Mayor joins utility, air quality leaders to back Sacramento's proposed electrification ordinance for new buildings
The Sacramento City Council is poised to take a major step toward meeting its climate change goals when it votes Tuesday on an ordinance requiring new homes, low-rise apartment buildings and commercial structures to run entirely on electricity starting in 2023.
Gas heating and cooking is a significant source of the greenhouse gas emissions that cause climate change, the effects of which are increasingly being felt in Sacramento and California as the summers become hotter and drier.
Mayor Steinberg joined leaders of Sacramento’s air quality and utility districts Thursday at a press conference to advocate for the ordinance, which comes to the Council on Tuesday, June 1. The ordinance would phase in electrification requirements, starting with new residential and commercial structures three stories or less starting in 2023. The ordinance does not require retrofitting of existing buildings. To date, 44 other cities in California have adopted electrification ordinances that are already in effect or go into effect before 2023, including San Francisco, San Jose and Oakland.
The press conference (watch recording here) was held outdoors under a bank of solar panels at the 10 and R streets headquarters of architectural firm ArchNexus, California’s first certified Living Building. The building produces nearly double the electricity it needs from solar panels on the roof, power which is sold back to the Sacramento Municipal Utility District.
“Electrification is coming, and our climate and the future of our planet depends on it,” said Mayor Darrell Steinberg. “This ordinance is the start of the capital city of California showing how we can grow jobs, create a healthy economy and address the health of our planet at the same time.”
Tubes bring daylight into the Archnexus facility
Another reason to wean new construction away from gas is that gas appliances emit fumes that increase the risk for respiratory disease and contribute to dirtier air and ozone, which is already a persistent problem in the Central Valley.
“The Sac Metro Air District supports the proposed Building Electrification Ordinance, due to the important air quality, climate, and health benefits it will achieve,” said Alberto Ayala, Air Pollution Control Officer for the District and a member of the Mayors’ Commission on Climate Change.
“The burning of natural gas for residential use for cooking and water heating is a widely recognized source of indoor air pollution exposure,” Ayala continued. “This problem can greatly affect the health of everyone, especially low-income residents that typically live in smaller spaces with limited ventilation. Natural gas combustion is also becoming a relatively larger source of outdoor air pollution. And, of course, natural gas is mostly methane, which is a very strong greenhouse gas. For all these reasons, this ordinance is the right step forward as we work together to support the transition to electrification of our built environment.”
Constructing new buildings to be all-electric takes advantage of the clean power that SMUD produces, maximizing the benefit of SMUD’s commitment to zero-carbon electricity by 2030. Shifting new buildings to electricity ensures they are clean, affordable, and resilient. This is why building electrification is a key principal for the 2040 General Plan, as committed by the City Council.
“Electrification of buildings and transportation is key to us reaching a clean energy future,” said SMUD CEO and General Manager Paul Lau. “For us to achieve these aggressive goals, we need community partners so together we can build a clean, green economy. One that provides cleaner air, better health outcomes and clean jobs for our entire community. I’m proud of this partnership and look forward to a building a clean power city.”
The ordinance contains exemptions lasting until 2025 for restaurants cooking with gas, some manufacturing equipment and hot water heating for regulated affordable housing projects. Mayor Steinberg has been working with the business community to address their concerns. He plans to offer an amend Tuesday that specifies that if the technology to require construction of an all-electric building for restaurants, manufacturing facilities or affordable housing is not feasible and available by July 1, 2025, the Council may continue extending the exemption.
Over time, building all electric could save building owners money (See FAQ below). Studies show construction costs for electric buildings can be considerably lower, particularly once SMUD incentives are factored in. And natural gas prices are expected to rise sharply because gas infrastructure is costly to maintain and keep safe.
Kendra Reed, who owns a construction and remodeling company with her husband, also appeared at the press conference. “I know my customers benefit from going all-electric because they save money on labor and material costs whether its’s new construction or a renovation project,” she said.
Solar panels, electric car chargers and rainwater cisterns at Archnexus
Electrifying buildings was one of the primary recommendation of the Mayors’ Commission on Climate Change, a joint commission created by Mayor Steinberg and then-West Sacramento Mayor Christopher Cabaldon to formulate strategies to get the two cities to carbon neutrality by 2045.
“This ordinance will signal a strong commitment to building communities that are climate resilient, healthy and more affordable,” said Climate Commission Chair Anne Stausboll.
The ArchNexus building, a former print shop, shows what is possible with a commercial structure. Tubes carry sunlight into the building, largely eliminating the need for lighting during much of the day. Cisterns collect rainwater that is used to flush composting toilets. In 2018, it became only the 18th building in the world and the first in California to be certified as a living building by the International Living Future Institute.
“Architectural Nexus is excited to see the City of Sacramento take this important step toward becoming the zero-emission capitol of California,” said Patty Karapinar, Director of Sustainability for ArchNexus. “The resiliency and health of the greater Sacramento region can be greatly increased through regenerative buildings and transportation electrification, solar energy production, water efficiency and reuse, healthy building materials, and connecting people to nature and their communities.”
