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A. For development activities proposed to be located in a floodway, a floodway encroachment analysis that demonstrates that the encroachment of the proposed development will not cause any increase in base flood elevations; where the applicant proposes to undertake development activities that do increase base flood elevations, the applicant shall submit such analysis to FEMA as specified in Section
12.40.290 of these regulations and shall submit the conditional letter of map revision, when issued by FEMA, with the site plan and construction documents.
B. For development activities proposed to be located in a riverine flood hazard area where base flood elevations are included in the flood insurance study or on the FIRM but floodways have not been designated, hydrologic and hydraulic analyses that demonstrate that the cumulative effect of the proposed development, when combined with all other existing and anticipated flood hazard area encroachments, will not increase the base flood elevation more than one foot at any point within the community. This requirement does not apply in isolated flood hazard areas not connected to a riverine flood hazard area or in flood hazard areas identified as Zone AO or Zone AH.
C. For alteration of a watercourse, an engineering analysis prepared in accordance with standard engineering practices that demonstrates the flood-carrying capacity of the altered or relocated portion of the watercourse will not be decreased, and certification that the altered watercourse shall be maintained in a manner which preserves the channel's flood-carrying capacity. The applicant shall submit the analysis to FEMA as specified in Section 12.40.290 of these regulations. The applicant shall notify the chief executive officer of adjacent communities and the California Department of Water Resources. The floodplain administrator shall maintain a copy of the notification in the permit records and shall submit a copy to FEMA.
12.40.290 Submission of additional data.
When additional hydrologic, hydraulic or other engineering data, studies, and additional analyses are submitted to support an application, the applicant has the right to seek a letter of map change from FEMA to change the base flood elevations, change floodway boundaries, or change boundaries of flood hazard areas shown on FIRMs, and to submit such data to FEMA for such purposes. The analyses shall be prepared by a qualified CA Licensed Civil Engineer in a format required by FEMA. Submittal requirements and processing fees shall be the responsibility of the applicant. Provided FEMA issues a conditional letter of map revision, construction of proposed flood control projects and land preparation for development are permitted, including clearing, excavation, grading, and
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filling. Permits for construction of buildings shall not be issued until the applicant satisfies the FEMA requirements for issuance of a letter of map revision.
Article 6. Inspections
12.40.300 Inspections, in general.
Development for which a permit for floodplain development is required shall be subject to inspection. Approval as a result of an inspection shall not be construed to be an approval of a violation of the provisions of these regulations or the building code. Inspections presuming to give authority to violate or cancel the provisions of these regulations or the building code or other ordinances shall not be valid.
12.40.310 Inspections of development other than buildings and structures.
The floodplain administrator shall make or cause to be made, inspections of all development other than buildings and structures that is authorized by issuance of a permit for floodplain development under these regulations. The floodplain administrator shall inspect flood hazard areas from time to time to determine when development is undertaken without issuance of a permit.
12.40.320 Inspections of manufactured homes installations.
The floodplain administrator shall make or cause to be made, inspections of installation and replacement of manufactured homes in flood hazard areas authorized by issuance of a permit for floodplain development under these regulations. Upon installation of a manufactured home and receipt of the elevation certification required in Section 12.40.580 of these regulations the floodplain administrator shall inspect the installation or have the installation inspected.
12.40.330 Buildings and structures.
The building official shall make or cause to be made, inspections for buildings and structures in flood hazard areas authorized by permit, in accordance with the building code:
A. Lowest floor elevation. Upon placement of the lowest floor, including the basement, and prior to further vertical construction, certification of the elevation required in the building code shall be prepared by a CA Licensed Land Surveyor or Civil Engineer and submitted to the building official.
B. Final inspection. Prior to the final inspection, certification of the elevation required in the building code shall be prepared by a CA Licensed Land Surveyor or Civil Engineer and submitted to the building official.
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Article 7. Variances
12.40.340 Nature of variances.
The considerations and conditions for variances set forth in this article are based on the general principle of zoning law that variances pertain to a piece of property and are not personal in nature. A variance may be issued for a parcel of property with physical characteristics so unusual that complying with the requirements of these regulations would create an exceptional hardship to the applicant or the surrounding property owners. The characteristics must be unique to the property and not be shared by adjacent parcels. The unique characteristic must pertain to the land itself, not to the structure, its inhabitants, or the property owners. The issuance of a variance is for floodplain management purposes only. Federal flood insurance premium rates are determined by the National Flood Insurance Program according to actuarial risk and will not be modified by the granting of a variance.
It is the duty of the City of Los Altos to promote public health, safety and welfare and minimize losses from flooding. This duty is so compelling and the implications of property damage and the cost of insuring a structure built below flood level are so serious that variances from the elevation or other requirements in the building codes should be quite rare. The long term goal of preventing and reducing flood loss and damage, and minimizing recovery costs, inconvenience, danger, and suffering, can only be met when variances are strictly limited. Therefore, the variance requirements in these regulations are detailed and contain multiple provisions that must be met before a variance can be properly issued. The criteria are designed to screen out those situations in which alternatives other than a variance are more appropriate.
12.40.350 Variances; general.
The city manager shall hear and decide requests for variances from the strict application of these regulations.
12.40.360 Limitations on authority.
The city manager shall base its determination on technical justifications submitted by applicants, the considerations and conditions set forth in this article, the comments and recommendations of the floodplain administrator and building official, as applicable, and has the right to attach such conditions to variances as it deems necessary to further the purposes and objectives of these regulations and the building code.
12.40.370 Records.
The floodplain administrator shall maintain a permanent record of all variance actions, including justification for issuance.
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12.40.380 Historic structures.
A variance is authorized to be issued for the repair, improvement, or rehabilitation of a historic structure upon a determination that the proposed repair, improvement, or rehabilitation will not preclude the structure's continued designation as a historic structure, and the variance is the minimum necessary to preserve the historic character and design of the structure. When the proposed work precludes the structure's continued designation as a historic building, a variance shall not be granted and the structure and any repair, improvement, and rehabilitation shall be subject to the requirements of the building code.
12.40.390 Restrictions in floodways.
A variance shall not be issued for any proposed development in a floodway when any increase in flood levels would result during the base flood discharge, as evidenced by the applicable analyses required in Section 12.40.280.A of these regulations.
12.40.400 Functionally dependent uses.
A variance is authorized to be issued for the construction or substantial improvement necessary for the conduct of a functionally dependent use provided the criteria in Section 1612 of the building code (CCR Title 24 Part 2) or Section R322 of the residential code (CCR Title 24 Part 2.5) are met, as applicable, and the variance is the minimum necessary to allow the construction or substantial improvement, and that all due consideration has been given to use of methods and materials that minimize flood damages during the base flood and create no additional threats to public safety.
12.40.410 Considerations for issuance of variances.
In reviewing applications for variances, all technical evaluations, all relevant factors, all other requirements of these Regulations and the building code, as applicable, and the following shall be considered:
A. The danger that materials and debris may be swept onto other lands resulting in further injury or damage.
B. The danger to life and property due to flooding or erosion damage.
C. The susceptibility of the proposed development, including contents, to flood damage and the effect of such damage on current and future owners.
D. The importance of the services provided by the proposed development to the community.
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E. The availability of alternate locations for the proposed development that are not subject to flooding or erosion and the necessity of a waterfront location, where applicable.
F. The compatibility of the proposed development with existing and anticipated development.
G. The relationship of the proposed development to the comprehensive plan and floodplain management program for that area.
H. The safety of access to the property in times of flood for ordinary and emergency vehicles.
I. The expected heights, velocity, duration, rate of rise and debris and sediment transport of the floodwater and the effects of wave action, if applicable, expected at the site.
J. The costs of providing governmental services during and after flood conditions including maintenance and repair of public utilities and facilities such as sewer, gas, electrical and water systems, streets and bridges.
12.40.420 Conditions for issuance of variances.
Variances shall only be issued upon:
A. Submission by the applicant of a showing of good and sufficient cause that the unique characteristics of the size, configuration or topography of the site limit compliance with any provision of these regulations or renders the elevation standards of the building code inappropriate.
B. A determination that failure to grant the variance would result in exceptional hardship due to the physical characteristics of the land that render the lot undevelopable.
C. A determination that the granting of a variance will not result in increased flood heights, additional threats to public safety, extraordinary public expense, nor create nuisances, cause fraud on or victimization of the public or future property owners, or conflict with existing local laws or ordinances.
D. A determination that the variance is the minimum necessary, considering the flood hazard, to afford relief.
E. When the request is to allow construction of the lowest floor of a new building or substantial improvement of a building below the base flood elevation, notification to the applicant in writing over the signature of the floodplain administrator specifying the difference between the base flood elevation and the proposed elevation of the lowest floor, stating that issuance of a variance to construct below the elevation required in the building code will result in increased premium rates for federal flood insurance up to amounts as high as twenty-five dollars ($25.00) for one hundred
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dollars ($100.00) of insurance coverage, and that such construction below the required elevation increases risks to life and property.
F. Written agreement signed by the recipient of a variance to allow construction of the lowest floor below the required elevation to record the variance in the Office of the Santa Clara County Recorder in a manner so that it appears in the chain of title of the property.
Article 8. Violations
12.40.430 Violations.
Any development in any flood hazard area that is being performed without an issued permit or that is in conflict with an issued permit shall be deemed a violation. A building or structure without the documentation of the elevation of the lowest floor, other required design certifications, or other evidence of compliance required by these regulations or the building code, is presumed to be a violation until such time as required documentation is submitted.
Violation of the requirements shall constitute a misdemeanor.
12.40.440 Authority.
The floodplain administrator is authorized to serve notices of violation or stop work orders to owners of property involved, to the owner's agent, or to the person or persons doing the work for development that is not within the scope of the building codes, but is regulated by these regulations and that is determined to be a violation.
12.40.450 Unlawful continuance.
Any person who shall continue any work after having been served with a notice of violation or a stop work order, except such work as that person is directed to perform to remove or remedy a violation or unsafe condition, shall be subject to penalties as prescribed by law.
Article 9. Definitions
12.40.460 General.
The following words and terms shall, for the purposes of these regulations, have the meanings shown herein. Where terms are not defined in these regulations and are defined in the building code (CCR Title 24 Part 2) and used in the residential code (CCR Title 24 Part
2.5), such terms shall have the meanings ascribed to them in those codes. Where terms are not defined in these Regulations or the building code, such terms shall have ordinarily accepted meanings such as the context implies.
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12.40.470 Definitions.
"Accessory structure" means a structure on the same parcel of property as a principal structure and the use of which is incidental to the use of the principal structure. For floodplain management purposes, the term includes only accessory structures used for parking and storage.
"Agricultural structure" means a walled and roofed structure used exclusively for agricultural purposes or uses in connection with the production, harvesting, storage, raising, or drying of agricultural commodities and livestock, including aquatic organisms. Structures that house tools or equipment used in connection with these purposes or uses are also considered to have agricultural purposes or uses.
"Alteration of a watercourse" means a dam, impoundment, channel relocation, change in channel alignment, channelization, or change in cross-sectional area of the channel or the channel capacity, or any other form of modification which may alter, impede, retard or change the direction and/or velocity of the riverine flow of water during conditions of the base flood.
"ASCE 24" means the standard Flood Resistant Design and Construction, referenced by the building code, developed and published by the American Society of Civil Engineers, Reston, VA. Where cited, ASCE 24 refers to the edition of the standard that is referenced by the building code.
"Base flood" means the flood having a one-percent chance of being equaled or exceeded in any given year. [Also defined in CCR Title 24 Part 2.]
"Base flood elevation" means the elevation of the base flood, including wave height, relative to the National Geodetic Vertical Datum (NGVD), North American Vertical Datum (NAVD) or other datum specified on the flood insurance rate map (FIRM). [Also defined in CCR Title 24 Part 2.]
"Basement" means, for the purpose of floodplain management, the portion of a building having its floor subgrade (below ground level) on all sides. [Also defined in CCR Title 24 Part
2.]
"Building code" means California Code of Regulations Title 24, the California Building Standards Code, the family of building codes specifically adopted by the State of California and composed of:
1) Part 2, applicable to buildings and structures other than dwellings within the scope of this part.
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2) Part 2.5, applicable to one- and two-family dwellings and townhouses not more than three stories, and accessory structures.
3) Part 10, applicable to existing buildings (as defined in that code). 4) Other specified codes.
"Design flood" means the flood associated with the greater of the following two areas: [Also defined in CCR Title 24 Part 2.]
1) Area with a flood plain subject to a one-percent or greater chance of flooding in any year.
2) Area designated as a flood hazard area on a community's flood hazard map, or otherwise legally designated.
"Design flood elevation" means the elevation of the "design flood," including wave height, relative to the datum specified on the community's legally designated flood hazard map. In areas designated as Zone AO, the design flood elevation shall be the elevation of the highest existing grade of the building's perimeter plus the depth number (in feet) specified on the flood hazard map. In areas designated as Zone AO where a depth number is not specified on the map, the depth number shall be taken as being equal to two feet (610 mm). [Also defined in CCR Title 24 Part 2.]
"Development" means any manmade change to improved or unimproved real estate, including but not limited to, buildings or other structures, temporary structures, temporary or permanent storage of materials, mining, dredging, filling, grading, paving, excavations, drilling operations, flood control projects, and other land-disturbing activities. "Encroachment" means the placement of fill, excavation, buildings, permanent structures or other development into a flood hazard area which may impede or alter the flow capacity of riverine flood hazard areas.
"Exceptional hardship" means, for the purpose of variances from these regulations or the building code, the exceptional difficulty that would result from a failure to grant a requested variance. Mere economic or financial hardship is not exceptional. Inconvenience, aesthetic considerations, physical handicaps, personal preferences, or the disapproval of one's neighbors do not, as a rule, qualify as exceptional hardships. All of these circumstances can be resolved through other means without granting variances, even when the alternatives are more expensive or require the property owner to build elsewhere or put the parcel to a different use than originally intended.
"Existing manufactured home park or subdivision" means a manufactured home park or subdivision for which the construction of facilities for servicing the lots on which the manufactured homes are to be affixed (including, at a minimum, the installation of utilities,
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the construction of streets, and either final site grading or the pouring of concrete pads) was completed before July 24, 1980.
"Expansion to an existing manufactured home park or subdivision" means the preparation of additional sites by the construction of facilities for servicing the lots on which the manufactured homes are to be affixed (including the installation of utilities, the construction of streets, and either final site grading or the pouring of concrete pads). "Flood or flooding" means a general and temporary condition of partial or complete inundation of normally dry land from:
1) The overflow of inland or tidal waters.
2) The unusual and rapid accumulation or runoff of surface waters from any source. 3) Mudslides (i.e., mudflows) which are proximately caused by flooding. "Flood control project" means a dam or barrier design and constructed to keep water away from or out of a specified area, including but not limited to levees, floodwalls, and channelization.
"Flood damage-resistant materials" means any construction material capable of withstanding direct and prolonged contact with floodwaters without sustaining any damage that requires more than cosmetic repair. [Also defined in CCR Title 24 Part 2.] "Flood hazard area" means the greater of the following two areas: [Also defined in CCR Title 24 Part 2.]
1) The area within a floodplain subject to a one-percent or greater chance of flooding in any year.
2) The area designated as a flood hazard area on the community's flood hazard map, or otherwise legally designated.
"Flood insurance rate map (FIRM)" means an official map of a community on which the Federal Emergency Management Agency (FEMA) has delineated both the special flood hazard areas and the risk premium zones applicable to the community. [Also defined in CCR Title 24 Part 2.]
"Flood insurance study" means the official report provided by the Federal Emergency Management Agency containing the flood insurance rate map (FIRM), the flood boundary and floodway map (FBFM), the water surface elevation of the base flood and supporting technical data. [Also defined in CCR Title 24 Part 2.]
"Floodplain administrator" means the Development Services Director or his or her designee, to leave in administer and enforce the floodplain management regulations.
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"Floodway" means the channel of the river, creek or other watercourse and the adjacent land areas that must be reserved in order to discharge the base flood without cumulatively increasing the water surface elevation more than a designated height. [Also defined in CCR Title 24 Part 2.]
