To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: DIRECT staff to participate in California Public Utilities Commission Rulemaking 24-09-012 on pilot projects of neighborhood-level conversion to all-electric buildings
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
DIRECT staff to participate in CPUC Rulemaking 24-09-012 for the purpose of identifying communities that could potentially be designated to participate in pilot projects of neighborhood-level conversion to all-electric buildings, as recommended by the Sustainability Committee.
FISCAL IMPACT:
Participation in the CPUC Rulemaking will require staff time to analyze proposals, write and submit comments, and participate in meetings or workshops. Through Measure X, DCD receives funds to support work on community clean energy. Those funds can be used to fund staff time to participate in this proceeding.
BACKGROUND:
Contra Costa County has an opportunity to identify neighborhoods that might be interested in converting all homes in the neighborhood to clean energy by removing gas lines. Contra Costa County has long placed a priority on ensuring that County residents live and work in buildings that operate on the cleanest, most efficient electricity sources available, thereby improving indoor air quality and reducing emissions of greenhouse gases that pollute the environment. Starting in 2010, through the American Recovery and Reinvestment Act (ARRA), the County administered a program that provided energy efficiency retrofits to homes throughout the County. In 2013, with the commencement of the Bay Area Regional Energy Network (BayREN), the County assumed a more permanent role in designing and delivering energy efficiency programs for residents and businesses in Contra Costa County and the nine-county Bay Area.
Contra Costa County is a leader in adopting policies and programs that improve indoor air quality for residents. The County administers the low-income Weatherization Program, a program funded by the federal and state governments that retrofits homes to improve indoor air quality, reduce leaks, and install more efficient appliances. From 2021-2023, the County piloted an Asthma Initiative that identified patients of the Contra Costa Health Plan who had the highest rates of visits to the Emergency Room for asthma and referred them for home energy retrofits. In 2023, the County adopted a requirement that new homes built in the County rely solely on electricity. After similar requirements in other jurisdictions were struck down by a federal court, the County in 2024 replaced its requirement with one that sets an efficiency standard that new buildings can meet using a combination of design elements and technologies. The 2024 Climate Action and Adaptation Plan (CAAP) sets goals for reducing greenhouse gas emissions from the built environment for both new and existing buildings.
Staff in the Department of Conservation and Development have been studying strategies for retrofitting existing buildings to operate on clean electricity for several years. In 2021-22, staff participated in an incubator with RMI (Formerly Rocky Mountain Institute, and independent, non-partisan nonprofit that focuses on global energy systems) to learn more about the benefits of clean energy in homes in partnership with a local community group (Richmond Progressive Alliance) and begin to develop strategies. The Sustainability Committee has received several reports on the progress of the Clean Energy Roadmap for Existing Buildings (Roadmap), most recently in March 2025, when staff presented an update on the draft Roadmap. Staff anticipates bringing a final version of the Roadmap to the Sustainability Committee and then Board of Supervisors for approval later this year.
There are over 50,000 homes in the unincorporated areas of Contra Costa County. A house-by-house approach to providing clean electricity could be lengthy and expensive. One option for utilities and communities is to remove gas lines from entire neighborhoods. This avoids costly upgrades to the gas distribution system and eliminates gas from homes, where methane emissions contribute to poor indoor air quality. Attachments B and C provide information on neighborhood approaches to clean energy conversion in nearby communities.
SB 1221 (2024, included as Attachment A) requires gas utilities to, starting July 1, 2025, annually submit to the California Public Utilities Commission (CPUC) maps that identify the location of all potential upcoming gas distribution line replacement projects. SB 1221 requires the CPUC by January 1, 2026, to designate “priority neighborhood decarbonization zones” and to facilitate up to 30 pilot projects statewide wherein gas lines would be removed rather than replaced. Those zones would instead be served by “zero-emission alternatives.” Zero-emission alternatives are defined as “methods of providing gas customers with suitable substitute energy service that does not require new investment in gas distribution lines, including, but not limited to, electrification of gas end uses and energy efficiency, thermal energy networks, and demand flexibility measures to alter energy needs.”
