are two of these.
"Install fenestration with a solar heat gain coefficient no less than
0.45."
"Install fenestration with a solar heat gain coefficient no greater than
0.22"
Greater than? Less than? I find the intent confusing. "no less than
0.45" No less what? No smaller number than .45? Yet that makes no
sense since a smaller number would exclude more solar heat, which
might in some buildings be very desirable. No smaller heat exclusion
than allowed by .45? That too makes no sense since it would exclude
a functioning passive solar building, whose SHGC would need to be .6
to .65 to admit winter sun, which building would also save far more and
cost far less than all the tech-based code-jiggling you seem to be
focused upon.
So these SHGC numbers need to be clarified for intent, and they also
need to be reconsidered in light of the desirability of encouraging
passive solar design.
I also don't understand why the SHGC requirement for hospitality
buildings is so much looser than for other buildings (the .45 and .22
above). Is it the city's intent that hotels and motels be allowed to
continue their notoriously wasteful energy practices while everyone
else is subjected to rigid limitations? Please explain or fix.
Removing prescriptive pathway for mixed-fuel
buildings.
40 Nonresidential:
Prescriptive
Path
140.2 Clarified that prescriptive requirements are additive Accepted suggested approach.
Packet Pg. 294
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 10
# Topic Section Comment Resolution
41 Nonresidential:
Prescriptive
Path
140.2 Modification of Section 140.2, subsection (b) may add construction
cost due to the fenestration solar heat gain coefficient required .
Additional limitation on east -facing and west-facing fenestration may
limit architectural options.
The prescriptive path has been removed.
42 Nonresidential:
Prescriptive
Path
140.2(a)(1)-
For
140.2(b)(1)
Section 140.2(a)(1) reversed the SHGC requirement; revise as follows.
1. Install fenestration with a solar heat gain coefficient no less greater
than 0.45.
Similarly, for 140.2(a)(4), I suggest the following revision:
4. Reduce the lighting power density (Watts/ft2) by ten percent (10%)
from that required from allowed by Table 140.6-C.
For 140.2(b)(1), is this amendment worthwhile? A 0.22 SHGC barely
differs from the adopted table, which lists 0.22 operable window, 0.23
glazed doors, 0.25 fixed windows and 0.26 curtainwall SHGCs in your
climate zone. For 140.2(b)(2), limiting the east and west facing falls to
a fraction of north and south facing glazed areas may have the
perverse effect of increasing north and south glazing.
The prescriptive path has been removed.
43 Nonresidential:
Retrofit Ready
140.0(b)(2)(iv) 140.0(b)(2)(iv) specifies a volume for rooms including water heating
equipment to facilitate future heat pump hot water heaters. An
immediate question that comes to mind is how this requirements
interact with hot water heaters installed at the building exterior, as is
common for residential tankless water heaters. Does exterior
installation fulfill the required volume for a future heat pump, or does a
large interior space for a future heat pump need to be designed within
the building under this condition?
Nonresidential retrofit ready requirements
have been removed.
44 Nonresidential:
Retrofit Ready
140.0(b)16 There is a need to input the commercial-scale electric readiness
capacities language however. The ‘engineering review’ on the
capacity-scaling that ZEB is contracting out is happening, but the
timeline is uncertain. Avani or I will let you know of updates when we
get them.
Retrofit ready requirements for non-residential
has been removed.
45 Nonresidential:
Retrofit Ready
140.0(b)2.B.ii Change to "electric" or do we need to keep heat pump? Retrofit ready requirements for non-residential
has been removed.
46 Nonresidential:
Retrofit Ready
140.0(b)2.C Add "Oven" or should oven have its own section? Retrofit ready requirements for non-residential
has been removed.
47 Nonresidential:
Retrofit Ready
Section
140.0(b)
Consider removing pre-wiring section Amended as requested
Packet Pg. 295
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
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# Topic Section Comment Resolution
48 Nonresidential:
Retrofit Ready
140.0 (b)2 140.0(b)(2)(A), (B), and (C) and 140 .0(b)(3) indicate that a receptacle
shall be provided for each device in question - if the circuit is reserved
for future use , does a receptacle device need to be provided?
• 140.0(b)(2)(A), (B), and (C) and 140 .0(b)(3) arguably will result in
wasted material, labor, and
infrastructure thereby increasing the carbon footprint of the total
installed project for devices which may never be used, or potentially
need to be re-sized/replaced if/when electrical appliances are installed.
140 .0(b)(2)(A) and (B) do not require a reserved 2-pole circuit breaker
space in the electrical panel, but (C) and 140 .0(b)(3) do call for
reserved 2-pole circuit breaker. This language appears inconsistently
applied.
• 140.0(b)(2)(A) Per section (i) a dedicated receptacle shall be
"connected to the electric panel" is interpreted that the conductors will
be physically connected to the circuit breaker in the electrical panel,
thus considered to be "in-use". Per section (ii) "both ends of unused
conductor shall be labeled" which conflicts with section (i) which
implies unused conductor exist and shall be connected, please clarify
which conductor is unused in this scenario. These comments apply to
multiple sections throughout the amendment.