"Fraud or victimization" means, for the purpose of variances from these regulations or the building code, the intentional use of deceit to deprive another of rights or property, making a victim of the deprived person or the public. As it pertains to buildings granted variances to be constructed below the elevation required by the building code, future owners or tenants of such buildings and the community as a whole may bear the burden of increased risk of damage from floods, increased cost of flood insurance, and increased recovery costs, inconvenience, danger, and suffering.
"Functionally dependent use" means a use that cannot perform its intended purpose unless it is located or carried out in close proximity to water, including only docking facilities, port facilities necessary for the loading or unloading of cargo or passengers, and shipbuilding or ship repair facilities. The term does not include long-term storage, manufacture, sales or service facilities.
"Highest adjacent grade" means the highest natural elevation of the ground surface prior to construction next to the proposed walls or foundation of a structure. "Historic structure" means any structure that is:
1) Listed individually in the National Register of Historic Places (a listing maintained by the Department of Interior) or preliminarily determined by the Secretary of the Interior as meeting the requirements for individual listing on the National Register; 2) Certified or preliminarily determined by the Secretary of the Interior as contributing to the historical significance of a registered historic district or a district preliminarily determined by the Secretary to qualify as a registered historic district; 3) Individually listed on the inventory of historic places maintained by the California Office of Historic Preservation; or
4) Individually listed on a local inventory of historic places in communities with historic preservation programs that have been certified by the California Office of Historic Preservation.
"Letter of map change (LOMC)" means an official determination issued by FEMA that amends or revises an effective flood insurance rate map or flood insurance study. Letters of map change include:
1) Letter of map amendment (LOMA): An amendment based on technical data showing that a property was incorrectly included in a designated special flood hazard area. A
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LOMA amends the current effective Flood Insurance Rate Map and establishes that a specific property, portion of a property, or structure is not located in a special flood hazard area.
2) Letter of map revision (LOMR): A revision based on technical data that may show changes to flood zones, flood elevations, special flood hazard area boundaries and floodway delineations, and other planimetric features.
3) Letter of map revision based on fill (LOMR-F): A determination that a structure or parcel of land has been elevated by fill above the base flood elevation and is, therefore, no longer located within the special flood hazard area. In order to qualify for this determination, the fill must have been permitted and placed in accordance with the community's floodplain management regulations. 4) Conditional letter of map revision (CLOMR): A formal review and comment as to whether a proposed flood protection project or other project complies with the minimum NFIP requirements for such projects with respect to delineation of special flood hazard areas. A CLOMR does not revise the effective flood insurance rate map or flood insurance study; upon submission and approval of certified as-built documentation, a letter of map revision may be issued by FEMA to revise the effective FIRM.
"Light-duty truck" means, as defined in 40 C.F.R. 86.082-2, any motor vehicle rated at eight thousand five hundred (8,500) pounds Gross Vehicular Weight Rating or less which has a vehicular curb weight of six thousand (6,000) pounds or less and which has a basic vehicle frontal area of forty-five (45) square feet or less, which is:
1) Designed primarily for purposes of transportation of property or is a derivation of such a vehicle, or
2) Designed primarily for transportation of persons and has a capacity of more than twelve (12) persons; or
3) Available with special features enabling off-street or off-highway operation and use. "Lowest floor" means the lowest floor of the lowest enclosed area, including basement, but excluding any unfinished or flood-resistant enclosure, usable solely for vehicle parking, building access or limited storage provided that such enclosure is not built so as to render the structure in violation of the non-elevation requirements of the building codes. [Also defined in CCR Title 24 Part 2.]
"Manufactured home" means a structure that is transportable in one or more sections, built on a permanent chassis, designed for use as a single-family dwelling with or without a permanent foundation when connected to the required utilities, and constructed to the Manufactured Home Construction and Safety Standards promulgated by the U.S.
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Department of Housing and Urban Development. Also see definitions in Health and Safety Code Sections 18000(a)(2) and 18001(a). For the purposes of floodplain management, the term also includes mobile homes and recreational vehicles, park trailers, travel trailers and similar transportable structures that are placed on a site for one hundred eighty (180) consecutive days or longer.
"Manufactured home park or subdivision" means a parcel (or contiguous parcels) of land divided into two or more manufactured home lots for rent or sale. "Market value" means the price at which a property will change hands between a willing buyer and a willing seller, neither party being under compulsion to buy or sell and both having reasonable knowledge of relevant facts. As used in these regulations, the term refers to the market value of buildings and structures, excluding the land and other improvements on the parcel. Market value may be established by one of the following methods: (1) Actual Cash Value (replacement cost depreciated for age and quality of construction), (2) tax assessment value adjusted to approximate market value by a factor provided by the property appraiser, or (3) a qualified independent appraiser.
"New manufactured home park or subdivision" means a manufactured home park or subdivision for which the construction of facilities for servicing the lots on which the manufactured homes are to be affixed (including at a minimum, the installation of utilities, the construction of streets, and either final site grading or the pouring of concrete pads) was completed on or after July 24, 1980.
"Nuisance" means that which is injurious to safety or health of an entire community or neighborhood, or any considerable number of persons, or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake, or river, bay, stream, canal, or basin.
"Permit for floodplain development" means an official document or certificate issued by the community, or other evidence of approval or concurrence, which authorizes performance of specified development activities that are located in flood hazard areas and that are determined to be compliant with these Regulations.
"Recreational vehicle" means a vehicle that is built on a single chassis, 400 square feet (37.16 m2 ) or less when measured at the largest horizontal projection, designed to be selfpropelled or permanently towable by a light-duty truck, and designed primarily not for use as a permanent dwelling but as temporary living quarters for recreational, camping, travel or seasonal use. A recreational vehicle is ready for highway use when it is on its wheels or jacking system, is attached to the site only by quick disconnect type utilities and security
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devices and has no permanently attached additions. Also see definitions in Health and Safety Code section 18010.
"Riverine" means relating to, formed by, or resembling a river (including tributaries), stream, brook, etc.
"Special flood hazard area (SFHA)" means the land area subject to flood hazards and shown on a Flood Insurance Rate Map or other flood hazard map as Zone A, AE, A1-30, A99, AR, AO, AH, V, VO, VE, or V1-30. [Also defined in CCR Title 24 Part 2.] "Substantial damage" means damage of any origin sustained by a structure whereby the cost of restoring the structure to its before-damaged condition would equal or exceed fifty (50) percent of the market value of the structure before the damage occurred. [Also defined in CCR Title 24 Part 2.]
"Substantial improvement" means any repair, reconstruction, rehabilitation, alteration, addition or other improvement of a building or structure, the cost of which equals or exceeds fifty (50) percent of the market value of the structure before the improvement or repair is started. When the structure has sustained substantial damage, any repairs are considered substantial improvement regardless of the actual repair work performed. The term does not, however, include either: [Also defined in CCR Title 24 Part 2.] 1) Any project for improvement of a building required to correct existing health, sanitary or safety code violations identified by the building official and that are the minimum necessary to assure safe living conditions.
2) Any alteration of a historic structure provided that the alteration will not preclude the structure's continued designation as a historic structure. "Utility and miscellaneous Group U" means buildings and structures of an accessory character and miscellaneous structure not classified in any special occupancy, as described in the building code.
"Variance" means a grant of relief from the requirements of these Regulations which permits construction in a manner otherwise prohibited and where specific enforcement would result in exceptional hardship.
"Violation" means a development that is not fully compliant with these regulations or the flood provisions of the building code, as applicable.
"Watercourse" means a river, creek, stream, channel or other topographic feature in, on, through, or over which water flows at least periodically.
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Article 10. Buildings and Structures
12.40.480 Requirements for buildings and structures in flood hazard areas.
Applications for building and structures within the scope of the building code that are proposed in flood hazard areas shall comply with the applicable requirements of the building code and local amendments to the building code specified in Title 12 Buildings and Construction.
12.40.490 Detached garages and accessory storage structures.
Detached garages and accessory storage structures used only for parking or storage (and cannot be attached to any structure used for human habitation or converted to a use for human habitation) are permitted below the base flood elevation provided the garages and accessory storage structures:
A. Are one story and not larger than four hundred (400) square feet in area when located in special flood hazard areas.
B. Are anchored to resist flotation, collapse or lateral movement resulting from flood loads.
C. Have flood openings in accordance with the building code.
D. Have flood damage-resistant materials used below the base flood elevation.
E. Have mechanical, plumbing and electrical systems, including plumbing fixtures, elevated to or above the base flood elevation.
12.40.500 Utility and Miscellaneous Group U.
Utility and miscellaneous Group U includes buildings that are accessory in character and miscellaneous structures not classified in any specific occupancy in the building code, including, but not limited to, agricultural buildings, aircraft hangars (accessory to a one- or two-family residence), barns, carports, fences more than six feet (1829 mm) high, grain silos (accessory to a residential occupancy), greenhouses, livestock shelters, private garages, retaining walls, sheds, stables, and towers. In addition to the building code requirements for fire and life safety, the following shall apply to utility and miscellaneous Group U buildings and structures in flood hazard areas:
A. New construction and substantial improvement of such buildings and structures shall be anchored to prevent flotation, collapse or lateral movement resulting from flood loads, including the effects of buoyancy, during conditions of the design flood.
B. New construction and substantial improvement of such buildings and structures, when fully enclosed by walls, shall be elevated such that the lowest floor, including
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basement, is elevated to or above the design flood elevation in accordance with ASCE 24 or shall be dry floodproofed in accordance with ASCE 24.
C. Unless dry floodproofed, fully enclosed areas below the design flood elevation shall be constructed in accordance with ASCE 24 and limited to parking, storage, and building access.
D. When fully enclosed by walls, flood openings shall be installed in accordance with ASCE 24.
E. Flood damage-resistant materials shall be used below the design flood elevation.
F. Mechanical, plumbing and electrical systems, including plumbing fixtures, shall be located or installed in accordance with ASCE 24.
Article 11. Subdivisions
12.40.510 Minimum requirements.
Subdivision proposals in flood hazard areas, including proposals for manufactured home parks and subdivisions, shall be reviewed to determine that:
A. Such proposals are consistent with the need to minimize flood damage and will be reasonably safe from flooding.
B. All public utilities and facilities, such as sewer, gas, electric, communications, and water systems are located and constructed to minimize or eliminate flood damage in accordance with Section 12.40.540 and Section 12.40.550 of these regulations, as applicable, and appropriate codes.
C. Adequate drainage is provided to reduce exposure to flood hazards; in Zones AH and AO, adequate drainage paths shall be provided to guide floodwater around and away from proposed structures.
12.40.520 Subdivision requirements.
In addition to the requirements of Section 302-1 of these regulations, where any portion of proposed subdivisions, including proposals for manufactured home parks and subdivisions, lies within a flood hazard area, the following shall be required:
A. The flood hazard area, including floodways, as appropriate, shall be delineated on preliminary subdivision plats.
B. Where the subdivision has more than fifty (50) lots or is larger than five acres and base flood elevations are not included on the FIRM, the base flood elevations determined in accordance with Section 12.40.270.A of these regulations.
C. When, as part of a proposed subdivision, fill will be placed to support buildings, the fill shall be placed in accordance with the building code and approval of the
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subdivision shall require submission of as-built elevations for each filled pad certified by a licensed land surveyor or registered civil engineer.
Article 12. Site Improvements, Utilities and Limitations
12.40.530 Minimum requirements.
All proposed development in flood hazard areas shall be reviewed to determine that:
A. Such proposals are consistent with the need to minimize flood damage and will be reasonably safe from flooding.
B. Where the proposed development has more than fifty (50) lots or is larger than five acres and base flood elevations are not included on the FIRM, the base flood elevations determined in accordance with Section 12.40.270.A of these regulations.
C. All public utilities and facilities, such as sewer, gas, electric, communications, and water systems are located and constructed to minimize or eliminate flood damage.
D. Adequate drainage is provided to reduce exposure to flood hazards; in Zones AH and AO, adequate drainage paths shall be provided to guide floodwater around and away from proposed structures.
12.40.540 Sanitary sewer facilities.
All new and replaced sanitary sewer facilities, private sewage treatment plants (including all pumping stations and collector systems) and on-site waste disposal systems shall be designed in accordance with Chapter 7, ASCE 24, to minimize or eliminate infiltration of floodwaters into the facilities and discharge from the facilities into flood waters, and impairment of the facilities and systems.
12.40.550 Water supply facilities.
All new and replaced water supply facilities shall be designed in accordance with the provisions of Chapter 7, ASCE 24, to minimize or eliminate infiltration of floodwaters into the systems.
12.40.560 Development in floodways.
Development, site improvements and land disturbing activity involving fill or regrading shall not be authorized in the floodway unless the floodway encroachment analysis required in Section 12.40.280.A of these regulations demonstrates the proposed work will not result in any increase in the base flood level during occurrence of the base flood discharge.
12.40.570 Limitations on placement of fill.
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Subject to the limitations of these Regulations, fill shall be designed to be stable under conditions of flooding including rapid rise and rapid drawdown of floodwaters, prolonged inundation, and protection against flood-related erosion and scour. In addition to these requirements, when intended to support buildings and structures, fill shall comply with the requirements of the building code. The placement of fill intended to change base flood elevations, change floodway boundaries, or change boundaries of flood hazard areas shown on FIRMs shall be subject to the requirements of Section 12.40.290 of these regulations.
Article 13. Installation of Manufactured Homes
12.40.580 Installation.
All manufactured homes installed in flood hazard areas shall be installed by an installer that is licensed pursuant to the Business and Professions Code and shall comply with the requirements of the Department of Housing and Community Development (HCD) and the requirements of these regulations. In addition to permits pursuant to these regulations, permits from the HCD are required where the HCD is the enforcement agency for installation of manufactured homes. Upon completion of installation and prior to the final inspection by the floodplain administrator, the installer shall submit certification of the elevation of the manufactured home, prepared by a licensed land surveyor or registered civil engineer, to the floodplain administrator.
12.40.590 Foundations.
All new and replacement manufactured homes, including substantial improvement of manufactured homes installed in flood hazard areas shall be installed on permanent, reinforced foundations that are designed in accordance with the foundation requirements of Section R322.2 of the residential code (CCR Title 24 Part 2.5) and these regulations.
Foundations for manufactured homes subject to Section 12.40.620 of these regulations are permitted to be reinforced piers or other foundation elements of at least equivalent strength.
12.40.600 Anchoring.
All new and replacement manufactured homes to be placed or substantially improved in a flood hazard area shall be installed using methods and practices which minimize flood damage and shall be securely anchored to an adequately anchored foundation system to resist flotation, collapse and lateral movement. Methods of anchoring are authorized to include, but are not limited to, use of over-the-top or frame ties to ground anchors. This requirement is in addition to applicable State and local anchoring requirements for resisting wind loads and seismic loads.
APPENDIX 18
12.40.610 General elevation requirement.
Unless subject to the requirements of Section 12.40.620 of these regulations, all manufactured homes that are placed, replaced, or substantially improved on sites located:
(a) outside of a manufactured home park or subdivision; (b) in a new manufactured home park or subdivision; (c) in an expansion to an existing manufactured home park or subdivision; or (d) in an existing manufactured home park or subdivision upon which a manufactured home has incurred "substantial damage" as the result of a flood, shall be elevated such that the lowest floor, or bottom of the lowest horizontal member of the lowest floor, as applicable to the flood hazard area, is at or above the base flood elevation.
12.40.620 Elevation requirement for certain existing manufactured home parks and subdivisions.
Manufactured homes that are not subject to Section 12.40.610 of these regulations, including manufactured homes that are placed, replaced, or substantially improved on sites located in an existing manufactured home park or subdivision, unless on a site where substantial damage as a result of flooding has occurred, shall be elevated such that either the:
A. Lowest floor, or bottom of the lowest horizontal structural member, as applicable to the flood hazard area, is at or above the base flood elevation.
B. Bottom of the frame is supported by reinforced piers or other foundation elements of at least equivalent strength that are not less than thirty-six (36) inches in height above grade.
12.40.630 Flood damage-resistant materials.
Materials below elevated manufactured homes shall comply with the flood-damage resistant materials requirements of Section R322 of the residential code (CCR Title 24 Part
2.5).
