TO: Napa County Climate Action Committee
FROM: David Morrison, Special Projects Director
REPORT BY: David Morrison, Special Projects Director
SUBJECT: Status Update on Consideration of the Draft Reach Code
RECOMMENDATION
title
Staff requests that the CAC receive a brief summary of the status of member jurisdictions’ consideration of the draft reach code and provide any discussion.
body
BACKGROUND
At the October 27, 2203, regular meeting, the CAC approved and submitted the Energy Reach Requirement Template Ordinance back to the jurisdictions, with a request for follow-up in 90 days.
For the past several years, a number of jurisdictions in California have adopted reach building codes that prohibited the use of natural gas in new construction, based on concerns for either health and/or greenhouse gas emissions. The CEC currently list 39 jurisdictions with reach codes, the majority of which are located in the Bay Area (https://localenergycodes.com/).
However, a recent court decision has left many of these codes in question. In 2019, the City of Berkeley adopted a new building code prohibiting natural gas in all new construction. That same year, the California Restaurant Association (CRA) filed a lawsuit seeking an injunction from enforcing the new code, on the grounds that the ordinance was invalid and in violation of the Federal Energy Policy and Conservation Act (EPCA) and the California Energy Code. The City, in turn, filed a motion to dismiss. The District Court dismissed the lawsuit in 2021. The CRA filed an appeal of the District Court decision with the U.S. Court of Appeals for the Ninth Circuit. On April 17, 2023, a three-judge panel of the Ninth Circuit Court of Appeals ruled in California Restaurant Association v. City of Berkeley, that a Berkeley ordinance requiring all-electric new buildings was pre-empted by the federal Energy Policy and Conservation Act of 1975 (EPCA) and was therefore invalid. It should be noted that no injunction has yet been issued and the City continues to enforce the reach code. The City has filed for a rehearing en banc with the Ninth District Court of Appeal. The City’s request for a rehearing has been denied and the court decision remains in effect.
During the July 2023 Climate Action Committee (CAC) regular meeting, staff was directed to research and report back on options and a recommendation for developing a reach building code for future consideration by the CAC member jurisdictions. At the August 25, 2023 regular meeting, the CAC discussed the development of a reach building code and directed staff to bring back a draft reach building code for recommendation by the CAC and future consideration by the member jurisdictions.
A total of nine options were provided by staff to the CAC at the August meeting. Staff recommended the development of a Flex-Path reach code. This approach encourages energy improvements that favor electrification, but do not mandate it. An ordinance based on this approach must be reviewed by the California Energy Commission before adoption, and filed with the California Building Standards Commission. The ordinance must demonstrate cost effectiveness. Staff recommended this option as it is both legally defensible and will reduce greenhouse gas emissions to the greatest extent compared to the other viable options. A majority of the CAC supported staff’s recommendation.
A draft ordinance based on the Flex-Path option was presented to the CAC in October of 2023. The draft ordinance was based on recommendations of the California Energy Commission (CEC), and was circulated it to the Chief Building Officials in each member jurisdiction, contractors and design professionals, and the California Energy Codes and Standards Program (a collaboration between the CEC and state utilities).
A summary of the changes included in the draft building reach code is as follows:
• The draft ordinance puts in place new standards to disincentivize the use of natural gas in new residential construction, but only requires non-residential construction to be electric ready. According to the CEC, standards for non-residential construction are not yet available.
• The draft ordinance exempts any remodels or remodels for the first three years after the construction of a new single-family residence.
• The draft ordinance includes an exemption for free-standing accessory dwelling units. Junior accessory dwelling units (JADUs) that are incorporated into the main dwelling would not be exempt. Staff believes that placing additional requirements on free-standing ADUs may be considered a barrier to affordable housing, as well as affect the cost-effectiveness study.
• The draft ordinance requires that single family residences reduce overall energy use at least 13 percent lower than a standard design. Multi-family homes would reduce overall energy use by at least 10 percent, as recommended in the most recent draft study issued by the CEC for Climate Zone 2 conditions. (Napa County is classified as Climate Zone 2.)
• The draft ordinance allows the applicant to submit a Certificate of Compliance signed by a Certified Energy Analyst, which may reduce the compliance margin by 1 percent.
• The draft ordinance does not require the installation of solar batteries in new homes. All new residential units already require solar panels and must be battery ready. Solar batteries are required to be installed in new commercial buildings and multi-family homes. Requiring them in new single-family homes would add $10,000 to the cost and may be considered a barrier to affordable housing, as well as affect the cost-effectiveness study.
• The draft ordinance does not address the installation of electric vehicle chargers in new homes, as that is a separate issue being considered by the CAC.
At the October 27 2023, meeting, the CAC added an additional requirement that homebuilders be required to offer an all-electric option for all interested owners.
The draft ordinance has been forwarded to the six member jurisdictions. If any jurisdiction wanted to move forward in adopting the ordinance, it would have to be adapted to each specific municipal code. The Council/Board would hold public hearings to adopt the ordinance by resolution, along with findings of fact, based on a cost effectiveness study. Before the ordinance went into effect, each jurisdiction would have to submit an application to the CEC for review and approval, including the following materials:
1. The proposed energy standards;
2. The local jurisdiction’s findings and supporting analyses on the energy savings and cost effectiveness of the proposed energy standards;
3. A statement or finding by the local jurisdiction that the local energy standards will require buildings to be designed to consume no more energy than permitted by Part 6; and
4. Any findings, determinations, declarations or reports, including any negative declaration or environmental impact report, required pursuant to the California Environmental Quality Act.
CEC review typically takes six months. Once the CEC has accepted the ordinance, then the new code would apply to all new residential and commercial building permits submitted after the effective date. Ordinances take a minimum of 30 days to take effect once adopted.
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California
Code of Regulations 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.