2035 Decarbonization
Feasibility Analysis & Plan
Complete Analysis and Draft Plan
September 22, 2022
Peninsula Clean Energy
Peninsula Clean Energy
2 The not for profit locally-led
electricity provider for San
Mateo County and Los Banos.
Mission: To reduce greenhouse
gas emissions by expanding
access to sustainable and
affordable energy solutions
How it works
Peninsula Clean Energy
Strategic Plan
3 ORGANIZATIONAL PRIORITIES:
By 2025, deliver 100% renewable
energy each and every hour of day.
Contribute to our community reaching a
goal of 100% greenhouse gas-free by
2035.
Contribute to our community reaching a
goal of 100% greenhouse gas-free in
buildings and transportation by 2035
Peninsula Clean Energy
2021 Board Directive
Direct Peninsula Clean Energy to adopt a goal of 100%
greenhouse gas free [in buildings and transportation]
by 2035 and direct staff to return with a plan for
achieving that goal.
Peninsula Clean Energy
Plan Must Address Critical Challenges
1.Building public awareness and motivating adoption
2.Making it easy to take action
3.Accessing the capital to enable action
5 Peninsula Clean Energy
Considerations for Feasibility
1. PCE targets are ones PCE is positioned to affect in energy
2. Solutions exist or are expected to in timeframe
3. State/Fed, local govs and market play material roles
4. A pathway to capital and PCE budget support
Peninsula Clean Energy
2035 Plan Objectives
1. Define Market Conditions projected in the timeframe
2. Determine costs of decarbonization within target segments
3. Specify investment strategy – PCE, non-PCE, and finance
4. Specify marketing and policy needs
5. Produce concrete program roadmap to implement and
achieve maximum decarbonization
| 7
Peninsula Clean Energy
Board and Advisory Committees
Board Sub-committee
Rick DeGolia (chair)
Jeff Aalfs
Dave Pine
Laura Parmer-Lohan
8 Advisory Committee
Jeff Aalfs Board of Directors, Peninsula Clean Energy
Diane Bailey Executive Director, Menlo Spark
Jeff Byron Former CEC Commissioner
Andrea Chow Sustainability Analyst, City of San Mateo
Pierre Del Forge Clean Buildings Director, NRDC
Cisco Devries CEO, OhmConnect
Adrienne Etherton Sustainability Manager, City of Brisbane Laura Feinstein Sustainability Policy Director, SPUR
Zach Franklin Chief Strategy Officer, GRID Alternatives Matt Golden CEO, Recurve
Ortensia Lopez Executive Director, El Concilio
Loren McDonald EV Industry Analyst, EVAdoption.com
Joshua Pierce EVP, Richard Heath and Associates
Mary Anne Piette Division Director, Lawrence Berkeley National Lab James Russell Energy Transition Director, CLEAResult
Nancy Ryan Former CPUC Commissioner
Justin Zuganis Director of Decarbonization, SVCE
Peninsula Clean Energy
Project Schedule
• Dec. ‘21: Scheduling and Scope
• Q1/Q2: Market Conditions
• Q2: Segments, Costs and Financing Options
• Q3: Financial Strategy, Policy, Programs, Scaling
• Q4: Final refinements (& Marketing, Metrics, Roadmap) Scope
| 10
Peninsula Clean Energy
We Are Here
• Dec: Scheduling and Scope
• Q1: Market Conditions
• Q2: Segments, Costs and Financing Options
• Q3: Financial Strategy, Policy, Programs, Scaling
• Q4: Final refinement
Board retreat
Scope
Where we will focus
Where not to focus
Does not define HOW
Peninsula Clean Energy
2035 Scoping Table of Contents
1. Scoping Approach
a. Rationale for out-of-scope emissions
b. Focusing on Transportation and Buildings
c. Scope Overview
d. Scope Implications & Catalyst/Enabler Role
2. Transportation Detail
a. Transportation Scope
b. Ecosystem
c. Impact
3. Buildings Detail
a. Buildings Scope
b. Ecosystem
c. Impact
4. Impact Summary
Peninsula Clean Energy
Rationale for Out of Scope
13 Rationale for Exclusion Example
Out of territory Maritime emissions, regional transportation Market momentum exists LED lighting
Other actors are leading CARB heavy duty investment
No direct line of influence Direct Access power
No PCE path to accelerate Industrial
Scope 3 emissions Embodied emissions
Adaption, mitigation, climate restoration Wildfire fuels reduction Peninsula Clean Energy
PCE Area of Influence
Focusing on Transportation and Buildings
14 Rational for exclusion:
• Electricity (Non-PCE) - Direct Access and PG&E
electricity supplies are not within our control. In
addition, our team forecasts these will be near-zero by 2030. • Water – Negligible emissions, and under purview
of water district.
• Wastewater – Negligible emissions, and other
actors are working in the space.
• Solid Waste – Negligible emissions, and other
actors are working in the space.
• Stationary Sources – Not within our control
Transportation
52%
Building
Methane*
30%
Electricity (Non-PCE)
Water 3%
0%
Wastewater
0%
Solid Waste
10%
Stationary Sources
5%
San Mateo Countywide Greenhouse Gas Emissions, 2021
*Methane estimate excludes fugitive emissions
and near-term warming potential
Peninsula Clean Energy
Scope Overview
• PCE Primary Scope
o Transportation: private passenger, local gov & small commercial fleets, ride-hailing, alternative mobility
o Buildings: residential (single family & small multifamily), office, small commercial • Not in PCE scope, or limited* (others lead)
o Transportation: heavy-duty vehicles, off-road
o Buildings: industrial, large commercial*, large multifamily* o Non-energy: land-use, compost, stationary sources, landfills o Out of territory: SF airport
o Embedded carbon, Climate Adaptation, Sequestration/restoration 15 Peninsula Clean Energy
Scope Implications & Catalyst/Enabler Role
Methods &
Marketing
Support
local policy
Encourage
state policy
Leverage
State
incentives
Provide
incentives
Facilitate
finance
16 Out of Scope
• Others lead (State,
Regional, Fed)
• PCE may highlight in
communications
Support Scope
• Limited complementary
program
• Ex: Fleet tech assist
• CARB regs, CEC incentives
• Modest GHGs
• Ex: Building
electrification in large
multi-family buildings
• Only 27% of SMC housing
• Existing BayREN program
Primary Scope
Transportation Scope
17 a. Transportation Scope
b. Ecosystem
c. Out-of-Scope
d. Impact
Peninsula Clean Energy
Proposed Transportation Scope
18 Primary Scope Out of Scope
• Personal vehicles
• Government vehicles
• Local commercial fleets (light and medium duty)
• Ride-hailing (for now)
• Alt. Mobility
• Heavy-duty trucks
• Non-local fleets
• Rental vehicle fleet
• Aviation
• Maritime
• Off-road
Support Scope
• Other mobile sources (Ag., outdoor equip.)
• Transit buses
Peninsula Clean Energy
We're Not Alone
Proposed Transportation Scope & Ecosystem
19 Personal Vehicles Fleet Vehicles,
LD + MD
Alt. Mobility (E-Bikes)
Ride-Hailing
Primary Scope Support Scope
Other Mobile Sources
Peninsula Clean Energy
Primary Scope Emissions, Transportation
20 76%
of transportation emissions
considered primary scope
Personal
Passenger Cars
33%
Government
Passenger Cars
1%
Personal
Trucks/SUVs
21%
Medium Duty
Trucks
15%
Commercial
Trucks/SUVs
2%
Commericial
Passenger Cars
2%
Buses
2%
Rental Passenger
Cars
5%
Rental
Trucks/SUVs
2%
Heavy Duty
Trucks
7%
All Others
10%
San Mateo Countywide Transportation Emissions
Buildings Scope
21 a. Buildings Scope
b. Out-of-Scope
c. Impact
d. Ecosystem
Peninsula Clean Energy
Proposed Buildings Scope
22 Primary Scope – We lead and mobilize capital Out of Scope • Single-family homes
• 1-4 unit homes
• Manufactured homes
• Small office/retail
• Municipal buildings
• Industrial
• Greenhouses
• Fixing leaking transmission and distribution lines
• Existing gas/diesel standby and portable generators
(assumed to be replaced on their own)
Support Scope – Others lead, we provide technical
support and pilots
• Multi-Family
• Lab
• Large hotel
• Large Commercial
• Restaurant cooking equipment
Peninsula Clean Energy
We're Not Alone
Buildings Co-Funding & Ecosystem
Support Scope
Multi-Family
Small Commercial, Non-Cooking
Large Commercial Commercial Cooking
Primary Scope
Single-Family
Peninsula Clean Energy
Primary Scope Emissions, Buildings
24 Rationale for exclusion:
• Large Multi-Family – Represents less than 25% of
building stock and associated emissions.
• Large Commercial – Represents less than 5% of
building emissions. Each project will be
unique and may require high effort, approaches.
• Restaurant Cooking – Market readiness.
