On September 22, 2020, the Board of Supervisors adopted a Climate Emergency Resolution that states the County should develop policies to require all new construction to be fully electric through the adoption of reach building codes.
This report summarizes the requirements needed by the State for the County to adopt a reach code to develop a building electrification ordinance. Staff requests that the Committee provide direction on (1) the timing of developing a reach code, (2) the type of reach code, and (3) if the County should consider initiating its own study to determine the cost-effectiveness of other building types beyond what has already been studied in Contra Costa County.
State Reach Code Requirements
In California, Title 24 of the Code of Regulations sets the building code standards for all jurisdictions statewide. The Energy Code is Part 6 of Title 24 and regulates building energy efficiency such as building envelope, mechanical systems, and lighting. However, local governments can adopt more stringent requirements which are known as reach codes. An example of an energy reach code is a modification to the energy code requiring that all new construction buildings in a specific jurisdiction use only high efficiency, electric equipment.
Both California law and Federal law apply to locally adopted reach does. California law sets out the process that local governments, such as the County, must use to adopt a reach code and establishes certain requirements for these types of ordinances. Federal law sets the standards for building appliances, and among other things, prohibits local ordinances from preempting those standards.
Special requirements are specified in Section 10-106 of the Building Energy Efficiency Standards and Public Resources Code Section 25402.1(h)2. In general, a reach code must be at least as stringent as the statewide code and meet the following requirements:
- A reach code must be cost effective.
- Requires a minimum of two public hearings prior to adoption.
- Be approved by the California Energy Commission (CEC).
- Be re-approved by the CEC every three years with each Energy Code update.
All reach codes must be shown to be cost effective. To be cost effective, the money saved from the reduced energy costs needs to be enough to cover the initial cost within a reasonable period of time. Cost-effectiveness is usually demonstrated through a study prepared by a consultant. However, local governments, such as the County, may use any study that applies to the climate zone(s) in which their jurisdiction is located. Most studies are developed under the auspices of the Statewide Investor Owned Utilities Codes and Standards Team (Statewide IOU Team) and funded by ratepayer funds. Local jurisdictions may request that a cost effectiveness study be conducted by the Statewide IOU Team.
The County may use the following Statewide IOU Team cost effectiveness studies that include Contra Costa County (Climate zones 3 and 12):
- 2019 Cost-effectiveness Study: Low-Rise Residential (Attachment 1), and
- 2019 Nonresidential New Construction Reach Code Cost Effectiveness Study (Attachment 2).
Each cost-effectiveness study includes two (2) criteria that may be used for determining cost-effectiveness. These are the On-Bill Benefit/Cost Ratio and TDV Benefit/Cost Ratio. The On-bill benefit-to-cost ratio is a customer-based approach to evaluating cost-effectiveness. It includes energy values based upon estimated site energy usage and customer on-bill savings using electricity and natural gas utility rate schedules over the useful life of the measure/package studies. The Time Dependent Valuation (TDV) is the cost-effectiveness and energy valuation methodology used to develop and implement the Title 24 Building code. The TDV of energy is a participant cost-effectiveness metric to evaluate whether a Title 24 measure will save consumers money on their utility bill over the life of a new building. The values of TDV are constructed from a long-term forecast of hourly electricity, natural gas, and propane costs to building owners consistent with the latest CEC forecasts and outlook for California’s energy sectors.
The low-rise residential study covers all single-family homes and multi-family buildings with three stories or less. Generally, the study found that electrification for single-family homes, or adding additional requirements beyond electrification, such as for energy efficiency measures, photovoltaic (PV), high efficiency appliances, or battery storage are considered cost-effective. However, based on the On-Bill Benefit/Cost Ratio cost-effectiveness criteria, electrification alone was not cost-effective due to large variations in cost data.
The nonresidential new construction study included office, retail, and hotel buildings. The study found that the all-electric option for all these building types is considered cost-effective, except under the On-Bill Benefit/Cost Ratio cost-effectiveness criteria for office buildings. Office buildings were also not cost-effective when including electrification with high efficiency appliances, or when including electrification and photovoltaic in the central and eastern parts of the County (climate zone 12) using the On-Bill Benefit/Cost Ratio criteria.
However, both studies found that when using the TDV Benefit/Cost Ratio cost-effectiveness criteria, electrification as well as adding additional measures beyond electrification, such as energy efficiency, solar photovoltaic (PV), high efficiency appliances, or battery storage were considered cost-effective.
If the County wants to include other building types beyond what was included in the studies listed above in a proposed reach code, the County would either have to (1) hire its own consultant to complete the study, or (2) request that the Statewide IOU Team complete a specific study for the County, which would not require any out-of-pocket cost to the County. If the County requests the Statewide IOU Team complete a specific study, it may take several months to complete. If the County were to hire in independent consultant, the County would have to cover the cost for completing the study. The cost range for cost-effectiveness studies are dependent on complexity and range of building types included in the study.
Energy Code Cycles and Reach Codes
The California Energy Code is updated every three years, with the code usually becoming more stringent with each update. Because local energy codes must be more stringent than the statewide code, each local code needs to be re-approved whenever the statewide code is updated to ensure that the local energy code is still at least as stringent as the statewide code. Attached is a list from the Building Decarbonization Coalition with all the jurisdictions that have adopted a reach code in the state as of January 2021 (Attachment 3).
The next energy code update will occur in mid-2022 and become effective January 2023. The current 2022 Energy Code Update Rulemaking (Docket Log # 21-BSTD-01) specifies several subsections that mostly look to having equipment be designed to be electric ready. It is anticipated that CALGreen 2022 will have an electric-ready option, but electrification will not be required until probably 2025. For this next code cycle, CALGreen is currently focusing on being electrification-ready. However, there have been some reports that non-residential buildings like high-rise multi-family residences, hotels, offices, restaurants, and schools may be required to install rooftop solar and battery storage. DCD staff will provide a verbal update on this at the Committee meeting.
Options for Committee Consideration
Reach codes can require one or more specific energy efficiency improvements (prescriptive reach codes) or can require a building to use less energy than average through a variety of optional measures (performance reach codes). For example, requiring reduced outdoor lighting (City of Fremont) and requiring cool roofs (Cities of Brisbane and San Mateo) are prescriptive reach codes. Performance reach codes require energy modeling and are generally more complicated. Performance reach codes usually require exceeding minimum building energy performance by a certain percentage. For example, the cities of Healdsburg, Novato, and Mill Valley have performance reach codes that require a minimum building energy performance of 15% for new construction. The prescriptive and performance approaches can also be combined as a hybrid reach code.
Beyond implementing an all-electric reach code, options also include requiring more stringent energy efficiency measures, requiring battery storage or high efficiency appliances.
Staff is requesting the Committee provide direction on the following:
- Whether the reach code should be developed for the current building code or be developed for the 2022 building code (effective January 2023).
- Determine the type of reach code, such as prescriptive, performance, or a hybrid version, and
- Whether the County should consider developing its own cost-effectiveness study to determine the cost-effectiveness of other building types beyond what has already been studied either by (a) Initiating its own study independently at the County’s cost through a consultant or (b) by requesting the Statewide IOU Team to develop a study at no direct cost. Based on the direction in the September 2021 Climate Emergency Resolution, staff is not recommending an electrification requirement for existing buildings.
|