• 140.0(b)(2)(c) - Question on placement of receptacle for
Cooktop/Range: Does "Accessible with no obstructions" include the
wall area behind the appliance? Connections to the s appliance
typically are provided BEHIND the appliance (for aesthetic reasons in
a kitchen), is that placement considered to be " obstructed" according
to this code modification?
• 140.0(b)(2) - does not address other kitchen appliances (for example,
in a commercial kitchen) such as griddle, broiler, fryer, waning ovens,
commercial dishwashers, etc. Literal interpretation of amendments
require only water heaters, clothes dryers, cooktop-range, ovens,
please clarify.
The nonresidential retrofit ready requirements
have been removed.
49 Nonresidential:
Solar
140.0(b)(1) A note for the new 140.0(b)(1), regarding the solar zone -- as currently
written, 110.10(a)(4) only includes non-residential buildings with three
habitable stories or fewer. If the solar zone requirements are meant to
apply to all non-residential buildings, 110.10(a)(4) will also require
amendment.
Amended as noted
50 Nonresidential:
Solar
140.0(b) Is this new (this is about adding a solar requirement to nonres) Yes, the nonresidential solar requirement is
new.
Packet Pg. 296
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
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# Topic Section Comment Resolution
51 General:
Applicability
General The text added to 140.0(b) indicates that the additional requirements
that follow be applied to additions as well as newly constructed
buildings. Requirements for non-residential building additions are
contained in Section 141 of the Energy Code. The "Note to Section
140.0" in the code text indicates that Sections 140.1 through 140.9
apply to newly constructed buildings, and refers to Section 141 to
determine which of Sections 140.1through140.9 also apply to additions
or alterations to existing buildings. A preferred approach for the
proposed amendment may be to create a new Section 140.10 to
include items 1, 2, and 3; then delete the exception for Additions in the
proposed text and amend Section 141 to indicate which of the
modifications in the revised Section 140.10 will apply to Additions.
Additions and alterations have been removed.
52 General:
Applicability
General The application of the proposed amendments for additions to a mixed -
fuel building may require further clarification. It is unclear at what
threshold the amended requirements apply to additions. Section 150.2
contains several exceptions for application of some Energy Code
requirements based on floor area of the addition, but no existing
exception applies to the proposed requirements. It may be
unreasonable or not cost effective to install the additional electrical
requirements for a small addition to a mixed -fuel building. For
comparison, another local amendment mandating installation of fire
sprinklers provides an exception where the addition does not exceed
1,000 square feet of floor area.
The provisions will only be applicable to new
buildings (excluding additions and alterations)
53 General:
Certified
Energy
Analyst
General We encourage the City Council members to approve a reach code that
includes a CEA requirement to prepare and sign compliance
documentation for residential and nonresidential projects. We believe
the CEA requirement will increase the accuracy of compliance
documentation and streamline the compliance process for your
jurisdiction.
The CEA requirement has been removed from
the proposal.
54 General:
Certified
Energy
Analyst
General CABEC also recommends that your reach code allow a grace period
for 2016 Residential CEAs of up to 9 months, or when the number of
2019 CEAs reaches 75, and for 2016 Nonresidential CEAs of up to 12
months, or when the number of 2019 CEAs reaches 25.
The CEA requirement has been removed from
the proposal.
55 General:
Certified
Energy
Analyst
Section
100.1(b)
CERTIFIED
ENERGY
ANALYST
It is confusing what requires certification by an energy consultant. It
appears that even prescriptive compliance requires such certification,
which, if so, defeats the purpose of prescriptive, rather than
performance-based, compliance. If prescriptive compliance requires
certification, please explain why. If it doesn't, you need to make that
clear.
The CEA requirement has been removed from
the proposal.
Packet Pg. 297
Item 18
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# Topic Section Comment Resolution
56 General:
Certified
Energy
Analyst
Section
100.1(b)
CERTIFIED
ENERGY
ANALYST
The requirement that energy consultants performing compliance
studies must be certified by a particular private organization seems
inappropriate. For example, any state-licensed architect is qualified to
do such energy assessment, yet would be excluded by your
requirement.
The CEA requirement has been removed from
the proposal.
57 General: Cost
Effectiveness
General Use of PG&E gas infrastructure costs in SoCalGas territory - Because
SoCalGas is the sole provider of gas service to the City of San Luis
Obispo, the City should not rely on a cost-effectiveness analysis that
uses infrastructure cost estimates provided by PG&E to determine
incremental customer costs for a mixed fuel home. PG&E's provided
estimates are approximately three times greater than SoCalGas'
infrastructure costs.
This information has been included in the
Council Agenda Report.
Packet Pg. 298
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
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# Topic Section Comment Resolution
58 General: Cost
Effectiveness
General Use of an unsubstantiated and flawed study to support affordability
analysis - the analysis relies on the flawed conclusions of E3's Deep
Decarbonization study that contains inaccurate projections of utility gas
rate increases and underestimates. electricity rate increases. For
example, it does not take into account wildfire damage ]recover costs
or system infrastructure expansion costs
The referenced cost effectiveness study was
developed as part of an open process by the
State Codes and Standards Program, which
includes SoCal Gas. SoCal Gas did not
provide these comments during the process.