12.40.640 Enclosures.
Fully enclosed areas below elevated manufactured homes shall comply with the enclosed area requirements of Section R322 of the residential code (CCR Title 24 Part 2.5).
12.40.650 Protection of mechanical equipment and outside appliances.
Mechanical equipment and outside appliances shall be elevated to or above the lowest floor or bottom of the lowest horizontal structural member of the manufactured home, as applicable to the flood hazard area.
APPENDIX 18
Exception. Where such equipment and appliances are designed and installed to prevent water from entering or accumulating within their components and the systems are constructed to resist hydrostatic and hydrodynamic loads and stresses, including the effects of buoyancy, during the occurrence of flooding up to the elevation required by Section 12.40.610 or Section 12.40.620, as applicable, the systems and equipment shall be permitted to be located below that elevation. Electrical wiring systems shall be permitted below the design flood elevation provided they conform to the provisions of NFPA 70 (National Electric Code).
Article 14. Recreational Vehicles
12.40.660 Temporary placement.
Recreational vehicles in flood hazard areas, shall be placed on a site for less than one hundred eighty (180) consecutive days or shall be fully licensed and ready for highway use.
Ready for highway use means the recreational vehicle is on wheels or jacking system, is attached to the site only by quick disconnect type utilities and security devices, and has no permanently attached additions, such as rooms, stairs, decks and porches.
12.40.670 Permanent placement.
Recreational vehicles that do not meet the limitations in Section 12.40.660 for temporary placement shall meet the requirements of Article 14 for manufactured homes.
Article 15. Other Development
12.40.680 General requirements for other development.
All development, including man-made changes to improved or unimproved real estate for which specific provisions are not specified in these regulations or the building code, shall:
A. Be located and constructed to minimize flood damage.
B. Meet the limitations of Section 12.40.560 of these regulations when located in a regulated floodway.
C. Be anchored to prevent flotation, collapse or lateral movement resulting from hydrostatic loads, including the effects of buoyancy, during conditions of the design flood.
D. Be constructed of flood damage-resistant materials.
E. Have mechanical, plumbing, and electrical systems above the design flood elevation or meet the requirements of ASCE 24, except that minimum electric service required to address life safety and electric code requirements is permitted below the design flood elevation provided it conforms to the provisions of the electrical part of the building code for wet locations.
APPENDIX 18
12.40.690 Tanks.
Tanks that serve buildings shall comply with the requirements of the building code.
Underground and above-ground tanks that serve other purposes shall be designed, constructed, installed and anchored in accordance with ASCE 24.
12.40.700 Requirements for temporary structures and temporary storage in flood hazard areas.
Temporary structures shall be erected for a period of less than one hundred eighty (180) days and temporary storage of goods and materials shall be permitted for a period of less than one hundred eighty (180) days. Extensions may be granted in accordance with Section
12.40.230 of these regulations. In addition, the following apply:
A. Temporary structures shall be anchored to prevent flotation, collapse or lateral movement resulting from hydrostatic loads, including the effects of buoyancy, during conditions of the design flood. Fully enclosed temporary structures shall have flood openings that are in accordance with ASCE 24 to allow for the automatic entry and exit of flood waters.
B. Temporary stored materials shall not include hazardous materials.
C. The requirements of Section 12.40.560 of these regulations, when located in floodways.
12.40.710 Fences in floodways.
Fences in floodways that have the potential to block the passage of floodwaters, such as stockade fences and wire mesh fences, shall meet the limitations of Section 12.40.560 of these regulations.
12.40.720 Oil derricks.
Oil derricks located in flood hazard areas shall be designed in conformance with flood loads required by the building code.
12.40.720 Retaining walls, sidewalks and driveways in floodways.
Retaining walls and sidewalks and driveways that involve placement of fill in floodways shall meet the limitations of Section 12.40.560 of these regulations and the requirements for site grading in Chapter 18 of the building code.
12.40.730 Roads and watercourse crossings in floodways.
Roads and watercourse crossings that encroach into floodways or riverine waterways with base flood elevations where floodways have not been designated, including roads, bridges,
APPENDIX 18
culverts, low-water crossings and similar means for vehicles or pedestrians to travel from one side of a watercourse to the other side shall meet the limitations of Section 12.40.560 of these regulations. Alteration of a watercourse that is part of work proposed for a road or watercourse crossing shall meet the requirements of Section 12.640.280.C of these regulations.
12.40.740 Swimming pools.
Above-ground swimming pools, on-ground swimming pools, and in-ground swimming pools that involve placement of fill in floodways shall meet the requirement of Section 12.40.560 of these regulations.
Article 16. Flood Control Projects
12.40.750 Flood control projects; general.
In addition to applicable Federal, State and other local permits, a permit for floodplain development is required for construction of flood control projects. The purpose for the permit is to examine the impact on flood hazard areas, floodways, and base flood elevations shown on the FIRM. Unless otherwise authorized by separate regulations, issuance of this permit does not address the sufficiency of the structural elements of the proposed flood control project. Permits for floodplain development and building permits in areas affected by proposed flood control projects shall not be issued based on conditional letters of map revision issued by FEMA.
12.40.760 Flood control projects; applications.
Applications for permits for flood control projects shall include documentation including but not limited to:
A. Site plan or document showing the existing topography and the boundaries of the flood hazard areas, floodway boundaries, and base flood elevations shown on the FIRM.
B. Site plan or document showing the proposed topography and the proposed changes to the boundaries of the flood hazard areas, floodway boundaries, and base flood elevations.
C. The documentation submitted to FEMA for a conditional letter of map revision (CLOMR) and, if issued, the conditional letter of map revision. Submittal requirements and processing fees shall be the responsibility of the applicant. A CLOMR is required when a proposed flood control project alters a floodway and increases base flood elevations more than greater than 0.00 feet, or alters a watercourse a riverine flood hazard area for which base flood elevations are included
APPENDIX 18
in the flood insurance study or on the FIRM and floodways have not been designated and increases base flood elevations more than 1.0 foot.
Summary of Compliance Requirements
Table 1. Summary of Requirements if Using a Heat Pump
Ducts State Code Requirements Additional Local Code
Requirements
Existing
• Duct sealing (10% leakage)
• Airflow efficiency (300 CFM/ton)
• Refrigerant charge verification
• None
New
• Duct sealing (5% leakage)
• Airflow efficiency (350 CFM/ton)
• Fan efficacy (0.58 W/CFM)
• Refrigerant charge verification
• Attic insulation (R-49)
• Air sealing
• R-8 Duct insulation
• None
Table 2. Summary of Requirements if Using a Furnace
Ducts State Code Requirements Additional Local Code
Requirements
Existing
• Duct sealing (10% leakage)
• Airflow efficiency (300 CFM/ton)
• Refrigerant charge verification
• Fan efficacy (0.45 watts/CFM)
• Attic insulation (R-49)
• Air sealing
New
• Duct sealing (5% leakage)
• Airflow efficiency (350 CFM/ton)
• Fan efficacy (0.45 W/CFM)
• Attic Insulation (R-49)
• Air sealing
• R-8 Duct insulation
• Refrigerant charge verification
• Fan efficacy (0.35 watts/CFM)
2025 CostEffectiveness Study:
Single Family AC to Heat
Pump Replacement
Prepared by:
Ada Shen, Alea German, Keith
Saechao, & Marc Hoeschele,
Frontier Energy, Inc
Misti Bruceri, Misti Bruceri &
Associates, LLC
Prepared for:
Kelly Cunningham, Codes and
Standards Program, Pacific Gas
and Electric
Revision: 1.0
Last modified: 2025/06/09
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 1 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 2025, 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.
Table 1. Summary of Revisions
Date Description Reference (page or section)
6/09/2025 Original Release N/A
2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2 Acronym List
AC – Air conditioner
ACH50 – Air Changes per
Hour at 50 pascals pressure
differential
AFUE – Annual Fuel
Utilization Efficiency
B/C – Lifecycle Benefit-toCost Ratio
BSC – Building Standards
Commission
CA IOUs – California
Investor-Owned Utilities
CARE – California Alternate
Rates for Energy
CASE – Codes and
Standards Enhancement
CBECC-Res – Computer
program developed by the
California Energy
Commission for
demonstrating compliance
with the California
Residential Building Energy
Efficiency Standards
CFM – Cubic Feet per
Minute
CO2 – Carbon Dioxide
CPAU – City of Palo Alto
Utilities
CPUC – California Public
Utilities Commission
CZ – California Climate
Zone
DFHP – Dual Fuel Heat
Pump
DHW – Domestic Hot Water
DOE – Department of
Energy
EDR – Energy Design
Rating
EER – Energy Efficiency
Ratio
EF – Energy Factor
GHG – Greenhouse Gas
HPWH – Heat Pump Water
Heater
HSPF – Heating Seasonal
Performance Factor
HVAC – Heating,
Ventilation, and Air
Conditioning
IOU – Investor Owned
Utility
kBtu – kilo-British thermal
unit
kWh – Kilowatt Hour
LCC – Lifecycle Cost
LLAHU – Low Leakage Air
Handler Unit
VLLDCS – Verified Low
Leakage Ducts in
Conditioned Space
NEEA – Northwest Energy
Efficiency Alliance
NEM – Net Energy Metering
NPV – Net Present Value
PG&E – Pacific Gas and
Electric Company
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
2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 1 Table of Contents
Executive Summary............................................................................................................4 1 Introduction..................................................................................................................7 2 Methodology and Assumptions ..................................................................................9
2.1 Modeling............................................................................................................... 9
2.2 Prototype Characteristics.....................................................................................10
2.3 Cost-Effectiveness Approach..............................................................................13
2.3.1 Benefits ...........................................................................................................13
2.3.2 Costs ...............................................................................................................13
2.3.3 Metrics.............................................................................................................15
2.3.4 Utility Rates .....................................................................................................16
2.4 Measure Details and Cost....................................................................................18
2.4.1 Lifecycle Cost Assuming Zero-NOx Standards for Space Heating After 2030 ..20 3 Results........................................................................................................................22
3.1 Cost-Effectiveness Results ..................................................................................22
3.1.1 Cost Effectiveness Results Using Standard Tariffs...........................................23
3.1.2 Cost Effectiveness Results Using CARE Tariffs ...............................................26
3.2 Zero-NOx Scenario Results.................................................................................28
3.3 AC Pathways for Heat Pump Replacements........................................................30 4 Recommendations and Discussion..........................................................................33 5 References .................................................................................................................36 6 Appendices ................................................................................................................38
6.1 Map of California Climate Zones..........................................................................38
6.2 Cost-Effectiveness Results ..................................................................................39
6.2.1 Standard Rates................................................................................................39
6.2.2 CARE tariffs.....................................................................................................45
6.3 Utility Rate Schedules..........................................................................................51
6.3.1 Pacific Gas & Electric.......................................................................................51
6.3.2 Southern California Edison ..............................................................................60
6.3.3 Southern California Gas...................................................................................64
6.3.4 San Diego Gas & Electric ................................................................................65 2025/06/09
Attachment 1
10 20
30 40
50 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2
6.3.5 City of Palo Alto Utilities ...................................................................................72
6.3.6 Sacramento Municipal Utilities District (Electric Only) ......................................74
6.3.7 Fuel Escalation Assumptions ...........................................................................76 List of Tables
Table 1. Summary of Revisions............................................................................................ 1 Table 2. Residential Prototype Characteristics ....................................................................
Table 9. HVAC Measure Cost Assumptions – 4-Ton Electric Replacements........................
Table 11. Lifecycle Incremental Cost Breakdown for 4-Ton System with no Gas Furnaces Table 19. DFHP Existing Furnace LSC Savings (Zero-NOx Rule).......................................
Table 23. [Pre-1978] Standard Efficiency HPSH..................................................................
Table 33. [1978-1991] High Efficiency HPSH CARE............................................................
Table 3. Efficiency Characteristics for Three Vintage Cases................................................12 Table 4. System Sizing by Climate Zone .............................................................................15 Table 5. Investor-Owned Utility Tariffs Used Based on Climate Zone ..................................16 Table 6. Publicly Owned Utility Tariffs Used Based on Climate Zone...................................17 Table 7. Lifecycle Incremental Cost Breakdown for a 4-Ton DFHP Existing Furnace...........19 Table 8. Lifecycle Incremental Cost Breakdown for 4-Ton HPSH ........................................19 Table 10. SCAQMD Rule 1111 Proposed Manufacturer Compliance Targets.......................20 after 2030............................................................................................................................21 Table 12. [1992-2010] DFHP Existing Furnace....................................................................23 Table 13. [1992-2010] Standard Efficiency HPSH ...............................................................24 Table 14. [1992-2010] High Efficiency HPSH ......................................................................25 Table 15. [1992-2010] DFHP Existing Furnace CARE.........................................................26 Table 16. [1992-2010] Standard Efficiency HPSH CARE ....................................................27 Table 17. [1992-2010] High Efficiency HPSH CARE............................................................28 Table 18. DFHP Existing Furnace On-Bill NPV (Zero-NOx Rule).........................................29 Table 20. New AC Only Path Cost Estimates ......................................................................32 Table 21. New AC/Furnace and New Ducts Path Cost Estimates........................................32 Table 22. [Pre-1978] DFHP Existing Furnace......................................................................39 Table 24. [Pre-1978] High Efficiency HPSH.........................................................................41 Table 25. [1978-1991] DFHP Existing Furnace....................................................................42 Table 26. [1978-1991] Standard Efficiency HPSH ...............................................................43 Table 27. [1978-1991] High Efficiency HPSH ......................................................................44 Table 28. [Pre-1978] DFHP Existing Furnace CARE ...........................................................45 Table 29. [Pre-1978] Standard Efficiency HPSH CARE.......................................................46 Table 30. [Pre-1978] High Efficiency HPSH CARE..............................................................47 Table 31. [1978-1991] DFHP Existing Furnace CARE.........................................................48 Table 32. [1978-1991] Standard Efficiency HPSH CARE ....................................................49 Table 34. PG&E Baseline Territory by Climate Zone............................................................51 Table 35. PG&E Monthly Gas Rate ($/therm)......................................................................52 2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 3 Table 36. SCE Baseline Territory by Climate Zone ..............................................................60 Table 37. SoCalGas Baseline Territory by Climate Zone .....................................................64 Table 38. SoCalGas Monthly Gas Rate ($/therm)................................................................65 Table 39. SDG&E Baseline Territory by Climate Zone.........................................................65 Table 40. SDG&E Monthly Gas Rate ($/therm) ...................................................................66 Table 41. CPAU Monthly Gas Rate ($/therm) ......................................................................72 Table 42. Real Utility Rate Escalation Rate Assumptions, CPUC En Banc and 2022 TDV Basis...................................................................................................................................77 Table 43. Real Utility Rate Escalation Rate Assumptions, 2025 LSC Basis.........................78 List of Figures
Figure 1. AC vs. Heat Pump Pathway Requirements ..........................................................31 Figure 2. AC vs. Heat Pump Energy Comparison................................................................31 Figure 3. Map of California climate zones. ..........................................................................38 2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 4 Executive Summary
The California Codes and Standards (C&S) Reach Codes program, also known as the Local Energy 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.
It is important to note that there is a voluntary measure in the 2025 CALGreen for replacing an air conditioner with a heat pump at time of air conditioner replacement, which can be adopted as is. This report seeks to provide options to modify the heat pump measure, and demonstrate the cost-effectiveness of these options.
This analysis used two different metrics to assess the cost-effectiveness of the proposed upgrades for a 1,665 square foot single family home prototype with an attached garage.
Both methodologies require estimating and quantifying the incremental costs and energy savings associated with each energy efficiency measure over a 30-year analysis period. OnBill cost-effectiveness is an occupant-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. To reflect how natural gas prices fluctuate with seasonal supply and demand, a normalized curve was used to estimate the cost for the remaining months relative to today’s rates. Long-term Systemwide Cost (LSC) is the California Energy Commission’s metric for determining cost-effectiveness of efficiency measures in the 2025 Energy Code. This metric 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.