78%
of building emissions
Small considered in scope Commercial,
Non-Cooking
28%
Small
Commercial,
Cooking
6%
Large
Commercial
4%
Mutli-Family
12%
Single-Family
(1-4 Units)
50%
San Mateo Countywide Building Methane Emissions
Impact Recap
25 Peninsula Clean Energy
In-Scope Emissions Impact Summary
26 65%
of Countywide emissions
considered in scope
Transportation
(Not-in-Scope)
13%
Transportation
(In-Scope)
41%
Methane Gas
(In-Scope)
24%
Methane Gas
(Not-in-Scope)
7%
Electricity
(Non-PCE)
2%
Water
0%
Wastewater
0%
Solid
Waste
8%
Stationary
Sources
5%
San Mateo Countywide Greenhouse Gas Emissions,
*Methane estimate excludes fugitive emissions
and near-term warming potential
Peninsula Clean Energy
PCE Scope
• Primary Scope
o Transportation
o private passenger, local gov & small commercial fleets, o ride-hailing, alternative mobility
o Buildings
o residential (single family & small multifamily),
o office, small commercial
• Not in scope, or limited* (others lead)
o Transportation: heavy-duty vehicles, off-road
o Buildings: industrial, large commercial*, large multifamily* o Non-energy: land-use, compost, stationary sources, landfills o Out of territory: SF airport
o Embedded carbon, Climate Adaptation, Sequestration/restoration 27 Market Conditions
| 28
Peninsula Clean Energy
We Are Here
• Dec: Scheduling and Scope
• Q1: Market Conditions
• Q2: Segments, Costs and Financing Options
• Q3: Financial Strategy, Policy, Programs, Scaling
• Q4: Final refinement
Market
Conditions
• What is the business
environment thru 2035
• What will happen
without PCE?
Board retreat
Peninsula Clean Energy
Market Conditions: How the analysis is done
Market Conditions
• Macroeconomic conditions
• Technology developments
• Cost changes (products, methods, rates)
• Available or expected policy support
(no PCE action) “Business-as-usual”
adoption forecasts
Peninsula Clean Energy
Table of Contents
31 The Market Conditions document outlines assumptions for current and trending market conditions through 2035, including: technology availability, technology pricing, known or expected policies, state and federal funding, consumer preferences, utility rate forecasts, and population growth projections. The corresponding Market Conditions excel file will be utilized in 2035 planning analytics.
Table of Contents:
1. Macroeconomic Conditions
2. Building Electrification
3. Transportation Electrification
Peninsula Clean Energy
Macroeconomic Conditions
32 1. Population and Housing continues at 10-yr historic rate • Population: 0.62%/yr, Housing: 0.94%/yr
2. Worker shortages continue
• Retirements & demographic changes
3. Supply Chain will catch up slowly; Inflation volatile, may flatten by mid-2023 • Volatile in the short term; Opinions vary
4. Resident purchasing power continues declining
• Housing costs rising faster than income
5. Electric Vehicle “hockey stick” is here
• San Mateo County at nearly 25% of new private vehicle sales in 2021 Peninsula Clean Energy
Population and Housing
33 Historical
annual growth
rate
(2010-2020)
Forecast
annual growth
through 2035
2020 2035
Population0.62% 0.62% 764,442 839,007
Housing Count (DUs)0.94% 0.94% 283,082 325,659
Personal Vehicles Owned Linked with population 575,000 629,000 Building Electrification
Primary Focus: Single-Family and Small Multi-Family Residential 34 Peninsula Clean Energy
Impact of Utility Rates
• Residential rates in PG&E
territory are very high
• Effectively eliminates economic
benefit of electrification
• PCIA is ~$11/year
• Load shape 3% reduction
• Unless rate structures shift
$222
$76
$232
$232
PG&E TOU-C
SMUD Resi Fixed Rate
Annual Water Heating Operating Cost by Utility and
Rate (2022 rates)
HPWH electric cost per year Gas WH cost per Year
PG&E Trans & Dist
$147
PCE Gen
$64 $27
Non-bypassable charges
including PCIA
PG&E Residential
Rate (TOU-C)
Sacramento (SMUD)
Residential Rate
Peninsula Clean Energy
BE: Residential Rate Forecast
36 Source: CPUC En Banc Whitepaper
Summary:
Rate forecasts based on 2021
CPUC En Banc white paper
• Forecasted rate increase:
o 3.7% annual electricity price increase
o 4.6% annual gas price increase
o Assumed CPI of 1.9%
• Inflation adjusted rate forecast
appears to be:
o 1.8% annual electricity price increase
o 2.7% annual gas price increase
Impact: increasing cost
effectiveness of electrification
Peninsula Clean Energy
Building Technology Advancements
37 Residential
New twists on proven products
120v HPWH Come to
Market in 2023
• Reduces costs
• Alleviates contractor
constraint issue
Combo systems become
readily available in 2024
• Reduces costs
• Alleviates panel upgrade
requirements
Commercial
Rooftop packaged heat
pumps increase in
efficiency
120V heat pump window
and wall units
Peninsula Clean Energy
Residential Appliance Equipment Costs
38 As HPWHs becomes more
common, costs should reduce
• "15% cost reduction for every
doubling of output"
• Increased output based on:
o NC all-electric reach codes
o TECH program goals
o Projected SGIP funding equivalent
to TECH annual funding
• Costs reduce by approximately
50% in 2022 dollars versus
today's costs
Peninsula Clean Energy
BE: Policy Expectations
39 Item Agency action Impact
Regional
policy
(BAAQMD)
Restrictions on gas-fired
equipment
BAAQMD will pass ultra-low-NOx standard by 2025,
requiring equipment by 2027
Increases costs of gas equipment and cost
effectiveness of electrification
State policy
changes
State new construction
code
2022 building code requires heat pump space heating and pre-wiring for electrification. Allows heat pump water heating in multi-family.
Drives heat pump space heating in new
construction, lowers future costs
State new
construction code CEC will not pass all-electric mandate in 2026 Little or no new construction improvement driven by state code in later years
Restrictions on gas-fired
equipment By 2030 CARB bans on the sale of gas-fired equipment Drives existing building electrification in later years, supply chain aligns earlier
State and
federal
funding
New state funding The Governor's $900m will be available in 2026 Supports electrification in low income, may
be limited in PCE territory. $18m will come
to San Mateo County
Existing state funding SGIP, TECH and BUILD funding - or equivalent - will be available through 2030
Continuation of ~$3,400 per HPWH and
$2,800 for panel upgrades
Federal funding
Inflation Reduction Act: numerous additional incentives for building electrification
Significant added support but not included
in BAU
Peninsula Clean Energy
Adoption Curve – Electric Water Heaters
40 CARB proposed Low-NOx policy increases
HPWH adoption Progress remains slow through 2030
Space Heating has a similar
pattern, but slower adoption due to
longer equipment life.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2020 2025 2030 2035
Total Saturation of Gas Water Heaters (Line)
Water Heater Installs Per Year (Column)
Year
“Business as Usual” Sm Residential Water Heater Installs by Type and Program San Mateo County
HPWH Adoption
Electric to Electric Conversions
Gas NC
Gas Replacements
Percent Gas WH in Buildings
Does not include Federal Inflation Reduction Act
Peninsula Clean Energy
Market Conditions Conclusions: Buildings
41 • High electric rates are major obstacle producing poor economics for electrification
• Economics improve with new technologies, increasing gas rates, manufacturing scale but not enough to drive market
• Statewide funding has arrived, and increases in 2026, but has modest impact. Federal funding to play significant role.
• Potential AQMD and CARB policies 2027-2031, would have enormous impact
• 60+% short of 2035 goals for electrification without intervention Transportation
Electrification
Primary Focus: Personal Vehicles
42 Peninsula Clean Energy
EV Cost Forecasts
43 New EV prices continue to decline Electricity will remain cheaper than petroleum Source: Bloomberg Source: EIA + PCE electricity forecast $-
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
2020 2025 2030 2035
Price per "Tank" (350 Miles)
EV ICE - Avg. ICE - High
Peninsula Clean Energy
EV Technology Advancements
44 EVSE
Smart Level 1 Charging
• Sig. reduces costs
• Provides billing and
access controls
Cheaper Level 2
Charging
• Newer market entrants
reducing costs
EVs
Most automakers
committed, Ex:
• GM: 30 EVs by 2025
• VW: 70 EVs by 2030
Vehicle to Building
• Added resiliency for
res. and com. buildings
Peninsula Clean Energy
EV Types Match Consumer Preferences
45 Source: Alliance for Automotive Innovation
• Crossovers most
popular vehicle type
(50% of new sales)
• EV crossovers now
available
o Model Y: Summer 2020
o ID4: Spring 2021
o Mach-e: Summer 2021
Impact: faster adoption
Peninsula Clean Energy
TE: Policy Expectations
46 Item Agency action Impact
State policy
Light-duty new gas car
ban Gov. EO bans the sale of new ICE vehicles in 2035 All EV new personal vehicle sales in 2035 State EV target 5 million EV target by 2030 (equiv. to 100k in SMC) None, local EV BAU adoption expected to exceed target locally
Local and
federal
funding
New state funding No major new funding for personal EV incentives anticipated No added support
Existing local/state
funding
Current EV incentive programs (e.g. CVRP, CCFA, etc.)
continue (~$1B provided statewide since 2010, $34.7M
to SMC), no major increase in incentives factored in
Historical EV adoption growth continues and
accelerates further as other barriers (range,
model variety, charging access), reduce
Current EVSE incentive programs (e.g. BAAQMD, LCFS,
etc.) continue unchanged (BAAQMD Charge! FY 22
budget is $7M, roughly $700k to SMC)
Historical average EVSE growth continues,
mostly supported by BAAQMD, LCFS, EVCN,
and tax credits. New state funds would be net
new to historical average.