The City finds the method used in the cost
effectiveness study to be sufficient for
complying with state requirements.
59 General: Cost
Effectiveness
General Inaccurate valuation of the societal costs of electrical infrastructure and
societal benefits of gas infrastructure - The cost-effectiveness analysis
overlooks the vulnerability of electric infrastructure to climate change
impacts and how such impacts affect energy reliability to residents. It
also does not account for the public health and environmental impacts
from the fires caused by electric infrastructure.
The referenced cost effectiveness study was
developed as part of an open process by the
State Codes and Standards Program, which
includes SoCal Gas. SoCal Gas did not
provide these comments during the process.
The City finds the method used in the cost
effectiveness study to be sufficient for
complying with state requirements.
60 General:
Definitions
100.1 (b) 100.1 (b) - Question on Free-standing Accessory Dwelling Unit: Is this
definition consistent with other SLO City/County definitions of " Free-
standing Accessory Dwelling Unit"?
Updated for consistency.
61 General:
Definitions
100.1(b) ALL-ELECTRIC BUILDING is a building and building site that uses a
permanent supply of electricity as the source of energy for all end
uses, and has no natural gas or propane plumbing installed to the
building or site. Regulated gas end uses on a site or in a building
include, but are not limited to: space heating, residential/pool/spa
water heating, cooking appliances, installed barbecues, clothes drying
appliances, saunas, recreational fireplaces, kilns, laboratory equipment
and recreational lighting, and outdoor heaters.
This definition is helpful, however the definition
as provided to the CEC was deemed sufficient.
No changes made.
62 General:
Definitions
100.1(b) Updated definitions for simplicity and clarification Accepted edits
63 General:
Definitions
Section
100.1(b)
Remove direct reference to pools and spas Amended as requested.
Packet Pg. 299
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 15
# Topic Section Comment Resolution
64 General:
General
General The California Health and Safety Code, Sections 17958.7 and
18941.5, requires the City Council, before making any modifications or
changes to the California Building Standards Code (CA Energy Code
in this case) pursuant to Health and Safety Code Sections 18941.5
and 17958.5, to make an express finding that each modification or
change is needed. Such changes must be determined including, but
not limited to, green building standards, to be reasonably necessary
because of local climatic, geological. or topographical conditions. Such
findings must be made available as a public record and a copy thereof
for each modification or change shall be filed with the State of
California Building Standards Commission. No findings have been
provided for the proposed amendments. This task should be carefully
reviewed, addressed and confirmed by the City Attorney.
The adopting Ordinance will provide the
express findings.
65 General:
General
General The Central Coast Taxpayers Association, a California non-profit
corporation and IRC Section 501c4 tax exempt organization and
taxpayer watchdog on the Central Coast, opposes the City’s adoption
of the proposed amendments that would lead to the elimination of use
of natural gas for heating in both residential and non-residential
commercial buildings, as well as apartment buildings and hotels/motels
This amendment is not required by state law, has not been evaluated
in terms of its cost impact on already-impacted new housing
construction or on remodeled construction, and is very likely to
increase the cost of housing which the city acknowledges has become
unaffordable to local families and workers. Neither the efficacy nor the
energy consumption impacts of the proposal has been evaluated.
The proposal appears to be another attempt by the City of San Luis
Obispo to “burnish” its extreme environmental credentials at the
expense of residents and taxpayers. We urge the City to take no
action on this measure.
The Ordinance has been evaluated and is not
expected to increase construction costs for a
typical building.
66 General:
General
General I am writing regarding the proposed amendments for the Building Code
to require "electric retrofit-ready" developments. My contractors and I
feel that more time and study is needed to ensure that the proposed
amendments are actually attainable as written. We are requesting that
additional time be given for study, and also would like to see a public
comment period before these changes are implemented. On behalf of
the National Electrical Contractors Association of San Luis Obispo
County, please consider an extended comment period and/or public
comment meeting. Thank you!
The City has worked with several local
electricians to improve the standards as
requested.
Packet Pg. 300
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 16
# Topic Section Comment Resolution
67 General:
General
General Building affordably within the city limits is already seen as cost
prohibitive to building workforce appropriate housing. Any cost
premium added to housing within the city should be avoided so as not
to push affordable housing outside reasonable ped/bike commuting
distances or to an unaffordable by design scale.
Resolution addressed in the Council Agenda
Report.
68 General:
General
General On page 1, footnote 1 should reference 2019 California Building Code
of Regulations; the California Building Code is Part 2 of Title 24, but
does not include Part 6, the California Energy Code.
Not applicable, this text no longer appears in
the Ordinance.
69 General:
General
General Work with SLO County and Cal Poly to reduce our regional carbon
emissions. To transform the marketplace, the scale needs to get
bigger. Partnering regionally allows us to more impactfully leverage
available funding and avoid unintended commute consequences
regarding where and if housing is built.