Local jurisdictions may 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, reach codes that amend Part 6 of the California Building Code (the Energy Code) and require energy performance beyond state code minimums must demonstrate the proposed changes are cost-effective and obtain approval from the Energy Commission as well as the Building Standards Commission (BSC). Amendments to Part 11, such as requirements for increased water efficiency or electric vehicle infrastructure only require BSC approval and do not require the Energy Commission approval. Although a cost-effectiveness study is only required to amend Part 6 of the California Building Code, this study provides valuable context for jurisdictions pursuing other ordinance paths to understand the economic impacts of the 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. 2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 5 The following summarizes key results:
1. Heat pumps are significantly more efficient than gas furnaces, requiring less than half the energy to meet the heating load. However, despite this reduction in heating energy use, the cost of heating a home using electricity (heat pump) could be higher than the cost to heat that same home with natural gas (furnace), depending on the electricity tariffs relative to the gas tariffs. Therefore, while a heat pump measure could be deemed as cost-effective over its lifecycle, installing a heat pump could result in a decrease or an increase in utility costs in the first years relative to a gas furnace and AC system.
2. The study assumes utility rates escalate over time. Because it is very difficult to predict how the rates will change, the analysis presents two escalation scenarios (modest and high gas escalation) to represent a range of outcomes.
3. The LSC metric most often produces more favorable cost-effectiveness results relative to the results produced using actual utility costs (On-Bill). When the analysis assumes a higher escalation rate for natural gas costs relative to electricity in future years (high gas escalation), the On-Bill results are more favorable in some cases. a. In the oldest (pre-1978) vintage, all three measures (dual fuel heat pump with existing furnace, standard heat pump space heater, and high efficiency heat pump space heater) are cost-effective using the LSC metric in all climate zones. When using the On-Bill metric, the measures remain cost-effective in most climate zones.
b. In the newer (1978-1991 and 1992-2010) vintages, the dual fuel heat pump (DFHP Existing Furnace) and the standard efficiency HPSH are cost-effective based on LSC in all cases except for Climate Zone 15 when using both the standard and California Alternate Rates for Energy (CARE) tariff.
4. Using the CARE tariff results in higher cost savings and cost-effectiveness relative to standard rates, with almost all cases yielding first year utility cost savings. The DFHP Existing Furnace is On-Bill cost-effective based on the high gas escalation scenario in all cases in the pre-1978 vintage, and almost all cases in the 1978-1991 and 1992-2010 vintage. It is also On-Bill cost-effective in most climate zones for the modest gas escalation scenario across all vintages. In Climate Zones 5, 8, 9, 10, 14, and 15, cost-effectiveness declines relative to other areas, and in some cases is not cost-effective from an On-Bill perspective. This is the case for both the CARE tariff and the standard rate.
5. The analysis also modeled the cost impact of using a standard time-of-use electricity tariff versus switching to a newer electrification tariff, designed to reduce costs in homes with heat pumps and/or electric vehicles. Older homes tend to be the least efficient and achieve the most savings from improving equipment efficiency. In most of the state, because older homes tend to use more electricity than a similarly sized, newer vintage home, they realize more costs savings under the electrification tariff.
Newer homes tend to use less electricity and therefore do not realize the same cost 2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 6 savings from switching tariffs; they generally perform better under the standard tariff.
This trend is different in milder climate zones in SCE territory (excluding CZ 15), where newer homes realize more cost savings. Both the standard and electrification tariffs in SCE territory include a daily allocation of lower-cost baseline electricity and a second, higher-priced tier when the baseline is exceeded. In many newer homes, a higher percentage of overall electricity use is within the baseline allocation, resulting in greater cost savings.
6. Higher efficiency equipment reduces utility costs in all cases and improves costeffectiveness in many climate zones in the oldest vintage relative to standard efficiency equipment. However, in more efficient newer homes, where costeffectiveness is generally lower, the savings are insufficient to offset the roughly $3,000 increase in incremental cost.
7. Given the adopted Bay Area Air Quality Management District (BAAD) Zero NOx rule, and the proposed California Air Resource Board or South Coast Air Quality Management District (SCAQMD) Zero-NOx rules, and gas furnaces are no longer available or less available to be installed in 2030, a sensitivity analysis was performed for the Zero NOx scenario and found that cost-effectiveness declines in many cases except in Climate Zones 8-10, some results improve enough to become cost-effective. The improved cost-effectiveness in Climate Zones 8-10 is due to the higher baseline cost when a HPSH must be installed at year 10 when the furnace must be replaced. However, the overall magnitude of 30-year On-Bill costeffectiveness is lower because there are only 10 years of utility cost savings. After year 10 the base case and upgrade measures are both heat pumps.
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/.
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].
2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 7 1 Introduction
The California Codes and Standards Reach Codes program, also known as the Local Energy Codes program, provides technical support to local governments considering adopting a local ordinance 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.
Local jurisdictions may 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, reach codes that amend Part 6 of the California Building Code (the Energy Code) (CEC, 2025) and require energy performance beyond state code minimums must demonstrate the proposed changes are cost-effective and obtain approval from the Energy Commission as well as the Building Standards Commission (BSC). Amendments to Part 11, such as requirements for increased water efficiency or electric vehicle infrastructure only require BSC approval and do not require the Energy Commission approval. Although a cost-effectiveness study is only required to amend Part 6 of the California Building Code, this study provides valuable context for jurisdictions pursuing other ordinance paths to understand the economic impacts of the 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.
This report is an update to the 2022 Single Family Retrofit Cost-effectiveness Study (Statewide Reach Codes Team, 2024) focused on an ordinance structure that encourages air conditioner (AC) to heat pump replacement. The methodology, prototype characteristics, and relevant measure packages are retained from the main study referenced above. The study includes updated utility rates, revised costs based on the TECH Clean California1 incremental cost study data, estimated costs for the AC path, updated and expanded AC path options, and a new cost-effectiveness scenario that considers upcoming proposed zero-NOx emission regulations (SCAQMD, 2025) (California Air Resources Board, 2022) (BAAD, 2025).
Local jurisdictions in California may consider adopting local energy ordinances to achieve energy savings beyond what will be accomplished by enforcing building efficiency requirements that apply statewide.
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 1 https://techcleanca.com/
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Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 8 decision regarding which code to amend will determine the specific requirements that must be followed for an ordinance to be legally enforceable. Although a cost-effectiveness study is only required to amend Part 6 of the CA Building Code, it is important 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 local leadership, residents, and other stakeholders make informed policy decisions.
This report was developed in coordination with the California Statewide Investor-Owned Utilities (IOUs) Codes and Standards Program, the California Energy Commission (CEC), key consultants, and engaged cities—collectively known as the Statewide Reach Codes Team. 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].
2025/06/09
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 9 2 Methodology and Assumptions
This study evaluates a potential reach code that encourages a heat pump or dual fuel system that includes a heat pump combined with a furnace when an air conditioner is replaced or installed new in existing single family homes. The ordinance structure and this analysis is based on the voluntary requirements adopted in 2025 Title 24, Part 11 California Green Building Standards Code (CALGreen), Section A4.204.1.1 for heat pump space conditioning alterations in single family homes (California Energy Commission, 2025). The proposed reach code also defines pathways for air conditioning equipment to be installed combined with additional efficiency measures. The heat pump path requires the heat pump as the primary heat source, with backup heating allowable either provided by electric resistance or natural gas. In cases where the existing furnace remains, the heat pump is installed alongside the existing furnace with integrated controls to allow for the furnace to provide backup heating. In alignment with the 2025 Energy Code requirements the heat pump must be sized to satisfy the heating load at the design heating temperature without the use of backup heat.
All methodology and assumptions are consistent with prior statewide analysis (Statewide Reach Codes Team, 2024) with the following exceptions:
1. Updated utility rates to January 2025
2. Equipment costs based on TECH data where available; the original report was based on Statewide contractor survey costs
3. Cost estimates were obtained for the AC path
4. Expanded AC path options
5. Cost-effectiveness results for the scenario if gas furnaces are no longer available for sale in California in 2030
2.1 Modeling
The Reach Codes Team performed energy simulations using the 2025 research version of the Residential California Building Energy Code Compliance software (CBECC). The 2025 version of CBECC includes updated weather files, metrics, and the weather stations were changed in Climate Zones 4 and 6 from San Jose to Paso Robles and Torrance to Los Angeles International Airport, respectively. Note that at the time of this report, the Energy Commission was working on integrating a new heat pump model into the CBECC-Res software to better reflect the actual energy use of heat pumps. The updated model results in lower heating energy use than is currently estimated. Once the revised software is released, the reach codes team plans to update this analysis.
Three unique building vintages are included: pre-1978, 1978-1991, and 1992-2010. The vintages were defined based on review of historic building code requirements and defining periods with distinguishing features. The proposed measures were modeled to determine the projected site energy (therm and kWh), source energy, GHG emissions, and long-term systemwide cost (LSC) impacts. Annual utility costs were calculated using hourly data 2025/06/09
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 10 output from CBECC, and updated (as of 1/1/2025) electricity and natural gas tariffs for each of the investor-owned utilities (IOUs) as appropriate for that climate zone.
Site energy results are similar between CBECC-Res 2022 and 2025. The 2025 compliance metrics include assumptions that more appliances will be electric in the future. This is predicted to result in higher natural gas retail rates as a result of gas utilities continuing to maintain safe and reliable infrastructure amidst declining natural gas use.
Equivalent CO2 emission reductions were calculated based on outputs from the CBECCRes simulation software. Electricity emissions vary by region and by hour of the year.
CBECC-Res applies two distinct hourly profiles, one for Climate Zones 1 through 5 and 11 through 13 and another for Climate Zones 6 through 10 and 14 through 16. Natural gas emissions do not vary hourly. To compare the mixed-fuel and all-electric cases side-by-side, GHG emissions are presented as pounds of CO2-equivalent (CO2e) emissions.
The Statewide Reach Codes Team designed the approach and selected measures for evaluation based on the 2019 existing building single family reach code analysis (Statewide Reach Codes Team, 2021) and supporting analysis used in the 2025 Energy Code development cycle as well as from outreach to architects, builders, and engineers.
2.2 Prototype Characteristics
The Energy Commission defines building prototypes which it uses to evaluate the costeffectiveness of proposed changes to Energy Code requirements. Average home size has steadily increased over time, and the Energy Commission single family new construction prototypes are larger than many existing single family homes across California. For this analysis, a 1,665 square foot prototype was evaluated. Table 2 describes the basic characteristics of the single family prototype. Additions are not evaluated in this analysis as they are already addressed in Section 150.2 of the Energy Code. In the 2025 Energy Code heat pumps are prescriptively required for space and water heating for additions (California Energy Commission, 2023).
Table 2. Residential Prototype Characteristics
Climate Zone Specification
Existing Conditioned Floor Area 1,665 ft2
Num. of Stories 1
Num. of Bedrooms 3
Window-to-Floor Area Ratio 13%
Attached Garage 2-car garage
Three building vintages were evaluated to determine sensitivity of existing building performance on cost-effectiveness of upgrades. For example, it is widely recognized that adding attic insulation in an older home with no insulation is cost-effective, however, newer homes will likely have existing attic insulation reducing the cost-effectiveness of an incremental addition of insulation. The building characteristics for each vintage were 2025/06/09
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 11 determined based on either prescriptive requirements from the building code that were in effect or standard construction practice during that time period. For example, homes built under 2001 Title 24 are subject to prescriptive envelope code requirements very similar to homes built under the 2005 code cycle, which was in effect until January 1, 2010.
Table 3 summarizes the assumptions for each of the three vintages. Additionally, the analysis assumed the following features when modeling the prototype buildings. • Efficiencies were defined by year of the most recent equipment replacement based on standard equipment lifetimes.
• Individual space conditioning and water heating systems, one per single family building.
• Split-system air conditioner with natural gas furnace. • Gas cooktop, oven, and clothes dryer.
The methodology applied in the analyses begins with a design that matches the specifications as described in Table 3 for each of the three vintages. Heat pump space conditioning measures were modeled to determine the projected energy performance and utility cost impacts relative to the baseline vintage.
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 12 Table 3. Efficiency Characteristics for Three Vintage Cases Building Component Efficiency
Feature Pre-1978 Vintage 1978-1991 Vintage 1992-2010 Vintage Envelope
Exterior Walls 2x4, 16-inch on center wood frame,
R-02
2x4 16 inch on center wood frame,
R-11
2x4 16 inch on center wood frame,
R-13
Foundation Type & Insulation Uninsulated slab (CZ 2-15) Raised floor, R-0 (CZ 1 & 16)
Uninsulated slab (CZ 2-15)
Raised floor, R-0 (CZ 1 & 16)
Uninsulated slab (CZ 2-15)
Raised floor, R-19 (CZ 1 & 16)
Ceiling Insulation & Attic Type
Vented attic, R-5 @ ceiling level for CZ
6 & 7,
Vented attic, R-11 @ ceiling level
(all other CZs)
Vented attic, R-19 @ ceiling level Vented attic, R-30 @ ceiling level Roofing Material & Color Asphalt shingles, dark
(0.10 reflectance, 0.85 emittance)
Asphalt shingles, dark
(0.10 reflectance, 0.85 emittance)
Asphalt shingles, dark
(0.10 reflectance, 0.85 emittance)
Radiant Barrier No No No
Window Type: U-factor/SHGC3 Metal, single pane: 1.16/0.76 Metal, dual pane: 0.79/0.70 Vinyl, dual pane Low-E: 0.55/0.40 House Infiltration at 50 Pascals 15 ACH50 10 ACH50 7 ACH50 HVAC Equipment
Heating Efficiency 78 AFUE (assumes 2 replacements) 78 AFUE (assumes 1 replacement) 78 AFUE Cooling Efficiency 10 SEER (assumes 2 replacements) 10 SEER (assumes 1 replacement) 13 SEER, 11 EER Duct Location & Details Attic, R-2.1, 30% leakage at 25 Pa Attic, R-2.1, 25% leakage at 25 Pa Attic, R-4.2, 15% leakage at 25 Pa Whole Building Mechanical
Ventilation None None None
Water Heating Equipment
Water Heater Efficiency 0.575 Energy Factor (assumes 2
replacements)
0.575 Energy Factor (assumes 1
replacement) 0.575 Energy Factor
Water Heater Type 40-gallon gas storage 40-gallon gas storage 40-gallon gas storage Pipe Insulation None None None
Hot Water Fixtures Standard, non-low flow Standard, non-low flow Standard, non-low flow 2 Pre-1978 wall modeled with R-5 cavity insulation to better align wall system performance with monitored field data and not overestimate energy use. 3 Window type selections were made based on conversations with window industry expert, Ken Nittler. If a technology was entering the market during the time period (e.g., Low-E during 1992-2010 or dual-pane during 1978-1991) that technology was included in the analysis. This provides a conservative assumption for overall building performance and additional measures may be cost-effective for buildings with lower performing windows, for example buildings with metal single pane windows in the 1978-1991 vintage
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 13
2.3 Cost-Effectiveness Approach
2.3.1 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 way they value energy impacts:
• On-Bill: Customer-based lifecycle cost approach that values energy based upon estimated site energy usage and customer On-Bill savings using electricity and natural gas utility rate schedules over a 30-year duration, accounting for a three percent discount rate and energy cost inflation per Appendix 6.3.7. • Long-term Systemwide Cost (LSC): Formerly known as Time Dependent Valuation (TDV) energy cost savings, LSC reflects the Energy Commission’s current lifecycle cost (LCC) methodology, which is intended to capture the total value or cost of energy use over 30 years. This method accounts for the hourly cost of marginal generation, transmission and distribution, fuel, capacity, losses, and cap-and-tradebased CO2 emissions (California Energy Commission, 2023). This is the methodology used by the Energy Commission in evaluating cost-effectiveness for measures in the 2025 Energy Code.
Energy simulations were completed using the 2025 research version of the Residential California Building Energy Code Compliance software (CBECC).
2.3.2 Costs
The Reach Codes Team assessed the incremental costs and savings of the packages over the lifecycle of 30-years. Incremental costs represent the equipment, installation, replacement, and maintenance costs of the proposed measure relative to the 2025 Energy Code minimum requirements or standard industry practices.
