the class to which appointed will be granted a merit increase to the next higher step in the pay range.
Employees who are at the “B step” of the salary range or higher shall receive a merit increase to the next higher step until the top step of the pay range each twelve (12) months of actual service after receiving a satisfactory performance evaluation. Regular part-time employees shall be entitled to merit increases after receiving a satisfactory performance evaluation upon completion of not less than twelve (12) months of actual service in each step of the range.
2. An employee shall not receive a merit increase beyond the maximum step established for the job classification.
3. Merit increases shall be effective on the anniversary date (i.e., six (6) months after initial appointment to the classification at Step A and every twelve (12) months after that), regardless of the date of evaluation.
4. Pay Following Promotion:
SEIU bargaining unit employees that are promoted will be offered pay in accordance with Policy and Procedure 3.9.08. If said promotion were to occur during the 30 days prior to the date of the Employee’s Performance Review (EPR), the subsequent step increase would occur before the promotion.
8.5. Promotion in a “flex” Position
Employees under “flex” positions (assistant/associate or I/II), may request a review of their current job duties and qualifications for consideration to move to the higher level within the classification, so long as the employee has been in Step E of the lower title for a minimum of 15 months and is meeting expectations according to the prior Employee Performance Report and is not currently subject to any disciplinary or performance improvement plan and is performing the full scope of their current role and meets the minimum qualifications of the higher level classification. Employees can formally request a review of their classification with the HR Division. The HR Division shall review petitions and render a determination within 90 days of petition receipt. The HR Division will include input from the department head regarding the moving of the employee to the higher level classification.
SEIU flex positions:
Accountant I/II
Accounting Technician I/II
Assistant/ Associate Engineer
Assistant/ Associate Planner
Building Inspector I/II
Building Inspector/ Neighborhood Preservation Officer I/II Maintenance Worker I/II
Neighborhood Preservation Officer I/II
Police Records Clerk 1/11
Rent Stabilization Program Coordinator I/II
Secretary I/II
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ARTICLE 9: WAGES
i. Employees in this unit will receive a salary increase of 3% (three percent) effective the first full payroll immediately following adoption of this agreement by City Council. a. Employees in this unit will receive a one-time payment of $2000 effective the first full payroll following adoption of this agreement by City Council.
ii. Employees in this unit will receive a salary increase of 3% (three percent) effective the first full payroll following June 29, 2025.
iii. Employees in this unit will receive a salary increase of 3% (three percent) effective the first full payroll following June 28th, 2026.
Revenue Surplus Cost-Share in 3rd year:
i. If change in fund balance on audited General Fund financial statement exceeds $650,000 in fiscal year 26/27, each SEIU bargaining unit member employed at the time will receive a 1% lump sum bonus. ii. In addition, if change in fund balance on audited General Fund financial statement exceeds $2,000,000, each SEIU bargaining unit member employed at the time will receive an additional 2% lump sum bonus (a total of 3%). iii. Revenue Surplus Cost-Share milestones will be determined in December 2026 and be paid to members of this unit on January 1st, 2027.
iv. If during the term of this contract, MEA or POA reaches an agreement with the City for wages, benefits, and/or contractual enhancements above and beyond the terms of this agreement, the City will apply those enhancements to all SEIU local 521 bargaining unit employees. The cost of all economic items will be considered when evaluating enhancements in other units.
9.3. Premium Pay
The City and the Union agree to meet and confer over premium pay for the SEIU bargaining unit related American Rescue Plan Act funds and if an agreement is not reached prior of the commencement of the next MOU negotiations, then this topic will be included in those negotiations.
ARTICLE 10: HIGHER CLASS PAY
A. The parties will continue to have discussions over higher class pay in Labor Management. This provision will sunset upon the parties’ mutual agreement on a replacement to this section. 149
B. An employee who is designated by his or her department head and approved by the City Manager to work in a position in a higher classification for period of more than two (2) consecutive days shall, beginning on the third (3rd) consecutive day, be entitled to an additional five percent (5%) of salary for the remainder of the period that he or she is assigned to work in the higher classification.
C. An employee on an out of class assignment shall receive the upgrade rate for all standby duty and call-back overtime pay earned while working out of class.
D. An employee who works in a higher classification for more than thirty-one (31) days shall be entitled to pay at either the lowest step of the salary range for the position in which he or she is working or 5% of salary, whichever is greater. In addition, the employee’s paid time off shall be compensated at the pay rate of the higher classification.
ARTICLE 11: HOURS OF WORK
11.1 Hours of Work
A. Regular Workweek
The regular workweek for bargaining unit employees shall consist of forty (40) hours within a seven (7) day workweek which begins Sunday morning at 12:00 a.m. and ends the following Saturday night at 11:59 p.m. The regular workweek for bargaining unit employees shall consist of five (5) consecutive days served in units of eight (8) hours.
Most City employees work from 8:00 am to 5:00 pm with one (1) hour meal period.
Employees in the maintenance division work from 7:30 a.m. to 4:00 p.m. with a thirty (30) minute meal period. However, employees may be assigned to different schedules based on operational need. The workweek for employees on an alternate work schedule will be set forth in a letter establishing the alternate work schedule.
B. “Flex” Hours
With the approval of their supervisor, employees assigned to work off hours, such as attendance at evening meetings or early morning training, may flex their schedules to accommodate the additional work, so long as the “flexed” hours occur within the same workweek. If the employee’s request to flex his or her schedule is denied, the employee may appeal the denial to his or her Department Head.
C. Alternate Work Schedules
The City may establish alternate workweeks (including 4/10, 9/80 or other schedules) for individuals or groups of employees by providing employees with written notice. The City and Union agree that the availability of alternate work schedules may be a valuable benefit to workers and the City. Alternate work schedules requests may be initiated by employee(s) or at the initiative of the City. Alternate work schedules must be recommended by the Department/Division Manager and approved by the City Manager, with the needs of the City, service to the public, and the needs of the employee(s) being considered. At the request of either party, the parties will meet and confer over the establishment of alternative work schedules in specific work locations. Should a 150
department or division establish an alternative work schedule as a result of meet and confer, the City will notify the Union of any issues with the alternative work schedule as well as any plans to eliminate the schedule.
In all decisions regarding alternative work schedules, the City Manager or designee’s decision will be final.
D. Rest Periods
Bargaining unit members will normally be granted and take a rest period of fifteen (15) minutes during each four (4) consecutive hours worked. These rest periods are considered time worked for pay purposes. For employees in the field, rest periods must be taken at the employee’s work area, provided that the work area is equipped with a public or City restroom, potable water, and shaded area, or at the closest facility that is equipped with a public or City restroom, potable water, and shaded area.
11.2 Overtime
Overtime is to be paid after forty (40) hours worked in one (1) work week. Overtime is paid at the rate of one and one-half times the employee’s regular rate for Fair Labor Standards Act (“FLSA”) purposes. The City will compute the regular rate, including standby pay, in accordance with the FLSA. Employees may be compensated with Compensatory Time Off (CTO) at the rate of one and one-half hours per hour worked.
However, employees may not accrue a CTO balance of more than eighty (80) hours.
11.3 Call Back
Workers who are called back after leaving work at the end of a normal working day shall be paid a minimum of three (3) hours at the overtime rate per section 11.2 (Overtime). If the employee works more than three hours during a call back, the employee shall be paid for his or her actual time worked.
If the employee responding to call back receives a second, third, or more calls within 24 hours, the employee receives the actual time spent on the additional calls.
Callback pay does not apply to incidental work performed without returning to the workplace. Employees will be paid for actual time spent on incidental work required by a supervisor, so long as the work exceeds ten (10) minutes. Incidental work in excess of ten (10) minutes will be recorded in quarter hour increments. Examples of incidental work include periodic phone calls, e-mails, and remote monitoring of systems.
11.4 Rest Periods After Extended Shift
A worker who works more than fourteen (14) consecutive hours during a twenty-four (24) hour period shall be entitled to receive an eight (8) hour rest period before returning to duty. Such rest period shall commence when the worker goes off duty. Should the eight (8) hour rest period extend beyond the starting time of the worker's regular shift, the worker shall be required to work only the remainder of the shift.
11.5 Standby Pay
With the written approval of the City Manager, Department Heads may assign workers to standby duty.
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Workers shall be paid an hourly rate of $3.50 per hour for time they are required to be on standby. Compensation for standby shall be paid only for those hours on, which a Department Head actually assigns the employee to standby duty. Employees are not entitled to standby pay for any hours when they are otherwise on paid status (e.g., working their normal shift, overtime, or callback).
Nothing in this section shall be deemed to require any Department Head to assign employees to standby duty. However, when the Department Head determines standby duty is appropriate, employees will be permitted to volunteer for standby if they meet the requirements (including response time) established by the Department Head. For rotational standby lists based on a job classification, absent special circumstances approved by a Department Head or Division Manager, all employees in the classification, shall participate in the standby rotation list.
The parties understand that stand-by compensation includes pay for incidental work performed while on standby. Examples of incidental work include periodic phone calls, emails, and remote monitoring of systems.
ARTICLE 12: ROTATION OF OVERTIME AND CALLBACK
Overtime and callback shall be assigned on a rotational basis except when management determines that the application of this provision would result in the assignment of an employee without special skills or training to perform the work with a satisfactory level of services. Hours, selection, and time off shall normally be assigned on a first-come, first served basis. However, seniority shall be used as a tiebreaker.
ARTICLE 13: BILINGUAL EXAMINATION AND DIFFERENTIAL
13.1 Bilingual Differential
Employees who are assigned to job duties requiring the use of bilingual skills are eligible to receive $50.00 per pay period. No employee shall be required to use bilingual skills who is not compensated under this section.
13.2 Eligibility
Bilingual Differential shall be available only to employees who are regularly required to speak, read, or translate in a language other than English in order to perform assigned job duties arising during the normal course of work.
13.3 Examination Process
The City shall establish a test for Bilingual Differential. This test shall include a written and verbal certification, including translation, given by an individual or entity designated by the City. The Human Resources Department shall be responsible for overseeing the administration of the test and certifying test results.
Eligible bargaining unit members may request to take the Bilingual Differential test by submitting a request in writing to the Human Resources Department. Within thirty (30) days of receiving such a request, the Human Resources Department shall decide, in its sole discretion, whether the employee is eligible for Bilingual Differential based on whether bilingual skills are essential to successful performance of the employee’s 152
assigned job duties and shall issue notice of its decision to the employee. The decision of the Human Resources Department to arrange for testing shall be final.
If the Human Resources Department approves an employee’s request for bilingual testing, the Department shall arrange for testing to be completed within thirty (30) days of the approval. The City will pay for the initial test. The City will also pay for one retest.
13.4 Effective Date
Bilingual Differential shall be paid beginning on the first day of the first pay period following the Human Resources Department’s certification that the employee has passed the test for Bilingual Differential and otherwise met the requirements to receive Bilingual Differential. Bilingual Differential shall be based solely on the date of the Department’s certification and shall not be paid retroactively.
ARTICLE 14: UNIFORM BOOTS AND LICENSES
14.1 Uniforms
The City may require bargaining unit employees to wear uniforms. Except as provided herein, bargaining group employees who are required to wear uniforms, rain gear, or safety gear will be provided with the appropriate uniform items. The City shall continue to provide laundry service for uniforms provided to the Maintenance Workers I/II and III.
So long as uniforms are required, the City shall provide the initial three (3) shirts, two pants, boots, jacket, belt and nameplate for the Environmental Services Aide, Community Services Officer and Neighborhood Preservation Officer I/II, and Building Inspector/ Neighborhood Preservation Officer I/II Classifications who are required to wear uniforms and shall pay $175 every six months for the care and replacement of City-required uniforms. Newly hired or newly eligible employees will be prorated on a monthly rate for this allowance.
For employees who already received additional City provided shirts, the City will provide the net difference of the shirts provided to new employees.
So long as uniforms are required, the City shall provide the initial five (5) uniform shirts for Police Records Clerks I/II and Property and Evidence Technician, if required to wear uniforms, and shall pay $175 every six months for the care and replacement of City-required uniforms.
For employees who already received additional City provided shirts, the City will provide the net difference of the shirts provided to new employees. Newly hired or newly eligible employees will be prorated on a monthly rate for this allowance.
In the event, the City ceases to require uniforms or begins to provide uniforms for any of these classifications, the uniform allowance shall cease.
City-provided uniforms and equipment are to be used for City business only. In the event, an employee damages, destroys, or loses City-provided equipment or uniform while the equipment or uniform is being used for non-City business, the employee will reimburse the City for the repair or replacement cost of the item and may be subject to discipline. 153
In the event an employee's uniform is damaged and/or worn, and/or unsafe as determined by the City, the employee may request that damaged uniform be replaced provided:
A. The division head/manager concludes the uniform is damaged and needs to be replaced.
B. The employee furnishes proof of purchase for the damaged uniform. Purchase shall have been within the current fiscal year.
C. The employee has fully expended the uniform allowance. If not fully expended, the employee must use the balance of his/her allowance for the purchase of a replacement uniform.
Requests for replacement shall be made to the City in writing on a City provided form. The City shall normally respond to such requests within five (5) working days. Denials may be appealed to the Human Resources Manager in writing within five (5) working days. The decision of the Human Resources Manager is final and shall not be appealed. Denials of replacement equipment shall not be subject to the grievance procedure.
14.2 Boots
Employees represented by this bargaining group who are required to wear protective footwear will be reimbursed up to $250 per year for the purchase of safety boots approved by OSHA/ASTM, orthopedic insoles, and ergonomic support inserts.
In the event an employee's shoes are damaged and/or worn, and/or unsafe as determined by the City, the employee may request that damaged shoes be replaced provided:
A. The division head/manager concludes the shoes are damaged and need to be replaced.
B. The employee furnishes proof of purchase for the damaged shoes. Purchase shall have been within the current fiscal year.
C. The employee has fully expended the boot allowance. If not fully expended, the employee must use the balance of his/her allowance for the purchase of replacement shoes.
Requests for replacement equipment shall be made to the City in writing on a City provided form. The City shall normally respond to such requests within five (5) working days. Denials may be appealed to the Human Resources Manager in writing within five (5) working days.
The decision of the Human Resources Manager is final and shall not be appealed.
Denials of replacement equipment shall not be subject to the grievance procedure.
14.3 Fair Labor Standard
The parties agree that uniforms provided by the City to employees should be manufactured under a “fair labor standard.” In the event, the Union has concerns about the labor practices of a manufacturer, it will present information regarding those labor practices to the City. The City and Union will then meet to review and discuss the manufacturers’ practices and appropriate responses.
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14.4 DMV Pull Notice Program
Employees whose positions require that they operate vehicles on city business, must possess and maintain a valid California driver’s license appropriate for the job and vehicle(s) to be operated. Employees required to operate motorized vehicles while on duty must enroll in the City's department of motor vehicles employer pull-notice program.
Employees enrolled in the DMV employer pull notice program must fill out a City-specified enrollment/waiver form directing the DMV to provide the City with periodic updates of the employee's driving record.
ARTICLE 15: HOLIDAYS
15.1 Holidays Observed
The parties agree to abide by the Holidays provisions contained in Section 3.10.01 through
3.10.05 of the City’s Personnel Rules and Regulations. Defined holidays are as follows:
New Year's Day, January 1
Martin Luther King Day, 3rd Monday in January
Lincoln's Birthday, February 12
Washington's Birthday, February 22 or its legal substitute (third Monday in February) Cesar Chavez Day, last Monday in March
Memorial Day, May 31 or its legal substitute (third Monday in May) Juneteenth, June 19
Independence Day, July 4
Labor Day, first Monday in September
Veteran's Day, November 11
Thanksgiving Day, fourth Thursday in November
Day after Thanksgiving, fourth Friday in November
Christmas Day, December 25
Note: When any day recognized as a holiday falls on Sunday, the holiday shall be observed on the following Monday. When any day recognized as a holiday falls on a Saturday, the holiday shall be observed on the preceding Friday.
ARTICLE 16: LEAVE PROVISIONS
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Effective the first full payroll pay period following City Council adoption of the MOU, the City will grant employees with twenty-five (25) or more years of City service twenty (20) hours of additional leave time. This additional leave must be used by the end of 2022. Any leave not used by the end of the calendar year will be paid out in the paycheck for the last full pay period for 2022 at the employee’s hourly rate.
16.1 Vacation
A. Crediting Vacation
Full-time employees, excluding seasonal and part-time temporary, shall be credited with vacation as follows:
Minimum Continuous Service Amount of Vacation Earned Annually 0-4.99 years 80 hours (3.08 hrs bi-weekly)
5-9.99 yrs. 120 hours (4.62 hrs bi-weekly)
10-14.99 years: 160 hours (6.15 hrs bi-weekly)
15-plus years: 200 hours (7.69 hrs bi-weekly)
Vacation Accumulation
An employee with less than ten (10) years of consecutive City service shall not accumulate more than two-hundred and eighty-eight (288) hours of vacation. An employee with more than ten (10) years of consecutive City service shall not accumulate more than three-hundred and twenty (320) hours of vacation. Once the accrual cap is reached, an employee will not accrue any additional vacation until he or she reduces the accumulated hours below the accrual cap, either through usage or cash-out. An employee shall receive reasonable notice of the amount of accumulated vacation leave in advance of each anniversary date. Requests for deferring vacation use must be presented to the City Manager sixty (60) calendar days before the end of the calendar year in which the vacation leave was to be taken. In granting deferred vacation, the City Manager may specify a time within which such excess vacation leave must be used.
B. Use of Vacation
The City and Union value vacation and believe that employees’ ability to utilize vacation is an important goal. The time at which an employee may use vacation leave and the amount to be taken at any one time shall be determined by the Department Head, with particular regard, for the needs of the City and, insofar as possible, considering the wishes of the employee. Except in unusual circumstances, use of vacation leave shall be scheduled and approved in advance of the first day of absence. Approval of use of vacation leave shall be in a form and manner prescribed by the Human Resources Manager. Said approval of vacation leave shall not be unreasonably withheld.
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C. Vacation Cash-out
Members of the bargaining unit may make an irrevocable election in the prior calendar year to cash-out vacation during the month of December each year. To qualify for vacation cash-out, an employee must have more than eighty (80) hours of accrued vacation. During the term of this MOU, Bargaining unit members shall be allowed to cash out up to 80 hours of leave vacation that has accrued in the current calendar year, so long as the member maintains a balance of at least eighty (80) hours.
Elections will be cashed out in December the year following the irrevocable election.
16.2 Military Leave
In addition to any provisions outlined in Personnel Policies and Procedures Section 3.12.16, including any amendments negotiated during the term of this agreement, the City shall follow any revised federal and/or state regulations including the Military and Veterans Code of the State of California that govern the granting of military leaves of absence and the rights of workers returning from such leaves.
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16.3 Family Medical Leave Act (FMLA) and California Family Rights Act (CFRA) The City agrees to abide by all conditions provided in the federal Family Medical Leave Act and/or the California Family Rights Act.
16.4 Bereavement Leave
Bargaining unit employees shall be entitled up to three (3) calendar days of paid leave for an occurrence of death or serious illness or accident determined to possibly lead to death in the immediate family; five (5) calendar days if out of state. Additional days may be approved by the City Manager or designee and charged to the employee’s available unused leave. This leave shall not be accumulated and is in addition to sick leave and vacation benefits except where additional time off is taken as provided above.
Request for bereavement leave must be in writing, state the relationship of the family member, and be approved in advance by the Department Head and City Manager (or designee). In special emergencies, an employee may request formal approval after the fact, if approved, leave records shall be adjusted accordingly. Death following a serious illness or injury shall generally be regarded as one (1) occurrence; however, the City reserves the responsibility for determining the nature and/or severity of the illness and the amount of time the occurrence warrants.
Immediate family shall mean the following: related by blood, marriage or adoption: spouse, child, parent, sister, brother, uncle, aunt, nephew, niece, grandparent, grandchild, and cousin.
Immediate Family shall also include registered domestic partners.
16.5 Sick Leave
A. Sick Leave Certification
1. An employee who is absent on sick leave three (3) or more consecutive working days may be required to present a treating physician’s certification shall be required only upon request of the worker’s supervisor at least one day prior to the worker’s return to work.
2. If management believes there is an abuse of sick leave, the Human Resources Manager may require the worker to provide medical verification for all future sick leave absences for a period of ninety (90) days. Prior to implementing this provision, the worker and the worker's representative shall, upon request, be given the opportunity to meet with the Human Resources Manager to show cause why this provision should not be invoked. Material relating to the sick leave use will be available to the worker and his representative prior to such meeting. The sick leave verification requirement shall be in writing and shall be reviewed every three (3) months, and the worker may appeal the decision to place him or her on sick leave verification and a decision to renew the verification requirement to the City Manager. This section shall not be subject to the grievance procedure.
3. Sick Leave Accrual:
Full-Time employees shall accrue (3.70) of Sick Leave per pay period. This amount shall be prorated based on hours for employees working less than the 1 FTE. 158
B. Fitness for Duty
City-required fitness for duty examinations shall occur on administrative leave with pay.
C. Family Sick Leave
Bargaining Unit members may use up to one-half of their annual accrual of sick leave for the diagnosis, care, or treatment of an existing health condition of, or preventive care for, a member of the employee's immediate family. For the purpose of this section, the immediate family of an employee shall be as defined in the Bereavement Leave Section (Section 16.4.B).
16.6 Leave Donations
Employees shall be eligible to participate as donors and recipients in the leave donation program, which provides a mechanism for assisting employees who have exhausted paid leave due to a catastrophic illness and/or injury. This program allows a regular City employee to donate accrued vacation time hours to a specific eligible employee who has exhausted his/her own available leave balances on an hour for hour basis. Catastrophic illness or injury is defined as the employee’s own adverse medical condition which requires the employee to be absent from work for more than twenty (20) consecutive work days, or similarly debilitating illness or injury of the employee’s immediate family member who has a catastrophic illness or injury as verified by a physician’s statement.
A. To receive leave donations, an employee:
1. Must have been employed in a regular full-time position with the City for a minimum of one year; and
2. Must be absent from work due to his/her own catastrophic illness or injury for more than twenty (20) consecutive days (as verified by a physician’s statement); or be absent from work in order to attend to his/her immediate family member who has a catastrophic illness or injury (as verified by a physician’s statement); and
3. Must have exhausted all earned leave balances (including sick leave if related to the employee’s own illness) vacation; except however, donations may be made prior to all balances being exhausted, when the physician’s statement and leave balance indicate the probable exhaustion of balances within two (2) pay periods.
B. Donations
1. Are voluntary.
2. Are made from accrued Vacation balance; donations of Sick Leave are not permitted.
3. Must be for a minimum of eight (8) hours, in whole hour increments.
4. Are irrevocable.
5. Are taxable on the part of the recipient, in accordance with IRS Regulations, and are subject to withholding as required by law.
6. Donations shall be processed in the order received. However, a donor’s leave shall not be reduced until the recipient actually uses the leave. Unused donation shall remain with the donor.
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7. An employee may not donate more that eighty (80) hours to any other individual employee.
8. The total donation received into an employee’s donated leave balance shall normally not exceed 1040 hours; however, donations in excess of 1040 hours may be considered when approved by the Human Resources Manager.
9. Upon approval of the request for donations, the Human Resources Manager (or his/her designee) shall, at the employee’s request, post a notice of the eligible employee’s need for donations on departmental bulletin boards accessible to employees. Confidential medical information shall not be included in the notice.
10. Nothing in this section shall be construed to modify the employment relationship between the City and the receiving employee, or to restrict the City’s management rights. Neither shall this section modify existing City rules, policies or agreements regarding unpaid leave of absence or family leave.
“This provision (16.6) shall sunset upon the parties’ mutual agreement on a City-wide policy on Leave Donation.”
16.7 Personal Business Leave
A. Permanent (non-probationary) employees shall be entitled to a maximum of three (3) days per calendar year for Personal Business Leave without loss of pay. Such leave shall be deducted from accrued sick leave. Personal Business Leave can be taken in two (2) hour increments at a time.
B. Personal Business is defined as business of urgent and compelling importance which cannot be taken care of outside of normal working hours and which is not covered under leave provisions of this Memorandum of Understanding.
C. A worker shall notify the division/department head two (2) days before taking this leave, unless an emergency exists which prohibits the worker from providing such advance notice.
D. Personal Business Leave may only be used for personal business of urgent and compelling importance, and may not be used for recreational purposes, extension of holidays or vacation, work stoppages, or for matters of purely personal convenience.
E. At the discretion of the supervisor, a worker may also use vacation, compensatory time off to cover absences of an emergency nature. No request shall be unreasonably denied.
16.8 Jury Duty Leave
A. A bargaining unit member required to report for jury duty during regularly scheduled work hours shall notify their supervisor as soon as possible and shall be entitled to leave with pay until released by the Court provided the employee remits to the City within five (5) calendar days after receipt, all fees excepting those specifically allowed for mileage and subsistence.
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B. A bargaining unit member subpoenaed to appear in court during regularly scheduled working hours, solely as a result of employment with the City, shall receive full pay for such appearance until released by the Court provided the employee remits to the City within five (5) calendar days after receipt, all fees excepting those specifically allowed for mileage and subsistence.
C. A bargaining unit member is responsible for keeping their supervisor informed of their court schedule and must return to work when released by the Court (including partial days).
ARTICLE 17: RETIREMENT
17.1 Retirement
A. Bargaining unit members who do not meet the definition of “new member” as determined by the California Public Employees’ Retirement System (CalPERS), shall be subject to the
2.5% @ 55 retirement formula highest three years.
B. Bargaining unit members who meet the definition of “new members,” as determined by CalPERS, shall be subject to the CalPERS 2.0% @ 62 retirement formula, highest three years.
C. Bargaining unit members will continue to pay the full employee contribution established for their retirement tier (this number is set by statute; and as of the date of this agreement is 8% for classic members and ½ of the Normal Cost for “new members.”).
17.2 Credit for Unused Sick Leave
The City has contracted with CalPERS to provide service credit for unused sick leave pursuant to the Public Employees Retirement Law. To qualify for this provision, a member must retire within one hundred and twenty (120) days of separation from the City.
ARTICLE 18: GRIEVANCE PROCEDURE
18.1 Policy
This grievance procedure is intended to assure that every reasonable effort will be made to resolve problems as near as possible to the point of origin. This Article shall supersede the grievance procedure contained in Sections 3.15.01-3.15.07 of the City’s Personnel Policies and Procedures.
18.2 Eligibility to File a Grievance
A permanent classified employee or his or her Union representative may submit a dispute according to this procedure. The Union may utilize this procedure in the event a dispute is not directly related to an individual employee and complies with all the provisions of this Article. 161
18.3 Definition
A grievance is defined as a dispute involving the interpretation, application or alleged violation of:
A. This Memorandum of Understanding; or
B. The City Personnel Rules affecting classified employees where the provision in dispute is within the scope of representation and not otherwise superseded by the provisions of this Agreement.
C. No dispute shall be considered a grievance if it does not conform to this definition. Where the City Codes or Rules and Regulations provide another appeal process, the Union shall choose which process is to be used but shall not use both.
18.4 Grievance Procedure
A. Step 1 - Informal Discussion (Immediate Supervisor/Division Head) Within ten (10) working days of the occurrence of an act in dispute, an employee shall discuss it with his/her immediate supervisor, who shall investigate and attempt to resolve the matter. The supervisor or designee shall give the employee an oral reply within ten (10) working days after the discussion. If the employee is not satisfied with the response, he/she may proceed to Step 2. In the event, the Division Head is the Employee’s direct supervisor, the Informal Discussion shall be with the Division Head or designee.
B. Step 2 – Formal Written Grievance (Division Head/Department Head) Any dispute not resolved at Step 1 may be submitted to the Division Head in writing citing the specific provision of the rule in dispute and stating the desired solution within ten (10) working days after the supervisor’s response. A copy shall be provided to the supervisor. Ten (10) working days thereafter, a meeting shall be scheduled with the employee by the Division Head or designee. The Division Head or designee shall give the employee a written reply within ten (10) working days after such meeting and file a copy with the Human Resources Manager. If the employee is not satisfied with the response, he/she may proceed to Step 3.
In the event, the Division Head is the Employee’s direct supervisor, the Step 2 Formal Written Grievance shall be filed with the Department Head. Employees who are supervised directly by their Department Head shall bypass Step 2 and proceed directly to Step 3.
C. Step 3 – Human Resources Manager
Any dispute not resolved at Step 2 may be submitted in writing to the Human Resources Manager within ten (10) working days after the Step 2 Response, with a copy to the Department Head and Immediate Supervisor. Within ten (10) working days thereafter, a meeting shall be scheduled with the employee by the Human Resources Manager or designee who shall attempt to resolve the matter.
The Human Resources Manager or designee shall give the employee a written reply within ten (10) working days after such meeting and file a copy with the 162
City Manager. If the employee is not satisfied with the response, he/she may proceed to Step 4.
D. Step 4 – City Manager
Any dispute not resolved at Step 3 may be submitted in writing to the City Manager within ten (10) working days after the Step 3 Response, with a copy to the Human Resources Manager and the Department Head. Within ten (10) working days thereafter, a meeting shall be scheduled with the employee by the City Manager or designee who shall attempt to resolve the matter. The City Manager or designee shall give the employee a written reply within ten (10) working days after such meeting. If the employee is not satisfied with the response, he/she may request that the Union proceed to Step 5.
E. Step 5 – Arbitration
If the Union is not satisfied with the City Manager or designee’s response, it may appeal the dispute to arbitration in writing within ten (10) calendar days after the date of the Step 4 response. Within ten (10) calendar days of the appeal, the parties shall meet to select an arbitrator. If the parties are unable to reach mutual agreement on an arbitrator, the parties shall jointly request a list of seven (7) labor arbitrators from the California State Mediation Service and shall alternately strike names until only one name remains. The Union shall strike first for the initial arbitration under this Agreement and the parties shall alternate the first strike thereafter.
Costs for the arbitration (including arbitrator fees and any court reporter) shall be shared equally by the parties. The parties shall each pay for their own representative. The decision of the arbitrator shall be final and binding upon the parties.
18.5 Service of City Responses
Copies of all City responses shall be sent to the Grievant, Local 521, and to the Grievant’s representative at the address indicated on the grievance form.
18.6 Settlement of a Grievance
Failure of the City to adhere to the designated time deadlines shall be deemed a denial and the Grievant may appeal the grievance to the next level. Failure of the grievant to adhere to the time deadlines shall mean that the grievance is settled. The grievant and the City may extend any time deadline by mutual agreement.
18.7 Representation
An employee may have a representative of his/her choice present at all stages of the grievance procedure.
18.8 No Retribution
An employee shall not be penalized in any way for availing himself/herself of this procedure. 163
ARTICLE 19: DISCIPLINE
19.1 Discipline
The City may reprimand, place on disciplinary probation, discharge, suspend, reduce salary, or demote any worker who has completed the specified probationary period for cause, including, but not limited to:
● Dishonesty,
● Insubordination,
● Immoral or unprofessional conduct,
● Intoxication or the use of controlled substances while on duty, ● Incompetence,
● Willful negligence,
● Excessive absences and/or tardiness,
● Inexcusable absence without leave,
● Misuse of City property,
● Failure to maintain licenses or certificates required by law, District requirements, or job description,
● Failure to perform work as required, or
● Failure to comply with or violation of the City's reasonable rules regarding safety, conduct and operations.
19.2 Right to Representation
Except in situations requiring immediate action, such as but not limited to, allegations of theft or urgent safety matters, a worker shall be entitled to a steward of his or her choice at an investigative interview that the worker reasonably believes may result in disciplinary action. The worker may request a representative either during or prior to the interview, and must make a selection, of which steward will be representing him or her within a reasonable time. The worker’s choice of representative will not be permitted to delay the investigation if the resulting delay would harm the investigation.
19.3 Procedure
1. Notice of Intent to Discipline
A Notice of Intent to discharge, demote or suspend must be served on the worker and the Union in person or by certified mail.
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The Notice shall include:
1. A statement of the nature of the disciplinary action;
2. The effective date of the action;
3. A statement of the cause thereof;
4. A statement of the act or omissions upon which the causes are based;
5. A statement of the worker's right to respond to the charges, either orally or in writing, prior the action becoming effective; and
6. A statement advising the worker of the right to Union representation.
The Notice shall be accompanied by all documentation upon which the City relied in determining the need for disciplinary action.
2. Employee Response/Skelly Meeting
The worker may respond to the Notice of Intent to Discipline either in person or in writing.
A. If the worker elects to respond in writing, the worker or his representative must file the worker’s response within ten (10) workdays after service of the Notice of Intent to Discipline.
B. If the worker elects to respond in person, the worker or his or her representative must request a meeting with the Department Head within ten (10) workdays after service of the Notice of Intent to Discipline. The Department Head shall hold a meeting with the employee within twenty (20) days of the worker’s request.
3. Notice of Discipline
If the Department Head determines that discipline is warranted, the Department Head shall issue a written Notice of Disciplinary Action within ten (10) workdays after either the filing of a written response or the date of the Skelly Meeting. If the worker did not request a meeting or file a written response, the Department Head’s decision is due twenty (20) workdays after the service of the Notice of Intent to Discipline. The Department Head shall furnish a copy of the Notice of Disciplinary Action to the Union and appropriate Steward.
4. Appeal to Human Resources Manager:
A. In the event a worker feels that the disciplinary action is unjust, the worker or his or her representative may appeal the action to the Human Resources Manager.
An appeal of the Notice of Disciplinary Action must be in writing and must be filed with the Human Resources Manager within ten (10) workdays of the date of service of the Notice of Disciplinary Action.
B. The Human Resources Manager or designee shall hold an appeal meeting within twenty (20) days.
C. For any matter not subject to binding arbitration pursuant to Section 5, below, the Human Resources Manager or designee’s decision shall be final and binding.
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D. The Human Resources Manager shall issue his/her decision within ten (10) workdays after either meeting with the worker or receipt of the arbitrator’s report, whichever is later.
E. Except for matters which are subject to arbitration pursuant to Section 5, the decision of the Human Resources Manager shall be final.
5. Arbitration of Serious Discipline
In the event a worker feels that a discharge, suspension of three (3) or more days, or a reduction in pay is unjust, the Union shall have the right to appeal the case to binding arbitration. Any appeal under this provision must be filed within twenty (20) days after receipt of the Human Resources Manager’s decision. The expenses of any arbitration convened pursuant to this section, including the fee for the services of the Arbitrator and court reporter, shall be borne equally by the parties. All other expenses which the parties may incur individually, including witness and attorney fees, are to be borne by the party incurring such expenses.
6. Removal of Disciplinary Notices
Employees may request in writing to the Human Resources Manager, with a copy to Union Representative, that disciplinary notices which are three (3) or more years old shall be removed and destroyed provided the following conditions are met:
1. The file does not contain subsequent notice of discipline or records of disciplinary action.
2. The employee has not been notified in writing of pending disciplinary action at the time the written request to remove said notice of discipline is received by the Human Resources Manager.
ARTICLE 20: MEDICAL INSURANCE
A. The City shall pay up to a maximum of sixty-five percent (65%) of the premium of the Kaiser Permanent HMO for employees electing to have dependent medical coverage under the City’s existing medical plans. The employee shall be responsible for the remaining premium for the elected medical coverage.
B. The City shall pay up to one hundred percent (100%) of the premium for Kaiser Permanente HMO Employee only.
C. Continuing from January 2024 and incorporated in the MOU starting July 2024, the City will make a semi-monthly contribution of $83.33 towards HSA for employees that enroll in Kaiser Permanente HSA high deductible plan. Equivalent to approximately $2,000 annually.
D. Benefits Committee
During the term of this MOU, the City and Unions shall convene the Benefits Committee for the following purposes:
1. To continue ongoing discussions regarding cost structures as a part of an overall strategy to maintain balanced enrollment in City plans,
2. To investigate the feasibility of revising medical and/or dental coverage and/or plan(s) and strategies to participate into benefit insurance cost 166
structure, and
The benefits Committee will commence no later than September 30,2022. The Committee will be composed of City labor representatives, not to exceed four (4) representatives and four (alternates) from each participating labor organization and four (4) representatives. These names will be provided to the City no later than August 31, 2022.
ARTICLE 21: DENTAL INSURANCE
21.1 Employee Coverage
The City agrees to provide a dental insurance plan or plans (if more than one is available) for its employees covered by this bargaining unit. The City shall contribute the full cost of the employee-only level for the dental plan selected by the employee. The contributions are based on regular full-time employment; part-time employees shall receive a prorated contribution based on their percentage of full-time equivalent.
Maximum Delta Dental payout per calendar year shall be $2,000.
Co-payment for Crown and Cast Restoration, and Prosthodontic benefits shall be 80/20; with the twenty percent (20%) share the responsibility of the employee.
21.2 Dependent Coverage
Employee may ensure their eligible dependents (including registered domestic partner as defined below) under the dental plan(s) in accordance with the rules and regulations applicable to obtaining said dependent coverage. Domestic partner (as defined by State law), shall be included as “eligible dependent” pursuant to Article 16.4B.
ARTICLE 22. STATE DISABILITY INSURANCE AND LIFE INSURANCE Effective July 1, 2007, bargaining unit employees shall be enrolled in the State Disability Insurance (SDI) system administered by the California Employment Development Department. Coverage shall be limited to the “State Plan” and shall not include any additional Voluntary plan design. SDI premiums shall be 100% employee-paid on an after-tax basis.
Payment shall be made by mandatory payroll deduction for every bargaining unit employee.
Bargaining Unit employees may elect to supplement their State Disability Insurance (SDI) benefits by integrating accrued leave (vacation, sick leave or compensatory time off). It is understood that the combined SDI benefit and use of leave credits cannot exceed the employee’s regular monthly net pay.
Employees under this bargaining unit are provided by the City with a group life insurance policy of $25,000. Should a change to the covered amount be made outside of the MOU negotiations process, both sides agree to implement change through the use of a side letter through the meet and confer process.
ARTICLE 23: RECLASSIFICATION
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A. When necessary, the Union may request that the City reclassify bargaining unit positions.
These requests shall be made in writing and shall indicate the position’s current classification, a detailed statement of the reasons that the reclassification is appropriate. The Human Resources Division shall respond to the reclassification requests in writing not later than three (3) months after the submission of the request, unless this deadline is mutually extended by the parties. The Human Resources Manager or designee will meet with the Union and each incumbent employee during the process.
B. In the event, the Human Resources Division determines that the reclassification is not appropriate, the Union may appeal the decision to the City Manager in writing, not later than ten (10) calendar days after the date of the Human Resources Division’s decision. The City Manager shall render a decision within ten (10) calendar days of the appeal. The decision of the City Manager shall be final. This section is not subject to the grievance procedure.
C. Reclassifications will be effective either the date of the Human Resources Division decision or three (3) months after the submission of the request, whichever is earlier.
D. Employees who are reclassified through the City’s reclassification process to a higher classification will not be subject to the probationary period.
ARTICLE 24: POSITION RECRUITMENT
A. Postings
1. Open Recruitment for Promotional opportunities for permanent city positions in classifications within the representation unit will be posted at all work locations and on the City’s website for at least fourteen (14) calendar days prior to closing applications and shall be mailed to the Union and e-mailed to bargaining unit members with City email accounts.
2. “Internal Only” recruitment for promotional opportunities for permanent city positions in classifications within the representation unit will be posted at all work locations for at least seven (7) calendar days (Monday through Friday) prior to closing applications and shall be mailed to the Union and e-mailed to bargaining unit members with City email accounts.
3. Such postings shall include a description of the type of examination and screening process that will be used in filling the position. Any test given shall relate to the skills, knowledge, and abilities necessary to perform the job.
B. Mandatory Interviews The top two (2) permanent bargaining unit members applying for promotional opportunities for classifications within the representation unit and who meet the minimum qualifications for the position will be interviewed regardless of the number of interviewees otherwise requested by the hiring department. When possible, the top two (2) permanent bargaining unit members applying for promotional opportunities outside of the representation unit and who meet the minimum qualifications for the position will be interviewed.
C. The List
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Once a list of reachable candidates has been generated and upon request by any Department Head, the Human Resources Manager shall refer to the requesting Department a list of the top seven (7) candidates as well as a list of all internal applicants on the recruitment list. The Department Head shall have the discretion to interview any of the candidates whose names have been referred by the Human Resources Manager.
ARTICLE 25: TRAVEL EXPENSES
Pursuant to City Policy, the City will advance 75% of the allowable reimbursement for meals consumed by bargaining unit members during travel on City business. For reimbursement exceeding the 75% advance, bargaining unit members are still required to submit receipts for meal reimbursement upon return from travel and will be reimbursed up to the allowable amount after submission of receipts.
If a bargaining unit member is required to use his/her personal vehicle for pre-approved workrelated travel purposes, the City shall pay said employee mileage at the current IRS rate.
ARTICLE 26: TUITION REIMBURSEMENT
A. The City shall provide tuition reimbursement for employees, subject to the limitations below of five hundred dollars $600 per fiscal year paid as taxable wages. Limited to the unit cost of the class and required textbooks (no supplies, no parking or mileage reimbursement). Coursework must be on the employee’s own time.
B. Tuition reimbursement shall be available only for coursework taken at an accredited institution and is only available for coursework in which the employee receives a passing grade. These funds are subject to budgetary constraints and may not be available from year to year.
C. All eligible employees in this unit are eligible to receive the $600 reimbursement, regardless of total cost to the City. In the event that the bargaining unit has not exhausted $5,000 in reimbursement by May 31 of any fiscal year, any unit member who has received the maximum individual reimbursement ($600) but has expended more than that amount on textbooks or tuition for approved coursework may apply to the City Manager for reimbursement of the remainder of the appropriate expenses up to $1000 maximum per individual. This additional reimbursement is on a first come, first serve basis and will be granted up to a total $5,000 per fiscal year for the entire unit. Workers must submit a request for additional reimbursement on or before May
31. If the balance remaining in the reimbursement pool is not sufficient to pay the additional expenses for applications received by May 31, the pool shall be distributed equally to each applicant up to the amount of each reimbursement request.
ARTICLE 27: LABOR-MANAGEMENT COMMITTEE
A. Purpose: A labor/management Committee shall be created. The purpose of the Committee shall be to examine labor-management issues. The committee shall also monitor labor-management issues that have not yet risen to the level of grievances.
B. Composition: The Committee will be composed of the HR Manager or designee, up to two (2) management representatives, the Local 521 staff person, and up to three 169
(3) Local 521 members.
C. Meeting Schedule: The Committee will commence meeting after ratification of the Agreement. The Committee will meet at least bi-monthly during the term of the agreement with both parties being considerate of bargaining and benefits committee commitments.
D. An agenda will be shared at least 48 hours prior to the meeting. A follow up meeting may be scheduled within 30 days if all items on the agenda are not discussed (ex. Not enough time was allotted) subject to availability of both parties.
ARTICLE 28: LICENSES AND CERTIFICATES
Workers who are required by State and/or Federal agencies to be licensed or secure a certificate shall be reimbursed for the fees for the licenses or certificates. This provision excludes licenses required by the Department of Motor Vehicles.
ARTICLE 29: Teleworking
SEIU bargaining unit employees have the right to telework when feasible according to the needs of the City and can request to work remotely/telework by writing to their direct supervisor. The parties shall follow the City’s personnel rules regarding teleworking, which is subject to meet and confer prior to implementation.
ARTICLE 30: Repayment Authorization
When it is discovered that an employee has been overpaid, regardless of cause, the City shall have the ability to recover those monies via a repayment agreement (see Appendix B). Such repayment agreement will not extend longer than the amount of time that the overpayment occurred, unless the parties mutually agree to another timeline.
In the event a payroll error has been made, including but not limited to the payment of an employee's salary, overtime payment or leave accruals, balances or usages, the City shall, for purposes of future compensation, adjust such compensation to the correct amount, and give written notice to the employee. The city shall provide documentation to back-up the conclusion that there has been an overpayment.
In the event an employee received an overpayment, the City and employee shall agree upon a repayment schedule utilizing one, or a combination of, the following elements:
(1) Lump sum payment by the employee;
(2) A one-time deduction from available accrued leave balances except sick leave equivalent to the overpayment at the employee's current hourly rate; (3) A repayment schedule through payroll deduction; and/or (4) Other means, as may be mutually agreed between the parties.
No action shall be taken to enforce repayment of an overpayment, or to correct an underpayment, unless action is taken within two (2) years from the ending date of the pay period in which the error is discovered. "Action is taken" as used in this Section shall mean written notice to the employee in the case of an overpayment or written or oral notice to the City 170
in the case of an underpayment error.
ARTICLE 31: SAVINGS CLAUSE
If any article or section of this contract or any rider thereto should be held invalid, illegal or unenforceable by operation of law or by any tribunal of competent jurisdiction, or if compliance with or enforcement of any article or section should be restrained by such tribunal pending forma1 determination as to its validity or legality, the remainder of this contract or any rider thereto, or the application of such article or section to persons or circumstances other than those which it has been held invalid or as to which compliance with or enforcement of has been restrained, shall not be affected thereby.
It is further the intent that should any article or sections of this contract be held invalid, illegal or unenforceable and inoperable, that article or section shall be renegotiated in an attempt to provide validity, legality and acceptability to such section or article.
31.1 Amendments to Agreement
This Agreement may be amended only by the mutual written agreement of the parties. Such amendments shall be lettered, dated, and signed by the parties and shall constitute a part of this Agreement.
ARTICLE 32: TERM
The term of this MOU shall be from August 1, 2022 to Dec 31, 2023 equivalent to sixteen months. Ninety days prior to the expiration the parties shall meet and confer, at the request of either the City or the Union, to amend or extend this Memorandum of Understanding.
ARTICLE 33: AUTOMATIC PAYROLL DEPOSIT
All employees covered by this Agreement shall participate in the City’s automatic payroll deposit program. Participation shall mean the employee’s execution of a payroll authorization form and submission of a voided check or savings slip to the Finance Department. It shall be the employee’s choice as to which financial institutions(s) he/she designates as the institution(s) receiving the payroll funds.
When the authorization form is properly executed and filed with the Finance Department, the City shall automatically deposit in the employee’s designated financial institution account(s) the net amount of pay each designated biweekly payday.
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APPENDIX A
SERVICE EMPLOYEES INTERNATIONAL UNION – MISCELLANEOUS UNIT
1. Accountant I
2. Accounting Technician I
3. Accounting Technician II
4. Accountant II
5. Administrative Grants Coordinator (NEW CLASS)
6. Administrative Assistant
7. Assistant Engineer
8. Assistant Planner
9. Associate Engineer
10. Associate Planner
11. Building Inspector I
12. Building Permit Technician
13. Code Enforcement Officer I
14. Code Enforcement Officer II
15. Community Services Officer
16. Environmental Services Aide
17. Electrician
18. Engineering Technician
19. Kitchen Aide (Part-Time)
20. Maintenance Worker I
21. Maintenance Worker II
22. Maintenance Worker III
23. Nutrition Site Supervisor (Part-Time)
24. Office Assistant
25. Police Records Clerk I
26. Police Records Clerks II
27. Police – Property and Evidence Technician
28. Police Crime Analyst
29. Public Works Inspector
30. Rent Stabilization Counselor I/II
31. Secretary I
32. Secretary II
33. Shuttle Van Driver (Part-Time)
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APPENDIX B
Repayment Authorization Form
CITY OF EAST PALO ALTO
PAYMENT PLAN AUTHORIZATION FORM
Employee Name:
AMOUNT OWED TO THE CITY FOR COVERAGE:
OPTION 1
Amount to be paid in one lump sum of $ - using either option A , B or C below:
A) to be deducted from your next payroll check.
B) to be paid by check or cash to the City
C) to be paid from earned leave balances*
OPTION 2
A bi-weekly amount of #DIV/0! to be taken from paychecks.
OPTION 3
A bi-weekly amount of to be taken from the next payroll periods until paid.
OPTION 4
Other option described here: #DIV/0! to be taken from paychecks.
I agree and understand the terms of this payment arrangement and authorize the City of East Palo Alto to deduct the following amount from my paycheck based on the payment plan option selected above. If I resign or am terminated, I understand that the remaining balance will be withheld from my final check.
Employee Signature Date
City Official Date
* Leave balances shall include vacation leave, floating holiday leave and comp time only .
Any pay increases may be used by the City to lower agreed upon payment plan to balance your payroll check.
0.00 $ -
0.00 Instructions: Please select one of the options below by placing an X in the appropriate box of your choice.
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ACCEPTED BY:
For the Union: For the City:
Guadalupe Rosas SEIU Local 521 Melvin Gaines, City Manager Janet Nuñez-Aguilar, SEIU Member Ana Torres-Mondragon,
Human Resources Manager
Amir Mahmoudi, SEIU Member Brenna Rowe, Chief Spokesperson Sloan Sakai Yeung & Wong LLP
Lenin Melgar, SEIU Member
Agripina Villegas, SEIU Member
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MEMORANDUM OF UNDERSTANDING
BETWEEN
THE CITY OF EAST PALO ALTO
AND THE
EAST PALO ALTO MANAGEMENT EMPLOYEES’ ASSOCIATION
(MANAGEMENT UNIT)
July 1, 2024- June 30, 2027 Equivalent to three (3) Years
PREAMBLE
This Memorandum of Understanding is entered into by and between the City of East Palo Alto, hereafter referred to as “City”, acting through its negotiator, and employees of the City as represented by the East Palo Alto Management Employees’ Association, hereafter referred to as “Union”, pursuant to the Meyers-Milias-Brown Act (MMBA) (Government Code Section 3500- 35100). Pursuant to Federal and California law, the City and Union have met and conferred in good faith and have fully communicated and exchanged information concerning wages, hours, and other terms and conditions of employment for the term of this agreement. It is the intent of the parties to set forth herein their entire agreement covering rates of pay, wages, working hours, and other terms and conditions of employment and to provide for prompt and fair settlement of grievances without interruption or other interference with the normal operations of the City.
This Agreement constitutes a mutual understanding between the parties of those wages, hours, terms, and conditions of employment which are to be in effect during the period of the Agreement. Both parties have mutually agreed that their objective is for the good of the City of East Palo Alto and Union members alike. Both parties agree further that, in the interest of collective bargaining and harmonious relations, they will at all times abide by the terms and conditions as hereinafter set forth.
It is agreed that the delivery of quality municipal services in the most efficient, effective, and courteous manner is of paramount importance to the City, Union, and the represented employees.
Such achievement, and the maintenance of a competent organization that delivers sustained quality municipal services is hereby recognized to be a mutual goal of the parties to this Agreement within their respective roles and responsibilities.
Unless separately identified in another provision of this Agreement, any notification given pursuant to the terms of this agreement shall be sent to the following:
For the City: For the Union:
City Manager Representative
City of East Palo Alto
2415 University Avenue
East Palo Alto, CA 94303
Management Employees’ Association (MEA)
2415 University Avenue
East Palo Alto, CA 94303
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2 ARTICLE 1.0: RECOGNITION
1.1 Union Recognition
The Union has been recognized as an Employee Organization pursuant to the EmployerEmployee Relations Resolution # 48-83, adopted by the City November 21, 1983 for the regular full-time employees assigned to the classifications set forth in Appendix A.
Pursuant to Section 3500-35100 of the Government Code of the State of California, the City recognizes the East Palo Alto Management Employees’ Association as the exclusive bargaining agent for the purpose of establishing salaries, wages, hours, terms, and other conditions of employment for all regular full-time management and mid-management employees in the City, except those in confidential classifications, which are unrepresented.
Pursuant to the language in the MOU, this list can be amended from time to time.
1.2 Job Descriptions
The City will make Job Descriptions for all filled bargaining unit positions available to the Union upon request and will provide the Union with drafts of revised job descriptions before approval by the City Manager. Upon request, the City will meet and confer with the Union over changes in job descriptions for bargaining unit members (to the extent those changes fall within the scope of representation) prior to approval by the City Manager.
1.3 Establishment of New Classifications
The City will provide reasonable advance written notice to the Union prior to establishing any new classifications appropriate to the MEA unit or removing classifications from the MEA unit. The City will provide its notice no later than one-week prior to any City Council action required to establish the new classification or modify the bargaining unit assignment of an existing classification. Upon written request from MEA prior to the establishment of the classification by the City Council, the City shall meet and confer regarding the job description and salary range for the new position.
1.4 Reclassification
A. When necessary, the Union may request that the City reclassify Union positions. These requests shall be made in writing and shall indicate the position’s current classification, the proposed reclassification, and a detailed statement of the reasons that the reclassification is appropriate. The Human Resources Manager or designee shall respond to the reclassification requests made by MEA in writing not later than three (3) months after the submission of the request, unless this deadline is mutually extended by the parties. The Human Resources Manager or designee will meet with the Union and each incumbent employee during the process.
B. In the event that the Human Resources Manager or designee, determines that the reclassification is not appropriate, the Union may appeal the decision to the City Manager in writing, not later than ten (10) calendar days after the date of the Human Resources Manager or designee’s decision. The City Manager shall render a decision within ten (10) calendar days of the appeal. The decision of the City Manager shall be final. This section is not subject to the grievance procedure.
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3 C. Reclassifications will be effective either the date of the Human Resources Manager or designee’s decision or three (3) months after the submission of the request, whichever is earlier.
1.5 Position Recruitment
A. Human Resources to define Internal and External Recruitments (prescribe when appropriate)
B. Postings
Open recruitments for promotional opportunities for permanent City positions in classifications within the representation unit will be posted at all work locations and on the City’s website for at least fourteen (14) calendar days prior to closing applications and shall be mailed to the Union and emailed to bargaining unit members with City email accounts.
Such postings shall include a description of the type of examination and screening process that will be used in filing the position. Any test given shall relate to the skills, knowledge, and abilities necessary to perform the job.
“Internal Posting” promotional opportunities for permanent City classifications within the representation unit will be posted at all work locations for at least seven (7) calendar days prior to closing applications and shall be mailed to the Union and emailed to bargaining unit members with City email accounts. All internal and external employment opportunities announcements will be emailed to all employees.
Such postings shall include a description of the type of examination and screening process that will be used in filling the position. Any test given shall relate to the skills, knowledge, and abilities necessary to perform the job.
C. The top two (2) permanent bargaining unit members applying for promotional opportunities for classifications within the representation unit and who meet the minimum qualifications for the position will be interviewed regardless of the number of interviewees otherwise requested by the hiring department. When possible, the top two (2) permanent bargaining unit members applying for promotional opportunities outside of the representation unit and who meet the minimum qualifications for the position will be interviewed.
D. Once a list of reachable candidates has been generated and upon request by any Department Head, the Human Resources Manager shall refer to the requesting Department a list of the top seven (7) candidates as well as a list of all internal applicants on the recruitment list. The Department Head shall have the discretion to interview any of the candidate whose names have been referred by the Human Resources Manager.
1.5 Contracting Out
A. The parties have a shared interest in eliminating unnecessary consulting contracts and hiring permanent employees to perform the work of the City. Conditioned upon having 177
4 available funds, the City will make every effort to recruit and fill all authorized positions which belong to the bargaining unit. The City will retain the right as to how the services will be delivered to the citizens of East Palo Alto.
B. Whenever possible, the City agrees to notify the Union ninety (90) days in advance of contracting out work that results in or is the result of elimination or not filing a bargaining unit position and will negotiate with the Union regarding the effects of contracting out on remaining bargaining unit members. In the event the City is moving forward with such a contract in a timeframe shorter than ninety (90) days prior to contracting out work that results in or is the result of the elimination or not filling a bargaining unit position, the City will notify the Union as soon as possible.
C. This provision shall not apply in situations where the City is preparing for or holding a recruitment for a bargaining unit employee to perform the work or where a recruitment has been unsuccessful in filling the unit position in the last twelve (12) months. However, if a recruitment is unsuccessful the City will run a new recruitment within twelve (12) months after the contracting out of work.
D. The City will provide the Union with a list of active Purchase Orders twice per year.
ARTICLE 2.0: NON-DISCRIMINATION
2.1 Non-Discrimination
The provisions of this Memorandum of Understanding (MOU) be applied equally to all employees covered hereby without unlawful discrimination because of race, religious creed or political opinion or affiliation or legitimate union activity, color, national origin, age, ancestry, physical and/or mental disability (including HIV and AIDS), medical condition, genetic information, marital status, sex (childbirth, breastfeeding and medical conditions related to pregnancy, childbirth or breastfeeding), gender, gender identity, gender expression, age, sexual orientation, and military and/or veteran status, against any employee or applicant for employment by the Union or by the City or by anyone employed by the City; and to the extent prohibited by applicable state and federal law.
Further information pertaining to Non-Discrimination is more fully detailed in the Citywide Diversity, Equity, and Inclusion Staff Retention Policy.
ARTICLE 3.0: UNION SECURITY
3.1 .
3.2 Dues Deductions
The City will deduct dues and remit them to the Union pursuant to State law. As of the date of execution of this MOU, the Union is not collecting dues from members. 178
5 ARTICLE 4.0: RIGHTS OF PARTIES
4.1 Management Rights
The City hereby retains and reserves unto itself, without limitation, all powers, rights, authority, duties and responsibilities conferred upon and vested in it by the laws of the Constitution of the State of California and of the United States, including but not limited to the generality of the foregoing, the right:
a. To set standards and levels of service;
b. To determine the procedures and standards of selection for employment and promotions;
c. To direct its employees;
d. To determine the methods and means to relieve its employees from duty because of lack of funds or other lawful reasons;
e. To determine the methods, means, numbers and kinds of personnel by which City operations are to be conducted;
f. To determine the methods of financing;
g. To determine the size and composition of the work force and allocate and assign work by which the City operations will be conducted;
h. To determine and change the number of locations, relocation and type of operations, processes and materials to be used in carrying out all City functions;
1. To establish employee performance standards including, but not limited, quality and standards, and to require compliance therewith;
j. To take necessary actions to carry out its mission in emergencies; k. To exercise complete control and discretion over its organization and the technology of performing its work;
l. To take any and all steps necessary to discharge the City's responsibilities to provide for the safety of the public it serves and to provide employees with a safe working environment; provided, however, nothing herein shall preclude the Union from providing input, consulting and/or meeting and conferring with the City as required by law on such safety issues so long as such actions do not prevent the City from discharging these responsibilities;
m. The exercise of the foregoing powers, rights, authorities, duties, and responsibilities by the City, the adoption of policies, rules, regulations and practices in furtherance thereof, and the use of judgment and discretion in connection therewith, shall be limited only by the specific and express terms of this memorandum and then only to the extent such express terms hereof are in conformance with the Constitution and laws of the United States and the Constitution of the State of California; and n. The exercise by the City through its City Council and management representatives of its rights hereunder shall not in any way, directly or indirectly, be subject to any grievance procedure nor subject to meeting and conferring.
4.2 Employee Rights
Employees of the City shall have the right to form, join and participate in the activities of employee organizations of their own choosing for the purpose of representation on all matters of employee relations. Employees also have the right not to participate in the activities of any employee organization.
Neither the City nor the Union shall interfere with, intimidate, restrain, coerce, unduly influence or discriminate against any bargaining unit member because of his/her exercise 179
6 of these rights.
4.3 Union Rights
4.3.1 Union Access
A qualified representative of the Union shall be allowed to visit City work locations for the purpose of ascertaining whether or not this Agreement is being observed. The right shall be exercised reasonably. The qualified representative shall report to management before proceeding to any work locations that are not open to the public. The representative shall not meet with employees during work time (not including breaks) and shall not interfere with the normal conduct of work. Activities such as solicitation of membership, collection of dues, holding membership meetings, campaigning for office, conducting elections and distributing literature is strictly prohibited during working hours without prior approval of the City Manager or his/her designee.
4.3.2 Notification to the Union
The City will comply with all conditions established by the MMBA.
4.3.3 Bulletin Boards
Posting of information on City premises shall be limited to approved bulletin boards.
Adequate space shall be made available to the Union for posting information on approved bulletin boards, provided the posted material is not derogatory to the City, employees of the City, or other employee organizations, and does not support or oppose candidates for public office or ballot issues.
4.3.4 Release Time
1. The Union shall be limited to no more than one (1) Representative for every three (3) members of the unit. However, Union may identify one (1) alternate Representative. The Alternate steward shall share the three (3) hours of release time with the primary steward for which they are the alternate. The Union shall provide the City with a list of all the primary Representatives and alternate Representatives, including work assignment and contact information.
2. Representatives shall be allowed no more than three (3) hours per month of release time to represent workers in meetings related to grievances, to investigate grievances, to orient new employees, and to meet with executives/management to discuss Union activities. The monthly allotment of hours provided for Representatives cannot be transferred or accumulated from month to month. If HR requires more than three (3) hours of meeting time, HR may request for MEA representative is authorized for extended time for these meetings on a case-by-case basis.
3. Release time must be pre-approved and is at the discretion of the City designated Manager/Director but shall not be unreasonably denied. Moreover, Representative shall not participate during a time that it is foreseeable that such action will create a gap in work production or staff supervision which may result in critical service interruption.
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7 4. A Representative who is released to investigate a grievance or to meet with City officials shall return promptly to his/her regularly assigned duties.
5. Only one Steward shall be relieved from assigned work duties for any given matter.
4.3.5 List of Bargaining Unit Members
On a semi-annual basis every six (6) months the City will provide to the Union a list of bargaining unit employees including vacancies. This list will be in Excel format and will include the following: first and last name; position title; department; Management status (mid-management or management); and employment date.