The City is already engaging with Cal Poly
facilities staff and will look to further
collaborate with regional agencies and entities.
70 General:
General
General Architecture2030 has done the legwork for you. We would recommend
adopting the ZERO Code model. It is working towards the same end
goal, and has the code language crafted along with the technical
support document. Palo Alto has completed the cost effectiveness
study.
Architecture 2030's ZERO CODE is an elegant
approach for zero net carbon in states that
aren't already mandated to have a carbon
neutral grid or cities that aren't already
procuring all of their energy from carbon free
resources. Additionally, Architecture 2030
does not address upstream methane
emissions that occur in the natural gas
extraction, transmission, and distribution
system.
71 General:
General
General Education and workforce development are key. The City is working with the Regional Energy
Network to provide trainings and open forums,
as described above.
72 General:
General
General When it comes to prescriptive pathway, simple is better. Instead of the
complicated mix of disincentives, legislate a Zero Net Carbon code
that gives both flexibility and clarity in expectations. For example, in
the ZERO Code model you just oversize your solar to compensate for
your carbon usage (flexibility and fiscal incentive to design a very
efficient electrified building). This provides a highly simplified
mechanism to incentivize a move towards carbon free fuel sources
while also rewarding creativity and innovation in building materials,
design and construction. Today, this approach is being successfully
implemented in countries around the world.
Architecture 2030's ZERO CODE is an elegant
approach for zero net carbon in states that
aren't already mandated to have a carbon
neutral grid or cities that aren't already
procuring all of their energy from carbon free
resources. Additionally, Architecture 2030
does not address upstream methane
emissions that occur in the natural gas
extraction, transmission, and distribution
system.
Packet Pg. 301
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 17
# Topic Section Comment Resolution
73 General:
General
General The state’s energy code is moving incrementally towards similar goals
(ZNE and ZNC), in three-year increments. ZNE in 2020 for residential
and 2030 for commercial. Incremental code updates are expected to
similarly move towards ZNC to achieve legislated state fossil fuel free
goals. Any reach code amendments should follow that path and not
embark on a tangent that will require course correction or overlapping
regulations down the road.
The proposed Ordinance follows the path as
described in the comment.
74 General:
General
General Establish a regulatory structure that makes smaller units feasible to
build. Additional complexity adds time and money to building, a cost
that is felt most acutely by small projects and affordable by design
units.
An all-electric building is less complicated than
a mixed-fuel building.
75 General:
General
General As stated in your direction to staff, the City has the opportunity to
encourage the construction of buildings that help us achieve our Net
Zero goal. The code, as currently proposed, instead takes a
disincentive/discourage approach that will likely result in other more
damaging outcomes. Integrating incentives and education is
something to tackle immediately. Instead of a carbon offset fee,
inspire, encourage and incentivize the performance and electric
pathways. We specifically recommend looking for incentives that
address multiple barriers to carbon neutrality in simultaneity such as
energy efficiency and fuel source, energy use and commuting
behavior, etc.
Staff will propose to Council a path for
reviewing and proposing potential incentives.
76 General:
General
General In offering incentives, make sure they are true incentives (instead of
fallacy or disincentives) for those projects that achieve the standards,
such as fossil free new construction that helpful offset any additional
costs associated with this approach. Some “true” incentives could
include:
o Free energy modeling services (rebate program) for fossil free
residential and non-residential projects – design and compliance
modeling
o Free induction ranges or electric water heaters
o Reduced minimum parking standards
o Up-zoning or density bonuses of parcels
o Reduced energy rates for fossil free projects through Monterey Bay
Community Power
o A meaningful guaranteed fast-track with specific turnaround times
through the permitting process (i.e. 5-7 day turnaround)
Staff will propose to Council a path for
reviewing and proposing potential incentives.
Packet Pg. 302
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 18
# Topic Section Comment Resolution
77 General:
General
General Leverage regional, state and federal grants to make the reduction of
GHG’s in our built environment as enticing, beneficial and easy as
possible. This is part of a Major City Goal and, instead of being used to
generate funds, should be an investment priority.
The City is actively pursuing grants to
implement the Climate Action Major City Goal.
For example, the City was recently awarded
over $425,000 from Caltrans to evaluate the
impacts of climate change on the community.
78 General:
General
General Our community’s participation in Monterey Bay Community Power is a
tipping point to address not only the fuel source but usage as well. Set
it up to fund retrofits straight out of the gate.
The City is actively advocating for Monterey
Bay Community Power programs that support
local building and transportation
decarbonization.
79 General:
General
General Leveraging 3C-REN The City works closely with 3C-REN on
program development and implementation.