In February 2024, the TECH Clean California statewide program completed an incremental cost study from cost data collected from 64 contractor participants (Opinion Dynamics, 2024). This report directly uses the TECH costs for all the scenarios for which there was TECH cost data available. These costs were supplemented with measure costs the Reach Codes Team obtained from a contractor survey conducted in the summer of 2023. Additional detail on the contractor cost survey is available in the prior existing building statewide study (Statewide Reach Codes Team, 2024). The following summarizes key assumptions in this costing approach.
• Average statewide costs from the TECH Study were used, no regional specific costs were applied.
• Costs for 3-ton and 4-ton units were scaled for smaller and larger systems based on linear interpolation between the 3-ton and 4-ton costs. 2025/06/09
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 14 • The TECH study provided cost for a minimum efficiency 60,000 Btu/h gas furnace.
However, beginning in 2028, newly installed residential gas furnaces must comply with updated federal efficiency standards requiring a minimum of 95% AFUE4 .
Because the TECH study did not include cost estimates for a 95% AFUE condensing furnace, an adjustment was made using data from the statewide contractor cost survey. For systems requiring larger furnace capacities, cost estimates were derived as follows:
o 80,000 Btu/h furnaces (serving systems sized 3 tons): The cost difference between the minimum efficiency and 95% AFUE versions of the 80,000 Btu/h furnace and the cost difference between the minimum efficiency 80,000 Btu/h furnace and the minimum efficiency 60,000 Btu/h furnace, as reported in the contractor survey, was added to the TECH cost for the 60,000 Btu/h unit. o 100,000 Btu/h furnaces (serving systems 4 tons and larger): The same method was applied using the corresponding cost differential for 100,000 Btu/h units.
• At time of replacement for the heat pump, based on heating loads and contractor feedback it is assumed an electric resistance backup coil would be installed with the air handler for Climate Zones 1 and 16. The CBECC-Res software applies back up electric resistance heating for all climate zones whenever it is assumed that the heat pump cannot meet the heating load based on the performance of currently available products (Heinemeier, 2025).The TECH costs did not include this option. The $819 incremental cost from the statewide study was added in this case. • At the time of replacement for a furnace when it fails, the statewide study assumed a fan motor replacement. The TECH costs did not include this option. A $1,200 incremental cost was added to the TECH cost.
• At time of replacement for high efficiency heat pump, the sum of the TECH cost for standard efficiency heat pump and the incremental cost difference from the statewide study for high efficiency and standard efficiency heat pump was applied.
Costs were applied based on the system capacity from heating and cooling load calculations in CBECC-Res as presented in Table 4. 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 revealed that Climate Zones 2 through 15 were coolingdominated, whereas Climate Zones 1 and 16 were heating-dominated. In these heating4 https://www.energy.gov/articles/doe-finalizes-energy-efficiency-standards-residential-furnaces-saveamericans-15- billion#:~:text=These%20furnace%20efficiency%20standards%20were,heat%20for%20the%20living %20space.
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 15 dominated zones, the heat pump was upsized compared to an air conditioner designed solely for cooling to ensure adequate heating performance.
Table 4. System Sizing by Climate Zone
Climate
Zone
Air Conditioner
Capacity (tons)
Heat Pump
Capacity (tons)
1 1.5 3.0
2 3.5 3.5
3 2.5 2.5
4 3.5 3.5
5 3.0 3.0
6 3.0 3.0
7 3.0 3.0
8 4.0 4.0
9 4.0 4.0
10 4.0 4.0
11 4.5 4.5
12 4.0 4.0
13 4.5 4.5
14 4.0 4.0
15 5.0 5.0
16 3.5 4.0
2.3.3 Metrics
Cost-effectiveness is presented using net present value (NPV). • NPV: The Reach Codes Team uses net savings (NPV benefits minus NPV costs) as the cost-effectiveness metric. If the net savings of a measure or package is positive, it is considered cost effective. Negative net savings represent net costs to the consumer. A measure that has negative energy cost benefits (energy cost increase) can still be cost effective if the costs to implement the measure are even more negative (i.e., construction and maintenance cost savings).
Improving the energy performance of a building often requires an initial investment. In most cases the benefit is represented by annual On-Bill utility or LSC savings, and the cost 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).
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 16
2.3.4 Utility Rates
In coordination with the CA IOU rates 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 to calculate utility costs and determine On-Bill cost-effectiveness for the proposed measures and packages. The utility tariffs, summarized in Table 5 and Table 6 with details in Section 6.2.26.2.2, were determined based on the appropriate rate for each. 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 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.
First-year utility costs were calculated using hourly electricity and natural gas output from CBECC-Res and applying the utility tariffs summarized in Table 5 and Table 6. Homes with a heat pump in IOU territory are eligible for either the electrification or the standard tariff. Utility costs were calculated under both tariffs with results presented using the one that yielded the lower annual utility cost. The electrification tariff resulted in better utility costs savings when there was high kWh usage, typically in older, less efficient homes. Conversely, newer homes which are more efficient, tend to benefit more under the standard tariff. However, in SCE’s milder climate zones, older homes benefit more under the standard tariff. Annual costs were also estimated for IOU customers eligible for the CARE tariff discounts on both electricity and natural gas bills.
Table 5. Investor-Owned Utility Tariffs Used Based on Climate Zone Climate
Zones
Electric / Gas
Utility
Electricity
Tariff:
Standard
Rate
Electricity
Tariff:
Electrification
Rate
Natural Gas
Tariff
1-5,11-13,16 PG&E / PG&E E-TOU-C E-ELEC G1
5 PG&E / SoCalGas E-TOU-C E-ELEC GR
6, 8-10, 14, 15 SCE / SoCalGas TOU-D-4-9 TOU-D-PRIME GR 7, 10, 14 SDG&E / SDG&E TOU-DR-1 EV-TOU-5 GR
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 17 Table 6. Publicly Owned Utility Tariffs Used Based on Climate Zone Climate
Zones
Electric / Gas Utility
Electricity Tariff: Standard
Rate
Electricity
Tariff:
Electrification
Rate
Natural Gas
Tariff
4 CPAU / CPAU E-1 G1
12 SMUD / PG&E R-TOD G1
Utility rates are assumed to escalate over time. Because it is very difficult to predict how rates will change, two escalation scenarios are presented in this study to represent a range of outcomes. See Appendix 6.3.7 Fuel Escalation Assumptions for details. 1) Modest Gas Escalation: This scenario is based on assumptions from the CPUC 2021 En Banc hearings on utility costs through 2030 (California Public Utilities Commission, 2021a). Escalation rates throughout the remainder of the 30-year evaluation period are based on the escalation rate assumptions within the 2022 Energy Code TDV factors developed by the Energy Commission (California Energy Commission. 2021b).
2) High Gas Escalation: This scenario is based on escalation rates developed by the Energy Commission and used within the 2025 Energy Code LSC factors (LSC replaces TDV in the 2025 Energy Code) which assumed steep increases in gas rates in the latter half of the analysis period.
Electricity tariff structures will evolve over time. Most recently, the CPUC approved an income-graduated fixed charge intended to benefit low-income customers and support electrification measures.5 The IOUs are currently developing tariffs that meet the direction given by the CPUC in this proceeding. These tariffs were not available at the time of this study, but this analysis may be re-evaluated later in 2025 once the rates are finalized. 5 https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/demand-responsedr/demand-flexibility-rulemaking 2025/06/09
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 18
2.4 Measure Details and Cost
This section describes the details of the measures and documents incremental costs. All measure costs were obtained from the TECH cost survey and contractor survey unless otherwise noted. These surveys reflect the cost to the customer and include equipment, labor, permit fees, and required HERS testing.
The following heat pump space heater (HPSH) measures were evaluated as described below. All included HERS verified refrigerant charge, 10% duct sealing, and 300 CFM/ton airflow, aligned with the proposed code requirements for the 2025 Title 24 code. 1) Dual Fuel Heat Pump (DFHP Existing Furnace): Replace existing ducted AC with an electric heat pump and install controls to operate the heat pump as the primary space conditioning source and to use the existing gas furnace (78 AFUE) for backup heat when heating demands cannot be met by the heat pump. In this report, dual fuel heat pumps were modeled to disable furnace operation above an outdoor temperature of 35°F in compliance with Energy Code Section 150.0(h)7, which requires this lockout for any heat pump with supplemental heating. A minimum federal efficiency (14.3 SEER2, 11.7 EER2, 7.5 HSPF2) heat pump was evaluated.
Savings are compared to a new AC (14.3 SEER2, 11.7 EER2) alongside the existing furnace (78 AFUE). A new evaporator coil is assumed to be installed with the AC system.
2) HPSH: Replace existing ducted AC and natural gas furnace with an electric heat pump and air handler. Minimum federal efficiency (14.3 SEER2, 11.7 EER2, 7.5 HSPF2) heat pumps were evaluated. Savings are compared to a new ducted natural gas furnace and AC (14.3 SEER2, 11.7 EER2, 80 AFUE).
3) High Efficiency HPSH: Replace existing ducted AC and natural gas furnace with an electric heat pump and air handler. Higher efficiency (17 SEER2, 12.48 EER2, 9.5 HSPF2) heat pumps were evaluated. Savings are compared to a new ducted natural gas furnace and AC (14.3 SEER2, 11.7 EER2, 80 AFUE).
Over the 30-year analysis period, certain changes are assumed when the equipment is replaced that impact both lifetime costs and energy use. Table 7 and Table 8 present the lifetime scenario for the DFHP Existing Furnace and HPSH measures, respectively. The analysis assumed a 20-year effective useful lifetime (EUL) for a furnace, a 15-year EUL for an air conditioner and a 15-year EUL for a heat pump. Lifetimes are based on the Database for Energy Efficient Resources (DEER) (California Public Utilities Commission, 2021b). The existing furnace is assumed to be halfway through its EUL at the beginning of the analysis period. After 10 years when the furnace reaches the end of its life and needs to be replaced, it will be subject to new federal efficiency standards for residential gas furnaces that go into effect in 2028 requiring 95 AFUE6
. Five years later the air conditioner reaches the end of its life and is replaced with a new air conditioner.
6 https://www.energy.gov/articles/doe-finalizes-energy-efficiency-standards-residential-furnaces-saveamericans-15- billion#:~:text=These%20furnace%20efficiency%20standards%20were,heat%20for%20the%20livin g%20space.
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 19 For the DFHP upgrade case, after 10 years when the furnace fails it’s expected that the furnace is abandoned in place since the heat pump serves primary heating and was sized to provide the full design heating load. In this case it is assumed that the fan motor is replaced with a new aftermarket unit and operates another five years until the heat pump fails and is replaced with a new heat pump and air handler. Table 7 through Table 8 present the lifecycle incremental cost breakdown for a 4-ton system. The heat pump is sized for each climate zone based on the heating and cooling load as shown in Table 4, and the 4-ton system was selected as an example to show the lifecycle cost breakdown.
Table 7. Lifecycle Incremental Cost Breakdown for a 4-Ton DFHP Existing Furnace Calendar
Year
Baseline AC
Replacement
Schedule
Baseline
Future
Cost
Baseline
Present
Value
Cost
Heat Pump
Heat
Pump
Future
Cost
Heat
Pump
Present
Value
Cost
2026 AC fails, install new
AC, keep existing
furnace
$10,431 $10,431 AC fails, install new
HP, keep existing
furnace
$12,347 $12,347
2036 Furnace fails, install
new 95AFUE
furnace
$7,476 $5,563 Furnace fails,
replace fan motor
$1,200 $893
2041 AC fails, install new
AC
$10,431 $6,695 HP fails, install new
HP and air handler
$14,529 $9,326
Total $22,689 $22,566
Incremental Cost -$123
Table 8. Lifecycle Incremental Cost Breakdown for 4-Ton HPSH Calendar
Year
Baseline AC
Replacement
Schedule
Baseline Future
Cost
Baseline
Present
Value
Cost
Heat Pump
Heat Pump
Future
Cost
Heat
Pump
Present
Value
Cost
2026 AC fails, install
new AC &
furnace
$13,808 $13,808 AC fails,
install new
HP & AHU
$14,529 $14,529
2041 AC fails, install
new AC
$10,431 $6,695 HP fails,
install new
HP & AHU
$13,529 $8,684
2046 Furnace fails,
install new
95AFUE
furnace
$7,476 $4,139
- - -
2056 Remaining
useful life for
furnace
-
-$1,540
- - -
Total $23,103 $23,213
Incremental Cost $110
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 20 Table 9 presents estimated first and lifetime costs for the baseline and heat pump scenarios for 4-ton equipment. Costs include all material and installation labor including providing new 240 V electrical service to the air handler location for all new air handler installations and decommissioning of the furnace for the cases where the furnace is removed. DFHP costs incorporate controls installation and commissioning to ensure the heat pump and the furnace communicate properly and don’t operate at the same time. Future replacement costs do not include any initial costs associated with 240V electrical service or furnace decommissioning.
Table 9. HVAC Measure Cost Assumptions – 4-Ton Electric Replacements Measure Case
AC +
Evaporator
Coil
Gas
Furnace
/AC
DFHP Existing
Furnace HPSH
High
Efficiency
HPSH
Base Case - - AC +
Evaporator Coil
Gas
Furnace
/AC
Gas
Furnace
/AC
First Cost $10,431 $13,808 $12,347 $14,529 $17,506
Replacement Cost
(Future Value) $17,907 $17,907 $15,729 $13,529 $16,506
Replacement Cost
(Present Value) $12,258 $11,639 $10,219 $8,684 $10,594
Remaining Value at
Year 30 $0 -$1,540 $0 $0 $0
Total Lifecycle Cost $22,689 $23,103 $22,566 $23,213 $28,100 Incremental Cost - - -$123 $110 $4,997
2.4.1 Lifecycle Cost Assuming Zero-NOx Standards for Space Heating After 2030
The California Air Resource Board proposed a strategy for reducing emissions in their 2022 Scoping Plan for Achieving Carbon Neutrality that includes a zero-emission standard for space and water heaters sold in California that would go into effect in 2030 (California Air Resources Board, 2022).
The South Coast Air Quality Management District (SCAQMD) proposed Rule 1111 for the Reduction of NOx Emissions from Natural Gas-Fired Furnaces. This rule applies to furnaces less than 175,000 Btu/hr and sets compliance goals for manufacturers with the proposed dates in Table 10. The sale of gas furnaces above the compliance target will incur a mitigation fee (SCAQMD, 2025).
Table 10. SCAQMD Rule 1111 Proposed Manufacturer Compliance Targets Target Dates 2027-2028 2029-2032 2033-2035 2036 and after NOx Emitting Units (e.g. gas) 70% 50% 25% 10%
Zero-Emission Units 30% 50% 75% 90%
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 21 The Bay Area Air Quality Management District (BAAD) adopted Rule 9-4 that similarly requires zero NOx standards for space heating systems sold in the Bay Area.
Implementation for residential furnaces will begin January 2029 (BAAD, 2025).
The BAAD Rule 9-4 has been adopted, but both the California Air Resources Board and SCAQMD Rule 1111 are proposed rules that have not yet been adopted, but given the implications these rulings would have on the 30-year cost-effectiveness if gas furnaces were very limited or no longer available in 2030, a sensitivity analysis for this scenario is included in this study for the DFHP Existing Furnace scenario. The other heat pump measures would also be impacted by this ruling; however, for simplicity the team selected one measure to give a sense of the impact on the results. The following costs reflect the scenario where gas furnaces are not available in 2030. This 30-year lifecycle analysis assumes that in 10 years when the furnace reaches the end of its useful life and needs to be replaced, it will be subjected to the SCAQMD Rule 1111 or California Air Resources Board proposal and will be replaced with a heat pump.
Table 11. Lifecycle Incremental Cost Breakdown for 4-Ton System with no Gas Furnaces after 2030
Calendar
Year
Baseline AC
Replacement
Schedule
Baseline
Future
Cost
Baseline
Present
Value
Cost
Heat Pump
Heat
Pump
Future
Cost
Heat
Pump
Present
Value
Cost
2026
AC fails, install new
AC, keep existing
furnace
$10,431 $10,431
AC fails, install new
HP, keep existing
furnace
$12,347 $12,347
2036 Furnace fails, install
new HP $14,529 $10,811 Furnace fails, replace fan motor $1,200 $893 2041 - - - HP fails, install new
HP and air handler $14,529 $9,326
2051 HP fails, install new
HP $13,529 $6,462 - - -
2056 Remaining useful
life for HP - -$4,459 - - -
Total $23,244 $22,566
Incremental Cost -$679
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 22 3 Results
The primary objective of the evaluation is to identify cost-effective HPSH upgrade measures for existing single family buildings, to support the design of local ordinances encouraging installation of a heat pump when replacing an air conditioner. While this section focuses primarily on the results of the cost-effectiveness analysis, it is important to highlight that the associated greenhouse gas (GHG) emissions savings are significant – averaging a 25% annual reduction across the climate zones and vintages. A full dataset of all results, including site energy, source energy, LSC and GHG emissions, 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/.