4.3.6 Bargaining Team
Subject to the City’s operational needs, the City shall allow three (3) Union Bargaining Team members reasonable time from work to attend required bargaining meetings during negotiations over a successor MOU. Additionally, negotiators will normally be granted one-half hour caucus time before, exclusive of travel to and from their worksite to the negotiations site. Reasonable requests for additional prep time will be granted. Should a conflict arise between negotiations and City business, the City will notify Union immediately and the parties will work to resolve scheduling issues. The City will not reimburse bargaining unit team members for time spent bargaining outside of normal work hours.
4.3.7 New Worker Orientation
The City will give new bargaining unit members contact information for the Union and any relevant materials (including the MOU) provided by the Union. The City will allow each new bargaining unit member thirty (30) minutes of release time to meet with a local union Representative. This time must be used during the member’s first pay period of employment with the City. The City will give the Union at least one-week advance notice of a new employee being hired. The City will give the Union at least one-week advance notice of a new employee being hired. The City shall grant release time to at least one appointed Union Representative to conduct the new worker orientation.
4.3.8 Use of City Facilities
The parties agree that work time is for work. Therefore, Union meetings and other Union activities shall not occur during participating employees’ work time. Union meetings may occur on participating employees’ non-work time in City-controlled public meeting facilities. However, the Union shall limit its use of City facilities to comply with City Policies, Rules, and Regulations. The Union shall procure prior City approval for the use of such facilities and shall schedule the use of City facilities according to City procedure.
ARTICLE 5.0: LAYOFF
5.1 Layoff
The parties agree to abide by the City's personnel rules in regard to layoffs as detailed in Personnel Policies and Procedures Sections. 181
8 ARTICLE 6.0: FURLOUGH
The parties agree to abide by the City’s personnel rules in regard to furloughs as detailed in Personnel Policies and Procedures Sections.
ARTICLE 7.0: LEAVE OF ABSENCE (PAID AND UNPAID)
7.1 Management Leave
FLSA Exempt bargaining unit employees often put in hours to meet the demands of their position. While some extra work time is an expected component of their position, the City wishes to provide a benefit in recognition of this service. The City Council has previously authorized standard criteria for Union positions to be eligible for up to sixty (60) hours of Management Leave annually for those employees who are exempt from the overtime provisions of the FLSA.
Accrual of Management Leave shall be in addition to earned vacation benefits and is not intended to be balanced hour for hour with extra time worked by FLSA exempt employees.
Each FLSA exempt Management employee shall receive sixty (60) hours of Management Leave annually, accrued in total as of January 1. Management leave for FLSA exempt employees hired after January 1 will be prorated.
If the leave is not used by December 31, of each year, the unused balance will not carry forward unless approval by the City Manager is received before December 31.
The City Manager may authorize a carryover of unused balance. Any unused leave not taken within the extension period, authorized by the City Manager, will be lost.
Management leave must be taken as time off and is not compensated upon termination.
7.2 Vacation Leave Credits
All full-time employees covered by this MOU shall earn vacation credits as follows:
Minimum Continuous City Service
Amount of Vacation Earned Annually
0-4.99 years: 80 hours (3.08 hrs bi-weekly)
5-9.99 yrs.: 120 hours (4.62 hrs bi-weekly)
10-14.99 years: 160 hours (6.15 hrs bi-weekly)
15-plus years: 200 hours (7.69 hrs bi-weekly)
7.2.1 Vacation Accumulation
A Management employee with less than ten (10) years of consecutive public service shall not accumulate more than two-hundred and eighty-eight (288) hours of vacation.
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9 A Management employee with more than ten (10) years of consecutive public service shall not accumulate more than three-hundred and twenty (320) hours of vacation.
Once the accrual cap is reached, a Management employee shall not accrue any additional vacation until he or she reduces the accumulated hours below the accrual cap, either through usage and/or cash-out (as described in Section 7.2.4).
A Management employee shall receive reasonable notice of the amount of accumulated vacation leave in advance of each anniversary date. Requests for deferring vacation use must be presented to the City Manager sixty (60) calendar days before the end of the calendar year in which the vacation leave was to be taken.
In granting deferred vacation, the City Manager may specify a time within which such excess vacation leave must be used.
7.2.2 Vacation Authorization
The City values vacation and believe that an employee's ability to utilize vacation is an important goal. To that end, the City and Union wish to emphasize that MEA bargaining unit employees are not expected to be "on call" during vacation. Of course, because of the importance of their positions, bargaining unit employees must provide adequate contact information in the event it becomes necessary to contact them prior to their return from vacation. If an employee is required to return to work from vacation, the employee shall not be charged vacation for the period during which they have returned to work.
The time at which an employee may use vacation leave and the amount to be taken, at any one time, shall be determined by the City Manager or Designee, with particular regard for the needs of the City and, insofar as possible, considering the desires of the employee. Except in unusual circumstances, use of vacation leave shall be scheduled and approved in advance of the first day of absence. Approval of use of vacation leave shall be in a form and manner prescribed by the City Manager.
Said approval of vacation leave shall not be unreasonably withheld.
7.2.3 Use of Vacation
Vacation leave may be taken by the management employee as it is credited. Accrued vacation time may be used, at a minimum, in blocks of four (4) hour increments.
The date of vacation may be selected by the employee but shall be approved by the City Manager or designee, who shall consider the wishes of the employee and the needs of the department and/or the City organization.
7.2.4 Vacation Cash Out
Members of the bargaining unit may make an irrevocable election to cash out vacation during the month of December each year. Employee must complete the “Irrevocable Annual Vacation Cash Out Election Form” each calendar year for the following year. To qualify for vacation cash out, an employee must have more than eighty (80) hours of accrued vacation. During the term of this MOU, Bargaining units shall be allowed to cash out up to 80 hours of leave vacation, so long as the member maintains a balance of at least eighty (80) hours. Elections will be cashed out December the following year.
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10 7.2.5 Pay for Vacation Time
Upon termination of employment the Management employee shall receive all earned vacation on record based on the pay level of the employee at the time of the separation of employment. Such payment shall be received in his/her final paycheck from the City.
7.3 Holidays
7.3.1 Official Holidays
All Management employees shall receive thirteen (13) designated paid holidays per year to be observed during each fiscal year (July 1 through June 30). Holiday Leave shall be administered as provided for in Section 3.10 of the City of East Palo Alto Personnel Policies and Procedures and subsequent amendments adopted by City Council. Paid holidays shall have a length of eight (8) hours. If an employee desires to take more than eight (8) hours of holiday time (e.g., an employee on a 4- 10 schedule), the employee will be permitted to use leave time to make up the difference.
Specified holidays authorized by the City Council are as follows:
1. New Year's Day, January 1
2. Martin Luther King Day, 3rd Monday in January
3. Lincoln's Birthday, February 12
4. Washington's Birthday, February 22 or its legal substitute (third Monday in February)
5. Cesar Chavez Day, last Monday in March
6. Memorial Day, May 31 or its legal substitute (third Monday in May)
7. Juneteenth, June 19
8. Independence Day, July 4
9. Labor Day, first Monday in September
10. Veteran's Day, November 11
11. Thanksgiving Day, third Thursday in November
12. Day after Thanksgiving
13. Christmas Day, December 25
Note: When any day recognized as a holiday falls on Sunday, the holiday shall be observed on the following Monday. When any day recognized as a holiday falls on a Saturday, the holiday shall be observed on the preceding Friday. When a holiday falls on an employee’s designated day off which is not a Saturday or Sunday, the employee shall be permitted to schedule eight hours of holiday time for another day within the same pay period as the holiday. A employee may schedule holiday time under this provision in the same manner as vacation is scheduled (pursuant to Section 7.2.3).
7.3.2 Other Holidays
In addition, any day proclaimed by the President of the United States, the Governor of the State of California, and recognized by the City Council as a public holiday, day of mourning or day of thanksgiving shall be provided as a holiday. This shall be administered in compliance with Resolution 0210 (Section 3.10.02). 184
11 7.3.3 Other Religious Holidays
A Management employee may request, in advance, to be excused from work for the observance of a bona fide religious holiday, subject to approval of the City Manager. If approved, such time off shall be charged to the Management employee’s unused available Vacation or Management Leave balance, whichever the employee designates. Approval of time off is subject to the needs of the City. If not approved, no pay or other time off shall be authorized in lieu thereof.
7.3.4 Effect of Other Leave While on Vacation
When a day designated as a holiday, in Section 7.3.1, occurs during the Management employee’s vacation leave, for payroll purposes, the day shall be charged as a holiday instead of vacation. Sick Leave shall not be approved for official holidays. A Management employee in no pay status shall not receive or accrue holiday leave.
7.3.5 Pay for Official Holidays
Management employees shall receive eight-hours of pay for each of the twelve (12) official holidays.
7.4 Sick Leave
7.4.1 Accrual
All Management employees shall accrue sick leave at a rate of three and seven tenths (3.7) hours per bi-weekly pay period, beginning at the end of the first thirty-one days of employment, and sick leave may be accrued with no maximum limit.
7.4.2 Personal Use
Use of accrued sick leave may begin as it is accrued. It is to be used for illness or injury and may not be used to supplement days off.
7.4.3 Family Care Use
Accrued sick leave may be used to care for children, siblings and parents, (be they natural, adoptive, step or foster, grandparents, aunts, uncles, of the employee their current spouse or domestic partner, to a maximum of eighty (80) hours in a calendar year (January through December). It is further provided that leave and or vacation accrual may be used for family care up to twelve (12) weeks in any twelve (12) month period. If all bank accruals have been used, without pay, may be used for such care in unusual or emergency cases with the approval of the City Manager.
7.4.4 Documentation
Employee Leave forms must be filed in all cases and a physician’s certification may be required at the discretion of the City Manager and/or designee for absences of three (3) consecutive workdays or more.
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12 7.4.5 Leave Donations
Bargaining Unit members may use up to one-half of their annual accrual of sick leave for the diagnosis, care, or treatment of an existing health condition of, or preventive care for, a member of the employee’s immediate family. For the purpose of this section, the immediate family of an employee shall mean the following: related by blood, marriage or adoption: spouse, child, parent, sister, brother, uncle, aunt, nephew, niece, grandparent, grandchild, and cousin. Immediate Family shall also include registered domestic partners.
Employees shall be eligible to participate as donors and recipients in the leave donation program, which provides a mechanism for assisting employees who have exhausted paid leave due to a catastrophic illness and/or injury. This program allows a permanent City employee to donate accrued vacation time hours to a specific eligible employee who has exhausted his/her own available leave balances on an hour for hour basis.
Catastrophic illness or injury is defined as the employee’s own adverse medical condition which requires the employee to be absent from work for more than twenty (20) consecutive work days, or similarly debilitating illness or injury of the employee’s immediate family member who has a catastrophic illness or injury as verified by a physician’s statement.
A. To receive leave donations, an employee:
1. Must have been employed in a regular full-time position with the City for a minimum of one year; and
2. Must be absent from work due to his/her own catastrophic illness or injury for more than twenty (20) consecutive days (as verified by a physician’s statement); or be absent from work in order to attend to his/her immediate family member who has a catastrophic illness or injury (as verified by a physician’s statement); and
3. Must have exhausted all earned leave balances (including sick leave if related to the employee’s own illness) vacation, and management leave; except however, donations may be made prior to all balances being exhausted, when the physician’s statement and leave balance indicate the probable exhaustion of balances within two (2) pay periods.
B. Donations
1. Are voluntary.
2. Are made from accrued Vacation and/or Management Leave balances; donations of Sick Leave are not permitted.
3. Must be for a minimum of eight (8) hours, in whole hour increments.
4. Are irrevocable.
5. Are taxable on the part of the recipient, in accordance with IRS Regulations, and are subject to withholding as required by law.
6. Donations shall be processed in the order received. However, a donor’s leave shall not be reduced until the recipient actually uses the leave. Unused donation shall remain with the donor.
7. An employee may not donate more that eighty (80) hours to any other individual employee.
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13 8. The total donation received into an employee’s donated leave balance shall normally not exceed 1040 hours; however, donations in excess of 1040 hours may be considered when approved by the Human Resources Manager.
9. Upon approval of the request for donations, the Human Resources Manager (or his/her designee) shall, at the employee’s request, post a notice of the eligible employee’s need for donations on departmental bulletin boards accessible to employees. Confidential medical information shall not be included in the notice.
10. Nothing in this section shall be construed to modify the employment relationship between the City and the receiving employee, or to restrict the City’s management rights. Neither shall this section modify existing City rules, policies or agreements regarding unpaid leave of absence or family leave.
“This provision (7.4.5) shall sunset upon the parties’ mutual agreement on a Citywide policy on Leave Donation.”
7.5 Fitness for Duty Examinations.
City retains the right to require employees, covered by this agreement, to take a Cityrequested examination at a physician of the City’s choosing. The parties agree that any City order that an employee submit to fitness for duty examination will be made in compliance with applicable laws and judicial decisions.
7.6 Family Medical Leave
7.6.1 Family Medical Leave Act and California Family Rights Act Management employees shall be entitled to and the City shall comply with leave as provided for in the Family Medical Leave Act (FMLA) and the California Family Rights Act (CFRA).
7.6.2 Immediate Family
Immediate Family shall mean the following: related by blood, marriage or adoption; spouse, child, parent, sister, brother, uncle, aunt, nephew, niece, grandparent, grandchild, and first and second level cousin. Immediate family shall also include a registered domestic partner.
7.7 Bereavement Leave
A. Management employees shall be entitled to up to three (3) calendar days of paid leave for an occurrence of death or serious illness or accident determined to possibly lead to death in the immediate family; five (5) calendar days if out of state. Additional days may be approved by the City Manager or designee and charged to the employee’s available unused leave. This leave shall not be accumulated and is in addition to sick leave and vacation benefits except where additional time off is taken as provided above.
B. Immediate family shall mean the following: related by blood, marriage or adoption:
spouse, child, parent, sister, brother, uncle, aunt, nephew, niece, grandparent, grandchild, and cousin. Immediate Family shall also include registered domestic partners; C. Request for funeral/emergency leave must be in writing, state the relationship of the 187
14 family member, and be approved in advance of the City Manager. In special emergencies, an employee may request formal approval after the fact; if approved, leave records shall be adjusted accordingly. Death following a serious illness or injury shall generally be regarded as one (1) occurrence; however, the City Manager reserves authority for determining the nature and/or severity of the illness and the amount of time the occurrence warrants.
7.8 Jury Duty Leave
A. Management employees required to report for jury duty during regularly scheduled work hours shall notify the City Manager as soon as possible and shall be entitled to leave with pay until released by the Court provided the employee remits to the City within five (5) calendar days after receipt, all fees except those specifically allowed for mileage and subsistence.
B. A Management employee subpoenaed to appear in court during regularly scheduled working hours, solely as a result of employment with the City, shall receive full pay for such appearance until released by the Court provided the employee remits to the City within five (5) calendar days after receipt, all fees except those specifically allowed for mileage and subsistence.
C. A Management employee is responsible for keeping the City Manager informed of his/her court schedule.
7.9 Military Leave
A. Military leave shall be granted in accordance with the Military and Veteran’s Code of the State of California and/or federal regulations as amended. All employees entitled to military leave shall be given such leave within such limits as the appropriate military regulations may determine, when leave is requested in addition to the rights of workers returning from such leave.
B. Every permanent classified officer or employee of the City who is actually inducted into, or enters, any branch of the military, Army, Navy, Air Force, Marines, National Guard, or Coast Guard Service of the United States of America, pursuant to and under the terms and conditions set forth in Section 395, et seq., as amended, of the Military and Veteran’s Code, shall be entitled to a military leave of absence from his/her City position and shall be entitled to receive regular compensation and benefits in accordance with state law and any current City Resolution.
C. This provision (7.7) shall sunset upon the parties’ mutual agreement on a City-wide policy on Military Leave.
7.10 Leave of Absence without Pay
If the circumstances of the particular case warrants, the City Manager may grant leaves of absence without pay for a maximum of ninety (90) working days to any employee.
The leave shall be governed by the Personnel Policies and Procedures Section 3.12.13 or as amended by the City Council.
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15 7.11 Industrial Accident Leave
The City agrees to comply with all State and Federal statues, regulations and rulings with respect to compensation of employees who suffer industrial injury or illness.
ARTICLE 8.0 H E A L T H , DENTAL, VISION, LONG TERM DISABILITY, LIFE INSURANCE, DEFERRED COMPENSATION, RETIREMENT, COBRA AND 125
FLEXIBLE SPENDING PLANS
8.1 Medical Insurance
A. The City shall provide a medical insurance plan or plans (if more than one is available) for eligible employees covered by this bargaining unit.
B. The City shall contribute up to the full cost of the employee-only level based on the Kaiser Permanente HMO premium. Eligible employees may select coverage from among the available options. Any premiums in excess of Kaiser Permanente HMO plan will be paid by the employee.
C. The City shall contribute up to sixty five percent (65%) of the premium of the Kaiser Permanente HMO medical plan for those employees electing to have dependent medical coverage under the City’s medical plans. The employee shall be responsible for the remaining premium for the elected medical coverage, payable through bi-weekly payroll deductions.
D. Medical coverage starts the first day of the month following date of hire.
E. Employees who fail to authorize payroll deduction or make payment pursuant to the approved schedule shall not be provided with dependent coverage.
F. Employees may insure their eligible dependents (including registered domestic partners, as defined by State law) in the Medical Plans offered by the City.
G. Employees electing not to take health c o v e r a g e shall be required to complete and sign a “Waiver Form” and such form shall be filed in the personnel file.
H. Benefits Committee
During the term of this MOU, the City and Unions shall convene the Benefits Committee for the following purposes:
1. To continue ongoing discussions regarding cost structures as a part of an overall strategy to maintain balanced enrollment in City plans,
2. To investigate the feasibility of revising medical and/or dental coverage and/or plan(s) and strategies to participate into benefit insurance cost structure, and
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16 The benefits Committee will commence no later than September 30,2022. The Committee will be composed of City labor representatives, not to exceed four (4) representatives and four (alternates) from each participating labor organization and four (4) representatives. These names will be provided to the City no later than August 31, 2022.
I. The City shall make a semi-monthly contribution of $83.33 toward an HSA for employees that enroll in Kaiser Permanente HSA high deductible plan. Equivalent to approximately $2,000 annually.
8.2 Dental Insurance
A. The City agrees to provide and contribute the full cost of a dental insurance plan(s) (if more than one is available) for its employees. Employees may insure their eligible dependents (including registered domestic partners, as defined by State law) in the Dental Plan(s) offered by the City. Dependent dental insurance coverage shall be paid for by the employee.
B. Employees electing not to take dental coverage shall be required to complete and sign a “Waiver Form” and such form shall be filed in the personnel file.
8.3 Long Term Disability Insurance
Management employees covered under this resolution may participate in the group longterm disability insurance program, at the City’s expense. For an overview of the plan see the certificate of insurance on file in the City’s Finance Department.
8.4 Life Insurance
The City agrees to provide and pay the full costs for a Basic Term life insurance policy in the amount of $100,000 for Management employees responsible for a Division, and $75,000 for Mid-management employee covered under this resolution. Any additional options available through the plan shall be at the employee’s expense. The City shall provide each member a copy of the plan as provided by the insurer.
8.5 Deferred Compensation
The City agrees to provide, at the employee’s expense, a deferred compensation (457) plan approved by resolution of the City Council.
8.6 Retirement
Effective on or about June 29, 2008, the City implemented the 2.5% @ 55 retirement enhancement. Eligible employees hired on or after January 1, 2013, and who meet the definition of “new member” under Government Code § 7522.04(f), shall be covered by the PERS retirement plan two percent (2%) at sixty-two (62) full formula for local miscellaneous employees.
Employees will pay the employee contribution in effect for the applicable formula.
8.7 Consolidated Omnibus Budget Reconciliation Act (COBRA) The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 requires the City 190
17 to offer employees and their families an opportunity for a temporary extension of health coverage upon separation of employment. The separated employee and/or dependent must pay premiums in advance plus the applicable administrative fee. The specific provisions and restrictions of the Act are available through the Human Resources Department.
8.8 Flexible Spending Plan (125 Plan)
The City shall establish and offer a Flexible Spending Plan (125 Plan) for employees.
Enrollment options shall be at the discretion of the employee. The costs of the plan will be paid for by the employee.
8.9 Short Term Disability Insurance (SDI)
MEA bargaining unit employees participate in the State Disability Insurance (SDI) system administered by the State of California Employment Development Department.
Coverage shall be limited to the “State Plan” and shall not include any additional voluntary plan design. SDI premiums shall be 100% employee paid on an after-tax basis.
Payment shall be made by mandatory payroll deduction for every Management employee.
ARTICLE 9.0 PROFESSIONAL DUES, SUBSCRIPTIONS, LICENSES, AND
CERTIFICATES
A. In order to support each MEA bargaining unit employee in the performance of his/her job duties, the City will pay for the costs of dues and subscriptions for professional/technical licensing and association membership as required, and as approved by the City Manager and/or designee.
B. The City shall cover costs for non-personal, job related expenses incurred by MEA bargaining unit employees in the course of employment. All such expenses shall be reimbursed or paid upon presentation of duly executed Purchase Orders, Claims Forms, and receipts with Department Head’s approval.
C. Workers who are required by State and/or Federal agencies to be licensed or secure a certificate shall be reimbursed for the fees for the licenses or certificates.
This provision excludes licenses required by the Department of Motor Vehicles.
ARTICLE 10.0 AUTOMOBILE USE
(Article 10.0 will be placed in the Personnel Policies and Procedures. Not the MOU) ARTICLE 11.0 EDUCATION INCENTIVE
A. No Management employee covered by this MOU shall receive any additional pay as an educational bonus or "certificate pay" unless specifically provided for herein.
B. Subject to the availability of funding, the City shall make available $5,000 for tuition reimbursement annually for the employees represented by the Union for purposes of continuing education and update of certification. The maximum per individual is 191
18 $500 per fiscal year, limited to the class tuition and required textbooks (neither supplies, nor parking or mileage reimbursements will be considered). Coursework must be on the employee’s own time.
C. Tuition reimbursement shall be available only for coursework that is job-related and taken at an accredited institution and must be approved in advance by the City Manager. Tuition reimbursement is only available for coursework in which the employee receives a passing grade. The decision of the City Manager is final. The funds shall be subject to budgetary constraints and may not be available from year to year.
D. In the event that the employees have not exhausted the $5,000 reimbursement pool by May 31 of any fiscal year, any member who has received the maximum individual reimbursement ($500), but has expended more than that amount on textbooks or tuition for approved coursework, may apply to the City Manager for reimbursement of the remainder of the appropriate expenses up to an additional $1,000 maximum per employee. Employees must submit a written request for additional reimbursement on or before May 31st. If the balance remaining in the reimbursement pool is not sufficient to pay the additional expenses for applications received by May 31, the pool shall be distributed equally to each applicant up to the amount of each reimbursement request.
ARTICLE 12.0 TRAVEL AND TRAINING EXPENSES
A. The City will pay the travel and subsistence expenses of MEA bargaining unit employees, in accordance with the Annual Approved Travel Plan and Budget (including any approved Plan modifications) for travel, meetings and occasions required to pursue the official business of the City, subject to prior approval by the City Manager.
B. Pursuant to City Policy, the City will advance 75% of the allowable reimbursement for meals consumed by MEA bargaining unit employees during travel on City business. For reimbursement exceeding the 75% advance, upon return from travel, employees are required to submit receipts for meal reimbursement to the City’s Finance Department and will be reimbursed up to the allowable amount.
ARTICLE 13.0 HOURS OF WORK
A.Salaries approved for MEA bargaining unit employees recognize the advanced level of skills required and possessed by these employees, the high level of responsibility delegated to these employees and the potential for longer working hours necessitated by meeting attendance, response to emergency situations, and attendance at court and/or the necessity for meeting project deadlines.
B. There is no specific compensation for hours worked by FLSA Exempt employees beyond the minimum workweek of forty (40) hours. The following shall serve as basic guidelines to be used in the management of employee work hours:
1. In order to fulfill their job duties, employees may be expected to attend City Council meetings, as well as other Board, Commission, and Committee meetings during the evening and/or on the weekend. FLSA exempt employees shall not receive overtime or additional compensation in any other form for attendance at such 192
19 meetings/activities. However, non-exempt FLSA employees may receive overtime or compensatory time off with the approval of the City Manager.
2. All FLSA exempt employees covered under this resolution shall be eligible to use Management Leave during the calendar year as provided in Section 7.1 of this MOU.
C. In recognition that FLSA exempt MEA bargaining unit employees are often required to attend early morning, lunch, and evening meetings and due to the fact that their work is results oriented without a specific workweek, a system of flexible time is available for their use, subject to the operational needs of the City and as determined by their immediate Supervisor/Manager/Director.
It is expected that all MEA bargaining unit employees work a minimum of forty (40) hours a week, plus any additional work time reasonably required to discharge the duties and responsibilities of the position.
D. “Flex” Hours
With the approval of their supervisor, FLSA non-exempt (overtime eligible) employees assigned to work off hours, such as attendance at evening meetings or early morning training, may flex their schedules to accommodate the additional work, so long as the “flexed” hours occur within the same workweek. If the employee’s request to flex his or her schedule is denied, the employee may appeal the denial to his or her Department Head.
E. Alternate Work Schedules
The City may establish alternate workweeks (including 4/10, 9/80 or other schedules) for individuals or groups of employees by providing employees with written notice. The City and Union agree that the availability of alternate work schedules may be a valuable benefit to workers and the City. Alternate work schedules requests may be initiated by employee(s) or at the initiative of the City.
Alternate work schedules must be recommended by the Department/Division Manager and approved by the City Manager, with the needs of the City, service to the public, and the needs of the employee(s) being considered. At the request of either party, the parties will meet and confer over the establishment of alternative work schedules in specific work locations. Should a department or division establish an alternative work schedule as a result of meet and confer, the City will notify the Union of any issues with the alternative work schedule as well as any plans to eliminate the schedule.
In all decisions regarding alternative work schedules, the City Manager or designee’s decision will be final.
ARTICLE 14.0 RELATIONSHIP TO PERSONNEL REGULATIONS
The "Personnel Rules and Regulations of the City of East Palo Alto”, as amended from time to time and as presently adopted by Resolution 0210 provide policies and regulations governing aspects of employee compensation, benefits and conditions of employment. In any conflict between this MOU and Resolution 0210, the provisions in this MOU, or its successor, shall 193
20 prevail.
ARTICLE 15.0 GRIEVANCE PROCEDURE
A. This grievance procedure is intended to assure that every reasonable effort will be made to resolve problems as near as possible to the point of origin.
B. A permanent classified employee or his/her Union representative may submit a dispute according to this procedure. The Union may utilize this procedure in the event a dispute is not directly related to an individual employee and complies with all the provisions of this Article.
C. Definition. A grievance is defined as a dispute involving the interpretation, application or alleged violation of this Memorandum of Understanding (MOU) and shall not include any appeal of a disciplinary action. No dispute shall be considered a grievance if it does not conform to this definition. Where City Codes or Rules and Regulations provide another appeal process, the Grievant shall choose which process is to be used but shall not use both.
D. Grievance Procedure
Step 1 - Informal Discussion
Within ten (10) working days of the occurrence of an act in dispute, an employee shall discuss it with the Department Head, who shall investigate and attempt to resolve the matter. The Department Head shall give the employee an oral reply within ten (10) working days after the discussion. If the employee is not satisfied with the response, he/she may proceed to Step 2.
Step 2 - Formal Written Grievance
Any dispute not resolved at Step 1 may be submitted to the City Manager in writing citing the specific provision of the rule in dispute and stating the desired solution within ten (10) working days after the Department Head’s Step 1 response. Ten (10) working days thereafter, a meeting shall be scheduled with the employee and the City Manager or designee. The City Manager or designee shall provide the employee a written reply within ten (10) working days after such meeting. If the employee is not satisfied with the response, he/she may proceed to Step 3.
Step 3 - Advisory Arbitration
If the Union is not satisfied with the City Manager or designee’s response, it may appeal the dispute to advisory arbitration in writing within ten (10) calendar days after the date of the Step 2 response. Within ten (10) calendar days of the appeal, the parties shall meet to select an arbitrator. If the parties are unable to reach mutual agreement on an arbitrator, the parties shall jointly request a list of seven (7) labor arbitrators from the California State Mediation Service and shall alternately strike names until only one name remains. The party making the first strike shall be determined by a flip of a coin.
Costs for the arbitration (including arbitrator fees and any court reporter) shall be shared equally by the parties. The parties shall each pay for their own representative.
The decision of the arbitrator shall be advisory to the City Manager. The City 194
21 Manager or designee shall have ten (10) calendar days after the receipt of the decision to notify the Union of his/her decision either to adopt or revoke the decision of the arbitrator. If the City Manager or designee takes no action within the ten (10) calendar day period, the City Manager shall be deemed to have adopted the decision.
A decision adopted by the City Manager or designee will be final and binding upon the parties. A decision revoked by the City Manager or designee shall be deemed to have no effect and the Step 2 reply shall be final and binding upon the parties.
E. Copies of all City responses shall be sent to the Grievant, Union, and to the Grievant representative at the address indicated on the grievance form.
F. Failure of the City to adhere to the designated time deadlines shall be deemed a denial and the Grievant may appeal the grievance to the next level. Failure of the Grievant to adhere to the time deadlines shall mean that the grievance is settled. The grievant and the City may extend any time deadline by mutual agreement.
G. An employee may have a representative of his/her choice present at all stages of the grievance procedure.
H. An employee shall not be penalized in any way for availing himself/herself of this procedure.
ARTICLE 16.0 DISCIPLINE
16.1 Discipline
Except for employees in the classifications of Chief Building Official and Planning Manager, who serve at the will of the City Manager, the City may reprimand, place on disciplinary probation, discharge, suspend, reduce salary, or demote any employee who has completed the specified probationary period for cause, including, but not limited to:
Dishonesty;
Insubordination;
Immoral or unprofessional conduct;
Intoxication or the use of controlled substances while on duty; Incompetence;
Willful negligence;
Excessive absences and/or tardiness;
Inexcusable absence without leave;
Misuse of City property;
Failure to maintain licenses or certificates required by law, City requirements, or job description;
Failure to perform work as required; or
Failure to comply with or violation of the City's reasonable rules regarding safety, 195
22 conduct and operations.
16.2 Right to Representation
Except in situations requiring immediate action, such as, but not limited to, allegations of theft or urgent safety matters, an employee shall be entitled to a representative of his or her choice at an investigative interview that the employee reasonably believes may result in disciplinary action. The employee may request a representative either during or prior to the interview and must make a selection of which individual will be representing him or her within a reasonable time. The employee’s choice of representative will not be permitted to delay the investigation, if the resulting delay would harm the investigation.
16.3 Procedure
A. Notice of Intent to Discipline
A Notice of Intent to discharge, demote or suspend must be served on the employee and the Union in person or by certified mail.
The Notice shall include:
1. A statement of the nature of the disciplinary action;
2. The effective date of the action;
3. A statement of the cause thereof;
4. A statement of the act(s) or omission(s) upon which the causes are based;
5. A statement of the employee's right to respond to the charges, either orally or in writing, prior to the action becoming effective; and
6. A statement advising the employee of the right to Union representation.
The Notice shall be accompanied by all documentation upon which the City relied in determining the need for disciplinary action.
B. Employee Response/Skelly Meeting
The employee may respond to the Notice of Intent to Discipline either in person or in writing.
1. If the employee elects to respond in writing, the employee or his representative must file the employee’s response within ten (10) workdays after service of the Notice of Intent to Discipline.
2. If the employee elects to respond in person, the employee or his or her representative must request a meeting with the Department Head within ten (10) workdays after service of the Notice of Intent to Discipline. The Department Head shall hold a meeting with the employee within twenty (20) days of the employee’s request.
C. Notice of Discipline
If the Department Head determines that discipline is warranted, the Department Head shall issue a written Notice of Disciplinary Action within ten (10) workdays after either the filing of a written response or the date of the Skelly Meeting. If the employee did not request a meeting or file a written response, the Department Head’s 196
23 decision is due twenty (20) workdays after the service of the Notice of Intent to Discipline. The Department Head shall furnish a copy of the Notice of Disciplinary Action to the Union and appropriate Steward.
D. Appeal to Personnel Officer
1. In the event an employee feels that the disciplinary action is unjust, the employee or his or her representative may appeal the action to the Personnel Officer. An appeal of the Notice of Disciplinary Action must be in writing and must be filed with the Personnel Officer within ten (10) workdays of the date of service of the Notice of Disciplinary Action.
2. For any matter subject to binding arbitration pursuant to Section E, below, the Personnel Officer or designee shall hold an appeal meeting within twenty (20) days.
3. For any matter not subject to binding arbitration pursuant to Section E, below, the Personnel Officer or designee may either hold an appeal meeting within twenty (20) days or may refer the matter to advisory arbitration.
A. Advisory arbitration shall be heard by a neutral arbitrator mutually selected by the parties or chosen by the alternating strike method from a list provided by the State Mediation and Conciliation Service. The arbitrator shall have the power to:
Compel the attendance of witnesses;
Require the production of evidence by subpoena;
Administer oaths to witnesses;
Receive evidence from the department head and the employee, allowing reasonable cross examination of witnesses; and Complete a record of the proceedings, including a certified reporter’s transcript.
B. The arbitrator shall prepare a report to the Personnel Officer with his/her findings and recommendations within forty- five (45) calendar days after the date of referral by the Personnel Officer. The report of the arbitrator shall be non-binding and advisory to the Personnel Officer who shall exercise his/her discretion to accept or reject all or part of the report.
4. The Personnel Officer shall issue his/her decision within ten (10) workdays after either meeting with the employee or receipt of the arbitrator’s report, whichever is later.
5. Except for matters which are subject to arbitration pursuant to Section E, the decision of the Personnel Officer shall be final.
E. Arbitration of Serious Discipline
In the event an employee feels that a discharge, suspension of three (3) or more days, or 197
24 a reduction in pay for sixty (60) or more days is unjust, the Union shall have the right to appeal the case to binding arbitration. Any appeal under this provision must be filed within twenty (20) days after receipt of the Personnel Officer’s decision. The expenses of any arbitration convened pursuant to this section, including the fee for the services of the Arbitrator and court reporter shall be borne equally by the parties. All other expenses which the parties may incur individually, including witness and attorneys’ fees, are to be borne by the party incurring such expenses.
16.4 Exceptions
The foregoing provisions shall not apply to employees in the classifications of Chief Building Official and Planning Manager. Employees in those classifications shall continue to be “at will” employees who serve at the will of the City Manager.
ARTICLE 17.0 WAGE AND SALARY SCHEDULE COST OF LIVING
ADJUSTMENTS
17.1. Wages
A. Employees in this unit will receive a salary increase of 3% (three percent) effective the first full payroll that includes the adoption of this agreement by City Council, anticipated to be the pay period starting May 26, 2024.
a. Employees in this unit will receive a one-time payment of $2000 effective the first full payroll following adoption of this agreement by City Council.
B. Employees in this unit will receive a salary increase of 3% (three percent) effective the first full payroll following July 1, 2025.
C. Employees in this unit will receive a salary increase of 3% (three percent) effective the first full payroll following July 1, 2026.
a. Revenue Surplus Cost-Share:
i. "If change in fund balance on audited General Fund financial statement exceeds $650,000, each MEA bargaining unit member employed at the time will receive a 1% lump sum bonus.
ii. In addition, if change in fund balance on audited General Fund financial statement exceeds $2,000,000, each MEA bargaining unit member employed at the time will receive an additional 2% lump sum bonus (a total of 3%)."
17.3. Merit Step Increases
Upon the completion of six (6) months of actual initial or promotional probationary service and after receiving a satisfactory performance evaluation, eligible full-time employees who were initially appointed to the “Step A” of the salary range in effect for the class to which appointed will be granted a merit increase to the next higher step in the pay range.
Employees who are at the “Step B” of the salary range or higher shall receive a merit increase to the next higher step until the top step of the pay range each twelve (12) months 198
25 of actual service after receiving a satisfactory performance evaluation. Regular part-time employees shall be entitled to merit increases after receiving a satisfactory performance evaluation upon completion of not less than twelve (12) months of actual service in each step of the range.
An employee shall not receive a merit increase beyond the maximum step established for the job classification.
Merit increases shall be effective on the first pay period following the anniversary date (i.e., six (6) months after the initial appointment to the classification at Step A and every twelve (12) months after that), regardless of the date of evaluation.
ARTICLE 19.0 BILINGUAL EXAMINATION AND DIFFERENTIAL
19.1 Bilingual Differential
Employees who are assigned to job duties requiring the use of bilingual skills are eligible to receive$50.00 per pay period. No employee shall be required to use bilingual skills who is not compensated under this section.
19.2 Eligibility
Bilingual Differential shall be available only to employees who are regularly required to speak, read, or translate in a language other than English in order to perform assigned job duties arising during the normal course of work.
19.3 Examination Process
The City shall establish a test for Bilingual Differential. This test shall include a written and verbal certification, including translation, given by an individual or entity designated by the City. The Human Resources Department shall be responsible for overseeing the administration of the test and certifying test results.
Eligible bargaining unit members may request to take the Bilingual Differential test by submitting a request in writing to the Human Resources Department. Within thirty (30) days of receiving such a request, the Human Resources Department shall decide, in its sole discretion, whether the employee is eligible for Bilingual Differential based on whether bilingual skills are essential to successful performance of the employee’s assigned job duties and shall issue notice if its decision to the employee. The decision of the Human Resources Department to arrange for testing shall be final.
If the Human Resources Department approves an employee’s request for bilingual testing, the Department shall arrange for testing to be completed within thirty (30) days of the approval.
19.4 Effective Date
Bilingual Differential shall be paid beginning on the first day of the first pay period following the Human Resources Department’s certification that the employee has passed the test for Bilingual Differential and otherwise met the requirements to receive Bilingual Differential. Bilingual Differential shall be based solely on the date of the Department’s certification and shall not be paid retroactively.
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26 ARTICLE 20: BOOTS
20.1 Boots
Employee represented by this bargaining group who are required to wear protective footwear will be reimbursed up to $250 per year for the purchase of safety boots approved by OSHA/ANSI.
In the event an employee’s shoes are damaged and/or worn, and/or unsafe as determined by the City, the employee may request that damaged shoes be replaced provided:
A. The division head/manager concludes the shoes are damaged and need to be replaced.
B. The employee furnishes proof of purchase for the damaged shoes. Purchase shall have been within the current fiscal year.
C. The employee has fully expended the boot allowance. If not fully expended, the employee must use the balance of his/her allowance for the purchase of replacement shoes. Requests for replacement equipment shall be made to the City in writing on a City-provided form.
The City shall normally respond to such requests within five (5) working days. Denials may be appealed to the Human Resources Manager in writing within five (5) working days. The decision of the Human Resources Manager is final and shall not be appealed.
Denials of replacement equipment shall not be subject to the grievance procedure.
ARTICLE 21.0: CONTRACT TERM
The term of the MOU shall be from July 1, 2024, to June 30, 2027, equivalent to three years.
Me too clause:
If during the term of this contract, SEIU 521 reaches an agreement with the City for wages, benefits, and/or contractual enhancements above and beyond the terms of this agreement, the City will apply those enhancements to all MEA/IFTPE local 21 bargaining unit employees.
ARTICLE 22.0 OVERTIME
For overtime-eligible classifications, overtime, overtime is limited to “actual hours worked” (not including sick leave, vacation, compensatory time, or other paid or unpaid leave).
ARTICLE 23.0: PAYROLL DEPOSIT
All bargaining unit members will enroll in direct payroll deposit.
ACCEPTED BY:
For the Management Employees’
Association Union:
For the City of East Palo Alto:
________________________________
Stanley Young, MEA Representative
________________________________
Melvin Gaines, City Manager
________________________________
________________________________
________________________________
Ana M Torres-Mondragon,
200
27 Maurice Baker, MEA President Human Resources Manager ________________________________
Kevin Lewis, MEA Member
________________________________
Brenna Rowe, Chief Spokesperson
Sloan Sakai Yeung & Wong LLP
________________________________
Natasha Raiburn, MEA Member
201
28 Memorandum of Understanding
Between
The City of East Palo Alto
And the
East Palo Alto Management Employees’ Association
(Management Unit)
Appendix A – Management Bargaining Unit
This unit of employees shall, for the purpose of identification, be titled the Management Unit.
Accountant Senior
Chief Building Official
City Engineer
Community Services Manager
Financial Services Manager
Housing Project Manager
Housing and Economic Development Manager
Maintenance Manager
Management Analyst I/II
Planning Manager
Police Records Supervisor
Public Works Supervisor
Rent Stabilization Program Administrator
Senior Engineer
Senior Planner
Support Services Manager (PD)
202
29 Memorandum of Understanding
Between
The City of East Palo Alto
And the
East Palo Alto Management Employees’ Association
(Management Unit)
Appendix B – Basic Term Life Insurance Policy
Position Designation/Policy Amount
Accountant Senior Mid-management $ 75,000
Chief Building Official Management $100,000
City Engineer Management $100,000
Community Services Manager Management $100,000
Financial Services Manager Management $100,000
Housing Project Manager Mid-management $ 75,000
Housing and Economic Development Manager Management $100,000 Maintenance Manager Management $100,000
Management Analyst I/II Mid-management $ 75,000
Planning Manager Management $100,000
Police Records Supervisor Mid-management $ 75,000
Public Works Supervisor Mid-management $ 75,000
203
30 Rent Stabilization Program Administrator Mid-management $ 75,000 Senior Engineer Mid-management $ 75,000
Senior Planner Mid-management $ 75,000
Support Services Manager (PD) Management $100,000
204
MEMORANDUM OF UNDERSTANDING
BETWEEN
THE CITY OF EAST PALO ALTO
AND THE
EAST PALO ALTO MANAGEMENT EMPLOYEES’ ASSOCIATION
(MANAGEMENT UNIT)
July 1, 2024- June 30, 2027 Equivalent to three (3) Years
PREAMBLE
This Memorandum of Understanding is entered into by and between the City of East Palo Alto, hereafter referred to as “City”, acting through its negotiator, and employees of the City as represented by the East Palo Alto Management Employees’ Association, hereafter referred to as “Union”, pursuant to the Meyers-Milias-Brown Act (MMBA) (Government Code Section 3500- 35100). Pursuant to Federal and California law, the City and Union have met and conferred in good faith and have fully communicated and exchanged information concerning wages, hours, and other terms and conditions of employment for the term of this agreement. It is the intent of the parties to set forth herein their entire agreement covering rates of pay, wages, working hours, and other terms and conditions of employment and to provide for prompt and fair settlement of grievances without interruption or other interference with the normal operations of the City.
This Agreement constitutes a mutual understanding between the parties of those wages, hours, terms, and conditions of employment which are to be in effect during the period of the Agreement. Both parties have mutually agreed that their objective is for the good of the City of East Palo Alto and Union members alike. Both parties agree further that, in the interest of collective bargaining and harmonious relations, they will at all times abide by the terms and conditions as hereinafter set forth.
It is agreed that the delivery of quality municipal services in the most efficient, effective, and courteous manner is of paramount importance to the City, Union, and the represented employees.
Such achievement, and the maintenance of a competent organization that delivers sustained quality municipal services is hereby recognized to be a mutual goal of the parties to this Agreement within their respective roles and responsibilities.
Unless separately identified in another provision of this Agreement, any notification given pursuant to the terms of this agreement shall be sent to the following:
For the City: For the Union:
City Manager Representative
City of East Palo Alto
2415 University Avenue
East Palo Alto, CA 94303
Management Employees’ Association (MEA)
2415 University Avenue
East Palo Alto, CA 94303
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2 ARTICLE 1.0: RECOGNITION
1.1 Union Recognition
The Union has been recognized as an Employee Organization pursuant to the EmployerEmployee Relations Resolution # 48-83, adopted by the City November 21, 1983 for the regular full-time employees assigned to the classifications set forth in Appendix A.
Pursuant to Section 3500-35100 of the Government Code of the State of California, the City recognizes the East Palo Alto Management Employees’ Association as the exclusive bargaining agent for the purpose of establishing salaries, wages, hours, terms, and other conditions of employment for all regular full-time management and mid-management employees in the City, except those in confidential classifications, which are unrepresented.
Pursuant to the language in the MOU, this list can be amended from time to time.
1.2 Job Descriptions
The City will make Job Descriptions for all filled bargaining unit positions available to the Union upon request and will provide the Union with drafts of revised job descriptions before approval by the City Manager. Upon request, the City will meet and confer with the Union over changes in job descriptions for bargaining unit members (to the extent those changes fall within the scope of representation) prior to approval by the City Manager.
1.3 Establishment of New Classifications
The City will provide reasonable advance written notice to the Union prior to establishing any new classifications appropriate to the MEA unit or removing classifications from the MEA unit. The City will provide its notice no later than one-week prior to any City Council action required to establish the new classification or modify the bargaining unit assignment of an existing classification. Upon written request from MEA prior to the establishment of the classification by the City Council, the City shall meet and confer regarding the job description and salary range for the new position.
1.4 Reclassification
A. When necessary, the Union may request that the City reclassify Union positions. These requests shall be made in writing and shall indicate the position’s current classification, the proposed reclassification, and a detailed statement of the reasons that the reclassification is appropriate. The Human Resources Manager or designee shall respond to the reclassification requests made by MEA in writing not later than three (3) months after the submission of the request, unless this deadline is mutually extended by the parties. The Human Resources Manager or designee will meet with the Union and each incumbent employee during the process.
B. In the event that the Human Resources Manager or designee, determines that the reclassification is not appropriate, the Union may appeal the decision to the City Manager in writing, not later than ten (10) calendar days after the date of the Human Resources Manager or designee’s decision. The City Manager shall render a decision within ten (10) calendar days of the appeal. The decision of the City Manager shall be final. This section is not subject to the grievance procedure.
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3 C. Reclassifications will be effective either the date of the Human Resources Manager or designee’s decision or three (3) months after the submission of the request, whichever is earlier.
1.5 Position Recruitment
A. Human Resources to define Internal and External Recruitments (prescribe when appropriate)
B. Postings
Open recruitments for promotional opportunities for permanent City positions in classifications within the representation unit will be posted at all work locations and on the City’s website for at least fourteen (14) calendar days prior to closing applications and shall be mailed to the Union and emailed to bargaining unit members with City email accounts.
Such postings shall include a description of the type of examination and screening process that will be used in filing the position. Any test given shall relate to the skills, knowledge, and abilities necessary to perform the job.
“Internal Posting” promotional opportunities for permanent City classifications within the representation unit will be posted at all work locations for at least seven (7) calendar days prior to closing applications and shall be mailed to the Union and emailed to bargaining unit members with City email accounts. All internal and external employment opportunities announcements will be emailed to all employees.
Such postings shall include a description of the type of examination and screening process that will be used in filling the position. Any test given shall relate to the skills, knowledge, and abilities necessary to perform the job.
C. The top two (2) permanent bargaining unit members applying for promotional opportunities for classifications within the representation unit and who meet the minimum qualifications for the position will be interviewed regardless of the number of interviewees otherwise requested by the hiring department. When possible, the top two (2) permanent bargaining unit members applying for promotional opportunities outside of the representation unit and who meet the minimum qualifications for the position will be interviewed.
D. Once a list of reachable candidates has been generated and upon request by any Department Head, the Human Resources Manager shall refer to the requesting Department a list of the top seven (7) candidates as well as a list of all internal applicants on the recruitment list. The Department Head shall have the discretion to interview any of the candidate whose names have been referred by the Human Resources Manager.
1.5 Contracting Out
A. The parties have a shared interest in eliminating unnecessary consulting contracts and hiring permanent employees to perform the work of the City. Conditioned upon having 207
4 available funds, the City will make every effort to recruit and fill all authorized positions which belong to the bargaining unit. The City will retain the right as to how the services will be delivered to the citizens of East Palo Alto.
B. Whenever possible, the City agrees to notify the Union ninety (90) days in advance of contracting out work that results in or is the result of elimination or not filing a bargaining unit position and will negotiate with the Union regarding the effects of contracting out on remaining bargaining unit members. In the event the City is moving forward with such a contract in a timeframe shorter than ninety (90) days prior to contracting out work that results in or is the result of the elimination or not filling a bargaining unit position, the City will notify the Union as soon as possible.
C. This provision shall not apply in situations where the City is preparing for or holding a recruitment for a bargaining unit employee to perform the work or where a recruitment has been unsuccessful in filling the unit position in the last twelve (12) months. However, if a recruitment is unsuccessful the City will run a new recruitment within twelve (12) months after the contracting out of work.
D. The City will provide the Union with a list of active Purchase Orders twice per year.
ARTICLE 2.0: NON-DISCRIMINATION
2.1 Non-Discrimination
The provisions of this Memorandum of Understanding (MOU) be applied equally to all employees covered hereby without unlawful discrimination because of race, religious creed or political opinion or affiliation or legitimate union activity, color, national origin, age, ancestry, physical and/or mental disability (including HIV and AIDS), medical condition, genetic information, marital status, sex (childbirth, breastfeeding and medical conditions related to pregnancy, childbirth or breastfeeding), gender, gender identity, gender expression, age, sexual orientation, and military and/or veteran status, against any employee or applicant for employment by the Union or by the City or by anyone employed by the City; and to the extent prohibited by applicable state and federal law.
Further information pertaining to Non-Discrimination is more fully detailed in the Citywide Diversity, Equity, and Inclusion Staff Retention Policy.
ARTICLE 3.0: UNION SECURITY
3.1 .
3.2 Dues Deductions
The City will deduct dues and remit them to the Union pursuant to State law. As of the date of execution of this MOU, the Union is not collecting dues from members.
ARTICLE 4.0: RIGHTS OF PARTIES
4.1 Management Rights
The City hereby retains and reserves unto itself, without limitation, all powers, rights, authority, duties and responsibilities conferred upon and vested in it by the laws of the 208
5 Constitution of the State of California and of the United States, including but not limited to the generality of the foregoing, the right:
a. To set standards and levels of service;
b. To determine the procedures and standards of selection for employment and promotions;
c. To direct its employees;
d. To determine the methods and means to relieve its employees from duty because of lack of funds or other lawful reasons;
e. To determine the methods, means, numbers and kinds of personnel by which City operations are to be conducted;
f. To determine the methods of financing;
g. To determine the size and composition of the work force and allocate and assign work by which the City operations will be conducted;
h. To determine and change the number of locations, relocation and type of operations, processes and materials to be used in carrying out all City functions;
1. To establish employee performance standards including, but not limited, quality and standards, and to require compliance therewith;
j. To take necessary actions to carry out its mission in emergencies; k. To exercise complete control and discretion over its organization and the technology of performing its work;
l. To take any and all steps necessary to discharge the City's responsibilities to provide for the safety of the public it serves and to provide employees with a safe working environment; provided, however, nothing herein shall preclude the Union from providing input, consulting and/or meeting and conferring with the City as required by law on such safety issues so long as such actions do not prevent the City from discharging these responsibilities;
m. The exercise of the foregoing powers, rights, authorities, duties, and responsibilities by the City, the adoption of policies, rules, regulations and practices in furtherance thereof, and the use of judgment and discretion in connection therewith, shall be limited only by the specific and express terms of this memorandum and then only to the extent such express terms hereof are in conformance with the Constitution and laws of the United States and the Constitution of the State of California; and n. The exercise by the City through its City Council and management representatives of its rights hereunder shall not in any way, directly or indirectly, be subject to any grievance procedure nor subject to meeting and conferring.
4.2 Employee Rights
Employees of the City shall have the right to form, join and participate in the activities of employee organizations of their own choosing for the purpose of representation on all matters of employee relations. Employees also have the right not to participate in the activities of any employee organization.
Neither the City nor the Union shall interfere with, intimidate, restrain, coerce, unduly influence or discriminate against any bargaining unit member because of his/her exercise of these rights.
4.3 Union Rights
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6 4.3.1 Union Access
A qualified representative of the Union shall be allowed to visit City work locations for the purpose of ascertaining whether or not this Agreement is being observed. The right shall be exercised reasonably. The qualified representative shall report to management before proceeding to any work locations that are not open to the public. The representative shall not meet with employees during work time (not including breaks) and shall not interfere with the normal conduct of work. Activities such as solicitation of membership, collection of dues, holding membership meetings, campaigning for office, conducting elections and distributing literature is strictly prohibited during working hours without prior approval of the City Manager or his/her designee.
4.3.2 Notification to the Union
The City will comply with all conditions established by the MMBA.
4.3.3 Bulletin Boards
Posting of information on City premises shall be limited to approved bulletin boards.
Adequate space shall be made available to the Union for posting information on approved bulletin boards, provided the posted material is not derogatory to the City, employees of the City, or other employee organizations, and does not support or oppose candidates for public office or ballot issues.
4.3.4 Release Time
1. The Union shall be limited to no more than one (1) Representative for every three (3) members of the unit. However, Union may identify one (1) alternate Representative. The Alternate steward shall share the three (3) hours of release time with the primary steward for which they are the alternate. The Union shall provide the City with a list of all the primary Representatives and alternate Representatives, including work assignment and contact information.
2. Representatives shall be allowed no more than three (3) hours per month of release time to represent workers in meetings related to grievances, to investigate grievances, to orient new employees, and to meet with executives/management to discuss Union activities. The monthly allotment of hours provided for Representatives cannot be transferred or accumulated from month to month. If HR requires more than three (3) hours of meeting time, HR may request for MEA representative is authorized for extended time for these meetings on a case-by-case basis.
3. Release time must be pre-approved and is at the discretion of the City designated Manager/Director but shall not be unreasonably denied. Moreover, Representative shall not participate during a time that it is foreseeable that such action will create a gap in work production or staff supervision which may result in critical service interruption.
4. A Representative who is released to investigate a grievance or to meet with City officials shall return promptly to his/her regularly assigned duties.
5. Only one Steward shall be relieved from assigned work duties for any given matter.
4.3.5 List of Bargaining Unit Members
210
7 On a semi-annual basis every six (6) months the City will provide to the Union a list of bargaining unit employees including vacancies. This list will be in Excel format and will include the following: first and last name; position title; department; Management status (mid-management or management); and employment date.
4.3.6 Bargaining Team
Subject to the City’s operational needs, the City shall allow three (3) Union Bargaining Team members reasonable time from work to attend required bargaining meetings during negotiations over a successor MOU. Additionally, negotiators will normally be granted one-half hour caucus time before, exclusive of travel to and from their worksite to the negotiations site. Reasonable requests for additional prep time will be granted. Should a conflict arise between negotiations and City business, the City will notify Union immediately and the parties will work to resolve scheduling issues. The City will not reimburse bargaining unit team members for time spent bargaining outside of normal work hours.
4.3.7 New Worker Orientation
The City will give new bargaining unit members contact information for the Union and any relevant materials (including the MOU) provided by the Union. The City will allow each new bargaining unit member thirty (30) minutes of release time to meet with a local union Representative. This time must be used during the member’s first pay period of employment with the City. The City will give the Union at least one-week advance notice of a new employee being hired. The City will give the Union at least one-week advance notice of a new employee being hired. The City shall grant release time to at least one appointed Union Representative to conduct the new worker orientation.
4.3.8 Use of City Facilities
The parties agree that work time is for work. Therefore, Union meetings and other Union activities shall not occur during participating employees’ work time. Union meetings may occur on participating employees’ non-work time in City-controlled public meeting facilities. However, the Union shall limit its use of City facilities to comply with City Policies, Rules, and Regulations. The Union shall procure prior City approval for the use of such facilities and shall schedule the use of City facilities according to City procedure.
ARTICLE 5.0: LAYOFF
5.1 Layoff
The parties agree to abide by the City's personnel rules in regard to layoffs as detailed in Personnel Policies and Procedures Sections.
ARTICLE 6.0: FURLOUGH
The parties agree to abide by the City’s personnel rules in regard to furloughs as detailed in Personnel Policies and Procedures Sections.
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8 ARTICLE 7.0: LEAVE OF ABSENCE (PAID AND UNPAID)
7.1 Management Leave
FLSA Exempt bargaining unit employees often put in hours to meet the demands of their position. While some extra work time is an expected component of their position, the City wishes to provide a benefit in recognition of this service. The City Council has previously authorized standard criteria for Union positions to be eligible for up to sixty (60) hours of Management Leave annually for those employees who are exempt from the overtime provisions of the FLSA.
Accrual of Management Leave shall be in addition to earned vacation benefits and is not intended to be balanced hour for hour with extra time worked by FLSA exempt employees.
Each FLSA exempt Management employee shall receive sixty (60) hours of Management Leave annually, accrued in total as of January 1. Management leave for FLSA exempt employees hired after January 1 will be prorated.
If the leave is not used by December 31, of each year, the unused balance will not carry forward unless approval by the City Manager is received before December 31.
The City Manager may authorize a carryover of unused balance. Any unused leave not taken within the extension period, authorized by the City Manager, will be lost.
Management leave must be taken as time off and is not compensated upon termination.
7.2 Vacation Leave Credits
All full-time employees covered by this MOU shall earn vacation credits as follows:
Minimum Continuous City Service
Amount of Vacation Earned Annually
0-4.99 years: 80 hours (3.08 hrs bi-weekly)
5-9.99 yrs.: 120 hours (4.62 hrs bi-weekly)
10-14.99 years: 160 hours (6.15 hrs bi-weekly)
15-plus years: 200 hours (7.69 hrs bi-weekly)
7.2.1 Vacation Accumulation
A Management employee with less than ten (10) years of consecutive public service shall not accumulate more than two-hundred and eighty-eight (288) hours of vacation.
A Management employee with more than ten (10) years of consecutive public service shall not accumulate more than three-hundred and twenty (320) hours of vacation.
Once the accrual cap is reached, a Management employee shall not accrue any additional vacation until he or she reduces the accumulated hours below the accrual cap, either through usage and/or cash-out (as described in Section 7.2.4). 212
9 A Management employee shall receive reasonable notice of the amount of accumulated vacation leave in advance of each anniversary date. Requests for deferring vacation use must be presented to the City Manager sixty (60) calendar days before the end of the calendar year in which the vacation leave was to be taken.
In granting deferred vacation, the City Manager may specify a time within which such excess vacation leave must be used.
7.2.2 Vacation Authorization
The City values vacation and believe that an employee's ability to utilize vacation is an important goal. To that end, the City and Union wish to emphasize that MEA bargaining unit employees are not expected to be "on call" during vacation. Of course, because of the importance of their positions, bargaining unit employees must provide adequate contact information in the event it becomes necessary to contact them prior to their return from vacation. If an employee is required to return to work from vacation, the employee shall not be charged vacation for the period during which they have returned to work.
The time at which an employee may use vacation leave and the amount to be taken, at any one time, shall be determined by the City Manager or Designee, with particular regard for the needs of the City and, insofar as possible, considering the desires of the employee. Except in unusual circumstances, use of vacation leave shall be scheduled and approved in advance of the first day of absence. Approval of use of vacation leave shall be in a form and manner prescribed by the City Manager.
Said approval of vacation leave shall not be unreasonably withheld.
7.2.3 Use of Vacation
Vacation leave may be taken by the management employee as it is credited. Accrued vacation time may be used, at a minimum, in blocks of four (4) hour increments.
The date of vacation may be selected by the employee but shall be approved by the City Manager or designee, who shall consider the wishes of the employee and the needs of the department and/or the City organization.
7.2.4 Vacation Cash Out
Members of the bargaining unit may make an irrevocable election to cash out vacation during the month of December each year. Employee must complete the “Irrevocable Annual Vacation Cash Out Election Form” each calendar year for the following year. To qualify for vacation cash out, an employee must have more than eighty (80) hours of accrued vacation. During the term of this MOU, Bargaining units shall be allowed to cash out up to 80 hours of leave vacation, so long as the member maintains a balance of at least eighty (80) hours. Elections will be cashed out December the following year.
7.2.5 Pay for Vacation Time
Upon termination of employment the Management employee shall receive all earned vacation on record based on the pay level of the employee at the time of the separation of employment. Such payment shall be received in his/her final paycheck from the City.
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10 7.3 Holidays
7.3.1 Official Holidays
All Management employees shall receive thirteen (13) designated paid holidays per year to be observed during each fiscal year (July 1 through June 30). Holiday Leave shall be administered as provided for in Section 3.10 of the City of East Palo Alto Personnel Policies and Procedures and subsequent amendments adopted by City Council. Paid holidays shall have a length of eight (8) hours. If an employee desires to take more than eight (8) hours of holiday time (e.g., an employee on a 4- 10 schedule), the employee will be permitted to use leave time to make up the difference.
Specified holidays authorized by the City Council are as follows:
1. New Year's Day, January 1
2. Martin Luther King Day, 3rd Monday in January
3. Lincoln's Birthday, February 12
4. Washington's Birthday, February 22 or its legal substitute (third Monday in February)
5. Cesar Chavez Day, last Monday in March
6. Memorial Day, May 31 or its legal substitute (third Monday in May)
7. Juneteenth, June 19
8. Independence Day, July 4
9. Labor Day, first Monday in September
10. Veteran's Day, November 11
11. Thanksgiving Day, third Thursday in November
12. Day after Thanksgiving
13. Christmas Day, December 25
Note: When any day recognized as a holiday falls on Sunday, the holiday shall be observed on the following Monday. When any day recognized as a holiday falls on a Saturday, the holiday shall be observed on the preceding Friday. When a holiday falls on an employee’s designated day off which is not a Saturday or Sunday, the employee shall be permitted to schedule eight hours of holiday time for another day within the same pay period as the holiday. A employee may schedule holiday time under this provision in the same manner as vacation is scheduled (pursuant to Section 7.2.3).