80 General:
General
General We can’t fight battles on all fronts in simultaneity. Focus staff time on
the issues that have the largest impact GHG reduction impacts. The
primary source of GHG in our area is through transportation
(commuter and passthrough) emissions. The primary mechanism to
address GHG reductions and a fossil free future is to: o Provide
housing options within walking/biking distance to where people work,
go to school, and recreate or, at the very least, shorten commutes. The
increase in the housing stock and elimination of commute trips reduces
CO2 by about 7,500 pounds per year (as validated by the APCD in
February.) By comparison, the elimination of a gas range and gas
dryer are 192 and 427 pounds of CO2 respectively.
o Improve transit options o Electrify transportation
It is agreed that transportation emissions are
the largest portion of community emissions.
The priority measures provided by the letter
are critical and the City will look to work with
the Chamber to achieve these outcomes.
Buildings comprise approximately one-third of
community emissions.
81 General:
General
General The analysis by Thoma Electric raises valid concern regarding PG&E
ability to accommodate increase electricity demand. Experience has
shown that the cost of providing necessary infrastructure is very
significant, which may be passed on to the customer. The analysis by
Thoma Electric concerning fuel for mandated emergency generators
for backup electric power is a valid concern . It may be necessary to
develop code language that allows an exception that would allow a
building that is not a mixed-fuel building to have natural gas service
limited to an emergency generator.
See response to Thoma Electric comments,
above.
82 General:
General
General As a draft, the codes are already quite clear and could be
straightforwardly implemented as soon as the 2019 codes are
enforced. Given the technical nature of the adoption, a few elements
were technically incorrect or would benefit from alternate construction.
I don’t doubt, however, that some of the proposed revisions below
would induce confusion in a third person’s reading – consider specific
proposals merely a first stab at revised text.
Noted.
Packet Pg. 303
Item 18
Attachment F - City of San Luis Obispo - 2019 California Energy Code Public Review Comments
Page 19
# Topic Section Comment Resolution
83 General: Local
Grid Capacity
General Has PG&E been contacted and consulted regarding additional utility
power distribution capacity requirements? Will there be physical space
on-site (in the downtown area especially) where larger transformers
will be necessary to account for the additional future electrical loads?
PG&E is aware of the proposed ordinance
language and has confirmed the ability to
manage the grid to accommodate load growth.
84 General:
Retrofit Ready
General The Ordinance generally refers to 240V appliances, however, larger
residential and most commercial electrical services are 208V. The
document should be clear that appliances should be installed/rated
according to nominal serving voltage.
The language has been revised to specify
128/120/240 as appropriate.
85 General:
Retrofit Ready
140.0(b),
150.0(h),
150.0(n),
150.0(s)
Updated electric readiness requirements to reference California
Electrical Code
Accepted suggested approach.
86 General:
Safety
General For residential, mixed residential, and commercial applications, if no
natural gas or propane options are provided during new construction,
choices for installation of optional standby generators will be limited to
gasoline (which is potentially more dangerous and not viable on large
generator systems) or diesel fueled. These types of fuel have
significant maintenance and emissions impacts.
Exemptions have been provided to address
this issue.
87 General:
Safety
General Has the Ordinance considered fire code and fire rated room
requirements, sprinkler requirements, ventilation and outdoor air-
changes, off-gassing, etc. from battery charging (or future battery
charging if/when installed).
Staff has regularly consulted with the Fire
Marshall during the development of this
proposal.
88 General:
Safety
General Has this Ordinance been fully vetted by the Fire Department and Fire
Chief? We would like to recommend that the City have The Fire
Marshall review the proposed Ordinance language, with the size of
battery storage systems in mind.
Staff has regularly consulted with the Fire
Marshall during the development of this
proposal.
89 General:
Safety
General Health care facilities (also governed by OSHPD), dispatch centers, fire
departments, police facilities are required to install emergency
generator systems for backup power. Legally these required
emergency generator systems shall have an on-site fuel source in
order to be compliant with other codes, including the life safety code.
Will there be exceptions to this Ordinance for these types of facilities to
be allowed to use gas, diesel, or natural gas as emergency backup?
Some of these facilities require on-site 96-hours of fuel.
The Ordinance has been amended to exempt
Essential Service buildings.
Packet Pg. 304
Item 18
ENaysp ipor : f the Cmtrctl Coast
TRIBUNE
735 Tank Farm Road, Suite 220 • Post Office Box 112 • San Luis Obispo, California 93406-0112
(805)783-7625
In the Superior Court of The State of California
In and for the County of San Luis Obispo
AD #4353152
CITY OF SAN LUIS OBISPO
CITY CLERK
STATE OF CALIFORNIA
ss.
County of San Luis Obispo
I am a citizen of the United States and a resident of the
County aforesaid; I am over the age of eighteen and not
interested in the above entitled matter; I am now, and at
all times embraced in the publication herein mentioned
was, the principal clerk of the printers and publishers of
THE TRIBUNE, a newspaper of general Circulation,
printed dbd published daily at the City of San Luis
Obispo irk the above named county and state; that notice
at which the annexed clippings is a true copy, was
published in the above-named newspaper and not in any
supplement thereof — on the following dates to wit;
AUGUST 24„ 2019 that said newspaper was duly and
regularly ascertained and established a newspaper of
general circulation by Decree entered in the Superior
Court of San Luis Obispo County, State of California, on
June 9, 1952, Case #19139 under the Government Code
of the State of California.