3.1 Cost-Effectiveness Results
Table 12 through Table 14 present results across the 16 climate zones for the 1992-2010 vintage using standard tariffs and Table 15 through Table 17 present results across the 16 climate zones and three vintages using CARE tariffs. Results show the incremental cost and utility bill savings for the first year along with cost effectiveness results for LSC and On-Bill under both the modest and high gas escalation scenarios. Results for additional vintages using standard tariffs are in Appendix 6.2 Cost-Effectiveness Results. 2025/06/09
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 23
3.1.1 Cost Effectiveness Results Using Standard Tariffs Table 12. [1992-2010] DFHP Existing Furnace
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $2,405 $60 $10,843 $5,471 $21,616
CZ02 PGE $1,670 ($86) $8,387 $2,238 $12,692
CZ03 PGE $1,178 $15 $8,383 $4,891 $13,958
CZ04 PGE $1,670 ($68) $7,322 $1,880 $10,049
CZ04 CPAU $1,670 ($9) $7,322 $2,132 $7,104
CZ05 PGE $1,424 ($12) $6,848 $3,425 $11,150
CZ05 PGE/SCG $1,424 ($195) $6,848 ($1,864) $2,099
CZ06 SCE/SCG $1,424 ($34) $2,647 $675 $1,468
CZ07 SDGE $1,424 ($36) $2,691 $599 $1,734
CZ08 SCE/SCG $1,916 ($65) $1,879 ($811) $162
CZ09 SCE/SCG $1,916 ($90) $2,600 ($1,186) $288
CZ10 SCE/SCG $1,916 ($79) $2,295 ($982) $394
CZ10 SDGE $1,916 $54 $2,295 $2,201 $4,708
CZ11 PGE $2,162 $68 $7,597 $4,639 $14,675
CZ12 PGE $1,916 $44 $8,317 $4,702 $15,222
CZ12 SMUD/PGE $1,916 $353 $8,317 $11,622 $22,364
CZ13 PGE $2,162 $76 $5,244 $3,897 $11,138
CZ14 SCE/SCG $1,916 ($179) $4,654 ($2,364) $1,340
CZ14 SDGE $1,916 ($22) $4,654 $1,282 $7,058
CZ15 SCE/SCG $2,408 ($133) ($271) ($3,438) ($3,209)
CZ16 PGE $2,243 ($66) $8,842 $1,260 $11,982
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 24 Table 13. [1992-2010] Standard Efficiency HPSH
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $3,067 ($145) $10,949 ($34) $17,899
CZ02 PGE $652 ($229) $9,362 ($702) $11,825
CZ03 PGE $514 ($62) $8,244 $2,373 $11,665
CZ04 PGE $652 ($205) $8,680 ($572) $10,753
CZ04 CPAU $652 ($85) $8,680 $556 $7,194
CZ05 PGE $583 ($113) $6,957 $752 $9,206
CZ05 PGE/SCG $583 ($316) $6,957 ($5,101) ($811)
CZ06 SCE/SCG $583 ($37) $2,134 ($63) $716
CZ07 SDGE $583 ($39) $2,156 ($149) $981
CZ08 SCE/SCG $721 ($79) $1,812 ($1,356) ($371)
CZ09 SCE/SCG $721 ($118) $2,589 ($2,038) ($524)
CZ10 SCE/SCG $721 ($103) $2,311 ($1,723) ($259)
CZ10 SDGE $721 $34 $2,311 $1,533 $4,218
CZ11 PGE $790 ($35) $8,817 $2,833 $14,504
CZ12 PGE $721 ($94) $9,199 $1,812 $13,563
CZ12 SMUD/PGE $721 $363 $9,199 $12,027 $24,107
CZ13 PGE $790 $6 $5,948 $2,558 $10,687
CZ14 SCE/SCG $721 ($412) $6,635 ($6,964) ($1,073)
CZ14 SDGE $721 ($107) $6,635 $166 $10,249
CZ15 SCE/SCG $859 ($139) ($112) ($3,434) ($3,186)
CZ16 PGE $2,095 ($385) $13,600 ($2,842) $19,424
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 25 Table 14. [1992-2010] High Efficiency HPSH
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $5,998 $56 $9,783 ($350) $17,727
CZ02 PGE $3,606 ($94) $7,527 ($2,544) $10,080
CZ03 PGE $3,422 $59 $5,701 $312 $9,692
CZ04 PGE $3,606 ($61) $6,961 ($2,193) $9,235
CZ04 CPAU $3,606 $0 $6,961 ($2,389) $4,310
CZ05 PGE $3,514 $4 $4,176 ($1,450) $7,088
CZ05 PGE/SCG $3,514 ($199) $4,176 ($7,303) ($2,929)
CZ06 SCE/SCG $3,514 ($14) ($2,162) ($4,367) ($3,567)
CZ07 SDGE $3,514 ($12) ($2,090) ($4,312) ($3,191)
CZ08 SCE/SCG $3,698 $13 ($1,660) ($4,217) ($3,149)
CZ09 SCE/SCG $3,698 ($26) ($750) ($4,883) ($3,284)
CZ10 SCE/SCG $3,698 ($4) ($844) ($4,418) ($2,864)
CZ10 SDGE $3,698 $132 ($844) ($1,068) $1,587
CZ11 PGE $3,789 $186 $7,738 $2,845 $14,675
CZ12 PGE $3,698 $88 $7,575 $996 $12,879
CZ12 SMUD/PGE $3,698 $422 $7,575 $8,459 $20,580
CZ13 PGE $3,789 $208 $4,419 $2,165 $10,439
CZ14 SCE/SCG $3,698 ($219) $5,760 ($7,575) ($1,506)
CZ14 SDGE $3,698 $77 $5,760 ($424) $9,604
CZ15 SCE/SCG $3,881 $50 ($2,144) ($4,209) ($3,786)
CZ16 PGE $5,071 ($97) $14,557 ($1,291) $21,181
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 26
3.1.2 Cost Effectiveness Results Using CARE Tariffs
Table 15. [1992-2010] DFHP Existing Furnace CARE
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $2,405 $153 $10,843 $6,436 $19,266
CZ02 PGE $1,670 $18 $8,387 $3,842 $12,159
CZ03 PGE $1,178 $73 $8,383 $5,574 $12,777
CZ04 PGE $1,670 $14 $7,322 $3,143 $9,641
CZ04 CPAU $1,670 $0 $7,322 $711 $711
CZ05 PGE $1,424 $47 $6,848 $4,198 $10,337
CZ05 PGE/SCG $1,424 ($98) $6,848 $23 $3,191
CZ06 SCE/SCG $1,424 ($18) $2,647 $967 $1,600
CZ07 SDGE $1,424 ($16) $2,691 $1,000 $1,887
CZ08 SCE/SCG $1,916 ($38) $1,879 ($285) $495
CZ09 SCE/SCG $1,916 ($52) $2,600 ($450) $731
CZ10 SCE/SCG $1,916 ($45) $2,295 ($331) $771
CZ10 SDGE $1,916 $51 $2,295 $1,998 $3,963
CZ11 PGE $2,162 $115 $7,597 $4,993 $12,965
CZ12 PGE $1,916 $103 $8,317 $5,287 $13,643
CZ12 SMUD/PGE $1,916 $418 $8,317 $12,339 $20,922
CZ13 PGE $2,162 $100 $5,244 $3,939 $9,686
CZ14 SCE/SCG $1,916 ($98) $4,654 ($849) $2,119
CZ14 SDGE $1,916 $23 $4,654 $2,007 $6,528
CZ15 SCE/SCG $2,408 ($88) ($271) ($2,456) ($2,260)
CZ16 PGE $2,243 $33 $8,842 $2,737 $11,267
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 27 Table 16. [1992-2010] Standard Efficiency HPSH CARE
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $3,067 $33 $10,949 $2,703 $16,973
CZ02 PGE $652 ($59) $9,362 $2,211 $12,188
CZ03 PGE $514 $25 $8,244 $3,685 $11,074
CZ04 PGE $652 ($53) $8,680 $2,048 $11,067
CZ04 CPAU $652 $0 $8,680 $255 $255
CZ05 PGE $583 ($13) $6,957 $2,389 $9,117
CZ05 PGE/SCG $583 ($173) $6,957 ($2,232) $1,208
CZ06 SCE/SCG $583 ($20) $2,134 $249 $872
CZ07 SDGE $583 ($18) $2,156 $279 $1,161
CZ08 SCE/SCG $721 ($47) $1,812 ($728) $62
CZ09 SCE/SCG $721 ($70) $2,589 ($1,094) $122
CZ10 SCE/SCG $721 ($61) $2,311 ($892) $281
CZ10 SDGE $721 $39 $2,311 $1,509 $3,612
CZ11 PGE $790 $60 $8,817 $4,141 $13,421
CZ12 PGE $721 $22 $9,199 $3,592 $12,940
CZ12 SMUD/PGE $721 $471 $9,199 $13,622 $23,292
CZ13 PGE $790 $61 $5,948 $3,234 $9,693
CZ14 SCE/SCG $721 ($241) $6,635 ($3,632) $1,098
CZ14 SDGE $721 ($5) $6,635 $1,996 $9,885
CZ15 SCE/SCG $859 ($91) ($112) ($2,414) ($2,201)
CZ16 PGE $2,095 ($92) $13,600 $2,163 $19,892
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 28 Table 17. [1992-2010] High Efficiency HPSH CARE
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $5,998 $164 $9,783 $813 $15,177
CZ02 PGE $3,606 $28 $7,527 ($683) $9,357
CZ03 PGE $3,422 $104 $5,701 $674 $8,120
CZ04 PGE $3,606 $41 $6,961 ($703) $8,383
CZ04 CPAU $3,606 $0 $6,961 ($4,595) ($4,595)
CZ05 PGE $3,514 $62 $4,176 ($727) $6,056
CZ05 PGE/SCG $3,514 ($98) $4,176 ($5,348) ($1,853)
CZ06 SCE/SCG $3,514 ($5) ($2,162) ($4,219) ($3,583)
CZ07 SDGE $3,514 ($0) ($2,090) ($4,112) ($3,235)
CZ08 SCE/SCG $3,698 $15 ($1,660) ($4,248) ($3,401)
CZ09 SCE/SCG $3,698 ($8) ($750) ($4,603) ($3,330)
CZ10 SCE/SCG $3,698 $6 ($844) ($4,300) ($3,065)
CZ10 SDGE $3,698 $103 ($844) ($1,892) $191
CZ11 PGE $3,789 $203 $7,738 $2,425 $11,808
CZ12 PGE $3,698 $141 $7,575 $1,351 $10,784
CZ12 SMUD/PGE $3,698 $471 $7,575 $8,735 $18,405
CZ13 PGE $3,789 $192 $4,419 $1,255 $7,809
CZ14 SCE/SCG $3,698 ($111) $5,760 ($5,632) ($783)
CZ14 SDGE $3,698 $115 $5,760 ($98) $7,755
CZ15 SCE/SCG $3,881 $36 ($2,144) ($4,549) ($4,220)
CZ16 PGE $5,071 $95 $14,557 $1,460 $19,324
3.2 Zero-NOx Scenario Results
This section presents cost-effectiveness results for the DFHP Existing Furnace under the scenario where proposed air quality district zero-NOx rules go into effect over the next 10 years. In the base case, at time of replacement of the gas furnace at year 10 a heat pump is installed. The energy profile between the base case and the heat pump upgrade case are subsequently identical for the remaining 20 years of the 30-year analysis period. As a result, energy and cost savings only persist for the first 10 years.
Table 18 shows the On-Bill NPV cost-effectiveness results and Table 19 the LSC costeffectiveness results for all three vintages. 2025 LSC savings were calculated using individual year multipliers for the first 10 years, 2026 through 2035. 2025/06/09
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 29 Table 18. DFHP Existing Furnace On-Bill NPV (Zero-NOx Rule) Climate
Zone
Electric/
Gas Utility
On-Bill NPV
Pre-1978 1978-1991 1992-2010
CZ01 PGE $5,473 $4,136 $2,349
CZ02 PGE $1,785 $1,031 $1,101
CZ03 PGE $2,863 $2,097 $2,052
CZ04 PGE $2,133 $1,162 $1,019
CZ04 CPAU $2,340 $1,599 $1,213
CZ05 PGE $1,918 $1,486 $1,576
CZ05 PGE/SCG ($1,308) ($834) ($491)
CZ06 SCE/SCG $401 $605 $635
CZ07 SDGE $1,473 $999 $641
CZ08 SCE/SCG ($125) $99 $195
CZ09 SCE/SCG ($563) ($183) $22
CZ10 SCE/SCG ($259) $53 $110
CZ10 SDGE $2,985 $2,261 $1,430
CZ11 PGE $3,287 $2,866 $2,279
CZ12 PGE $2,935 $2,578 $2,202
CZ12 SMUD/PGE $7,877 $5,978 $5,040
CZ13 PGE $2,927 $2,556 $2,053
CZ14 SCE/SCG ($864) ($943) ($543)
CZ14 SDGE $2,204 $1,655 $1,064
CZ15 SCE/SCG $1,338 $396 ($688)
CZ16 PGE $1,192 $1,071 $1,096
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 30 Table 19. DFHP Existing Furnace LSC Savings (Zero-NOx Rule) Climate
Zone
Electric/
Gas Utility
LSC NPV
Pre-1978 1978-1991 1992-2010
CZ01 PGE $3,019 $2,510 $1,558
CZ02 PGE $1,256 $1,025 $1,006
CZ03 PGE $1,460 $1,120 $1,036
CZ04 PGE $1,242 $949 $887
CZ04 CPAU $1,242 $949 $887
CZ05 PGE $1,127 $816 $820
CZ05 PGE/SCG $1,127 $816 $820
CZ06 SCE/SCG $545 $318 $251
CZ07 SDGE $639 $403 $314
CZ08 SCE/SCG $428 $279 $244
CZ09 SCE/SCG $608 $424 $372
CZ10 SCE/SCG $469 $320 $293
CZ10 SDGE $469 $320 $293
CZ11 PGE $1,871 $1,475 $1,263
CZ12 PGE $1,924 $1,539 $1,356
CZ12 SMUD/PGE $1,375 $1,090 $939
CZ13 PGE ($206) ($186) $50
CZ14 SCE/SCG ($206) ($186) $50
CZ14 SDGE $127 $60 $38
CZ15 SCE/SCG ($185) ($12) $77
CZ16 PGE $3,019 $2,510 $1,558
3.3 AC Pathways for Heat Pump Replacements
Many jurisdictions are interested in seeing alternative pathways for residents who may prefer to replace an air conditioner with similar equipment, rather than migrating to a heat pump system. Alternative packages analyzed to support this request include air conditioning equipment combined with additional efficiency measures resulting in options that are reasonably energy or LSC cost equivalent to a heat pump system, to the extent feasible.
Figure 1 shows two AC pathways, one with an existing duct system and another path with a new duct system, alongside the heat pump pathways. The figure presents the proposed efficiency upgrade measures that would be part of a reach code (solid blue) along with the relevant requirements from Title 24, Part 6 that are triggered as part of equipment replacements (white or gradient blue). A reach code that establishes requirements when an air conditioner is replaced or installed new could allow for either a heat pump to be installed or an AC as long as the performance measures listed below are met. 2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 31 Figure 1. AC vs. Heat Pump Pathway Requirements
The heat pump only and two AC pathways are presented in Figure 2 comparing total LSC energy use relative to the existing home for the 1992-2010 vintage. The heat pump path is represented by the DFHP Existing Furnace scenario. In most climate zones, the heat pump path results in higher energy savings, in the milder climates the AC and new ducts and New AC Only paths save marginally more energy.