7.3.2 Other Holidays
In addition, any day proclaimed by the President of the United States, the Governor of the State of California, and recognized by the City Council as a public holiday, day of mourning or day of thanksgiving shall be provided as a holiday. This shall be administered in compliance with Resolution 0210 (Section 3.10.02).
7.3.3 Other Religious Holidays
A Management employee may request, in advance, to be excused from work for the observance of a bona fide religious holiday, subject to approval of the City Manager. If approved, such time off shall be charged to the Management employee’s unused available Vacation or Management Leave balance, whichever the employee designates. Approval of time off is subject to the needs of the City. If 214
11 not approved, no pay or other time off shall be authorized in lieu thereof.
7.3.4 Effect of Other Leave While on Vacation
When a day designated as a holiday, in Section 7.3.1, occurs during the Management employee’s vacation leave, for payroll purposes, the day shall be charged as a holiday instead of vacation. Sick Leave shall not be approved for official holidays. A Management employee in no pay status shall not receive or accrue holiday leave.
7.3.5 Pay for Official Holidays
Management employees shall receive eight-hours of pay for each of the twelve (12) official holidays.
7.4 Sick Leave
7.4.1 Accrual
All Management employees shall accrue sick leave at a rate of three and seven tenths (3.7) hours per bi-weekly pay period, beginning at the end of the first thirty-one days of employment, and sick leave may be accrued with no maximum limit.
7.4.2 Personal Use
Use of accrued sick leave may begin as it is accrued. It is to be used for illness or injury and may not be used to supplement days off.
7.4.3 Family Care Use
Accrued sick leave may be used to care for children, siblings and parents, (be they natural, adoptive, step or foster, grandparents, aunts, uncles, of the employee their current spouse or domestic partner, to a maximum of eighty (80) hours in a calendar year (January through December). It is further provided that leave and or vacation accrual may be used for family care up to twelve (12) weeks in any twelve (12) month period. If all bank accruals have been used, without pay, may be used for such care in unusual or emergency cases with the approval of the City Manager.
7.4.4 Documentation
Employee Leave forms must be filed in all cases and a physician’s certification may be required at the discretion of the City Manager and/or designee for absences of three (3) consecutive workdays or more.
7.4.5 Leave Donations
Bargaining Unit members may use up to one-half of their annual accrual of sick leave for the diagnosis, care, or treatment of an existing health condition of, or preventive care for, a member of the employee’s immediate family. For the purpose of this section, the immediate family of an employee shall mean the following: related by blood, marriage or adoption: spouse, child, parent, sister, brother, uncle, aunt, 215
12 nephew, niece, grandparent, grandchild, and cousin. Immediate Family shall also include registered domestic partners.
Employees shall be eligible to participate as donors and recipients in the leave donation program, which provides a mechanism for assisting employees who have exhausted paid leave due to a catastrophic illness and/or injury. This program allows a permanent City employee to donate accrued vacation time hours to a specific eligible employee who has exhausted his/her own available leave balances on an hour for hour basis.
Catastrophic illness or injury is defined as the employee’s own adverse medical condition which requires the employee to be absent from work for more than twenty (20) consecutive work days, or similarly debilitating illness or injury of the employee’s immediate family member who has a catastrophic illness or injury as verified by a physician’s statement.
A. To receive leave donations, an employee:
1. Must have been employed in a regular full-time position with the City for a minimum of one year; and
2. Must be absent from work due to his/her own catastrophic illness or injury for more than twenty (20) consecutive days (as verified by a physician’s statement); or be absent from work in order to attend to his/her immediate family member who has a catastrophic illness or injury (as verified by a physician’s statement); and
3. Must have exhausted all earned leave balances (including sick leave if related to the employee’s own illness) vacation, and management leave; except however, donations may be made prior to all balances being exhausted, when the physician’s statement and leave balance indicate the probable exhaustion of balances within two (2) pay periods.
B. Donations
1. Are voluntary.
2. Are made from accrued Vacation and/or Management Leave balances; donations of Sick Leave are not permitted.
3. Must be for a minimum of eight (8) hours, in whole hour increments.
4. Are irrevocable.
5. Are taxable on the part of the recipient, in accordance with IRS Regulations, and are subject to withholding as required by law.
6. Donations shall be processed in the order received. However, a donor’s leave shall not be reduced until the recipient actually uses the leave. Unused donation shall remain with the donor.
7. An employee may not donate more that eighty (80) hours to any other individual employee.
8. The total donation received into an employee’s donated leave balance shall normally not exceed 1040 hours; however, donations in excess of 1040 hours may be considered when approved by the Human Resources Manager.
9. Upon approval of the request for donations, the Human Resources Manager (or his/her designee) shall, at the employee’s request, post a notice of the eligible employee’s need for donations on departmental bulletin boards accessible to employees. Confidential medical information shall not be 216
13 included in the notice.
10. Nothing in this section shall be construed to modify the employment relationship between the City and the receiving employee, or to restrict the City’s management rights. Neither shall this section modify existing City rules, policies or agreements regarding unpaid leave of absence or family leave.
“This provision (7.4.5) shall sunset upon the parties’ mutual agreement on a Citywide policy on Leave Donation.”
7.5 Fitness for Duty Examinations.
City retains the right to require employees, covered by this agreement, to take a Cityrequested examination at a physician of the City’s choosing. The parties agree that any City order that an employee submit to fitness for duty examination will be made in compliance with applicable laws and judicial decisions.
7.6 Family Medical Leave
7.6.1 Family Medical Leave Act and California Family Rights Act Management employees shall be entitled to and the City shall comply with leave as provided for in the Family Medical Leave Act (FMLA) and the California Family Rights Act (CFRA).
7.6.2 Immediate Family
Immediate Family shall mean the following: related by blood, marriage or adoption; spouse, child, parent, sister, brother, uncle, aunt, nephew, niece, grandparent, grandchild, and first and second level cousin. Immediate family shall also include a registered domestic partner.
7.7 Bereavement Leave
A. Management employees shall be entitled to up to three (3) calendar days of paid leave for an occurrence of death or serious illness or accident determined to possibly lead to death in the immediate family; five (5) calendar days if out of state. Additional days may be approved by the City Manager or designee and charged to the employee’s available unused leave. This leave shall not be accumulated and is in addition to sick leave and vacation benefits except where additional time off is taken as provided above.
B. Immediate family shall mean the following: related by blood, marriage or adoption:
spouse, child, parent, sister, brother, uncle, aunt, nephew, niece, grandparent, grandchild, and cousin. Immediate Family shall also include registered domestic partners; C. Request for funeral/emergency leave must be in writing, state the relationship of the family member, and be approved in advance of the City Manager. In special emergencies, an employee may request formal approval after the fact; if approved, leave records shall be adjusted accordingly. Death following a serious illness or injury shall generally be regarded as one (1) occurrence; however, the City Manager reserves authority for determining the nature and/or severity of the illness and the amount of time the occurrence warrants.
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14 7.8 Jury Duty Leave
A. Management employees required to report for jury duty during regularly scheduled work hours shall notify the City Manager as soon as possible and shall be entitled to leave with pay until released by the Court provided the employee remits to the City within five (5) calendar days after receipt, all fees except those specifically allowed for mileage and subsistence.
B. A Management employee subpoenaed to appear in court during regularly scheduled working hours, solely as a result of employment with the City, shall receive full pay for such appearance until released by the Court provided the employee remits to the City within five (5) calendar days after receipt, all fees except those specifically allowed for mileage and subsistence.
C. A Management employee is responsible for keeping the City Manager informed of his/her court schedule.
7.9 Military Leave
A. Military leave shall be granted in accordance with the Military and Veteran’s Code of the State of California and/or federal regulations as amended. All employees entitled to military leave shall be given such leave within such limits as the appropriate military regulations may determine, when leave is requested in addition to the rights of workers returning from such leave.
B. Every permanent classified officer or employee of the City who is actually inducted into, or enters, any branch of the military, Army, Navy, Air Force, Marines, National Guard, or Coast Guard Service of the United States of America, pursuant to and under the terms and conditions set forth in Section 395, et seq., as amended, of the Military and Veteran’s Code, shall be entitled to a military leave of absence from his/her City position and shall be entitled to receive regular compensation and benefits in accordance with state law and any current City Resolution.
C. This provision (7.7) shall sunset upon the parties’ mutual agreement on a City-wide policy on Military Leave.
7.10 Leave of Absence without Pay
If the circumstances of the particular case warrants, the City Manager may grant leaves of absence without pay for a maximum of ninety (90) working days to any employee.
The leave shall be governed by the Personnel Policies and Procedures Section 3.12.13 or as amended by the City Council.
7.11 Industrial Accident Leave
The City agrees to comply with all State and Federal statues, regulations and rulings with respect to compensation of employees who suffer industrial injury or illness.
ARTICLE 8.0 H E A L T H , DENTAL, VISION, LONG TERM DISABILITY, LIFE 218
15 INSURANCE, DEFERRED COMPENSATION, RETIREMENT, COBRA AND 125
FLEXIBLE SPENDING PLANS
8.1 Medical Insurance
A. The City shall provide a medical insurance plan or plans (if more than one is available) for eligible employees covered by this bargaining unit.
B. The City shall contribute up to the full cost of the employee-only level based on the Kaiser Permanente HMO premium. Eligible employees may select coverage from among the available options. Any premiums in excess of Kaiser Permanente HMO plan will be paid by the employee.
C. The City shall contribute up to sixty five percent (65%) of the premium of the Kaiser Permanente HMO medical plan for those employees electing to have dependent medical coverage under the City’s medical plans. The employee shall be responsible for the remaining premium for the elected medical coverage, payable through bi-weekly payroll deductions.
D. Medical coverage starts the first day of the month following date of hire.
E. Employees who fail to authorize payroll deduction or make payment pursuant to the approved schedule shall not be provided with dependent coverage.
F. Employees may insure their eligible dependents (including registered domestic partners, as defined by State law) in the Medical Plans offered by the City.
G. Employees electing not to take health c o v e r a g e shall be required to complete and sign a “Waiver Form” and such form shall be filed in the personnel file.
H. Benefits Committee
During the term of this MOU, the City and Unions shall convene the Benefits Committee for the following purposes:
1. To continue ongoing discussions regarding cost structures as a part of an overall strategy to maintain balanced enrollment in City plans,
2. To investigate the feasibility of revising medical and/or dental coverage and/or plan(s) and strategies to participate into benefit insurance cost structure, and
The benefits Committee will commence no later than September 30,2022. The Committee will be composed of City labor representatives, not to exceed four (4) representatives and four (alternates) from each participating labor organization and four (4) representatives. These names will be provided to the City no later than August 31, 2022. 219
16 I. The City shall make a semi-monthly contribution of $83.33 toward an HSA for employees that enroll in Kaiser Permanente HSA high deductible plan. Equivalent to approximately $2,000 annually.
8.2 Dental Insurance
A. The City agrees to provide and contribute the full cost of a dental insurance plan(s) (if more than one is available) for its employees. Employees may insure their eligible dependents (including registered domestic partners, as defined by State law) in the Dental Plan(s) offered by the City. Dependent dental insurance coverage shall be paid for by the employee.
B. Employees electing not to take dental coverage shall be required to complete and sign a “Waiver Form” and such form shall be filed in the personnel file.
8.3 Long Term Disability Insurance
Management employees covered under this resolution may participate in the group longterm disability insurance program, at the City’s expense. For an overview of the plan see the certificate of insurance on file in the City’s Finance Department.
8.4 Life Insurance
The City agrees to provide and pay the full costs for a Basic Term life insurance policy in the amount of $100,000 for Management employees responsible for a Division, and $75,000 for Mid-management employee covered under this resolution. Any additional options available through the plan shall be at the employee’s expense. The City shall provide each member a copy of the plan as provided by the insurer.
8.5 Deferred Compensation
The City agrees to provide, at the employee’s expense, a deferred compensation (457) plan approved by resolution of the City Council.
8.6 Retirement
Effective on or about June 29, 2008, the City implemented the 2.5% @ 55 retirement enhancement. Eligible employees hired on or after January 1, 2013, and who meet the definition of “new member” under Government Code § 7522.04(f), shall be covered by the PERS retirement plan two percent (2%) at sixty-two (62) full formula for local miscellaneous employees.
Employees will pay the employee contribution in effect for the applicable formula.
8.7 Consolidated Omnibus Budget Reconciliation Act (COBRA) The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 requires the City to offer employees and their families an opportunity for a temporary extension of health coverage upon separation of employment. The separated employee and/or dependent must pay premiums in advance plus the applicable administrative fee. The specific provisions and restrictions of the Act are available through the Human Resources Department.
8.8 Flexible Spending Plan (125 Plan)
The City shall establish and offer a Flexible Spending Plan (125 Plan) for employees. 220
17 Enrollment options shall be at the discretion of the employee. The costs of the plan will be paid for by the employee.
8.9 Short Term Disability Insurance (SDI)
MEA bargaining unit employees participate in the State Disability Insurance (SDI) system administered by the State of California Employment Development Department.
Coverage shall be limited to the “State Plan” and shall not include any additional voluntary plan design. SDI premiums shall be 100% employee paid on an after-tax basis.
Payment shall be made by mandatory payroll deduction for every Management employee.
ARTICLE 9.0 PROFESSIONAL DUES, SUBSCRIPTIONS, LICENSES, AND
CERTIFICATES
A. In order to support each MEA bargaining unit employee in the performance of his/her job duties, the City will pay for the costs of dues and subscriptions for professional/technical licensing and association membership as required, and as approved by the City Manager and/or designee.
B. The City shall cover costs for non-personal, job related expenses incurred by MEA bargaining unit employees in the course of employment. All such expenses shall be reimbursed or paid upon presentation of duly executed Purchase Orders, Claims Forms, and receipts with Department Head’s approval.
C. Workers who are required by State and/or Federal agencies to be licensed or secure a certificate shall be reimbursed for the fees for the licenses or certificates.
This provision excludes licenses required by the Department of Motor Vehicles.
ARTICLE 10.0 AUTOMOBILE USE
(Article 10.0 will be placed in the Personnel Policies and Procedures. Not the MOU) ARTICLE 11.0 EDUCATION INCENTIVE
A. No Management employee covered by this MOU shall receive any additional pay as an educational bonus or "certificate pay" unless specifically provided for herein.
B. Subject to the availability of funding, the City shall make available $5,000 for tuition reimbursement annually for the employees represented by the Union for purposes of continuing education and update of certification. The maximum per individual is $500 per fiscal year, limited to the class tuition and required textbooks (neither supplies, nor parking or mileage reimbursements will be considered). Coursework must be on the employee’s own time.
C. Tuition reimbursement shall be available only for coursework that is job-related and taken at an accredited institution and must be approved in advance by the City Manager. Tuition reimbursement is only available for coursework in which the employee receives a passing grade. The decision of the City Manager is final. The funds shall be subject to budgetary constraints and may not be available from year to year.
D. In the event that the employees have not exhausted the $5,000 reimbursement pool by May 31 of any fiscal year, any member who has received the maximum individual 221
18 reimbursement ($500), but has expended more than that amount on textbooks or tuition for approved coursework, may apply to the City Manager for reimbursement of the remainder of the appropriate expenses up to an additional $1,000 maximum per employee. Employees must submit a written request for additional reimbursement on or before May 31st. If the balance remaining in the reimbursement pool is not sufficient to pay the additional expenses for applications received by May 31, the pool shall be distributed equally to each applicant up to the amount of each reimbursement request.
ARTICLE 12.0 TRAVEL AND TRAINING EXPENSES
A. The City will pay the travel and subsistence expenses of MEA bargaining unit employees, in accordance with the Annual Approved Travel Plan and Budget (including any approved Plan modifications) for travel, meetings and occasions required to pursue the official business of the City, subject to prior approval by the City Manager.
B. Pursuant to City Policy, the City will advance 75% of the allowable reimbursement for meals consumed by MEA bargaining unit employees during travel on City business. For reimbursement exceeding the 75% advance, upon return from travel, employees are required to submit receipts for meal reimbursement to the City’s Finance Department and will be reimbursed up to the allowable amount.
ARTICLE 13.0 HOURS OF WORK
A.Salaries approved for MEA bargaining unit employees recognize the advanced level of skills required and possessed by these employees, the high level of responsibility delegated to these employees and the potential for longer working hours necessitated by meeting attendance, response to emergency situations, and attendance at court and/or the necessity for meeting project deadlines.
B. There is no specific compensation for hours worked by FLSA Exempt employees beyond the minimum workweek of forty (40) hours. The following shall serve as basic guidelines to be used in the management of employee work hours:
1. In order to fulfill their job duties, employees may be expected to attend City Council meetings, as well as other Board, Commission, and Committee meetings during the evening and/or on the weekend. FLSA exempt employees shall not receive overtime or additional compensation in any other form for attendance at such meetings/activities. However, non-exempt FLSA employees may receive overtime or compensatory time off with the approval of the City Manager.
2. All FLSA exempt employees covered under this resolution shall be eligible to use Management Leave during the calendar year as provided in Section 7.1 of this MOU.
C. In recognition that FLSA exempt MEA bargaining unit employees are often required to attend early morning, lunch, and evening meetings and due to the fact that their work is results oriented without a specific workweek, a system of flexible time is available for their use, subject to the operational needs of the City and as determined by their immediate Supervisor/Manager/Director.
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19 It is expected that all MEA bargaining unit employees work a minimum of forty (40) hours a week, plus any additional work time reasonably required to discharge the duties and responsibilities of the position.
D. “Flex” Hours
With the approval of their supervisor, FLSA non-exempt (overtime eligible) employees assigned to work off hours, such as attendance at evening meetings or early morning training, may flex their schedules to accommodate the additional work, so long as the “flexed” hours occur within the same workweek. If the employee’s request to flex his or her schedule is denied, the employee may appeal the denial to his or her Department Head.
E. Alternate Work Schedules
The City may establish alternate workweeks (including 4/10, 9/80 or other schedules) for individuals or groups of employees by providing employees with written notice. The City and Union agree that the availability of alternate work schedules may be a valuable benefit to workers and the City. Alternate work schedules requests may be initiated by employee(s) or at the initiative of the City.
Alternate work schedules must be recommended by the Department/Division Manager and approved by the City Manager, with the needs of the City, service to the public, and the needs of the employee(s) being considered. At the request of either party, the parties will meet and confer over the establishment of alternative work schedules in specific work locations. Should a department or division establish an alternative work schedule as a result of meet and confer, the City will notify the Union of any issues with the alternative work schedule as well as any plans to eliminate the schedule.
In all decisions regarding alternative work schedules, the City Manager or designee’s decision will be final.
ARTICLE 14.0 RELATIONSHIP TO PERSONNEL REGULATIONS
The "Personnel Rules and Regulations of the City of East Palo Alto”, as amended from time to time and as presently adopted by Resolution 0210 provide policies and regulations governing aspects of employee compensation, benefits and conditions of employment. In any conflict between this MOU and Resolution 0210, the provisions in this MOU, or its successor, shall prevail.
ARTICLE 15.0 GRIEVANCE PROCEDURE
A. This grievance procedure is intended to assure that every reasonable effort will be made to resolve problems as near as possible to the point of origin.
B. A permanent classified employee or his/her Union representative may submit a dispute according to this procedure. The Union may utilize this procedure in the event a dispute is not directly related to an individual employee and complies with all the provisions of this Article.
C. Definition. A grievance is defined as a dispute involving the interpretation, application or alleged violation of this Memorandum of Understanding (MOU) and 223
20 shall not include any appeal of a disciplinary action. No dispute shall be considered a grievance if it does not conform to this definition. Where City Codes or Rules and Regulations provide another appeal process, the Grievant shall choose which process is to be used but shall not use both.
D. Grievance Procedure
Step 1 - Informal Discussion
Within ten (10) working days of the occurrence of an act in dispute, an employee shall discuss it with the Department Head, who shall investigate and attempt to resolve the matter. The Department Head shall give the employee an oral reply within ten (10) working days after the discussion. If the employee is not satisfied with the response, he/she may proceed to Step 2.
Step 2 - Formal Written Grievance
Any dispute not resolved at Step 1 may be submitted to the City Manager in writing citing the specific provision of the rule in dispute and stating the desired solution within ten (10) working days after the Department Head’s Step 1 response. Ten (10) working days thereafter, a meeting shall be scheduled with the employee and the City Manager or designee. The City Manager or designee shall provide the employee a written reply within ten (10) working days after such meeting. If the employee is not satisfied with the response, he/she may proceed to Step 3.
Step 3 - Advisory Arbitration
If the Union is not satisfied with the City Manager or designee’s response, it may appeal the dispute to advisory arbitration in writing within ten (10) calendar days after the date of the Step 2 response. Within ten (10) calendar days of the appeal, the parties shall meet to select an arbitrator. If the parties are unable to reach mutual agreement on an arbitrator, the parties shall jointly request a list of seven (7) labor arbitrators from the California State Mediation Service and shall alternately strike names until only one name remains. The party making the first strike shall be determined by a flip of a coin.
Costs for the arbitration (including arbitrator fees and any court reporter) shall be shared equally by the parties. The parties shall each pay for their own representative.
The decision of the arbitrator shall be advisory to the City Manager. The City Manager or designee shall have ten (10) calendar days after the receipt of the decision to notify the Union of his/her decision either to adopt or revoke the decision of the arbitrator. If the City Manager or designee takes no action within the ten (10) calendar day period, the City Manager shall be deemed to have adopted the decision.
A decision adopted by the City Manager or designee will be final and binding upon the parties. A decision revoked by the City Manager or designee shall be deemed to have no effect and the Step 2 reply shall be final and binding upon the parties.
E. Copies of all City responses shall be sent to the Grievant, Union, and to the Grievant representative at the address indicated on the grievance form.
F. Failure of the City to adhere to the designated time deadlines shall be deemed a denial and the Grievant may appeal the grievance to the next level. Failure of the Grievant to adhere to the time deadlines shall mean that the grievance is settled. The 224
21 grievant and the City may extend any time deadline by mutual agreement.
G. An employee may have a representative of his/her choice present at all stages of the grievance procedure.
H. An employee shall not be penalized in any way for availing himself/herself of this procedure.
ARTICLE 16.0 DISCIPLINE
16.1 Discipline
Except for employees in the classifications of Chief Building Official and Planning Manager, who serve at the will of the City Manager, the City may reprimand, place on disciplinary probation, discharge, suspend, reduce salary, or demote any employee who has completed the specified probationary period for cause, including, but not limited to:
Dishonesty;
Insubordination;
Immoral or unprofessional conduct;
Intoxication or the use of controlled substances while on duty; Incompetence;
Willful negligence;
Excessive absences and/or tardiness;
Inexcusable absence without leave;
Misuse of City property;
Failure to maintain licenses or certificates required by law, City requirements, or job description;
Failure to perform work as required; or
Failure to comply with or violation of the City's reasonable rules regarding safety, conduct and operations.
16.2 Right to Representation
Except in situations requiring immediate action, such as, but not limited to, allegations of theft or urgent safety matters, an employee shall be entitled to a representative of his or her choice at an investigative interview that the employee reasonably believes may result in disciplinary action. The employee may request a representative either during or prior to the interview and must make a selection of which individual will be representing him or her within a reasonable time. The employee’s choice of representative will not be permitted to delay the investigation, if the resulting delay would harm the investigation.
16.3 Procedure
225
22 A. Notice of Intent to Discipline
A Notice of Intent to discharge, demote or suspend must be served on the employee and the Union in person or by certified mail.
The Notice shall include:
1. A statement of the nature of the disciplinary action;
2. The effective date of the action;
3. A statement of the cause thereof;
4. A statement of the act(s) or omission(s) upon which the causes are based;
5. A statement of the employee's right to respond to the charges, either orally or in writing, prior to the action becoming effective; and
6. A statement advising the employee of the right to Union representation.
The Notice shall be accompanied by all documentation upon which the City relied in determining the need for disciplinary action.
B. Employee Response/Skelly Meeting
The employee may respond to the Notice of Intent to Discipline either in person or in writing.
1. If the employee elects to respond in writing, the employee or his representative must file the employee’s response within ten (10) workdays after service of the Notice of Intent to Discipline.
2. If the employee elects to respond in person, the employee or his or her representative must request a meeting with the Department Head within ten (10) workdays after service of the Notice of Intent to Discipline. The Department Head shall hold a meeting with the employee within twenty (20) days of the employee’s request.
C. Notice of Discipline
If the Department Head determines that discipline is warranted, the Department Head shall issue a written Notice of Disciplinary Action within ten (10) workdays after either the filing of a written response or the date of the Skelly Meeting. If the employee did not request a meeting or file a written response, the Department Head’s decision is due twenty (20) workdays after the service of the Notice of Intent to Discipline. The Department Head shall furnish a copy of the Notice of Disciplinary Action to the Union and appropriate Steward.
D. Appeal to Personnel Officer
1. In the event an employee feels that the disciplinary action is unjust, the employee or his or her representative may appeal the action to the Personnel Officer. An appeal of the Notice of Disciplinary Action must be in writing and must be filed with the Personnel Officer within ten (10) workdays of the date of service of the Notice of Disciplinary Action.
2. For any matter subject to binding arbitration pursuant to Section E, below, the Personnel Officer or designee shall hold an appeal meeting within twenty (20) 226
23 days.
3. For any matter not subject to binding arbitration pursuant to Section E, below, the Personnel Officer or designee may either hold an appeal meeting within twenty (20) days or may refer the matter to advisory arbitration.
A. Advisory arbitration shall be heard by a neutral arbitrator mutually selected by the parties or chosen by the alternating strike method from a list provided by the State Mediation and Conciliation Service. The arbitrator shall have the power to:
Compel the attendance of witnesses;
Require the production of evidence by subpoena;
Administer oaths to witnesses;
Receive evidence from the department head and the employee, allowing reasonable cross examination of witnesses; and Complete a record of the proceedings, including a certified reporter’s transcript.
B. The arbitrator shall prepare a report to the Personnel Officer with his/her findings and recommendations within forty- five (45) calendar days after the date of referral by the Personnel Officer. The report of the arbitrator shall be non-binding and advisory to the Personnel Officer who shall exercise his/her discretion to accept or reject all or part of the report.
4. The Personnel Officer shall issue his/her decision within ten (10) workdays after either meeting with the employee or receipt of the arbitrator’s report, whichever is later.
5. Except for matters which are subject to arbitration pursuant to Section E, the decision of the Personnel Officer shall be final.
E. Arbitration of Serious Discipline
In the event an employee feels that a discharge, suspension of three (3) or more days, or a reduction in pay for sixty (60) or more days is unjust, the Union shall have the right to appeal the case to binding arbitration. Any appeal under this provision must be filed within twenty (20) days after receipt of the Personnel Officer’s decision. The expenses of any arbitration convened pursuant to this section, including the fee for the services of the Arbitrator and court reporter shall be borne equally by the parties. All other expenses which the parties may incur individually, including witness and attorneys’ fees, are to be borne by the party incurring such expenses.
16.4 Exceptions
The foregoing provisions shall not apply to employees in the classifications of Chief Building Official and Planning Manager. Employees in those classifications shall continue to be “at will” employees who serve at the will of the City Manager.
ARTICLE 17.0 WAGE AND SALARY SCHEDULE COST OF LIVING
227
24 ADJUSTMENTS
17.1. Wages
A. Employees in this unit will receive a salary increase of 3% (three percent) effective the first full payroll that includes the adoption of this agreement by City Council, anticipated to be the pay period starting May 26, 2024.
a. Employees in this unit will receive a one-time payment of $2000 effective the first full payroll following adoption of this agreement by City Council.
B. Employees in this unit will receive a salary increase of 3% (three percent) effective the first full payroll following July 1, 2025.
C. Employees in this unit will receive a salary increase of 3% (three percent) effective the first full payroll following July 1, 2026.
a. Revenue Surplus Cost-Share:
i. "If change in fund balance on audited General Fund financial statement exceeds $650,000, each MEA bargaining unit member employed at the time will receive a 1% lump sum bonus.
ii. In addition, if change in fund balance on audited General Fund financial statement exceeds $2,000,000, each MEA bargaining unit member employed at the time will receive an additional 2% lump sum bonus (a total of 3%)."
17.3. Merit Step Increases
Upon the completion of six (6) months of actual initial or promotional probationary service and after receiving a satisfactory performance evaluation, eligible full-time employees who were initially appointed to the “Step A” of the salary range in effect for the class to which appointed will be granted a merit increase to the next higher step in the pay range.
Employees who are at the “Step B” of the salary range or higher shall receive a merit increase to the next higher step until the top step of the pay range each twelve (12) months of actual service after receiving a satisfactory performance evaluation. Regular part-time employees shall be entitled to merit increases after receiving a satisfactory performance evaluation upon completion of not less than twelve (12) months of actual service in each step of the range.
An employee shall not receive a merit increase beyond the maximum step established for the job classification.
Merit increases shall be effective on the first pay period following the anniversary date (i.e., six (6) months after the initial appointment to the classification at Step A and every twelve (12) months after that), regardless of the date of evaluation.
ARTICLE 19.0 BILINGUAL EXAMINATION AND DIFFERENTIAL
19.1 Bilingual Differential
228
25 Employees who are assigned to job duties requiring the use of bilingual skills are eligible to receive$50.00 per pay period. No employee shall be required to use bilingual skills who is not compensated under this section.
19.2 Eligibility
Bilingual Differential shall be available only to employees who are regularly required to speak, read, or translate in a language other than English in order to perform assigned job duties arising during the normal course of work.
19.3 Examination Process
The City shall establish a test for Bilingual Differential. This test shall include a written and verbal certification, including translation, given by an individual or entity designated by the City. The Human Resources Department shall be responsible for overseeing the administration of the test and certifying test results.
Eligible bargaining unit members may request to take the Bilingual Differential test by submitting a request in writing to the Human Resources Department. Within thirty (30) days of receiving such a request, the Human Resources Department shall decide, in its sole discretion, whether the employee is eligible for Bilingual Differential based on whether bilingual skills are essential to successful performance of the employee’s assigned job duties and shall issue notice if its decision to the employee. The decision of the Human Resources Department to arrange for testing shall be final.
If the Human Resources Department approves an employee’s request for bilingual testing, the Department shall arrange for testing to be completed within thirty (30) days of the approval.
19.4 Effective Date
Bilingual Differential shall be paid beginning on the first day of the first pay period following the Human Resources Department’s certification that the employee has passed the test for Bilingual Differential and otherwise met the requirements to receive Bilingual Differential. Bilingual Differential shall be based solely on the date of the Department’s certification and shall not be paid retroactively.
ARTICLE 20: BOOTS
20.1 Boots
Employee represented by this bargaining group who are required to wear protective footwear will be reimbursed up to $250 per year for the purchase of safety boots approved by OSHA/ANSI. In the event an employee’s shoes are damaged and/or worn, and/or unsafe as determined by the City, the employee may request that damaged shoes be replaced provided:
A. The division head/manager concludes the shoes are damaged and need to be replaced.
B. The employee furnishes proof of purchase for the damaged shoes. Purchase shall have been within the current fiscal year.
C. The employee has fully expended the boot allowance. If not fully expended, the employee must use the balance of his/her allowance for the purchase of replacement shoes. Requests for replacement equipment shall be made to the City in writing on a City-provided form.
The City shall normally respond to such requests within five (5) working days. Denials may be appealed to the Human Resources Manager in writing within five (5) working days. The decision of the Human Resources Manager is final and shall not be appealed. 229
26 Denials of replacement equipment shall not be subject to the grievance procedure.
ARTICLE 21.0: CONTRACT TERM
The term of the MOU shall be from July 1, 2024, to June 30, 2027, equivalent to three years.
Me too clause:
If during the term of this contract, SEIU 521 reaches an agreement with the City for wages, benefits, and/or contractual enhancements above and beyond the terms of this agreement, the City will apply those enhancements to all MEA/IFTPE local 21 bargaining unit employees.
ARTICLE 22.0 OVERTIME
For overtime-eligible classifications, overtime, overtime is limited to “actual hours worked” (not including sick leave, vacation, compensatory time, or other paid or unpaid leave).
ARTICLE 23.0: PAYROLL DEPOSIT
All bargaining unit members will enroll in direct payroll deposit.
ACCEPTED BY:
For the Management Employees’
Association Union:
For the City of East Palo Alto:
________________________________
Stanley Young, MEA Representative
________________________________
Melvin Gaines, City Manager
________________________________
Maurice Baker, MEA President
________________________________
Ana M Torres-Mondragon,
Human Resources Manager
________________________________
Kevin Lewis, MEA Member
________________________________
Brenna Rowe, Chief Spokesperson
Sloan Sakai Yeung & Wong LLP
________________________________
Natasha Raiburn, MEA Member
230
27 Memorandum of Understanding Between
The City of East Palo Alto And the
East Palo Alto Management Employees’ Association
(Management Unit)
Appendix A – Management Bargaining Unit
This unit of employees shall, for the purpose of identification, be titled the Management Unit.
Accountant Senior
Chief Building Official
City Engineer
Community Services Manager
Financial Services Manager
Housing Project Manager
Housing and Economic Development Manager
Maintenance Manager
Management Analyst I/II
Planning Manager
Police Records Supervisor
Public Works Supervisor
Rent Stabilization Program Administrator
Senior Engineer
Senior Planner
Support Services Manager (PD)
231
28 Memorandum of Understanding
Between The City of East Palo Alto And the
East Palo Alto Management Employees’ Association
(Management Unit)
Appendix B – Basic Term Life Insurance Policy
Position Designation/Policy Amount
Accountant Senior Mid-management $ 75,000
Chief Building Official Management $100,000
City Engineer Management $100,000
Community Services Manager Management $100,000
Financial Services Manager Management $100,000
Housing Project Manager Mid-management $ 75,000
Housing and Economic Development Manager Management $100,000 Maintenance Manager Management $100,000
Management Analyst I/II Mid-management $ 75,000
Planning Manager Management $100,000
Police Records Supervisor Mid-management $ 75,000
Public Works Supervisor Mid-management $ 75,000
Rent Stabilization Program Administrator Mid-management $ 75,000 Senior Engineer Mid-management $ 75,000
Senior Planner Mid-management $ 75,000
Support Services Manager (PD) Management $100,000
232
INFORMATIONAL REPORT ITEM 6.1
EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: June 4, 2024
TO: Honorable Mayor and Members of the City Council
BY: Tai Michaels, Sustainability Coordinator
Fatima Khan, Environmental Services Aide
Humza Javed, Public Works Director
SUBJECT: Climate Action Plan Implementation Report
Recommendation
Receive an informational report regarding the current status and planned implementation of the 2030 Community Climate Action Plan. Offer feedback on existing projects and insight into future priorities.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Priority No. 2: Implement Comprehensive Transportation and Mobility Plan Priority No. 3: Promote Health and Public Safety
233
INFORMATIONAL REPORT ITEM 6.1
Background
Cities are leading the charge in combating global warming by adopting sustainable solutions and passing forward-thinking policies. Yet cities are also on the frontlines of climate impacts such as flooding, extreme heat, and air pollution.
In recognition of both the challenges and opportunities of local climate action, the City of East Palo Alto has taken important steps towards building a more sustainable future. The City of East Palo Alto adopted its first Climate Action Plan in December 2011 with a goal of reducing greenhouse gas emissions to 15% below 2005 levels by 2020. The City exceeded its goal in just six years, reducing greenhouse gas emissions by 20% and avoiding emitting more than 27,000 metric tons of polluting carbon dioxide.
The City began work on the 2030 Community Climate Action Plan (CAP), its second climate action plan, in 2019. The City set a goal of a 55% reduction in per capita emissions relative to 2005 levels by 2030 in alignment with a long-term goal of carbon neutrality by 2045 and related state regulations (SB32). The CAP was designed using input from community organizations including Acterra’s Community-Based Vulnerability Planning Report, a resident survey, and five council/commission meetings. The CAP was adopted September 5, 2023.
The CAP details key actions the City will take to reach its goals of emissions reduction as well as achieving “co-benefits” to health, equity, the environment, and climate resilience. The plan recommends 53 actions, broadly grouped into Energy & Water, Transportation, and Waste.
The CAP also contains 17 recommended adaptation strategies to prepare residents for the impacts of climate change. As part of CAP implementation, the City seeks to provide annual updates on implementation status and the most recent available greenhouse gas emissions.
Analysis
After the adoption of the CAP, City staff have taken key steps to lay the groundwork for CAP actions and develop plans for ongoing implementation. City staff have worked to strengthen ties to the strong community-based environmental movement in order to align City actions and priorities with those of residents and community members. Extensive coordination with County and regional entities has also been crucial to develop thorough implementation planning. The following sections detail ongoing and planned projects and potential future strategies. Detailed project status and greenhouse gas emissions data are included as attachments.
Current & planned projects
While the Environmental Programs Division is involved in these projects, many are partnerships or are led by other departments or community partners.
Expand engagement and communication
A key part of the CAP is to ensure continued engagement from the community to build awareness of ongoing efforts in the city. This forms a key starting point to improve trust and engagement with the CAP implementation process.
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INFORMATIONAL REPORT ITEM 6.1
The Climate Change Community Team (CCCT) – The CCCT is a group of city residents and community group members who share information and resources on climaterelated topics as well as coordinating events and projects in the city. Environmental Programs representatives have attended nearly every meeting since the passage of the CAP to provide updates on behalf of the City and solicit input. Environmental Programs website – Created the Environment & Sustainability website section covering information and resources on key CAP topics including sustainable homes, transportation, waste, resilience, and the environment. Sustainability newsletter – Started a bimonthly sustainability newsletter to keep residents and community groups informed of events, resources, and ways for the community to get involved.
Community events – Staff have helped coordinate sustainability focused events in the city including a creek cleanup, Earth Day festival, Arbor Day celebration, e-waste event, and Bike to Work Day. Staff have also helped promote, plan, and conduct outreach at other community events such as MLK Day tree planting and upcoming Resilience Fair.
Sustainable homes & buildings
Building energy use accounts for 35% of the city’s greenhouse gas emissions, primarily from natural gas-fueled appliances. It is also one of the emission sources over which the City and residents have the greatest control, and it is key to reaching the City’s ambitious emissions reduction goals.
Climate Pollution Reduction Grant (CPRG) – Participated in the planning process for a regional application for over $100 million in federal funding towards electrifying gas appliances in single family homes and small multifamily complexes across the Bay Area including in EPA. Notification of funding is expected by Fall 2024. Increasing City facility sustainability – Working with PG&E and PCE to secure funding through three programs to help reduce emissions from City facilities by replacing gas water heaters, installing more efficient HVAC, and potentially installing EV charging.
Connecting with energy-efficient design incentives and technical assistance from the State to improve sustainability of upcoming housing and library projects. Existing building electrification (EBE) planning – Creating an EBE plan is a key part of the CAP and the city’s long-term emissions reduction goals. Staff have met repeatedly with key organizations involved in housing and electrification work including CRC, PCE, BayREN, and the Rent Stabilization Program to evaluate challenges and needs.
Currently part of a County working group strategizing collective approaches including permit standardization or an outreach campaign.
Transportation
Transportation is the largest part of the city’s emissions — and also the largest opportunity for a shift to a more sustainable city. Since the vast majority of residents get around by driving alone in a gas vehicle, shifting towards more sustainable modes of transit (such as biking and bussing) or more sustainable vehicles (such as electric and hybrid) can have a big impact on 235
INFORMATIONAL REPORT ITEM 6.1
both emissions and air pollution.
City fleet upgrades – Completed first holistic inventory of City fleets across all departments to comply with Advanced Clean Fleets (ACF) regulations. Working with PCE to develop a plan for shifting City vehicles to EVs over time to reduce air pollution and comply with ACF regulations. Planning and designing EV charger installation for City vehicles and potentially the public as well.
Increasing access to bikes – Worked with Live in Peace (LIP) Bike Shop to secure dozens of free bikes for EPA residents. Partnered on an application for County Measure K funding to implement an e-bike pilot for low-income residents along with job training.
Working with LIP and community members to identify locations for new and expanded bike parking. Helping promote free bike safety in partnership with LIP and SMC Safe Routes to School projects.
Reduce waste
Rethinking how we deal with waste is a key part of maintaining a healthy environment and a clean city. Even something as simple as putting trash in the right bin can avoid pollution and reduce emissions. The City has made strong commitments to reducing waste both within the CAP and through other policies and targets it has set. Composting outreach – As part of CA SB1383, all businesses and multifamily developments are required to have composting available. City staff coordinate with businesses to help them comply with regulations and reduce the amount of food/yard waste that goes to landfills. Installed composting at all City offices. City sustainable purchasing – Certifying that paper products the City purchases are compostable/recyclable and made from qualifying percentages of recycled content. Training staff to use recordkeeping systems.
Community resilience
It is crucial for residents to adjust to more damaging, climate change-fueled disasters by increasing community resilience – preparing for, responding to, and bouncing back from these disasters. The City plays a key role in helping inform residents and developing forward-thinking policies and infrastructure improvements.
Safety & Environmental Justice (EJ) Element Updates – Working with County consultants to update the Safety and EJ Elements of the City’s General Plan. Currently planning and conducting initial outreach about the plan, soliciting resident input. Expanding tree coverage and green infrastructure – Working with Canopy to plant more than 50 trees per year with the help of the Teen Urban Foresters program. Currently partnering with Canopy on two grant applications totaling over $11 million to dramatically expand tree planting and resilience outreach programs. Partnering with CRC on an application to expand their community rain garden program to install hundreds of rain gardens for residents.
Flood preparation and flood insurance – Investigating projects to improve flood 236
INFORMATIONAL REPORT ITEM 6.1
response planning and communication to increase resident awareness and safety.
Seeking to reduce flood insurance costs for residents by improving the city’s FEMA Community Rating System classification.
Future directions & options
In addition to the projects listed above, there are many other parts of the CAP still in early stages. A major goal of the implementation report is to seek guidance on which projects to prioritize and explore further over the next seven years of implementation.
Existing building electrification (EBE)
Although some of the City’s current work covers sustainable buildings and healthy homes, creating strategies to equitably transition homes and businesses to all-electric appliances (ie: water heaters, HVAC, stoves) is a key part of CAP goals. Electrification has important financial and health benefits as well – switching to electric stoves alone reduces the risk of childhood asthma by more than 40%. However, this project is challenging due to the costs (many of which may be unexpected), lack of awareness of benefits and incentives, and a wide range of barriers for renters including unresponsive property owners, increasing rents, and the “split incentive” – where tenants benefits from lower utility bills but the property owner owns the actual appliances.
Several potential options exist for promoting EBE, and further input is key for focusing on the pathways that offer the greatest potential. A few key pathways are listed below:
Time of replacement/renovation – Requiring old gas appliances to be replaced with electric versions once they need to be replaced with some exceptions. High impact but could raise costs for residents depending on how incentives change. Building performance standards – Setting standards of energy efficiency for large building which become stricter over time. Moderate impact on energy use and emissions (eg: Ikea alone is responsible for >5% of all building emissions in the city) and largely avoids financial pressure on residents but requires a lot of management from the City and may be more practical on a county or state level. Pursue funding to support electrification for priority groups – Most electrification projects to date have been done by wealthy homeowners in single family homes.
Increasing funding to reach renters, low-income residents, and residents with language barriers key to support equitable electrification. Due to high demand and upcoming regional rules, it may be difficult to get funding specific to EPA. Expand outreach about existing programs – Increasing resident awareness and use of existing programs that offer incentives and technical assistance with electrifying homes. Taking a more active role in outreach could increase voluntary electrification; however, existing programs have gaps, frequently failing to address the needs of renters and low-moderate income residents.
Other CAP measures
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INFORMATIONAL REPORT ITEM 6.1
Beyond EBE, there are many CAP measures that are still in early planning stages.
While the City is working to achieve all of the goals in the CAP, prioritization is important, especially early on in CAP implementation. More information on each CAP measure is listed below, but several key topics that the City has not thoroughly approached yet include:
Promoting residential water efficiency
Creating a plan for public EV charging
Reducing the impact of small off-road engines (eg: leaf blowers, lawn equipment) Recruiting e-bike/e-car share services to the city
Promoting microgrid pilot projects – energy systems that maintain power even when the grid is down
Reforming parking policies to encourage alternative transit All measures listed as planning in Attachment E
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INFORMATIONAL REPORT ITEM 6.1
Public Notice
The public was provided notice by making the agenda and report available on the City’s website and on the City’s official bulletin board outside City Hall and report available at the San Mateo County Library located at 2415 University Avenue in East Palo Alto.
Environmental
The action being considered does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.
Government Code § 84308
Applicability of Levine Act: No, as the proposed action does not involve an entitlement within the meaning of the Levine Act.
Analysis of Levine Act Compliance: Not applicable.
Attachments
Attachment A – 2030 Community Climate Action Plan – See here for the full plan:
https://www.cityofepa.org/publicworks/page/2030-climate-action-plan Attachment B – 2005 Greenhouse Gas Emission Inventory
Attachment C – 2021 Greenhouse Gas Emission Inventory
Attachment D – Existing building electrification strategy options matrix Attachment E – Action-by-action status
239
Climate Action
Plan
Implementation
Report
City Council 06.04.24
240
Overview
01 02 03
Background Current & planned
projects
Future directions &
options
241
Background
01 242
Completed projects from
2011 Climate Action Plan
22 actions
73,885Mt
Total 2021 CO2 emissions
26%
Decrease in emissions from 2005-2021
243
Our goals
2030 Climate Action Plan (CAP)
• 53 actions across energy,
transportation, and waste
• 17 resilience strategies
• Focus on both climate and
community throughout
• Continue to reduce emissions
• Increase community
resilience
• Make sure the community
benefits
Our aims
244
Current
projects
02 245
Key areas
01 04
02 05
03 Increased
engagement
Healthy
buildings
Sustainable
transportation
Reduced
waste
Community
resilience
246
City website
01 - Engagement
Participating in the Climate Change
Community Team to engage with
community groups and residents
Coordinate and collaborate with the
community to run sustainability-focused
events throughout the year
Created Environmental Programs website
covering key resources and information on
all CAP topics
Started bimonthly sustainability newsletter
to promote events, workshops, and
resources from the City and community
groups
CCCT Local events
Sustainability newsletter
247
02 – Buildings
US EPA grant City facilities
Participating in planning
process for a regional
grant application for over
$100 million in funding for
helping low-income
residents increase the
sustainability of their
homes
Working with PG&E and
PCE to fund sustainable
upgrades to existing City
buildings and incentivize
energy efficiency in future
facilities
Coordinating with regional
agencies and community
groups to identify
opportunities and
challenges for electrifying
buildings
Planning &
outreach
248
03 – Transportation
City fleet
Bike access &
safety
Planning for electrifying
City vehicles to meet
state regulations and CAP
goals. Working with PCE to
design charger installation
with potential for public
charging access.
Working with Live in Peace
to secure free bikes for
residents, partner on
funding for low-cost
e-bikes, and promote
community bike safety
events. Planning
expanded bike parking.
Participating in regional
grant application to
increase connections to
transit hubs. Considering
two grants for safer, bike
friendly streets later this
year.
Funding &
connectivity
249
04 – Waste
Composting
Water
conservation
Helping businesses (and
City facilities) set up
compost bins to avoid
fines. Certifying that City
paper product purchases
are all made from
recycled materials.
Integrating enforcement
of water-efficient
landscaping ordinance.
Investigating programs to
promote residential water
conservation.
Considering ordinance
requiring compostable
foodware. Planning
outreach to food vendors
later this spring.
Single-use
foodware
250
Resilience outreach
05 - Resilience
Working with County consultants to update
the Safety and Environmental Justice
Elements. Currently conducting outreach.
Continuing to work with Canopy to plant
trees, applying to two grants to fund
expanded planting and outreach. Partnering
with CRC on potential expansion to rain
garden project.
Coordinating Earth Day and EPA Resilience
Fair focused on helping residents prepare
for climate impacts.
Planning updates to flood outreach and
communications.
General Plan updates Nature-based solutions
Flood preparation
251
Future
directions
03 252
Key directions
01 02 03
Ongoing & planned
projects
Sustainable
buildings
CAP measures
in development
253
Increase incentives
02 - Sustainable buildings
• Legislation requiring replacing appliances
with electric versions when they fail
• High impact on emissions and health
• Could raise costs for residents
• Required energy benchmarks for large
buildings to meet over time
• High impact on emissions, avoids major
costs for residents
• High staff time, limited health benefits
• Seek funding to incentivize sustainable
upgrades for priority groups
• Potential for greater equity
• May be difficult to secure EPA-specific
funds
• Increase outreach to residents about
existing support
• Takes advantage of existing resources,
low direct costs
• Current resources have many gaps
Electric replacements Performance standards
Expand outreach
254
03 – Other CAP
measures
Prioritizing CAP measures that are still in development such as:
• Residential energy efficiency & electrification
• Water efficiency
• Public EV charging
• Reducing air pollution impacts of lawn equipment
• Microgrids (keeping power in outages)
• Parking policies to encourage alternative transit
• Recruiting e-car/e-bike share services
• … and more topics listed in the report under the
action-by-action section as in “planning”
255
Questions?
256
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257
East Palo Alto Greenhouse Gas Emissions Inventory
2005 Inventory Year
2005 GHG Emissions
Sector MT CO2e
Building Energy 48,767
On-road Transportation 54,334
Solid Waste 5,922
Off-road Equipment 2,009
Wastewater 0
Water 182
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 PG&E Electricity1
PG&E Electricity T&D2
PCE Electricity1
PCE Electricity T&D2
Residential Natural Gas
Residential Natural Gas Leaks
Nonresidential Natural Gas
Nonresidential Natural Gas Leaks
GHG Emissions (MT CO2e)
2005 Building Energy
0 10,000
20,000
30,000
40,000
50,000
60,000
On-road Passenger Total
VMT
On-road Commercial Total
VMT
On-road Passenger EVMT On-road Commercial
EVMT
GHG Emissions (MT CO2e)
2005 Transportation
48,767
54,334
5,922
2,009
0 182
Building Energy
On-road Transportation
Solid Waste
Off-road Equipment
Wastewater
Water
0 10,000 20,000 30,000 40,000 50,000 60,000
GHG Emissions (MT CO2e)
Off RoadDiesel
34%
Off RoadGasoline
56%
Off RoadNatural Gas
10%
2005 Offroad
258
East Palo Alto Greenhouse Gas Emissions Inventory
2021 Inventory Year
2021 GHG Emissions
Sector MT CO2e
Building Energy 25,912
On-road Transportation 40,903
Solid Waste 4,489
Off-road Equipment 1,823
Wastewater 856
Water 44
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000
PG&E Electricity
PG&E Electricity T&D
PCE Electricity
PCE Electricity T&D
Residential Natural Gas
Residential Natural Gas Leaks
Nonresidential Natural Gas
Nonresidential Natural Gas Leaks
GHG Emissions (MT CO2e)
2021 Building Energy
0 5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
On-road Passenger Total
VMT
On-road Commercial Total
VMT
On-road Passenger EVMT* On-road Commercial
EVMT*
GHG Emissions (MT CO2e)
2021 Transportation
25,912
40,903
4,489
1,823
856
44 Building Energy
On-road Transportation
Solid Waste
Off-road Equipment
Wastewater
Water
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 GHG Emissions (MT CO2e)
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GHG Emissions Over Time
Year Annual
GHG Emissions (MT CO2e) ACS 5yr pop
1990 94,532 23570
2005 111,214 31933
2010 0 28220
2015 0 29593
2017 0 29659
2019 0 29386
2021 73,885 28847
2022 28383
On-road Commercial
EVMT*
2005, 111,214
2021, 73,885
0 20,000
40,000
60,000
80,000
100,000
120,000
2005 2021
GHG Emissions (MT CO2e)
Annual 1990 Baseline
Off RoadDiesel
29%
Off RoadGasoline
60%
Off RoadNatural Gas
11%
2021 Offroad
0 20,000
40,000
60,000
80,000
100,000
120,000
2005 2021
GHG Emissions (MT CO2e)
GHG Emissions Over Time by Sector
Building Energy On-road Transportation* Off-road Equipment Solid Waste* Wastewater Water 260
Direct
cost
Planning
time
Ongoing
time Feasibility
Emission
reduction Equity
Household
costs
Displacement
risk Notes Alternative versions Next steps
Policy Actions
0 3 2 1 3 0 3 1
When each individual appliance is replaced. Planned
BAAQMD rules will require this for water heaters in 2027 and furnaces in 2029.
Can require electric or option for high efficiency,
can include exemptions for much higher costs for
electric alternatives
Electric required 0 3 2 1 2 0 2 1
Only an electric replacement may be installed Can include flexibility to require only for comparable or reasonable price difference
Flexible compliance 0 3 2 2 1 0 1 0
Certain parts must be electrified or high efficiency as part of larger renovations
Could do a points system-based compliance
method for renovations where they need to meet
a certain number of upgrades.
Electric readiness 0 2 2 2 0 0 1 0
Renovated areas must be made such that electric
appliances could be installed (ie: outlets, high capacity outlets, space requirements)
May require panel upgrades for some
renovations/building types
0 2 2 2 0 1 0 0
Require reporting on energy usage, electric vs gas
appliances, and other energy metrics to better inform
other policies and target initiatives/outreach
Can require this information for larger buildings,
for all buildings at point of sale, etc
Set energy use standards for large buildings and mandate gradual reductions over time
Could be all commercial or include large
residential
Commercial only 0 3 2 1 2 0 0 0
All large buildings 0 3 3 1 3 0 2 1
0 3 2 1 2 0 1 0
Reduce the emissions associated with building materials by reuse, local sourcing, and sustainable materials
requirements
Regulations could include construction materials,
construction equipment, and demolition/disposal
practices
City Initiatives
1-3 2 0 2 2 2 0 1
Direct funding towards existing PCE programs to expand
number of EPA residents served
Must be under an existing program like
appliances, whole home, panel, etc.
Could further specify different demographics
(renters, LIC)
Tenant-targeted incentives 2-3 3 3 1 2 3 0 1
Develop the city's own targeted incentive/rebate
program to increase electrification in rental units with a focus on low/fixed income tenants
Could target incentives towards particular
demographics, building type, or neighborhoods
Energy audits 1 2 2 2 1 1 0 0
Conduct energy audits of city buildings Could focus on energy use or potential for/difficulty of electrification
Could use to give property owner's
recommendations, target incentives, or get a
sense of the energy landscape of the city
Outreach & Engagement
0 1 2 3 0 1 0 0
Conduct outreach and solicit community input on
electrification concerns and needs
Policy-related outreach 0 1 2 2 0 1 0 0
Workshops and feedback for developing specific city
policies and programs
Landlord/renter outreach 0 1 2 2 0 2 0 0
Aim to understand the challenges that tenants and
landlords face as well as improving awareness of/support for electrification programs
0 0 1 3 1 1 1 1
Increase awareness and utilization of existing rebates and assistance programs
Could be done in tandem with other
engagement/outreach efforts
Resources Impacts Details
Time of replacement
Time of renovation
Reporting requirements
Building performance standards
Expand PCE programs
General engagement
Promote existing programs
Develop city programs
Specific outreach
Embodied carbon regulation
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Action-by-action status
Acronyms:
BAAQMD – Bay Area Air Quality Management District
BayREN – Bay Area Regional Energy Network
CCCT – EPA Climate Change Community Team
CRC – Climate Resilient Communities
EBES – Existing building electrification strategy
RICAPS -- San Mateo County Regionally Integrated Climate Action Planning Suit SFCJPA – San Francisquito Creek Joint Powers Authority SB1383 – CA Short-Lived Climate Pollutant Reduction Strategy EW.1: Reduce energy emissions
Action Description / Goal Status
EW.1.1
Participate in PCE,
encourage “opting up”
to 100% clean energy
Planning – Already participating in PCE. Currently seeking ways to increase participation in ECO100 “opt up” program (currently
0.85%) including promotion on sustainability website and copromotion with PCE. By 2027, all PCE electricity is anticipated to be clean and emission-free by default.
EW.1.2
Promote energy
efficiency in
commercial buildings /
15% receive efficiency
upgrades
Planning – Promoting commercial energy efficiency programs through the sustainability website. Potential policy measures include enacting building performance standards to continually decrease energy use in large commercial buildings.
EW.1.3
Promote energy
efficiency in residential
buildings / 5% receive
efficiency upgrades
Initial steps –Promoting residential energy efficiency programs through the sustainability website and the CCCT. Collaborating with PCE and BayREN to strategize upcoming residential
programs.
EW.1.4
Implement programs
for free or subsidized
shade trees / 5% of
households receive
trees
Ongoing – Free tree planting is available for residents through a contract with Canopy which was just extended. Seeking to expand efforts through Community Change Grant, ICARP
Extreme Heat Grant, and promotion on the website.
EW.1.5
Promote opportunities
for microgrid projects /
one every other year
Planning – Completed initial planning for PG&E Microgrid Incentive Program but determined to be incompatible with community needs. Currently evaluating funding opportunities.
EW.1.6
Encourage pairing
battery storage with all
solar PV systems
Planning – Promoting the advantages of battery storage on sustainability website. Updated state solar generation incentives (NEM3) also strongly incentivize pairing with battery storage.
EW.1.7
Policy to prohibit small
offroad engines on
Spare the Air Days
Planning – As of 2024, state regulations ban the sale of new gaspowered small offroad engines (eg: leaf blowers, lawn mowers).
Currently evaluating potential impacts of a partial ban.
EW.1.8
Participate in incentive
programs through
Commute.org
Ongoing – Participating in commute.org incentives. Assisting with outreach to businesses and promoting free Caltrain pass program.
EW.1.9
Support partnerships
to bring awareness to
air quality monitoring
Ongoing – In communication with researchers in the Our
Communities Our Bay team to remain apprised of any findings. 262
EW.1.10 Install energy efficient
streetlighting
Complete – All streetlights updated to LED.
EW.1.11
“Opt up” to 100%
clean power for City
buildings
Complete – Currently exploring low-cost upgrades to make city buildings more energy efficient.
EW.2: Electrify building stock
Action Description / Goals Status
EW.2.1 Expand all-electric
building policy
Complete – City reach codes mandate all-electric construction.
Working with RICAPS to address legal challenges.
EW.2.2
Develop an existing
building electrification
strategy (EBES)
Planning – Developed EBES policy matrix, seeking further input.
Working with Rent Stabilization, CRC, and PCE to determine challenges and next steps.
EW.2.3 Develop partnerships
for EBES development
Ongoing – Working with Rent Stabilization, CRC, and PCE to determine challenges and next steps. Consulting with RICAPS, CRC, and PG&E to ease permitting.
EW.2.4 Conduct community
engagement for EBES
Planning – CRC and PCE have done some community
workshops. Planning combined outreach across the county.
EW.2.5
Adopt an electrification
ordinance for existing
building appliances
Initial steps – Currently drafting a city policy in support of BAAQMD rules 9-4 and 9-6. Timeline 2027.
EW.2.6
Define equity metrics
for EBES ordinance
enforcement
Planning – Work with PCE, CRC, and Rent Stabilization to determine renter protections. Planning ways to track equity in electrification rebate distribution with PCE.
EW.2.7
Develop partnerships
to fund existing
building electrification
Initial steps – PCE currently developing turnkey, hotline, and whole home decarbonization programs. BayREN overhauling single family rebates. Working with BARCAP on Climate Pollution Reduction Grant application.
EW.2.8
Develop a temporary
staff position to
support EBES
Planning – Status uncertain.
EW.2.9
Establish building
performance
standards
Planning – Scoping feasibility using state benchmarking program and SMC Energy Watch. Pending interest.
EW.2.10 Partner with PG&E on
infrastructure pruning
Planning – Currently corresponding with PG&E and RICAPS on pruning potential and possible permit streamlining.
EW.2.11
Expand partnerships
to bring awareness to
air quality monitoring
and appliance
replacement
Ongoing – In communication with researchers in the Our
Communities Our Bay team to remain apprised of any findings.
EW.3: Reduce water consumption
Action Description / Goals Status
EW.3.1 Promote water
efficiency programs
Initial steps – CRC and Grassroots Ecology installing rain gardens for residents, partnering to expand it through Community Change Grants program. Investigating other external funding. 263
with local partners /
upgrade 10% of homes
EW.3.2
Ensure enforcement of
Water Efficient
Landscape Ordinance
Ongoing – Working to integrate Water-Efficient Landscaping Ordinance review into the standard planning process.
EW.4: Protect low-income residents from extreme heat
Action Description / Goals Status
EW.4.1
Conduct an extreme
heat study to
understand impacts
Initial steps – Partnering with Palo Alto on NOAA-funded heat study at street level to be conducted summer 2024.
EW.4.2
Identify financing
opportunities for
deploying heat pumps
in low-income housing
Initial steps – Identified opportunities, listed on sustainability website. Directly communicating with affordable housing properties about opportunities for efficiency and solar financing.
EW.4.3
Educate low-income
communities about
steps for extreme heat
Planning – Currently working to expand information on
sustainability website. Planning to target outreach based on results from upcoming heat study.