I certify (or declare) under the penalty of perjury that the
foregoing is true and correct.
(SigA6= of Principal Clerk)
DATE: AUGUST 24, 2019
AD COST: $146.16
C1r1y OP
` ,� 7 Sqn LaL OBISPO
SAN LUIS ❑BISPO CITY COUNCIL
NOTICE OF PUBLIC HEARING
The San Luis Obispo City Council invites all interested persons
attend a public; liaaring on Tuesday. September 3, 2019, at
00 p.m. in the City Hall Council Cnamber. 990 Palm Street, San
its Oblapo, Cafifomfa, relative to the following;
Consideration of a Resolution establishing a Clean Energy
Cholee Policy, and Impfamentation Measures including an Ordi-
nance approving locgl amendments to the Energy Code, and
an Ordinance Implementing a Carbon Offset Requirement with
an In -Lieu Fee Option.
For more information, you are invited to contact Chris Read of
the City's Administration Department at (805) 781-7151 or by
email at tread®slocity.org.
The City Council may also discuss other hearings or business
items before or after the items listedabove.
11op'ris for this meeting will be available for review In the City
Gir:.rk's Office and praline at www.slocity.orp on Wednesday, Au-
gnO 28, 2019. Please call the City Clerk's Office at (805) 781-
7I00 for more information. The City Council meeting will be tele-
vised live on Charter Cable Channel 20 and live streaming on
Teresa Purrington. City Clerk
City of San Luls Obispo
Avgusf 24, 2019
4353152
9/3/2019 Item 18 ‐ Staff Presentation
1
Clean Energy Choice Program
City Council Public Hearing – September 3, 2019
1
Recommendations
1.Adopt a Resolution titled “Clean Energy Choice Policy,” establishing a policy framework in support of (1) local amendments to the California Energy Code, and (2) a proposed carbon offset program for new buildings with natural gas (Attachment A); and
2.Introduce an Ordinance implementing an Energy Reach Code titled “Local
Amendments to Part 6 (Energy) of the 2019 California Building Code” adding Chapter
15.04.110, titled “Amendments – California Energy Code”, to the City’s Municipal Code
(Attachment B); and
3.Introduce an Ordinance implementing a carbon offset program titled “Clean Energy Choice Program,” adding Chapter 15.50 to the City’s Municipal Code (Attachment C); and
4.Direct staff to develop an implementation plan for the Clean Energy Choice Policy to
include 1) establishing the in-lieu fee, 2) education and outreach, 3) development of a
program making professional consultation and design services available to property
owners, and 4) identification of a series of incentives, such as permit streamlining and
property development standard allowances (for example, parking reductions, building
height allowances, and residential density) in exchange for all-electric development and
return to the City Council for approval (currently scheduled for November 5, 2019); and
5.Direct staff to submit the approved local amendments to the California Energy Commission to initiate the Reach Code review and approval process; and
6.Direct staff to submit a letter to Monterey Bay Community Power to drive support for
energy programs, such as retrofit rebates, that promote all electric development.
2
AGENDA PACKET PAGE #221
1
2
9/3/2019 Item 18 ‐ Staff Presentation
2
Agenda
Why All Electric Buildings Now?
Clean Energy Choice Policy Overview
Cost Effectiveness
Public Engagement
Implementation and Alternatives
3
Why All
Electric
Buildings
Now?
4
3
4
9/3/2019 Item 18 ‐ Staff Presentation
3
Why All Electric Buildings Now?
5
In 2016, building energy emissions accounted for 40
percent of total community emissions:
47 percent from electricity consumption
53 percent from onsite natural gas combustion
Monterey Bay Community Power will purchase carbon
free electricity for the City starting on January 1, 2020.
City’s Land Use Element anticipates 4,607 additional
housing units and 5,170,000 square feet of additional
nonresidential space by 2035.
AGENDA PACKET PAGE #238
The Clean Energy
Choice Program
would be expected
to avoid 7,800
Metric Tons of
CO2 equivalence
(MTCO2e) per
year, equivalent to
taking 1,600
passenger vehicles
off the road or
planting nearly
130,000 trees to
sequester carbon
Why All Electric Buildings Now?
6
Substantial changes to the 2019 Building Code
All-electric compliance options, mandatory solar on
residential buildings, and pre-wiring requirements for
water heating
Development Agreement provisions for both Avila Ranch
and San Luis Ranch (over 1,300 homes in total)
Must be Citywide Policies
Statewide direction towards electric buildings
Cost comparable construction (discussed later in the
presentation)
Insulation from expected grid-based energy fluctuations
AGENDA PACKET PAGE #238
5
6
9/3/2019 Item 18 ‐ Staff Presentation
4
Why All Electric Buildings Now?
7
High efficiency, high performing, cost comparable
appliances
Clean Energy Choice
Policy Overview
8
7
8
9/3/2019 Item 18 ‐ Staff Presentation
5
Policy Statements
“It is the policy of the City that new buildings should
be all-electric.”