Figure 2. AC vs. Heat Pump Energy Comparison
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 32 Though the AC path does not need to meet cost-effectiveness criteria to be adopted as a reach code since it’s an alternative path, in order to understand the implications of the AC path on the customer, Table 20 and Table 21 present estimated costs for the new AC only and the new AC + new ducts paths respectively.
Table 20. New AC Only Path Cost Estimates
New AC Only Path Pre-1978 1978-1991 1992-2010
Fan Efficacy: 0.45 W/CFM - - -
Refrigerant Charge Verification $100 $100 $1007
R-49 Attic Insulation $5,483 $3,612 $1,827
Air Sealing $1,963 $1,963 $1,963
Total $7,546 $5,675 $3,790
Table 21. New AC/Furnace and New Ducts Path Cost Estimates New AC and New Ducts Path Pre-1978 1978-1991 1992-2010
New R-8 Ducts $6,311 $6,311 $6,311
Furnace $5,951 $5,951 $5,951
Fan Efficacy: 0.35 W/CFM $500 $500 $500
Refrigerant Charge Verification $100 $100 $100
Total $12,862 $12,862 $12,862
7 This is an incremental cost and in some climate zones, refrigerant charge verification is required so there is no incremental cost added.
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 33 4 Recommendations and Discussion
This analysis evaluated the feasibility and cost-effectiveness of AC to heat pump measures in California existing homes built before 2010. To meet the needs of jurisdictions evaluating this option, Statewide Reach Codes Team used both On-Bill and LSC-based lifecycle cost approaches to evaluate cost-effectiveness and quantify the energy cost savings associated with energy efficiency measures compared to the incremental costs associated with the measures.
Conclusions and Discussion:
1. Heat pumps are significantly more efficient than gas furnaces, requiring less than half the energy to meet the heating load. However, despite this reduction in heating energy use, the cost of heating a home using electricity (heat pump) could be higher than the cost to heat that same home with natural gas (furnace), depending on the electricity tariffs relative to the gas tariffs. Therefore, while a heat pump measure could be deemed as cost-effective over its lifecycle, installing a heat pump could result in a decrease or an increase in utility costs in the first years relative to a gas furnace and AC system. For example, the heat pump space heater measure in climate zone 12 in the newest vintage results in the customer saving money on their utility bill in SMUD territory but paying more on their utility bill in PG&E territory. Both PG&E and SMUD territory use PG&E gas rates, but SMUD has lower electricity rates than PG&E. With fuel switching measures like the AC to HP measure, the electricity to gas ratio has a significant impact on the savings or costs the customer will see by switching from gas to an electric heat pump space heater.
2. The LSC metric most often produces more favorable cost-effectiveness results relative to the results produced using actual utility costs (On-Bill). When the analysis assumes a higher escalation rate for natural gas costs relative to electricity in future years (high gas escalation), the On-Bill results are more favorable in some cases. a. In the oldest (pre-1978) vintage, all three measures (dual fuel heat pump with existing furnace, standard heat pump space heater, and high efficiency heat pump space heater) are cost-effective using the LSC metric in all climate zones. When using the On-Bill metric, the measures remain costeffective in most climate zones. b. In the newer (1978-1991 and 1992-2010) vintages, the dual fuel heat pump (DFHP Existing Furnace) and the standard efficiency HPSH are cost-effective based on LSC in all cases except for Climate Zone 15 when using both the standard and California Alternative Rates for Energy (CARE) tariff.
3. Using the CARE tariff results in higher cost savings and cost-effectiveness relative to standard rates, with almost all cases yielding first year utility cost savings. The DFHP Existing Furnace is On-Bill cost-effective based on the high gas escalation scenario in all cases in the pre-1978 vintage, and almost all cases in the 1978-1991 and 1992-2010 vintage. It is also On-Bill cost-effective in most climate zones for the 2025/06/09
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 34 modest gas escalation scenario across all vintages. In Climate Zones 5, 8, 9, 10, 14, and 15, cost-effectiveness declines relative to other areas, and in some cases is not cost-effective from an On-Bill perspective. This is the case for both the CARE tariff and the standard rate.
4. The analysis also modeled the cost impact of using a standard time-of-use electricity tariff versus switching to a newer electrification tariff, designed to reduce costs in homes with heat pumps and/or electric vehicles. Older homes tend to be the least efficient and achieve the most savings from improving equipment efficiency. In most of the state, because older homes tend to use more electricity than a similarly sized, newer vintage home, they realize more costs savings under the electrification tariff.
Newer homes tend to use less electricity and therefore do not realize the same cost savings from switching tariffs; they generally perform better under the standard tariff.
This trend is different in milder climate zones in SCE territory (excluding CZ 15), where newer homes realize more cost savings than older homes. Both the standard and electrification tariffs in SCE territory include a daily allocation of lower-cost baseline electricity and a second, higher-priced tier when the baseline is exceeded.
In many newer homes, a higher percentage of overall electricity use is within the baseline allocation, resulting in greater cost savings.
5. Higher efficiency equipment reduces utility costs in all cases and improves costeffectiveness in many climate zones in the oldest vintage relative to standard efficiency equipment. However, in more efficient newer homes, where costeffectiveness is generally lower, the savings are insufficient to offset the roughly $3,000 increase in incremental cost.
6. Given the adopted Bay Area Air Quality Management District Zero NOx rule, and the proposed California Air Resource Board or South Coast Air Quality Management District (SCAQMD) Zero-NOx rules, and gas furnaces may not be available to be installed in 2030, a sensitivity analysis was performed for the Zero NOx scenario and found that cost-effectiveness decreases in many cases except in Climate Zones 8- 10, some results improve enough to become cost-effective. The improved costeffectiveness in Climate Zones 8-10 is due to the higher baseline cost when a HPSH must be installed at year 10 when the furnace must be replaced. However, the overall magnitude of 30-year On-Bill cost-effectiveness is lower because there are only 10 years of utility cost savings. After year 10 the base case and upgrade measures are both heat pumps.
7. While not evaluated in this report, the 2022 Single Family Retrofit Cost-effectiveness Study (Statewide Reach Codes Team, 2024) shows it is beneficial to combine a heat pump space conditioning system with photovoltaics (PV) because the additional electricity required by the heat pump can be met by the PV system and result in reduced utility bills.
8. In this study the dual fuel heat pump is evaluated with an existing furnace, however the homeowner could choose to replace the existing furnace with a new furnace at 2025/06/09
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 35 this time as well. This measure (DFHP New Furnace) was evaluated in the 2022 Single Family Retrofit Cost-effectiveness Study (Statewide Reach Codes Team, 2024) but found to be less cost-effective than the DFHP Existing Furnace case. 2025/06/09
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 36 5 References
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 37 E-CFR. (2020). https://www.ecfr.gov/cgibin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt1
0.3.431&r=PART&ty=HTML#se10.3.431_197. Retrieved from Electronic Code of Federal Regulations: https://www.ecfr.gov/cgibin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt1
0.3.431&r=PART&ty=HTML#se10.3.431_197
Heinemeier, K. (2025). Residential HVAC Performance. Retrieved from https://title24stakeholders.com/wp-content/uploads/2025/03/Residential-HVACPerformance.pdf SCAQMD. (2025). Proposed Amended Rules (PAR) 1111 and 1121. Retrieved from aqmd.gov.
SCAQMD. (2025, February 21). Space and Water Heating Building Appliances. Retrieved from South Coast AQMD: https://www.aqmd.gov/docs/defaultsource/Agendas/ssc/ssc-agenda-2-21-2025.pdf Statewide CASE Team. (2023). Multifamily Domestic Hot Water. Retrieved from https://title24stakeholders.com/wp-content/uploads/2023/08/2025_T24_CASEReport-_MF-DHW-Final-1.pdf Statewide CASE Team. (2023). Residential HVAC PErformance. Retrieved from https://title24stakeholders.com/wpcontent/uploads/2023/11/Revised_2025_T24_Final-CASE-Report-RES-HVACPerformance.pdf Statewide Reach Codes Team. (2021). 2019 Cost-Effectiveness Study: Existing Single Family Residential Buidling Upgrades. Retrieved from
https://localenergycodes.com/content/resources
Statewide Reach Codes Team. (2024). 2022 Cost-Effectiveness Study: Existing Single Family Building Upgrades. Prepared by Frontier Energy. Retrieved from https://localenergycodes.com/download/1222/file_path/fieldList/Single%20Family%2 0Retrofits%20CostEff%20Report.pdf
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 38 6 Appendices
6.1 Map of California Climate Zones
Climate zone geographical boundaries are depicted in Figure 3. The map in Figure 3 along with a zip-code search directory is available at:
https://ww2.energy.ca.gov/maps/renewable/building_climate_zones.html Figure 3. Map of California climate zones.
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 39
6.2 Cost-Effectiveness Results
6.2.1 Standard Rates
The following tables present results across the16 climate zones for the pre-1978 (Table 22 through Table 24) and the 1978-1991 (Table 25 through Table 27) vintages supplementing the results in Section 3.
Table 22. [Pre-1978] DFHP Existing Furnace
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $2,405 $155 $25,223 $14,524 $51,831
CZ02 PGE $1,670 ($81) $11,551 $4,316 $20,806
CZ03 PGE $1,178 $39 $11,680 $7,248 $21,906
CZ04 PGE $1,670 ($7) $10,574 $4,948 $18,321
CZ04 CPAU $1,670 $63 $10,574 $5,177 $14,531
CZ05 PGE $1,424 ($29) $9,462 $4,574 $16,955
CZ05 PGE/SCG $1,424 ($314) $9,462 ($3,674) $2,838
CZ06 SCE/SCG $1,424 ($70) $4,223 $179 $1,795
CZ07 SDGE $1,424 $41 $4,278 $2,725 $5,055
CZ08 SCE/SCG $1,916 ($111) $3,216 ($1,507) $375
CZ09 SCE/SCG $1,916 ($168) $4,238 ($2,500) $125
CZ10 SCE/SCG $1,916 ($133) $3,755 ($1,774) $774
CZ10 SDGE $1,916 $201 $3,755 $6,175 $10,683
CZ11 PGE $2,162 $93 $11,970 $7,593 $24,951
CZ12 PGE $1,916 $46 $12,302 $6,948 $24,190
CZ12 SMUD/PGE $1,916 $584 $12,302 $18,997 $36,626
CZ13 PGE $2,162 $112 $8,180 $6,374 $18,740
CZ14 SCE/SCG $1,916 ($244) $6,646 ($2,926) $3,332
CZ14 SDGE $1,916 $65 $6,646 $4,203 $13,297
CZ15 SCE/SCG $2,408 $80 $401 $1,506 $2,532
CZ16 PGE $2,243 ($199) $17,538 $2,333 $25,276
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Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 40 Table 23. [Pre-1978] Standard Efficiency HPSH
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $3,067 ($127) $27,155 $7,800 $48,445
CZ02 PGE $652 ($242) $13,342 $1,420 $21,282
CZ03 PGE $514 ($46) $11,946 $4,614 $19,670
CZ04 PGE $652 ($139) $13,059 $3,274 $21,888
CZ04 CPAU $652 ($48) $13,059 $3,194 $15,372
CZ05 PGE $583 ($131) $9,998 $2,045 $15,648
CZ05 PGE/SCG $583 ($449) $9,998 ($7,152) ($94)
CZ06 SCE/SCG $583 ($76) $3,860 ($652) $931
CZ07 SDGE $583 $35 $3,876 $1,901 $4,218
CZ08 SCE/SCG $721 ($128) $3,305 ($2,112) ($199)
CZ09 SCE/SCG $721 ($219) $4,415 ($3,839) ($1,141)
CZ10 SCE/SCG $721 ($188) $3,982 ($3,168) ($483)
CZ10 SDGE $721 $166 $3,982 $5,200 $10,049
CZ11 PGE $790 ($74) $14,045 $4,727 $24,836
CZ12 PGE $721 ($179) $13,850 $2,374 $21,622
CZ12 SMUD/PGE $721 $601 $13,850 $19,845 $39,654
CZ13 PGE $790 ($14) $9,394 $3,998 $17,858
CZ14 SCE/SCG $721 ($450) $10,103 ($6,294) $4,015
CZ14 SDGE $721 ($66) $10,103 $2,757 $18,994
CZ15 SCE/SCG $859 $68 $643 $1,364 $2,430
CZ16 PGE $2,095 ($484) $27,492 $2,918 $49,419
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 41 Table 24. [Pre-1978] High Efficiency HPSH
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $5,998 $249 $30,518 $11,401 $52,316
CZ02 PGE $3,606 ($24) $13,354 $1,431 $21,449
CZ03 PGE $3,422 $100 $10,768 $3,122 $18,282
CZ04 PGE $3,606 $118 $13,537 $4,185 $22,984
CZ04 CPAU $3,606 $101 $13,537 $1,665 $13,950
CZ05 PGE $3,514 $10 $8,416 $384 $14,087
CZ05 PGE/SCG $3,514 ($308) $8,416 ($8,814) ($1,654)
CZ06 SCE/SCG $3,514 $3 $380 ($3,709) ($2,052)
CZ07 SDGE $3,514 $114 $430 ($1,063) $1,230
CZ08 SCE/SCG $3,698 $31 $1,065 ($3,478) ($1,420)
CZ09 SCE/SCG $3,698 ($40) $2,358 ($4,759) ($1,897)
CZ10 SCE/SCG $3,698 $6 $2,191 ($3,746) ($882)
CZ10 SDGE $3,698 $344 $2,191 $4,481 $9,276
CZ11 PGE $3,789 $283 $15,614 $7,801 $28,167