T.1: Reduce vehicle miles traveled in the community
Action Description / Goal Status
T.1.1
Establish or expand
local shuttle service /
expand coverage 50%
Complete – SAMTRANS Ride Plus fulfills this target. Currently partnering with SAMTRANS on upcoming promotional campaign.
T.1.2
Encourage e-bike/car
shares to operate in the
city / target 2030
Planning – Evaluating feasibility, planning outreach to service providers.
T.1.3a
Design infrastructure to
promote shared e-bikes
and e-scooters
Initial steps – Pending interest from shared micromobility service providers. Working with Live in Peace to identify areas with bike parking needs.
T.1.3b
Pass policy to promote
shared e-bikes and escooters
Planning – Investigating similar ordinances from surrounding cities. Pending interest from service providers.
T.1.4 Expand bike access
and bike safety training
Ongoing – Working with Live in Peace to secure 100 free bikes for residents. Planning multiple bike repair and safety events.
T.1.5 Free public transit
program
Complete – Youth Unlimited pass was made permanent.
Confirmed participation and outreach with RCSD.
T.1.6 Adopt employer TDM
ordinance
Ongoing – Consultant has prepared revised transportation demand management (TDM) guidelines for City approval.
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T.1.7 Encourage free micromobility in new MFD
Ongoing – Added sections incentivizing shared micro-mobility to proposed multifamily development (MFD) TDM guidelines
T.1.8 Free e-bike pilot Initial steps – Partnered with Live in Peace on a grant application for free e-bikes and a job training program. Staying updated on ebike pilot program in surrounding cities.
T.2: Decarbonize transportation
Action Description / Goal Status
T.2.1
Increase EV ownership
/ 6% of miles travelled
from EVs
Planning – Compiling EV financing resources on sustainability website. Integrating PCE workshops into planning.
T.2.2
Expand EV charging
infrastructure / 20% of
MFD, 10% of workplaces, 100 publicly
accessible chargers
Initial steps – Working with PCE to identify potential for public charging at City facilities. Working to publicize information on EV charging infrastructure incentives through sustainability website.
T.2.3 Survey EV charging
network
Initial steps – Identified public charging locations, identifying residential charging installations. Working with PCE to identify potential for public charging at City facilities.
T.2.4 Establish EV charging
ordinance
Complete – Completed by City Reach Codes mandating
minimum EV charging requirements for new development.
T.2.5 Encourage the use of
EV rideshares
Planning – Unclear legality and process.
T.2.6 Pursue EV car share
for priority housing
Planning – Investigating options for EV carshare expansion.
T.2.7 Review and improve
local EV adoption rates
Planning – Investigating barriers with PCE and CRC.
T.2.8 EV on-bill financing Planning – Evaluating options with PCE, but not currently in effect.
T.2.9 Commercial EV
incentives
Planning – Compiling information on incentives in sustainability website. Planning outreach.
T.3: Increase walkability and bikeability
Action Description / Goal Status
T.3.1
Develop walkable and
bikeable street
landscaping
Ongoing – Engineering currently working on designing safe, pedestrian/bike friendly streets when updated. Completed Addison Avenue project.
T.3.2
Reform parking
policies to encourage
alternative transit
Planning – Evaluating potential impacts to residents.
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T.3.3 Support Safe Routes to
School Program
Ongoing – Completed traffic circle pilot, coordinating with County on projects including Addison Avenue. Developing safe routes project at Costaño along with the County.
T.3.4 Equitable bicycle and
pedestrian network
Planning – Working to identify opportunities to prioritize bike and pedestrian infrastructure.
T.3.5 Bike parking
improvements
Initial steps – Working with Live in Peace to identify locations with further bike parking needs. Considering a request form.
T.4: Increase Housing in Transit Corridors
Action Description / Goal Status
T.4.1 Implement smart
growth development
policy
Ongoing – Continuing to pursue smart growth policy outlined in the General Plan.
W.1: Increase Diversion of Materials from Landfills
Action Description / Goal Status
W.1.1 Increase waste
diversion rate
Initial steps – Conducting outreach to businesses on SB1383 composting requirements. Starting paper product staff reporting.
Acquired composting for city facilities and planning training.
Adaptation strategies
Action Description / Goal Status
1 Update City planning to
account for sea-level
rise
Ongoing – Many planning policies already incorporate sea-level rise. Currently updating Safety Element using most up to date sea-level rise projects under the high risk aversion scenario. 2 Pass climate
emergency resolution
Planning – Not currently underway.
3 Improve climate action
communication
Initial steps – Expanding outreach through sustainability newsletter, community events, updated website, and CCCT. 4 Incorporate climate
risks into Hazard
Mitigation Plan
Complete – Updated Multi-Jurisdictional Hazard Mitigation Plan (2021) includes planning for climate hazards.
5 Expand tree coverage
on an earlier timeline
Initial steps – Extending tree planting contract with Canopy for two years. Partnering on two grant applications to expand tree planting in EPA.
6 Increase protections
for trees
Initial steps – Currently reviewing proposed changes to the Tree Protection Ordinance.
7 Implement the Green
Infrastructure Plan
Initial steps – Parks Plan (2023) incorporated elements of the plan. Permeable area requirements for large new construction. 8 Support horizontal
levee development
Ongoing – City continues to work with SFCJPA and
OneShoreline on coastal barrier project.
266
9 Develop climateresilient infrastructure
Planning – Currently planning ways to improve City drainage systems, upgrade pump station, and expand green infrastructure. 10 Expand linear parks
and accessibility
Planning – The completed Parks Master Plan (2023) outlines planned linear park expansions including San Francisquito Creek, SFPUC right of way, and more Bay Trail access points.
11 Divert more waste from
landfills
Initial steps – Conducting outreach to businesses on SB1383 composting requirements. Starting paper product staff reporting.
Acquired composting for city facilities and planning training. 12 Expand local compost
use
Planning – Working with Recology to organize compost
distribution events. Investigating more ways to use SMC Resource Conservation District compost procurement locally. 13 Reduce impervious
surfaces in private lots
Planning – The Green Infrastructure Plan (2020) identifies key strategies. CRC implementing rain garden pilot project. 14 Partner to reduce air
pollution impacts
Planning – Partnering with Stanford on Our Communities Our Bay project studying air pollution impacts. CRC helping distribute some air purifiers.
15 Increase local water
supply resilience and
emergency readiness
Initial steps – Two local wells are undergoing further testing as backup water sources. Menlo FD running emergency prep
outreach. Planning residential water conservation efforts. 16 Consider expanding
wetlands to buffer sea
level rise
Planning – City is working with SFCJPA and OneShoreline on plans for sea level rise protections and preservation of local ecosystem functions.
17 Plan for seawater
intrusion
Initial steps – Currently considering sea level rise impacts on groundwater in Safety Element update.
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SPECIAL PRESENTATION ITEM 7.1
EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: June 4, 2024
TO: Honorable Mayor and Members of the City Council
VIA: Melvin E. Gaines, City Manager
BY: James Colin, City Clerk
SUBJECT: Peninsula Clean Energy Presentation
Recommendation
Receive a presentation from Peninsula Clean Energy.
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PUBLIC HEARING ITEM 8.1
EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: June 4, 2024
TO: Honorable Mayor and Members of the City Council
VIA: Melvin E. Gaines, City Manager
BY: Donald Zhao, Interim Chief Building Official
Amy Chen, Community & Economic Development Director
SUBJECT: Introduction of Municipal Code Amendments to Chapter 15.11 - Reach Codes Recommendation
Waive the first reading and introduce an ordinance amending:
1. Chapter 15.11 (California Green Building Standards, California Code of Regulations, Title 24, Part 11) of the East Palo Alto Municipal Code (EPAMC), with local amendments related to building electrification;
2. Chapter 15.25 (California Energy Code, California Code of Regulations, Title 24, Part 6) of the EPAMC, with local amendments to mandate cost-effective building requirements, including increasing building efficiency and requiring electric readiness; and
3. Make any necessary conforming amendments, as the Council deems necessary.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Priority: Promote Health & Public Safety
Background
The City of East Palo Alto (City) has demonstrated leadership in sustainability when adopting reach codes during the 2019 and 2022 code cycles and has updated its Community Climate Action Plan and Adaptation Strategies 2030 (CAP). The CAP describes the process the City will embark on to both reduce our impact on the environment and increase our resilience against the impacts of the climate crisis. The CAP was adopted on September 5, 2023 and establishes guidelines for reaching the stated goal of reducing per person (or per capita) 269
PUBLIC HEARING ITEM 8.1
carbon emissions 55 percent below 2005 levels by 2030 and aspires to reach carbon neutrality by 2045. Please see the 2030 Climate Action Plan webpage for more details:
https://www.cityofepa.org/publicworks/page/2030-climate-action-plan Consistent with the City’s climate goals, on March 21, 2023, the City Council unanimously adopted an ordinance amending Chapter 15.11 of the East Palo Alto Municipal Code to adopt local amendments to the 2022 edition of the California Green Building Code to adopt a “Reach” Code. This Reach Code was tied to the 2022 California Building Standards Code that was adopted on December 6, 2022 by the City Council. The City Council had previously adopted Reach Codes on October 20, 2020 that were tied to the 2019 California Building Standards Code.
California Restaurant Association (CRA) v. City of Berkeley Since the adoption of this amending ordinance, recent case law has emerged relevant to enforceability of the City’s Reach Code, California Restaurant Association (CRA) v. City of Berkeley. On April 17, 2023, the California Ninth Circuit Court of Appeals struck down the City of Berkeley’s natural gas prohibition as part of the ruling in CRA v. City of Berkeley. The Ninth Circuit Opinion holds that the Energy Policy and Conservation Act (EPCA) preempts the City of Berkeley’s ordinance as the EPCA does not allow State and local governments to prohibit an end-user’s ability to use natural gas products. To be sure, preemption is a judicial determination reserved for a court of law, and while the City’s ordinance has not been challenged, this ruling calls into question the City’s ability to enforce its Reach Code. The City of Berkeley was unable to obtain further judicial review. As such, the CRA opinion remains binding legal precedent, even though no court has opined on the City’s Reach Code directly.
The City of East Palo Alto would therefore incur legal risk if it continued to enforce its current Reach Code, given the similarities between the City’s Reach Code and the Berkeley ordinance.
Additionally, to ensure the City will be able to reach its legal GHG emissions reduction target, under the City’s Community Climate Action Plan and Adaptation Strategies 2030 (CAP). staff is therefore recommending introduction of a new ordinance, consistent with state and federal law, which regulates whole building efficiency for new buildings, including the regulation of its water heater, heating, ventilation, and air conditioning (HVAC) system, solar generating system, and insulation, among other things. The proposed Reach Code would not regulate cooking equipment, laundry dryers, or other unregulated energy uses. Importantly, the proposed Reach Code would provide developers with a range of options with regard to the type of equipment and energy source that will be supplied to new buildings. The purpose of the proposed amended Reach Code is to help the City meet the CAP 2030 GHG emissions target by reducing carbon emissions associated with new construction while ensuring cost-effective options per building type.
So far, five cities have amended their building Reach Codes, including San Jose, Santa Cruz, San Luis Obispo, Los Altos Hills, and Encinitas. Others have paused or suspended enforcement including the County of San Mateo, Menlo Park and Mountain View. The most recent jurisdiction, the City of Palo Alto, is scheduled to introduce their ordinance on June 3, 2024.
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PUBLIC HEARING ITEM 8.1
Peninsula Clean Energy (PCE)
The City of East Palo Alto has reengaged with Peninsula Clean Energy (PCE) to explore this update to the Reach Codes. PCE is a not-for-profit and community-owned energy provider based in San Mateo County that provides expert technical assistance to cities like the City to develop and implement building reach codes. PCE has several incentive programs supporting electrification regardless of what reach codes the City adopts, including electric appliances, zero-interest loans, and EV Infrastructure rebates. The programs have enhanced offerings for income-qualified households. PCE assisted the City in 2020 with the initial adoption of the Reach Codes as well as in 2023 with the amendment to the ordinance to align with the 2022 Building Codes.
In alignment with the above, staff recommends modifying EPA’s Reach Code. This report provides an overview of the Source Energy Margin References prepared by PCE for the City, detailed findings, and provides model code language for the associated Reach Code being proposed.
Analysis
The CRA v. City of Berkeley ruling limits how the City can reduce GHG emissions from new buildings. Staff have identified increased building energy performance requirements via local amendments to the California Energy Code (also known as a “reach code”) as the preferred alternative approach. The California Energy Code establishes whole-building efficiency requirements, which account for a building’s water heater, HVAC (heating, ventilation, and air conditioning) system, solar generating system, and insulation, among other things. The California Energy Code includes both a prescriptive option and performance option per building type. Through the performance path, it does not account for cooking equipment, laundry dryers, or other unregulated energy uses. The proposed reach code primarily amends the performance pathways and therefore does not regulate cooking equipment, laundry dryers, or other energy uses not addressed by the performance path of the California Energy Code.
California Energy Code Energy Evaluation Metrics
The 2022 Energy Code contains energy and water efficiency requirements (and indoor air quality requirements) for newly constructed buildings, additions to existing buildings, and alterations to existing buildings. The California Energy Code provides different metrics for different types of buildings and is organized into three categories:
1. Single-Family Residential: A new single-family residential building must meet or exceed all “Energy Design Ratings” (EDR). There are three EDR categories:
o EDR1 (Source Energy) – EDR1 is a score representing a building’s energy efficiency expressed in terms that serve as a proxy for greenhouse gas emissions. o EDR2 (Efficiency) – EDR2 is a score representing a building’s energy efficiency 271
PUBLIC HEARING ITEM 8.1
expressed in terms of the value and cost of energy consumed at different times of the day and year.
o EDR Total (Total Energy Design Rating) is a score representing the building’s total energy expressed in terms of the value and cost of energy consumed at different times of the day and year while also factoring in solar and energy demand flexibility.
2. Multi-Family Residential: A new multi-family residential building must meet or exceed a standard that combines the value and cost of energy consumed at different times of the day and year (referred to as Time Dependent Valuation of energy, or TDV), and the emissions from the building’s energy source. The 2022 Source Energy metric is new for all multifamily buildings, and it was added to support decarbonization and electrification policy goals.
3. Non-Residential: A new non-residential building must also meet or exceed a standard that uses TDV energy and Source Energy emissions scores.
Proposed Energy Performance Enhancements
Public Resources Code Section 25402.1(h)(2) and Section 10-106 of the Building Energy Efficiency Standards establish a process that allows local adoption of energy standards that are more stringent than the statewide standards. Under this process, the California Energy Commission requires any local amendments to the California Energy Code that affect energy use in regulated buildings to be cost effective and use less energy than the standard requirements contained in Title 24, Part 6.
The proposed Reach Code would increase the required EDR1 score for single family residential buildings and the required Source Energy scores for all other buildings. The compliance margins were established based on staff analysis of the data provided in the cost effectiveness studies per building type. As noted in Table 1, below, new single-family residential buildings would be required to exceed the standard design Total Source Energy Design Rating (EDR1) by at least 9 points. Table 1 also identifies Source Energy performance requirements for new multi-family residential buildings ( exceed the standard Source Energy requirement by at least 10% for three stories or fewer, exceed the standard Source Energy requirement by at least 4% for four stories or more), and new non-residential buildings, which must exceed the standard Source Energy requirement by at least 7%.
Because of how the EDR1 and Source Energy scores are calculated in the 2022 California Energy Code, the higher standards proposed in the Reach Code would incentivize new buildings to include electric appliances and/or mechanical systems, while also allowing mixed-fuel appliances and/or systems which would that include additional energy efficiency measures, PV systems, and/or a battery. There are two main pathways when amending the energy code:
Prescriptive Codes: Require one or more specific energy efficiency or renewable energy 272
PUBLIC HEARING ITEM 8.1
measures, or
Performance Codes: Require buildings to meet an energy budget/performance score through a custom design, allowing applicants flexibility.
EPA is proposing a performance code where the enhanced performance requirements would apply equally to mixed-fuel and all-electric buildings and are cost-effectively achievable through the energy code’s performance pathway without requiring appliances that exceed federal efficiency standards. There would also be additions to the mandatory requirements of the energy code related to electric readiness.
Table 1. Proposed Improved Energy Performance Standards Building Type Performance Requirement
Single Family Residential Buildings Exceed the standard EDR1 requirement by at least 9 points
Multi-Family Residential (Low-rise, ≤ 3 stories) Exceed the standard Source Energy requirement by 10%
Multi-Family Residential (High-rise, ≥ 4 stories) Exceed the standard Source Energy requirement by 4%
Non-Residential Exceed the standard Source Energy
requirement by 7%
Electric Ready Requirements
The 2022 California Energy Code requires certain mixed-fuel buildings to include “electric ready” components including electric outlets near natural gas appliances, appropriate ventilation for future heat pump appliances, and reserved and labelled breakers in the electrical panel for future electric appliances as follows:
Single-Family Residential – heat pump hot water heaters are a prescriptive (or optional) pathway to compliance, and “electric ready” infrastructure is required for any new building that installs a gas-fueled furnace, clothes dryer, and/or cooktop. Multi-Family Residential – “electric ready” infrastructure is required in a newly constructed multi-family residential unit that installs a gas fueled space heater, water heater, clothes dryer, and/or cooktop. This includes water-heating systems for multifamily buildings, considering both individual heating systems and central water heating systems. Nonresidential - “electric ready” infrastructure is required for newly constructed nonresidential buildings that use systems using gas or propane. Additionally, a required control is added for HVAC hot water temperatures, setting the design temperature for a hot water supply temperature to be no greater than 130F. Commercial kitchens also have electric-readiness requirements.
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PUBLIC HEARING ITEM 8.1
Practical Effect of the Reach Code
Because the City is working within the confines of the California Energy Code, the description of the proposed approach above is inherently technical. This section illustrates the practical effect of the proposed approach by providing a simplified example of how a single-family home designer would comply with the proposed Reach Code.
Under the current California Energy Code, a building designer working on a single-family home built to the code minimum; with current incentives and rebates available, the design is likely to include high efficiency LED lighting, rooftop solar, an electric heat pump hot water heater, a natural gas furnace, insulated walls, an insulated attic, and efficient windows, among other things. The designer would load the proposed building design into a computer model and estimate its energy performance. The energy modeling software would provide standard reporting metrics, including an EDR1. The designer would then compare the EDR1 to a standard design building. In this case, the proposed designed building’s EDR1 score would be equal to the standard design building’s EDR1 score. To calculate the compliance margin, the designer would subtract the standard design building’s EDR1 rating from the proposed designed building’s EDR1. In this example, which results in a compliance margin of 0, which meets the compliance requirement for that part of the California Energy Code.
With the proposed reach code in place, the designer would now need to achieve a compliance margin of 9 points. That means that the EDR1 of the proposed designed building needs to be 9 points better than the standard design building (i.e., an EDR1 compliance margin of 6 or greater).
If this building designer replaced the natural gas furnace with a commonly available heat pump HVAC system, the building would achieve a score that is 9 EDR1 points better than the code minimum standard design and would be consistent with the proposed Reach Code requirements. Alternatively, the building designer could keep the gas furnace and install a battery storage system, which would also result in an increase of more than 9 EDR1 points. The building designer also has the option to develop a package of efficiency and solar measures; so long as the measures lead to an increase of 9 or more EDR1 points better than the code minimum standard design, it is consistent with the reach code.
This example for single family homes is similar for the other building types where the compliance margins could be achieved by either installing electric heat pump HVAC equipment or installing some package of additional solar capacity, battery storage systems, and efficiency measures.
Cost Effectiveness
The California Energy Commission requires any local amendments to the California Energy Code that affect energy use in regulated buildings (e.g., reach codes) to be cost effective and to use less energy than the standard requirements. The California Energy Commission (CEC) requires the local agency to adopt a determination that the energy standards are cost effective at a public meeting. The determination must subsequently be filed with the CEC.
One way to illustrate cost effectiveness is through the “Time Dependent Valuation” or “TDV” metric. The TDV metric is what the CEC uses in evaluating cost effectiveness for efficiency 274
PUBLIC HEARING ITEM 8.1
measures in the California Energy Code and includes the onsite costs and savings of the proposed energy measures, as well as the energy system costs and benefits of the energy measures. The metric is “time dependent” because energy use has different costs and impacts depending on the time of day and season. For example, electricity saved during peak periods has a much higher value than electricity saved during off-peak periods.
In support of reach code development, the California Energy Codes and Standards Statewide Utility Program, which includes the State's Investor-Owned Utilities (PG& E, SDG&E, and SCE, under the auspices of the California Public Utilities Commission) developed and published the:
2022 Cost-Effectiveness Study: Single Family New Construction Study and the associated cost-effectiveness data;
2022 Cost-Effectiveness Study: Multifamily New Construction Study and the associated cost-effectiveness data; and
2022 Code: Non-residential New Construction Reach Code Cost-effectiveness Study and the associated cost-effectiveness data.
These studies and the associated cost-effectiveness data are highly detailed and are included in the record to support the findings required for CEC approval. The studies and the associated cost-effectiveness data include a calculated benefit-to-cost ratio for a wide variety of measures, building types, and climate zones. A benefit-cost value of “1” or greater illustrates that the measures save more than they cost and are therefore “cost effective.” These studies and the associated cost-effectiveness data are the basis for staff’s cost effectiveness findings and are sufficient to illustrate compliance with the requirements set forth under California Administrative Regulations Section 10-106.
Based on these studies, staff finds the proposed local amendments to the 2022 California Energy Code to be cost-effective and consume less energy than otherwise permitted by Title 24, Part 6.
In short, using either the California Energy Commission’s on-bill metric and/or TDV metric, the proposed amendments save more than they cost to implement. The following additional detail is included for transparency and to facilitate the California Energy Commission’s review of the City’s cost effectiveness findings:
1. Requiring new single-family residential buildings to achieve an EDR1 margin over the standard building by 9 or more points. As illustrated in the study data, an all-electric singlefamily home with additional efficiency measures would save energy relative to the base code and would achieve an EDR1 margin of 11 and a benefit to cost ratio of greater than 1 on a TDV basis. The study data also shows that a mixed-fuel building with additional efficiency measures, additional rooftop solar, and a battery storage system would save energy relative to the base code and would achieve and EDR1 margin of 12.8and a benefit to cost ratio of 1.1 on a TDV basis.
2. Requiring low rise multi-family buildings to achieve a Source Energy savings 10% or more. As illustrated in the study data, an all-electric low rise multi-family building built to 275
PUBLIC HEARING ITEM 8.1
minimum code standards would achieve a Source Energy margin of 10% and a benefit to cost ratio of 9.8 on a TDV basis. The study data also shows that a mixed-fuel building with additional efficiency measures, additional rooftop solar, and a battery storage system would save energy relative to the base code, would achieve a Source Energy margin of 17% and would achieve a benefit to cost ratio of 1.5 on a TDV basis.
3. Requiring high-rise multi-family buildings to achieve a Source Energy savings of 4% or more. As illustrated in the study data, an all-electric high rise multi-family building built to minimum code standards would achieve a Source Energy margin of 7% and a benefit to cost ratio of 2.4 on a TDV basis. The study data also shows that a mixed-fuel building with additional efficiency measures, and additional rooftop solar would save energy relative to the base code, would achieve a Source Energy margin of 4%, and would achieve a benefit to cost score of 3.5 on a TDV basis.
4. Requiring non-residential buildings to achieve a Source Energy budget savings of 7%.
The Non-Residential New Construction Reach Code Cost-effectiveness Study provides analysis for several non-residential building prototypes. One of the prototypes is a retail building, which prescriptively requires electric heat pump space conditioning and along with other similar small-to-medium non-residential buildings that prescriptively require electric space conditioning, would be exempt from the reach code. As illustrated in the study data for the remaining non-residential building prototypes, all-electric new nonresidential buildings built with additional efficiencies meet or exceed the 7% compliance margin. Mixed-fuel non-residential buildings with various additional energy efficiency measures and rooftop solar, would meet or exceed the 7% compliance margin, save energy relative to the base code, and are cost effective on a TDV basis.
Applicability
The ordinance applies to various building types, including single family, multifamily (low-rise and high-rise), nonresidential (commercial), and hotels/motels. Its effective date is 30 days after its adoption, as with all other ordinances. However, local amendments to efficiency or conservation standards require approval by the CEC, which is not expected until September 1, 2024.
Fiscal Impact
There is no fiscal impact with the items described in this staff report.
Public Notice
Notice of the public hearing was published in the local newspaper: San Mateo Daily Journal on May 24, 2024. Additionally, the public was provided notice by making the agenda and report available on the City’s website and on a bulletin board located at City Hall: 2415 University Avenue, East Palo Alto.
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Environmental
This action is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3) in that the standards set forth in the ordinance are more protective of the environment than the California Energy Code standards, and there is no possibility that the activity in question may have a significant effect on the environment. As a separate and independent basis, this action is exempt from CEQA pursuant to CEQA Guidelines section 15308 in that the standards set forth in the ordinance assure the maintenance, restoration, enhancement or protection of natural resources and the environment. In addition, CEQA Guidelines section 15183 (Projects Consistent with a Community Plan, General Plan, or Zoning) applies to the project in that the standards set forth in the Ordinance are consistent with the General Plan and the Climate Action Plan.
Government Code § 84308
Applicability of Levine Act: No.
Analysis of Levine Act Compliance: Not applicable.
Attachments
1. Ordinance
2. 2022 Cost-Effectiveness Study: Single Family New Construction Study
3. 2022 Cost-Effectiveness Study: Multifamily New Construction Study
4. 2022 Code: Non-Residential New Construction Reach Code Cost-Effectiveness Study 277
ORDINANCE NO. _________
AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF EAST PALO ALTO
AMENDING MUNICIPAL CODE CHAPTERS 15.11 AND 15.25 OF TITLE 15 (BUILDINGS AND CONSTRUCTION) OF THE EAST PALO ALTO MUNICIPAL CODE TO ADOPT A LOCAL “REACH” CODCE AND ADOPTING FINDINGS JUSTIFYING THE LOCAL AMENDMENTS TO THE 2022 CALIFRONIA GREEN BUILDING STANDARDS CODE AND THE 2022 CALIFORNIA ENERGY CODE
WHEREAS, on January 6, 2023 the City of East Palo Alto (“City”) adopted the 2022 California Energy Code, with amendments to make it a “reach” code, in accordance with law and to use the most updated regulations in the processing of development in the City; and
WHEREAS, California Health and Safety Code section 17958 requires that cities adopt building regulations that are substantially the same as those adopted by the California Building Standards Commission and contained in the California Building Standards; and
WHEREAS, the California Energy Code is a part of the California Building Standards which implements minimum energy efficiency standards in building through mandatory requirements, prescriptive standards, and performance standards; and WHEREAS, California Health and Safety Code Sections 17958.5, 17958.7 and 18941.5 provide that the City may make changes or modifications to the building standards contained in the California Building Standards based upon express finding that such changes or modifications are reasonably necessary because of local climatic, geological or topographical conditions; and
WHEREAS, the City Council of the City of East Palo Alto finds that each of the amendment additions and deletions to the California Energy Code contained in this ordinance are reasonably necessary because of local climatic, geological or topographical conditions; and
WHEREAS, Public Resources Code Section 25402.1(h)2 and Section 10-106 of the Building Energy Efficiency Standards (Standards) establish a process which allows local adoption of energy standards that are more stringent than the statewide Standards, provided that such local standards are cost effective and the California Energy Commission finds that the standards will require building to be designed to consume no more energy than permitted by the California Energy Code; and WHEREAS, on or about September 20, 2016, the State of California enacted Senate Bill (SB) 32, which added Health and Safety Code Section 38566 to require 278
greenhouse gas emissions to be reduced to 40 percent below 1990 levels by no later than December 31, 2030; and
WHEREAS, in December 2011, the City Council adopted the City’s Climate Action Plan (CAP), which included policies directing staff to prepare a “green building policy”; and
WHEREAS, such modifications will result in designs that consume less energy than they would under the 2022 State Energy Code through the California Codes and Standards Reach Code Program, the State has performed cost effectiveness analyses as required by the California Energy Commission for the local amendments to the California Energy Code contained in this ordinance which is hereby incorporated by reference; and
WHEREAS, consistent with the CAP, the local amendments to the 2022 California Building Codes, including the California Green Building Code, establish requirements for single-family (e.g., townhomes), multifamily, and nonresidential structures to electrify, which will reduce demands for local energy and resources, reduce regional pollution, and promote a lower contribution to greenhouse gases emissions as evidenced by the statewide cost-effectiveness studies prepared by the California Statewide Investor Owned Utilities Codes and Standards Program, which demonstrate the potential for both a reduction in emissions and energy usage; and
WHEREAS, cost effectiveness studies prepared by the California Statewide Investor-Owned Utilities Codes and Standards Program demonstrate that the local amendments are cost-effective and do not result in buildings consuming more energy than is permitted by the 2022 California Green Building Code; and WHEREAS, that such modifications will result in designs that consume less energy than they would under the 2022 State Energy Code through the California Codes and Standards Reach Code Program, has performed cost effectiveness analyses as required by the California Energy Commission for the local amendments to the California Energy Code contained in this ordinance which is hereby incorporated by reference; WHEREAS, based upon these analyses, the City Council of the City of East Palo Alto finds that the local amendments to the California Energy Code contained in this ordinance are cost effective and will require buildings to be designed to consume no more energy than permitted by the California Energy Code;
WHEREAS, because of the City’s unique local climatic, geologic and topographic conditions, the City desires to make amendment and additions to the code.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO DOES ORDAIN AS FOLLOWS:
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SECTION 1. INCORPORATION OF RECITALS
The City Council finds that all the foregoing recitals are true and correct and incorporated herein by reference.
SECTION 2: PURPOSE AND INTENT
It is the purpose and intent of this Ordinance to adopt the local amendments to the 2022 California Energy Code (Title 24, Part 6) that provide local, cost effective standards for new residential, non-residential, and hotel and motel buildings that exceed the minimum standards of the 2022 California Energy Code to achieve energy savings, reduce local pollution, reduce greenhouse gas emissions, and address unique local climatic, geological, and topographical conditions.
SECTION 3: LOCAL CONDITIONS
The City Council makes the following findings regarding local climatic, geological, topographical, and environmental conditions related to the local amendments to the 2022 California Green Building Code and California Energy Code, as described below:
The following local climatic, conditions justify modifications to the California Building Standards Code:
a. Climatic: The City is located in Climate Zones 3 and 4 as established in the 2022 California Energy Code, Climate Zones 3 and 4 incorporate mostly coastal communities from Marin County to southern Monterey County including San Francisco. The City experiences precipitation ranging from 13 to 20 inches per year with an average of approximately 15 inches per year. Ninety- five percent of precipitation falls during the months of November through April, leaving a dry period of approximately six months each year. Relative humidity remains moderate most of the time. Temperatures in the summer average around 80 degrees Fahrenheit and in the winter in the mid 50 degrees Fahrenheit. Prevailing winds in the area come from the west with velocities generally in the 12 miles per hour range, gusting from 25 to 35 miles per hour.
These climatic conditions along with the greenhouse emissions generated from structures in both the residential and nonresidential sectors requires exceeding the energy standards for building construction established in the 2022 California Buildings Standards Code. The City Council also adopted a Climate Action Plan that has a goal of reducing greenhouse gas emissions. In order to achieve and maintain this goal, the City needs to adopt policies and regulations that reduce the use of fossil fuels that contribute to climate change, such as natural gas in buildings, in new development.
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Human activities, such as burning natural. gas to heat buildings, releases greenhouse gases into the atmosphere and causes an overall increase in global average temperature. This causes sea levels to rise, affecting the City's shoreline and infrastructure. Roughly 49% of the City remains in a regulatory flood inundation zone associated with the 100 -year sea level rise FEMA maps adopted April, 2019. San Francisquito Creek also runs through the City, which creates an increasing potential flooding risk with climate change as a result of human generated greenhouse gas emissions. East Palo Alto is vulnerable to sea level rise where new developments are proposed in this code cycle. New buildings that are directly vulnerable to sea level rise should avoid generating additional greenhouse gas emissions.
The proposed Reach Code would ensure that new buildings use cleaner sources of energy that are greenhouse gas free. Vehicular traffic through East Palo Alto is significant, and it continues to increase as East Palo Alto, and it' s neighboring cities, become an employment center as well as the location of residential projects.
Moreover, the observed increase in plug- in electric vehicle adoption reduces the climate impact of vehicular greenhouse gas emissions.
b. Seismic/Geologic: The City of East Palo Alto is subject to earthquake hazard caused by its proximity to San Andreas fault. This fault runs from Hollister, through the Santa Cruz Mountains, epicenter of the 1989 Loma Prieta earthquake, then on up the San Francisco Peninsula, then offshore at Daly City near Mussel Rock. This is the approximate location of the epicenter of the 1906 San Francisco earthquake.
The other fault is Hayward Fault. This fault is about 74 miles long, situated mainly along the western base of the hills on the east side of San Francisco Bay. Both of these faults are considered major Northern California earthquake faults which may experience rupture at any time. Thus, because the City is within a seismic area which includes these earthquake faults, the modifications and changes cited herein are designed to better limit property damage as a result of seismic activity and to 2of14 establish criteria for repair of damaged properties following a local emergency. In the event of a natural disaster such as an earthquake or fire, the natural gas infrastructure in and around the City of East Palo Alto presents a risk to the life and safety of residents and first responders. Moreover, the electric grid system can be brought back online more swiftly than the natural gas pipeline when the community is recovering from such an event.
c. Topographic: The City of East Palo Alto is a low-lying contiguous portion of the San Francisco Bay, resulting in a natural receptor for storm and wastewater runoff. Also, the City is located in an area that has relatively high liquefaction potential given its proximity to the Bay. The surface condition consists mostly of stiff to dense sandy clay, which is highly plastic and expansive in nature. The aforementioned conditions within the City create hazardous conditions for which departure from the California Building Standards Code is warranted.
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SECTION 4: LOCAL AMENDMENTS TO GREEN BUILDING CODE
Notwithstanding any provisions of the 2022 California Green Building Standards Code, or other codes adopted in any Chapter in the East Palo Alto Municipal Code to the contrary, the City Council hereby amends and replaces it with the following local amendments to the 2022 California Green Building Standards Code underlined for additions and strike through for deletions; otherwise, unchanged). Sections and subsections that are not amended by this Ordinance are not included below and shall remain in full force and effect.
CHAPTER 2
DEFINITIONS
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SECTION 202
GENERAL
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AFFORDABLE HOUSING. Residential buildings that entirely consist of units below market rate and whose rents or sales prices are governed by local agencies to be affordable based on area median income.
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ALL-ELECTRIC BUILDING. A building that contains no combustion equipment or plumbing for combustion equipment serving space heating (including fireplaces), water heating (including pools and spas), cooking appliances (including barbeques), and clothes drying, within the building or building property lines, and instead uses electric heating appliances for service.
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ELECTRIC HEATING APPLIANCE. A device that produces heat energy to create a warm environment by the application of electric power to resistance elements, refrigerant compressors, or dissimilar material junctions, as defined in the California Mechanical Code.
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FUEL GAS. A gas that is natural, manufactured, liquefied petroleum, or a mixture of these.
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CHAPTER 4
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RESIDENTIAL MANDATORY MEASURES
Division 4.1 PLANNING AND DESIGN
[…]
SECTION 4.106
SITE DEVELOPMENT
4.106.5 All-electric buildings. New construction buildings and qualifying alteration projects shall comply with Section 4.106.5.1 or 4.106.5.2 so that they do not use combustion equipment or are ready to accommodate installation of electric heating appliances.
4.106.5.1. New construction and qualifying alteration projects. All newly constructed buildings shall be all-electric buildings. Alterations that include replacement or addition of over 50 percent of the existing foundation for purposes other than a repair or reinforcement as defined in California Existing Building Code Section 202; or where over 50 percent of the existing framing above the sill plate is removed or replaced for purposes other than repair, shall be all-electric buildings. If either of these criteria are met within a three-year period, measured from the date of the most recent previously obtained permit final date, the project shall be subject to the all-electric buildings requirements.
Tenant improvements shall not be considered new construction. The final determination whether a project meets the definition of substantial reconstruction/alteration shall be made by the Building Official.
Exceptions:
1. If the applicant establishes that there is not an all-electric prescriptive compliance pathway for the building system under the California Building Energy Efficiency Standards, and that the building is not able to achieve the performance compliance standard applicable to the building under the Energy Efficiency Standards using commercially available technology and an approved calculation method, then the Building Official may grant a modification. The applicant shall comply with Section 4.106.5.2.
2. All-Electric domestic water heating requirements shall not apply to new residential structures that have central water heating and entirely consist of affordable rental units, defined as units rented at an amount consistent with the maximum rent levels for a housing development that receives an allocation of state or federal low-income housing tax credits from the California Tax Credit Allocation Committee. Residential developments meeting the above definition must have an Inclusionary Housing Plan that is approved by the Housing Division pursuant to Section 18.37.090. 283
3. Multifamily residential building projects that have been granted planning entitlements before January 1, 2021, or have been approved, before the effective date of this ordinance, are not required to install all-electric water heating systems. If the Building Official grants a modification pursuant to this Exception, the applicant shall comply with the pre-wiring provision of Note 1 below.
4. When improvements to existing buildings contain physical constraints that prevent conformance to the All-Electric Building requirements, the applicant may request an exception. In applying for an exception, the burden is on the applicant to identify the size requirements to comply with an All-Electric Building.
Inactive Fuel Gas Infrastructure may be extended to spaces that are anticipated to qualify for the exceptions contained in this chapter. The inactive Fuel Gas Infrastructure shall not be activated, have a meter installed, or otherwise used unless the exemptions specified in this chapter have been confirmed as part of the issuance of a building permit. If the Fuel Gas Infrastructure is no longer serving one of the exceptions contained in this chapter, it shall either be capped, otherwise terminated, or removed by the entity previously entitled to the exemption, in a manner pursuant to all applicable Codes.
The City shall have the authority to approve alternative materials, design and methods of construction or equipment per California Building Code Section 104.
4.106.5.2 Requirements for combustion equipment.
Where combustion equipment is allowed per Exceptions under 4.106.5.1, the construction drawings shall indicate electrical infrastructure and physical space accommodating the future installation of an electrical heating appliance in the following ways, as certified by a registered design professional or licensed electrical contractor:
1. Branch circuit wiring, electrically isolated and designed to serve all electrical heating appliances in accordance with manufacturer requirements and the California Electrical Code, including the appropriate voltage, phase, minimum amperage, and an electrical receptacle or junction box within five feet of the appliance that is accessible with no obstructions. Appropriately sized conduit may be installed in lieu of conductors; and
2. Labeling of both ends of the unused conductors or conduit shall be with “For Future Electrical Appliance”; and
3. Reserved circuit breakers in the electrical panel for each branch circuit, appropriately labeled (e.g.. “Reserved for Future Electric Range”), and positioned on the opposite end of the panel supply conductor connection; and
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4. Connected subpanels, panelboards, switchboards, busbars, and transformers shall be sized to serve the future electrical heating appliances.
The electrical capacity requirements shall be adjusted for demand factors in accordance with the California Electric Code; and
5. Physical space for future electrical heating appliances, including equipment footprint, and if needed a pathway reserved for routing of ductwork to heat pump evaporator(s), shall be depicted on the construction drawings.
The footprint necessary for future electrical heating appliances may overlap with non-structural partitions and with the location of currently designed combustion equipment.
CHAPTER 5
NONRESIDENTIAL MANDATORY MEASURES
Division 5.1 PLANNING AND DESIGN
SECTION 5.106
SITE DEVELOPMENT
5.106.5.3.2 Hotel and Motel Occupancies – Shared Parking Facilities.
5.106.5.3.2.1 New Construction. Five percent (5%) of parking spaces provided shall be EVCS with Level 2 EV Ready. ALMS shall be permitted to reduce load when multiple vehicles are charging. Twenty-five percent (25%) of parking spaces provided shall be Low Power Level 2 EV Ready space. Ten percent (10%) of parking spaces provided shall be Level 2 EV Capable.
5.106.5.3.2.2 Existing Buildings. When new parking facilities are added, or electrical systems or lighting of existing parking facilities are added or altered and the work requires a building permit, ten percent (10%) of the total number of parking spaces added or altered shall be EVCS with Level 2 EV Ready. Any existing EV Capable spaces on the building property required by the locally adopted codes at the time of building permit shall be upgraded to a minimum of Level 1 EV Ready. Upgrades shall be required at currently designated vehicle parking spaces. Upgrades shall be required for remaining parking spaces after meeting the accessibility requirements of California Building Code Chapters 11A and 11B.
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5.106.13 All-electric buildings. New construction buildings and qualifying alteration projects shall comply with Section 5.106.13.1 or 5.106.13.2 so that they do not use combustion equipment or are ready to facilitate future electrification.
5.106.13.1. New construction and qualifying alteration projects. All newly constructed buildings shall be all-electric buildings. Alterations that include replacement 285
of over 50 percent of the existing foundation for purposes other than a repair or reinforcement as defined in California Existing Building Code Section 202; or where over 50 percent of the existing framing above the sill plate is removed or replaced for purposes other than repair, shall be all-electric buildings. If either of these criteria are met within a three-year period, measured from the date of the most recent previously obtained permit final date, the project shall be subject to the all-electric buildings requirements.
Tenant improvements shall not be considered new construction. The final determination whether a project meets the definition of substantial reconstruction/alteration shall be made by the Building Official.
Exceptions:
1. Nonresidential buildings containing kitchens located in a place of public accommodation, as defined in the California Building Code Chapter 2, may apply to the Building Official for a modification to install commercial food heatprocessing equipment served by fuel gas. The Building Official may grant the modification if they find:
a. A business-related need to cook with combustion equipment; and b. The need cannot be achieved equivalently with an electric heating appliance; and
c. The applicant has installed energy efficient equipment based on Energy Star or California Energy Wise qualifications, as available. d. The applicant shall comply with Section 5.106.13.2.
2. If the applicant establishes that there is not an all-electric prescriptive compliance pathway for the building system under the California Building Energy Efficiency Standards, and that the building is not able to achieve the performance compliance standard applicable to the building under the Energy Efficiency Standards using commercially available technology and an approved calculation method, then the Building Official may grant a modification. The applicant shall comply with Section 5.106.13.2.
3. Non-Residential Buildings containing a Scientific Laboratory Building, such area may contain a non-electric Space Conditioning System.
3. Exemption for public agency owned and operated emergency centers. To take advantage of this exception applicant shall provide third party verification that All-Electric space heating requirement is not cost effective and feasible. 286
4. When improvements to existing buildings contain physical constraints that prevent conformance to the All-Electric Building requirements, the applicant may request an exception. In applying for an exception, the burden is on the applicant to identify the size requirements to comply with an All-Electric Building.
Inactive Fuel Gas Infrastructure may be extended to spaces that are anticipated to qualify for the exceptions contained in this chapter. The inactive Fuel Gas Infrastructure shall not be activated, shall not have a meter installed, and/or shall not otherwise be used unless the exemptions specified in this chapter have been confirmed as part of the issuance of a building permit. If the Fuel Gas Infrastructure is no longer serving one of the exceptions contained in this chapter, it shall either be capped, otherwise terminated, or removed by the entity previously entitled to the exemption, in a manner pursuant to all applicable Codes.
The Building Official shall have the authority to approve alternative materials, design and methods of construction or equipment per California Building Code Section 104.
5.106.13.2. Requirements for combustion equipment.
Where combustion equipment is allowed per exceptions under Section 5.106.13.1, the construction drawings shall indicate electrical infrastructure and physical space accommodating the future installation of an electrical heating appliance in the following ways, as certified by a registered design professional or licensed electrical contractor:
1. Branch circuit wiring, electrically isolated and designed to serve all electrical heating appliances in accordance with manufacturer requirements and the California Electrical Code, including the appropriate voltage, phase, minimum amperage, and an electrical receptacle or junction box within five feet of the appliance that is accessible with no obstructions. Appropriately sized conduit may be installed in lieu of conductors; and
2. Labeling of both ends of the unused conductors or conduit shall be with “For Future Electrical Appliance”; and
3. Reserved circuit breakers in the electrical panel for each branch circuit, appropriately labeled (e.g., “Reserved for Future Electric Range”), and positioned on the opposite end of the panel supply conductor connection; and
4. Connected subpanels, panelboards, switchboards, busbars, and transformers shall be sized to serve the future electrical heating appliances.
The electrical capacity requirements shall be adjusted for demand factors in accordance with the California Electric Code; and
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5. Physical space for future electrical heating appliances, including equipment footprint, and if needed a pathway reserved for routing of ductwork to heat pump evaporator(s), shall be depicted on the construction drawings.
The footprint necessary for future electrical heating appliances may overlap with non-structural partitions and with the location of currently designed combustion equipment.
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SECTION 5: AMENDMENTS TO CALIFORNIA ENERGY CODE
The City Council hereby amends and replaces Chapter 15.25 of the East Palo Alto Municipal Code to read as follows (with text in strikeout indicating deletion and underlined text indicating addition). Sections and subsections that are not amended by this Ordinance are not included below and shall remain in full force and effect.
15.25.010 Adoption by reference.
The City of East Palo Alto (“City”) hereby adopts by reference as the Energy Code of the City of East Palo Alto, the California Building Energy Efficiency Standards, 2022 Edition, Title 24, Part 6 of the California Code of Regulations (“2022 California Energy Code”) in its full form with the following amendments. All references to jurisdictional requirements are found in the East Palo Alto Municipal Code or other appropriate schedules.
One copy of the 2022 California Energy Code, as amended, is and shall be maintained on file in the office of the building official, for use and examination by the public.
15.25.020 Energy Code amendments.
Energy Code amendments are as follows:
SECTION 100.1(b) – DEFINITIONS AND RULES OF CONSTRUCTION Section 100.1(b) is modified by adding the following definitions:
ELECTRIC HEATING APPLIANCE. A device that produces heat energy to create a warm environment by the application of electric power to resistance elements, refrigerant compressors, or dissimilar material junctions, as defined in the California Mechanical Code.
NET FREE AREA (NFA) is the total unobstructed area of the air gaps between louver and grille slats in a vent through which air can pass. The narrowest distance between two slats, perpendicular to the surface of both slats is the air gap height. The narrowest 288
width of the gap is the air gap width. The NFA is the air gap height multiplied by the air gap width multiplied by the total number of air gaps between slats in the vent.
SECTION 120.2 – REQUIRED CONTROLS FOR SPACE-CONDITIONING SYSTEMS Subchapter 3 is amended to add Section 120.2(l) to be numbered, entitled, and to read as follows:
(l) HVAC Hot Water Temperature. Zones that use hot water for space heating shall be designed for a hot water supply temperature of no greater than 130 °F.
SECTION 120.6 – GENERAL
Subchapter 3 is amended to add Section 120.6 to be numbered, entitled, and to read as follows:
(a) – (j): Subsections 120.6(a) – (j) are adopted without modification. (k) Mandatory requirements for commercial kitchens. Electric Readiness for Newly Constructed Commercial Kitchens shall meet the following requirements:
1. Quick-service commercial kitchens and institutional commercial kitchens shall meet all of the following requirements:
a. Include a dedicated branch circuit wiring and outlet that would be accessible to cookline appliances.
b. The branch circuit conductors shall be rated at 50 amps minimum.
c. The electrical service shall have a capacity not less than 800 amps.
2. Main electrical service panel shall be sized to accommodate at least two additional 50 amp breakers.
SECTION 130.0 – LIGHTING SYSTEMS AND EQUIPMENT, AND ELECTRICAL POWER DISTRIBUTION SYSTEMS —GENERAL
Section 130.0 is amended to read as follows:
a. The design and installation of all lighting systems and equipment in nonresidential and hotel/motel buildings, outdoor lighting, and electrical power distribution systems 289
within the scope of Section 100.0(a), shall comply with the applicable provisions of Sections 130.0 through 130.6.
NOTE: The requirements of Sections 130.0 through 130.6 apply to newly constructed buildings. Section 141.0 specifies which requirements of Sections 130.0 through 130.6 also apply to additions and alterations to existing buildings.
SECTION 130.6 – ELECTRIC READINESS REQUIREMENTS FOR SYSTEMS USING
GAS OR PROPANE
Subchapter 4 is amended to add Section 130.6 to be numbered, entitled, and to read as follows:
130.6 Electric Readiness Requirements for Systems Using Gas or Propane Where nonresidential systems using gas or propane are installed, the construction drawings shall indicate electrical infrastructure and physical space accommodating the future installation of an electric heating appliance in the following ways, as certified by a registered design professional or licensed electrical contractor. a) Branch circuit wiring, electrically isolated and designed to serve all electric heating appliances in accordance with manufacturer requirements and the California Electrical Code, including the appropriate voltage, phase, minimum amperage, and an electrical receptacle or junction box within five feet of the appliance that is accessible with no obstructions. Appropriately sized conduit may be installed in lieu of conductors; and
b) Labeling of both ends of the unused conductors or conduit shall be with “For Future Electrical Appliance”; and
c) Reserved circuit breakers in the electrical panel for each branch circuit, appropriately labeled (e.g. “Reserved for Future Electric Range”), and positioned on the opposite end of the panel supply conductor connection; and d) Connected subpanels, panelboards, switchboards, busbars, and transformers shall be sized to serve the future electric heating appliances. The electrical capacity requirements shall be adjusted for demand factors in accordance with the California Electric Code; and
e) Physical space for future electric heating appliances, including equipment footprint, and if needed a pathway reserved for routing of ductwork to heat pump evaporator(s), shall be depicted on the construction drawings. The footprint necessary for future electric heating appliances may overlap with non-structural partitions and with the location of currently designed combustion equipment. 290
SECTION 140.0 – PERFORMANCE AND PRESCRIPTIVE COMPLIANCE
APPROACHES
Section 140.0 is amended to read as follows:
Nonresidential and hotel/motel buildings shall comply with all of the following:
a) The requirements of Sections 100.0 through 110.12 applicable to the building project (mandatory measures for all buildings).
b) The requirements of Sections 120.0 through 130.6 (mandatory measures for nonresidential and high-rise residential and hotel/motel buildings). c) Either the performance compliance approach (energy budgets) specified in Section 140.1 or the prescriptive compliance approach specified in Section 140.2 for the Climate Zone in which the building will be located. Climate zones are shown in FIGURE 100.1-A.
NOTE to Section 140.0(c): The Commission periodically updates, publishes and makes available to interested persons and local enforcement agencies precise descriptions of the Climate Zones, which is available by zip code boundaries depicted in the Reference Joint Appendices along with a list of the communities in each zone.
NOTE to Section 140.0: The requirements of Sections 140.1 through 140.9 apply to newly constructed buildings. Section 141.0 specifies which requirements of Section 140.1 through 140.9 also apply to additions or alterations to existing buildings.
SECTION 140.1 - PERFORMANCE APPROACH: ENERGY BUDGETS
Section 140.1 is amended to read as follows:
A building complies with the performance approach provided that:
1. The time-dependent valuation (TDV) energy budget calculated for the Proposed Design Building under Subsection (b) is no greater than the TDV energy budget calculated for the Standard Design Building under Subsection (a), and
2. The source energy budget calculated for the proposed design building under Subsection (b) has a source energy compliance margin, relative to the energy budget calculated for the standard design building under Subsection (a), of at least 7 percent for all nonresidential occupancies.
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EXCEPTION 1 to 140.1 item 2 A source energy compliance margin of 0 percent or greater is required when nonresidential occupancies are designed with single zone space-conditioning systems complying with Section 140.4(a)2. (a) – (c) Subsections 140.1 (a) – (c) are adopted without modification.
Section 150.0 is amended as follows:
Single-family residential buildings shall comply with the applicable requirements of Sections 150(a) through 150.0(v).
NOTE: The requirements of Sections 150.0 (a) through (v) apply to newly constructed buildings. Sections 150.2(a) and 150.2(b) specify which requirements of Sections 150.0(a) through 150.0(r) also apply to additions or alterations. The amendments to sections 150.0 (t) do not apply to additions or alterations. (a) – (s): Subsections 150.0(a) – (s) are adopted without modification. (t) Heat pump space heater ready. Systems using gas or propane furnace to serve individual dwelling units shall include the following:
1. A dedicated 240 volt branch circuit wiring shall be installed within 3 feet from the furnace and accessible to the furnace with no obstructions. The branch circuit conductors shall be rated at 30 amps minimum. The blank cover shall be identified as “240V ready.” All electrical components shall be installed in accordance with the California Electrical Code.
2. The main electrical service panel shall have a reserved space to allow for the installation of a double pole circuit breaker for a future heat pump space heater installation. The reserved space shall be permanently marked as “For Future 240V use.”
3. A designated exterior location for a future heat pump compressor unit with either a drain or natural drainage for condensate.
(u) – (v): Subsections 150.0(u) – (v) are adopted without modification.
SECTION 150.1 - PERFORMANCE AND PRESCRIPTIVE COMPLIANCE
APPROACHES FOR SINGLE FAMILY RESIDENTIAL BUILDINGS
Section 150.1 is amended to read as follows:
(a) Section (a) is adopted without modification
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(b) Performance Standards. A building complies with the performance standards if the energy consumption calculated for the proposed design building is no greater than the energy budget calculated for the standard design building using Commission-certified compliance software as specified by the Alternative Calculation Methods Approval Manual, as specified in sub-sections 1, 2 and 3 below.
1. Newly Constructed Buildings. The Energy Budget for newly constructed buildings is expressed in terms of the Energy Design Ratings, which are based on source energy and time-dependent valuation (TDV) energy. The Energy Design Rating 1 (EDR1) is based on source energy. The Energy Design Rating 2 (EDR2) is based on TDV energy and has two components, the Energy
Efficiency Design Rating, and the Solar Electric Generation and Demand Flexibility Design Rating. The total Energy Design Rating shall account for both the Energy Efficiency Design Rating and the Solar Electric Generation and Demand Flexibility Design Rating.
The proposed building shall separately comply with the Source Energy Design Rating, Energy Efficiency Design Rating and the Total Energy Design Rating. A building complies with the performance approach if the TDV energy budget calculated for the proposed design building is no greater than the TDV energy budget calculated for the Standard Design Building AND Source Energy compliance margin of at least 9, relative to the Source Energy Design Rating 1 calculated for the Standard Design building.
EXCEPTION 1 to Section 150.1(b)1. A community shared solar electric generation system, or other renewable electric generation system, and/or community shared battery storage system, which provides dedicated power, utility energy reduction credits, or payments for energy bill reductions, to the permitted building and is approved by the Energy Commission as specified in Title 24, Part 1, Section 10-115, may offset part or all of the solar electric generation system Energy Design Rating required to comply with the Standards, as calculated according to methods established by the Commission in the Residential ACM Reference Manual.
EXCEPTION 2 to Section 150.1(b)1. A newly constructed building with a conditioned floor area less than 1,500 square feet shall achieve a Source Energy compliance margin of 4 or greater, relative to the Source Energy Design Rating 1 calculated for the Standard Design building.
EXCEPTION 3 to Section 150.1(b)1. Due to conditions specific to the project, if it is technically infeasible to achieve source energy compliance margins mandated by City, the Building Official may reduce the compliance margin for a newly constructed building. The 293
Building Official may adopt interpretative guidance to implement this exception.
2. Additions and Alterations to Existing Buildings. The Energy Budget for additions and alterations is expressed in terms of TDV energy.
3. Section (b)(3) is adopted without modification.
(c) Section (c) is adopted without modification.
SECTION 160.4 MANDATORY REQUIREMENTS FOR WATER HEATING SYSTEMS Section 160.4 is amended to remove subsection (a) as follows:
(a) Reserved. Systems using gas or propane water heaters to serve individual dwelling units shall include the following components:
1. A dedicated 125 volt, 20 amp electrical receptacle that is connected to the electric panel with a 120/240 volt 3 conductor, 10 AWG copper branch circuit, within 3 feet from the water heater and accessible to the water heater with no obstructions. In addition, all of the following:
A. Both ends of the unused conductor shall be labeled with the word “spare” and be electrically isolated; and
B. A reserved single pole circuit breaker space in the electrical panel adjacent to the circuit breaker for the branch circuit in A above and labeled with the words “Future 240V Use”; and
2. A Category III or IV vent, or a Type B vent with straight pipe between the outside termination and the space where the water heater is installed; and
3. A condensate drain that is no more than 2 inches higher than the base of the installed water heater, and allows natural draining without pump assistance; and
4. A gas supply line with a capacity of at least 200,000 Btu/hr.
Sections (b) to (f) are adopted without amendments.
SECTION 160.9 MANDATORY REQUIREMENTS FOR ELECTRIC READY
BUILDINGS
Section 160.9 Sections (a) to (c) are adopted without amendments. Sections (d) through (f) are added as follows:
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(a) – (c): Subsections 150.0(a) – (c) are adopted without modification. (d) Individual Heat Pump Water Heater Ready. Systems using gas or propane water heaters to serve individual dwelling units shall include the following components and shall meet the requirements of Section 160.9(f):
1. A dedicated 125 volt, 20 amp electrical receptacle that is connected to the electric panel with a 120/240 volt 3 conductor, copper branch circuit rated to 30 amps, within 3 feet from the water heater and accessible to the water heater with no obstructions. In addition, such systems shall provide all of the following:
A. Both ends of the unused conductor shall be labeled with the word “spare” and be electrically isolated; and
B. A reserved single pole circuit breaker space in the electrical panel adjacent to the circuit breaker for the branch circuit in A above and labeled with the words “For Future Use”.
2. A condensate drain that is no more than 2 inches higher than the base of the installed water heater, and allows natural draining without pump assistance.
3. The construction drawings shall indicate the location of the future heat pump water heater. The reserved location shall have minimum interior dimensions of 39”x39”x96”.
4. A ventilation method meeting one of the following:
A. The designed space reserved for the future heat pump water heater shall have a minimum volume of 700 cubic feet; or
B. The designed space reserved for the future heat pump water heater shall vent to a communicating space in the same pressure boundary via permanent openings with a minimum total net free area of 250 square inches so that the total combined volume connected via permanent openings is 700 cu. ft. or larger. The permanent openings shall be:
i. Fully louvered doors with fixed louvers consisting of a single layer of fixed flat slats; or
ii. Two permanent fixed openings, consisting of a single layer of fixed flat slat louvers or grilles, one commencing within 12 inches from the top of the enclosure and one commencing within 12 inches from the bottom of the enclosure.
C. The designed space reserved for the future heat pump water heater shall include two 8” capped ducts, venting to the building exterior:
i. All ducts, connections and building penetrations shall be sealed, ii. Exhaust air ducts and all ducts which cross pressure boundaries shall 295
be insulated to a minimum insulation level of R-6,
iii. Airflow from termination points shall be diverted away from each other. (e) Central Heat Pump Water Heater Electric Ready. Central water heating systems using gas or propane to serve multiple dwelling units shall include the following:
1. The system input capacity of the gas or propane water heating system shall be determined as the sum of the input gas or propane capacity of all water heating devices associated with each gas or propane water heating system.
2. Space reserved shall include:
A. Heat Pump. The minimum space reserved shall include space for service clearances and air flow clearances and shall meet one of the following:
i. If the system input capacity of the gas water heating system is less than 200,000 BTU per hour, the minimum space
reserved for the heat pump shall be 2.0 square feet per input 10,000 BTU per hour of the gas or propane water heating system, and the minimum linear dimension of the space
reserved shall be 48 linear inches.
ii. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU per hour, the
minimum space reserved for the heat pump shall be 3.6
square feet per input 10,000 BTU per hour of the gas or propane water heating system, and the minimum linear
dimension of the space reserved shall be 84 linear inches. iii. The space reserved shall be the space required for a heat pump water heater system that meets the total building hot water demand as calculated and documented by the
responsible person associated with the project.
B. Tanks. The minimum space reserved shall include space for service clearances and shall meet one of the following:
i. If the system input capacity of the gas water heating system is less than 200,000 BTU per hour, the minimum space
reserved for the storage and temperature maintenance tanks shall be 4.4 square feet per input 10,000 BTU per hour. of the gas or propane water heating system.
ii. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU per hour, the
minimum physical space reserved for the storage and
temperature maintenance tanks shall be 3.1 square feet per input 10,000 BTU per hour. of the gas or propane water
heating system.
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iii. The space reserved shall be the space required for a heat pump water heater system that meets the total building hot water demand as calculated and documented by the
responsible person associated with the project.
3. Ventilation shall be provided by meeting one of the following:
A. Physical space reserved for the heat pump shall be located outside, or
B. A pathway shall be reserved for future routing of supply and exhaust air via ductwork from the reserved heat pump location to an appropriate outdoor location. Penetrations through the building envelope for louvers and ducts shall be planned and identified for future use. The reserved pathway and penetrations through the building envelope shall be sized to meet one of the following:
i. If the system input capacity of the gas water heating system is less than 200,000 BTU per hour, the minimum air flow rate shall be 70 CFM per input 10,000 BTU per hour of the gas or propane water heating system and the total external static pressure drop of ductwork and louvers shall not exceed 0.17 inch when the future heat pump water heater is installed. ii. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU per hour, the
minimum air flow rate shall be 420 CFM per input 10,000 BTU per hour of the gas or propane water heating system and the total external static pressure drop of ductwork and louvers shall not exceed 0.17 inch when the future heat pump water heater is installed.
iii. The reserved pathway and penetrations shall be sized to serve a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project.