“The Community Development Department should
only issue a building permit for a new building if it is
an all-electric building or if the applicant meets the
City’s current Reach Code and Carbon Offset
Program requirements.”
9
The proposed
Clean Energy
Choice Policy
uses an offset
requirement to
offer choice to
builders, while
also not
increasing
greenhouse gas
emissions from
natural gas
used to power
new buildings.
AGENDA PACKET PAGE #248
Clean Energy Choice Policy
10
AGENDA PACKET PAGE #225
Residential
9
10
9/3/2019 Item 18 ‐ Staff Presentation
6
Clean Energy Choice Policy
11
AGENDA PACKET PAGE #226
Non-Residential
Reach Code: Energy Performance
Standards
12
Building Type Performance Requirement Requirement Justification
Single-family Exceed the standard Energy
Design Rating by at least
9.5 points
Maximum cost-effective
Total Energy Design Rating
Low-rise multifamily Exceed the standard Energy
Design Rating by at least 9
points
Maximum cost-effective
Total Energy Design Rating
Building Type Performance Requirement Requirement Justification
Office/retail 15% compliance margin Maximum cost-effective
compliance margin
Hotel/motel and high-rise residential 9% compliance margin Maximum cost-effective
compliance margin
Other nonresidential 5% compliance margin Maximum cost-effective
compliance margin
Residential
Non-Residential
AGENDA PACKET PAGE #228
11
12
9/3/2019 Item 18 ‐ Staff Presentation
7
Reach Code: Nonresidential, High-
Rise Residential, and Hotel Solar
Requirements
The 2019 California Energy Code requires non-
residential, high-rise residential, and hotel buildings to
be “solar ready”
Staff’s recommendation takes the next step by
requiring new buildings to meet the minimum
requirements for solar panel installation in the entire
solar zone* of a nonresidential, high-rise residential,
or hotel building.
Solar Zone: For most buildings, the roof area dedicated to
solar will be 15%
13
AGENDA PACKET PAGE #228
Reach Code: Building Code
“Electric Ready” Requirements
Proposed requirements for each natural gas
appliance include:
1.Minimum space requirements for a future electric
requirement
2.A dedicated electrical circuit that is able to be connected
to the electrical panel
3.A double pole breaker in the electrical panel labeled with
the name of the appliance
14
AGENDA PACKET PAGE #229
13
14
9/3/2019 Item 18 ‐ Staff Presentation
8
Carbon Offset Requirement
Allows the City to offer choice to builders, while also
not increasing greenhouse gas emissions from natural
gas used to power new buildings.
New mixed-fuel buildings would be required to offset
the carbon introduced into the environment:
Retrofit an existing building to offset proposed gas use, or
Pay an in-lieu fee to be used for the same purpose.
15
AGENDA PACKET PAGE #229
Carbon Offset Requirement
The in-lieu fee is calculated to be $27.33 per therm
generated.
The therms generated will vary by application,
depending on the type and size of the development.
Residential - tiered fee schedule anticipated
Commercial - will vary based on specific application
Sample fee table:
16
Building Type Average Therm Usage Calculated In-Lieu Fee
Single Family Residential 220 therms per year $6,013
Multifamily Residential 120 therms per year $3,280
Medium Retail (25,000 s.f.) 1,746 therms per year $47,718
Large Office (54,000 s.f.) 3,240 therms per year $88,549
The proposed
in-lieu fee of
$27.33 per
therm is based
on a 5-year
average of
retrofit data
from the
Energy Savings
Assistance
program,
administered by
SoCal Gas
AGENDA PACKET PAGE #229-230
15
16
9/3/2019 Item 18 ‐ Staff Presentation
9
Applicability and Exemptions
17
AGENDA PACKET PAGE #231
A.Manufacturing/industrial processes
B.Attached accessory dwelling units
C.Essential Service Buildings
D.Temporary buildings
E.Gas line connections used exclusively for emergency generators
F.Buildings or building components exempt from the California
Energy Code.
G.Residential subdivisions in process of permitting or constructing
initial public improvements for any phase of a final map recorded
prior to January 1, 2020, unless compliance is required by an
existing Development Agreement.
H.Public Interest Exemptions listed in proposed ordinance Section
15.50.060 (Packet Page 267).
Applicability and Exemptions
18
AGENDA PACKET PAGE #231
17
18
9/3/2019 Item 18 ‐ Staff Presentation
10
Cost
Effectiveness
19
Cost Effectiveness for CEC Review
Technical definition per the California Energy Code
and the California Energy Commission.
The City is responsible for finding amendments to the
California Energy Code to be cost effective and using
less energy.
The City uses the 2019 Statewide Cost Effectiveness
Studies as the basis for its findings.
The City amends the California Energy Code in three
ways and finds all the of them to be cost effective and
to use less energy than the standard code.