Federal funding
Inflation Reduction Act: Extension of new EV tax credit (with US content restrictions), Used EV credits
Helpful for new EV market but SMC already
very accelerated rate. Used EV credits provide
important added support.
Peninsula Clean Energy
Adoption Curve – EV Charging
| 47
# of Chargers Deployed
0 10000
20000
30000
40000
50000
60000
70000
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Min. Need BAU EVSE Cumulative Growth Over Time, by Segment
MUD MUD Codes Pub./Work Pub./Work Codes DCFC According
to CEC
720
2,000
31,000
37,500
15,400
10,080
5,600
Conclusion: Not enough EVSE will be
installed without intervention
Peninsula Clean Energy
Adoption Curve - Personal EVs
48 -
100,000
200,000
300,000
400,000
500,000
600,000
-
20,000
40,000
60,000
80,000
100,000
120,000
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Axis Title
Annual Sales, Columns
Gas Cars at Year End
BAU EV and Gas Vehicle Sales & Gas Vehicle Retirements
Net New EVs from New
Sales
EV to EV replacement,
New Sales
Annual Gas Sales, New
Net New Personal EVs
from Used Sales
EV to EV replacement,
Used
Annual Gas Sales, Used
Total Personal Gas Cars
Population at Year End
Peninsula Clean Energy
Market Conditions Conclusions: Transportation
49 • New EV sales expected to increase significantly in 2025 as new model types, increased ranges, cheaper EVs become available • Used EV market slower than new EVs, likely supply constrained • State/Fed policy moderately assists new and used EV markets • 43% short of 2035 goals for personal EV adoption without intervention • 54% short of 2035 minimum need for EV charging without intervention Segments and Costs
| 50
Peninsula Clean Energy
We Are Here
• Dec: Scheduling and Scope
• Q1: Market Conditions
• Q2: Segments, Costs and Financing Options
• Q3: Financial Strategy, Policy, Program Concepts, Scaling • Q4: Final refinement
Segments/
Costs
• Who is in our buildings
and vehicles?
Board retreat
Peninsula Clean Energy
Table of Contents
52 Buildings
1. What buildings do we have?
• Residential
• Housing units by type
• Housing units by vintage
• Commercial
• Commercial building breakdown by size
• Commercial building breakdown by type (pending.)
2. Who is in our buildings?
• Residential
• Housing counts by type and tenure
• MUD housing by class and type
• Income level definitions in San Mateo County
• Overarching income distribution in San Mateo County
• Small residential income distribution in San Mateo County • Housing cost burden in SF Bay Area
• Commercial
• Types of businesses in San Mateo County
3. What equipment is in our buildings?
• Residential
• Water heating
• Space heating
• Air conditioning
• Cooking
• Clothes drying
• Commercial
• Commercial equipment
4. What are the costs to electrify our buildings?
• Residential
• Water heating
• Space heating
• Dryers and Ranges
• Panel upgrades
• BayREN gas in-kind replacement costs
• Summary
• Commercial
What buildings do we
have?
2035 Building Segmentation Study
| 53
Peninsula Clean Energy
Housing Units by Type
Single
Family &
Small
Multifamily
Multifamily
Other
There are 278,700 dwelling
units in San Mateo County. The
majority are single-family or
small multifamily, making up
69% of dwelling units in the
County.
Small Scale
Development
23,525
156,524
7,639
13,100
17,215
16,719
16,906
23,980
219
2,929
One-family house attached
One-family house detached
2 Residential units
3-4 Residential units
5-9 Residential units
10-19 Residential units
20-49 Residential units
50 or more residential units
Boat, RV, van, etc.
Mobile home or trailer
Dwelling Unit by Type in San Mateo County
Peninsula Clean Energy
Housing Units by Vintage and Tenure
55 22,109
27,098
58,782
43,737 42,410
25,501
17,797
14,539
10,379
0 10,000
20,000
30,000
40,000
50,000
60,000
70,000
1939 or earlier 1940 to 1949 1950 to 1959 1960 to 1969 1970 to 1979 1980 to 1989 1990 to 1999 2000-2009 2010-2019 Number of Households
Decade of Construction
Homes in San Mateo by Vintage, Type, and Tenure
Mobile Homes
MF Owned
MF Rented
SF Rented
SF Owned
Instantaneous gas
water heaters 200A Service
Has A/C
More likely to need
of panel replacement
Peninsula Clean Energy
Commercial Building Breakdown by Size
56 1582
1723
1634
1245
558
294
223
164
115
92 65
56 68
40 45
32 36
24 23
20 14
14 15
12 14
10 10
92 2500 to 5000sqft
5000 to 10000sqft
10000 to 20000sqft
20000 to 30000sqft
30000 to 40000sqft
40000 to 50000sqft
50000 to 60000sqft
60000 to 70000sqft
70000 to 80000sqft
80000 to 90000sqft
90000 to 100000sqft
100000 to 110000sqft
110000 to 120000sqft
120000 to 130000sqft
130000 to 140000sqft
140000 to 150000sqft
150000 to 160000sqft
160000 to 170000sqft
170000 to 180000sqft
180000 to 190000sqft
190000 to 200000sqft
200000 to 210000sqft
210000 to 220000sqft
220000 to 230000sqft
230000 to 240000sqft
240000 to 250000sqft
>250000 to sqft
Number of Buildings by Size
Our focus on small commercial
includes 6,184 buildings
Larger commercial buildings
are likely to require customized
electrification strategies, and
more likely to have building
owners and/or tenants who can
afford the cost of electrification.
There are 1,862 buildings over
30,000 sqft in our territory
Peninsula Clean Energy
Commercial Building Breakdown by Type
57 City Flex Health Care Hospitality Industrial Office Retail Specialty Sports &
Entertainment Student Grand Total
Atherton 5 7 2 14
Belmont 18 6 10 117 40 105 19 315
Brisbane 12 2 86 19 26 5 1 151
Burlingame 46 9 10 177 115 228 19 604
Colma 2 1 25 4 1 33
Daly City 1 9 8 70 68 397 39 5 597
East Palo Alto 2 1 1 27 8 24 9 72
El Granada 1 1 2 3 4 11
Foster City 37 2 2 9 39 34 3 126
Half Moon Bay 5 1 7 67 67 117 22 286
Hillsborough 1 1
La Honda 1 1 3 5
Loma Mar 1 1 2
Menlo Park 66 4 11 81 239 176 32 1 610
Millbrae 2 3 7 10 27 132 2 1 184
Montara 1 1
Moss Beach 1 1
Pacifica 1 2 9 40 5 1 58
Palo Alto 2 2 10 10 29 33 86
Pescadero 1 1 1 13 7 23
Portola Valley 2 16 18 4 2 42
Princeton 1 1
Redwood City 94 23 21 434 341 452 91 3 1459
San Bruno 6 3 13 93 57 259 12 2 445
San Carlos 60 4 8 282 106 264 17 741
San Francisco 1 5 4 2 12
San Gregorio 1 1
San Mateo 22 17 15 208 307 543 34 3 1149
South San Francisco 97 7 32 473 131 248 42 1030
Woodside 1 7 7 1 2 18
Grand Total 471 95 152 2157 1618 3154 409 21 1 8078
471
95 152
2,157
1,618
3,154
409
21 1
Flex
Health Care
Hospitality
Industrial
Office
Retail
Specialty
Sports & Entertainment
Student
Number of Commercial Buildings by Type
San Mateo County
Who is in our buildings?
2035 Building Segmentation Study
| 58
Peninsula Clean Energy
Housing Counts by Type and Tenure
98,239
10,191
42,390
4,599
30,359
72,098
7,502
7,588
180,049
95,559
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Single Family Multi-Family
Tenure by Home Type
Occupied w/out payment
Vacant
Rented
Owned outright
Owned with mortgage
San Mateo County has approximately
280,000 housing units, and the
majority are single-family or small
multi-family homes.
20% of single-family homes are rented
85% of multi-family homes are rented
55% homeownership rate
38% of residents own their homes
outright.
Peninsula Clean Energy
MUD Housing by Class and Type
60 Real Estate Property Classes
Class A: <15 years old, desirable
neighborhoods, low vacancy rates, higher-income tenants Class B: Average income tenants, more
likely to need some maintenance
Class C + D: 20+ years old, likely requires
upgrades, lower rental rates, etc.