4. Condensate drainage piping. An approved receptacle that is sized in accordance with the California Plumbing Code to receive the condensate drainage shall be installed within 3 feet of the reserved heat pump location, or piping shall be installed from within 3 feet of the reserved heat pump location to an approved discharge location that is sized in accordance with the California Plumbing Code, and meets one of the following:
A. If the system input capacity of the gas water heating system is less than 200,000 BTU per hour, condensate drainage shall be sized for
0.2 tons of refrigeration capacity per input 10,000 BTU per hour.
B. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU per hour, condensate drainage shall be sized for 0.7 tons of refrigeration capacity per 297
input 10,000 BTU per hour.
C. Condensate drainage shall be sized to serve a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project.
5. Electrical.
A. Physical space shall be reserved on the bus system of the main switchboard or on the bus system of a distribution board to serve the future heat pump water heater system including the heat pump and temperature maintenance tanks. In addition, the physical space reserved shall be capable of providing adequate power to the future heat pump water heater as follows:
i. Heat Pump. For the Heat Pump, the physical space reserved shall comply with one of the following:
A. If the system input capacity of the gas water heating system is less than 200,000 BTU per hour, provide
0.1 kVA per input 10,000 BTU per hour.
B. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU per
hour, provide 1.1 kVA per input 10,000 BTU per hour.
C. The physical space reserved supplies sufficient
electrical power required to power a heat pump water
heater system that meets the total building hot water
demand as calculated and documented by the
responsible person associated with the project.
ii. Temperature Maintenance Tank. For the Temperature
Maintenance Tank, the physical space reserved shall comply with one of the following:
A. If the system input capacity of the gas water heating system is less than 200,000 BTU per hour, provide
1.0 kVA per input 10,000 BTU per hour.
B. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU per
hour, provide 0.6 kVA per input 10,000 BTU per hour.
C. The physical space reserved supplies sufficient
electrical power required to power a heat pump water
heater system that meets the total building hot water
demand as calculated and documented by the
responsible person associated with the project.
(f) The building electrical system shall be sized to meet the future electric requirements of the electric ready equipment specified in sections 160.9 a – e.
To meet this requirement the building main service conduit, the electrical system to the point specified in each subsection, and any on-site distribution transformers shall have sufficient capacity to supply full rated amperage at 298
each electric ready appliance in accordance with the California Electric Code.
SECTION 170.1 – PERFORMANCE APPROACH
Section 170.1 is adopted with amendments as follows:
A building complies with the performance approach if the TDV energy budget calculated for the proposed design building under Subsection (b) is no greater than the TDV energy budget calculated for the Standard Design Building under Subsection (a).
Additionally, where applicable, a building must comply with the following requirements:
1. The energy budget, expressed in terms of source energy, of a newly constructed lowrise multifamily building (three habitable stories or less) shall be at least 10 percent lower than that of the Standard Design Building.
2. Newly Constructed high-rise multifamily buildings (greater than four habitable stories) shall be at least 4 percent lower than that of the Standard Design Building.
Sub-sections (a) to (d) are adopted without amendments.
SECTION 6: CALIFORNIA ENVIRONMENTAL QUALITY ACT
The City Council finds that adoption of this Ordinance is exempt from CEQA pursuant to CEQA Guidelines section 15061(b)(3) in that the standards set forth in the ordinance are more protective of the environment than the California Energy Code standards, and there is no possibility that the activity in question may have a significant effect on the environment. As a separate and independent basis, this action is exempt from CEQA pursuant to CEQA Guidelines section 15308 in that the standards set forth in the ordinance assure the maintenance, restoration, enhancement or protection of natural resources and the environment. In addition, CEQA Guidelines section 15183 (Projects Consistent with a Community Plan, General Plan, or Zoning) applies to the project in that the standards set forth in the Ordnance are consistent with the General Plan and the Climate Action Plan.
SECTION 7: IMPLIED REPEAL.
Any provision of the East Palo Alto Municipal Code inconsistent with this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to the extent necessary to effectuate this Ordinance.
SECTION 8: REFERENCES TO PRIOR CODE
Unless superseded and repealed (express or implied), references in City forms, documents and regulation to the chapters and sections of the former City codes, shall be construed to apply to the corresponding provisions contained within this Ordinance. 299
SECTION 9: SEVERABILITY
If any section, subsection, sentence, clause, phrase, or word of this Ordinance is for any reason held to be invalid by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares it would have passed and adopted this Ordinance, and each and all provisions hereof, irrespective of the fact that one or more provisions may be declared invalid.
SECTION 10: EFFECTIVE DATE
This Ordinance shall become effective 30 days after the second public hearing.
SECTION 11: PUBLICATION
Within fifteen (15) days of tis adoption, the Ordinance shall be posted in three (3) public places within the City of East Palo Alto, and the Ordinance, or summary of the Ordinance prepared by the City Attorney, shall be published in a local newspaper used to publish official notice for the City of East Palo Alto prior to the effective date.
This Ordinance was introduced at the______________ meeting of the City Council of the City of East Palo Alto.
PASSED AND ADOPTED this _____ day of ______________, 202[ ] by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Antonio D. Lopez, Mayor
ATTEST: APPROVED AS TO FORM:
300
James Colin, City Clerk John D. Lê, City Attorney
301
Prepared by:
Alea German, Claudia Pingatore, Ada Shen, & Keith Saechao, Frontier Energy, Inc Misti Bruceri, Misti Bruceri & Associates, LLC
Prepared for:
Kelly Cunningham, Codes and Standards Program, Pacific Gas and Electric Last modified: 2024/04/26
Revision: 1.2
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Cost-Effectiveness Analysis: Single Family New Construction Legal Notice
This report was prepared by Pacific Gas and Electric Company and funded by the California utility customers under the auspices of the California Public Utilities Commission.
Copyright 2022, Pacific Gas and Electric Company. All rights reserved, except that this document may be used, copied, and distributed without modification.
Neither PG&E nor any of its employees makes any warranty, express or implied; or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any data, information, method, product, policy or process disclosed in this document; or represents that its use will not infringe any privatelyowned rights including, but not limited to, patents, trademarks or copyrights.
Acronym List
2023 PV$ – Present value costs in 2023
ACH50 – Air Changes per Hour at 50 pascals pressure
differential
ACM – Alternative Calculation Method
ADU – Accessory Dwelling Unit
AFUE – Annual Fuel Utilization Efficiency
B/C – Lifecycle Benefit-to-Cost Ratio
BEopt – Building Energy Optimization Tool
BSC – Building Standards Commission
CA IOUs – California Investor-Owned Utilities
CASE – Codes and Standards Enhancement
CBECC-Res – Computer program developed by the California Energy Commission for use in demonstrating
compliance with the California Residential Building
Energy Efficiency Standards
CFI – California Flexible Installation
CFM – Cubic Feet per Minute
CO2 – Carbon Dioxide
CPAU – City of Palo Alto Utilities
CPUC – California Public Utilities Commission
CZ – California Climate Zone
DHW – Domestic Hot Water
DOE – Department of Energy
DWHR – Drain Water Heat Recovery
EDR – Energy Design Rating
EER – Energy Efficiency Ratio
EF – Energy Factor
303
Cost-Effectiveness Analysis: Single Family New Construction GHG – Greenhouse Gas
HERS Rater – Home Energy Rating System Rater
HPA – High Performance Attic
HPWH – Heat Pump Water Heater
HSPF – Heating Seasonal Performance Factor
IECC – International Energy Conservation Code
IOU – Investor Owned Utility
kBtu – kilo-British thermal unit
kWh – Kilowatt Hour
LBNL – Lawrence Berkeley National Laboratory
LCC – Lifecycle Cost
LLAHU – Low Leakage Air Handler Unit
LSC – Long-term System Cost (2025 Title 24, Part 6 compliance metric) MF – Multifamily
NEEA – Northwest Energy Efficiency Alliance
NEM – Net Energy Metering
NPV – Net Present Value
NREL – National Renewable Energy Laboratory
PG&E – Pacific Gas and Electric Company
POU – Publicly-Owned-Utilities
PV – Photovoltaic
SCE – Southern California Edison
SDG&E – San Diego Gas and Electric
SEER – Seasonal Energy Efficiency Ratio
SF – Single Family
SMUD – Sacramento Municipal Utility District
SoCalGas – Southern California Gas Company
TDV – Time Dependent Valuation (2022 Title 24, Part 6 compliance metric) Therm – Unit for quantity of heat that equals 100,000 British thermal units Title 24 – Title 24, Part 6
TOU – Time-Of-Use
UEF – Uniform Energy Factor
VLLDCS – Verified Low Leakage Ducts in Conditioned Space ZNE – Zero-net Energy
304
Cost-Effectiveness Analysis: Single Family New Construction Summary of Revisions
Date Description Reference (page or section)
9/12/2022 Original Release (1.0) N/A
3/25/2024 Updated analysis (1.1) • New simulation results with latest CBECC-Res version (Section 2.1.1)
• Updated utility cost estimates using
recent utility tariff and net billing
tariff (Section 2.1.3)
• New measure costs for heat pumps,
batteries, and PV (Section 3.3)
• Revised packages (Section 3.4)
• Revised Results, Summary,
References, and Appendices
(Sections 4-7)
4/26/2024 Corrected errors (1.2) • Corrected incorrect results in Tables 16-19, 23, 26
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Cost-Effectiveness Analysis: Single Family New Construction
TABLE OF CONTENTS
Executive Summary..........................................................................................................................................................1 1 Introduction................................................................................................................................................................4 2 Methodology and Assumptions...............................................................................................................................5
2.1 Analysis for Reach Codes..................................................................................................................................................... 5
2.1.1 Modeling ....................................................................................................................................................................... 5
2.1.2 Cost-effectiveness ........................................................................................................................................................ 5
2.1.3 Utility Rates................................................................................................................................................................... 7
2.2 Greenhouse Gas Emissions ................................................................................................................................................. 8
2.3 Energy Design Rating........................................................................................................................................................... 8 3 Prototypes, Measure Packages, and Costs............................................................................................................9
3.1 Prior Reach Code Research ................................................................................................................................................. 9
3.2 Prototype Characteristics...................................................................................................................................................... 9
3.3 Measure Definitions and Costs ........................................................................................................................................... 12
3.3.1 Efficiency, Solar PV, and Batteries ............................................................................................................................. 12
3.3.2 Electrification............................................................................................................................................................... 17
3.4 Measure Packages ............................................................................................................................................................. 22 4 Results......................................................................................................................................................................24
4.1 Compliance Results: All-Electric vs. Mixed Fuel Code Minimum ........................................................................................ 24
4.2 All-Electric Code Minimum Results ..................................................................................................................................... 26
4.3 All-Electric Efficiency, PV, and Battery Results................................................................................................................... 29
4.4 Mixed Fuel Results ............................................................................................................................................................. 31
4.5 Greenhouse Gas Reductions.............................................................................................................................................. 33
4.6 Sensitivity Analysis ............................................................................................................................................................. 35
4.6.1 CARE Rate Comparison ............................................................................................................................................. 36
4.6.2 Utility Infrastructure Cost Sensitivity............................................................................................................................ 38
4.6.3 Utility Rate Escalation................................................................................................................................................. 39 5 Summary ..................................................................................................................................................................42 6 References ...............................................................................................................................................................46 7 Appendices ..............................................................................................................................................................48
7.1 Map of California Climate Zones......................................................................................................................................... 48
7.2 Utility Rate Schedules......................................................................................................................................................... 49
7.2.1 Pacific Gas & Electric.................................................................................................................................................. 50
7.2.2 Southern California Edison ......................................................................................................................................... 57
7.2.3 Southern California Gas.............................................................................................................................................. 61
7.2.4 San Diego Gas & Electric............................................................................................................................................ 62
7.2.5 City of Palo Alto Utilities.............................................................................................................................................. 68
7.2.6 Sacramento Municipal Utilities District (Electric Only)................................................................................................. 70
7.2.7 Fuel Escalation Assumptions...................................................................................................................................... 72
7.3 Summary of Efficiency Measures........................................................................................................................................ 74
7.4 Summary of Applicable Prescriptive Base case Measures ................................................................................................. 76 306
Cost-Effectiveness Analysis: Single Family New Construction
LIST OF TABLES
Table 1: Utility Tariffs Used Based on Climate Zone ............................................................................................................................ 7 Table 2: Prototype Characteristics........................................................................................................................................................ 9 Table 3: Base case Characteristics of the Prototypes ........................................................................................................................ 11 Table 4: Base Package PV Capacities (kW-DC) ................................................................................................................................ 12 Table 5: Incremental Cost Assumptions: Efficiency, PV, and Battery Measures ................................................................................ 14 Table 6: Single Family IOU Total Natural Gas Infrastructure Costs.................................................................................................... 17 Table 7: Single Family CPAU Total Natural Gas Infrastructure Costs ................................................................................................ 18 Table 8: ADU Utility Infrastructure Total and Incremental Costs......................................................................................................... 18 Table 9: Effective Useful Lifetime (EUL) of Water Heating & Space Conditioning Equipment............................................................ 19 Table 10: Space Conditioning System Nominal Capacities ................................................................................................................ 20 Table 11: Space Conditioning System Incremental Costs (2023 PV$)............................................................................................... 20 Table 12: Heat Pump Water Heating System Incremental Costs (2023 PV$) .................................................................................... 21 Table 13: Single Family All-Electric Appliance Incremental Costs ...................................................................................................... 22 Table 14: Single Family Cost-Effectiveness: All-Electric Code Minimum............................................................................................ 27 Table 15: ADU Cost-Effectiveness: All-Electric Code Minimum.......................................................................................................... 28 Table 16: Single Family Cost-Effectiveness: Comparison of All-Electric Efficiency Only, PV, and Battery Packages ........................ 29 Table 17: ADU Cost-Effectiveness: All-Electric Energy Efficiency + Additional PV + Battery ............................................................. 30 Table 18: Single Family Cost-Effectiveness: Mixed Fuel Efficiency + PV + Battery............................................................................ 31 Table 19: ADU Cost-Effectiveness: Mixed Fuel Efficiency + PV + Battery ......................................................................................... 32 Table 20: Single Family Greenhouse Gas Reductions (metric tons) .................................................................................................. 33 Table 21: ADU Greenhouse Gas Reductions (metric tons) ................................................................................................................ 34 Table 22: On-Bill Cost-Effectiveness with CARE Tariffs: All-Electric Code Minimum ......................................................................... 36 Table 23: On-Bill Cost-Effectiveness with CARE Tariffs: Mixed Fuel Efficiency + PV+ Battery Package ........................................... 37 Table 24: Single Family Cost-Effectiveness Comparison with Range of Natural Gas Utility Infrastructure Costs: All-Electric Code Minimum........................................................................................................................................................................................ 38 Table 25: Cost-Effectiveness, 2025 LSC Basis: All-Electric Code Minimum ...................................................................................... 40 Table 26: Cost-Effectiveness, 2025 LSC Basis: Mixed Fuel Efficiency + PV + Battery ...................................................................... 41 Table 27: Summary of Single Family EDR1 Margins and Cost-Effectiveness .................................................................................... 44 Table 28: Summary of ADU EDR1 Margins and Cost-Effectiveness .................................................................................................. 45 Table 29: PG&E Baseline Territory by Climate Zone.......................................................................................................................... 50 Table 30: PG&E Monthly Gas Rate ($/therm)..................................................................................................................................... 50 Table 31: SCE Baseline Territory by Climate Zone ............................................................................................................................ 57 Table 32: SoCalGas Baseline Territory by Climate Zone ................................................................................................................... 61 Table 33: SoCalGas Monthly Gas Rate ($/therm) .............................................................................................................................. 61 Table 34: SDG&E Baseline Territory by Climate Zone ....................................................................................................................... 62 307
Cost-Effectiveness Analysis: Single Family New Construction Table 35: SDG&E Monthly Gas Rate ($/therm).................................................................................................................................. 62 Table 36: CPAU Monthly Gas Rate ($/therm)..................................................................................................................................... 68 Table 37: Real Utility Rate Escalation Rate Assumptions, CPUC En Banc and 2022 TDV Basis ...................................................... 72 Table 38: Real Utility Rate Escalation Rate Assumptions, 2025 LSC Basis ....................................................................................... 73 Table 39: All-Electric Single Family Efficiency Measures, Various Packages..................................................................................... 74 Table 40: Mixed Fuel Single Family Measures, Efficiency + PV + Battery Package........................................................................... 75 Table 41: Efficiency Measures for All ADU Packages ........................................................................................................................ 75 Table 42 Prescriptive Envelope, PV, and Battery Measures by Climate Zone.................................................................................... 76 Table 43 Prescriptive HVAC Measures by Climate Zone ................................................................................................................... 77 Table 44 Prescriptive Water Heating Measures by Climate Zone....................................................................................................... 77
LIST OF FIGURES
Figure 1: Single family all-electric home compliance impacts............................................................................................................. 24 Figure 2: ADU all-electric home compliance impacts.......................................................................................................................... 25 Figure 3: Single family four gas appliance home compliance impacts................................................................................................ 25 Figure 4: Map of California climate zones........................................................................................................................................... 48 308
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Cost-Effectiveness Analysis: Single Family New Construction Executive Summary
1 California Energy Codes & Standards | A statewide utility program 2024-04-26 Executive Summary
The California Codes and Standards (C&S) Reach Codes program provides technical support to local governments considering adopting a local ordinance (reach code) intended to support meeting local and/or statewide energy efficiency and greenhouse gas (GHG) reduction goals. The program facilitates adoption and implementation of the code when requested by local jurisdictions by providing resources such as cost-effectiveness studies, model language, sample findings, and other supporting documentation.
This report documents cost-effectiveness analysis results for traditional new detached single family and detached accessory dwelling unit (ADUs) building types. It evaluates mixed fuel and all-electric package options in all sixteen California climate zones (CZs). Packages include combinations of efficiency measures, on-site renewable energy, and battery energy storage.
This analysis used two different metrics to assess the cost-effectiveness of the proposed upgrades. Both methodologies require estimating and quantifying the incremental costs and energy savings associated with each energy efficiency measure over a 30-year analysis period. On-Bill cost-effectiveness is a customer-based lifecycle cost (LCC) approach that values energy based upon estimated site energy usage and customer utility bill savings using today’s electricity and natural gas utility tariffs. Time Dependent Valuation (TDV) is the California Energy Commission’s LCC methodology, which is intended to capture the long-term projected cost of energy, including costs for providing energy during peak periods of demand, carbon emissions, grid transmission and distribution impacts. This is the methodology used by the Energy Commission in evaluating cost-effectiveness for efficiency measures in Title 24, Part 6.
The following are key takeaways and recommendations from the analysis.
Conclusions and Discussion:
• All-electric buildings have lower GHG emissions than mixed fuel buildings, due to the clean power sources currently available from California’s power providers as well as accounting for increased penetration of renewables in the future. Almost all the all-electric packages evaluated resulted in greater GHG emission savings than the mixed fuel packages, with the exception of the mixed fuel package with battery storage in climate zones with low heating loads.
• The Reach Codes Team found code-compliant all-electric new construction to be feasible and cost-effective based on TDV for single family homes in all cases except Climate Zone 16. • All-electric single family new construction was On-Bill cost-effective in all cases except Climate Zones 1, 3, 14, and 16.
• The all-electric ADU home was cost-effective based on TDV in all cases except in Climate Zones 3, 4, 13, and 14 where the higher cost of installing a ducted heat pump water heater (HPWH) instead of the prescriptively required gas tankless water heater exceed the resulting energy cost savings. In the other climate zones there were first cost savings for installing a heat pump space heater instead of a gas furnace, contributing to an overall TDV cost-effective result.
• Few cases were cost-effective On-Bill for the ADU.
• All-electric code minimum construction results in an increase in first year utility costs relative to a mixed fuel home, except for CPAU and SMUD where electricity rates are much lower than for the investor-owned utilities (IOUs). The addition of efficiency measures, market dominant HPWHs that meet the Northwest Energy Efficiency Alliance’s (NEEA’s) Advanced Water Heating Specification1, high efficiency heat pumps, increased solar photovoltaics (PV), and batteries all reduce utility costs, and a combination of these options was found to reduce annual utility costs relative to a mixed fuel home in all cases. 1 Refer to Section 0 for an explanation of HPWHs certified through NEEA’s Advanced Water Heating Specification, their market status, and how they compare to federal minimum efficiency standards. 310
Cost-Effectiveness Analysis: Single Family New Construction Executive Summary
2 California Energy Codes & Standards | A statewide utility program 2024-04-26 • Under the Net Biling Tariff (NBT)2, utility cost savings for increasing PV system size beyond code minimum are substantially less than what they were under prior net energy metering rules (NEM 2.0); however, savings are sufficient to be On-Bill cost-effective in all climate zones for the all-electric single family home. Coupling PV with battery systems increases utility cost savings as a result of improved on-site utilization of PV generation and fewer exports to the grid.
• Applying California Alternate Rates for Energy (CARE) rates in the IOU territories improves On-Bill costeffectiveness for all-electric buildings, as compared to the same case under standard rates, due to higher utility cost savings compared to a code compliant mixed fuel building also on a CARE rate. This is due to the CARE discount on electricity being higher than that on gas.
• If gas tariffs are assumed to increase substantially over time, in line with the escalation assumption from the 2025 LSC development, all-electric new construction was found to be On-Bill cost-effective in almost all scenarios over the 30-year analysis period. There is much uncertainty surrounding future tariff structures as well as escalation values. While it’s clear that gas rates are anticipated to increase, how much and how quickly is not known. Electricity tariff structures are expected to evolve over time, and the California Public Utilities Commission (CPUC) has an active proceeding to adopt an income-graduated fixed charge that benefits lowincome customers and supports electrification measures3. The CPUC will make a decision in mid-2024 and the new rates are expected to be in place later that year or in 2025. While the anticipated impact of this rate change is lower volumetric electricity rates, the rate design is not finalized. While lower volumetric electricity rates provide many benefits like incentivizing electrification, it also will make building efficiency measures harder to justify as cost-effective due to lower utility bill cost savings.
Recommendations:
• A reach code with a single performance target based on source energy (EDR1) can be structured to strongly encourage electrification. This approach requires equivalent performance for all buildings and allows mixed fuel buildings which minimizes the risk of violating federal preemption. Below are examples of how a reach code for single family homes could be set up based on the results summarized in Table 27. o A jurisdiction in Climate Zone 12 could set a performance target at an EDR1 margin of 11.5 (the EDR1 margin for the all-electric Code Minimum package). Any all-electric home meeting or exceeding the prescriptive requirements would comply, and a mixed fuel home would likely need to incorporate a combination of efficiency measures and a battery system to comply. o Similarly, a jurisdiction in Climate Zone 7 may consider setting a performance target of 2.8 EDR1 margin (also the EDR1 margin for the all-electric Code Minimum package). Any all-electric home meeting or exceeding the prescriptive requirements would comply, but a mixed fuel home would likely be able to comply with only a suite of above-code efficiency measures (no battery). Alternatively, a higher EDR1 margin target of 5 would incentivize more energy efficiency or additional PV for allelectric construction, and mixed fuel construction would likely need to incorporate a battery system to comply.
o A jurisdiction in Climate Zone 16 may want to set a performance target at an EDR1 margin of 20.5 (the EDR1 margin for the mixed fuel efficiency + PV + battery package). This would establish a target that a mixed fuel home could cost-effectively meet, likely only after incorporating a combination of efficiency measures and a battery system, and that an all-electric home could easily meet. • The 2022 Title 24 code’s new source energy metric combined with the heat pump baseline encourage allelectric construction, providing an incentive that allows for some amount of prescriptively required building efficiency to be traded off, still meeting minimum code compliance. This compliance benefit for all-electric homes highlights a unique opportunity for jurisdictions to incorporate efficiency into all-electric reach codes.
Efficiency and electrification have symbiotic benefits and are both critical for decarbonization of buildings. As demand on the electric grid is increased through electrification, efficiency can reduce the negative impacts of 2 Refer to Section 2.1.3 for discussion on NBT and NEM
3 https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/demand-response-dr/demand-flexibility-rulemaking 311
Cost-Effectiveness Analysis: Single Family New Construction Executive Summary
3 California Energy Codes & Standards | A statewide utility program 2024-04-26 additional electricity demand on the grid, reducing the need for increased generation and storage capacity, as well as the need to upgrade upstream transmission and distribution equipment. The Reach Codes Team recommends that jurisdictions adopting a reach code for single family buildings also include an efficiency requirement with EDR1 margins at minimum consistent with the all-electric code minimum package results in Table 27.
• The code compliance margins for the ADU all-electric code minimum package are lower than for the single family prototype; code compliance and cost-effectiveness can be more challenging for smaller dwelling units.
As a result, the Reach Codes Team does not recommend EDR1 targets above those reported for the allelectric Code Minimum package in Table 28.
This report presents measures or measure packages that local jurisdictions may consider adopting to achieve energy savings and emissions reductions beyond what will be accomplished by enforcing minimum state requirements, the 2022 Building Energy Efficiency Standards (Title 24, Part 6), effective January 1, 2023.
Local jurisdictions may also adopt ordinances that amend different Parts of the California Building Standards Code or may elect to amend other state or municipal codes. The decision regarding which code to amend will determine the specific requirements that must be followed for an ordinance to be legally enforceable. For example, jurisdictions may amend Part 11 instead of Part 6 of the CA Building Code requiring review and approval by the Building Standards Commission (BSC) but not the California Energy Commission (Energy Commission). Reach codes that amend Part 6 of the CA Building Code and require energy performance beyond state code minimums must demonstrate the proposed changes are cost-effective and obtain approval from the Energy Commission. Although a cost-effectiveness study is only required to amend Part 6 of the CA Building Code, this study provides valuable context for jurisdictions pursuing other ordinance paths to understand the economic impacts of any policy decision. This study documents the estimated costs, benefits, energy impacts and greenhouse gas emission reductions that may result from implementing an ordinance based on the results to help residents, local leadership, and other stakeholders make informed policy decisions.
Model ordinance language and other resources are posted on the C&S Reach Codes Program website at LocalEnergyCodes.com. Local jurisdictions that are considering adopting an ordinance may contact the program for further technical support at [email protected]. In addition, jurisdictions in a CCA territory with rates or rate structures that are significantly different than IOU rates may email the program at [email protected] to request a custom analysis.
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Cost-Effectiveness Analysis: Single Family New Construction Introduction
4 California Energy Codes & Standards | A statewide utility program 2024-04-26 1 Introduction
This report documents cost-effective combinations of measures that exceed the minimum state requirements, the 2022 Building Energy Efficiency Standards, effective January 1, 2023, for newly constructed single family buildings. This report was developed in coordination with the California Statewide Investor-Owned Utilities (CA IOUs) Codes and Standards Program, key consultants, and engaged cities—collectively known as the Reach Codes Team.
The analysis considers traditional detached single family and detached accessory dwelling unit (ADUs) building types and evaluates mixed fuel and all-electric package options in all sixteen California climate zones (CZs).4 Packages include combinations of efficiency measures, on-site renewable energy, and battery energy storage.
This report documents the key results and conclusions from the Reach Codes Team analysis. A full dataset of all results can be downloaded from the Local Energy Codes Resources5 webpage. Results alongside policy options and the potential citywide impacts for specific jurisdictions can also be explored using the Cost-effectiveness Explorer at https://explorer.localenergycodes.com/.
The California Building Energy Efficiency Standards Title 24, Part 6 (Title 24) (California Energy Commission, 2021a) is maintained and updated every three years by two state agencies: the California Energy Commission (Energy Commission) and the Building Standards Commission (BSC). In addition to enforcing the code, local jurisdictions have the authority to adopt local energy efficiency ordinances—or reach codes—that exceed the minimum standards defined by Title 24 (as established by Public Resources Code Section 25402.1(h)2 and Section 10-106 of the Building Energy Efficiency Standards). Local jurisdictions must demonstrate that the requirements of the proposed ordinance are costeffective and do not result in buildings consuming more energy than is permitted by Title 24. In addition, the jurisdiction must obtain approval from the Energy Commission and file the ordinance with the BSC for the ordinance to be legally enforceable.
The Department of Energy (DOE) sets minimum efficiency standards for equipment and appliances that are federally regulated under the National Appliance Energy Conservation Act, including heating, cooling, and water heating equipment (E-CFR, 2020). Since state and local governments are prohibited from adopting higher minimum efficiencies than the federal standards require — herein referred to as federal preemption — the focus of this study is to identify and evaluate cost-effective packages that do not include high efficiency heating, cooling, and water heating equipment.
High efficiency appliances are often the easiest and most affordable measures to increase energy performance. While federal preemption limits reach code mandatory requirements for covered appliances, in practice, builders may install any package of compliant measures to achieve the performance requirements.
4 See Appendix 7.1 Map of California Climate Zones for a graphical depiction of climate zone locations. 5 https://localenergycodes.com/content/resources/?q=newly%20constructed%20buildings:%20efficiency%20and%20electrification 313
Cost-Effectiveness Analysis: Single Family New Construction Methodology and Assumptions
5 California Energy Codes & Standards | A statewide utility program 2024-04-26 2 Methodology and Assumptions
2.1 Analysis for Reach Codes
This section describes the approach to calculating cost-effectiveness including benefits, costs, metrics, and utility rate selection.
2.1.1 Modeling
The Reach Codes Team performed energy simulations using software approved for 2022 Title 24 Code compliance analysis, CBECC-Res 2022.3.0.
The general approach applied in this analysis is to evaluate performance and determine cost-effectiveness of various energy efficiency upgrade measures, individually and as packages, in single family buildings. Using the 2022 baseline as the starting point, prospective measures and packages were identified and modeled in each of the prototypes to determine the projected energy use (therm and kWh) and compliance impacts. A large set of parametric runs were conducted to evaluate various options and develop packages of measures that met or exceeded minimum code performance. The analysis utilized a Python based parametric tool to automate and manage the generation of CBECCRes input files. This allowed for quick evaluation of various efficiency measures across multiple climate zones and prototypes and improved quality control. The batch process functionality of CBECC-Res was utilized to simulate large groups of input files at once.
2.1.2 Cost-effectiveness
2.1.2.1 Benefits
This analysis used two different metrics to assess cost-effectiveness of the proposed upgrades. Both methodologies require estimating and quantifying the incremental costs and energy savings associated with each energy efficiency measure. The main difference between the methodologies is the manner in which they value energy and thus the cost savings of reduced or avoided energy use:
Utility Bill Impacts (On-Bill): Customer-based lifecycle cost (LCC) approach that values energy based upon estimated site energy usage and customer utility bill savings using today’s electricity and natural gas utility tariffs. Total savings are estimated over a 30-year duration and include discounting of future costs and energy cost inflation.
Time Dependent Valuation (TDV): Energy Commission LCC methodology, which is intended to capture the total value or cost of energy use over 30 years. This method accounts for long-term projected costs, such as the cost of providing energy during peak periods of demand, and other societal costs, such as projected costs for carbon emissions as well as grid transmission and distribution impacts. This metric values energy use differently depending on the fuel source (natural gas, electricity, and propane), time of day, and season. For example, electricity used (or saved) during peak periods has a much higher value than electricity used (or saved) during off-peak periods due to the less inefficient energy generation sources providing peak electricity (Horii, Cutter, Kapur, Arent, & Conotyannis, 2014). This is the methodology used by the Energy Commission in evaluating cost-effectiveness for efficiency measures in Title 24, Part 6.
2.1.2.2 Costs
The Reach Codes Team assessed the incremental costs of the measures and packages over a 30-year lifecycle.
Incremental costs represent the equipment, installation, replacement, and maintenance costs of the proposed measure relative to the 2022 Title 24 Standards minimum requirements or standard industry practices. Present value of replacement cost is included only for measures with lifetimes less than the 30-year evaluation period.
In calculating On-Bill cost-effectiveness, incremental first costs were assumed to be financed into a mortgage or loan with a 30-year loan term and four percent interest rate. Financing was not applied to future replacement or maintenance costs. In calculating TDV cost-effectiveness, incremental first costs were not assumed to be financed into a mortgage or loan.
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Cost-Effectiveness Analysis: Single Family New Construction Methodology and Assumptions
6 California Energy Codes & Standards | A statewide utility program 2024-04-26
2.1.2.3 Metrics
Cost-effectiveness is presented using net present value (NPV) and benefit-to-cost (B/C) ratio metrics.
NPV Savings: The lifetime NPV savings is reported as a cost-effectiveness metric; Equation 1 demonstrates how this is calculated. If the net savings of a measure or package is positive, it is considered cost-effective. Negative savings represent net costs.
B/C Ratio: Ratio of the present value of all benefits to the present value of all costs over 30 years (present value of benefits divided by present value of costs). The criteria benchmark for cost-effectiveness is a B/C ratio greater than one. A value of one indicates the present value of the savings over the analysis period is equivalent to the present value of the lifetime incremental cost of that measure. A value greater than one represents a positive return on investment. The B/C ratio is calculated according to Equation 2.
Equation 1
𝑁𝑁𝑁𝑁𝑁𝑁 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 = 𝑃𝑃𝑃𝑃 𝑃𝑃 𝑃𝑃 𝑣𝑣𝑣𝑣 𝑜𝑜𝑜𝑜 𝑙𝑙 𝑏𝑏 − 𝑃𝑃𝑃𝑃 𝑃𝑃 𝑃𝑃 𝑣𝑣𝑣𝑣 𝑜𝑜𝑜𝑜 𝑙𝑙 𝑐𝑐 Equation 2
𝐵𝐵 − − 𝐶𝐶 𝑅𝑅 = 𝑃𝑃𝑃𝑃 𝑃𝑃 𝑃𝑃 𝑣𝑣𝑣𝑣 𝑜𝑜𝑜𝑜 𝑙𝑙 𝑏𝑏
𝑃𝑃𝑃𝑃 𝑃𝑃 𝑃𝑃 𝑣𝑣𝑣𝑣 𝑜𝑜𝑜𝑜 𝑙𝑙 𝑐𝑐
Improving the efficiency of a project often requires an initial incremental investment. In most cases the benefit is represented by annual On-Bill utility or TDV savings, and the cost is represented by incremental first cost and replacement costs. However, some packages result in initial construction cost savings (negative incremental cost), and either energy cost savings (positive benefits), or increased energy costs (negative benefits). In cases where both construction costs and energy-related savings are negative, the construction cost savings are treated as the ‘benefit’ while the increased energy costs are the ‘cost.’ In cases where a measure or package is cost-effective immediately (i.e., upfront construction cost savings and lifetime energy cost savings), B/C ratio cost-effectiveness is represented by “>1”.
The lifetime costs or benefits are calculated according to Equation 3.
Equation 3
𝑜𝑜𝑜𝑜 𝑙𝑙 𝑐𝑐 𝑜𝑜 𝑏𝑏 = �(𝐴𝐴 𝑐𝑐 𝑜𝑜 𝑏𝑏 )𝑡𝑡
(1 + )𝑡𝑡
𝑛𝑛
𝑡𝑡=0
Where: n = analysis term in years
• r = discount rate
The following summarizes the assumptions applied in this analysis to both methodologies. • Analysis term of 30 years
• Real discount rate of three percent
TDV is a normalized monetary format and there is a unique procedure for calculating the present value benefit of TDV energy savings. The present value of the energy cost savings in dollars is calculated by multiplying the TDV savings (reported by the CBECC-Res simulation software) by a NPV factor developed by the Energy Commission (see (Energy + Environmental Economics, 2020)). The 30-year residential NPV factor is $0.173/kTDV kBtu for the 2022 code cycle.
Equation 4
• 𝑇𝑇𝑇𝑇 𝑜𝑜𝑜𝑜 𝑙𝑙 𝑏𝑏 = 𝑇𝑇𝑇𝑇 𝑒𝑒 ∗ 𝑁𝑁𝑁𝑁𝑁𝑁
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Cost-Effectiveness Analysis: Single Family New Construction Methodology and Assumptions
7 California Energy Codes & Standards | A statewide utility program 2024-04-26
2.1.3 Utility Rates
In coordination with the CA IOU rate team (comprised of representatives from Pacific Gas and Electric (PG&E), Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E)) and two Publicly-Owned-Utilities (POUs) (Sacramento Municipal Utility District (SMUD) and City of Palo Alto Utilities (CPAU)), the Reach Codes Team determined appropriate utility rates for each climate zone in order to calculate utility costs and determine On-Bill costeffectiveness for the proposed measures and packages. The utility tariffs, summarized in Table 1, were determined based on the most prevalent active rate in each territory. Utility rates were applied to each climate zone based on the predominant IOU serving the population of each zone, with a few climate zones evaluated multiple times under different utility scenarios. Climate Zones 10 and 14 were evaluated with both SCE/SoCalGas and SDG&E tariffs since each utility has customers within these climate zones. Climate Zone 5 is evaluated under both PG&E and SoCalGas natural gas rates. Two POU or municipal utility rates were also evaluated: SMUD in Climate Zone 12 and CPAU in Climate Zone 4.
Some community choice aggregations (CCAs) have utility rates that are very similar to IOU rates, often within $0.02 per kWh. For these CCA customers, total utility costs will be very similar to those calculated in this study and the results from this study will generally apply. The study results cannot be easily applied to CCAs with rates that do not closely track the IOU rates or municipal utilities outside of SMUD and CPAU.
First-year utility costs were calculated using hourly electricity and natural gas output from CBECC-Res and applying the utility tariffs summarized in Table 1. Annual costs were also estimated for IOU customers eligible for the CARE tariff discounts on both electricity and natural gas bills. Appendix 7.2 Utility Rate Schedules includes details of each utility tariff. For cases with onsite generation (i.e. solar photovoltaics (PV)), the approved Net Billing Tariff (NBT) was applied along with monthly service fees and hourly export compensation rates for 20246. In December 2022, the California Public Utilities Commission (CPUC) issued a decision adopting NBT as a successor to prior net energy metering rules (NEM 2.0) that went into effect April of 2023.7 The ADU was assumed to have separate electric and gas meters from the main house.
Table 1: Utility Tariffs Used Based on Climate Zone
Climate
Zones
Electric / Gas
Utility Electricity Tariff Natural GasTariff
IOUs
1-5,11-13,16 PG&E / PG&E E-ELEC G1
5 PG&E / SoCalGas E-ELEC GR
6, 8-10, 14, 15 SCE / SoCalGas TOU-D-PRIME GR
7, 10, 14 SDG&E / SDG&E EV-TOU-5 (TOU-ELEC for ADU
cases without PV systems8) GR
POUs
4 CPAU / CPAU E-1 G1
12 SMUD / PG&E R-TOD G1
Utility rates are assumed to escalate over time according to the CPUC 2021 En Banc hearings on utility costs through 2030 (California Public Utilities Commission, 2021a). Escalation rates through the remainder of the 30-year evaluation period are based on the escalation rate assumptions within the 2022 TDV factors. A second set of escalation rates were also evaluated to demonstrate the impact that utility cost changes over time have on cost-effectiveness. This utility rate escalation sensitivity analysis, presented in Section 4.6.3, was based on those used within the 2025 Long6 https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/net-energy-metering-nem/nemrevisit/nbtmodel--12142022.xlsb 7 https://www.cpuc.ca.gov/nemrevisit 8 See Section 3.2 Prototype Characteristics for a description of ADU cases that don’t require solar PV prescriptively. 316
Cost-Effectiveness Analysis: Single Family New Construction Methodology and Assumptions
8 California Energy Codes & Standards | A statewide utility program 2024-04-26 term System Cost (LSC) factors (LSC replaces TDV in the 2025 code cycle) which assumed steep increases in gas rates in the latter half of the analysis period. See Appendix 7.2.7 Fuel Escalation Assumptions for details.
2.2 Greenhouse Gas Emissions
The analysis reports the greenhouse gas (GHG) emission estimates based on assumptions within CBECC-Res. There are 8,760 hourly multipliers accounting for time-dependent energy use and carbon based on source emissions, including renewable portfolio standard projections. There are two strings of multipliers—one for Northern California climate zones, and another for Southern California climate zones.9 GHG emissions are reported as average annual metric tons of CO2 equivalent over the 30-year measure analysis period.
2.3 Energy Design Rating
The 2019 Title 24 Code introduced California’s Energy Design Rating (EDR) as the primary metric to demonstrate compliance with the energy code for single family buildings. This EDR was based on the hourly TDV energy use from a building that is compliant with the 2006 International Energy Conservation Code (IECC) as the Reference Building. The Reference Building has an EDR score of 100 while a zero-net energy (ZNE) home has an EDR score of zero. While the Reference Building is used to set the scale for the rating, the Proposed Design is still compared to the Standard Design based on the Title 24 prescriptive baseline assumptions to determine compliance. In the 2022 Title 24 Code a second new EDR metric was introduced based on hourly source energy. The two EDR metrics are described below:
• EDR1 is calculated based on source energy.
• EDR2 is calculated based on TDV energy.
EDR1 has only one component, “Total EDR1” which represents source energy use for the entire building. EDR2 is composed of two components for compliance purposes: the “Efficiency EDR2”, which represents the energy efficiency features of a home, and the PV/Flexibility EDR2, which includes the effects of PV and battery storage systems. “Total EDR2” combines all energy use of the building including both the Efficiency and PV/Flexibility impacts. While the Efficiency EDR2 does not include the full impact of a battery system, it can include a self-utilization credit for batteries if certain conditions are met.
For a new, single family building to comply with the 2022 Title 24 Code, three criteria must be met:
1. The Proposed Total EDR1 must be equal to or less than the Total EDR1 of the Standard Design, and
2. The Proposed Efficiency EDR2 must be equal to or less than the Efficiency EDR2 of the Standard Design, and
3. The Proposed Total EDR2 must be equal to or less than the Total EDR2 of the Standard Design.
This concept, consistent with California’s “loading order” which prioritizes energy efficiency ahead of renewable generation, requires projects to meet a minimum Efficiency EDR2 before PV is credited but allows for PV to be traded off with additional efficiency when meeting the Total EDR2. A project may improve building efficiency beyond the minimum required and subsequently reduce the PV generation capacity necessary to achieve the required Total EDR2.
However, it may not increase the size of the PV system and trade this off with a reduction of efficiency measures.
Results from this analysis are presented as EDR Margin, a reduction in the EDR score relative to the Standard Design.
EDR Margin is a better metric to use than absolute EDR in the context of a reach code because absolute values vary based on the home design and characteristics such as size and orientation. This approach aligns with how compliance is reported for the 2019 and 2022 Title 24 Code. The EDR Margin is calculated according to Equation 5.
Equation 5
𝐸𝐸 𝑀𝑀 = 𝑆𝑆 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑆𝑆 𝐸𝐸 − 𝑃𝑃 𝑃𝑃 𝑃𝑃 𝐸𝐸
9 CBECC-Res multipliers are the same for CZs 1-5 and 11-13 (Northern California), while there is another set of multipliers for CZs 6-10 and 14-16 (Southern California).
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Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
9 California Energy Codes & Standards | A statewide utility program 2024-04-26 3 Prototypes, Measure Packages, and Costs
This section describes the prototypes and the scope of analysis drawing from previous research where necessary, including the 2019 low-rise residential single family reach code study (Statewide Reach Codes Team, 2019).
3.1 Prior Reach Code Research
In 2019, the Reach Codes Team analyzed the cost-effectiveness of residential single family new construction projects for mixed fuel and all-electric packages (Statewide Reach Codes Team, 2019). Using this analysis, several cities and counties in California adopted local energy code amendments encouraging or requiring that low-rise residential new construction be all-electric. As there were few changes to the single family requirements, this analysis for the 2022 code cycle leveraged the work completed for the 2019 reports. Initial efficiency packages were based on the final packages from the 2019 research and were revised to reflect measure specifications and costs based on new data.
3.2 Prototype Characteristics
The Energy Commission defines building prototypes which it uses to evaluate the cost-effectiveness of proposed changes to Title 24 requirements. For the 2022 code cycle the Energy Commission used two single family prototypes, both of which were used in this analysis. Additional details on the prototypes can be found in the Alternative Calculation Method (ACM) Approval Manual (California Energy Commission, 2018).
Additionally, a detached new construction ADU prototype was developed to reflect recent trends in California construction related to the high cost of housing (TRC, 2021). ADUs are additional dwelling units typically built on the property of an existing single-family parcel. ADUs are defined as new construction in the energy code when they are ground-up developments, do not convert an existing space to livable space, and are not attached to the primary dwelling. The evaluated prototype is not representative of an attached ADU constructed as an addition to an existing home.
The Reach Codes Team leveraged prior research to define the detached ADU baseline and measure packages. The house size and number of bedrooms were based on data from a survey conducted by UC Berkeley’s Center for Community Innovation (UC Berkeley Center for Community Innovation, 2021). The survey found that the average square footage for new ADUs statewide is 615 square feet and that the majority (61 percent) of new ADUs have one bedroom.
Table 2 describes the basic characteristics of each prototype. The prototypes have equal geometry on all walls, windows and roof to be orientation neutral.
Table 2: Prototype Characteristics
Characteristic Single Family
One-Story
Single Family
Two-Story ADU
Conditioned Floor Area 2,100 ft2 2,700 ft2 625 ft2
Num. of Stories 1 2 1
Num. of Bedrooms 3 4 1
Window-to-Floor Area Ratio 20% 20% 19.2%
The Energy Commission’s protocol for the two single family prototypes is to weigh the simulated energy impacts by a factor that represents the distribution of single-story and two-story homes being built statewide. Consistent with this protocol, this study assumed 50 percent single-story and 50 percent two-story. Simulation results in this study are 318
Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
10 California Energy Codes & Standards | A statewide utility program 2024-04-26 characterized and presented according to this ratio, which is approximately equivalent to a 2,400-square foot (ft2) house.10 ADU results are presented separately.
The methodology used in the analyses for each of the prototypical building types begins with a design that precisely meets the minimum 2022 prescriptive requirements (zero compliance margin). Table 150.1-A in the 2022 Standards (California Energy Commission, 2021a) lists the prescriptive measures that determine the baseline design in each climate zone. Other features are consistent with the Standard Design in the ACM Reference Manual (California Energy Commission, 2022), and are designed to meet, but not exceed, the minimum requirements. See Appendix 7.4 for a list of prescriptive values relevant to the measures explored in this analysis.
Table 3 describes additional characteristics as they were applied to the base case, or baseline, energy model in this analysis. In a shift from the 2019 Standards, the 2022 Standards apply a prescriptive fuel source for space heating and water, where one is gas-fueled and one is a heat pump depending on climate zone. This establishes a prescriptive heat pump baseline. In most climate zones the prescriptive base case includes a heat pump water heater and a natural gas furnace for space heating. In Climate Zones 3, 4, 13, and 14 this is reversed, where the base case has a heat pump space heater and natural gas tankless water heater.
Table 4 summarizes the PV capacities for the base case packages. 10 2,400 ft2 = (50% x 2,100 ft2) + (50% x 2,700 ft2)
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Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
11 California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 3: Base case Characteristics of the Prototypes
Characteristic Single Family ADU
Space
Heating/Cooling1,2
CZs 1-2,5-12,15-16: Natural gas furnace, split
AC 80 AFUE, 14.3 SEER2, 11.7 EER2
CZs 3-4,13-14: Split heat pump – 7.5 HSPF2,
14.3 SEER2, 11.7 EER2
Same as single family
Air Distribution Ductwork located in vented attic Same as single family Water Heater1,2
CZs 1-2,5-12,15-16: Heat pump water heater
(HPWH) UEF = 2.0 located in the garage
CZs 3-4,13-14: Natural gas tankless –
UEF = 0.81
Same equipment type as SF
except HPWH is located inside
the conditioned space with the
supply air ducted from outside
and exhaust air ducted to
outside.3
Hot Water
Distribution
Code minimum
CZs 1,16: Basic compact distribution credit Same as single family Cooking Natural Gas Same as single family
Clothes Drying Natural Gas Same as single family
PV System
Sized to offset 100% of electricity use for space
cooling, ventilation, lighting, appliance, & other
miscellaneous electric loads. Size differs by
climate zone ranging from 2.64 kW to 5.21 kW,
see Table 4.
PV is not required when the PV
system size required based on the
prescriptive calculations is less
than 1.8 kW, as is the case in
Climate Zones 1-9, 12, 14, and
16. In the other climate zones the
PV size ranges from 1.73 kW to
2.51 kW, see Table 4.
4 Foundation Slab-on-grade Same as single family
1 Equipment efficiencies are equal to minimum federal appliance efficiency standards. 2 AFUE = annual fuel utilization efficiency. SEER = seasonal energy efficiency ratio. EER = energy efficiency ratio.
HSPF = heating seasonal performance factor. UEF = uniform energy factor. 3 This version of CBECC-Res used in this analysis did not have the capability to directly model ducted HPWHs even though this configuration is called out as the Standard Design in the 2022 ACM (California Energy Commission, 2022). This was modeled by indicating that the tank is located within the conditioned space with the compressor unit located outside. 4 Exception 2 to Section 150.1(I)14 states that “no PV system is required when the minimum PV system size specified by section 150.1(c)14 is less than 1.8 kWdc.” In this analysis this exception is applied based on the sizes calculated per Equation150.1-C of Section 150.1(c)14. The performance software sizes the PV system based on the estimated energy use, which differs slightly from the prescriptive sizing. As a result, the baseline PV capacity from the performance software for Climate Zone 10 is less than 1.8 kWdc.
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Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
12 California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 4: Base Package PV Capacities (kW-DC)
Climate
Zone
Base Package
Single
Family ADU
CZ01 3.57 0
CZ02 3.03 0
CZ03 2.83 0
CZ04 2.91 0
CZ05 2.64 0
CZ06 2.65 0
CZ07 2.83 0
CZ08 3.11 0
CZ09 2.96 0
CZ10 3.17 1.73
CZ11 3.90 2.06
CZ12 3.14 0
CZ13 4.05 2.09
CZ14 3.15 0
CZ15 5.21 2.51
CZ16 2.93 0
3.3 Measure Definitions and Costs
Measures evaluated in this study fall into two categories: those associated with general efficiency — onsite generation (solar PV), and demand flexibility (batteries) — and those associated with building electrification. Furthermore, general efficiency measures are broken into those that are federally preempted and those that are not; see Section 1 for background information on preemption and Section 3.4 for details of measure packages evaluated in this study. The Reach Codes Team selected measures based on cost-effectiveness as well as decades of experience with residential architects, builders, and engineers along with general knowledge of the relative consumer acceptance of many measures.
The following sections describe the details and incremental cost assumptions for each of the measures. Incremental costs represent the equipment, installation, replacement, and maintenance costs of the proposed measures relative to the base case.11 Replacement costs are applied for roofs, mechanical equipment, PV inverters and battery systems over the 30-year evaluation period. Maintenance costs are estimated for PV systems, but not any other measures.
Costs were estimated to reflect costs to the building owner. All costs are provided as present value in 2023 (2023 PV$).
The Reach Codes Team obtained measure costs from distributors, contractors, literature review, and online sources such as Home Depot and RS Means. Contractor markups are incorporated. These are the Reach Codes Team’s best estimates of average costs statewide. However, it's recognized that local costs may differ, and that inflation and supply chain issues may also impact costs.
3.3.1 Efficiency, Solar PV, and Batteries
The following are descriptions of each of the efficiency, PV, and battery measures evaluated under this analysis and applied in at least one of the packages presented in this report, including how they compare to the current prescriptive requirements. Throughout this report, “Efficiency” measures refer specifically to the following non-preempted 11 All first costs are assumed to be financed in a mortgage and interest costs due to financing are included in the incremental costs.
See Section 2.1.2 for details.
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Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
13 California Energy Codes & Standards | A statewide utility program 2024-04-26 measures. These measures are in addition to or in place of the relevant 2022 base case prototype characteristics outlined in Table 3, and their applicability to measure packages are summarized in Table 39 through Table 41. Table 5 summarizes the incremental cost assumptions for each of these measures.
Reduced Infiltration (ACH50): Reduce infiltration in single family homes from the default infiltration assumption of five (5) air changes per hour at 50 Pascals (ACH50) 12 by 40 percent to 3 ACH50. HERS rater field verification and diagnostic testing of building air leakage according to the procedures outlined in the 2022 Reference Appendices RA3.8 (California Energy Commission, 2021b).
Lower U-Factor Fenestration: Reduce window U-factor to 0.24. The prescriptive U-factor is 0.30 in all climate zones.
Higher SHGC Fenestration: Increase solar heat gain coefficient (SHGC) to 0.50 in climate zones where heating loads dominate (1, 3, 5 and 16). The baseline SHGC applied in the Standard Design is 0.35 in these climate zones.
Cool Roof: Install a roofing product that’s rated by the Cool Roof Rating Council to have an aged solar reflectance (ASR) equal to or greater than 0.25. Steep-sloped roofs were assumed in all cases. The prescriptive ASR is 0.20 for Climate Zones 10 through 15.
Increased Ceiling Insulation: Increase ceiling level insulation in a vented attic to R-38, R-49, or R-60 insulation.
Slab Insulation: Install R-10 perimeter slab insulation at a depth of 16-inches. This measure doesn’t apply to Climate Zone 16 where slab insulation is required prescriptively.
Low Pressure Drop Ducts: Upgrade the duct distribution system to reduce external static pressure and meet a maximum fan efficacy of 0.35 Watts per cfm (compared to the prescriptively required 0.45 W/cfm). This may involve upsizing ductwork, reducing the total effective length of ducts, and/or selecting low pressure drop components such as filters. Fan watt draw must be verified by a HERS rater according to the procedures outlined in the 2022 Reference Appendices RA3.3 (California Energy Commission, 2021b). This applies to the single family prototype only.
Buried Radial Duct Design: Bury all ductwork in ceiling insulation by laying the ducts across the ceiling joists or inbetween ceiling joists directly on the ceiling drywall. Duct design is based on a radial design where individual ducts are run to each supply register. This allows for smaller diameter ducts, reducing duct losses and more easily meeting fully or deeply buried conditions.13 Duct burial and duct system design must be verified by a HERS rater according to the procedures outlined in the 2022 Reference Appendices RA3.1.4.1.5 and RA3.1.4.1.6 (California Energy Commission, 2021b). This applies to the single family prototype only.
Ductless Mini-Split Heat Pump: In the ADU prototype install a ductless mini-split heat pump with three indoor heads.
The system is evaluated as meeting the criteria for the variable capacity heat pump (VCHP) credit, introduced in the 2019 code cycle, which must be verified by a HERS rater according to the procedures outlined in the 2022 Reference Appendices RA3.4.4.3 (California Energy Commission, 2021b). This credit requires verification of refrigerant charge, that all equipment is entirely within conditioned space, that airflow is directly supplied to all habitable space, and that wall mounted thermostats serve any zones greater than 150 square feet. This measure is non-preempted because it does not require the installation of equipment with efficiencies above federal minimum requirements.
Compact Hot Water Distribution: Design the hot water distribution system to meet minimum requirements for the basic compact hot water distribution credit according to the procedures outlined in the 2022 Reference Appendices RA4.4.6 (California Energy Commission, 2021b). In many single family homes this may require moving the water heater from an exterior to an interior garage wall. CBECC-Res software assumes a 30% reduction in distribution losses for the basic credit. This is prescriptively required in Climate Zones 1 and 16 only.
Solar PV: Installation of on-site PV is required in the 2022 residential code unless an exception is met. The PV sizing methodology in each package was developed to offset annual building electricity use and avoid oversizing. In all cases, 12 Whole house leakage tested at a pressure difference of 50 Pascals between indoors and outdoors. 13 The duct systems in the Central Valley Research Homes Project Final Project Report are illustrative of this approach (Proctor, Wilcox, & Chitwood, 2018).
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Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
14 California Energy Codes & Standards | A statewide utility program 2024-04-26 PV is evaluated in CBECC-Res according to the California Flexible Installation (CFI) 1 assumptions. To meet CFI eligibility, the requirements of 2022 Reference Appendices JA11.2.2 (California Energy Commission, 2021b) must be met.
The Reach Codes Team used two options within the CBECC-Res software for sizing the PV system. The first option, “Standard Design PV”, was applied in the base case simulations and packages where the PV system size was not changed from the minimum system size required14. For the PV packages, the second option, “Specify PV System Scaling”, was used. In these cases, a scaling of 100 was applied, indicating that the PV system be sized to offset 100% of the estimated electricity use of the Proposed Design case.
One exception to the PV requirement is when the minimum PV system size required is less than 1.8 kW. This exception applies to the ADU models in Climate Zones 1-9, 12, 14, and 16. For these cases no PV system is required by code and no PV system was modeled in the base case simulations.
Battery Energy Storage: A 10 kWh battery system was evaluated in CBECC-Res with control type set to “Basic” and with default efficiencies of 95% for both charging and discharging. 10kWh battery capacity is representative of systems installed in single family homes based on the Self-Generation Incentive Program (SGIP) participant data. The “Basic” control option charges the battery system anytime PV generation is greater than the house load and discharges the battery whenever the house load exceeds PV generation. The battery does not discharge to the grid, maximizing onsite utilization of the PV system and in turn utility bill benefits under NBT. To qualify for the battery storage compliance credit the battery system must meet the requirements outlined in the 2022 Reference Appendices JA12 (California Energy Commission, 2021b). Batteries are not prescriptively required in any climate zone.
Table 5: Incremental Cost Assumptions: Efficiency, PV, and Battery Measures Measure
Performance
Level
Incremental
Cost
(2023 PV$)1
Source & Notes
Single
Family ADU
Reduced
Infiltration
3.0 vs 5.0
ACH50 $591 $362 $0.115/ft2 based on NREL’s BEopt cost database plus $250 HERS rater verification.
Window Ufactor 0.24 vs 0.30 $2,280 $285 $4.23/ft2 window area based on analysis conducted for the 2019 and 2022 Title 24 cycles (Statewide CASE Team, 2018).
Window
SHGC 0.50 vs 0.35 $0 $0
Based on feedback from Statewide CASE Team that higher SHGC does not necessarily have any incremental cost (Statewide CASE Team, 2017).
Cool Roof
0.25 vs 0.20
aged solar
reflectance
$219 $53
$0.07per ft2 of roof area first incremental cost for asphalt shingle product based on the 2022 Nonresidential High Performance Envelope CASE Report (Statewide CASE Team, 2020a). Total costs assume present value of replacement at year 20 and residual cost for remaining product life at end of 30-year analysis period. Higher reflectance values for lower cost are achievable for tile roof products
Attic
Insulation
R-49 vs R-30 $872 n/a
Based on costs from the 2022 Residential Additions & Alterations CASE Report (Statewide CASE Team, 2020b).
R-60 vs R-30 $1,420 n/a
R-60 vs R-38 $1,096 n/a
Slab Edge
Insulation R-10 vs R-0 $651 $449 $4 per linear foot of slab perimeter based on internet research. Assumes 16in depth. 14 The Standard Design PV system is sized to offset the electricity use of the building loads which are typically electric in a mixed fuel home, which includes all loads except space heating, water heating, clothes drying, and cooking. 323
Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
15 California Energy Codes & Standards | A statewide utility program 2024-04-26 Measure
Performance
Level
Incremental
Cost
(2023 PV$)1
Source & Notes
Single
Family ADU
Low
Pressure
Drop Ducts
0.35 vs 0.45
W/cfm $99 n/a
Costs assume one-hour labor for single family and half-hour for the ADU. Labor rate of $88 per hour is from 2022 RS Means for sheet metal workers and includes a weighted average City Cost Index for labor for California.
Buried
Ducts
Buried, radial
design $281 n/a
No cost for laying ducts on attic floor versus suspending, in some cases there will be cost savings. Neutral cost for radiant design versus trunk and branch design. A $250 HERS Rater verification fee is included.
Duct
Insulation R-8 vs R-6 $201 n/a Based on costs from the 2022 Residential Additions & Alterations CASE Report (Statewide CASE Team, 2020b).
Ductless
Mini-Split
Heat Pump
Ductless
system
meeting the
VCHP credit
vs. ducted
split heat
pump
n/a $1,571
Costs were developed based on data from E3’s 2019 report Residential Building Electrification in California (Energy & Environmental Economics, 2019) and the 2022 All-Electric Multifamily CASE Report (Statewide CASE Team, 2020c).
Equipment costs are from the CASE Report for the 10-story multifamily prototype assuming similar sized equipment between the multifamily dwelling unit and the ADU. Thermostat, wiring, electrical, and ducting costs are from the E3 study. A $250 HERS Rater verification fee is also included. Where this measure is applied to the mixed fuel home with a gas furnace, this cost is in addition to the cost difference for a heat pump versus a gas furnace/split AC reported in Section 3.3.2.
Compact
Hot Water
Distribution
Basic credit –
homes with
gas tankless
$196 $0
For single family homes with a gas tankless water heater (mixed fuel homes in Climate Zones 3, 4, 13, 14) assumes adding 20-feet venting at $14.69 per linear foot to locate water heater on interior garage wall, less 20-feet savings for PEX and pipe insulation at $5.98 per linear foot. Costs obtained from online retailers. For single family homes with a HPWH there is an incremental cost savings from less pipe being required. For the ADU it is assumed the credit can be met without any changes to design and there is no cost impact.
Basic credit –
homes with
HPWH
-$134 $0
PV System
First Cost $3.11/
W
$3.11/
W
First costs are from LBNL’s Tracking the Sun 2022 (Barbose, Galen; Darghouth, Naim; O'Shaughnessy, Eric; Forrester, Sydney, 2022) and represent median costs in California in 2022 of $3.78/WDC for residential systems. The first cost was reduced by the solar energy Investment Tax Credit of 30%.2
Inverter replacement cost of $0.14/WDC present value includes replacements at year 11 at $0.15/WDC (nominal) and at year 21 at $0.12/WDC (nominal) per the 2019 PV CASE Report (California Energy Commission, 2017).