20
AGENDA PACKET PAGE #232
19
20
9/3/2019 Item 18 ‐ Staff Presentation
11
Anticipated Costs for Developers
and Consumers
Cost to build
Utility costs
High uncertainty, using current projections: $5-$15 more
Income qualified rate programs
21
According to the
2019 Cost-
effectiveness
Study: Modest
additions of
solar in the 1 to
2 kW range
could turn
lifetime utility
costs into
lifetime utility
savings, even
when including
the upfront costs
of the additional
panels.
AGENDA PACKET PAGE #233
Single Family Low-Rise Multifamily
Cost to Build (Typical) $-421 $-221
Offsite Infrastructure Savings
(Typical)
$-493.93 $-19.54
Source: 2019 Statewide Cost Effectiveness Study for Low-Rise Residential New Construction;
SoCal Gas Direct Communication
22
Outreach
22
21
22
9/3/2019 Item 18 ‐ Staff Presentation
12
City Staff Outreach
The City has led the following public engagement events:
Energy code workshop #1. May 1, 2019
Builders Roundtable. May 13, 2019
Planning Commission. May 22, 2019 and July 24, 2019
Chamber of Commerce Legislative Action Committee. July 11, 2019
Energy code workshop #2 – Code and Offset Program Review. July
24, 2019
Public Comment Period. August 9, 2019
Direct conversations with developers, builders, electricians,
engineers, and architects.
The City supported the following public engagement events:
Electrification Panel & Expo. August 22, 2019
Induction Cooktop Lending Program
23
AGENDA PACKET PAGE #241
Implementation and
Alternatives
24
23
24
9/3/2019 Item 18 ‐ Staff Presentation
13
Implementation Plan
Administrative Guidelines – November 5th
Establishing the In-Lieu Fee and how it will be applied
Details of an Education and Outreach Plan
Incentives for all electric buildings, such as flexibility in
property development standards where it is shown to
facilitate all-electric development
Guidance and examples on how/when to apply to Public
Interest Exemptions
AGENDA PACKET PAGE #230
Alternatives
No Action
Adopt only one or the other implementing ordinance
Adopt one or both implementing ordinances with
modifications
Add/subtract from list of exemptions
Eliminate solar requirement for new commercial buildings
Eliminate retrofit ready requirements
Increase or relax the performance requirements for
mixed-fuel buildings
Provide additional edits for clarity
26
AGENDA PACKET PAGE #246
25
26
9/3/2019 Item 18 ‐ Staff Presentation
14
Schedule and Next Steps
27
Task Timeframe
Adoption of “Reach Code” and submittal to the California Energy
Commission; Council approval of the Carbon Offset In-Lieu
Program
September 2019
Receive approval from the California Energy Commission November 2019
Return to the City Council with a fee resolution and approving an
implementation plan
November 2019
Building Code goes into effect January 1, 2020
Clean Energy Choice Program goes into effect January 1, 2020
Implementation support Ongoing
AGENDA PACKET PAGE #244
Key Issues for Discussion
Should the City establish a solar requirement for all new
commercial buildings?
Should the City phase in the full in-lieu fee or any other
aspect of the program?
Is the overall proposal balanced, or should the City
adjust standards for new buildings?
What types of incentives are appropriate for staff to
consider for when we return to Council in November?
Does the Council support the proposed Public Interest
Exemptions, which allow to work though unanticipated
situations?
27
28
9/3/2019 Item 18 ‐ Staff Presentation
15
Recommendations
1.Adopt a Resolution titled “Clean Energy Choice Policy,” establishing a policy framework
in support of (1) local amendments to the California Energy Code, and (2) a proposed
carbon offset program for new buildings with natural gas (Attachment A); and
2.Introduce an Ordinance implementing an Energy Reach Code titled “Local Amendments to Part 6 (Energy) of the 2019 California Building Code” adding Chapter 15.04.110, titled “Amendments – California Energy Code”, to the City’s Municipal Code (Attachment B); and
3.Introduce an Ordinance implementing a carbon offset program titled “Clean Energy
Choice Program,” adding Chapter 15.50 to the City’s Municipal Code (Attachment C);
and
4.Direct staff to develop an implementation plan for the Clean Energy Choice Policy to include 1) establishing the in-lieu fee, 2) education and outreach, 3) development of a program making professional consultation and design services available to property owners, and 4) identification of a series of incentives, such as permit streamlining and property development standard allowances (for example, parking reductions, building height allowances, and residential density) in exchange for all-electric development and return to the City Council for approval (currently scheduled for November 5, 2019); and
5.Direct staff to submit the approved local amendments to the California Energy
Commission to initiate the Reach Code review and approval process; and
6.Direct staff to submit a letter to Monterey Bay Community Power to drive support for energy programs, such as retrofit rebates, that promote all electric development.
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AGENDA PACKET PAGE #221
ADDITIONAL SLIDES
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9/3/2019 Item 18 ‐ Staff Presentation
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In-Lieu Fee Program
Revenue Analysis – Based on Building Permits issued
in FY 2018/19.
In-Lieu Fee Program
Revenue Analysis – Based on Building Permits issued
in FY 2018/19.
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