Peninsula Clean Energy
Income level definitions in SM County
61 Number of Persons in House
Income Category by
California Definition 1 2 3 4 5 6 7 8
San Mateo County Area
Median Income:
$149,600
Acutely Low $15,700 $17,950 $20,200 $22,450 $24,250 $26,050 $27,850 $29,650 Extremely Low
$38,400 $43,850 $49,350 $54,800 $59,200 $63,600 $68,000 $72,350 Very Low Income
$63,950 $73,100 $82,250 $91,350 $98,700 $106,000 $113,300 $120,600 Low Income $102,450 $117,100 $131,750 $146,350 $158,100 $169,800 $181,500 $193,200 Moderate Income
$125,650 $143,600 $161,550 $179,500 $193,850 $208,200 $222,600 $236,950 Peninsula Clean Energy
Overarching income distribution – SM County
Moderate Income 62
80% - 200% AMI
Low Income
Under 80% AMI
Upper Income
200% - 300% AMI
Very High Income
Over 300% AMI
49% 36% 8% 7%
0 2,000
4,000
6,000
8,000
10,000
12,000
14,000
- $50k $100k $150k $200k $250k $300k $350k $400k $450k $500k $550k $600k $650k $700k $750k $800k $850k $900k $950k $1,000k Household Income
MF Rented
MF Owned with Mortgage
MF Owned Outright
SF Rented
SF Owned with Mortgage
SF Owned Outright
Multifamily units are shown for
scale, but are not included in
Scope of 2035 Analysis
Source: US Census – American Community Survey
Note: Low-income categories likely include homeowners with significant assets that are not normally considered “low-income” Peninsula Clean Energy
Small residential income distribution – SM County
Moderate Income 63
80% - 200% AMI
Low Income
Under 80% AMI
Upper Income
200% - 300% AMI
Very High Income
Over 300% AMI
41% 37% 11% 11%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
- $50k $100k $150k $200k $250k $300k $350k $400k $450k $500k $550k $600k $650k $700k $750k $800k $850k $900k $950k $1,000k Number of Households
Household Income by Tenure
Owned Free and Clear Owned with Mortgage Rented
Note: Low-income categories likely include homeowners with significant assets that are not normally considered “low-income” Peninsula Clean Energy
Housing Cost Burden, SF Bay Area
Housing Cost Burdened
(30% of income to housing costs)
Severely Housing Cost Burdened
(50% of income to housing costs)
All Household 35% of homes 16% of homes
Renters 43% of homes
Cannot easily save to
purchase a home or
retire
22% of homes Having trouble meeting basic needs
Owners 28% of homes
Can likely pay for
basic maintenance.
Might struggle to fund
electrification
upgrades
12% of homes
Will struggle to pay for basic
maintenance, let alone electrification
upgrades
https://www.jchs.harvard.edu/son-2020-cost-burdens-map. SF Bay Area.
Peninsula Clean Energy
Types of Businesses
65 6,996
5,281
5,033
3,555
3,453
2,992
2,784
2,736
2,609
2,235
1,706
1,692
1,590
1,582
1,540
1,478
1,468
1,463
1,443
1,388
1,256
1,240
1,195
1,181
1,075
1,043
1,027
985
Restaurants and Other Eating Places
Offices of Real Estate Agents and Brokers
Personal Care Services
Lessors of Real Estate
Legal Services
Agencies, Brokerages, and Other Insurance…
Services to Buildings and Dwellings
Taxi and Limousine Service
Building Equipment Contractors
Management, Scientific, and Technical…
Residential Building Construction
Accounting, Tax Preparation, Bookkeeping,…
Architectural, Engineering, and Related Services
Other Professional, Scientific, and Technical…
Computer Systems Design and Related Services
Scientific Research and Development Services
Elementary and Secondary Schools
Building Material and Supplies Dealers
Individual and Family Services
Other Amusement and Recreation Industries
Religious Organizations
Building Finishing Contractors
Nonresidential Building Construction
Professional and Commercial Equipment and…
Grocery Stores
Social Advocacy Organizations
Advertising, Public Relations, and Related…
Automotive Repair and Maintenance
No of Tenancies
The chart at right displays the top 30 most
common tenancy types across San Mateo
County based on North American Industry
Classification System (NAICS) code
designations
Peninsula Clean Energy
Small commercial sqft by tenant type
66 3,588,186
3,368,745
2,221,127
5,905,526
7,038,564
4,940,113
2,291,218
9,493,712
10,407,309
7,161,240
1,147,400
2,733,995
1,273,784
421,473
394,612
Retail
Office
Flex
Sports & Entertainment
Health Care
Specialty
Student
Hospitality
Total square footage of building stock by occupancy type and tenancy type (buildings under 30k sqft)
Square footage in single-tenancy Square footage in multi-tenancy Retail and office buildings make up
61% of small commercial square
footage. Systems in these buildings
tend to be both easy and cost-effective to electrify during equipment replacement.
Retail
29%
Office
32%
Flex
22%
Sports &
Entertainment
3%
Health Care
8%
Specialty
4%
Student
1%
Hospitality
1%
Space type by Square Footage
What is in our buildings?
2035 Building Segmentation Study
| 67
Peninsula Clean Energy
Water heating by fuel type and building type
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Single family owned Single family rented Multifamily rent Multifamily condo Mobile homes Water Heaters in SM County by Type
standard tank gas water heater whole house tankless gas water heater standard tank electric water heater heat pump electric water heater whole house tankless electric water heater point of use tankless electric water heater whole house tankless propane water heater
98% of residential water
heating in San Mateo County is
fueled by gas.
We estimate there are between
200-300 heat pump water
heaters in the County,
representing less than 0.1% of
dwelling units.
Peninsula Clean Energy
How are San Mateans Heating Their Homes?
68% of residential space
heating in San Mateo County is
fueled by gas.
We estimate there are between
6,000-7,000 heat pump space
heaters in the County,
representing le2.5% of dwelling
units.
Central gas furnaces are the
most common heating system
type in small residential.
Peninsula Clean Energy
Which Homes Have Air Conditioning?
25% of homes in San Mateo
County have air conditioning.
This is important because the
existence of air conditioning in a
home makes electrifying the
space heating for that home
easier.
Central A/C is the most.
Common type of air conditioner
type.
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Single family
owned
Single family
rented
Multifamily
rent
Multifamily
condo
Mobile
homes
Air Conditioning by Type in San Mateo County Homes
No A/C
Multiple A/C Types
Room A/C only
Central Evap Cooler only
Central A/C only
Peninsula Clean Energy
How are San Mateans Cooking?
58% of homes in San Mateo
County use natural gas cooktops.
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Single family
owned
Single family
rented
Multifamily rent Multifamily
condo
Mobile homes
Fuel for Cooktop by Household Type in San Mateo County
Electricity
Natural Gas
42% of homes in San Mateo
County use electric cooktops.
Peninsula Clean Energy
How are San Mateans Drying their Clothes?
27% of homes in San Mateo
County use natural gas dryers.
39% of homes in San Mateo
County use electric dryers.
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Single family
owned
Single family
rented
Multifamily rent Multifamily condo Mobile homes
Fuel for Clothes Dyer by Household Type in San Mateo
County 34% of homes in San Mateo
County lack in-unit dryers.
Peninsula Clean Energy
Commercial HVAC Equipment
73 29%
8%
11%
9%
12%
1%
0%
8%
3%
3%
4%
1%
0%
1%
1%
1%
5%
2%
1%
Packaged SZ Gas Furnace with Cooling
Packaged SZ Gas Furnace No Cooling
Packaged SZ Heat Pump
Packaged SZ No Heating
Heat/Vent Gas Furnace no cooling
Heat/Vent Resistance no cooling
Heat/Vent Radiant no cooling
Split SZ Gas Furnace with Cooling
Split SZ Gas Furnace with no Cooling
Split SZ Heat Pump
Packaged Terminal + Gas Furnace
Packaged Terminal + Heat Pump
Packaged Terminal + Resistance
Packaged Terminal + No Heating
Ductless Mini Split + Heat Pump
Ductless Mini Split No Heating
MZ Heat Pump
MZ Other
Baseboard Resistance
Estimated Prevalence based on CSS
Easy to Electrify – 43%
Blue indicates gas units which
have cooling. These are easy to
electrify during replacement with
minimum incremental costs.
Already Electric – 33%
Green indicates units which are
already electric. No action
required except grid enablement.
Gas, No A/C – 34%
Red indicates gas units without
air conditioning. These are
incrementally expensive to
electrify.
Peninsula Clean Energy
Commercial: Packaged HVAC Equipment Counts
74 Easy to Electrify – 5,441
Existing building 2-way A/C
ordinances can cover most of
these units without the
requirement for incentives.
Gas, No A/C – 1,535
Incentives may be required to
offset the incremental cost
increases to electrify. Electric
service upgrades may also be
required.
5,441
1,535
2,106
1,711
Packaged SZ Gas Furnace with Cooling
Packaged SZ Gas Furnace No Cooling
Packaged SZ Heat Pump
Packaged SZ No Heating
Number of Rooftop Units in Small Commercial Buildings - Countywide
Peninsula Clean Energy
Commercial: Water Heaters by Space Type
75 69%
60% 60%
75% 80%
60%
68%
48%
12%
10% 10%
13%
15%
10%
12%
5%
21% 35%
16%
25% 25%
7% 5%
25%
11%
3% 5% 5% 5% 5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Retail Office Flex Sports &
Entertainment
Health Care Specialty Student Hospitality
Estimated Prevalence of Water Heaters by Space Type
Electric Tankless
Electric Tank
Natural Gas Boiler
Natural Gas Tankless
Natural Gas Tank
What are the Costs to
Electrify our Buildings?