System maintenance costs of $0.31/WDC present value assume $0.02/WDC (nominal) annually per the 2019 PV CASE Report (California Energy Commission, 2017).
Inverter
replacement
$0.14/
W
$0.14/
W
Maintenance $0.31/
W
$0.31/
W
Replacement
cost
$648/
kWh
$648/
kWh
324
Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
16 California Energy Codes & Standards | A statewide utility program 2024-04-26 Measure
Performance
Level
Incremental
Cost
(2023 PV$)1
Source & Notes
Single
Family ADU
Battery (10
kWh) First cost $782/kWh
$782/
kWh
First costs of $1,101/kWh are from SGIP residential participant cost data for single family projects between 2020 and 2023. The first cost is reduced by 30% due to the Investment Tax Credit2 and also by $0.15/Wh due to the base SGIP incentive3. The SGIP incentive is only accounted for in IOU territories and not for SMUD and CPAU analyses.
Replacement cost at years 10 and 20 was calculated based on the first cost reduced by 7% annually over the next 10 years for a future value cost of $533/kWh. The 7% reduction is based on SDG&E’s Behind-the-Meter Battery Market Study (E-Source companies, 2020). For projects constructed in 2024 or 2025, the first replacement at year 10 would occur in 2034 or 2035. This replacement cost includes an average Investment Tax Credit of 22% in 2034 and 0% in 20352.
1All first costs are assumed to be financed in a mortgage and interest costs due to financing are included in the incremental costs. See Section 2.1.2 for details. Interest costs were not included for calculating TDV costeffectiveness. 2As part of the Inflation Reduction Act in August 2022 the Section 25D Investment Tax Credit was extended and raised to 30% through 2032 with a step-down beginning in 2033. https://www.seia.org/sites/default/files/2022- 08/Inflation%20Reduction%20Act%20Summary%20PDF%20FINAL.pdf 3SGIP incentives vary by ‘steps’ which reflect utility-specific funding across program implementation years. See:
https://www.selfgenca.com/home/program_metrics/
325
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17 California Energy Codes & Standards | A statewide utility program 2024-04-26
3.3.2 Electrification
This analysis compared a code compliant mixed fuel prototype, which uses natural gas for three appliances (cooking, clothes drying and either space heating or water heating), with a code compliant all-electric prototype. The associated costs included the relative costs between natural gas and electric appliances, differences between in-house electricity and natural gas infrastructure, and the associated infrastructure costs for providing natural gas to the building. To estimate costs the Reach Codes Team leveraged costs from the 2019 reach code cost-effectiveness studies for residential new construction (Statewide Reach Codes Team, 2019) and detached accessory dwelling units (Statewide Reach Codes Team, 2021b), 2022 RS Means, PG&E data, published utility schedules and rules, and online research.
3.3.2.1 Utility Infrastructure
This section addresses utility infrastructure costs during construction; appliance-specific infrastructure costs are addressed in Section 0. Table 6 presents total costs for natural gas infrastructure for a single family building within CA gas IOU territory, including distribution and service line extensions, meter installation, and plan review. These costs are applied as cost savings for an all-electric home when compared to a mixed fuel home. This is the component with the highest degree of variability for all-electric homes, as they are project-dependent and may be significantly impacted by such factors as utility territory, site characteristics, distance to the nearest natural gas main and main location, joint trenching, whether work is conducted by the utility or a private contractor, and number of dwelling units per development. All gas utilities participating in this study were solicited for cost information. The CA IOU costs for single family homes presented are based on cost data provided by PG&E.
Extension of service lines from a main distribution line to the home were provided separately for a new subdivision in an undeveloped area ($1,300) as well as an infill development ($6,750). The service extension is typically more costly in an infill scenario due to the disruption of existing roads, sidewalks, and other structures. For this analysis an average of the new subdivision and infill development costs was used, representing 80 percent of the new subdivision and 20 percent infill. In the case of distribution line extensions, the estimated cost is for new greenfield development.
For the single family analysis, based on the Reach Codes Team's conversations with the industry it is assumed that no upgrades to the electrical panel are required and that a 200 Amp panel is typically installed for both mixed fuel and allelectric homes.
Table 6: Single Family IOU Total Natural Gas Infrastructure Costs Item Cost
Distribution Line Extension $1,020
Service Line Extension $2,390
Meter $300
Plan Review Costs $850
Total $4,560
CPAU provides gas service to its customers and therefore separate costs were evaluated based on CPAU gas service connection fees.15 Table 7 presents the breakdown of gas infrastructure costs used in this analysis for CPAU. There is no main distribution line component since Palo Alto has little greenfield space remaining and most of the development is infill.
15 CPAU Schedule G-5 effective 09-01-2019: https://www.cityofpaloalto.org/files/assets/public/utilities/utilities-engineering/generalspecifications/gas-service-connection-fees.pdf 326
Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
18 California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 7: Single Family CPAU Total Natural Gas Infrastructure Costs Item Cost
Service Extension $5,892
Meter $1,012
Plan Review Costs $924
Total $7,828
Electricity infrastructure costs for single family homes were not estimated as part of this work as they are expected to be the same for both all-electric and mixed fuel construction. This will change in July 2024 based on the CPUC’s recent decision to eliminate electric line extension subsidies for new construction projects that use natural gas and/or propane.16 This will increase the utility infrastructure costs for mixed fuel homes, relative to all-electric homes, improving the cost-effectiveness of all-electric construction. The Reach Codes Team intends to quantify this impact in future studies.
Table 8 presents utility infrastructure costs for the detached ADU, both mixed fuel and all-electric designs. These costs are directly from the 2019 detached ADU reach code report (Statewide Reach Codes Team, 2021b) and were obtained from stakeholder interviews and RS Means. For the ADU scenario it’s assumed that natural gas infrastructure already exists on the lot and is being extended to the location of the ADU typically at the back of the lot. There are incremental cost savings for an all-electric ADU from not extending the natural gas service; however, there is also a small incremental cost for upgrading the electric service to accommodate the additional electrical load. The Reach Codes Team found that a new detached ADU would require that the building owner upgrade the service connection to the lot in both the mixed fuel ADU design and the all-electric design. The most common size for this upgrade is to upsize the existing panel to 225A, which would not represent an incremental cost from the mixed fuel project to the all-electric project. Feeder wiring to the ADU and the ADU subpanel, on the other hand, will need to be slightly upgraded for the all-electric design.
Table 8: ADU Utility Infrastructure Total and Incremental Costs Mixed Fuel Measure Mixed Fuel
Total Cost All-Electric Measure All-Electric Total Cost All-Electric
Incremental Cost
Site natural gas service
extension $1,998 No site natural gas service $0 ($1,998) Site electrical service
connection upgrade 225A $3,500
Site electrical service
connection upgrade 225A $3,500 $0
100A feeder to ADU with
breaker $933
125A feeder to ADU with
breaker $1,206 $273
100A ADU subpanel $733 125A ADU subpanel $946 $213
Totals $7,164 $5,652 ($1,512)
3.3.2.2 Equipment
This section provides descriptions and costs of the equipment applied to electrify mixed fuel homes in the all-electric packages. The equipment meets but does not exceed federal efficiency requirements to avoid federal preemption concerns.
16 https://www.cpuc.ca.gov/news-and-updates/all-news/cpuc-eliminates-last-remaining-utility-subsidies-for-new-construction-ofbuildings-using-gas-2023 327
Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
19 California Energy Codes & Standards | A statewide utility program 2024-04-26 For the water heating and space conditioning equipment analyzed, cost analyses incorporated the equipment’s effective useful lifetime (EUL), which are summarized in Table 9. The EUL for the heat pump, furnace, and air conditioner are based on the Database for Energy Efficient Resources (DEER) (California Public Utilities Commission, 2021b). Water heating equipment lifetimes are based on DOE’s recent water heater rulemaking (Department of Energy, 2022). Replacement costs are applied when equipment reaches its EUL within the 30-year evaluation period, and in such cases are included in the total lifetime costs. Residual value of the gas furnace and gas tankless at the end of the 30-year analysis period was accounted for to represent the remaining life of the equipment.
In this analysis, replacement costs assume a like-for-like replacement of equipment type and fuel (as listed in Table 9).
However, this may be precluded in the future due to efforts to prohibit the sale of gas equipment currently being considered or undertaken by air districts (ex. BAAQMD, SCAQMD) and the California Air Resources Board (ex. zero NOx appliance rules).
Table 9: Effective Useful Lifetime (EUL) of Water Heating & Space Conditioning Equipment Measure EUL (Years)
Gas Furnace 20
Air Conditioner 15
Heat Pump 15
Gas Tankless Water Heater 20
Heat Pump Water Heater 15
Space Conditioning: This measure covers replacing a prescriptive air conditioner and gas furnace with a minimum efficiency heat pump in applicable climate zones (1, 2, 5 to 12, 15 and 16; see Table 3). Typical incremental costs for this equipment were based on contractor feedback and price variation by system capacity from the AC Wholesalers website and the RS Means cost database (RSMeans, 2022). Costs were applied based on the system capacity from heating and cooling load calculations in CBECC-Res as presented in Table 10. Air conditioner nominal capacity was calculated as the CBECC-Res cooling load, rounded up to the nearest half ton. Heat pump nominal capacity was calculated as the maximum of either the CBECC-Res heating or cooling load, rounded up to the nearest half ton. In both cases a minimum capacity of 1.5-ton was applied as this represents the typical smallest available split system heat pump equipment. Load calculations demonstrated that Climate Zones 2, 5 to 12, and 15 were cooling-dominated while Climate Zones 1 and 16 were heating-dominated. In the heating dominated climate zones the heat pump for the single family home needs to be upsized relative to an air conditioner that only provides cooling.
Replacement costs were estimated based on a contractor survey conducted by the Statewide Reach Codes Team in 2023 (Statewide Reach Codes Team, tbd), less any gas and electric infrastructure costs, and the equipment lifetimes listed in Table 9. Resultant incremental costs are presented in Table 11.
This measure, and thus the incremental cost, does not apply to climate zones where heat pump space conditioning is already prescriptively required (Climate Zones 3, 4, 13, and 14). 328
Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
20 California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 10: Space Conditioning System Nominal Capacities
Climate
Zone
Single Family ADU
Air Conditioner
Capacity (tons)
Heat Pump
Capacity (tons)
Air Conditioner
Capacity (tons)
Heat Pump
Capacity (tons)
1 1.5 2.5 1.5 1.5
2 3 3 1.5 1.5
3 - - - -
4 - - - -
5 3 3 1.5 1.5
6 3 3 1.5 1.5
7 3 3 1.5 1.5
8 2.5 2.5 1.5 1.5
9 2.5 2.5 1.5 1.5
10 2.5 2.5 1.5 1.5
11 3 3 1.5 1.5
12 2.5 2.5 1.5 1.5
13 - - - -
14 - - - -
15 4 4 1.5 1.5
16 2 3.5 1.5 1.5
Table 11: Space Conditioning System Incremental Costs (2023 PV$) Climate
Zone
Single Family ADU
First
Cost
Total Lifetime
Cost (Financed)
First
Cost
Total Lifetime
Cost (Financed)
1 $803 $2,705 ($2,120) ($1,717)
2 ($1,044) ($44) ($2,120) ($1,717)
3 - - - -
4 - - - -
5 ($1,044) ($44) ($2,120) ($1,717)
6 ($1,044) ($44) ($2,120) ($1,717)
7 ($1,044) ($44) ($2,120) ($1,717)
8 ($1,445) ($673) ($2,120) ($1,717)
9 ($1,445) ($673) ($2,120) ($1,717)
10 ($1,445) ($673) ($2,120) ($1,717)
11 ($1,044) ($44) ($2,120) ($1,717)
12 ($1,445) ($673) ($2,120) ($1,717)
13 - - - -
14 - - - -
15 ($1,032) $368 ($2,120) ($1,717)
16 $2,331 $5,123 ($2,120) ($1,717)
329
Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
21 California Energy Codes & Standards | A statewide utility program 2024-04-26 Water Heater: This measure covers replacing a prescriptive gas tankless water heater with a minimum efficiency HPWH in applicable climate zones (3, 4, 13, and 14; see Table 3). Typical incremental costs were based on costs from prior reach code work and recent contractor feedback. Incremental first costs assume a 65-gal HPWH and incremental replacement costs account for equipment lifetimes listed in Table 9. Replacement costs assume no change in cost from the first cost estimates before accounting for inflation, less any gas and electric infrastructure costs. For the ADU analysis the water heater is evaluated within the conditioned space with the supply air ducted from the outside and exhaust air ducted to the outside. A mechanical contractor provided a cost estimate of $943 for ducting through the attic in an ADU where the water heater is in an interior room. This cost is included in the equipment and installation total for the ADU. Resultant incremental costs are presented in Table 12.
Table 12: Heat Pump Water Heating System Incremental Costs (2023 PV$) Item
ADU Single Family
First
Cost
Total Lifetime
Cost
(Financed)
First
Cost
Total Lifetime
Cost
(Financed)
Equipment & Installation $2,243 $3,930 $1,300 $2,267
Electric Service Upgrade $43 $48 $45 $51
In-House Gas Piping ($580) ($651) ($580) ($651)
Total $1,706 $3,327 $765 $1,666
For this electrification analysis, a HPWH that just meets the federal minimum efficiency standards17 of close to 2.0 Uniform Energy Factor (UEF) was evaluated in order to satisfy preemption requirements. However, the Reach Codes Team is not aware of any 2.0 UEF products that are available on the market. The Northwest Energy Efficiency Alliance (NEEA) established its own rating system for high efficiency HPWHs18 and maintains a database of qualified products.
The lowest UEF currently reported in the database is 2.73. In fact, of the four rating tiers offered by NEEA, those meeting Tier 3 or Tier 4 are the dominant products on the market today. According to NEEA all major HPWH manufacturers are represented in NEEA’s qualified product list19 and there are fewer than 10 integrated products certified as Tier 1 or Tier 2, all of which have UEFs greater than 3.0.20 NEEA Tier 3 water heaters were included in the high-efficiency measure packages (see Section 3.4).
Clothes Dryer and Range: After review of various sources, the Reach Codes Team concluded that the cost difference between gas and electric resistance equipment for clothes dryers and stoves is negligible and that the lifetimes of the two technologies are similar. Resultant incremental costs are presented in Table 13. Note that while induction stoves may be a more likely installation option in many homes, CBECC-Res does not currently differentiate between electric technologies for stoves and therefore they were not considered in this analysis. Relative to electric resistance, induction stoves use less energy and improve performance and user satisfaction, at an additional cost.
Electric Service Upgrade (appliance-specific): The 2022 Title 24 Code requires electric readiness for gas appliances; as a result, the incremental costs to provide electrical service for electric appliances are minimal. The incremental costs accounted for in this study — shown in Table 13 — are calculated as the cost to install 220V service for the electric appliances less the cost for the electric ready requirements and for installing 110V service for the 17 The Department of Energy establishes minimum energy conservation standards for consumer products, as directed in the Energy Policy and Conservation Act. See https://www.ecfr.gov/current/title-10/chapter-II/subchapter-D/part-430/subpart-C/section430.32. 18 Based on operational challenges experienced in the past, NEEA established rating test criteria to ensure newly installed HPWHs perform adequately, especially in colder climates. The NEEA rating requires products comply with ENERGY STAR and includes requirements regarding noise and prioritizing heat pump use over supplemental electric resistance heating. 19 https://neea.org/success-stories/heat-pump-water-heaters 20 As of 3/8/2024: https://neea.org/img/documents/residential-unitary-HPWH-qualified-products-list.pdf 330
Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
22 California Energy Codes & Standards | A statewide utility program 2024-04-26 comparable gas appliance. Incremental costs are applied for the space conditioner, water heater, and cooking range.
Based on builder surveys, it’s assumed that in a typical mixed fuel home both electric and gas service are provided to the dryer location and therefore no incremental costs for the dryer were applied. Costs assume 50A service for the range and 30A service for the space conditioner and water heater. Costs are assumed to be the same for the single family and ADU analyses.
In-House Natural Gas Infrastructure (from meter to appliances): Installation cost to run a natural gas line from the meter to the appliance location was estimated at $580 per appliance, as shown in Table 13. These costs were based on material costs from Home Depot and labor costs from 2022 RS Means. The material costs were about 1/3 higher in RS Means than Home Depot, so the Reach Codes Team used the lower costs from Home Depot. The Reach Codes Team conducted a pipe sizing analysis for the two single family and one ADU prototype homes to estimate the length and diameter of gas piping required assuming the home included a gas furnace, gas tankless water heater, gas range, and gas dryer. Total estimated costs were very similar for each of the three prototypes and an average cost per appliance of $580 was determined. Costs are assumed to be the same for the single family and ADU analyses.
Table 13: Single Family All-Electric Appliance Incremental Costs Item
ADU & Single Family
First
Cost
Total Lifetime Cost
(Financed)
Electric Resistance vs Gas Cooking
Equipment & Installation $0 $0
Electric Service Upgrade $100 $113
In-House Gas Piping ($580) ($651)
Total ($480) ($539)
Electric Resistance vs Gas Clothes Drying
Equipment & Installation $0 $0
Electric Service Upgrade $0 $0
In-House Gas Piping ($580) ($651)
Total ($580) ($651)
3.4 Measure Packages
The Reach Codes Team evaluated two packages for mixed fuel homes and five packages for all-electric homes for each prototype and climate zone, as described below.
1. All-Electric Code Minimum: This package applied the prescriptive requirements of the 2022 Title 24 Code and replaced gas equipment with minimum efficiency electric equipment.
2. Efficiency Only, all-electric: This package used only efficiency measures that don’t trigger federal preemption issues including envelope, water heating distribution, and duct distribution efficiency measures. For ADUs, this also included ductless variable capacity heat pumps (VCHPs). This package was evaluated for the all-electric homes only.
3. Efficiency + High Efficiency (Preempted) Equipment, all-electric and mixed fuel: This package builds off the Efficiency Only package, adding water heating and space conditioning equipment that is more efficient than federal standards. The Reach Codes Team considers this more reflective of how builders meet above code requirements in practice. This package was evaluated to compare compliance results against the other nonpreempted packages (see Table 27 and Table 28), however cost-effectiveness was not evaluated for this package since it cannot serve as the basis for adoption of a local ordinance. Specifically, it applied:
a. Water heating, all-electric: Heat pump water heaters with a NEEA Tier 3 rating (3.45 UEF). b. Water heating, mixed fuel: High efficiency (0.95 UEF) gas tankless. 331
Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
23 California Energy Codes & Standards | A statewide utility program 2024-04-26 c. Space conditioning, single family: High efficiency (16 SEER2/8 HSPF2) heat pumps. In mixed fuel packages, for climate zones with prescriptive gas heating, high efficiency (16 SEER2/95 AFUE) units were applied.
4. Efficiency + PV, all-electric: This package also builds on the Efficiency Only package, excluding preempted equipment. Instead, PV capacity was added to offset all of the estimated annual electricity use. This package was evaluated for the all-electric homes only.
5. Efficiency + PV + Battery, all-electric and mixed fuel: Using the Efficiency + PV package as a starting point for the all-electric analysis, a battery system was added. For mixed fuel homes the package of efficiency measures differed from the all-electric homes in some climate zones to arrive at a cost-effective solution.
To reiterate previous statements, the non-preempted measures used in all of the above packages (except for the AllElectric Code Minimum package) are referred to as “Efficiency measures”. As noted above, these measures may differ by prototype (single family vs. ADU) and by package. See Table 40 and Table 41 for the details of these measures. 332
Cost-Effectiveness Analysis: Single Family New Construction Results
24 California Energy Codes & Standards | A statewide utility program 2024-04-26 4 Results
Section 4.1 presents compliance results for all-electric versus mixed fuel code minimum packages to provide a broad overview of how these different approaches impact code compliance. Sections 4.2 to 4.5 present EDR results along with other savings data for packages of particular interest, as well as cost-effectiveness results for all packages.
Section 4.5 presents results for sensitivity analyses. All results reflect savings over a 30-year analysis period and are compared against the 2022 prescriptive baseline.
4.1 Compliance Results: All-Electric vs. Mixed Fuel Code Minimum The Reach Codes Team evaluated the compliance impacts of a prescriptive all-electric home as well as a traditional mixed fuel home with four gas appliances (space heating, water heating, cooking, clothes drying). Compliance is relative to the 2022 prescriptive base case home with three gas appliances which, by definition, has a compliance margin of zero in all climate zones. The impacts for the all-electric single family home and the ADU are presented in Figure 1 and Figure 2, respectively. The all-electric single family and ADU home prototypes are code compliant with both EDR1 (source energy) and efficiency EDR2 (TDV energy) in all climate zones, though the compliance margin is highly variable across climate zones. The four gas appliance single family home is presented in Figure 3. This case is not code compliant in any climate zone.
Figure 1: Single family all-electric home compliance impacts. 0 5
10 15
20 25
30 CZ01 CZ02 CZ03 CZ04 CZ05 CZ06 CZ07 CZ08 CZ09 CZ10 CZ11 CZ12 CZ13 CZ14 CZ15 CZ16 EDR Margin
All-Electric Prescrip�ve
Source (EDR1) TDV (EDR2 Efficiency)
333
Cost-Effectiveness Analysis: Single Family New Construction Results
25 California Energy Codes & Standards | A statewide utility program 2024-04-26 Figure 2: ADU all-electric home compliance impacts.
Figure 3: Single family four gas appliance home compliance impacts.
This analysis illustrates a couple of interesting points:
1. The 2022 compliance metrics are important drivers encouraging electrification. The compliance penalties associated with the four gas appliance home scenarios are significant and will require deep efficiency measures to overcome.
2. The 2022 Title 24 Code’s new source energy metric combined with the heat pump baseline encourage allelectric construction, providing a compliance benefit that allows for some amount of prescriptively required building efficiency to be traded off and still comply when using the performance method. 0 2
4 6
8 10
12 14
CZ01 CZ02 CZ03 CZ04 CZ05 CZ06 CZ07 CZ08 CZ09 CZ10 CZ11 CZ12 CZ13 CZ14 CZ15 CZ16 EDR Margin
All-Electric Prescrip�ve
Source (EDR1) TDV (EDR2 Efficiency)
-18
-16
-14
-12
-10
-8
-6
-4
-2
0 2
CZ01 CZ02 CZ03 CZ04 CZ05 CZ06 CZ07 CZ08 CZ09 CZ10 CZ11 CZ12 CZ13 CZ14 CZ15 CZ16 EDR Margin
Mixed Fuel Prescrip�ve, 4 Gas Appliances
Source (EDR1) TDV (EDR2 Efficiency)
334
Cost-Effectiveness Analysis: Single Family New Construction 26 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26
4.2 All-Electric Code Minimum Results
Table 14 shows results for the single family all-electric Code Minimum measure package. Utility cost savings are negative, indicating an increase in utility costs for the all-electric building, everywhere except in CPAU and SMUD territories. In all cases the incremental cost is negative, which reflects cost savings for the all-electric building due to elimination of gas infrastructure costs. The package is cost-effective based on TDV in all cases but one (Climate Zone 16); it’s not cost-effective On-Bill in Climate Zones 1, 3, 14, and 16.
Table 15 shows the all-electric Code Minimum package results for the ADU. Utility savings and incremental costs reflect the same general trend as single family homes. Cost-effectiveness is less favorable than the single family application, with TDV cost-effectiveness not met in Climate Zones 3, 4, 13, and 14, and On-Bill cost-effectiveness met only in Climate Zones 4 in CPAU territory, 10 in SCE/SCG territory, 12 in SMUD/PG&E territory, 11 and 15. Costeffectiveness in Climate Zones 3, 4, 13, and 14 is worse than in the other climate zones due to the higher cost of converting from a gas tankless to a ducted HPWH (see Table 3) which isn’t offset enough by the energy savings. Cost savings due to elimination of gas infrastructure costs are also lower for the ADU relative to the single family home. 335
Cost-Effectiveness Analysis: Single Family New Construction 27 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 14: Single Family Cost-Effectiveness: All-Electric Code Minimum 1 Though uncommon, incremental costs can be negative, reflecting initial construction cost savings. When paired with increased energy costs (negative benefits), the construction cost savings are treated as the ‘benefit’ while the increased energy costs are the ‘cost,’ which may yield positive cost effectiveness. See Section 2.1.2.3 for more information.
Climate
Zone
Electric
/Gas Utility
Total
EDR1
Margin
Efficiency
EDR2
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost Savings Incremental Cost1 On-Bill TDV
First
Year
Lifecycle
(2022$) First Year Lifecycle (2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 25.8 12.4 -4,308 398 ($431) ($3,873) ($4,816) ($3,605) 0.9 ($268) >1 $5,702 CZ02 PGE 14.0 8.3 -2,888 246 ($327) ($4,000) ($6,664) ($6,355) 1.6 $2,355 >1 $7,711 CZ03 PGE 9.1 7.7 -2,433 171 ($303) ($4,734) ($4,854) ($4,644) 0.98 ($90) 25.3 $3,887 CZ04 PGE 8.8 5.0 -2,232 163 ($251) ($3,665) ($4,854) ($4,644) 1.3 $979 >1 $4,494 CZ04 CPAU 8.8 5.0 -2,232 163 ($36) $2,123 ($8,122) ($8,314) >1 $10,437 >1 $7,762 CZ05 PGE 6.5 4.0 -1,960 133 ($292) ($4,981) ($6,664) ($6,355) 1.3 $1,373 6.1 $4,633 CZ05 PGE/SCG 6.5 4.0 -1,960 133 ($277) ($4,532) ($6,664) ($6,355) 1.4 $1,823 6.1 $4,633 CZ06 SCE/SCG 4.2 3.5 -1,432 84 ($231) ($4,015) ($6,664) ($6,355) 1.6 $2,339 4.7 $4,353 CZ07 SDGE 2.8 3.2 -1,293 69 ($266) ($5,731) ($6,664) ($6,355) 1.1 $624 4.2 $4,211 CZ08 SCE/SCG 2.1 1.1 -1,293 67 ($228) ($4,192) ($7,065) ($6,983) 1.7 $2,792 4.2 $4,674 CZ09 SCE 3.6 1.9 -1,453 84 ($237) ($4,153) ($7,065) ($6,983) 1.7 $2,831 5.5 $5,013 CZ10 SCE/SCG 4.8 2.3 -1,683 107 ($258) ($4,342) ($7,065) ($6,983) 1.6 $2,642 7.4 $5,287 CZ10 SDGE 4.8 2.3 -1,683 107 ($265) ($5,158) ($7,065) ($6,983) 1.4 $1,825 7.4 $5,287 CZ11 PGE 11.4 4.9 -2,712 226 ($306) ($3,803) ($6,664) ($6,355) 1.7 $2,552 >1 $7,153 CZ12 PGE 11.5 5.6 -2,554 212 ($294) ($3,773) ($7,065) ($6,983) 1.9 $3,210 >1 $7,504 CZ12 SMUD/PGE 11.5 5.6 -2,554 212 $79 $4,731 ($7,065) ($6,983) >1 $11,714 >1 $7,504 CZ13 PGE 8.3 3.2 -2,095 154 ($224) ($3,164) ($4,854) ($4,644) 1.5 $1,480 >1 $4,490 CZ14 SCE/SCG 8.8 3.3 -2,291 159 ($322) ($5,166) ($4,854) ($4,644) 0.9 ($522) >1 $4,105 CZ14 SDGE 8.8 3.3 -2,291 159 ($344) ($6,361) ($4,854) ($4,644) 0.7 ($1,717) >1 $4,105 CZ15 SCE/SCG 0.9 1.0 -1,167 53 ($217) ($4,152) ($6,652) ($5,942) 1.4 $1,791 3.0 $3,439 CZ16 PG&E 21.3 0.7 -4,729 403 ($548) ($6,581) ($3,289) ($1,187) 0.2 ($5,394) 0.4 ($1,339) 336
Cost-Effectiveness Analysis: Single Family New Construction 28 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 15: ADU Cost-Effectiveness: All-Electric Code Minimum 1 Though uncommon, incremental costs can be negative, reflecting initial construction cost savings. When paired with increased energy costs (negative benefits), the construction cost savings are treated as the ‘benefit’ while the increased energy costs are the ‘cost,’ which may yield positive cost effectiveness. See Section 2.1.2.3 for more information.
Climate
Zone
Electric
/Gas
Utility
Total
EDR1
Margin
Efficiency
EDR2
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost Savings Incremental Cost1 On-Bill TDV
First
Year
Lifecycle
(2022$) First Year Lifecycle (2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 11.9 6.1 -1,641 114 ($353) ($6,682) ($4,692) ($4,605) 0.7 ($2,077) 3.9 $2,986 CZ02 PGE 5.7 3.4 -1,245 75 ($312) ($6,347) ($4,692) ($4,605) 0.7 ($1,742) 2.7 $2,515 CZ03 PGE 2.9 2.3 -1,672 123 ($377) ($7,138) ($863) $442 0.0 ($7,581) 0.0 ($1,489) CZ04 PGE 2.4 1.4 -1,612 118 ($366) ($6,964) ($863) $442 0.0 ($7,406) 0.0 ($801) CZ04 CPAU 2.4 1.4 -1,612 118 $25 $3,035 ($863) $442 6.9 $2,592 0.0 ($801) CZ05 PGE 1.8 0.8 -1,026 49 ($302) ($6,517) ($4,692) ($4,605) 0.7 ($1,912) 2.0 $2,021 CZ05 PGE/SCG 1.8 0.8 -1,026 49 ($257) ($5,178) ($4,692) ($4,605) 0.9 ($574) 2.0 $2,021 CZ06 SCE/SCG 0.5 0.2 -904 38 ($243) ($4,923) ($4,692) ($4,605) 0.9 ($318) 2.1 $2,135 CZ07 SDGE 0.1 0.1 -884 37 ($337) ($7,903) ($4,692) ($4,605) 0.6 ($3,298) 2.2 $2,205 CZ08 SCE/SCG 0.1 0.1 -878 36 ($241) ($4,894) ($4,692) ($4,605) 0.9 ($289) 2.3 $2,274 CZ09 SCE 0.4 0.1 -903 38 ($243) ($4,914) ($4,692) ($4,605) 0.9 ($310) 2.4 $2,321 CZ10 SCE/SCG 1.0 0.4 -952 43 ($189) ($3,629) ($4,692) ($4,605) 1.3 $976 2.8 $2,577 CZ10 SDGE 1.0 0.4 -952 43 ($249) ($5,689) ($4,692) ($4,605) 0.8 ($1,084) 2.8 $2,577 CZ11 PGE 4.6 2.1 -1,209 71 ($224) ($4,405) ($4,692) ($4,605) 1.0 $200 3.5 $2,870 CZ12 PGE 4.6 2.3 -1,183 69 ($306) ($6,315) ($4,692) ($4,605) 0.7 ($1,710) 3.0 $2,684 CZ12 SMUD/PGE 4.6 2.3 -1,183 69 ($65) ($808) ($4,692) ($4,605) 5.7 $3,797 3.0 $2,684 CZ13 PGE 3.1 1.3 -1,611 112 ($218) ($3,689) ($863) $442 0.0 ($4,131) 0.0 ($858) CZ14 SCE/SCG 3.5 1.2 -1,714 115 ($375) ($6,933) ($863) $442 0.0 ($7,375) 0.0 ($1,089) CZ14 SDGE 3.5 1.2 -1,714 115 ($483) ($10,348) ($863) $442 0.0 ($10,790) 0.0 ($1,089) CZ15 SCE/SCG 0.0 0.0 -864 36 ($172) ($3,359) ($4,692) ($4,605) 1.4 $1,246 2.6 $2,477 CZ16 PG&E 11.2 0.1 -1,781 122 ($379) ($7,167) ($4,692) ($4,605) 0.6 ($2,562) 2.1 $2,133 337
Cost-Effectiveness Analysis: Single Family New Construction 29 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26
4.3 All-Electric Efficiency, PV, and Battery Results
Table 16 and Table 17 compare cost-effectiveness results for the all-electric packages for the single family and ADU prototypes, respectively, with the exception of the all-electric Efficiency + High Efficiency (Preempted) Equipment package (cost-effectiveness was not evaluated for this package but see Table 27 and Table 28 for a comparison of compliance impacts). In almost all cases the packages are cost-effective based on TDV. On-Bill cost-effectiveness generally improves with the addition of efficiency measures, further improves with an upsized PV system, and improves even more once batteries are added. A summary of measures included in each package is provided in Appendix 7.3 Summary of Measures by Package. The efficiency measures added to the all-electric package to meet minimum code requirements are described in Table 39 and Table 41.
Table 16: Single Family Cost-Effectiveness: Comparison of All-Electric Efficiency Only, PV, and Battery Packages Climate
Zone
Electric
/Gas Utility
All-Electric Code Minimum All-Electric Efficiency Only All-Electric-Efficiency + PV All-Electric Efficiency + PV + Battery
On-Bill TDV On-Bill TDV On-Bill TDV On-Bill TDV
B/C
Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 0.93 ($268) >1 $5,702 >1 $2,945 >1 $8,168 0.9 ($1,313) 1.8 $9,817 1.0 $1,012 1.2 $4,391 CZ02 PGE 1.6 $2,355 >1 $7,711 8.9 $3,870 >1 $9,325 1.5 $2,242 4.2 $12,452 1.3 $4,962 1.5 $8,190 CZ03 PGE 0.98 ($90) 25.3 $3,887 1.1 $168 >1 $3,939 0.8 ($903) 2.8 $6,465 1.1 $2,114 1.1 $1,347 CZ04 PGE 1.3 $979 >1 $4,494 1.7 $1,054 >1 $4,849 1.1 $204 3.5 $7,893 1.2 $3,709 1.3 $4,506 CZ04 CPAU >1 $10,437 >1 $7,762 >1 $10,021 >1 $8,117 >1 $14,776 >1 $11,161 0.9 ($1,076) 1.5 $6,724 CZ05 PGE 1.3 $1,373 6.1 $4,633 1.6 $1,975 >1 $4,985 2.2 $1,457 8.5 $7,927 1.3 $5,551 1.2 $3,296 CZ05 PGE/SCG 1.4 $1,823 6.1 $4,633 1.9 $2,424 >1 $4,985 2.6 $1,907 8.5 $7,927 1.4 $6,001 1.2 $3,296 CZ06 SCE/SCG 1.6 $2,339 4.7 $4,353 1.6 $1,813 >1 $4,119 109.5 $2,638 152.4 $6,727 1.5 $7,153 1.2 $2,276 CZ07 SDGE 1.1 $624 4.2 $4,211 1.2 $839 8.3 $4,070 5.7 $469 >1 $6,079 2.0 $13,798 1.1 $1,186 CZ08 SCE/SCG 1.7 $2,792 4.2 $4,674 1.8 $2,574 17.7 $4,642 >1 $3,329 >1 $7,492 1.7 $8,899 1.2 $2,085 CZ09 SCE 1.7 $2,831 5.5 $5,013 1.9 $2,699 >1 $5,087 >1 $3,634 >1 $8,007 1.7 $9,151 1.3 $3,630 CZ10 SCE/SCG 1.6 $2,642 7.4 $5,287 2.0 $2,668 >1 $5,376 >1 $3,765 >1 $8,347 1.7 $10,088 1.3 $3,901 CZ10 SDGE 1.4 $1,825 7.4 $5,287 1.8 $2,438 >1 $5,376 >1 $2,539 >1 $8,347 2.4 $19,463 1.3 $3,901 CZ11 PGE 1.7 $2,552 >1 $7,153 >1 $4,159 >1 $8,524 1.8 $2,984 4.6 $11,310 1.4 $7,781 1.5 $8,757 CZ12 PGE 1.9 $3,210 >1 $7,504 4.6 $3,742 >1 $8,084 1.9 $2,561 5.5 $11,063 1.3 $6,021 1.5 $8,216 CZ12 SMUD/PGE >1 $11,714 >1 $7,504 >1 $10,665 >1 $8,084 5.8 $13,407 5.5 $11,063 0.9 ($1,237) 1.4 $7,166 CZ13 PGE 1.5 $1,480 >1 $4,490 >1 $2,876 >1 $5,773 1.7 $2,334 3.7 $8,341 1.4 $7,848 1.4 $7,005 CZ14 SCE/SCG 0.9 ($522) >1 $4,105 1.8 $811 >1 $5,461 1.6 $2,558 3.6 $9,965 1.6 $10,569 1.4 $6,204 CZ14 SDGE 0.7 ($1,717) >1 $4,105 1.5 $643 >1 $5,461 1.2 $922 3.6 $9,965 2.1 $20,099 1.4 $6,204 CZ15 SCE/SCG 1.4 $1,791 3.0 $3,439 8.0 $3,267 >1 $4,669 >1 $3,940 >1 $6,120 2.0 $13,576 0.99 ($80) CZ16 PG&E 0.2 ($5,394) 0.4 ($1,339) 0.2 ($1,946) 1.7 $1,894 0.8 ($3,199) 1.6 $6,711 1.0 $206 1.1 $1,690 338
Cost-Effectiveness Analysis: Single Family New Construction 30 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 17: ADU Cost-Effectiveness: All-Electric Energy Efficiency + Additional PV + Battery Climate
Zone
Electric
/Gas Utility
All-Electric Code Minimum All-Electric Efficiency Only All-Electric Efficiency + PV All-Electric Efficiency + PV + Battery On-Bill TDV On-Bill TDV On-Bill TDV On-Bill TDV
B/C
Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 0.7 ($2,077) 3.9 $2,986 0.6 ($1,727) >1 $2,900 1.2 $2,003 1.5 $5,010 0.997 ($79) 0.9 ($2,884) CZ02 PGE 0.7 ($1,742) 2.7 $2,515 0.5 ($2,541) >1 $1,945 1.4 $3,532 1.8 $6,360 1.1 $1,302 0.98 ($410) CZ03 PGE 0.0 ($7,581) 0.0 ($1,489) 0.0 ($8,981) 0.0 ($2,680) 0.8 ($2,489) 1.1 $1,436 0.8 ($4,949) 0.8 ($5,369) CZ04 PGE 0.0 ($7,406) 0.0 ($801) 0.0 ($8,705) 0.4 ($1,762) 0.9 ($1,480) 1.3 $3,589 0.9 ($3,501) 0.8 ($3,849) CZ04 CPAU 6.9 $2,592 0.0 ($801) 1.3 $944 0.4 ($1,762) 1.7 $8,498 1.3 $3,589 0.7 ($9,161) 0.8 ($4,899) CZ05 PGE 0.7 ($1,912) 2.0 $2,021 0.4 ($3,310) 1.4 $650 1.6 $4,015 1.9 $5,436 1.1 $2,498 0.9 ($1,611) CZ05 PGE/SCG 0.9 ($574) 2.0 $2,021 0.6 ($1,972) 1.4 $650 1.8 $5,353 1.9 $5,436 1.2 $3,836 0.9 ($1,611) CZ06 SCE/SCG 0.9 ($318) 2.1 $2,135 0.6 ($1,579) 2.1 $1,103 2.0 $5,866 2.2 $6,551 1.1 $2,799 0.95 ($852) CZ07 SDGE 0.6 ($3,298) 2.2 $2,205 0.4 ($4,255) 1.8 $941 1.8 $5,667 1.9 $5,493 1.5 $10,358 0.9 ($1,804) CZ08 SCE/SCG 0.9 ($289) 2.3 $2,274 0.6 ($1,432) 2.1 $1,179 2.0 $6,364 2.3 $7,936 1.2 $4,058 0.97 ($609) CZ09 SCE 0.9 ($310) 2.4 $2,321 0.6 ($1,494) 2.3 $1,280 2.0 $6,568 2.4 $7,709 1.2 $4,314 0.99 ($279) CZ10 SCE/SCG 1.3 $976 2.8 $2,577 0.96 ($106) 3.7 $1,593 2.2 $734 6.7 $3,496 0.9 ($860) 0.7 ($3,944) CZ10 SDGE 0.8 ($1,084) 2.8 $2,577 0.6 ($1,787) 3.7 $1,593 0.0 ($1,465) 6.7 $3,496 1.3 $5,079 0.7 ($3,944) CZ11 PGE 1.0 $200 3.5 $2,870 10.7 ($96) >1 $2,531 0.7 ($602) 3.2 $4,037 0.9 ($1,125) 0.9 ($1,893) CZ12 PGE 0.7 ($1,710) 3.0 $2,684 0.5 ($2,538) >1 $1,878 1.6 $4,644 1.9 $6,675 1.1 $2,970 1.0 $178 CZ12 SMUD/PGE 5.7 $3,797 3.0 $2,684 13 $1,980 >1 $1,878 1.7 $5,737 1.9 $6,675 0.6 ($9,432) 0.96 ($872) CZ13 PGE 0.0 ($4,131) 0.0 ($858) 0.0 ($4,502) 0.6 ($1,223) 0.3 ($4,759) 1.1 $305 0.8 ($4,729) 0.7 ($5,491) CZ14 SCE/SCG 0.0 ($7,375) 0.0 ($1,089) 0.0 ($7,929) 0.5 ($1,684) 1.1 $1,555 1.5 $5,935 1.0 $1,222 0.9 ($1,525) CZ14 SDGE 0.0 ($10,790) 0.0 ($1,089) 0.0 ($10,375) 0.5 ($1,684) 1.2 $2,956 1.5 $5,935 1.4 $10,678 0.9 ($1,525) CZ15 SCE/SCG 1.4 $1,246 2.6 $2,477 2.4 $1,243 >1 $2,342 >1 $1,729 >1 $3,560 1.2 $2,631 0.8 ($2,812) CZ16 PG&E 0.6 ($2,562) 2.1 $2,133 0.5 ($2,378) >1 $2,282 1.6 $5,433 2.0 $7,875 1.2 $3,618 1.0 $611 339
Cost-Effectiveness Analysis: Single Family New Construction 31 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26
4.4 Mixed Fuel Results
Table 18 and Table 19 show results for the mixed fuel Efficiency + PV + Battery package for Single Family and ADU prototypes, respectively. On a TDV basis, this package is cost-effective only in Climate Zone 1 for single family and in no cases for ADUs. However, this package is cost-effective On-Bill for the single family home in all climate zones except 4 in CPAU territory and 12 in SMUD/PG&E territory. On-Bill cost-effectiveness for the ADU home, on the other hand, is seen only in Climate Zones 2, 5, 7 through 9, 10 in SDG&E territory, 12 in PG&E territory, 14, and 16.
Table 18: Single Family Cost-Effectiveness: Mixed Fuel Efficiency + PV + Battery Climate
Zone
Electric
/Gas Utility
Total
EDR1
Margin
Efficiency
EDR2
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 22.6 18.8 1,571 116 $1,084 $26,667 $11,160 $20,166 1.3 $6,501 1.0 $500 CZ02 PGE 14.1 7.4 1,257 34 $913 $21,353 $10,268 $18,868 1.1 $2,486 0.9 ($1,282) CZ03 PGE 12.8 4.3 858 7 $785 $18,003 $8,708 $16,900 1.1 $1,104 0.7 ($4,777) CZ04 PGE 13.2 4.3 790 6 $803 $18,394 $9,623 $17,938 1.0 $456 0.8 ($3,925) CZ04 CPAU 13.2 4.3 790 6 $123 $2,877 $10,673 $19,172 0.2 ($16,295) 0.7 ($4,975) CZ05 PGE 14.8 4.9 1,178 13 $905 $20,821 $9,441 $17,885 1.2 $2,936 0.8 ($3,468) CZ05 PGE/SCG 14.8 4.9 1,178 13 $900 $20,690 $9,441 $17,885 1.2 $2,805 0.8 ($3,468) CZ06 SCE/SCG 18.3 5.5 888 6 $864 $19,539 $9,266 $17,587 1.1 $1,951 0.8 ($3,941) CZ07 SDGE 18.7 4.8 832 4 $1,134 $27,505 $9,214 $17,537 1.6 $9,967 0.7 ($4,817) CZ08 SCE/SCG 17.1 3.0 777 2 $920 $20,754 $9,134 $17,410 1.2 $3,344 0.7 ($4,341) CZ09 SCE 16.2 3.1 833 3 $922 $20,804 $9,152 $17,435 1.2 $3,369 0.8 ($3,839) CZ10 SCE/SCG 14.4 2.7 846 2 $958 $21,608 $8,489 $16,733 1.3 $4,875 0.7 ($3,859) CZ10 SDGE 14.4 2.7 846 2 $1,288 $31,210 $8,489 $16,733 1.9 $14,477 0.7 ($3,859) CZ11 PGE 12.9 5.1 1,025 26 $1,031 $23,949 $9,828 $18,296 1.3 $5,653 0.94 ($1,066) CZ12 PGE 13.2 4.8 1,098 23 $923 $21,415 $10,065 $18,616 1.2 $2,800 0.93 ($1,194) CZ12 SMUD/PGE 13.2 4.8 1,098 23 $253 $6,133 $11,115 $19,850 0.3 ($13,717) 0.9 ($2,244) CZ13 PGE 12.3 4.2 1,006 5 $1,016 $23,250 $9,831 $18,236 1.3 $5,013 0.9 ($2,354) CZ14 SCE/SCG 13.4 5.4 1,514 6 $1,093 $24,697 $10,741 $19,342 1.3 $5,354 0.9 ($1,910) CZ14 SDGE 13.4 5.4 1,514 6 $1,421 $34,477 $10,741 $19,342 1.8 $15,135 0.9 ($1,910) CZ15 SCE/SCG 13.5 3.8 531 2 $1,140 $25,708 $8,586 $16,630 1.5 $9,078 0.6 ($5,490) CZ16 PG&E 20.4 14.2 1,228 114 $1,070 $26,218 $12,086 $20,964 1.3 $5,254 0.98 ($444) 340
Cost-Effectiveness Analysis: Single Family New Construction 32 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26
Table 19: ADU Cost-Effectiveness: Mixed Fuel Efficiency + PV + Battery Climate
Zone
Electric
/Gas Utility
Total
EDR1
Margin
Efficiency
EDR2
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 18.5 7.7 3,666 20 $1,078 $24,880 $15,432 $25,919 0.96 ($1,040) 0.7 ($6,719) CZ02 PGE 16.6 3.5 3,472 11 $1,042 $23,928 $13,846 $23,790 1.0 $138 0.8 ($4,128) CZ03 PGE 11.8 1.2 2,679 0 $781 $17,816 $11,879 $21,215 0.8 ($3,399) 0.6 ($6,826) CZ04 PGE 13.3 1.6 2,799 0 $859 $19,588 $12,213 $21,598 0.9 ($2,011) 0.7 ($5,306) CZ04 CPAU 13.3 1.6 2,799 0 $391 $8,911 $13,263 $22,833 0.4 ($13,922) 0.7 ($6,356) CZ05 PGE 16.9 1.1 3,309 2 $1,031 $23,539 $12,668 $22,274 1.1 $1,265 0.8 ($4,765) CZ05 PGE/SCG 16.9 1.1 3,309 2 $1,031 $23,520 $12,668 $22,274 1.1 $1,246 0.8 ($4,765) CZ06 SCE/SCG 19.8 1.2 3,285 1 $953 $21,468 $12,496 $22,043 0.97 ($575) 0.8 ($3,877) CZ07 SDGE 20.3 1.2 3,278 0 $1,296 $31,370 $12,869 $22,545 1.4 $8,825 0.8 ($4,633) CZ08 SCE/SCG 20.4 0.5 3,505 0 $1,040 $23,434 $12,952 $22,678 1.0 $755 0.8 ($3,522) CZ09 SCE 19.6 0.5 3,497 0 $1,030 $23,213 $12,691 $22,327 1.0 $886 0.8 ($3,318) CZ10 SCE/SCG 19.0 0.6 729 0 $537 $12,107 $8,436 $16,606 0.7 ($4,499) 0.5 ($7,344) CZ10 SDGE 19.0 0.6 729 0 $813 $19,671 $8,436 $16,606 1.2 $3,065 0.5 ($7,344) CZ11 PGE 17.6 3.0 871 10 $663 $15,273 $9,218 $17,568 0.9 ($2,295) 0.7 ($5,528) CZ12 PGE 16.7 2.7 3,594 9 $1,112 $25,496 $13,764 $23,710 1.1 $1,786 0.8 ($3,321) CZ12 SMUD/PGE 16.7 2.7 3,594 9 $537 $12,380 $14,844 $24,944 0.5 ($12,564) 0.8 ($4,371) CZ13 PGE 14.5 2.2 273 0 $551 $12,569 $7,979 $15,904 0.8 ($3,335) 0.5 ($6,903) CZ14 SCE/SCG 14.5 3.2 3,499 0 $1,006 $22,671 $12,815 $22,325 1.0 $346 0.8 ($3,423) CZ14 SDGE 14.5 3.2 3,499 0 $1,351 $32,711 $12,815 $22,325 1.5 $10,386 0.8 ($3,423) CZ15 SCE/SCG 19.2 1.8 551 0 $683 $15,387 $8,478 $16,574 0.9 ($1,187) 0.5 ($7,021) CZ16 PG&E 18.3 6.3 3,680 24 $1,117 $25,838 $13,872 $23,801 1.1 $2,037 0.8 ($3,759) 341
Cost-Effectiveness Analysis: Single Family New Construction 33 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26
4.5 Greenhouse Gas Reductions
Table 20 and Table 21 present greenhouse gas reductions for the single family and ADU prototypes, respectively. Savings represent average annual savings over the 30-year lifetime of the analysis. Greenhouse gas reductions are greatest for the all-electric Efficiency + PV + Battery package in all cases. For the single family homes, the all-electric Code Minimum case reduces greenhouse gas emissions as much or greater than the mixed fuel Efficiency + PV + Battery package in Climate Zones 1 through 4, 11 through 13, and 16—showcasing the benefit of all-electric construction over even the most ambitious of mixed fuel construction packages evaluated in this study. The trend differs for the ADU where the mixed fuel Efficiency + PV + Battery package results in more greenhouse gas savings than the all-electric Code Minimum in all climate zones except Climate Zones 3, 4, and 13. In most of the climate zones (1, 2, 5 through 12, 15, and 16) the allelectric ADU involves electrification of space heating, cooking, and clothes drying. The space heating loads for the ADU are very low, even in the colder climates, and as a result the greenhouse gas savings from efficiency measures, PV and battery are greater than just code minimum electrification. This is also the case for single family homes in Climate Zones 5 through 10, and 15 where space heating loads are low.
Table 20: Single Family Greenhouse Gas Reductions (metric tons) Climate
Zone
Single Family All-Electric Single Family Mixed Fuel
Code
Minimum
Efficiency
Only
Efficiency +
High
Efficiency
Equipment
Efficiency +
PV
Efficiency +
PV +
Battery
Efficiency +
High
Efficiency
Equipment
Efficiency +
PV +
Battery
CZ01 1.5 1.7 1.8 1.8 2.3 0.8 1.1
CZ02 0.9 1.0 1.1 1.1 1.6 0.5 0.7
CZ03 0.7 0.7 0.8 0.8 1.3 0.2 0.5
CZ04 0.7 0.7 0.8 0.8 1.3 0.2 0.5
CZ05 0.4 0.5 0.6 0.6 1.1 0.2 0.6
CZ06 0.3 0.3 0.3 0.4 0.9 0.1 0.5
CZ07 0.2 0.2 0.3 0.3 0.8 0.1 0.5
CZ08 0.2 0.2 0.3 0.3 0.8 0.1 0.5
CZ09 0.3 0.3 0.3 0.4 0.9 0.1 0.5
CZ10 0.3 0.4 0.4 0.5 1.0 0.1 0.5
CZ11 0.8 0.9 1.0 1.0 1.5 0.4 0.7
CZ12 0.7 0.8 0.9 0.9 1.4 0.4 0.6
CZ13 0.6 0.7 0.8 0.8 1.3 0.2 0.6
CZ14 0.6 0.7 0.8 0.9 1.4 0.2 0.6
CZ15 0.2 0.2 0.3 0.3 0.7 0.1 0.5
CZ16 1.4 1.7 1.7 1.9 2.3 1.0 1.1
342
Cost-Effectiveness Analysis: Single Family New Construction 34 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 21: ADU Greenhouse Gas Reductions (metric tons)
Climate
Zone
ADU All-Electric ADU Mixed Fuel
Code
Minimum
Efficiency
Only
Efficiency
+ High
Efficiency
Equipment
Efficiency
+ PV
Efficiency
+ PV +
Battery
Efficiency + High Efficiency
Equipment
Efficiency
+ PV +
Battery
CZ01 0.4 0.5 0.5 0.6 1.0 0.2 0.5
CZ02 0.2 0.3 0.3 0.4 0.8 0.1 0.5
CZ03 0.5 0.5 0.6 0.7 1.0 0.1 0.3
CZ04 0.5 0.5 0.5 0.7 1.0 0.1 0.4
CZ05 0.1 0.2 0.2 0.3 0.7 0.0 0.4
CZ06 0.1 0.1 0.1 0.3 0.6 0.0 0.4
CZ07 0.1 0.1 0.1 0.3 0.6 0.0 0.4
CZ08 0.1 0.1 0.1 0.3 0.6 0.0 0.5
CZ09 0.1 0.1 0.1 0.3 0.7 0.0 0.5
CZ10 0.1 0.1 0.2 0.2 0.6 0.0 0.4
CZ11 0.2 0.3 0.3 0.3 0.7 0.1 0.4
CZ12 0.2 0.3 0.3 0.4 0.7 0.1 0.5
CZ13 0.4 0.5 0.5 0.5 0.9 0.1 0.3
CZ14 0.4 0.5 0.5 0.7 1.1 0.1 0.5
CZ15 0.1 0.1 0.1 0.2 0.6 0.0 0.4
CZ16 0.4 0.5 0.5 0.7 1.0 0.2 0.6
343
Cost-Effectiveness Analysis: Single Family New Construction 35 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26
4.6 Sensitivity Analysis
In response to jurisdictional interest, several cases were evaluated under circumstances different than those presented above in order to assess their impact on cost-effectiveness. Altered circumstances include:
1. CARE versus standard tariffs. This comparison is presented for the all-electric Code Minimum and the mixed fuel Efficiency + PV+ Battery packages and shows the impact on On-Bill cost-effectiveness for income qualified utility customers.
2. Infill versus new subdivision single family developments. This comparison applied to the all-electric Code Minimum package demonstrates how costeffectiveness is impacted due to the magnitude of cost savings for all-electric construction from elimination of the natural gas infrastructure.
3. Utility rate escalation factors. The impact on On-Bill cost-effectiveness is presented for the all-electric Code Minimum package from varying the assumptions for escalation of electricity and natural gas utility rates over the 30-year analysis period. 344
Cost-Effectiveness Analysis: Single Family New Construction 36 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26
4.6.1 CARE Rate Comparison
Table 22 and Table 23 present a comparison of On-Bill cost-effectiveness results for CARE tariffs relative to standard IOU tariffs for the all-electric Code Minimum package for the single family and ADU prototypes, respectively. Applying the CARE rates lowers both electric and gas utility bills for the consumer. In the case of the all-electric home, the net impact of CARE rates is improved cost-effectiveness relative to the standard tariffs. This is because the discount on electricity is greater than that for natural gas. The opposite trend occurs for the mixed fuel packages, where the lower CARE rates result in lower utility cost savings and subsequently lower benefit-to-cost ratios.
Table 22: On-Bill Cost-Effectiveness with CARE Tariffs: All-Electric Code Minimum Climate
Zone
Electric
/Gas Utility
Single Family ADU
Standard CARE Standard CARE
B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 0.9 ($268) >1 $3,886 0.7 ($2,077) 1.2 $696
CZ02 PGE 1.6 $2,355 5.1 $5,107 0.7 ($1,742) 1.1 $580
CZ03 PGE 1.0 ($90) 1.7 $1,968 0.0 ($7,581) 0.0 ($4,596) CZ04 PGE 1.3 $979 2.3 $2,619 0.0 ($7,406) 0.0 ($4,526)
CZ05 PGE 1.3 $1,373 2.2 $3,467 0.7 ($1,912) 1.1 $237
CZ05 PGE/SCG 1.4 $1,823 2.5 $3,841 0.9 ($574) 1.4 $1,321 CZ06 SCE/SCG 1.6 $2,339 2.3 $3,535 0.9 ($318) 1.4 $1,225 CZ07 SDGE 1.1 $624 2.1 $3,309 0.6 ($3,298) 0.9 ($627)
CZ08 SCE/SCG 1.7 $2,792 2.3 $3,945 0.9 ($289) 1.4 $1,231 CZ09 SCE 1.7 $2,831 2.4 $4,074 0.9 ($310) 1.4 $1,230
CZ10 SCE/SCG 1.6 $2,642 2.4 $4,083 1.3 $976 1.7 $1,923
CZ10 SDGE 1.4 $1,825 3.0 $4,642 0.8 ($1,084) 1.3 $1,114 CZ11 PGE 1.7 $2,552 5.0 $5,077 1.0 $200 1.6 $1,634
CZ12 PGE 1.9 $3,210 5.0 $5,587 0.7 ($1,710) 1.1 $545
CZ13 PGE 1.5 $1,480 2.7 $2,924 0.0 ($4,131) 0.0 ($2,754) CZ14 SCE/SCG 0.9 ($522) 1.3 $1,191 0.0 ($7,375) 0.0 ($4,754) CZ14 SDGE 0.7 ($1,717) 2.0 $2,295 0.0 ($10,790) 0.0 ($6,496) CZ15 SCE/SCG 1.4 $1,791 1.9 $2,831 1.4 $1,246 1.8 $2,031 CZ16 PG&E 0.2 ($5,394) 0.8 ($351) 0.6 ($2,562) 1.1 $453 345
Cost-Effectiveness Analysis: Single Family New Construction 37 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 23: On-Bill Cost-Effectiveness with CARE Tariffs: Mixed Fuel Efficiency + PV+ Battery Package Climate
Zone
Electric
/Gas Utility
Single Family ADU
Standard CARE Standard CARE
B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 1.3 $6,501 0.9 ($2,072) 0.96 ($1,040) 0.7 ($9,009) CZ02 PGE 1.1 $2,486 0.7 ($5,286) 1.0 $138 0.7 ($7,683)
CZ03 PGE 1.1 $1,104 0.6 ($5,980) 0.8 ($3,399) 0.6 ($9,288) CZ04 PGE 1.0 $456 0.6 ($6,790) 0.9 ($2,011) 0.6 ($8,586) CZ05 PGE 1.1 $2,285 0.7 ($4,995) 0.4 ($13,922) 0.7 ($6,642) CZ05 PGE/SCG 1.1 $2,154 0.7 ($5,100) 1.1 $1,246 0.7 ($6,657) CZ06 SCE/SCG 1.1 $1,951 0.7 ($5,232) 0.97 ($575) 0.7 ($5,976) CZ07 SDGE 1.6 $9,869 1.1 $1,601 1.4 $8,825 0.9 ($2,435) CZ08 SCE/SCG 1.2 $3,344 0.7 ($4,574) 1.0 $755 0.8 ($5,331) CZ09 SCE 1.2 $3,369 0.7 ($4,547) 1.0 $886 0.8 ($5,198)
CZ10 SCE/SCG 1.3 $4,546 0.8 ($3,354) 0.7 ($4,499) 0.5 ($8,010) CZ10 SDGE 1.8 $14,148 1.3 $4,789 1.2 $3,065 0.8 ($3,001) CZ11 PGE 1.4 $6,523 0.9 ($3,358) 0.9 ($2,295) 0.6 ($8,074) CZ12 PGE 1.2 $3,451 0.7 ($5,212) 1.1 $1,786 0.7 ($6,653) CZ13 PGE 1.3 $5,665 0.8 ($4,024) 0.8 ($3,335) 0.5 ($8,497) CZ14 SCE/SCG 1.3 $5,945 0.8 ($3,665) 1.0 $346 0.7 ($5,727) CZ14 SDGE 1.8 $15,726 1.2 $4,127 1.5 $10,386 0.9 ($1,393) CZ15 SCE/SCG 1.5 $9,078 0.9 ($877) 0.93 ($1,187) 0.6 ($6,708) CZ16 PG&E 1.3 $5,254 0.8 ($3,523) 1.1 $2,037 0.7 ($6,282) 346
Cost-Effectiveness Analysis: Single Family New Construction 38 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26
4.6.2 Utility Infrastructure Cost Sensitivity
Table 24 compares cost-effectiveness results for the natural gas service line extension cost scenarios that inform the average values presented in Table 8. The average cost scenario reflects the cost-effectiveness results for the single family all-electric Code Minimum package presented in Table 16. Relative to a new subdivision, gas infrastructure cost savings are higher for the infill development case, which translates to higher cost-effectiveness. This is shown by positive costeffectiveness in all metrics except one – On-Bill for Climate Zone 16 – for infill development. Compared to the average cost scenario, there are two cases – OnBill for Climate Zone 4 in PG&E territory and Climate Zone 7 – where the all-electric Code Minimum package is no longer cost-effective based on the new subdivision costs.