Investor-owned utilities like PG&E have an obligation to provide service. Usually that obligation to serve would require the utility to receive approval from all property owners in an area before it removes gas service. SB 1221 states that the pilot projects should include no more than one percent of a gas utility’s customers. It also states that for purposes of the pilot projects, a neighborhood can proceed if two-thirds of the property owners agree, rather than all.
DCD staff participated last month in a meeting PG&E hosted to describe the process by which it will be identifying potential “priority neighborhood zones.” These zones have been tentatively defined as having the following characteristics:
• Disadvantaged or low-income
• Environmental and social justice communities as defined by CPUC
• Support from local government or community partners
• Concentration of gas line replacement projects
Contra Costa County has a large number of Impacted Communities (as referred to in the CAAP and 2045 General Plan) that could potentially be eligible for participation in the pilot projects. While there are many details to work out, most notably how the gas line removal and appliance retrofits will be funded and how the program will be deemed cost-effective, this program could provide an opportunity to advance the County’s clean energy goals and Roadmap priorities and benefit local residents. (The General Plan defines Impacted Community as: An area, typically low-income, that is disproportionately affected by environmental pollution and other hazards that can lead to negative health effects, exposure, or environmental degradation. This is the term Contra Costa County uses in place of “disadvantaged communities,” as named in Senate Bill (SB) 1000. SB 1000 defines disadvantaged communities per Health and Safety Code Section 39711, specifying CalEnviroScreen as the primary screening method for identifying these communities. In this General Plan, Census tracts with a cumulative CalEnviroScreen score of 72 or higher are identified as Impacted Communities).
Maps published by PG&E on July 1, 2025 show 10 years (about 2000 miles) of foreseeable gas distribution work. The area shown on these maps represents the potential area for inclusion in the SB 1221 program. PG&E is aggregating by census tracts for public maps; PG&E will provide more details to the CPUC under confidentiality rules. PG&E recognizes that it will need funding and trusted, local community support for these projects to be successful, hence the meeting last month to begin assessing interest from potential partners.
The CPUC is the lead for implementing SB 1221, and has established the following timeline for identifying potential priority neighborhood zones:
• July 1, 2025 - utilities will publish maps
• July 21, 2025 - utilities propose priority neighborhood zones
• August 8, 2025 - parties submit comments on maps and proposed zones
• August 29, 2025 - parties submit reply comments
• Jan. 1, 2026 - CPUC identifies potential neighborhood zones for participation
There will be a separate process after January 1, 2026 to identify the specific neighborhoods that will be selected to participate in the SB 1221 program. That process is yet to be determined by the CPUC. Staff will report back to the Sustainability Committee following January 1, 2026 regarding the outcome of the CPUC’s identification of potential zones for participation and will share any additional information provided by the CPUC describing how neighborhoods will be selected for SB 1221 program participation.
The purpose of County staff participation in the CPUC proceedings is to monitor the potential for neighborhoods in Contra Costa County to potentially participate in the SB 1221 program, coordinate with the affected Supervisorial district(s), and advocate for including appropriate neighborhoods in Contra Costa County in a manner that will benefit residents. Staff participation in CPUC proceedings will involve reviewing relevant rulings and decisions from the CPUC, reviewing the information filed by other parties to the proceeding, developing and submitting comments based on review of information submitted by others, and developing and reviewing comments on proposed decisions issued by the CPUC. As seen in the schedule above, the proceedings can move at a pace that does not provide time for staff to report back to the Board and obtain further direction.
The SB 1221 program is in early stages of development. It is too early to know if this will be a program of interest to communities in Contra Costa County. Participation in CPUC Rulemaking 24-09-012 process will enable staff to learn more about and monitor the program and advocate eligibility of Contra Costa communities to participate when appropriate and to benefit residents. In light of the opportunities that the SB 1221 program presents to meet County priorities for buildings that operate on clean energy, staff and the Sustainability Committee recommend that the Board authorize staff to participate in CPUC Rulemaking 24-09-012 for the purpose of identifying communities in Contra Costa County that could potentially be designated as priority neighborhood zones.
CONSEQUENCE OF NEGATIVE ACTION:
Failure to participate in the CPUC proceedings on implementation of SB 1221 would result in the County losing an opportunity to advocate for clean energy projects that will benefit County residents, particularly those in Impacted Communities.