2035 Building Segmentation Study
| 76
Peninsula Clean Energy
Single Family Water Heater Installation Costs
77 0%
10%
20%
30%
40%
50%
60%
up to $1k $1k to $2k $2k to $3k $3k to $4k $4k to $5k $5k to $6k $6k to $7k $7k to $8k $8k to $9k $9k to $10k $10k to $11k
$11k to
$12k
Over $12k
Percent of Installations
Gas Tank
Gas Tankless
HPWH
Gas Tank
Median - $2,000
N = 18
Gas Tankless
Median - $4,500
N = 244
Heat Pump
Median - $6,000
N = 893
$4,000 cost increase Incentive Recommendation
• $2,000-$3,000 is current incentive
• $1,000 from PCE (+$1,000 for CARE)
• $1,000 from BayREN
• $4,000 incentive if cost parity is the goal
• $5,000 incentive if carrot is the goal
Data from BayREN incentive program reported installation costs through May 2022.
BayREN-wide territory figures used as SM County figures are similar with fewer data points Peninsula Clean Energy
Heat Pump Water Heater Costs
78 Typical installed costs are $4,500-$8,500
(excluding panel upgrades)
There are outliers,
costing up to $12,000
Average cost is $6,100
Peninsula Clean Energy
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Percent of Installations
Gas Furnace
Heat Pump (BayREN)
Heat Pump (TECH)
Single Family Space Heater Installation Costs
79 Gas Furnace
Median - $5,611
N = 2,252
HP BayREN
Median - $15,314
N = 270
HP TECH
Median - $21,372
N = 12
$13,000 cost increase Incentive Recommendation
The cost increase to go from furnace to heat
pump is too high to backstop with policy at our
current budget levels. Recommend focusing
specifically on Air Conditioners in the near-term.
HP Average All
Median - $18,725
N = 282
Data from BayREN incentive program reported installation costs through May 2022 & CA TECH Installation costs through May 2022.
BayREN-wide territory figures used as SM County figures are similar with fewer data points. TECH data leverages only SM County installations.
Peninsula Clean Energy
Heat Pump Space Heater Costs
80 $20,676
$19,005
$21,856
$10,584
$11,800
$11,957
$12,800
$12,875
$16,171
$16,895
$29,900
$14,808
$15,295
$18,621
$22,888
$29,800
$36,350
$41,424
$48,014
$19,388
$20,676
$24,159
$24,285
$8,091
$15,280
$17,428
$19,127
$20,374
$20,888
$21,856
$24,616
$26,316
$29,473
$29,473
$33,289
$48,132
Median All
Median Local Quotes
Median TECH
Josie 1
Josie 2
Josie 3
Josie 4
Josie 5
Brown 1
Brown 2
Brown 3
Jason 1
Jason 2
Jason 3
Jason 4
Jason 5
Jason 6
Jason 7
Jason 8
KJ 1
KJ 2
KJ 3
KJ 4
TECH 1
TECH 2
TECH 3
TECH 4
TECH 5
TECH 6
TECH 7
TECH 8
TECH 9
TECH 10
TECH 11
TECH 12
TECH 13
Josie Quotes
Michael Quotes
Jason Quotes
KJ Quotes
TECH Installed
Costs
We reviewed quotes and installation cost data from
15 projects in San Mateo County as well as the
quotes from KJ on our team, who lives in Santa Clara
County. We found the following results:
• The median cost of a heat pump space heater
is $20,700
• Quotes at an individual home can range by
$15,000 or more.
• TECH installations appear to be slightly more
expensive than non-TECH installations. This could
be because:
• Contractors are keeping some of the
incentive
• Contractors are charging more for early
adopters
• Later installation data reflects recent inflation
Peninsula Clean Energy
2-Way AC Incentives
81 Adding A/C
(keep
furnace)
Adding A/C +
HP (keep
furnace)
Adding A/C +
HP (remove
furnace
Replacing
A/C +
Furnace
Replacing
A/C &Furnace
w/HP
Replace A/C
(keep
furnace)
Replace A/C
with HP
(keep furnace)
Replace A/C
(keep furnace)
Replace A/C
with HP
(remove
furnace)
Add circuit Yes Yes Yes N/A N/A N/A N/A N/A N/A
Indoor unit
equipment
+$1,000-
$2,000
+$1,000-
$2,000
Indoor unit labor +$500-$1,000
Refrigerant pipe
Duct test + seal
Cap gas line $100 $100 $100 $100
Flue work $100 $100 $100 N/A $100 $100
Outdoor unit
equipment
+$500 -$1,000 +$500 -$1,000 +$500-$1,000 +$500 -$1,000 +$500 -$1,000 Outdoor Unit
labor
Total +$500-$1,000 +$1,500-3,000 Neutral +$500 -$1,000 +$1,500-3,000 Peninsula Clean Energy
Dryers and Ranges
82 Dryers cost
around $925
delivered and
installed, old
one removed
Ranges cost around $1,150 delivered and
installed, old one removed
Blake estimates wiring runs to cost
$500 - $2,000 (excluding panel or sub-panels)
Peninsula Clean Energy
Panel Upgrade Program Costs (n = 25)
83 $0.00
$2,000.00
$4,000.00
$6,000.00
$8,000.00
$10,000.00
$12,000.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Panel Upgrade Costs from Our Program
• Panel upgrade costs ranged from $1,000 to $10,000
• Two thirds were between $1,500 and $5,000
• Two thirds were below $4,000
• Half are between $2,000 and $4,000
Average cost is $3,700
Peninsula Clean Energy
Summary for Financing Analysis
84 Electrification Cost Replace In-Kind Cost Incremental Cost Water Heating (includes 240V circuit) $6,100 $2,000 $4,100 Space Heating $20,700 $6,132 $14,568
Cooking $1,098 $1,155 -57
Clothes Drying $925 $925 $0
Total $28,823 $9,057 $18,611
Panel, if required $3,700
Total non-optimized cost $32,523
The most common single-family home in SM County has:
• Gas water heating, tank-type
• Gas space heating, without air conditioning
• Gas cooktop
• Electric drying
The cost to electrify will be $28,000, an increased cost to the homeowner of $18,600 versus typical replacement costs.
Peninsula Clean Energy
Commercial: Rooftop Packaged Unit Costs
85 $22,750
$37,250
$63,750
$23,100
$38,000
$65,500
Small (3-4 ton) Medium (5-10 ton) Large (15-20 ton)
Median Rooftop Packaged Heat Pump Installation Costs
Gas Heat Pump
Reach Code Opportunity
Costs of rooftop heat pumps are nearly
identical to gas-fired rooftop packaged
unit costs. While an incentive of
$100/ton would provide cost parity, it
may not be required for commercial
existing building policies for this
technology.
Peninsula Clean Energy
How Big is the Task? – Sm Res. (DRAFT)
$5.4b
$5.0b
$3.2b $3.2b
$2.5b $2.3b
Already
electrified
In-Kind
Costs
State
Funding
Innovative
Tech
$-
$1,000,000,000
$2,000,000,000
$3,000,000,000
$4,000,000,000
$5,000,000,000
$6,000,000,000
Without Federal Inflation Reduction Act
Does not consider very low-income needs
Peninsula Clean Energy
Segmentation Conclusions: Buildings
• Older small-residential dominant: Small residential represents most of the building stock (>70%), and these tend to have more gas appliances
• Methane gas equipment predominates: Most homes have methane water heaters (98%) and gas furnaces (68%). Electric dryers and stoves are common. • Space heating is the biggest installation expense: At $20k, electrifying space heating is a significant cost.
• Total Capital Required: Estimated ~$3.6-4B needed to electrify single-family and small multifamily.
• Low-income segment challenge: High percentage of small residential units (~20%) owned by very low-income residents creates a challenge to self-fund electrification. 87 (San Mateo County only)
88 Vehicles
Peninsula Clean Energy
Table of Contents
89 Vehicles
What vehicles do we have?
• Registration Type
• Fuel Type
• Vehicle Type
• Vehicle Age & Fuel Type
• Ownership Type
• Used Car Finance Rates
• Average Monthly Car Payments
• 2021 New EV Sales
• 2021 New/Used EV Purchases by Zip Code
• 2021 New Vehicle Sales Price
Who owns them?
• Vehicle Age by Zip Code
• Vehicle Ages by Median Income, Zip Code Level
• Vehicle Age by Median HH Income
• EV Adoption by Income
How Big is the Task?
What EV charging do we have?
• EV charging segmentation
• Estimated Charging Gap Costs
Peninsula Clean Energy
What cars do we have? Registration Type
90% of all vehicles
registered in San Mateo
County are personally
owned, relatively small
local fleet segment.
90 Personal, 541,873
Rental , 21,371
Small Fleet, 28,023
On-Road Vehicle Fleet
Personal Rental Small Fleet Large Fleet Government Fleet Dealer/Manuf. 598k total vehicles
Peninsula Clean Energy
What cars do we have? Fuel Types
91 598k total
vehicles
83% of personal
vehicles are non-hybrid
gas cars
Peninsula Clean Energy
What cars do we have? Vehicle Types
92 598k total
vehicles
60% of personal
vehicles are sedans
and coups
Peninsula Clean Energy
What cars do we have? Vehicle Age & Fuel Type
93 Median Age = MY 2015/2016, ~7 years old (National Average = 12 Years Old) -
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Total Vehicles by Model Year and Fuel Type
ICE EV Personal Vehicles Only
Peninsula Clean Energy
What cars do we have? Ownership Type
Purchase vs Lease
• ~70/30 purchase/lease (nearly identical for EV and non-EVs in San Mateo County)
• Consistent for previous 3 years
94 Peninsula Clean Energy
What cars do we have? Used Car Finance Rates
Note: national
trend, NOT local
95 Share of Used Car Purchases with Financing
Peninsula Clean Energy 96
Average monthly payment for new and used vehicle financing Note: national trend, NOT local
What cars do we have? Average Monthly Payments
Peninsula Clean Energy
What cars do we have? 2021 New EV Sales
97 Tesla still over half of all
new EV sales
~8k new
EV sales
Peninsula Clean Energy
What vehicles do we have?
