To: Board of Supervisors
From: Sustainability Committee
Report Title: Proposed Energy Code Amendment to Reduce Greenhouse Gas Emissions from New Buildings
☐Recommendation of the County Administrator ☒ Recommendation of Board Committee
RECOMMENDATIONS:
CONSIDER authorizing the Department of Conservation and Development to prepare an ordinance amending the County building code to increase energy efficiency standards for newly constructed residential buildings, offices, hotels, and retail buildings to meet the County’s Climate Action Plan goals, and provide related direction to staff, as recommended by the Sustainability Committee.
FISCAL IMPACT:
This activity will be accomplished with existing staff. Technical assistance for the development of the ordinance is provided with funding through the California Public Utilities Commission from the Bay Area Regional Energy Network and Statewide Reach Codes Program. There is no direct cost to the County if the Board chooses to use existing cost-effectiveness studies, which are used to demonstrate the findings and supporting analyses required under Section 10-106 of the State’s Building Energy Efficiency Standards to adopt an amendment to a locally adopted building code that increase energy code requirements beyond the State-wide minimum requirements, commonly referred to as a “reach code.”
BACKGROUND:
On February 27, 2024, the Board of Supervisors (Board) suspended its enforcement of Ordinance No. 2022-02, which amended the California Energy Code to require all newly constructed residential buildings, hotels, offices, and retail buildings be constructed as all-electric buildings without natural gas infrastructure. The ordinance, adopted on January 18, 2022, and operative on June 1, 2022, was suspended because of a decision on January 2, 2024, by the U.S. Court of Appeals 9th Circuit that invalidated a City of Berkely ordinance that prohibited natural gas infrastructure in new buildings. The court held that the federal Energy Policy and Conservation Act (“EPCA”), a federal statute that regulates the energy efficiency of several consumer products including water heaters, furnaces, stoves, and Heating, Ventilation, and Air Conditioning (HVAC) systems, precludes cities and counties from adopting ordinances that prohibit the installation of gas plumbing in buildings.
At the time ordinance was suspended, the Board also directed staff to amend the Draft Climate Action Plan 2024 Update to reflect the suspension of the County’s all-electric requirement and to evaluate alternative methods of meeting the County’s Climate Action Plan (CAP).
At its meetings on March 18, 2024, and May 20, 2024, the Sustainability Committee received updates from staff on options for encouraging all-electric buildings in Contra Costa County. Based on direction provided by the Committee at its March meeting, staff proposed a new energy code amendment to the Committee at its May meeting to replace the County’s all-electric ordinance suspended by the Board on February 27, 2024.
Sustainability Committee Recommendation(s)
As recommended by staff, the Sustainability Committee recommends that the Board of Supervisors authorize staff to develop an ordinance amending the energy code portion of the local building code to require new construction of single-family, multi-family, retail, office, and hotels to achieve a higher performance standard for energy efficiency and conservation than what is currently required in the State Energy Code. Based on current technologies, most if not all cost-effective measures taken to achieve the higher energy performance standard will result in reduced greenhouse gas (GHG) emissions.
It is also recommended that the proposed energy code amendment be planned for an operative date of January 1, 2025, to align with the County’s Draft 2024 CAP goals. An overview of the specific energy performance standards recommended for each building type is provided in Exhibit A of this report.
Single-Family Residential Buildings and Accessory Dwelling Units
Under the current State Energy Code, newly constructed single-family residential buildings and accessory dwelling units (ADUs) must be designed to achieve the statewide minimum building energy standard as measured by the building’s Energy Design Rating (EDR). The EDR is a metric that rates the building’s energy performance and consumption based on the proposed design. The EDR considers the building’s energy efficiency (based on the efficiency features of the building’s space heating, cooling, ventilation, and water heating) and the building’s demand flexibility (including the building’s solar photovoltaic system, battery storage system, precooling, and other demand-responsive measures). Due to climactic effects, the required energy performance standard, like the EDR, differs depending on the climate zone (location) in which the new building is constructed. Contra Costa County has two climate zones. Climate Zone 3 generally encompasses West County, and Climate Zone 12 generally encompasses Central and East County.
The current State Energy Code requires newly constructed single-family residential buildings and ADUs to achieve a minimum EDR score based on the installation of at least one heat-pump system (e.g., space heating or water heating). However, the required EDR may be achieved through other alternative measures that achieve a similar level of energy performance and consumption.