Table 24: Single Family Cost-Effectiveness Comparison with Range of Natural Gas Utility Infrastructure Costs:
All-Electric Code Minimum
Climate
Zone
Electric
/Gas Utility
Average New Subdivision Infill Development
On-Bill TDV On-Bill TDV On-Bill TDV
B/C Ratio NPV B/C Ratio NPV B/C
Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV
CZ01 PGE 0.9 ($268) >1 $5,702 0.6 ($1,492) >1 $4,612 2.2 $4,628 >1 $10,062 CZ02 PGE 1.6 $2,355 >1 $7,711 1.3 $1,131 >1 $6,621 2.8 $7,250 >1 $12,071 CZ03 PGE 0.98 ($90) 25.3 $3,887 0.7 ($1,314) 18.5 $2,797 2.0 $4,806 52.6 $8,247 CZ04 PGE 1.3 $979 >1 $4,494 0.9 ($245) >1 $3,404 2.6 $5,875 >1 $8,854 CZ04 CPAU >1 $10,437 >1 $7,762 >1 $10,437 >1 $7,762 >1 $10,437 >1 $7,762 CZ05 PGE 1.3 $1,373 6.1 $4,633 1.0 $149 4.9 $3,543 2.3 $6,269 11.0 $8,993 CZ05 PGE/SCG 1.4 $1,823 6.1 $4,633 1.1 $599 4.9 $3,543 2.5 $6,719 11.0 $8,993 CZ06 SCE/SCG 1.6 $2,339 4.7 $4,353 1.3 $1,115 3.8 $3,263 2.8 $7,235 8.4 $8,713 CZ07 SDGE 1.1 $624 4.2 $4,211 0.9 ($600) 3.4 $3,121 2.0 $5,519 7.5 $8,571 CZ08 SCE/SCG 1.7 $2,792 4.2 $4,674 1.4 $1,568 3.5 $3,584 2.8 $7,687 7.3 $9,034 CZ09 SCE 1.7 $2,831 5.5 $5,013 1.4 $1,607 4.6 $3,923 2.9 $7,726 9.5 $9,373 CZ10 SCE/SCG 1.6 $2,642 7.4 $5,287 1.3 $1,418 6.1 $4,197 2.7 $7,537 12.6 $9,647 CZ10 SDGE 1.4 $1,825 7.4 $5,287 1.1 $601 6.1 $4,197 2.3 $6,721 12.6 $9,647 CZ11 PGE 1.7 $2,552 >1 $7,153 1.3 $1,328 >1 $6,063 3.0 $7,448 >1 $11,513 CZ12 PGE 1.9 $3,210 >1 $7,504 1.5 $1,986 >1 $6,414 3.1 $8,106 >1 $11,864 CZ12 SMUD/PGE >1 $11,714 >1 $7,504 >1 $10,490 >1 $6,414 >1 $16,610 >1 $11,864 CZ13 PGE 1.5 $1,480 >1 $4,490 1.1 $256 >1 $3,400 3.0 $6,376 >1 $8,850 CZ14 SCE/SCG 0.9 ($522) >1 $4,105 0.7 ($1,746) >1 $3,015 1.8 $4,374 >1 $8,465 CZ14 SDGE 0.7 ($1,717) >1 $4,105 0.5 ($2,941) >1 $3,015 1.5 $3,179 >1 $8,465 CZ15 SCE/SCG 1.4 $1,791 3.0 $3,439 1.1 $567 2.4 $2,349 2.6 $6,687 5.6 $7,799 CZ16 PG&E 0.2 ($5,394) 0.4 ($1,339) 0.0 ($6,618) 0.0 ($2,429) 0.9 ($498) 2.4 $3,021 347
Cost-Effectiveness Analysis: Single Family New Construction 39 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26
4.6.3 Utility Rate Escalation
In this sensitivity analysis, an alternative set of annual utility escalation rates was applied to the gas and electricity savings in select measure packages to show the impact that utility cost changes over time have on cost-effectiveness. This set of rates, detailed in Section 7.2.7, reflects those used by the Energy Commission in their development of the LSC factors for the 2025 code cycle (LSC replaces TDV in the 2025 code cycle). The rates assume steep increases in gas rates starting in 2030. Increased gas rates range from 2% to 6.7% higher than annual rates used in the 2022 code cycle; electricity rates are only marginally (about 0.5%) higher each year.
On-Bill cost-effectiveness results are shown for in Table 25 for the all-electric Code Minimum scenario and Table 26 for the mixed fuel Efficiency + PV + Battery measure package. The alternative rates described above (“2025 LSC”) are shown alongside those reported elsewhere in this report (“CPUC / 2022 TDV”, described in Section 2.1.3) for comparison. In all cases, the 2025 LSC escalation rates improve cost-effectiveness. In some cases, this improvement is enough to change the result from not cost-effective to cost-effective, these cases are summarized below:
• All-Electric Code Minimum package
o Climate Zones 1, 3, 14, and 16 for the single family home o Climate Zones 1, 5 in PG&E/SCG territory, 6, 8, 9, 10 in SDG&E territory, and 16 for the ADU home • Mixed fuel Efficiency + PV + Battery package
o Climate Zones 1, 6, and 15 for the ADU home
348
Cost-Effectiveness Analysis: Single Family New Construction 40 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 25: On-Bill Cost-Effectiveness, 2025 LSC Basis: All-Electric Code Minimum Climate
Zone
Electric
/Gas Utility
Single Family ADU
CPUC / 2022 TDV 2025 LSC CPUC / 2022 TDV 2025 LSC
B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 0.9 ($268) >1 $13,867 0.7 ($2,077) 1.2 $833
CZ02 PGE 1.6 $2,355 >1 $10,458 0.7 ($1,742) 0.95 ($228) CZ03 PGE 0.98 ($90) >1 $4,883 0.0 ($7,581) 0.0 ($4,465) CZ04 PGE 1.3 $979 >1 $5,728 0.0 ($7,406) 0.0 ($4,466)
CZ04 CPAU >1 $10,437 >1 $17,647 6.9 $2,592 20.7 $8,704
CZ05 PGE 1.3 $1,373 5.3 $5,148 0.7 ($1,912) 0.8 ($1,386) CZ05 PGE/SCG 1.4 $1,823 13.5 $5,884 0.9 ($574) 1.2 $807 CZ06 SCE/SCG 1.6 $2,339 4.0 $4,751 0.9 ($318) 1.2 $630
CZ07 SDGE 1.1 $624 1.9 $3,008 0.6 ($3,298) 0.7 ($2,394) CZ08 SCE/SCG 1.7 $2,792 3.0 $4,650 0.9 ($289) 1.1 $591
CZ09 SCE 1.7 $2,831 4.0 $5,233 0.9 ($310) 1.2 $634
CZ10 SCE/SCG 1.6 $2,642 5.4 $5,700 1.3 $976 1.9 $2,147
CZ10 SDGE 1.4 $1,825 7.4 $6,038 0.8 ($1,084) 1.0 $102
CZ11 PGE 1.7 $2,552 >1 $9,997 1.0 $200 1.6 $1,669
CZ12 PGE 1.9 $3,210 >1 $10,077 0.7 ($1,710) 0.9 ($430)
CZ12 SMUD/PGE >1 $11,714 >1 $19,028 5.7 $3,797 >1 $5,367 CZ13 PGE 1.5 $1,480 >1 $5,987 0.0 ($4,131) 0.0 ($1,228) CZ14 SCE/SCG 0.9 ($522) 6.0 $3,876 0.0 ($7,375) 0.0 ($4,363) CZ14 SDGE 0.7 ($1,717) >1 $4,799 0.0 ($10,790) 0.0 ($6,285) CZ15 SCE/SCG 1.4 $1,791 2.2 $3,214 1.4 $1,246 1.9 $2,210 CZ16 PG&E 0.2 ($5,394) >1 $8,516 0.6 ($2,562) 1.2 $629
349
Cost-Effectiveness Analysis: Single Family New Construction 41 Results
California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 26: On-Bill Cost-Effectiveness, 2025 LSC Basis: Mixed Fuel Efficiency + PV + Battery Climate
Zone
Electric
/Gas Utility
Single Family ADU
CPUC / 2022 TDV 2025 LSC CPUC / 2022 TDV 2025 LSC
B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 1.3 $6,501 1.6 $12,598 0.96 ($1,040) 1.0 $993
CZ02 PGE 1.1 $2,486 1.3 $4,914 1.0 $138 1.1 $1,816
CZ03 PGE 1.1 $1,104 1.1 $2,287 0.8 ($3,399) 0.9 ($2,462) CZ04 PGE 1.0 $456 1.1 $1,645 0.9 ($2,011) 0.95 ($980)
CZ04 CPAU 0.2 ($16,295) 0.2 ($15,990) 0.4 ($13,922) 0.4 ($13,453) CZ05 PGE 1.1 $2,285 1.3 $4,506 1.1 $1,265 1.1 $2,574
CZ05 PGE/SCG 1.1 $2,154 1.2 $4,291 1.1 $1,246 1.1 $2,543 CZ06 SCE/SCG 1.1 $1,951 1.2 $3,420 0.97 ($575) 1.0 $847 CZ07 SDGE 1.6 $9,869 1.6 $9,930 1.4 $8,825 1.4 $8,570
CZ08 SCE/SCG 1.2 $3,344 1.3 $4,750 1.0 $755 1.1 $2,288
CZ09 SCE 1.2 $3,369 1.3 $4,812 1.0 $886 1.1 $2,407
CZ10 SCE/SCG 1.3 $4,546 1.4 $6,334 0.7 ($4,499) 0.8 ($3,703) CZ10 SDGE 1.8 $14,148 1.9 $14,289 1.2 $3,065 1.2 $2,904 CZ11 PGE 1.4 $6,523 1.4 $7,967 0.9 ($2,295) 0.94 ($1,126) CZ12 PGE 1.2 $3,451 1.3 $4,806 1.1 $1,786 1.1 $3,458
CZ12 SMUD/PGE 0.3 ($13,066) 0.4 ($12,515) 0.5 ($12,564) 0.5 ($11,582) CZ13 PGE 1.3 $5,665 1.4 $6,448 0.8 ($3,335) 0.8 ($2,674) CZ14 SCE/SCG 1.3 $5,945 1.4 $7,138 1.0 $346 1.1 $1,827
CZ14 SDGE 1.8 $15,726 1.8 $15,116 1.5 $10,386 1.5 $10,107 CZ15 SCE/SCG 1.5 $9,078 1.7 $10,819 0.9 ($1,187) 0.99 ($182) CZ16 PG&E 1.3 $5,254 1.5 $10,999 1.1 $2,037 1.2 $4,285
350
Cost-Effectiveness Analysis: Single Family New Construction 42 Summary
California Energy Codes & Standards | A statewide utility program 2024-04-26 5 Summary
The purpose of this study was to examine and document the code compliance and cost-effectiveness impacts of improving performance among single family new construction – both standard sized homes and ADUs. To this end, the Reach Codes Team evaluated packages of energy efficiency measures as well as packages combining energy efficiency with solar PV generation and battery storage, simulated them in building modeling software, and gathered costs to determine the cost-effectiveness of multiple scenarios. The Reach Codes Team coordinated with multiple utilities, cities, and building community experts to develop a set of assumptions considered reasonable in the current market. Changing assumptions, such as the period of analysis, measure selection, cost assumptions, energy escalation rates, or utility tariffs are likely to change results.
Table 27 (single family) and Table 28 (ADU) summarize results for each prototype and depict the EDR1 compliance margins achieved for each climate zone and package. Because local reach codes must both exceed the energy code (i.e., have a positive compliance margin in the performance approach) and be cost-effective, the Reach Codes Team highlighted cells meeting these two requirements to help clarify the upper boundary for potential reach code policies.
All results presented in this study have a positive compliance margin. • Cells highlighted in green depict a positive compliance margin and cost-effective results using both On-Bill and TDV approaches.
• Cells highlighted in yellow depict a positive compliance and cost-effective results using either the On-Bill or TDV approach.
• Cells not highlighted depict a package that was not cost-effective using either the On-Bill or TDV approach. • Cells highlighted in grey depict the high efficiency equipment packages where cost-effectiveness was not evaluated.
The following are key takeaways and recommendations from the analysis.
Conclusions and Discussion:
• All-electric buildings have lower GHG emissions than mixed fuel buildings, due to the clean power sources currently available from California’s power providers as well as accounting for increased penetration of renewables in the future. Almost all the all-electric packages evaluated resulted in greater GHG emission savings than the mixed fuel packages, with the exception of the mixed fuel package with battery storage in climate zones with low heating loads. The Reach Codes Team found code-compliant, all-electric new construction to be feasible and cost-effective based on TDV for single family homes in all cases except Climate Zone 16.
• All-electric single family new construction was On-Bill cost-effective in all cases except Climate Zones 1, 3, 14, and 16.
• The all-electric ADU home was cost-effective based on TDV in all cases except in Climate Zones 3, 4, 13, and 14 where the higher cost of installing a ducted HPWH instead of the prescriptively required gas tankless water heater outweigh the resulting energy cost savings. In the other climate zones there were first cost savings for installing a heat pump space heater instead of gas furnace, contributing to an overall TDV cost-effective result. • Few cases were cost-effective On-Bill for the ADU.
• All-electric code minimum construction results in an increase in first year utility costs relative to a mixed fuel home, except for CPAU and SMUD where electricity rates are much lower than for the IOUs. The addition of efficiency measures, market dominant HPWHs that meet NEEA’s Advanced Water Heating Specification, high efficiency heat pumps, increased PV, and batteries all reduce utility costs, and a combination of these options was found to reduce annual utility costs relative to a mixed fuel home in all cases. • Under NBT, utility cost savings for increasing PV system size beyond code minimum are substantially less than under prior net energy metering rules (NEM 2.0); however, savings are sufficient to be On-Bill costeffective in all climate zones for the all-electric single family home. Coupling PV with battery systems increases utility cost savings as a result of improved on-site utilization of PV generation and fewer exports to the grid. 351
Cost-Effectiveness Analysis: Single Family New Construction 43 Summary
California Energy Codes & Standards | A statewide utility program 2024-04-26 • Applying CARE rates in the IOU territories increases improves On-Bill cost-effectiveness for all-electric buildings, as compared to the same case under standard rates, due to higher utility cost savings compared to a code compliant mixed fuel building also on a CARE rate, improving On-Bill cost-effectiveness. This is due to the CARE discount on electricity being higher than that on gas. • If gas tariffs are assumed to increase substantially over time, in-line with the escalation assumption from the 2025 LSC development, all-electric new construction was found to be On-Bill cost-effective in almost all scenarios over the 30-year analysis period. There is much uncertainty surrounding future tariff structures as well as escalation values. While it’s clear that gas rates will increase, how much and how quickly is not known.
Electricity tariff structures are expected to evolve over time, and the CPUC has an active proceeding to adopt an income-graduated fixed charge that benefits low-income customers and supports electrification measures.21 The CPUC will make a decision in mid-2024 and the new rates are expected to be in place later that year or in 2025. While the anticipated impact of this rate change is lower volumetric electricity rates, the rate design is not finalized. While lower volumetric electricity rates provide many benefits including incentivizing electrification, it also will make building efficiency measures harder to justify as cost-effective due to lower utility bill cost savings.
Recommendations:
• A reach code with a single performance target based on source energy (EDR1) can be structured to strongly encourage electrification. This approach requires equivalent performance for all buildings and allows mixed fuel buildings which minimizes the risk of violating federal preemption. Below are examples of how a reach code for single family homes could be setup based on the results summarized in Table 27. o A jurisdiction in Climate Zone 12 could set a performance target at an EDR1 margin of 11.5 (the EDR1 margin for the all-electric Code Minimum package). Any all-electric home meeting or exceeding the prescriptive requirements would comply, and a mixed fuel home would likely need to incorporate a combination of efficiency measures and a battery system to comply. o Similarly, a jurisdiction in Climate Zone 7 may consider setting a performance target of 2.8 EDR1 margin (also the EDR1 margin for the all-electric Code Minimum package). Any all-electric home meeting or exceeding the prescriptive requirements would comply, but a mixed fuel home would likely be able to comply with only a suite of above-code efficiency measures (no battery). Alternatively, a higher EDR1 margin target of 5 would incentivize more energy efficiency or additional PV for allelectric construction, and mixed fuel construction would likely need to incorporate a battery system to comply.
o A jurisdiction in Climate Zone 16 may want to set a performance target at an EDR1 margin of 20.5 (the EDR1 margin for the mixed fuel efficiency + PV + battery package). This would establish a target that a mixed fuel home could cost-effectively meet, likely only after incorporating a combination of efficiency measures and a battery system, and that an all-electric home could easily meet. • The 2022 Title 24 code’s new source energy metric combined with the heat pump baseline encourage allelectric construction, providing an incentive that allows for some amount of prescriptively required building efficiency to be traded off, still meeting minimum code compliance. This compliance benefit for all-electric homes highlights a unique opportunity for jurisdictions to incorporate efficiency into all-electric reach codes.
Efficiency and electrification have symbiotic benefits and are both critical for decarbonization of buildings. As demand on the electric grid is increased through electrification, efficiency can reduce the negative impacts of additional electricity demand on the grid, reducing the need for increased generation and storage capacity, as well as the need to upgrade upstream transmission and distribution equipment. The Reach Codes Team recommends that jurisdictions adopting a reach code for single family buildings also include an efficiency requirement with EDR1 margins at minimum consistent with the all-electric code minimum package results in Table 27.
21 https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/demand-response-dr/demand-flexibility-rulemaking 352
Cost-Effectiveness Analysis: Single Family New Construction 44 Summary
California Energy Codes & Standards | A statewide utility program 2024-04-26 • The code compliance margins for the ADU all-electric code minimum package are lower than for the single family prototype; code compliance and cost-effectiveness can be more challenging for smaller dwelling units.
As a result, the Reach Codes Team does not recommend EDR1 targets above those reported for the allelectric Code Minimum package in Table 28.
Local jurisdictions may also adopt ordinances that amend different Parts of the California Building Standards Code or may elect to amend other state or municipal codes. The decision regarding which code to amend will determine the specific requirements that must be followed for an ordinance to be legally enforceable. For example, jurisdictions may amend Part 11 instead of Part 6 of the CA Building Code requiring review and approval by the BSC but not the Energy Commission. Reach codes that amend Part 6 of the CA Building Code and require energy performance beyond state code minimums must demonstrate the proposed changes are cost-effective and obtain approval from the Energy Commission.
This report documents the key results and conclusions from the Reach Codes Team analysis. A full dataset of all results can be downloaded at https://localenergycodes.com/content/resources. Results alongside policy options can also be explored using the Cost-effectiveness Explorer at https://explorer.localenergycodes.com/.
Table 27: Summary of Single Family EDR1 Margins and Cost-Effectiveness Climate
Zone
Electric
/Gas Utility
All-Electric Mixed Fuel
Code
Minimum Efficiency
Efficiency +
High
Efficiency
Equipment
Efficiency
+ PV
Efficiency
+ PV +
Battery
Efficiency +
High
Efficiency
Equipment
Efficiency
+ PV +
Battery
CZ01 PGE 25.8 29.1 31.4 32.6 41.4 14.8 22.6
CZ02 PGE 14.0 16.3 18.0 18.9 28.3 9.1 14.1
CZ03 PGE 9.1 10.6 12.2 13.1 24.2 3.6 12.8
CZ04 PGE 8.8 10.4 11.9 12.8 24.6 3.8 13.2
CZ04 CPAU 8.8 10.4 11.9 12.8 24.6 3.8 13.2
CZ05 PGE 6.5 7.9 10.2 10.8 23.3 5.2 14.8
CZ05 PGE/SCG 6.5 7.9 10.2 10.8 23.3 5.2 14.8
CZ06 SCE/SCG 4.2 5.3 6.6 8.4 24.6 4.0 18.3
CZ07 SDGE 2.8 3.6 4.8 6.9 23.6 3.2 18.7
CZ08 SCE/SCG 2.1 2.9 4.2 5.6 21.3 2.7 17.1
CZ09 SCE/SCG 3.6 4.4 5.7 7.1 21.8 3.2 16.2
CZ10 SCE/SCG 4.8 5.8 7.2 8.5 21.9 3.9 14.4
CZ10 SDGE 4.8 5.8 7.2 8.5 21.9 3.9 14.4
CZ11 PGE 11.4 13.4 15.0 15.6 24.5 7.7 12.9
CZ12 PGE 11.5 13.3 14.8 15.5 25.2 7.2 13.2
CZ12 SMUD/PGE 11.5 13.3 14.8 15.5 25.2 7.2 13.2
CZ13 PGE 8.3 10.3 11.9 12.3 22.3 4.1 12.3
CZ14 SCE/SCG 8.8 11.5 13.2 14.3 24.7 4.6 13.4
CZ14 SDGE 8.8 11.5 13.2 14.3 24.7 4.6 13.4
CZ15 SCE/SCG 0.9 2.4 3.7 3.8 15.7 3.5 13.5
CZ16 PG&E 21.3 25.6 27.0 29.1 37.5 16.3 20.4
353
Cost-Effectiveness Analysis: Single Family New Construction 45 Summary
California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 28: Summary of ADU EDR1 Margins and Cost-Effectiveness Climate
Zone
Electric
/Gas Utility
All-Electric Mixed Fuel
Code
Minimum Efficiency
Efficiency +
High
Efficiency
Equipment
Efficiency
+ PV
Efficiency
+ PV +
Battery
Efficiency +
High
Efficiency
Equipment
Efficiency
+ PV +
Battery
CZ01 PGE 11.9 15.7 18.5 19.3 33.7 2.9 18.5
CZ02 PGE 5.7 7.9 9.7 10.8 25.6 -4.7 16.6
CZ03 PGE 2.9 4.0 5.9 7.1 23.2 4.0 11.8
CZ04 PGE 2.4 3.9 5.5 6.8 23.6 4.2 13.3
CZ04 CPAU 2.4 3.9 5.5 6.8 23.6 4.2 13.3
CZ05 PGE 1.8 2.9 4.8 6.4 24.0 -12.1 16.9
CZ05 PGE/SCG 1.8 2.9 4.8 6.4 24.0 -12.1 16.9
CZ06 SCE/SCG 0.5 1.3 2.6 5.0 25.7 -15.6 19.8
CZ07 SDGE 0.1 0.9 2.1 5.0 26.4 -16.5 20.3
CZ08 SCE/SCG 0.1 0.7 1.8 4.2 25.1 -15.3 20.4
CZ09 SCE 0.4 1.1 2.3 4.5 25.0 -14.4 19.6
CZ10 SCE/SCG 1.0 2.0 3.5 5.4 25.3 -11.9 19.0
CZ10 SDGE 1.0 2.0 3.5 5.4 25.3 -11.9 19.0
CZ11 PGE 4.6 7.0 8.6 9.6 25.1 -3.5 17.6
CZ12 PGE 4.6 6.6 8.3 9.3 24.5 -5.6 16.7
CZ12 SMUD/PGE 4.6 6.6 8.3 9.3 24.5 -5.6 16.7
CZ13 PGE 3.1 5.5 6.9 7.8 25.2 4.4 14.5
CZ14 SCE/SCG 3.5 6.3 8.0 9.6 26.9 5.1 14.5
CZ14 SDGE 3.5 6.3 8.0 9.6 26.9 5.1 14.5
CZ15 SCE/SCG 0.0 2.2 2.6 4.4 25.3 -9.3 19.2
CZ16 PG&E 11.2 14.7 15.7 18.3 33.7 2.9 18.3
354
Cost-Effectiveness Analysis: Single Family New Construction 46 References
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https://www.researchgate.net/publication/342135376_Central_Valley_Research_Homes_Project_-- _Final_CEC_Report
RSMeans. (2022). Cost data obtained from the 2022 RSMeans online database.
Statewide CASE Team. (2017). Residential High Performance Windows & Doors Codes and Standards Enhancement (CASE) Initiative 2019 California Energy Code. Retrieved from http://title24stakeholders.com/wpcontent/uploads/2017/09/2019-T24-CASE-Report_Res-Windows-and-Doors_Final_September-2017.pdf Statewide CASE Team. (2018). Energy Savings Potential and Cost-Effectiveness Analysis of High Efficiency Windows in California. Prepared by Frontier Energy. Retrieved from https://www.etcc-ca.com/reports/energy-savingspotential-and-cost-effectiveness-analysis-high-efficiency-windows-california Statewide CASE Team. (2020a). Nonresidential High Performance Envelope Codes and Standards Enhancement (CASE) Initiative 2022 California Energy Code. Prepared by Energy Solutions. Retrieved from https://title24stakeholders.com/wp-content/uploads/2020/10/2020-T24-NR-HP-Envelope-Final-CASEReport.pdf Statewide CASE Team. (2020b). Residential Energy Savings and Process Improvements for Additions and Alterations Codes and Standards Enhancement (CASE) Initiative 2022 California Energy Code. Prepared by Frontier Energy. Retrieved from https://title24stakeholders.com/wp-content/uploads/2020/08/SF-Additions-andAlterations_Final_-CASE-Report_Statewide-CASE-Team.pdf Statewide CASE Team. (2020c). Multifamily All-Electric Codes and Standards Enhancement (CASE) Initiative 2022 California Energy Code. Prepared by TRC.
Statewide Reach Codes Team. (2019, August). 2019 Cost-effectiveness Study: Low-Rise Residential New Construction.
Prepared for Pacific Gas and Electric Company. Prepared by Frontier Energy. Retrieved from https://localenergycodes.com/download/800/file_path/fieldList/2019%20Res%20NC%20Reach%20Codes Statewide Reach Codes Team. (2021a). Cost-Effectiveness Analysis: Batteries in Single Family Homes. Prepared by Frontier Energy. Retrieved from
https://localenergycodes.com/download/930/file_path/fieldList/Single%20Family%20Battery%20Costeff%20Report.pdf Statewide Reach Codes Team. (2021b). 2020 Reach Code Cost-Effectiveness Analysis: Detached Accessory Dwelling Units. Prepared by TRC. Retrieved from
https://localenergycodes.com/download/760/file_path/fieldList/2019%20New%20Detached%20ADUs%20Co st-effectiveness%20Report.pdf
Statewide Reach Codes Team. (tbd). 2022 Cost-Effectiveness Study: Existing Single Family Building Upgrades.
Prepared by Frontier Energy. Not yet published.
TRC, P. E. (2021). 2020 Reach Code Cost-Effectiveness Analysis: Detached Accessory Dwelling Units.
UC Berkeley Center for Community Innovation. (2021). Implementing the Backyard Revolution: Perspectives of California’s ADU Owners.
356
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California Energy Codes & Standards | A statewide utility program 2024-04-26 7 Appendices
7.1 Map of California Climate Zones
Climate zone geographical boundaries are depicted in Figure 4. The map in Figure 4 along with a zip-code search directory is available at: https://ww2.energy.ca.gov/maps/renewable/building_climate_zones.html Figure 4: Map of California climate zones.
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7.2 Utility Rate Schedules
The Reach Codes Team used the CA IOU and POU rate tariffs detailed below to determine the On-Bill savings for each package. The California Climate Credit was applied for both electricity and natural gas service for the IOUs using the 2023 credits shows below.22 The credits were applied to reduce the total calculated annual bill, including any fixed fees or minimum bill amounts.
Electricity rates reflect the most recently approved tariffs. Monthly gas rates were estimated based on recent gas rates (November 2023) and a curve to reflect how natural gas prices fluctuate with seasonal supply and demand. The seasonal curve was estimated from monthly residential tariffs between 2014 and 2023 (between 2017 and 2023 for CPAU). 12-month curves were created from monthly gas rates for each of the ten years (seven years for CPAU).
These annual curves were then averaged to arrive at an average normalized annual curve. This was conducted separately for baseline and excess energy rates. Costs used in this analysis were then derived by establishing the most recent baseline and excess rate from the latest tariff as a reference point (November 2023), and then using the normalized curve to estimate the cost for the remaining months relative to the reference point rate. 22 https://www.cpuc.ca.gov/industries-and-topics/natural-gas/greenhouse-gas-cap-and-trade-program/california-climate-credit 358
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7.2.1 Pacific Gas & Electric
The following pages provide details on the PG&E electricity and natural gas tariffs applied in this study. Table 29 describes the baseline territories that were assumed for each climate zone. A net surplus compensation rate of $0.07051/ kWh was applied to any net annual electricity generation based on a one-year average of the rates between December 2022 and November 2023.
Table 29: PG&E Baseline Territory by Climate Zone
Climate
Zone
Baseline
Territory
CZ01 V
CZ02 X
CZ03 T
CZ04 X
CZ05 T
CZ11 R
CZ12 S
CZ13 R
CZ16 Y
The PG&E monthly gas rate for G-1 in $/therm was applied on a monthly basis according to the rates shown in Table
30. These rates are based on applying a normalization curve to the November 2023 tariff based on ten years of historical gas data. Corresponding CARE rates reflect the 20 percent discount per the GL-1 tariff.
Table 30: PG&E Monthly Gas Rate ($/therm)
Month Total Charge
Baseline Excess
January $2.05 $2.43
February $2.08 $2.46
March $1.92 $2.31
April $1.80 $2.20
May $1.77 $2.18
June $1.78 $2.18
July $1.80 $2.20
August $1.85 $2.26
September $1.92 $2.33
October $1.99 $2.40
November $2.06 $2.46
December $2.05 $2.44
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7.2.2 Southern California Edison
The following pages provide details on the SCE electricity tariffs applied in this study. Table 31 describes the baseline territories that were assumed for each climate zone. A net surplus compensation rate of $ 0.06030/ kWh was applied to any net annual electricity generation based on a one-year average of the rates between December 2022 and November 2023.
Table 31: SCE Baseline Territory by Climate Zone
Climate
Zone
Baseline
Territory
CZ06 6
CZ08 8
CZ09 9
CZ10 10
CZ14 14
CZ15 15
366
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7.2.3 Southern California Gas
Following are the SoCalGas natural gas tariffs applied in this study. Table 32 describes the baseline territories that were assumed for each climate zone.
Table 32: SoCalGas Baseline Territory by Climate Zone
Climate
Zone
Baseline
Territory
CZ05 2
CZ06 1
CZ08 1
CZ09 1
CZ10 1
CZ14 2
CZ15 1
The SoCalGas monthly gas rate in $/therm was applied on a monthly basis according to the rates shown in Table 33.
These rates are based on applying a normalization curve to the November 2023 tariff based on ten years of historical gas data. Long-term historical natural gas rate data was only available for SoCalGas’ procurement charges.23 The baseline and excess transmission charges were found to be consistent over the course of a year and applied for the entire year based on 2023 rates. CARE rates reflect the 20 percent discount per the GR tariff.
Table 33: SoCalGas Monthly Gas Rate ($/therm)
Month Procurement
Charge
Transportation Charge Total Charge
Baseline Excess Baseline Excess
January $0.72 $0.86 $1.31 $1.92 $2.36
February $0.50 $0.86 $1.31 $1.57 $2.02
March $0.44 $0.86 $1.31 $1.48 $1.93
April $0.39 $0.86 $1.31 $1.39 $1.84
May $0.41 $0.86 $1.31 $1.43 $1.87
June $0.46 $0.86 $1.31 $1.49 $1.93
July $0.47 $0.86 $1.31 $1.51 $1.96
August $0.51 $0.86 $1.31 $1.58 $2.03
September $0.46 $0.86 $1.31 $1.52 $1.96
October $0.45 $0.86 $1.31 $1.48 $1.92
November $0.48 $0.86 $1.31 $1.54 $1.99
December $0.57 $0.86 $1.31 $1.63 $2.08
23 The SoCalGas procurement and transmission charges were obtained from the following site: https://www.socalgas.com/for-yourbusiness/energy-market-services/gas-prices RES2023.xlsx (live.com) 370
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7.2.4 San Diego Gas & Electric
Following are the SDG&E electricity and natural gas tariffs applied in this study. Table 34 describes the baseline territories that were assumed for each climate zone. A net surplus compensation rate of $0.04542/ kWh was applied to any net annual electricity generation based on a one-year average of the rates between December 2022 and November 2023.
Table 34: SDG&E Baseline Territory by Climate Zone
Climate
Zone
Baseline
Territory
CZ07 Coastal
CZ10 Inland
CZ14 Mountain
The SDG&E monthly gas rate in $/therm was applied on a monthly basis according to the rates shown in Table
35. These rates are based on applying a normalization curve to the November 2023 tariff based on ten years of historical gas data. CARE rates reflect the 20 percent discount per the G-CARE tariff.
Table 35: SDG&E Monthly Gas Rate ($/therm)
Month Total Charge
Baseline Excess
January $2.34 $2.63
February $2.28 $2.57
March $2.21 $2.51
April $2.14 $2.45
May $2.18 $2.48
June $2.23 $2.55
July $2.26 $2.57
August $2.32 $2.62
September $2.26 $2.59
October $2.21 $2.55
November $2.24 $2.57
December $2.38 $2.70
371
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7.2.5 City of Palo Alto Utilities
Following are the CPAU electricity and natural gas tariffs applied in this study. The CPAU monthly gas rate in $/therm was applied on a monthly basis according to the rates shown in Table 36. These rates are based on applying a normalization curve to the October 2023 tariff based on seven years of historical gas data. The monthly service charge applied was $14.01 per month per the November 2023 G-1 tariff.
Table 36: CPAU Monthly Gas Rate ($/therm)
Month G1
Volumetric
Total
Baseline
G1
Volumetric
Total
Excess
January $1.83532 $3.35639
February $1.38055 $2.59947
March $1.32506 $2.47695
April $1.29680 $2.44038
May $1.29511 $2.43804
June $1.32034 $2.45406
July $1.35688 $2.61519
August $1.40696 $2.67944
September $1.42130 $2.70301
October $1.42310 $2.48300
November $1.46286 $2.45547
December $1.62415 $2.62128
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7.2.6 Sacramento Municipal Utilities District (Electric Only) Following are the SMUD electricity tariffs applied in this study. The rates effective January 2023 were used. 379
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7.2.7 Fuel Escalation Assumptions
The average annual escalation rates in Table 37 were used in this study. These are based on assumptions from the CPUC 2021 En Banc hearings on utility costs through 2030 (California Public Utilities Commission, 2021a). Escalation rates through the remainder of the 30-year evaluation period are based on the escalation rate assumptions within the 2022 TDV factors. No data was available to estimate electricity escalation rates for CPAU and SMUD, therefore electricity escalation rates for PG&E and statewide natural gas escalation rates were applied. Table 38 presents the average annual escalation rates used in the utility rate escalation sensitivity analysis shown in Section 4.6.3. Rates were applied for the same 30-year period and are based on the escalation rate assumptions within the 2025 LSC factors from 2027 through 2053.24 These rates were developed for electricity use statewide (not utility-specific) and assume steep increases in gas rates in the latter half of the analysis period. Data was not available for years 2024, 2025, and 2026 and so the CPUC En Banc assumptions were applied for those years using the average rate across the three IOUs for statewide electricity escalation.
Table 37: Real Utility Rate Escalation Rate Assumptions, CPUC En Banc and 2022 TDV Basis
24 https://www.energy.ca.gov/files/2025-energy-code-hourly-factors. Actual escalation factors were provided by consultants E3.
Year
Statewide Natural
Gas Residential
Average Rate
(%/year, real)
Electric Residential Average Rate
(%/year, real)
PG&E SCE SDG&E
2024 4.6% 1.8% 1.6% 2.8%
2025 4.6% 1.8% 1.6% 2.8%
2026 4.6% 1.8% 1.6% 2.8%
2027 4.6% 1.8% 1.6% 2.8%
2028 4.6% 1.8% 1.6% 2.8%
2029 4.6% 1.8% 1.6% 2.8%
2030 4.6% 1.8% 1.6% 2.8%
2031 2.0% 0.6% 0.6% 0.6%
2032 2.4% 0.6% 0.6% 0.6%
2033 2.1% 0.6% 0.6% 0.6%
2034 1.9% 0.6% 0.6% 0.6%
2035 1.9% 0.6% 0.6% 0.6%
2036 1.8% 0.6% 0.6% 0.6%
2037 1.7% 0.6% 0.6% 0.6%
2038 1.6% 0.6% 0.6% 0.6%
2039 2.1% 0.6% 0.6% 0.6%
2040 1.6% 0.6% 0.6% 0.6%
2041 2.2% 0.6% 0.6% 0.6%
2042 2.2% 0.6% 0.6% 0.6%
2043 2.3% 0.6% 0.6% 0.6%
2044 2.4% 0.6% 0.6% 0.6%
2045 2.5% 0.6% 0.6% 0.6%
2046 1.5% 0.6% 0.6% 0.6%
2047 1.3% 0.6% 0.6% 0.6%
2048 1.6% 0.6% 0.6% 0.6%
2049 1.3% 0.6% 0.6% 0.6%
2050 1.5% 0.6% 0.6% 0.6%
2051 1.8% 0.6% 0.6% 0.6%
2052 1.8% 0.6% 0.6% 0.6%
2053 1.8% 0.6% 0.6% 0.6%
381
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California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 38: Real Utility Rate Escalation Rate Assumptions, 2025 LSC Basis Year
Statewide Natural
Gas Residential
Average Rate
(%/year, real)
Statewide
Electricity
Residential
Average Rate
(%/year, real)
2024 4.6% 2.1%
2025 4.6% 2.1%
2026 4.6% 2.1%
2027 4.2% 0.6%
2028 3.2% 1.9%
2029 3.6% 1.6%
2030 6.6% 1.3%
2031 6.7% 1.0%
2032 7.7% 1.2%
2033 8.2% 1.1%
2034 8.2% 1.1%
2035 8.2% 0.9%
2036 8.2% 1.1%
2037 8.2% 1.1%
2038 8.2% 1.0%
2039 8.2% 1.1%
2040 8.2% 1.1%
2041 8.2% 1.1%
2042 8.2% 1.1%
2043 8.2% 1.1%
2044 8.2% 1.1%
2045 8.2% 1.1%
2046 8.2% 1.1%
2047 3.1% 1.1%
2048 -0.5% 1.1%
2049 -0.6% 1.1%
2050 -0.5% 1.1%
2051 -0.6% 1.1%
2052 -0.6% 1.1%
2053 -0.6% 1.1%
382
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7.3 Summary of Efficiency Measures
Table 39 provides the details of the efficiency (non-preempted) measures, by climate zone, included in the following all-electric packages for the single family prototype:
• Efficiency Only
• Efficiency + High Efficiency (Preempted) Equipment
• Efficiency + PV
• Efficiency + PV + Battery
The efficiency measures for the single family mixed fuel packages are presented in Table 40, and Table 41 presents the efficiency measures for all the ADU packages. In all tables, the lack of an “X” indicates that the prescriptive values for that climate zone were not changed. See Appendix 7.4 for a list of prescriptive values by climate zone. Efficiency measures are described in Section 3.3.1.
Table 39: All-Electric Single Family Efficiency Measures, Various Packages Climate
Zone
3 ACH50
R-10
Slab
Attic Ceiling
Insulation
0.25 Roof
Solar
Reflectance
0.24 U-Factor /
0.50 SHGC
Windows
0.35 W/cfm
Buried
Ducts
Basic Compact
Hot Water
Credit
1 X R-60 X
2 X R-60 X X X
3 R-60 X X X
4 X R-60 X X X
5 X1 R-49 X X X
6 R-60 X X X
7 R-49 X X
8 R-60 X X X
9 R-60 X X X
10 R-60 X X X X
11 X R-60 X X X X
12 X R-60 X X X X
13 X R-60 X X X X
14 X X R-60 X X X X
15 X R-60 X X X X
16 R-60 X X X 1 This measure in Climate Zone 5 was only evaluated for the Efficiency + PV + Battery package. 383
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California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 40: Mixed Fuel Single Family Measures, Efficiency Only & Efficiency + PV + Battery Packages
Climate
Zone
3 ACH50
R-10
Slab
Attic:
EE Only
Attic:
EE + PV
+ Bat
0.25 Roof
Solar
Reflectance
0.24 UFactor / 0.50
SHGC
Windows
0.30 UFactor / 0.50
SHGC
Windows
0.35 W/cfm
Buried
Ducts
CDHW1:
EE Only
CDHW:
EE + PV
+ Bat
1 X R-60 vs R-38 X X
2 X R-60 vs R-38 R-49 X X X X
3 R-60 vs R-30 R-38 X EE Only X X
4 X R-60 vs R-38 R-49 X X X
5 R-60 vs R-38 R-49 X X X X
6 R-49 vs R-30 R-49 X X X X
7 R-49 vs R-30 R-49 X X X
8 R-60 vs R-30 R-49 X X X X
9 R-49 vs R-30 R-49 X X X X
10 R-60 vs R-38 X X X X X
11 X R-60 vs R-38 R-49 X X X X X
12 X R-60 vs R-38 R-49 X X X X X
13 X R-60 vs R-38 R-49 X X X X
14 X X R-60 vs R-38 R-49 X X X X
15 X R-60 vs R-38 R-49 X X X X X
16 R-60 vs R-38 R-49 X X X 1 CDHW stands for basic Compact Domestic Hot Water credit Table 41: Efficiency Measures for All ADU Packages
Climate
Zone
3 ACH50
R-10
Slab Attic1
0.25 Roof
Solar
Reflectance
0.24 U-Factor /
0.50 SHGC
Windows
Ductless
VCHP2
Basic
Compact Hot
Water Credit
3 1 X R-60 vs R-38 X
2 X R-60 vs R-38 X X
3 R-60 vs R-30 X X
4 X R-60 vs R-38 X X
5 R-60 vs R-38 X X
6 R-60 vs R-30 X X
7 R-60 vs R-30 X X
8 R-60 vs R-30 X X
9 R-60 vs R-30 X X
10 R-60 vs R-38 X X X
11 X R-60 vs R-38 X X X
12 X R-60 vs R-38 X X X
13 X R-60 vs R-38 X X X
14 X X R-60 vs R-38 X X X
15 X R-60 vs R-38 X X X
16 R-60 vs R-38 X X 1 This measure was added to all ADU packages except the Mixed Fuel Efficiency + High Efficiency Equipment package. 2 The ductless VCHP measure was only applied to the all-electric packages; the mixed fuel packages instead applied
0.35 W/cfm fans in Climate Zones 2, 4-6, and 8-15. 3 The compact hot water measure was only applied to the all-electric packages. 384
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7.4 Summary of Applicable Prescriptive Base Case Measures This appendix lists the prescriptive values, by climate zone, of building components relevant to the measures included in this analysis. Table 42 outlines envelope, PV, and battery values; Table 43 outlines space conditioning values, and Table 44 outlines domestic water heating (DHW) values.
Table 42: Prescriptive Envelope, PV, and Battery Measures by Climate Zone CZ Air
Infiltration1 Foundation Wall
Insulation2
Attic
Insulation3
Roof Aged
Solar
Reflectivity
Window
U-Factor /
SHGC
PV4 Battery
1 5 ACH50 Uninsulated slab R-21 + R-5 R-38 0.1 0.30 / 0.35 code min. none 2 5 ACH50 Uninsulated slab R-21 + R-5 R-38 0.1 0.30 / 0.23 code min. none 3 5 ACH50 Uninsulated slab R-21 + R-5 R-30 0.1 0.30 / 0.35 code min. none 4 5 ACH50 Uninsulated slab R-21 + R-5 R-38 + R-19 0.1 0.30 / 0.23 code min. none 5 5 ACH50 Uninsulated slab R-21 + R-5 R-30 0.1 0.30 / 0.35 code min. none 6 5 ACH50 Uninsulated slab R-15 + R-4 R-30 0.1 0.30 / 0.23 code min. none 7 5 ACH50 Uninsulated slab R-15 + R-4 R-30 0.1 0.30 / 0.23 code min. none 8 5 ACH50 Uninsulated slab R-21 + R-5 R-38 + R-19 0.1 0.30 / 0.23 code min. none 9 5 ACH50 Uninsulated slab R-21 + R-5 R-38 + R-19 0.1 0.30 / 0.23 code min. none 10 5 ACH50 Uninsulated slab R-21 + R-5 R-38 + R-19 0.2 0.30 / 0.23 code min. none 11 5 ACH50 Uninsulated slab R-21 + R-5 R-38 + R-19 0.2 0.30 / 0.23 code min. none 12 5 ACH50 Uninsulated slab R-21 + R-5 R-38 + R-19 0.2 0.30 / 0.23 code min. none 13 5 ACH50 Uninsulated slab R-21 + R-5 R-38 + R-19 0.2 0.30 / 0.23 code min. none 14 5 ACH50 Uninsulated slab R-21 + R-5 R-38 + R-19 0.2 0.30 / 0.23 code min. none 15 5 ACH50 Uninsulated slab R-21 + R-5 R-38 + R-19 0.2 0.30 / 0.23 code min. none 16 5 ACH50 R-7, 16” slab
insulation R-21 + R-5 R-38 + R-19 0.1 0.30 / 0.35 code min. none 1 5 ACH50 is prescriptively required however verification is not required. 2 Cavity wall insulation + continuous rigid insulation. 3 Ceiling/attic insulation R-value. R-38 + R-19 reflect High Performance Attics (HPAs) as defined by Option B in Table 150.1-A. 4 Prescriptive PV capacities (kW-DC) by climate zone are summarized in Table 4. 385
Cost-Effectiveness Analysis: Single Family New Construction 77 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-26 Table 43: Prescriptive HVAC Measures by Climate Zone
CZ Heating
Type AC Type HeatingEfficiency1
HVAC
Efficiency
(SEER2/EER2)
HVAC Fan
Efficacy
(W/cfm)
Ducts2
1 Gas Furnace AC 80% 14.3 / 11.7 0.45 R-8, 5%, in attic (not buried) 2 Gas Furnace AC 80% 14.3 / 11.7 0.45 R-8, 5%, in attic (not buried) 3 Heat pump Heat pump 7.5 14.3 / 11.7 0.45 R-6, 5%, in attic (not buried) 4 Heat pump Heat pump 7.5 14.3 / 11.7 0.45 R-8, 5%, in attic (not buried) 5 Gas Furnace AC 80% 14.3 / 11.7 0.45 R-6, 5%, in attic (not buried) 6 Gas Furnace AC 80% 14.3 / 11.7 0.45 R-6, 5%, in attic (not buried) 7 Gas Furnace AC 80% 14.3 / 11.7 0.45 R-6, 5%, in attic (not buried) 8 Gas Furnace AC 80% 14.3 / 11.7 0.45 R-8, 5%, in attic (not buried) 9 Gas Furnace AC 80% 14.3 / 11.7 0.45 R-8, 5%, in attic (not buried) 10 Gas Furnace AC 80% 14.3 / 11.7 0.45 R-8, 5%, in attic (not buried) 11 Gas Furnace AC 80% 14.3 / 11.7 0.45 R-8, 5%, in attic (not buried) 12 Gas Furnace AC 80% 14.3 / 11.7 0.45 R-8, 5%, in attic (not buried) 13 Heat pump Heat pump 7.5 14.3 / 11.7 0.45 R-8, 5%, in attic (not buried) 14 Heat pump Heat pump 7.5 14.3 / 11.7 0.45 R-8, 5%, in attic (not buried) 15 Gas Furnace AC 80% 14.3 / 11.7 0.45 R-8, 5%, in attic (not buried) 16 Gas Furnace AC 80% 14.3 / 11.7 0.45 R-8, 5%, in attic (not buried) 1 AFUE for gas furnaces, HSPF2 for heat pumps. 2 Duct insulation R-value, duct leakage, duct location.
Table 44: Prescriptive Water Heating Measures by Climate Zone CZ DHW Type
DHW Location DHW:
Basic
Compact
Distribution
Credit
Single
Family ADU
1 Heat pump Garage In conditioned space, ducted to/from outside Yes 2 Heat pump Garage In conditioned space, ducted to/from outside No 3 Gas tankless Garage In conditioned space, ducted to/from outside No 4 Gas tankless Garage In conditioned space, ducted to/from outside No 5 Heat pump Garage In conditioned space, ducted to/from outside No 6 Heat pump Garage In conditioned space, ducted to/from outside No 7 Heat pump Garage In conditioned space, ducted to/from outside No 8 Heat pump Garage In conditioned space, ducted to/from outside No 9 Heat pump Garage In conditioned space, ducted to/from outside No 10 Heat pump Garage In conditioned space, ducted to/from outside No 11 Heat pump Garage In conditioned space, ducted to/from outside No 12 Heat pump Garage In conditioned space, ducted to/from outside No 13 Gas tankless Garage In conditioned space, ducted to/from outside No 14 Gas tankless Garage In conditioned space, ducted to/from outside No 15 Heat pump Garage In conditioned space, ducted to/from outside No 16 Heat pump Garage In conditioned space, ducted to/from outside Yes 386
Cost-Effectiveness Analysis: Single Family New Construction 78 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-26 Get In Touch
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387
Prepared by:
Frontier Energy, Inc
Misti Bruceri & Associates, LLC
Prepared for:
Kelly Cunningham, Codes and Standards Program, Pacific Gas and Electric Last modified: 2023/06/20
Revision: 1.1
2022 Cost-Effectiveness Study:
Multifamily New Construction
388
Cost-Effectiveness Analysis: Multifamily New Construction Legal Notice
This report was prepared by Pacific Gas and Electric Company and funded by the California utility customers under the auspices of the California Public Utilities Commission.
Copyright 2022, Pacific Gas and Electric Company. All rights reserved, except that this document may be used, copied, and distributed without modification.
Neither PG&E nor any of its employees makes any warranty, express or implied; or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any data, information, method, product, policy or process disclosed in this document; or represents that its use will not infringe any privately-owned rights including, but not limited to, patents, trademarks or copyrights.
Acronym List
2023 PV$ – Present value costs in 2023
ACH50 – Air Changes per Hour at 50 pascals pressure differential ACM – Alternative Calculation Method
ADU – Accessory Dwelling Unit
AFUE – Annual Fuel Utilization Efficiency
B/C – Lifecycle Benefit-to-Cost Ratio
BEopt – Building Energy Optimization Tool
BSC – Building Standards Commission
CA IOUs – California Investor-Owned Utilities
CASE – Codes and Standards Enhancement
CBECC-Res – Computer program developed by the California Energy Commission for use in demonstrating compliance with the California Residential Building Energy Efficiency Standards CFI – California Flexible Installation
CFM – Cubic Feet per Minute
CO2 – Carbon Dioxide
CPAU – City of Palo Alto Utilities
CPUC – California Public Utilities Commission
CZ – California Climate Zone
DHW – Domestic Hot Water
DOE – Department of Energy
DWHR – Drain Water Heat Recovery
EDR – Energy Design Rating
EER – Energy Efficiency Ratio
EF – Energy Factor
GHG – Greenhouse Gas
389
Cost-Effectiveness Analysis: Multifamily New Construction HERS Rater – Home Energy Rating System Rater
HPA – High Performance Attic
HPWH – Heat Pump Water Heater
HSPF – Heating Seasonal Performance Factor
HVAC – Heating, Ventilation, and Air Conditioning
IECC – International Energy Conservation Code
IOU – Investor Owned Utility
kBtu – kilo-British thermal unit
kWh – Kilowatt Hour
LBNL – Lawrence Berkeley National Laboratory
LCC – Lifecycle Cost
LLAHU – Low Leakage Air Handler Unit
VLLDCS – Verified Low Leakage Ducts in Conditioned Space MF – Multifamily
NEEA – Northwest Energy Efficiency Alliance
NEM – Net Energy Metering
NPV – Net Present Value
NREL – National Renewable Energy Laboratory
PG&E – Pacific Gas and Electric Company
POU – Publicly-Owned-Utilities
PV – Photovoltaic
SCE – Southern California Edison
SDG&E – San Diego Gas and Electric
SEER – Seasonal Energy Efficiency Ratio
SF – Single Family
SMUD – Sacramento Municipal Utility District
SoCalGas – Southern California Gas Company
TDV – Time Dependent Valuation
Therm – Unit for quantity of heat that equals 100,000 British thermal units Title 24 – Title 24, Part 6
TOU – Time-Of-Use
UEF – Uniform Energy Factor
ZNE – Zero-net Energy
390
Cost-Effectiveness Analysis: Multifamily New Construction Summary of Revisions
Date Description Reference (page or section)
2/28/2022 Original Release N/A
6/20/2023 Minor revisions to content; no change to results 2, 3, 32, 33 391
Cost-Effectiveness Analysis: Multifamily New Construction
TABLE OF CONTENTS
Executive Summary..........................................................................................................................................................1 1 Introduction................................................................................................................................................................4 2 Methodology and Assumptions...............................................................................................................................5
2.1 Analysis for Reach Codes..................................................................................................................................................... 5
2.1.1 Modeling ....................................................................................................................................................................... 5
2.1.2 Cost-Effectiveness ........................................................................................................................................................ 5
2.1.3 Utility Rates................................................................................................................................................................... 6
2.2 2022 T24 Compliance Metrics .............................................................................................................................................. 8
2.3 Greenhouse Gas Emissions ................................................................................................................................................. 8 3 Prototypes, Measure Packages, and Costs............................................................................................................9
3.2 Measure Definitions and Costs ........................................................................................................................................... 11
3.2.1 Efficiency, Solar PV, and Batteries ............................................................................................................................. 11
3.2.2 All-Electric................................................................................................................................................................... 15
3.3 Measure Packages ............................................................................................................................................................. 18 4 Results......................................................................................................................................................................20
4.1 All-Electric Prescriptive Code.............................................................................................................................................. 20
4.2 All-Electric Plus PV ............................................................................................................................................................. 23
4.3 Mixed Fuel Efficiency .......................................................................................................................................................... 25
4.4 Mixed Fuel Plus PV (Plus Battery for the 3-Story Prototype).............................................................................................. 26
4.5 CARE Rate Comparison..................................................................................................................................................... 29
4.6 Greenhouse Gas Reductions.............................................................................................................................................. 30 5 Summary ..................................................................................................................................................................32 6 References ...............................................................................................................................................................34 7 Appendices ..............................................................................................................................................................36
7.1 Map of California Climate Zones......................................................................................................................................... 36
7.2 Utility Rate Schedules......................................................................................................................................................... 37
7.2.1 Pacific Gas & Electric.................................................................................................................................................. 38
7.2.2 Southern California Edison ......................................................................................................................................... 43
7.2.3 Southern California Gas.............................................................................................................................................. 46
7.2.4 San Diego Gas & Electric............................................................................................................................................ 48
7.2.5 City of Palo Alto Utilities.............................................................................................................................................. 53
7.2.6 Sacramento Municipal Utilities District (Electric Only)................................................................................................. 55
7.2.7 Fuel Escalation Assumptions...................................................................................................................................... 57
7.3 Cost Details......................................................................................................................................................................... 58
7.4 PG&E Gas Infrastructure Cost Memo................................................................................................................................. 59
7.5 Central Heat Pump Water Heater Comparison................................................................................................................... 62
7.6 Summary of Measures by Package .................................................................................................................................... 63 392
Cost-Effectiveness Analysis: Multifamily New Construction
LIST OF TABLES
Table ES-1. Summary of Efficiency TDV Compliance Margins and Cost-Effectiveness....................................................................... 3 Table 1. Utility Tariffs Used Based on Climate Zone ............................................................................................................................ 8 Table 2. Prototype Characteristics........................................................................................................................................................ 9 Table 3. Base Case Characteristics of the Prototypes........................................................................................................................ 10 Table 4. Base Package PV Capacities (kW-DC) ................................................................................................................................ 10 Table 5. Incremental Cost Assumptions ............................................................................................................................................. 13 Table 6. Heat Pump Water Heater Incremental System Costs (Present Value (2023$)).................................................................... 16 Table 7. Heat Pump Space Heater Costs per Dwelling Unit (Present Value (2023$)......................................................................... 16 Table 8. Lifetime of Water Heating & Space Conditioning Equipment Measures ............................................................................... 17 Table 9. IOU Natural Gas Infrastructure Cost Savings for All-Electric Building................................................................................... 18 Table 10. Multifamily IOU Total Natural Gas Infrastructure Costs ...................................................................................................... 18 Table 11. Multifamily CPAU Total Natural Gas Infrastructure Costs................................................................................................... 18 Table 12. 3-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric Prescriptive Code......................................................... 21 Table 13. 5-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric Prescriptive Code......................................................... 22 Table 14. 3-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric 100% PV...................................................................... 23 Table 15. 5-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric 100% PV...................................................................... 24 Table 16. 3-Story Cost-Effectiveness Results per Dwelling Unit: Mixed Fuel Efficiency..................................................................... 25 Table 17. 5-Story Cost-Effectiveness Results per Dwelling Unit: Mixed Fuel Efficiency..................................................................... 26 Table 18. 3-Story Cost-Effectiveness Results per Dwelling Unit: Mixed Fuel Efficiency + PV + Battery............................................. 27 Table 19. 5-Story Cost-Effectiveness Results per Dwelling Unit: Mixed Fuel Efficiency + PV............................................................ 28 Table 20. On-Bill IOU Cost-Effectiveness Comparison with CARE Tariffs, Results per Dwelling Unit: All-Electric Prescriptive Code 29 Table 21. On-Bill IOU Cost-Effectiveness Comparison with CARE Tariffs, Results per Dwelling Unit: Mixed Fuel Packages ........... 29 Table 22. Summary of Efficiency TDV Compliance Margins and Cost-Effectiveness......................................................................... 33 Table 23. PG&E Baseline Territory by Climate Zone.......................................................................................................................... 38 Table 24. PG&E Monthly Gas Rate ($/therm)..................................................................................................................................... 38 Table 25. PG&E Monthly CARE (GL-1) Gas Rate ($/therm)............................................................................................................... 39 Table 26: SCE Baseline Territory by Climate Zone ............................................................................................................................ 43 Table 27. SoCalGas Baseline Territory by Climate Zone ................................................................................................................... 46 Table 28. SoCalGas Monthly Gas Rate ($/therm) .............................................................................................................................. 46 Table 29. SDG&E Baseline Territory by Climate Zone ....................................................................................................................... 48 393
Cost-Effectiveness Analysis: Multifamily New Construction Table 30. SDG&E Monthly Gas Rate ($/therm).................................................................................................................................. 48 Table 31. CPAU Monthly Gas Rate ($/therm)..................................................................................................................................... 53 Table 32: Real Utility Rate Escalation Rate Assumptions................................................................................................................... 57 Table 33. Heat Pump Water Heater First Costs per Building (Present Value (2023$))....................................................................... 58 Table 34. Heat Pump Space Heater First Costs per Dwelling Unit (Present Value (2023$)............................................................... 58 Table 35. 5-Story Cost-Effectiveness: All-Electric Prescriptive Code with R-134a Heat Pump Water Heater .................................... 62 Table 36. Mixed Fuel Efficiency Package Measures .......................................................................................................................... 63 Table 37. Upgrade Package PV Capacities (kW-DC)......................................................................................................................... 64
LIST OF FIGURES
Figure 1. 3-Story greenhouse gas reductions (metric tons) per dwelling unit ..................................................................................... 31 Figure 2. 5-Story greenhouse gas savings (metric tons) per dwelling unit.......................................................................................... 31 Figure 3. Map of California climate zones........................................................................................................................................... 36 394
395
Cost-Effectiveness Analysis: Multifamily New Construction Executive Summary
1 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Executive Summary
The California Codes and Standards (C&S) Reach Codes program provides technical support to local governments considering adopting a local ordinance (reach code) intended to support meeting local and/or statewide energy efficiency and greenhouse gas (GHG) reduction goals. The program facilitates adoption and implementation of the code when requested by local jurisdictions by providing resources such as cost-effectiveness studies, model language, sample findings, and other supporting documentation.
This report documents cost-effective combinations of measures that exceed the minimum state requirements, the 2022 Building Energy Efficiency Standards (Title 24, Part 6 or Energy Code), effective January 1, 2023, for newly constructed multifamily buildings. The analysis considers low-rise and mid-rise multifamily building types and evaluates mixed fuel and all-electric package options in all sixteen California climate zones (CZs) Packages include a code compliant electrification package and a mixed fuel efficiency package, as well as the addition of above-code on-site solar photovoltaic (PV) capacity and battery energy storage. The 2022 Energy Code established electric heat pumps as the prescriptive baseline for space heating in most climate zones. As a result, this analysis primarily focuses on the electrification of central water heating. Space heating electrification was also evaluated where the prescriptive heat pump baseline didn’t apply: In Climate Zone 16 for multifamily buildings three habitable stories or fewer, and Climate Zones 1 and 16 for multifamily buildings greater than three habitable stories.
This analysis used two different metrics to assess the cost-effectiveness of the proposed upgrades. Both methodologies require estimating and quantifying the incremental costs and energy savings associated with each energy efficiency measure over a 30-year analysis period. On-Bill cost-effectiveness is a customer-based lifecycle cost (LCC) approach that values energy based upon estimated site energy usage and customer utility bill savings using today’s electricity and natural gas utility tariffs. Time Dependent Valuation (TDV) is the California Energy Commission’s LCC methodology, which is intended to capture the long-term projected cost of energy including costs for providing energy during peak periods of demand, carbon emissions, grid transmission and distribution impacts. This is the methodology used by the Energy Commission in evaluating cost-effectiveness for efficiency measures in Title 24, Part
6. Two multifamily prototypes were evaluated in this study. A 3-story loaded corridor and a 5-story mixed use prototype, which combined are estimated to represent 91 percent of new multifamily construction in California.
The following summarizes key results from the study:
• The Reach Codes Team found all-electric new construction to be feasible and cost-effective based on the California Energy Commission’s Time Dependent Valuation (TDV) metric in all cases. In many cases allelectric prescriptive code construction results in an increase in utility costs and is not cost-effective On-Bill.