2021 New/Used EV Purchase Volume by Zip Code
98 0
100
200
300
400
500
600
700
800
New/Used EV Sales by Zip Code (Shown by City)
New EV Sales Used EV Sales
Peninsula Clean Energy
What cars do we have? 2021 New Sales Prices
99 Average MSRP of SMC New Vehicle Sales, 2021
ICE: $41,400
EV: $52,145
All: $41,860
0 1000
2000
3000
4000
5000
6000
7000
0 - 20k 20k - 30k 30k - 40k 40k - 50k 50k - 60k 60k - 70k 70k - 80k 80k+ 2021 Total New Personal EV and ICE Sales, by MSRP
EV Sales ICE Sales
Peninsula Clean Energy
Who’s in our Vehicles? Vehicle Age by Zip Code
100
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
94027 94010 94025 94028 94065 94070 94404 94002 94030 94062 94402 94403 94005 94014 94015 94019 94044 94061 94066 94080 94037 94038 94401 94020 94021 94063 94303 94060 Median MY by Zip Code
Pescadero
16 years
Atherton,
6 years
Daly City,
9 years
Peninsula Clean Energy
Who’s in our Vehicles?
Vehicle Ages by Median Income, Zip Code Level
101
$0
$50,000
$100,000
$150,000
$200,000
$250,000
2004 2006 2008 2010 2012 2014 2016 2018
Zip Codes by Median Model Year by Median Household Income Atherton
Pescadero
San Mateo
RWC
Peninsula Clean Energy
Who’s in our Vehicles? HH Income and Veh. Age
102
$116,000.00
$118,000.00
$120,000.00
$122,000.00
$124,000.00
$126,000.00
$128,000.00
$130,000.00
0 5000
10000
15000
20000
25000
30000
35000
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Average HH Income by Vehicle MY and Vehicle Totals by MY Peninsula Clean Energy
Who’s in our Vehicles? EV Adoption and Income
103
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
$0 $50,000 $100,000 $150,000 $200,000 $250,000
EV Adoption (%)
Median Income
EV Adoption and Median Income, by Zip Code
Atherton
RWC/NFO
Pescadero
Portola Valley
Menlo Park
San Mateo
.8 correlation =
strong
relationship
Peninsula Clean Energy
How Big is the Task? Vehicles
Remaining gas vehicles in BAU scenario and various reductions strategies (without increasing new EV purchases)
104
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Remaining ICE Vehicles in 2035
292k
Ongoing
WFH
yields 6%
reduction
in vehicles
274k 266k
243k
Remaining
ICE Cars
Remaining
ICE Cars
Remaining
ICE Cars
Remaining
ICE Cars
E-Bikes
100%
optimized
Used EV
market
Peninsula Clean Energy
Current EV Charging Distribution
105
Note: data quality is poor for workplace
charging and multifamily (MUD) so
counts may be higher
~4600
Stations
• Min. need to support all-electric fleet, ~70k chargers (CEC)
• Major need in multi-family
housing
• 80% of EV charging happens
at home
Peninsula Clean Energy
Estimated Charging Gap Costs
106
EVSE
2035 Min.
Charging Need
Expected
Chargers by
2035 in BAU
Charging
Gap
Cost to Install
Charging Gap
MUD 37,500 16,060 21,440 $71,180,800
Pub/Work 31,000 15,680 15,320 $137,880,000
DCFC 2,000 720 1,280 $130,560,000
Total 70,500 32,460 38,040 $339,620,800
Peninsula Clean Energy
Segmentation Conclusions: Transportation
• Young fleet: Our vehicles are younger than national average (our new vehicle segment is 2x national average) and appear to turnover faster • Vehicle prices: New car prices in SMC track with national average • Vehicle Age & Income Correlate: Vehicle age and income are highly correlated (areas where average car age is 10+ years old have avg. income of <$100k, very low income)
• EVs and Income Correlate: EV adoption and income are highly correlated • Min. Charging at MUDs: Virtually none exist currently, reach codes to be a material contributor but substantial gap remains
107
Finance Options
| 108
Peninsula Clean Energy
Overview of Funding & Financing
| 109
Federal & State
• DOE grants & loans
• CEC, CARB grants
• iBank loans/bonds
• Treasurer loans, credit enhancement
T&D value streams
• CPUC programs
• Wholesale market/DR
Public & Private Capital
• Debt/Credit instruments
• Project finance
• Bonds
PCE Leverage
• Budget
• Balance sheet
• Revenue streams
• Credit ratings
Peninsula Clean Energy
Finance Mechanisms
| 110
• Consumer/Business Finance
• Debt held by individual/company
• Usually dependent on individual/company credit worthiness • Mature but available to limited population, possibly high cost of capital • Credit Enhancement
• Mechanism to improve consumer or business credit terms or eligibility • Via added govt funding to “buy down” rates or create loan-loss reserve • Specialized applications requires policy approval
• Project Finance
• Debt and possibly asset ownership held by third-party • Usually tied to the cashflows of the project to be financed • Available only in large capital pools
Peninsula Clean Energy
Examples
Finance
Class
Security Finance Type Capital Source
Consumer
Finance
Unsecured
Revolving credit (ex: credit card)
Unsecured loan Private
On-bill finance Rate payer funds
On-bill repayment loan Private
Secured Home mortgage
Home equity line of credit Private
Business
Finance
Unsecured Line of credit Private
Secured Mortgage
Property Assessed Clean Energy (PACE) Private
Project
Finance
Single
project
Power Purchase Agreement
Energy/Efficiency Service Agreements Private
Tariff On-Bill Finance Private, Rate payer funds, Public Public works (bridge, treatment plant) Public (bond)
Aggregate Distributed project Private, Public
111
Peninsula Clean Energy
Access to Finance
Customer capacity Who Current Option Possible Option
Credit worthy
Corporate PACE, Line of Credit --
Residential Consumer loans, HELOC --
Limited or None
Med/Small
business
Maybe small business loan, but not for
many or expensive.
Project finance or
Credit enhanced debt
Residential None Project finance or
Credit enhanced debt
112
Est. 12% of residential customers have especially limited/no access to credit (very low-income property owners bearing mortgages)
Peninsula Clean Energy
Low-income Considerations
• 12-20% Segment: Very low-income property owners earning 30-50% of Area Median Income
• Major barrier: Most unable to bear costs, including debt • Total Cost to Electrify: $480 M
• Possible Tools
o Very large grant sources
o Property owner requirements for rented units
o Loans with credit enhancement for some
o Incentive + Aggregate Project Finance
113
Credit Enhancement
115 Peninsula Clean Energy
Financing – Credit Enhancement
Credit enhancement is a financial instrument to reduce rates or broaden customer creditworthiness eligibility by provide partial risk coverage to lenders.
• Determinants for creditworthiness
• Track record of default rates and percentage of loan loss reserve deposit against borrowing
• Example
• Michigan Saves program provide affordable financing for energy improvements • California GoGreen Home
116 Peninsula Clean Energy 1. Michigan saves financing program Michigan Saves State of Michigan
Lenders
Customers
Customers who are not able to
produce credit scoring or have
credit scoring is not lendable by
financial intuitions can seek for
loans from Michigan Saves
Loan loss reserve
fund1
Loans
grants
Loan
repayments
• Program
• deposits a security based on a percentage of the loan amount into reserve, improving the overall credit quality, attracting more lenders and better terms • provides low-interest energy efficiency loans to customers with improved eligibility • pays contractors directly and customers payments are on-bill • Viable for customer if savings delivered are greater than loan payment amount Loan
repayments
Loans
Financing – Credit Enhancement Example
Project Finance
Peninsula Clean Energy
Project Finance – PV and Building Electrification
118
Install
Bill Payments
Capital
Customer Payments
Solar PPA
Or developer
Install
Bill Payments
Capital
Customer Payments
Building Electrification
Project Finance
Or developer
Appendix
120 Peninsula Clean Energy
Financing – Typical Project Financing Structure
Consultants
Lenders
(Financing)
Sponsors/Owners
(Equity)
Borrower / Project
Company
Supplier
Insurers
(Insurance)
Operations and
Maintenance Construction
Off-taker
(Source of
Revenue)
All key financial risks and project risks are
identified at the beginning of the financing
through contractual agreements with
various counterparties. The project cash
flow is only for project uses.