For new single-family residential buildings, the proposed approach would increase the energy performance standard by requiring new building designs to achieve a higher EDR score. The increased standard would be based on building designs that include two heat-pump systems (e.g., one space heating heat-pump and one water heating heat-pump), though developers could achieve the increased standard through other alternative measures, such as battery storage or additional rooftop solar. The increased performance standard is expected to result in GHG reductions due to the cost-effective measures available for achieving the standard. The proposed approach is similar to those implemented by the City of San Luis Obispo and the City of Santa Cruz.
For Climate Zone 3, it is not recommended that the County have a higher EDR standard for new ADUs because current cost-effectiveness studies have not found that imposing the higher standards for ADUs in that zone to be cost-effective. New ADUs in Climate Zone 12 would be subject to the higher EDR standard.
Multi-family Residential and Non-Residential Buildings
Under the current State Energy Code, newly constructed multi-family residential buildings and non-residential buildings (office, retail, and hotel) must be designed to achieve the statewide minimum building energy standard as measured by the building’s Time Dependent Valuation (TDV). The TDV metric calculates the long-term forecast of hourly electricity, natural gas, and propane costs to building owners using the latest California Energy Commission forecasts and outlook for California’s energy sectors. It is meant to incorporate the societal and environmental impacts into the cost of energy during a given hour of the year.
For new multi-family residential buildings and non-residential buildings, the proposed approach would increase the energy performance standard by requiring new building designs to achieve a more energy efficient TDV score. For new low-rise multi-family residential buildings (three stories or fewer), the more efficient TDV score would be based on building designs that include two heat-pump systems (e.g., one space heating and one water heating), though developers could achieve the increased standard through other alternative measures such as battery storage or additional rooftop solar. For new high-rise multi-family residential buildings (four stories or more) and non-residential buildings, the increase in required TDV score would be less than for other building types because high-rise multi-family residential buildings and non-residential buildings are already required to install highly efficient equipment under the current energy code. To achieve the higher TDV score, most new high-rise multi-family residential and non-residential buildings would only need to install additional photovoltaic solar (PV) beyond the current energy code requirements.
Cost-effectiveness and California Energy Commission Approval
Local building codes that go beyond the state minimum standards of the energy code, like what is being proposed, must be cost-effective and must be submitted to the California Energy Commission for approval. Cost-effectiveness studies for regulations similar to what is being proposed have been developed for most climate zones throughout the State. Most studies have been prepared by the Statewide Investor-Owned Utilities Codes and Standards Team (Statewide IOU Team) and funded by ratepayer funds. Staff has reviewed the existing cost-effectiveness studies that support the proposed regulations and believe those studies show that the recommended energy performance standards for each building type are cost-effective. If approved by the Board, the County could utilize the existing cost-effectiveness studies to substantiate the proposed regulations for submittal to the Energy Commission.
Other Options Considered but not Recommended
County staff attended a workshop with the Building Official from the Town of Los Altos Hills to discuss the Town’s Zero NOx ordinance adopted in February 2024, which amends the CalGreen portion of the building code. The ordinance requires that all building heating and cooling systems inside a residential building be Zero NOx (e.g. have no nitrogen oxides emissions), such as water heating and space heating/cooling. The ordinance also has exemptions for both indoor and outdoor cooking equipment and allows for technical infeasibilities, where the property owner may submit a request to use alternative means and methods for both water heating and space heating/cooling, if necessary. Due to its technical infeasibility clause and exemptions, as well as its mandate to require Zero NOx equipment without the option to choose based on building code performance, this approach is not recommended by staff. The proposed energy code amendment recommended by the Sustainability Committee will achieve the same objective as regulating NOx (namely, reducing emissions from new buildings) while providing home builders with more options for achieving the objective.
Staff also researched the feasibility of amending the CalGreen portion of the building code to reduce the amount of construction waste sent to landfills and use materials that have lower life-cycle emissions. After full consideration, these options were found to be infeasible to implement to meet our current short-term CAP goals. However, County staff will be exploring on a more long-term basis the potential to consider policies that can lower life-cycle emissions and other options that may reduce construction waste sent to landfills.
Proposed Energy Code Amendment Impact on 2024 Draft Climate Action Plan
If the County were to implement this proposed energy code amendment by January 1, 2025, it would have a substantial impact on the County meeting its Draft 2024 CAP goals. However, the proposed energy code amendment would not entirely make up for all of the GHG reduction projected from the now suspended all-electric building ordinance. DCD and its consultants are reviewing various alternatives for achieving additional GHG reductions in the CAP and will report back to the Board at a future date.
CONSEQUENCE OF NEGATIVE ACTION:
The County would likely not meet its GHG emissions targets proposed in its Draft 2024 Climate Action Plan.