Some exceptions include the SMUD and CPAU territories where lower electricity rates relative to gas rates result in lower overall utility bills.
• All-electric packages have lower GHG emissions than mixed fuel packages in all cases, due to the clean power sources currently available from California’s power providers. • The 2022 Energy Code’s new source energy metric combined with the heat pump space heating baseline in most climate zones encourages all-electric construction. While the code does not include an electric baseline for water heating, the penalty for central electric water heating observed in the performance approach in past code cycles has been removed and a credit is provided for well-designed central heat pump water heaters in most cases.
• Electrification combined with increased PV capacity results in utility cost savings and was found to be On-Bill cost-effective in all cases.
• The results in this study are based on today’s net energy metering (NEM 2.0) rules and do not account for recently approved changes to the NEM tariff (referred to as the net billing tariff). The net billing tariff decreases the value of PV to the consumer as compared to NEM 2.0. As a result, the cost-effectiveness of the packages that include above-code PV capacity is expected to be less under the net billing tariff. Conversely, the net 396
Cost-Effectiveness Analysis: Multifamily New Construction Executive Summary
2 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 billing tariff is expected to increase On-Bill cost-effectiveness of the all-electric prescriptive code scenario. An all-electric home has better on-site utilization of generated electricity from PV than a mixed fuel home with a similar sized PV system, and as a result exports less electricity to the grid. Since the net-billing tariff values exports less than under NEM 2.0, the relative impact on annual utility costs to the mixed fuel baseline is greater.
• This analysis does justify a modest reach based on either efficiency TDV or source energy for all-electric buildings. However, this may be challenging for some projects given the recent changes to which the industry must adapt, including the efficiency updates and multifamily restructuring in the 2022 Title 24, Part 6 code.
While project compliance margins using a CO2 refrigerant heat pump water heating system are high, the Reach Code Team found lower compliance margins using other heat pump water heater system designs.
Focusing on supporting projects to electrify water heating is expected to support the market shift towards more central heat pump water heaters.
• For jurisdictions interested in a reach code that allows for mixed fuel buildings, a mixed fuel efficiency and PV package (and battery for the 3-story prototype) was found to be cost-effective based on TDV in all cases and cost-effective On-Bill in most climate zones. This path, referred to as “Electric-Preferred”, allows for mixed fuel buildings but requires a higher building performance than for all-electric buildings. The efficiency measures evaluated in this study did not provide significant compliance benefit. As a result, the Reach Codes Team recommends establishing a compliance margin target based on source energy or total TDV. This would allow for PV and battery above minimum code requirements to be used to meet the target. • Jurisdictions interested in increasing affordable multifamily housing should know that applying the CARE rates has the overall impact of increasing utility cost savings for an all-electric building in most climate zones compared to a code compliant mixed fuel building, improving On-Bill cost-effectiveness.
Table ES-1 summarizes results for each prototype and depicts the efficiency TDV compliance margins achieved for each climate zone and package. All results presented in the table have a positive compliance margin (greater than zero percent). Cells highlighted in green depict cases with a positive compliance margin and cost-effective results using both On-Bill and TDV approaches. Cells highlighted in yellow depict cases with a positive compliance margin and costeffective results using either the On-Bill or TDV approach. Cells not highlighted depict cases with a positive compliance margin but that were not cost-effective using either the On-Bill or TDV approach. 397
Cost-Effectiveness Analysis: Multifamily New Construction Executive Summary
3 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table ES-1. Summary of Efficiency TDV Compliance Margins and Cost-Effectiveness Climate
Zone
Electric
/Gas Utility
3-Story 5-Story
All-Electric
Prescriptive
Code
AllElectric
+ PV
Mixed
Fuel
Efficiency
Mixed
Fuel
Efficiency
+ PV +
Battery
All-Electric
Prescriptive
Code
AllElectric
+ PV
Mixed
Fuel
Efficiency
Mixed
Fuel
Efficiency
+ PV
CZ01 PGE 26% 26% 1% 1% 14% 14% 0% 0%
CZ02 PGE 20% 20% 1% 1% 9% 9% 1% 1%
CZ03 PGE 21% 21% 1% 1% 11% 11% 0% 0%
CZ04 PGE 18% 18% 1% 1% 9% 9% 1% 1%
CZ04 CPAU 18% 18% 1% 1% 9% 9% 1% 1%
CZ05 PGE 23% 23% 1% 1% 12% 12% 0% 0%
CZ05 PGE/SCG 23% 23% 1% 1% 12% 12% 0% 0%
CZ06 SCE/SCG 18% 18% 1% 1% 9% 9% 0% 0%
CZ07 SDGE 20% 20% 0% 0% 11% 11% 0% 0%
CZ08 SCE/SCG 13% 13% 1% 1% 8% 8% 1% 1%
CZ09 SCE 13% 13% 1% 1% 7% 7% 1% 1%
CZ10 SCE/SCG 14% 14% 3% 3% 7% 7% 2% 2%
CZ10 SDGE 14% 14% 3% 3% 7% 7% 2% 2%
CZ11 PGE 14% 14% 3% 3% 8% 8% 2% 2%
CZ12 PGE 17% 17% 2% 2% 9% 9% 2% 2%
CZ12 SMUD/PGE 17% 17% 2% 2% 9% 9% 2% 2%
CZ13 PGE 13% 13% 4% 4% 7% 7% 2% 2%
CZ14 SCE/SCG 13% 13% 3% 3% 6% 6% 2% 2%
CZ14 SDGE 13% 13% 3% 3% 6% 6% 2% 2%
CZ15 SCE/SCG 5% 5% 5% 5% 3% 3% 3% 3%
CZ16 PG&E 24% 24% 5% 5% 9% 9% 2% 2%
Local jurisdictions may also adopt ordinances that amend different Parts of the California Building Standards Code or may elect to amend other state or municipal codes. The decision regarding which code to amend will determine the specific requirements that must be followed for an ordinance to be legally enforceable. Reach codes that amend Part 6 of the CA Building Code and require energy performance (including PV and storage) beyond state code minimums must demonstrate that the proposed changes are cost-effective and obtain approval from the Energy Commission prior to filing with the BSC.
Model ordinance language and other resources are posted on the C&S Reach Codes Program website at LocalEnergyCodes.com. Local jurisdictions that are considering adopting an ordinance may contact the program for further technical support at [email protected]. 398
Cost-Effectiveness Analysis: Multifamily New Construction Introduction
4 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 1 Introduction
This report documents cost-effective combinations of measures that exceed the minimum state requirements, the 2022 Building Energy Efficiency Standards, effective January 1, 2023, for newly constructed multifamily buildings. This report was developed in coordination with the California Statewide Investor-Owned Utilities (CA IOUs) Codes and Standards Program, key consultants, and engaged cities—collectively known as the Reach Codes Team. The CA IOU Codes and Standards Program is comprised of IOUs representatives from Pacific Gas and Electric (PG&E), Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E) and two Publicly-Owned-Utilities (POUs) – Sacramento Municipal Utility District (SMUD) and City of Palo Alto Utilities (CPAU), The analysis considers low-rise and mid-rise multifamily building types and evaluates mixed fuel and all-electric package options in all sixteen California climate zones (CZs) 1 Packages include combinations of efficiency measures, on-site renewable energy, and battery energy storage.
The California Building Energy Efficiency Standards Title 24, Part 6 (Energy Code) (California Energy Commission, 2022a) is maintained and updated every three years by two state agencies: the California Energy Commission (Energy Commission) and the Building Standards Commission (BSC). In addition to enforcing the code, local jurisdictions have the authority to adopt local energy efficiency ordinances—or reach codes—that exceed the minimum standards defined by Title 24 (as established by Public Resources Code Section 25402.1(h)2 and Section 10-106 of the Building Energy Efficiency Standards (California Energy Commission, 2022a)). Local jurisdictions must demonstrate that the requirements of the proposed ordinance are cost-effective and do not result in buildings consuming more energy than is permitted by Title 24. In addition, the jurisdiction must obtain approval from the Energy Commission and file the ordinance with the BSC for the ordinance to be legally enforceable.
The Department of Energy (DOE) sets minimum efficiency standards for equipment and appliances that are federally regulated under the National Appliance Energy Conservation Act, including heating, cooling, and water heating equipment (E-CFR, 2020). Since state and local governments are prohibited from adopting higher minimum efficiencies than the federal standards require, the focus of this study is to identify and evaluate cost-effective packages that do not include high efficiency heating, cooling, and water heating equipment. High efficiency appliances are often the easiest and most affordable measures to increase energy performance. While federal preemption limits reach code mandatory requirements for covered appliances, in practice, builders may install any package of compliant measures to achieve the performance requirements.
1 See Appendix 7.1 Map of California Climate Zones for a graphical depiction of climate zone locations. 399
Cost-Effectiveness Analysis: Multifamily New Construction Methodology and Assumptions
5 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 2 Methodology and Assumptions
2.1 Analysis for Reach Codes
This section describes the approach to calculating cost-effectiveness including benefits, costs, metrics, and utility rate selection.
2.1.1 Modeling
The Reach Codes Team performed energy simulations using software approved for 2022 Title 24 Code compliance analysis, CBECC 2022.2.0.
Using the 2022 baseline as the starting point, prospective energy efficiency measures were identified and modeled to determine the projected site energy (therm and kWh) and compliance impacts. Annual utility costs were calculated using hourly data output from CBECC, and electricity and natural gas tariffs for each of the investor-owned utilities (IOUs).
This analysis focused on residential apartments only (a prior study and report analyzed the cost-effectiveness of above code packages for nonresidential buildings (Statewide Reach Codes Team, 2022b). The Statewide Reach Codes Team selected measures for evaluation based on the single family 2022 reach code analysis (Statewide Reach Codes Team, 2022a) and the multifamily 2019 reach code analysis [ (Statewide Reach Codes Team, 2020), (Statewide Reach Codes Team, 2021)] as well as experience with and outreach to architects, builders, and engineers.
2.1.2 Cost-Effectiveness
2.1.2.1 Benefits
This analysis used two different metrics to assess the cost-effectiveness of the proposed upgrades. Both methodologies require estimating and quantifying the incremental costs and energy savings associated with each energy efficiency measure. The main difference between the methodologies is the manner in which they value energy and thus the cost savings of reduced or avoided energy use:
Utility Bill Impacts (On-Bill): This customer-based lifecycle cost (LCC) approach values energy based upon estimated site energy usage and customer utility bill savings using the latest electricity and natural gas utility tariffs available at the time of writing this report. Total savings are estimated over a 30-year duration and include discounting of future utility costs and energy cost inflation.
Time Dependent Valuation (TDV): This reflects the Energy Commission’s current LCC methodology, which is intended to capture the total value or cost of energy use over 30 years. This method accounts for long-term projected costs, such as the cost of providing energy during peak periods of demand, costs for carbon emissions, and grid transmission and distribution impacts. This metric values energy use differently depending on the fuel source (natural gas, electricity, and propane), time of day, and season. Electricity used (or saved) during peak periods has a much higher value than electricity used (or saved) during off-peak periods due to the less inefficient energy generation sources providing peak electricity (Horii, Cutter, Kapur, Arent, & Conotyannis, 2014). This is the methodology used by the Energy Commission in evaluating cost-effectiveness for efficiency measures in the 2022 Energy Code.
2.1.2.2 Costs
The Reach Codes Team assessed the incremental costs of the measures and packages over a 30-year lifecycle.
Incremental costs represent the equipment, installation, replacements, and maintenance costs of the proposed measure relative to the 2022 Energy Code minimum requirements or standard industry practices. Present value of replacement cost is included for measures with lifetimes less than the evaluation period.
2.1.2.3 Metrics
Cost-effectiveness is presented using net present value (NPV) and benefit-to-cost (B/C) ratio metrics.
NPV: The lifetime NPV is reported as a cost-effectiveness metric, Equation 1 demonstrates how this is calculated. If the NPV of a measure or package is positive, it is considered cost-effective. A negative values represent net costs. 400
Cost-Effectiveness Analysis: Multifamily New Construction Methodology and Assumptions
6 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 B/C Ratio: This is the ratio of the present value (PV) of all benefits to the present value of all costs over 30 years (PV benefits divided by PV costs). The criteria benchmark for cost-effectiveness is a B/C ratio greater than one. A value of one indicates the NPV of the savings over the life of the measure is equivalent to the NPV of the lifetime incremental cost of that measure. A value greater than one represents a positive return on investment. The B/C ratio is calculated according to Equation 2.
Equation 1
𝑁𝑁𝑁𝑁𝑁𝑁 = 𝑜𝑜𝑜𝑜 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑏𝑏 𝑏𝑏 − 𝑜𝑜𝑜𝑜 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑐𝑐 𝑐𝑐 Equation 2
𝐵𝐵 − − 𝐶𝐶 𝑅𝑅𝑅𝑅 = 𝑜𝑜𝑜𝑜 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑏𝑏 𝑏𝑏
𝑜𝑜𝑜𝑜 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑐𝑐 𝑐𝑐
Improving the efficiency of a project often requires an initial incremental investment. In most cases the benefit is represented by annual On-Bill utility or TDV savings, and the cost is represented by incremental first cost and replacement costs. Some packages result in initial construction cost savings (negative incremental cost), and either energy cost savings (positive benefits), or increased energy costs (negative benefits). In cases where both construction costs and energy-related savings are negative, the construction cost savings are treated as the ‘benefit’ while the increased energy costs are the ‘cost.’ In cases where a measure or package is cost-effective immediately (i.e., upfront construction cost savings and lifetime energy cost savings), B/C ratio cost-effectiveness is represented by “>1”.
The lifetime costs or benefits are calculated according to Equation 3.
Equation 3
𝑜𝑜𝑜𝑜 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑐𝑐 𝑐𝑐 𝑜𝑜𝑜𝑜 𝑏𝑏 𝑏𝑏 = �(𝐴𝐴 𝐴𝐴 𝑐𝑐 𝑐𝑐 𝑜𝑜𝑜𝑜 𝑏𝑏 𝑏𝑏 )𝑡𝑡 (1 + )𝑡𝑡
𝑛𝑛
𝑡𝑡=0
Where:
• n = analysis term in years
• r = discount rate
The following summarizes the assumptions applied in this analysis to both methodologies. • Analysis term of 30 years
• Real discount rate of three percent
TDV is a normalized monetary format and there is a unique procedure for calculating the present value benefit of TDV energy savings. The present value of the energy cost savings in dollars is calculated by multiplying the TDV savings (reported by the CBECC simulation software) by a NPV factor developed by the Energy Commission (see E3’s 2022 TDV report for details (Energy + Environmental Economics, 2020)). The 30-year residential NPV factor is $0.173/kTDV for the 2022 Energy Code.
Equation 4
𝑇𝑇𝑇𝑇 𝑜𝑜𝑜𝑜 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙𝑙𝑙 𝑏𝑏 𝑏𝑏 = 𝑇𝑇𝑇𝑇 𝑒𝑒𝑒𝑒 𝑠𝑠 ∗ 𝑁𝑁𝑁𝑁𝑁𝑁
2.1.3 Utility Rates
In coordination with the CA IOU rate team (comprised of representatives from PG&E, SCE, SDG&E, SMUD, and CPAU), the Reach Codes Team determined appropriate utility rates for each climate zone in order to calculate utility costs and determine On-Bill cost-effectiveness for the proposed measures and packages. The utility tariffs, summarized in Table 1, were determined based on the most prevalent active rate in each territory. Utility rates were applied to each climate zone based on the predominant IOU serving the population of each zone, with a few climate zones evaluated multiple times under different utility scenarios. Climate Zones 10 and 14 were evaluated with both 401
Cost-Effectiveness Analysis: Multifamily New Construction Methodology and Assumptions
7 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 SCE for electricity and Southern California Gas Company (SoCalGas) for gas and SDG&E tariffs for both electricity and gas since each utility has customers within these climate zones. Climate Zone 5 is evaluated under both PG&E and SoCalGas natural gas rates. Two POU or municipal utility rates were also evaluated: SMUD in Climate Zone 12 and CPAU in Climate Zone 4.
For the IOUs in-unit gas was evaluated under the G1 rate and central gas for water heating was evaluated under the relevant master metered gas tariff, GM. Electricity use for central water heating was evaluated using the residential TOU rates. The water heating utility bill was calculated separately from the in-unit electricity bill. Photovoltaic (PV) and battery energy storage benefits were applied according to virtual net energy metering (VNEM) rules.2 PV was first assigned to the central water heating meter to offset 100 percent of the electricity use. The remaining PV and all of the battery impacts were then split evenly across the apartment meters. The same approach was applied for CPAU and SMUD using the rates described in Table 1.
The multifamily prototypes used in this analysis include common area spaces that serve the residents (lobby, leasing office, corridors, etc.). Most of the energy use for these spaces could not be separated from that for the dwelling units within the CBECC model. As a result, average per dwelling unit hourly energy use was calculated to include both the dwelling unit and common space energy use.
First-year utility costs were calculated using hourly electricity and natural gas output from CBECC and applying the utility tariffs summarized in Table 1. Annual costs were also estimated for customers eligible for the CARE tariff discounts on both electricity and natural gas bills. The CARE tariff was only applied to the in-unit apartment meters.
Appendix 7.2 Utility Rate Schedules includes details of each utility tariff.
For cases with PV generation, the approved NEM 2.0 tariffs were applied along with minimum daily use billing and mandatory non-bypassable charges. In December the California Public Utilities Commission (CPUC) issued a decision adopting a net billing tariff (NBT) as a successor to NEM 2.0 that will go into effect April of 20233 Given the recent timing of this decision there was not time to incorporate these changes into this analysis. The Reach Codes Team conducted a limited sensitivity analysis on the impacts of NBT relative to NEM 2.0 on utility bills. It was found that utility costs will increase for all homes with PV systems; however, the increase was less for an all-electric building compared to a mixed fuel building with a similarly sized PV system. As a result of better onsite utilization of PV generation and thus fewer exports to the grid, the Reach Codes Team expects the cost-effectiveness for the electrification scenarios for the all-electric home evaluated in this report to improve under NBT. Conversely, cost-effectiveness of increasing PV capacity is expected to be reduced under NBT.
2 PG&E: https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHEDS_NEM2V.pdf SDG&E: https://tariff.sdge.com/tm2/pdf/tariffs/ELEC_ELEC-SCHEDS_NEM-V-ST.pdf SCE:
https://edisonintl.sharepoint.com/teams/Public/TM2/Shared%20Documents/Forms/AllItems.aspx?ga=1&id=%2Fteams %2FPublic%2FTM2%2FShared%20Documents%2FPublic%2FRegulatory%2FTariff%2DSCE%20Tariff%20Books%2F Electric%2FSchedules%2FOther%20Rates%2FELECTRIC%5FSCHEDULES%5FNEM%2DV%2DST%2Epdf&parent= %2Fteams%2FPublic%2FTM2%2FShared%20Documents%2FPublic%2FRegulatory%2FTariff%2DSCE%20Tariff%20 Books%2FElectric%2FSchedules%2FOther%20Rates
3 https://www.cpuc.ca.gov/nemrevisit
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Cost-Effectiveness Analysis: Multifamily New Construction Methodology and Assumptions
8 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 1. Utility Tariffs Used Based on Climate Zone
Climate Zones Electric / Gas Utility Electricity Natural Gas IOUs
1-5,11-13,16 PG&E / PG&E E-TOU Option C G1 (in-unit) & GM (central water heating)1
5 PG&E / SoCalGas E-TOU Option C GM
6, 8-10, 14, 15 SCE / SoCalGas TOU-D Option 4-9 GM
7, 10, 14 SDG&E / SDG&E TOU-DR-1 GM
POUs
4 CPAU / CPAU E-1 (in-unit) & E-2 (central
water heating) G-2
12 SMUD / PG&E R-TOD, RT02 (in-unit) &
RSMM (central water heating) GM
1G1 rate applied to gas use within the apartment units, which only occurs in Climate Zones 1 and 16, see Section 3 for details. GM rate applied to gas use for central water heating.
Utility rates are assumed to escalate over time according to the assumptions from the CPUC 2021 En Banc hearings on utility costs through 2030 (California Public Utilities Commission, 2021a). Escalation rates through the remainder of the 30-year evaluation period are based on the escalation rate assumptions within the 2022 TDV factors. See Appendix 7.2.7 Fuel Escalation Assumptions for details.
2.2 2022 T24 Compliance Metrics
2022 Title 24, Part 6 Section 170.1 defines the energy budget of the building based on source energy and TDV energy for space-conditioning, indoor lighting, mechanical ventilation, PV and battery storage systems, service water heating and covered process loads. In 2022, the Energy Commission introduced the new compliance metric of source energy, which differs by fuel source (as does TDV) and is a reasonable proxy for greenhouse gas emissions. Additionally, for multifamily buildings four habitable stories and higher prescriptive requirements for PV and battery systems were also introduced. This led to the need to differentiate an efficiency compliance metric, which ensured that the building met minimum efficiency standards, and a total energy compliance metric which incorporated the PV and battery standards.
In order to be compliant with the building code a building needs to comply with all three compliance metrics described below:
• Efficiency TDV. Efficiency TDV accounts for all regulated end-uses but does not include the impacts of PV and battery storage.
• Total TDV. Total TDV includes regulated end-uses and accounts for PV and battery storage contributions. • Source Energy. Source energy is based on fuel used for power generation and distribution.
2.3 Greenhouse Gas Emissions
The analysis reports the greenhouse gas (GHG) emission estimates based on assumptions within CBECC. There are 8,760 hourly multipliers accounting for time dependent energy use and carbon based on source emissions, including renewable portfolio standard projections. There are two series of multipliers—one for Northern California climate zones, and another for Southern California climate zones.4 GHG emissions are reported as average annual metric tons of CO2 equivalent over the 30-year building lifetime.
4 CBECC multipliers are the same for CZs 1-5 and 11-13 (Northern California), while there is another set of multipliers for CZs 6-10 and 14-16 (Southern California).
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Cost-Effectiveness Analysis: Multifamily New Construction Prototypes, Measure Packages, and Costs
9 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 3 Prototypes, Measure Packages, and Costs
This section describes the prototypes, measures, costs, and the scope of analysis drawing from previous reach code research where appropriate.
3.1 Prototype Characteristics
The Energy Commission defines building prototypes which it uses to evaluate the cost-effectiveness of proposed changes to Title 24 requirements. There are 4 multifamily prototypes used in code development: a 2-story garden style, a 3-story loaded corridor, a 5-story mixed use and a 10-story mixed use. Based on work completed for the 2022 Title 24 code development, the 3-story and the 5-story represent 33 percent and 58 percent, respectively, of new multifamily construction in California. As a result, these two prototypes are used in this analysis. Additional details on all four prototypes can be found in the Multifamily Prototypes Report (TRC, 2019).
Table 2 describes the basic characteristics of each prototype.
Table 2. Prototype Characteristics
Characteristic 3-Story Loaded
Corridor 5-Story Mixed Use
Conditioned Floor Area 39,372 ft2
113,100 ft2 total:
33,660 ft2 nonresidential
79,440 ft2 residential
Num. of Stories 3
6 Stories total:
1 story parking garage (below grade)
1 story of nonresidential space
4 stories of residential space
Num. of Bedrooms
(6) Studio
(12) 1-bed
(12) 2-bed
(6) 3-bed
(8) studios
(40) 1-bed units
(32) 2-bed units
(8) 3-bed units
Window-to-Wall Area Ratio 25% 25%
Wall Type Wood framed Wood frame over a first-floor concrete podium
Roof Type Flat roof Flat roof
Foundation Slab-on-grade Concrete podium with underground parking
The methodology used in the analyses for each of the prototypical building types begins with a design that precisely meets the minimum 2022 prescriptive requirements.5 Table 170.2-A and 170.2-B in the 2022 Standards (California Energy Commission, 2022a) list the prescriptive measures that determine the baseline design in each climate zone.
Other features are designed to meet, but not exceed, the minimum requirements and are consistent with the Standard Design in the ACM Reference Manual (California Energy Commission, 2022c). The analysis also assumed electric resistance cooking in the apartment units to reflect current market data. The 3-story building prototype includes a central laundry facility, and the 5-story assumes laundry in the units. Laundry equipment was assumed to be electric in all cases; electrification of laundry equipment was not addressed in this study. The nonresidential 2022 reach code analysis (Statewide Reach Codes Team, 2022b) did consider electrification of central laundry facilities within the small hotel prototype.
Table 3 describes characteristics as they were applied to the base case energy model in this analysis. In a shift from the 2019 Standards, the 2022 Standards define a prescriptive fuel source for space heating establishing an electric 5Due to planned software updates to how the prescriptive requirements are applied in the Standard Design and challenges for certain space types with sizing heating and cooling equipment the same in the Proposed Design as in the Standards, the results compliance margins for the base case models were not exactly zero percent.. 404
Cost-Effectiveness Analysis: Multifamily New Construction Prototypes, Measure Packages, and Costs
10 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 heat pump baseline in all climate zones except 16 for multifamily buildings three habitable stories and fewer and 1 and 16 for multifamily buildings four habitable stories and greater.
Table 3. Base Case Characteristics of the Prototypes
Characteristic 3-Story Loaded Corridor 5-story Mixed Use Space
Heating/Cooling1
Individual split systems with ducts in
conditioned space
CZ 1-15: Heat pump
CZ 16: Natural gas furnace with air
conditioner
Individual split systems with ducts in
conditioned space
CZ2-15: Heat pump
CZ1, 16: Dual-fuel heat pump with
natural gas backup
Ventilation Individual balanced fans, continuously
operating
Individual balanced fans, continuously
operating
Water Heater1
Natural gas central boiler with solar
thermal sized to meet the prescriptive
requirements by climate zone.
Natural gas central boiler with solar
thermal sized to meet the prescriptive
requirements by climate zone.
Hot Water
Distribution Central recirculation Central recirculation Cooking Electric Electric
Clothes Drying Electric (central) Electric (in-unit)
PV System
Sized according to the prescriptive
requirements in Equation 170.2-C of the
2022 Title 24 Standards. Size differs by
climate zone ranging from 1.60 kW to
2.90 kW per dwelling unit, see Table 4.
Sized according to the prescriptive
requirements in Equation 170.2-D of the
2022 Title 24 Standards. Size differs by
climate zone ranging from 2.26 kW to
3.34 kW per dwelling unit, see Table 4.
Battery System None None
1 Equipment efficiencies are equal to minimum federal appliance efficiency standards.
Table 4 summarizes the PV capacities for the base case packages.
Table 4. Base Package PV Capacities (kW-DC)
Climate
Zone
Base Package
3-Story 5-Story
CZ01 2.00 2.26
CZ02 1.79 2.68
CZ03 1.70 2.26
CZ04 1.75 2.68
CZ05 1.60 2.26
CZ06 1.77 2.68
CZ07 1.67 2.68
CZ08 1.91 2.68
CZ09 1.92 2.68
CZ10 1.98 2.68
CZ11 2.21 2.68
CZ12 1.96 2.68
CZ13 2.33 2.68
CZ14 1.94 2.68
CZ15 2.90 3.34
CZ16 1.76 2.26
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Cost-Effectiveness Analysis: Multifamily New Construction Prototypes, Measure Packages, and Costs
11 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20
3.2 Measure Definitions and Costs
Measures evaluated in this study fall into two categories: those associated with general efficiency, onsite generation, and demand flexibility and those associated with building electrification. The Reach Codes Team selected measures based on cost-effectiveness as well as decades of experience with residential architects, builders, and engineers along with general knowledge of the relative consumer acceptance of many measures. This analysis focused on measures that impacted the residential dwelling units only.
The following sections describe the details and incremental cost assumptions for each of the measures. Incremental costs represent the equipment, installation, replacement, and maintenance costs of the proposed measures relative to the base case. Replacement costs are applied for roofs, mechanical equipment, PV inverters and battery systems over the 30-year evaluation period. Incremental maintenance costs are estimated for PV systems, but not any other measures. Costs were estimated to reflect costs to the building owner. All costs are provided as present value in 2023 (2023 PV$).
The Reach Codes Team obtained measure costs from distributors, contractors, literature review, and online sources such as Home Depot and RS Means. Contractor markups are incorporated. These are the Reach Codes Team best estimate of average costs statewide. Regional variation in costs is not accounted for, although it's recognized that local costs may differ. Cost increases due to recent high inflation rates and supply chain delays are not included.
3.2.1 Efficiency, Solar PV, and Batteries
The following are descriptions of each of the efficiency, PV, and battery measures evaluated under this analysis and applied in at least one of the packages presented in this report. Table 5 summarizes the incremental cost assumptions for each of these measures. These measures were evaluated for all climate zones but were ultimately adopted in a subset of climate zones based on cost-effectiveness outcomes.
Lower U-Factor Fenestration: Reduce window U-factor to 0.24. The prescriptive U-factor is 0.30 in all climate zones except Climate Zones 7 and 8 where it is 0.34. This measure is included in Climate Zone 16 only.
Cool Roof: Install a roofing product that’s rated by the Cool Roof Rating Council to have an aged solar reflectance (ASR) equal to or greater than 0.70. Low-sloped roofs were assumed in all cases. The 2022 Title 24 specifies a prescriptive ASR of 0.63 for Climate Zones 9 through 11 and 13 through 15. This measure is included in Climate Zones 9 through 15.
Low Pressure Drop Ducts: Upgrade the duct distribution system to reduce external static pressure and meet a maximum fan efficacy of 0.35 Watts per cfm. This may involve upsizing ductwork, reducing the total effective length of ducts, and/or selecting low pressure drop components such as filters. Fan watt draw must be verified by a HERS rater according to the procedures outlined in the 2022 Reference Appendices RA3.3 (California Energy Commission, 2022b). This measure is included in Climate Zones 1 and 10 through 16.
Verified Low Leakage Ducts in Conditioned Space: Seal the ducts to achieve a measured leakage no greater than 25 cfm leakage to outside. This may be verified using a guarded blower door test to isolate leakage to outside.
Alternatively, this can also be satisfied by demonstrating that total leakage is not greater than 25 cfm. Ducts are assumed to already be located in conditioned space in the baseline. This measure is included in all climate zones.
Solar PV: Installation of on-site PV is required in the 2022 residential code unless an exception is met. The PV sizing methodology in each package was developed to offset annual building electricity use and avoid oversizing which would violate net energy metering (NEM) rules.6 In all cases, PV is evaluated in CBECC according to the California Flexible Installation (CFI) assumptions. This measure is included in all climate zones.
Battery Energy Storage: A battery system was evaluated in CBECC-Res with control type set to “Time-of-Use” and with default efficiencies of 95% for both charging and discharging. This control option assumes the battery system will 6 NEM rules apply to the IOU territories only.
406
Cost-Effectiveness Analysis: Multifamily New Construction Prototypes, Measure Packages, and Costs
12 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 charge or discharge based on a utility tariff time-of use signal. To qualify, the battery system must meet the requirements outlined in the 2022 Reference Appendices JA12.2.3.2 (California Energy Commission, 2022b). This measure is included in all climate zones but only for the 3-story prototype. A 100kWh battery was applied following the battery sizing requirements for multifamily buildings more than three habitable stories per Equation 170.2-E of the 2022 Energy Code.
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Cost-Effectiveness Analysis: Multifamily New Construction Prototypes, Measure Packages, and Costs
13 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 5. Incremental Cost Assumptions
Measure
Performance
Level
Incremental Cost per
Dwelling Unit
(2023 PV$)
3-Story 5-Story Source & Notes
Non-Preempted Measures
Window U-factor 0.24 vs 0.30 $536 $489 $4.23/ft2 of window area based on analysis conducted for the 2019 and 2022 Title 24 cycles (Statewide CASE Team, 2018).
Low-Sloped Cool
Roof Aged Solar
Reflectance
0.63 vs 0.10 $314 $222
$0.525/ft2 of roof area first incremental cost based on the 2022 Residential Additions and Alterations CASE Report (Statewide CASE Team, 2020b).Total costs assume present value of replacement at year 15.
0.70 vs 0.63 $24 $17
$0.04/ft2 of roof area first incremental cost based on the 2022 Nonresidential High Performance Envelope CASE Report (Statewide CASE Team, 2020a). Costs assume a blended average across roofing product types. Total costs assume present value of replacement at year 15.
Low Pressure
Drop Ducts
0.35 vs 0.45
W/cfm $44 $44
Costs assume half-hour labor per multifamily dwelling unit. Labor rate of $88 per hour is from 2022 RS Means for sheet metal workers and includes a weighted average City Cost Index for labor for California.
Verified Low
Leakage Ducts in
Conditioned
Space
≤25 cfm leakage
to outside $132 $132
Costs assume half-hour labor per multifamily dwelling unit and a $100 HERS Rater fee.
Labor rate of $88 per hour is from 2022 RS Means for sheet metal workers and includes a weighted average City Cost Index for labor for California. Ducts are already assumed to be located in conditioned space and the incremental costs reflect additional sealing and testing only.
PV + Battery
PV System
First Cost $1.47/W $1.47/W
First costs from LBNL’s Tracking the Sun 2022 costs (Barbose, Darghouth, O'Shaughnessy, & Forrester, 2022) and represent median costs in California in 2021 of $2.10/WDC for nonresidential greater than 100kWDC systems. The first cost was reduced by the solar energy Investment Tax Credit (ITC) of 30%.1 Costs are presented as the average of 2023, 2024, and 2025.
Inverter replacement cost of $0.14/WDC present value includes replacements at year 11 at $0.15/WDC (nominal) and at year 21 at $0.12/WDC (nominal) per the 2019 PV CASE Report (California Energy Commission, 2017).
System maintenance costs of $0.31/WDC present value assume $0.02/WDC (nominal) annually per the 2019 PV CASE Report (California Energy Commission, 2017).
Inverter
replacement $0.14/W $0.14/W
Maintenance $0.31/W $0.31/W
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Cost-Effectiveness Analysis: Multifamily New Construction Prototypes, Measure Packages, and Costs
14 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Measure
Performance
Level
Incremental Cost per
Dwelling Unit
(2023 PV$)
3-Story 5-Story Source & Notes
Battery
First cost $700/kWh n/a
First cost of $1,000/kWh from LBNL’s Tracking the Sun 2022 costs (Barbose, Darghouth, O'Shaughnessy, & Forrester, 2022) for residential systems > 30kWh. The report derived costs from California’s Self-Generation Incentive Program (SGIP) residential participant cost data. First cost is reduced by the solar energy ITC of 30%.1 No SGIP incentives are included.
Costs are assumed to remain consistent at $1,000/kWh through 2025 and then reduced by 7% annually based on SDG&E’s Behind-the-Meter Battery Market Study (E-Source companies, 2020) over a 10 year period. Replacement is assumed at years 10 and 20. At year 10 the replacement cost is based on the average of expected 2033, 2034, and 2035 costs after applying the ITC for a future value cost of $435. Replacement cost at year 20 is based on a future value cost of $484 and does not include any ITC reduction.
Replacement
cost $564/kWh n/a
1As part of the Inflation Reduction Act in August 2022 the Section 25D Investment Tax Credit was extended and raised to 30% through 2032 with a step-down to 26% in 2033 and 22% in 2034. It’s assumed that the ITC is not renewed and is 0% starting in 2035. https://www.irs.gov/pub/taxpros/fs-2022-40.pdf. 409
Cost-Effectiveness Analysis: Single Family New Construction 15 Prototypes, Measure Packages, and Costs
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20
3.2.2 All-Electric
This analysis compared a code compliant mixed fuel prototype, which uses natural gas for water heating only in most climate zones, with a code compliant all-electric prototype. In these cases, the relative costs between natural gas and electric appliances and natural gas infrastructure and the associated infrastructure costs for not providing natural gas to the building were included.
To estimate costs the Reach Codes Team leveraged costs from the 2022 Multifamily All-Electric CASE Report (Statewide CASE Team, 2020c) and the 2019 reach code multifamily cost-effectiveness studies ( (Statewide Reach Codes Team, 2020), (Statewide Reach Codes Team, 2021)), and online equipment research. Present value replacement costs are included in the total lifetime incremental costs.
3.2.2.1 Water Heating
Federal regulations establish minimum efficiency requirements for heat pump water heaters with rated storage volume less than 120 gallons. While some heat pump water heaters falling into this regulated category can be used in a central water heater design, they are not required and therefore this measure does not trigger federal preemption and heat pump equipment of any efficiency level may be used for this analysis to justify the basis of a reach code.
For the central heat pump water heating system in the 3-story prototype the system design was based on the 2022 AllElectric Multifamily CASE Report (Statewide CASE Team, 2020c) and used CO2 refrigerant based heat pump water heaters (four Sanden GS3-45HPA-US units), 525 gallons of storage, and a 250 gallon electric resistance swing tank.
The 2022 CASE work based the 5-story system design on Colmac R-134a refrigerant heat pump water heaters. While this is an acceptable design, R-134a or R-410a refrigerant heat pump water heaters were found to be less costeffective for the prototypes evaluated in this analysis due to higher incremental costs and lower overall performance relative to CO2 refrigerant products. As such, the Reach Codes Team evaluated a CO2 refrigerant system for the 5- story prototype for this analysis. As part of the 2025 Energy Code update cycle, designs for both multifamily prototypes are being reexamined using CO2 refrigerant heat pump water heaters. While full design and cost information was not yet available for this analysis, preliminary design data was used to inform sizing of a Sanden system for this prototype.
The system used 10 heat pump water heaters (Sanden GS3-45HPA-US units), 800 gallons of storage, and a 200 gallon electric resistance swing tank.
Table 6 reports costs for the central heat pump water heating systems relative to a gas boiler system with solar thermal that meets the prescriptive requirements of 20% solar fraction in Climate Zones 1 through 9 and 35% solar fraction in Climate Zones 10 through 16. Costs include equipment and labor, gas piping within the building for the boiler system, and additional electrical service necessary for the heat pump system. Replacement costs are based on an effective useful life of 15 years for the water heaters and tanks, and 20 years for the solar thermal collectors. For the solar thermal systems, it’s also assumed that the glycol is replaced at years 9, 18 and 27. Additional details on cost assumptions are presented in Appendix 7.3 Cost Details. 410
Cost-Effectiveness Analysis: Single Family New Construction 16 Prototypes, Measure Packages, and Costs
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 6. Heat Pump Water Heater Incremental System Costs (Present Value (2023$)) Item
3-Story 5-Story
Source & Notes Central
Gas
Boiler
Central
Heat
Pump
Central
Gas
Boiler
Central
Heat
Pump
First Cost CZs 1-9 $173,772
$211,531
$279,163
$343,920
3-story costs directly from 2022
Multifamily All-Electric CASE
Report. 5-story costs estimated
based on component costs for
the 3-story from the CASE
report.
CZs 10-16 $182,810 $300,883
Replacement Cost CZs 1-9 $32,297
$44,263
$59,930
$110,659
CZs 10-16 $36,943 $69,361
Total Incremental
Cost
CZs 1-9
n/a
$49,725
n/a
$115,486
CZs 10-16 $36,041 $84,335
Incremental Cost
per Dwelling Unit
CZs 1-9 $1,381 $1,312
CZs 10-16 $1,001 $958
3.2.2.2 Space Heating
Table 7 presents the costs for heat pump space heater conversion from gas equipment. In most climate zones the baseline per the 2022 Energy Code is a heat pump space heater, so these costs are only applied in a couple of instances. For the 3-story prototype the baseline in Climate Zone 16 is a gas furnace and air conditioner. For the 5- story prototype the baseline in Climate Zones 1 and 16 is a dual fuel heat pump with a gas furnace as backup. Costs include equipment and labor, gas piping within the building for the boiler system, and additional electrical service necessary for the heat pump system. Most of the cost difference between the two systems is attributed to higher labor costs to install the gas system as a result of gas piping and venting. Additional details on cost assumptions are presented in Appendix 7.3 Cost Details.
Table 7. Heat Pump Space Heater Costs per Dwelling Unit (Present Value (2023$) Item
3-Story 5-Story
Furnace + Source & Notes
Split AC
Heat
Pump
Furnace +
Split HP
Heat
Pump
First Cost
$20,667 $16,776 $21,245 $16,597
Costs largely based on the 2022
Multifamily All-Electric CASE Report with
some updates to reflect online equipment
cost research and labor cost alignments.
Replacement Cost $8,059 $7,326 $9,052 $7,326 See lifetimes referenced in Table 8.
Residual value at the end of the 30-year
analysis period was accounted for to
represent the remaining life of any
Residual Value ($1,591) $0 $0 $0 equipment.
Total $27,135 $24,102 $30,296 $23,924
Incremental Cost ($3,032) ($6,373)
Equipment lifetimes applied in this analysis for the space conditioning measures are summarized in Table 8. The lifetime for the heat pump, furnace, and air conditioner are based on the Database for Energy Efficient Resources (DEER) (California Public Utilities Commission, 2021b). In DEER, heat pump and air conditioner measures are assigned an effective useful lifetime (EUL) of 15 years and a furnace an EUL of 20 years. The heating and cooling system components are typically replaced at the same time when one reaches the end of its life and the other is near 411
Cost-Effectiveness Analysis: Single Family New Construction 17 Prototypes, Measure Packages, and Costs
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 it. Therefore, it is assumed that both the furnace and air conditioner are replaced at the same time at year 17.5, halfway between 15 and 20 years. For HVAC system costing, air-conditioning is included in all cases in both the base case and proposed models.
Table 8. Lifetime of Water Heating & Space Conditioning Equipment Measures Measure Lifetime
Gas Furnace 17.5
Air Conditioner 17.5
Heat Pump 15
Dual Fuel Heat Pump 15
3.2.2.3 Natural Gas Infrastructure
Eliminating natural gas to a building saves costs associated with connecting a service line from the street main to the building, piping distribution within the building, and monthly meter customer charges from the utility. This section focuses on the first item, not connecting gas service to the building. The latter two are captured in the appliance costs and the utility bill analysis. Cost savings for removing natural gas infrastructure to a multifamily building in IOU territory are presented in Table 9 and Table 10. These costs are applied as cost savings for the all-electric case when compared to the mixed fuel baseline.
These costs are project dependent and may be significantly impacted by such factors as utility territory, site characteristics, distance to the nearest natural gas main and main location, joint trenching, whether work is conducted by the utility or a private contractor, and number of dwelling units per development. All gas utilities participating in this study were solicited for cost information.
Service Extension: Service extension costs to the building were taken from a PG&E memo dated December 5, 2019 to Energy Commission staff (see Appendix 7.4 PG&E Gas Infrastructure Cost Memo for a copy of the memo). The estimated cost of $6,750 excludes costs for trenching and assumes nonresidential new construction within a developed area. For the 5-story building the cost is apportioned between the residential and nonresidential spaces in the building based on associated conditioned floor areas where 84 percent is residential. All of the spaces in the 3-story building are residential based.
Today, total costs are reduced to account for deductions per the Utility Gas Main Extensions rules.7 These rules categorize distribution line extensions as “refundable” costs, which are offset or subsidized by all other ratepayers. The CPUC issued a Decision in September 2022 that eliminates the subsidies effective July 1, 2023 (California Public Utilities Commission, 2022). Since most of the development that will occur during the three-year 2022 code cycle (2023-2025) will not be subject to these deduction allowances they are not included in this analysis.
Meter: Cost per meter provided by PG&E of $3,600 for a commercial meter to serve the central water heating and $600 per multifamily dwelling unit. The $600 dwelling unit meter is only applied in Climate Zone 16 for the 3-story prototype and Climate Zones 1 and 16 for the 5-story prototypes where gas is used either for primary or backup space heating. Two scenarios are presented in the tables. One is the case with electric space heating, no in-unit gas and the only residential gas use is to serve the central water heating system. The other case represents the scenario where there is in-unit gas to service space heating.
7 PG&E Rule 15: https://www.pge.com/tariffs/assets/pdf/tariffbook/GAS_RULES_15.pdf.
SoCalGas Rule 20: https://www.socalgas.com/regulatory/tariffs/tm2/pdf/20.pdf.
SDG&E Rule 15: https://tariff.sdge.com/tm2/pdf/GAS_GAS-RULES_GRULE15.pdf. 412
Cost-Effectiveness Analysis: Single Family New Construction 18 Prototypes, Measure Packages, and Costs
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Natural Gas Plan Review: Total costs are based on TRC’s 2019 reach code analysis for Palo Alto (TRC, 2018 ). The cost for the 5-story prototype is apportioned between the residential and nonresidential spaces in the building in the same way as was done for the service extension costs.
Table 9. IOU Natural Gas Infrastructure Cost Savings for All-Electric Building Item 3-Story 5-Story
Service Extension $6,750 $5,695
Meter
No In-Unit Gas
(Gas DHW only) $3,600 $3,600
In-Unit Gas $25,200 $56,400
Plan Review $2,316 $1,954
Table 10. Multifamily IOU Total Natural Gas Infrastructure Costs Prototype Scenario Total
Building
Per Dwelling
Unit
3-Story
No In-Unit Gas $12,666 $352
In-Unit Gas $34,266 $952
5-Story
No In-Unit Gas $11,248 $128
In-Unit Gas $64,048 $728
CPAU provides gas service to its customers and therefore separate costs were evaluated based on CPAU gas service connection fees.8 Table 11 presents the breakdown of gas infrastructure costs used in this analysis for CPAU. The same approach to apportioning the total building costs to the residential spaces as described in the IOU section was applied here for the service extension and plan review costs for the 5-story prototype. Meter costs were based on $1,772 for an 800 cubic foot per hour commercial meter for the central water heating system.
Table 11. Multifamily CPAU Total Natural Gas Infrastructure Costs Item 3-Story 5-Story
Service Extension $5,892 $4,971
Meter $1,772 $1,772
Plan Review $2,557 $2,157
3.3 Measure Packages
The Reach Codes Team evaluated three packages for mixed fuel homes and five packages for all-electric homes for each prototype and climate zone, as described below.
1. All-Electric Prescriptive Code: This package meets all the prescriptive requirements of the 2022 Energy Code.
2. All-Electric Prescriptive Code + PV: Using the code minimum package as a starting point, PV capacity was added to offset 100 percent of the estimated annual electricity use.
3. Mixed Fuel Efficiency Only: This package uses only efficiency measures that do not trigger federal preemption including envelope and duct distribution efficiency measures. 8 CPAU Schedule G-5 effective 09-01-2019: https://www.cityofpaloalto.org/files/assets/public/utilities/utilitiesengineering/general-specifications/gas-service-connection-fees.pdf 413
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4. Mixed Fuel Efficiency + PV + Battery: Using the Efficiency Package as a starting point, PV capacity was added to offset 100 percent of the estimated annual electricity use. A battery system was also added. This package only applies to the 3-story prototype. The 5-story prototype includes a battery system in the baseline per the 2022 prescriptive requirements.
5. Mixed Fuel Efficiency + PV: Using the Efficiency Package as a starting point, PV capacity was added to offset 100 percent of the estimated annual electricity use. This package only applies to the 5-story prototype. 414
Cost-Effectiveness Analysis: Single Family New Construction 20 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 4 Results
Cost-effectiveness results are presented per prototype and measure packages described in Section 3.3. The TDV and On-Bill based cost-effectiveness results are presented in terms of B/C ratio and NPV. Energy savings, compliance margin, utility bill savings, and incremental costs are also shown.
In the following figures, green highlighting indicates that the case is cost-effective with a B/C ratio greater than or equal to 1 and a NPV greater than or equal to 0. Red highlighting indicates the case is not cost-effective.
Compliance margins are presented as percentages both for the efficiency TDV and the source energy metrics. A compliance margin that is equal to or greater than 0 indicates the case is code compliant.
4.1 All-Electric Prescriptive Code
Table 12 and Table 13 shows results for the multifamily all-electric prescriptive code case compared to the 2022 baseline. For both prototypes this scenario is cost-effective based on TDV in all climate zones. This scenario is only On-Bill cost-effective in a few climate zones. The 3-story all-electric case is cost-effective On-Bill in Climate Zones 1 through 3, 4 in CPAU territory, 12 in SMUD territory, and 16. The 5-story all-electric case is cost-effective On-Bill in Climate Zones 1, 4, 12 in SMUD territory, and 16.
In most cases there is a small net increase in utility cost in the first year.
There is an incremental cost for the central heat pump water heater ranging from $361 to $697 per dwelling unit.
The all-electric packages applied to the 3-story prototype in Climate Zone 16 and the 5-story prototype in Climate Zones 1 and 16 incorporate both gas to electric water heating and gas to electric space heating measures. In these cases, there are significant cost savings due to the avoided first costs of installing a gas furnace as compared to a heat pump. As a result, these cases are On-Bill cost-effective.
These results reflect a CO2 refrigerant based central heat pump water heating system. The 5-story prototype was also evaluated with a R-134a refrigerant based central heat pump water heater and these results are shown in Appendix
7.5 Central Heat Pump Water Heater Comparison.
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Cost-Effectiveness Analysis: Single Family New Construction 21 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 12. 3-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric Prescriptive Code Climate
Zone
Electric
/Gas Utility
Efficiency
TDV
Comp
Margin
Source
Comp
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 26% 15% -904 135 ($19) $1,676 $97 $429 3.9 $1,247 >1 $4,158 CZ02 PGE 20% 11% -801 115 ($30) $1,061 $697 $1,029 1.0 $32 9.9 $2,998 CZ03 PGE 21% 10% -789 115 ($26) $1,148 $697 $1,029 1.1 $119 9.9 $2,990 CZ04 PGE 18% 9% -759 109 ($31) $922 $697 $1,029 0.9 ($108) 9.2 $2,767 CZ04 CPAU 18% 9% -759 109 $233 $8,191 $765 $1,097 7.5 $7,094 7.7 $2,700 CZ05 PGE 23% 9% -789 112 ($30) $1,009 $697 $1,029 0.98 ($21) 9.3 $2,782 CZ05 PGE/SCG 23% 9% -789 112 ($79) ($515) $697 $1,029 0.0 ($1,545) 9.3 $2,782 CZ06 SCE/SCG 18% 7% -709 100 ($61) ($226) $697 $1,029 0.0 ($1,255) 8.6 $2,551 CZ07 SDGE 20% 8% -704 102 ($69) ($427) $697 $1,029 0.0 ($1,456) 9.1 $2,712 CZ08 SCE/SCG 13% 6% -689 96 ($61) ($302) $697 $1,029 0.0 ($1,331) 8.2 $2,432 CZ09 SCE 13% 5% -698 96 ($64) ($351) $697 $1,029 0.0 ($1,380) 8.0 $2,363 CZ10 SCE/SCG 14% 7% -701 83 ($88) ($1,109) $446 $649 0.0 ($1,758) >1 $1,959 CZ10 SDGE 14% 7% -701 83 ($112) ($1,803) $446 $649 0.0 ($2,452) >1 $1,959 CZ11 PGE 14% 10% -740 91 ($64) ($177) $446 $649 0.0 ($826) >1 $2,212 CZ12 PGE 17% 11% -755 94 ($62) ($70) $446 $649 0.0 ($719) >1 $2,297 CZ12 SMUD/PGE 17% 11% -755 94 $68 $2,942 $446 $649 4.5 $2,293 >1 $2,297 CZ13 PGE 13% 9% -717 86 ($65) ($291) $446 $649 0.0 ($940) >1 $2,050 CZ14 SCE/SCG 13% 7% -748 83 ($102) ($1,413) $446 $649 0.0 ($2,063) >1 $1,759 CZ14 SDGE 13% 7% -748 83 ($128) ($2,191) $446 $649 0.0 ($2,841) >1 $1,759 CZ15 SCE/SCG 5% 2% -607 64 ($89) ($1,403) $446 $649 0.0 ($2,053) >1 $1,305 CZ16 PG&E 24% 29% -1,928 185 ($178) ($1,066) ($4,045) ($2,983) 2.8 $1,917 >1 $4,352 416
Cost-Effectiveness Analysis: Single Family New Construction 22 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 13. 5-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric Prescriptive Code Climate
Zone
Electric
/Gas Utility
Efficiency
TDV
Comp
Margin
Source
Comp
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 14% 9% -1,146 147 ($49) $1,209 ($4,639) ($5,788) >1 $6,998 >1 $9,816 CZ02 PGE 9% 6% -888 120 ($45) $809 $608 $1,185 0.7 ($375) 3.0 $2,270 CZ03 PGE 11% 7% -874 120 ($46) $778 $608 $1,185 0.7 ($407) 3.1 $2,421 CZ04 PGE 9% 6% -824 113 $18 $2,130 $608 $1,185 1.8 $945 3.1 $2,393 CZ04 CPAU 9% 6% -824 113 $230 $8,205 $635 $1,211 6.8 $6,994 3.0 $2,367 CZ05 PGE 12% 6% -871 117 ($47) $706 $608 $1,185 0.6 ($479) 2.8 $2,065 CZ05 PGE/SCG 12% 6% -871 117 ($99) ($919) $608 $1,185 0.0 ($2,103) 2.8 $2,065 CZ06 SCE/SCG 9% 5% -739 104 ($10) $986 $608 $1,185 0.8 ($199) 2.9 $2,183 CZ07 SDGE 11% 6% -735 106 ($74) ($500) $608 $1,185 0.0 ($1,685) 2.9 $2,215 CZ08 SCE/SCG 8% 4% -710 100 ($79) ($644) $608 $1,185 0.0 ($1,829) 3.0 $2,259 CZ09 SCE 7% 4% -725 100 ($53) ($51) $608 $1,185 0.0 ($1,236) 3.0 $2,274 CZ10 SCE/SCG 7% 4% -729 84 ($111) ($1,615) $361 $831 0.0 ($2,445) 2.7 $1,374 CZ10 SDGE 7% 4% -729 84 ($137) ($2,404) $361 $831 0.0 ($3,234) 2.7 $1,374 CZ11 PGE 8% 5% -790 92 ($86) ($663) $361 $831 0.0 ($1,494) 3.1 $1,656 CZ12 PGE 9% 6% -809 96 ($83) ($527) $361 $831 0.0 ($1,358) 3.0 $1,620 CZ12 SMUD/PGE 9% 6% -809 96 $62 $2,831 $361 $831 3.4 $2,000 3.0 $1,620 CZ13 PGE 7% 5% -754 88 ($83) ($686) $361 $831 0.0 ($1,517) 3.0 $1,570 CZ14 SCE/SCG 6% 3% -803 84 ($131) ($2,085) $361 $831 0.0 ($2,916) 2.2 $928 CZ14 SDGE 6% 3% -803 84 ($165) ($3,106) $361 $831 0.0 ($3,937) 2.2 $928 CZ15 SCE/SCG 3% 1% -602 65 ($105) ($1,775) $361 $831 0.0 ($2,606) 1.9 $695 CZ16 PG&E 9% 11% -1,388 142 ($127) ($675) ($4,886) ($6,142) 9.1 $5,467 >1 $6,704 417
Cost-Effectiveness Analysis: Single Family New Construction 23 Results
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4.2 All-Electric Plus PV
Table 14 and Table 15 present cost-effectiveness results for the all-electric plus PV packages for the 3-story and 5-story prototypes, respectively. All cases are cost-effective both On-Bill and based on TDV.
Table 14. 3-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric 100% PV Climate
Zone
Electric
/Gas Utility
Efficiency
TDV
Comp
Margin
Source
Comp
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 26% 24% 2,127 135 $782 $20,242 $3,638 $5,034 4.0 $15,208 3.2 $9,448 CZ02 PGE 20% 20% 1,835 115 $653 $16,910 $3,294 $4,406 3.8 $12,504 3.3 $8,632 CZ03 PGE 21% 20% 1,711 115 $614 $15,998 $3,076 $4,123 3.9 $11,875 3.4 $8,209 CZ04 PGE 18% 18% 1,558 109 $559 $14,587 $2,841 $3,818 3.8 $10,770 3.6 $8,230 CZ04 CPAU 18% 18% 1,558 109 $489 $14,138 $2,909 $3,886 3.6 $10,253 3.6 $8,162 CZ05 PGE 23% 20% 1,604 112 $579 $15,137 $2,826 $3,798 4.0 $11,338 3.6 $8,026 CZ05 PGE/SCG 23% 20% 1,604 112 $531 $13,613 $2,826 $3,798 3.6 $9,814 3.6 $8,026 CZ06 SCE/SCG 18% 17% 1,207 100 $378 $9,795 $2,364 $3,197 3.1 $6,598 3.8 $7,092 CZ07 SDGE 20% 21% 1,528 102 $723 $19,318 $2,777 $3,734 5.2 $15,584 3.5 $7,623 CZ08 SCE/SCG 13% 17% 1,393 96 $426 $10,842 $2,569 $3,464 3.1 $7,378 3.9 $7,908 CZ09 SCE 13% 15% 1,204 96 $379 $9,756 $2,335 $3,160 3.1 $6,596 3.9 $7,158 CZ10 SCE/SCG 14% 18% 1,381 83 $404 $10,130 $2,237 $2,978 3.4 $7,152 4.1 $7,031 CZ10 SDGE 14% 18% 1,381 83 $621 $16,493 $2,237 $2,978 5.5 $13,514 4.1 $7,031 CZ11 PGE 14% 19% 1,843 91 $625 $15,782 $2,940 $3,893 4.1 $11,889 3.4 $7,748 CZ12 PGE 17% 19% 1,704 94 $579 $14,777 $2,756 $3,654 4.0 $11,124 3.6 $7,607 CZ12 SMUD/PGE 17% 19% 1,704 94 $399 $10,615 $2,756 $3,654 2.9 $6,961 3.6 $7,607 CZ13 PGE 13% 17% 1,572 86 $544 $13,822 $2,567 $3,408 4.1 $10,415 3.6 $7,148 CZ14 SCE/SCG 13% 18% 1,572 83 $449 $11,152 $2,300 $3,060 3.6 $8,092 4.2 $7,668 CZ14 SDGE 13% 18% 1,572 83 $688 $18,158 $2,300 $3,060 5.9 $15,098 4.2 $7,668 CZ15 SCE/SCG 5% 11% 1,163 64 $330 $8,164 $1,966 $2,626 3.1 $5,539 3.9 $5,567 CZ16 PG&E 24% 38% 1,371 185 $700 $19,307 ($1,064) $894 21.6 $18,412 58.9 $11,596 418
Cost-Effectiveness Analysis: Single Family New Construction 24 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 15. 5-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric 100% PV Climate
Zone
Electric
/Gas Utility
Efficiency
TDV
Comp
Margin
Source
Comp
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 14% 21% 1,437 147 $629 $16,919 ($1,574) ($1,803) >1 $18,721 >1 $18,222 CZ02 PGE 9% 14% 428 120 $262 $7,918 $1,930 $2,904 2.7 $5,015 4.0 $8,679 CZ03 PGE 11% 16% 682 120 $327 $9,417 $2,121 $3,152 3.0 $6,265 4.0 $9,285 CZ04 PGE 9% 13% 92 113 $207 $6,524 $1,476 $2,313 2.8 $4,211 4.1 $7,054 CZ04 CPAU 9% 13% 92 113 $337 $10,667 $1,502 $2,340 4.6 $8,327 4.0 $7,027 CZ05 PGE 12% 16% 451 117 $259 $7,806 $1,815 $2,754 2.8 $5,052 4.0 $8,096 CZ05 PGE/SCG 12% 16% 451 117 $207 $6,182 $1,815 $2,754 2.2 $3,427 4.0 $8,096 CZ06 SCE/SCG 9% 12% -163 104 $98 $3,449 $1,127 $1,859 1.9 $1,590 3.8 $5,035 CZ07 SDGE 11% 15% 74 106 $192 $6,131 $1,387 $2,198 2.8 $3,934 3.9 $6,204 CZ08 SCE/SCG 8% 14% 265 100 $154 $4,666 $1,516 $2,365 2.0 $2,301 4.0 $7,053 CZ09 SCE 7% 12% 60 100 $122 $3,930 $1,307 $2,093 1.9 $1,837 3.7 $5,636 CZ10 SCE/SCG 7% 13% 289 84 $131 $3,912 $1,266 $2,007 1.9 $1,905 3.9 $5,749 CZ10 SDGE 7% 13% 289 84 $238 $6,951 $1,266 $2,007 3.5 $4,945 3.9 $5,749 CZ11 PGE 8% 17% 1,091 92 $417 $10,990 $2,226 $3,256 3.4 $7,734 4.2 $10,472 CZ12 PGE 9% 16% 594 96 $263 $7,487 $1,712 $2,587 2.9 $4,901 4.3 $8,544 CZ12 SMUD/PGE 9% 16% 594 96 $260 $7,419 $1,712 $2,587 2.9 $4,889 4.3 $8,544 CZ13 PGE 7% 17% 1,036 88 $398 $10,479 $2,064 $3,045 3.4 $7,434 4.2 $9,715 CZ14 SCE/SCG 6% 11% 182 84 $102 $3,250 $1,170 $1,883 1.7 $1,368 4.0 $5,515 CZ14 SDGE 6% 11% 182 84 $194 $5,858 $1,170 $1,883 3.1 $3,975 4.0 $5,515 CZ15 SCE/SCG 3% 10% 387 65 $153 $4,119 $1,238 $1,971 2.1 $2,148 3.6 $4,998 CZ16 PG&E 9% 23% 1,007 142 $501 $13,864 ($2,682) ($3,275) >1 $17,139 >1 $16,140 419
Cost-Effectiveness Analysis: Single Family New Construction 25 Results
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