121 Peninsula Clean Energy
Financing – Typical Project Financing Structure
Example: Cash Flow Waterfall in Project Finance
Project Revenue from PPA
Less: Project Operating Expenses
• O&M expenses
• Staff costs
• Tax expenses
Less: Senior Debt Payments
• Interest costs
• Hedging costs
Less: Senior Debt Service Reserve
Less: Capex Reserve Account
Access cash after all debt obligations are
fulfilled will go into distribution account
Distribution Account (Dividend to
Project Sponsors)
122 Peninsula Clean Energy
Financing – Power Purchase Agreement (PPA, Project Finance) PPA is an agreement between a generator and an electricity supplier to buy and sell the electricity (Supplier PPA) being produced by the generator at a renewable energy project. A generator could sell electricity directly to large industrial or commercial end-users via corporate PPA.
PPA
Supplier
PPA
Corporate
PPA
PPA structures
1. Sleeved PPA 2. Synthetic (Virtual) PPA 3. Private-wire PPA
1. Variable Price PPA 2. Hybrid Price PPA 3. Fixed Price PPA • Can be long-term (e.g., 10
years)
• Exposure to day-ahead,
intraday, imbalance and
potentially the Balancing
Mechanism facilitates full
optionality realization
• Relatively short; 3-5 years
maximum tenor
• Price Schedule with the PPA
offer is aligned to the market
forward curve
• Can be up to 5 years
• Options to ‘Lock-in value’ with
fixed pricing or ‘Stay
uncontracted’ with variable
pricing
• Corporate buys electricity
directly from Generator
• Supplier provides back-to-back or ‘Sleeved PPA’ with
Corporate
• No physical electricity
connection between
Corporate and Generator
• Generator sells electricity to
Supplier
• Supplier sells electricity on to
Corporate in the normal way
• No physical electricity
connection between
Corporate and Generator
• Corporate buy electricity
directly from Generator
• Residual electricity
requirement is met by
Supplier from the grid
• Physical electricity
connection between
Corporate and Generator
123 Peninsula Clean Energy
On-Bill Financing (Project Finance)
1. https://www.eesi.org/obf/case-2https://www.pge.com/en_US/small-medium-business/save-energy-and-money/energy-efficiency-financing.page 3 https://michigansaves org/on-bill-financing/ ; https://www tclp org/Page/OnBillFinancing Description Customers Eligibility Loan Capitalization Source PG&E 0% interest loans for replacing
equipment with energy-efficient models. Energy bill cannot increase due to equipment
investment.
Commercial;
MFH (only
for common
meters)
Business must have been a PG&E non-residential customer for at least 24 months & has 12 months of consistent payment history CPUC approved tariff increase,
ratepayer funding, monthly
loan repayments. PG&E is
looking to expand the program
in the coming years and
involve third-party lenders to
secure additional source of
capital.
Holland PW Holland Board of Public Works’ On-Bill Loan Program was launched in late 2016. Over the program’s first
three years, more than $2 million
were invested into 116 homes. HBPW
works with Michigan Saves, a green
bank, that issues loans by working
with third-party investors.
SFH, MFH Applicant owns a home in the City of Holland, has 12 months of consistent payment history, has no delinquent taxes,
unsatisfied money judgements or bankruptcies within the last three years, and works with an authorized contractor
Green bank/lenders.
Michigan
Saves
Michigan Saves works with
municipalities and utilities to establish
OBF programs. Michigan Saves has
launched OBF programs Holland
Board of Public Works and Traverse
City Light & Power. OBF programs
offer low interest rates for residential
customers.
Residential Traverse City Light & Power’s OBF is only open to single-family (one- to four-unit) homes. Rental/income properties are eligible provided the landlord meets program
requirements. 12 months of consistent payment history. If an applicant has no more than one delinquency in the past 12 months, TCL&P may pre-approve the applicant if there is no more than one delinquency in the last 24 months or the applicant has a credit score of 640 or higher. Additionally, Applicants should not have any delinquent taxes,
bankruptcies within the last three years (from discharge), foreclosures, repossessions greater than $1,000, or
unsatisfied money judgements.
Michigan Saves provide a
portion of the loan amount as a
deposit in the loan loss
reserves as a credit
enhancement to improve its
credit quality when borrowing
from its participating lenders
(credit unions).
124 Peninsula Clean Energy
Financing - On-Bill Financing (PG&E Cashflow Diagram)
Contractor
Customer
Provides capital
Repays loan
over time
through utility bill
Provides loan, places loan amount
Pays on monthly utility bill
contractor for
work Completes project
Customer repayments
recapitalize the OBF account
Postproject process
flow
Preproject process
flow
Sources of Capital
(CPUC approved funding, ratepayer
funding, monthly loan repayments)
PG&E OBF Account
125 Peninsula Clean Energy
Financing - OBF (Michigan Saves - Green Bank Cashflow Diagram)
1. https://michigansaves.org/on-bill-financing/
2. Michigan Save sample loan loss reserves agreement, State of Michigan $1 million grant for Michigan Saves Contractor
Customers
Michigan Saves
Provides loan
capital
Closes the loan
with Michigan
Saves
Applies for
loan and
receives loan
decision
Finds authorized Michigan Saves contractor
Completes project
Postproject process
flow
Preproject process
flow
Returns loan
capital
Credit enhancement2:
Michigan Saves provides partial
reimbursement through loan loss
reserve. This structure encourage
lenders to provide capital to the program
Utility
Determines
monthly payment
Returns
customer
payment amount
Places loan
amount on
monthly utility
bill
Repays loan on a monthly utility
bill
Pays contractor for
work
Loan capital
(Credit unions)
Financial Strategy
126
Peninsula Clean Energy
Questions Financial Strategy aims to answer
• How much does the plan do: GHG, # EVs, chargers, buildings • With what resources: $ from all sources
• How much we can capture: Other value streams (DR, LCFS, PV) • What is the role of policy: Local, regional, state
• What are the limits: State/Fed funds, finance, PCE budget • What is the gap: GHG & financial gap
127
Peninsula Clean Energy
PCE Financial Strategy – Key Principles
1. Leverage market forces, innovation and policy support for cost-effective GHG reduction measures
2. Provide higher incentives early, better than cost parity where possible, then reduce incentives as market matures and costs decline
3. Offer more support to those with less capacity to bear costs
4. Mobilize traditional and innovative finance solutions for scale
5. Where practical, leverage other/existing programs and fill gaps
6. Target and fund programs to enable key policy adoption for required action and market transformation
Peninsula Clean Energy
Modeling Assumptions (as of Aug. 2022)
Assumption Basis/Notes
Model is in constant dollars (no inflation)
Costs are estimated on 2021 costs
Service territory: San Mateo County Los Banos data will be integrated at later date Assumed external Building electrification (BE) funding:
$27-33M/year
Assumes TECH and CEC budgets are continually
funded at initial/current levels. Assumes IRA and tax
credits are renewed once and extend to 2035.
Assumed external Transportation electrification
(TE) funding: $8-10M/year
Approved CEC budget continued, expected CPUC
TEF funding, & Federal for EVs & multi-family (MUD)
Existing building reach codes adopted over 10 yrs
with increasing efficacy over time
Some cities beginning to consider adoption, increasing
stringency over time. Policies drive adoption.
PCE investment grows moderately: 3.5 to 5%
annual program budget growth beyond FY22-FY26
forecasted baseline; 80% for decarbonization
Current conditions for budget growth are favorable
Additional value streams to be captured (DR):
estimated at $4-5M/year
Majority DR value from res. EV load shaping. Assumes
10% EV participation. Buildings provide modest load
shaping potential (excl. storage, TBD) 129
Peninsula Clean Energy
Projected Policy Progression
BE Policies 2024-2026 2027-2030 2031-2035
Local Reach Codes –
Existing Buildings
Several cities adopt
modest requirements
Half cities adopt more
stringent requirements
Most cities adopt very
stringent requirements
AQMD NOx limit Resi WHs & Furnaces ban
CARB gas appl. ban All gas appliances
State & Federal Funding Expect to continue at current levels 130
TE Policies 2024-2026 2027-2030 2031-2035
CARB new gas car ban 2035 ban on new
gas sales
CARB ride-hailing clean miles Start 2% to 30% clean miles 50% to 90% clean miles State & Federal Funding Expect to continue at current levels Policy requirements will drive the volume of adoption. AQMD & CARB NG appliance policies may drive more volume than incentives can support, expectation that AQMD and CARB are not providing additional incentive support Peninsula Clean Energy
Financial Strategy: Buildings (small resi)
2024-2035 Notes
Total Small Residential Units 200,000 San Mateo County only (Los Banos to incorporate at later date) Avg. Cost to Electrify $19,000-$21,000
Per residence; Aggressive optimized cost with declining costs over time. However ~$10k are costs homeowners would have anyway to install units with “in-kind” equipment at time of replacement Total Cost $3.6 - $4 billion Approximately half is an “incremental cost” PCE Incentive Investment $160 - 200 million Excluding load-shaping, project finance funds State & Fed Investment $320 - 400 million CA TECH and CEC funding assumed ongoing and federal IRA rebates and tax credits assumed renewed
Customer Investment $600 - 700 million Customer copay & consumer finance Aggregate Project Finance Cost $40 - 50 million For ~20% of homes that are very low income Load Shaping Value $3 - 5 million 80% participation of HVAC and HPWH Total Available Capital $1 – 1.3 billion All sources
Total Residential Units
Electrified 57,000 – 69,000
Adoption rate is driven by policies at replacement rates. Measured in "home equivalents", actual electrification may be more distributed with partially electrified homes.
