California has been a leader in building energy efficiency since the late 1970s, but state officials readily acknowledge that much more can be done to decarbonize buildings.
The California Energy Commission (CEC), the agency responsible for updating the state’s Title 24 Building Energy Efficiency Standards, is beginning a concerted push toward zero-emission buildings. The CEC hosted a first-of-its-kind workshop on the topic last month.
As it happens, a team at the Sacramento Municipal Utility District (SMUD) has been doing some deep thinking about zero-emission buildings. SMUD has amassed practical experience in the area, as Greentech Media reported last month, by offering rebates for new or retrofitted all-electric homes.
In comments submitted to the CEC after the workshop, SMUD outlined a list of policy recommendations to mainstream zero-emission, all-electric buildings in California. While some of the recommendations are California-specific, the policy solutions are also relevant to gas-to-electricity shifts beyond California.
Here’s a summary of some of SMUD’s suggested policy changes.
Include the cost of gas infrastructure in Title 24. SMUD’s argument here is that electricity in a home is required to power plug loads (laptops, toasters and TVs) but that gas infrastructure — the service line from the street to the home, the meter, the indoor piping — is discretionary. Owen Howlett, SMUD’s project manager of energy strategy research and development, noted in an interview that new measures adopted under Title 24 must be proven to be cost-effective. That process was never undertaken for gas infrastructure.
“Title 24 has always assumed that both gas and electricity are provided to the home — effectively for free,” he said. “We’re anticipating that if the energy commission begins to consider the cost of gas infrastructure to be optional, and over and above the basic of what’s required for a home, that’s going to quite quickly lead to gas being eliminated from new construction.”
Initiate a “pruning the tree” gas pipe pilot. SMUD wants to work with the CEC and the California Public Utilities Commission (CPUC) on a pilot for gas distribution pipe removal or retirement. When a pipeline reaches the end of its life, rather than pay to replace or repair it, SMUD proposes that the avoided cost of pipeline replacement could instead be invested in upgrading the electric infrastructure, and installing electric appliances for homeowners, in the service area.
“We can do that for an awful lot less than the replacement cost for the gas line in most of the cases people have looked at,” said Howlett. He even suggested electric companies and gas companies could partner to target electrification. After all, he said, “They don’t want to have customers who are partially electrified but still have a residual amount of gas use.”
Amortize electrification costs over multiple appliance life cycles. The CEC assesses the cost-effectiveness of appliances over the effective useful life of each appliance. That method of accounting can negatively impact electric appliances, because their costs may include the one-time upfront cost for infrastructure upgrades in the home, such as wiring, the condensate drain, and capping the gas line in a heat pump water heater install. SMUD argues a fairer calculation would amortize upfront costs over several appliance life cycles and take a 50- or a 100-year view.
Incentivize cities to add all-electric building code provisions. At the CEC workshop, Howlett said conventional thinking means utilities won’t offer rebates for measures required in state or local codes — after all, if the measure is mandatory, you’re not changing consumer behavior. SMUD wants to flip that thinking around. It will commit to fund incentives for electric appliances such as air-source heat pumps, heat pump water heaters, or induction cooktops, expressly to persuade local governments to update their building codes with provisions for all-electric new construction or electric appliances.
“Obviously the big impediment to electrification is the initial cost,” Howlett told GTM. “If cities and counties push all of that initial cost onto homeowners, it would be so unpopular they’d never be able to pass the code.”
SMUD would agree to provide rebates or other incentives for three or six years, suggested Howlett, until a technology becomes the market norm, prices come down, and consumer awareness rises. At that point, incentives could be scaled back or dropped.
A policy not on SMUD’s list but often raised by electrification advocates is amending the CPUC’s “three-prong test.” This legacy policy, based on two CPUC decisions in 1992, determines whether ratepayer energy-efficiency funding can be used to encourage fuel-switching (or as the CPUC puts it, “fuel substitution”) by stipulating that programs must be better from an energy-use, cost and environmental perspective.
In practice, the test has enabled the state’s investor-owned utilities to offer rebates for gas appliances but not for high-efficiency electric appliances such as air-source heat pumps. (SMUD is not regulated by the CPUC and is therefore free to offer rebates for all-electric new or converted homes.)
Last June, the Natural Resources Defense Council and Sierra Club petitioned the CPUC to review and modify the three-prong test to account for California’s much cleaner electricity grid and to align the policy with the state’s climate goals. In April, the CPUC agreed to review the three-prong test.
Raising awareness among homeowners. In addition to the suggested policy tweaks, widespread adoption of all-electric homes will require buy-in from owners of new or retrofitted homes.
The problem today, according to Howlett, is “the public awareness of these measures is close to zero. Most people have no idea what a heat pump is or even whether their home has a gas furnace or heat pump.”
To educate developers, SMUD has hosted outreach sessions on all-electric new construction. For retrofits, SMUD is considering more substantial education efforts.
The utility has already convened two awareness-raising events on heat-pump water heaters for local plumbers. Howlett said SMUD is in the “very early stages” of creating joint messaging with other utilities on the benefits of all-electric buildings.