For more details about the electrification ordinance, please see FAQ below:
Key points:
What is the ordinance? The ordinance requires that new buildings be all-electric, with no gas or propane infrastructure. The ordinance slowly ramps in by development type and size, from 2023 to 2026, starting with residential and commercial buildings of three stories or less.
What does the ordinance apply to?
Only to new buildings, with limited exemptions and a process to accommodate infeasibility.
The ordinance does not apply to existing buildings, remodels of existing buildings, tenant improvements, or expansions.
Who will this affect? Only those developing new buildings. The ordinance doesn’t apply to existing construction.
Why is the City doing this?
Electrifying new buildings is a key strategy to ensure new buildings are efficient, clean, and resilient. In August 2020, City Council prioritized the ordinance as a critical near-term action to reduce greenhouse gas emissions and achieve climate goals. The ordinance advances a key recommendation of the Mayors’ Commission on Climate Change.
When you use gas in your home, such as a gas stove for cooking food, the combustion creates air pollutants – not only does this pollution create dirtier air and contribute to ozone, but studies have shown that using a gas stove increases the likelihood of asthma in children by 42%.
Long-term, electric buildings are more resilient and can use the renewable power that SMUD generates. SMUD has committed to 100% clean power by 2030.
Electric buildings will save residents money over time. One study estimated that over a 30-year period, residents in new electric construction would pay less in energy bills by approximately $5,349 in single family housing and $2,337 in low-rise multi-family.[1] SMUD also has the lowest electricity rates in the state, meaning that going all-electric in Sacramento will yield the biggest ratepayer benefits.
What about costs to build new construction? Building without gas is cheaper in almost all circumstances, and SMUD incentives are available to further reduce costs.
Accounting for both the City’s EV standards and all-electric requirements for residential buildings, data suggests that construction savings ranges from over $6,000 (for a mid-rise, ~88-unit development) to over $60,000 (for a low-rise multi-family project with 8 dwelling units), based on cost-effectiveness studies for SMUD territory.[2]
Construction costs for all-electric high-rise multi-family vary depending on project design and how hot water heating is addressed, but are offset by SMUD incentive. While the cost increase for all-electric mid- to high-rise unit can range from a savings of $228 per unit to a cost increase of $557 per dwelling unit, SMUD electric incentives range from $1,750 - $5,000 unit, offsetting the cost.
Also, gas rates are forecasted to increase because gas infrastructure is costly to maintain and keep safe. Residential gas costs are forecasted to increase from just about $1.3 per residential therm today to an estimated $18 per therm in 2050[3] (the average home in Sacramento uses about 300 therms per year; without a managed transition, annual average home gas costs in Sacramento would increase from approximately $400/year today to over $5,400/year in 2050).
Why is the City doing this now in the midst of COVID19? New development often takes years to plan. By passing the ordinance now, Council is sending a strong signal to inform financial decisions and infrastructure planning, so that developers are ready for implementation when the ordinance goes into effect in 2023.
How will this impact new business and housing construction?
The ordinance includes limited exemptions and infeasibility process, to ensure it does not place a barrier on business or housing development. This means that new restaurants can build with a gas stove, or a new manufacturing facility could include gas equipment for high-intensity process loads where technology may not be widely available. Hot water heating in regulated affordable housing is also exempt from the ordinance until 12/31/25.
Stakeholders will be invited to advise staff to develop infeasibility criteria, to ensure that the process is clear and transparent for applicants, and to identify technologies that may not be market ready, or project-specific conditions that may make all-electric infeasible. A range of representatives will be involved including those representing manufacturing, business, development, restaurants, equity and environmental justice perspectives, cultural perspectives, technical and engineering expertise, and labor.
The City will work closely with SMUD to ensure availability of educational materials and resources to assist developers with the transition to all-electric construction.
What other cities have done this? 44 other cities in California have adopted electrification ordinances that are in effect already or go into effect before 2023, including San Francisco, San Jose, and Oakland.
What about existing buildings?
The ordinance does not regulate existing buildings, and there’s no proposed requirements to retrofit or replace of appliances in existing buildings.
On June 1st, staff are also recommending a framework to City Council for an 18-month planning process to evaluate options and develop a strategy to decarbonize existing buildings over the next twenty-five years. To develop this strategy, the City will conduct a technical analysis and lead extensive stakeholder engagement. The proposed framework does not include new retrofit mandates, but outlines a planning process to develop recommendations for City Council.
[1] Low-rise multi-family defined as 8 units. California Energy Codes & Standards. (August 1, 2019). 2019 Cost-effectiveness Study: Low-Rise Residential New Construction. Prepared for Pacific Gas and Electric Company. Prepared by Frontier Energy. https://localenergycodes.com/download/73/file_path/fieldList/2019%20Res%20NC%20Cost-eff%20Report.
[2] Statewide Codes & Standards studies, multiple reports: https://explorer.localenergycodes.com/studies/city-sacramento/
[3] Gridworks (2019). California’s gas system in transition. https://gridworks.org/wp-content/uploads/2019/09/GW_Calif-Gas-System-report-1.pdf