Remaining Units to Electrify 130,000 -140,000 131
Peninsula Clean Energy
Financial Strategy: Transportation (personal vehicles)
2024-2035
EVs Chargers Notes
Total New Units Expected by 2035 300k - 375,000 30k - 35,000 Business as usual adoption without PCE support Total Units Deployed by PCE 55k - 70,000
Used EVs & bikes
20k - 25,000 Used EV equity program (not additive) + e-bikes (~40% EVs), Charging is for primarily MUD, but also workplace and public (not DCFC)
Avg. Cost to Electrify EV: $24k - 30,000
Bike: $1k - 2,000
$5.5k - 6,800 Per unit costs. Charging costs are blend of L1 and L2 ports Total Cost of PCE-supported units $715 - 875 million $130-160 million PCE Incentive Investment $10-12 million $22-28 million Net of Load Shaping Value, no admin or TA State & Fed Investment $70-90 million $27-33 million Assumes fed & state funding at current levels Customer Investment $600-730 million $55-70 million
Load Shaping Value $30-40 million $14-17 million Assumes 10% participation from EVs Low Carbon Fuel Standard $10-12 million LCFS reinvested to electrification Total Available Capital $715-875 million $130-160 million Total Units Electrified in 2035 300k - 375,000 50k - 60,000 Used EVs do not add to total but ensure low-income access Remaining Gap 215k - 270,000 13k - 17,000 Charging based on CEC projected need, excludes DCFC Peninsula Clean Energy
Risks/Uncertainties
1. State and Federal funding is not renewed or not fully accessible
2. Programs are not able to coordinate to achieve scale
3. Cities and agencies do not adopt codes/regulations
4. Programs are unsuccessful in delivering cost reductions
5. Supply chains do not scale to meet demand
6. Additional value streams are not realized (DR, LCFS)
7. Interest rates make consumer finance too expensive
8. Capital for aggregate project finance cannot be secured 133
Policy Needs
Regional and State
Peninsula Clean Energy
Key Regional and State Policies
Category Objective Target
Overall Influence rates to improve economics Lowering T&D rates incl. exploring:
• Marginal rates for incremental electrification load
Buildings Phase out gas appliances Local code requirements (new & existing) State code requirements (new & existing)
AQMD NG standard
CARB ban on NG appliances
Ensure availability of scaled finance Capitalization of statewide low-cost finance facility Tariff On-Bill
Improve economics State incentive support (continue & expand) Transportation Phase out of gas vehicles New gas car ban by 2035 CARB (-done-) Model credits - Increased EV model availability, esp. low MSRP (in CARB AC2) Used EV incentive program (done)
Used car buybacks, early retirements
Improve economics State incentive support (continue & expand) Charging access State/local codes (new & existing)
Increased state support (all charging)
135
Peninsula Clean Energy
Additional Regional and State Policies
136
Category Objective Target
Workforce Increase trained workforce Increase diversity and underserved community training for building and transportation electrification
Transition legacy sectors Support retraining programs
Grid Grid readiness Resiliency for electric-only homes, V2B Distribution interconnection timelines
BTM resources compensation, load shaping, dispatchability Gas System Reduce investment in gas infrastructure
Gas legacy cost management
Limit expansion and minimize continued investment
Shift capital from gas grid to electric grid
Oppose gas cost-shift to electric ratepayers
Oppose enhancements & requirements, esp ratepayer funding Program Concepts
Building on PCE's Strong Program
Foundation
137
Peninsula Clean Energy
Impacts & Additionality
138
Advancing
Innovation
Technology
Methods
Data
Shape
Policy
Reach
Codes,
CALGreen,
CPUC, etc.
Influence
Individual
Decisions
Incentives
Tech Assist
Education
• Not all impacts are measurable
• Not all actions are additional
• No program stands alone, all
partner (state, etc.)
• Early action paves way for
state and national action
Peninsula Clean Energy
Market Transformation – Considerations
139
• Needs change over time as
market matures
• Initial emphasis is to build
momentum
• Some segments will develop
market momentum (EVs) but
policy support is key
• Over time increase emphasis on
low-income and target barriers
• Areas that are more difficult are
typically more “additional” (ex:
multi-family EV charging)
100
75 50
25 0
Market share
%
Innovators
2.5 %
Early
Adopters
13.5 %
Early
Majority
34 %
Late
Majority
34 %
Laggards
16 %
Peninsula Clean Energy
Decarbonization Programs
1. Building Electrification
o Flexible incentives
o High touch support
o Links to finance
2. Reach Codes & Other Local
Policies
o Continue new construction
o Support existing buildings
o Ensure programs support policies
140
3. Transportation Electrification
o Vehicle Incentives
o EV Charging (esp. MUD)
o Fleets & Alternative Mobility
4. PCE as Conduit to Capital
o On-Bill Finance
o Information Conduit & Credit
Enhancements
o Project Finance
Peninsula Clean Energy
Buildings Electrification
1. Flexible Incentives
o All measures, incl. prewiring and panels
o Broader building segments
o Integrated load shaping & solar+storage
options
2. High touch support
o Advanced “right-sizing” design
o One-stop shop, hotline assist, turnkey option
o Procurement aggregation to lower costs
o Greater contractor support
3. Links to Finance
o Specific linkages by customer segment
141
Peninsula Clean Energy
Reach Codes and Other Local Policies
1. Continue to Support New Construction
o Re-adopt and increase jurisdictions
o Remove exemptions and expand building types
o Progressive increase in EV charging capacity as
needed
2. Support Existing Building Policy
o Adopt no-cost and low-cost measures first
o Adopt new measures as programs and funding
become available
o Increase city count over time
3. Build Programs to Support Policy
o To support local reach code adoption
o To support BAAQMD goals
o Work with state and federal agencies to leverage
funding streams
142
Peninsula Clean Energy
Transportation Electrification
1. Vehicle Incentives
o Low income used EV incentives with tech. assistance
o Integrated load shaping
2. EV Charging
o Technical assistance and incentives for multi-family and public agency parking, “right-sizing” design
o Incentives in other market segments taper over time
o Integration with SFH whole-home solutions (and V2H
resiliency as appropriate)
o Contractor training for grid & load mgmt. solutions
3. Fleets & Alternative Mobility
o Local government and small commercial fleet incentives and technical assistance
o E-bikes and, until state EV requirements come into
effect, ride-hailing
143
Peninsula Clean Energy
PCE as Conduit to Capital
1. On-bill finance (OBF) from PCE
o Limited scale 0% interest credit for any customer
o Could expand to include third-party capital
2. Provide customer information on third-party finance
o Guidance on consumer credit, including point of sale
3. Advocate for state credit enhancements
o Foster credit enhancements to lower credit cost
4. Aggregate residential project finance (under study)
o Adapted from Government Solar
o Target lowest income customers without capacity for debt or added cost
o PCE fully funds installations using external capital, repays capital under long term plan
o Customers assume no debt or added expense
144
Scaling & Partnerships
We're Not In This Alone
145
Peninsula Clean Energy | 146
Lowers
Costs
Increased
Manufacturing
Increase
Demand
Lowers
Costs
Increased
Manufacturing
Increase
Demand
Lowers
Costs
Increased
Manufacturing
Increase
Demand
Market Transformation: Generating Scale
Policy
Intervention
Policy
Intervention
Peninsula Clean Energy
Leverage & Replicability
147
Local
Governments
State &
AQMD
Capital
Providers
Private
Companies
CCAs
Local codes
& policies
Policies &
Incentives
Financial
Tools
Products &
Services
Best Practices
& Partnerships
Peninsula Clean Energy
Acting with Others
148
Transportation Buildings
Next Up: Capital Providers
Cities
Private
Companies
Private
Companies
Peninsula Clean Energy
Objectives
• Policy advocacy
• State and Federal funding
• Communications
• Standardized metrics & timelines
• Sharing analysis and equity strategy
• Coordinated implementation
Intentional coalition of three main countywide Board organizations towards carbon neutrality 149
SMC Carbon Neutrality Action Plan
Peninsula Clean Energy
Replication
| 150
• Develop Methods & Partners
• Technology & Technical method, Financial tools, Program models • Policies
• Partnerships
• Foster Early Market
• Generate early volume to establish initial market
• Foster manufacturer and supply chain pipeline
• Workforce
• Replicate
• Push policies and methods to peers, practitioners, and state Peninsula Clean Energy
Replication: Initial Successes
• Building Codes
o Local codes: 16 local adopters
o State codes: Single-family electrification, multi-family EV ready with power mgmt., low-power o Replicated: SVCE, EBCE, Clean Power Alliance, San Luis Obispo • EV Charging methods
o Power Management/Level 1: Adopted by CEC, PG&E, AQMD, SVCE, MCE o Advance design and technical assistance: CLEAResult with SVCE, EBCE, Palo Alto • Other Programs
o Government Solar: EBCE, CalChoice, Prime
o Portable batteries (MCE)
o Residential solar + storage (SVCE, EBCE)
o Ebikes (SCP)
o Fleets (SVCE, 3CE)
o On-Bill Finance (SCP)
o New EV Dealer Incentive (SCP)
o Low Income Turnkey (EBCE)
o Heat Pump Water Heaters (CPSF, EBCE, MCE, SCP, SVCE)
151