CZ12 PGE $3,698 $152 $14,490 $4,899 $24,385
CZ12 SMUD/PGE $3,698 $708 $14,490 $17,350 $37,236
CZ13 PGE $3,789 $326 $10,164 $6,697 $20,802
CZ14 SCE/SCG $3,698 ($173) $11,876 ($5,041) $5,522
CZ14 SDGE $3,698 $244 $11,876 $5,111 $21,254
CZ15 SCE/SCG $3,881 $335 $393 $2,323 $3,635
CZ16 PGE $5,071 $45 $34,043 $9,856 $56,737
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Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 42 Table 25. [1978-1991] DFHP Existing Furnace
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $2,405 $99 $20,184 $10,746 $40,368
CZ02 PGE $1,670 ($114) $9,142 $2,185 $14,361
CZ03 PGE $1,178 $3 $9,033 $5,101 $15,624
CZ04 PGE $1,670 ($68) $8,160 $2,319 $11,818
CZ04 CPAU $1,670 $18 $8,160 $3,161 $9,418
CZ05 PGE $1,424 ($32) $7,070 $3,268 $11,902
CZ05 PGE/SCG $1,424 ($238) $7,070 ($2,666) $1,747
CZ06 SCE/SCG $1,424 ($39) $2,941 $614 $1,557
CZ07 SDGE $1,424 $1 $3,046 $1,512 $2,837
CZ08 SCE/SCG $1,916 ($78) $2,145 ($1,026) $145
CZ09 SCE/SCG $1,916 ($116) $2,978 ($1,655) $122
CZ10 SCE/SCG $1,916 ($89) $2,606 ($1,096) $571
CZ10 SDGE $1,916 $139 $2,606 $4,321 $7,320
CZ11 PGE $2,162 $103 $9,118 $6,239 $18,777
CZ12 PGE $1,916 $60 $9,604 $5,770 $18,506
CZ12 SMUD/PGE $1,916 $430 $9,604 $14,059 $27,062
CZ13 PGE $2,162 $111 $6,237 $5,242 $14,247
CZ14 SCE/SCG $1,916 ($230) $4,931 ($3,277) $1,039
CZ14 SDGE $1,916 $35 $4,931 $2,793 $9,271
CZ15 SCE/SCG $2,408 ($17) ($99) ($807) ($310)
CZ16 PGE $2,243 ($161) $14,397 $1,740 $20,318
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Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 43 Table 26. [1978-1991] Standard Efficiency HPSH
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $3,067 ($128) $21,427 $5,043 $37,346
CZ02 PGE $652 ($235) $10,428 ($90) $14,711
CZ03 PGE $514 ($67) $8,999 $2,767 $13,608
CZ04 PGE $652 ($164) $9,984 $1,062 $14,605
CZ04 CPAU $652 ($66) $9,984 $1,535 $9,914
CZ05 PGE $583 ($132) $7,290 $703 $10,264
CZ05 PGE/SCG $583 ($361) $7,290 ($5,939) ($1,104)
CZ06 SCE/SCG $583 ($43) $2,450 ($151) $775
CZ07 SDGE $583 ($3) $2,539 $747 $2,065
CZ08 SCE/SCG $721 ($96) $2,111 ($1,658) ($472)
CZ09 SCE/SCG $721 ($152) $3,022 ($2,659) ($831)
CZ10 SCE/SCG $721 ($121) $2,672 ($2,017) ($239)
CZ10 SDGE $721 $114 $2,672 $3,568 $6,801
CZ11 PGE $790 ($46) $10,682 $3,545 $18,156
CZ12 PGE $721 ($110) $10,747 $2,278 $16,574
CZ12 SMUD/PGE $721 $445 $10,747 $14,697 $29,392
CZ13 PGE $790 $1 $7,141 $3,112 $13,232
CZ14 SCE/SCG $721 ($398) $7,556 ($6,191) $1,058
CZ14 SDGE $721 ($53) $7,556 $1,909 $13,834
CZ15 SCE/SCG $859 ($25) $71 ($848) ($322)
CZ16 PGE $2,095 ($445) $22,236 $708 $37,873
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Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 44 Table 27. [1978-1991] High Efficiency HPSH
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $5,998 $169 $23,092 $6,895 $39,412
CZ02 PGE $3,606 ($75) $9,242 ($1,370) $13,547
CZ03 PGE $3,422 $53 $6,872 $675 $11,602
CZ04 PGE $3,606 $26 $9,114 $463 $14,143
CZ04 CPAU $3,606 $43 $9,114 ($868) $7,590
CZ05 PGE $3,514 ($16) $4,859 ($1,522) $8,122
CZ05 PGE/SCG $3,514 ($246) $4,859 ($8,164) ($3,246)
CZ06 SCE/SCG $3,514 ($1) ($1,546) ($4,024) ($3,059)
CZ07 SDGE $3,514 $47 ($1,407) ($2,879) ($1,576)
CZ08 SCE/SCG $3,698 $37 ($828) ($3,608) ($2,300)
CZ09 SCE/SCG $3,698 ($17) $232 ($4,573) ($2,623)
CZ10 SCE/SCG $3,698 $20 $82 ($3,764) ($1,856)
CZ10 SDGE $3,698 $251 $82 $1,869 $5,060
CZ11 PGE $3,789 $259 $10,685 $5,452 $20,283
CZ12 PGE $3,698 $138 $10,023 $2,954 $17,430
CZ12 SMUD/PGE $3,698 $525 $10,023 $11,609 $26,363
CZ13 PGE $3,789 $289 $6,612 $4,624 $14,951
CZ14 SCE/SCG $3,698 ($188) $7,697 ($6,429) $1,012
CZ14 SDGE $3,698 $182 $7,697 $2,525 $14,378
CZ15 SCE/SCG $3,881 $193 ($1,111) ($992) ($267)
CZ16 PGE $5,071 ($30) $26,407 $5,118 $42,581
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Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 45
6.2.2 CARE tariffs
Table 28. [Pre-1978] DFHP Existing Furnace CARE
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $2,405 $364 $25,223 $16,641 $46,300
CZ02 PGE $1,670 $64 $11,551 $6,432 $19,553
CZ03 PGE $1,178 $128 $11,680 $8,248 $19,898
CZ04 PGE $1,670 $90 $10,574 $6,198 $16,835
CZ04 CPAU $1,670 $0 $10,574 $711 $711
CZ05 PGE $1,424 $69 $9,462 $5,901 $15,746
CZ05 PGE/SCG $1,424 ($157) $9,462 ($613) $4,598
CZ06 SCE/SCG $1,424 ($37) $4,223 $776 $2,067
CZ07 SDGE $1,424 $42 $4,278 $2,609 $4,434
CZ08 SCE/SCG $1,916 ($63) $3,216 ($595) $911
CZ09 SCE/SCG $1,916 ($97) $4,238 ($1,132) $972
CZ10 SCE/SCG $1,916 ($75) $3,755 ($660) $1,379
CZ10 SDGE $1,916 $160 $3,755 $4,963 $8,500
CZ11 PGE $2,162 $183 $11,970 $8,415 $22,212
CZ12 PGE $1,916 $152 $12,302 $8,126 $21,834
CZ12 SMUD/PGE $1,916 $686 $12,302 $20,080 $34,172
CZ13 PGE $2,162 $160 $8,180 $6,595 $16,418
CZ14 SCE/SCG $1,916 ($126) $6,646 ($779) $4,233
CZ14 SDGE $1,916 $101 $6,646 $4,530 $11,652
CZ15 SCE/SCG $2,408 $60 $401 $982 $1,788
CZ16 PGE $2,243 $34 $17,538 $5,963 $24,236
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Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 46 Table 29. [Pre-1978] Standard Efficiency HPSH CARE
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $3,067 $205 $27,155 $12,440 $44,777
CZ02 PGE $652 ($16) $13,342 $5,095 $20,910
CZ03 PGE $514 $76 $11,946 $6,319 $18,293
CZ04 PGE $652 $41 $13,059 $6,031 $20,843
CZ04 CPAU $652 $0 $13,059 $255 $255
CZ05 PGE $583 $12 $9,998 $4,285 $15,110
CZ05 PGE/SCG $583 ($240) $9,998 ($2,978) $2,679
CZ06 SCE/SCG $583 ($42) $3,860 ($7) $1,259
CZ07 SDGE $583 $37 $3,876 $1,837 $3,652
CZ08 SCE/SCG $721 ($75) $3,305 ($1,076) $457
CZ09 SCE/SCG $721 ($131) $4,415 ($2,095) $72
CZ10 SCE/SCG $721 ($110) $3,982 ($1,649) $504
CZ10 SDGE $721 $139 $3,982 $4,305 $8,106
CZ11 PGE $790 $94 $14,045 $7,108 $23,108
CZ12 PGE $721 $20 $13,850 $5,506 $20,829
CZ12 SMUD/PGE $721 $772 $13,850 $22,326 $38,189
CZ13 PGE $790 $89 $9,394 $5,347 $16,369
CZ14 SCE/SCG $721 ($241) $10,103 ($2,418) $5,836
CZ14 SDGE $721 $62 $10,103 $4,832 $17,541
CZ15 SCE/SCG $859 $52 $643 $930 $1,769
CZ16 PGE $2,095 $16 $27,492 $10,883 $47,907
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Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 47 Table 30. [Pre-1978] High Efficiency HPSH CARE
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $5,998 $450 $30,518 $13,096 $45,609
CZ02 PGE $3,606 $126 $13,354 $3,405 $19,322
CZ03 PGE $3,422 $172 $10,768 $3,678 $15,720
CZ04 PGE $3,606 $209 $13,537 $4,926 $19,859
CZ04 CPAU $3,606 $0 $13,537 ($4,595) ($4,595)
CZ05 PGE $3,514 $103 $8,416 $1,521 $12,412
CZ05 PGE/SCG $3,514 ($148) $8,416 ($5,742) ($19)
CZ06 SCE/SCG $3,514 $11 $380 ($3,634) ($2,319)
CZ07 SDGE $3,514 $89 $430 ($1,774) $25
CZ08 SCE/SCG $3,698 $33 $1,065 ($3,586) ($1,955)
CZ09 SCE/SCG $3,698 ($10) $2,358 ($4,304) ($2,027)
CZ10 SCE/SCG $3,698 $21 $2,191 ($3,628) ($1,354)
CZ10 SDGE $3,698 $255 $2,191 $2,127 $5,893
CZ11 PGE $3,789 $327 $15,614 $7,382 $23,549
CZ12 PGE $3,698 $236 $14,490 $5,437 $20,914
CZ12 SMUD/PGE $3,698 $772 $14,490 $17,439 $33,302
CZ13 PGE $3,789 $310 $10,164 $5,378 $16,558
CZ14 SCE/SCG $3,698 ($54) $11,876 ($3,161) $5,265
CZ14 SDGE $3,698 $263 $11,876 $4,651 $17,300
CZ15 SCE/SCG $3,881 $232 $393 ($35) $970
CZ16 PGE $5,071 $360 $34,043 $13,682 $50,953
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Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 48 Table 31. [1978-1991] DFHP Existing Furnace CARE
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $2,405 $273 $20,184 $12,619 $36,168
CZ02 PGE $1,670 $12 $9,142 $4,166 $13,857
CZ03 PGE $1,178 $76 $9,033 $6,011 $14,375
CZ04 PGE $1,670 $23 $8,160 $3,702 $11,261
CZ04 CPAU $1,670 $0 $8,160 $711 $711
CZ05 PGE $1,424 $40 $7,070 $4,285 $11,150
CZ05 PGE/SCG $1,424 ($122) $7,070 ($400) $3,130
CZ06 SCE/SCG $1,424 ($21) $2,941 $952 $1,705
CZ07 SDGE $1,424 $9 $3,046 $1,631 $2,667
CZ08 SCE/SCG $1,916 ($45) $2,145 ($395) $544
CZ09 SCE/SCG $1,916 ($67) $2,978 ($712) $712
CZ10 SCE/SCG $1,916 ($50) $2,606 ($357) $976
CZ10 SDGE $1,916 $110 $2,606 $3,472 $5,826
CZ11 PGE $2,162 $155 $9,118 $6,542 $16,502
CZ12 PGE $1,916 $128 $9,604 $6,434 $16,553
CZ12 SMUD/PGE $1,916 $506 $9,604 $14,879 $25,269
CZ13 PGE $2,162 $135 $6,237 $5,170 $12,318
CZ14 SCE/SCG $1,916 ($128) $4,931 ($1,351) $2,112
CZ14 SDGE $1,916 $65 $4,931 $3,123 $8,195
CZ15 SCE/SCG $2,408 ($9) ($99) ($653) ($256)
CZ16 PGE $2,243 $28 $14,397 $4,676 $19,471
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Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 49 Table 32. [1978-1991] Standard Efficiency HPSH CARE
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $3,067 $146 $21,427 $8,941 $34,641
CZ02 PGE $652 ($47) $10,428 $3,076 $14,864
CZ03 PGE $514 $33 $8,999 $4,259 $12,882
CZ04 PGE $652 ($10) $9,984 $3,558 $14,338
CZ04 CPAU $652 $0 $9,984 $255 $255
CZ05 PGE $583 ($18) $7,290 $2,586 $10,196
CZ05 PGE/SCG $583 ($199) $7,290 ($2,659) $1,219
CZ06 SCE/SCG $583 ($24) $2,450 $215 $956
CZ07 SDGE $583 $6 $2,539 $898 $1,929
CZ08 SCE/SCG $721 ($57) $2,111 ($896) $57
CZ09 SCE/SCG $721 ($91) $3,022 ($1,455) $13
CZ10 SCE/SCG $721 ($71) $2,672 ($1,035) $390
CZ10 SDGE $721 $96 $2,672 $2,939 $5,474
CZ11 PGE $790 $74 $10,682 $5,209 $16,830
CZ12 PGE $721 $30 $10,747 $4,418 $15,794
CZ12 SMUD/PGE $721 $573 $10,747 $16,567 $28,332
CZ13 PGE $790 $72 $7,141 $4,003 $12,047
CZ14 SCE/SCG $721 ($224) $7,556 ($2,880) $2,930
CZ14 SDGE $721 $42 $7,556 $3,476 $12,809
CZ15 SCE/SCG $859 ($13) $71 ($639) ($219)
CZ16 PGE $2,095 ($25) $22,236 $7,529 $37,120
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Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 50 Table 33. [1978-1991] High Efficiency HPSH CARE
Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
First-year
Utility
Savings
Lifecycle NPV Savings
2025
LSC NPV
On-Bill NPV
Modest Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $5,998 $339 $23,092 $8,460 $34,300
CZ02 PGE $3,606 $57 $9,242 $547 $12,409
CZ03 PGE $3,422 $111 $6,872 $1,228 $9,907
CZ04 PGE $3,606 $113 $9,114 $1,472 $12,340
CZ04 CPAU $3,606 $0 $9,114 ($4,595) ($4,595)
CZ05 PGE $3,514 $58 $4,859 ($544) $7,120
CZ05 PGE/SCG $3,514 ($124) $4,859 ($5,789) ($1,857)
CZ06 SCE/SCG $3,514 $5 ($1,546) ($3,963) ($3,196)
CZ07 SDGE $3,514 $39 ($1,407) ($3,143) ($2,122)
CZ08 SCE/SCG $3,698 $32 ($828) ($3,800) ($2,766)
CZ09 SCE/SCG $3,698 ($0) $232 ($4,336) ($2,784)
CZ10 SCE/SCG $3,698 $25 $82 ($3,803) ($2,290)
CZ10 SDGE $3,698 $184 $82 $124 $2,631
CZ11 PGE $3,789 $272 $10,685 $4,725 $16,488
CZ12 PGE $3,698 $191 $10,023 $3,148 $14,639
CZ12 SMUD/PGE $3,698 $573 $10,023 $11,680 $23,445
CZ13 PGE $3,789 $259 $6,612 $3,262 $11,441
CZ14 SCE/SCG $3,698 ($82) $7,697 ($4,629) $1,311
CZ14 SDGE $3,698 $195 $7,697 $2,166 $11,452
CZ15 SCE/SCG $3,881 $133 ($1,111) ($2,349) ($1,794)
CZ16 PGE $5,071 $245 $26,407 $8,685 $38,470
2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 51
6.3 Utility Rate Schedules
6.3.1 Pacific Gas & Electric
The following pages provide details on the PG&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 $ 0.03396/ kWh was applied to any net annual electricity generation based on a one-year average of the rates between February 2024 and January 2025.
Table 34. PG&E Baseline Territory by Climate Zone
Climate Baseline
Zone 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 in $/therm was applied on a monthly basis according to the rates shown in Table 35. The gas rates were developed based on the latest available gas rate for January 2025 and a curve to reflect how natural gas prices fluctuate with seasonal supply and demand. The seasonal curve was estimated from PG&E’s monthly residential tariffs between 2015 and 2024. 12-month curves were created from monthly gas rates for each of the ten years. The ten annual curves were then averaged to arrive at an average normalized annual curve. The baseline and excess transmission charges were found to be consistent over the course of a year and applied for the entire year based on January 2025 rates. The costs presented in Table 35 were then derived by establishing the baseline and excess rates from the latest January 2025 tariff as a reference point, and then using the normalized curve to estimate the cost for the remaining months relative to the January rates.
Corresponding CARE tariffs reflect the 20 percent discount per the GL-1 tariff. 2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 52 Table 35. PG&E Monthly Gas Rate ($/therm)
Month Total Charge
Baseline Excess
January $2.63 $3.15
February $2.64 $3.16
March $2.41 $2.94
April $2.24 $2.77
May $2.21 $2.74
June $2.23 $2.77
July $2.26 $2.80
August $2.36 $2.90
September $2.42 $2.98
October $2.52 $3.07
November $2.63 $3.17
December $2.70 $3.23
2025/06/09
Attachment 1
ial
GAS
Baseline Territories and Quantities 11
Effective A ril 1, 2022 • Present
BASELINE QUANITTIES (Therms Per Day Per Dwelling Unit)
lndividualli Metered
Baseline Summer Winier Off-Peak
Territories (April-October) (Nov, Feb, Mar)
Effective Al!r, 1, 2022 Effective Nov. 11 2022
p 0.39 1.88
Q 0.56 1.48
R 0.36 1.24
s 0 39 1.38
T 0.56 1.31
V 0.59 1.51
w 0.39 1.14
X 0.49 1.48
y 0.72 2.22
Master Metered
Baseline Summer
Territories (April-October)
Elfecllve Apr. 1, 2022
p 0.29
Q 0.56
R 0.33
s 0.29
T 0 56
V 0.59
w 0 26
X 0.33
y 0.52
Summer Season: Apr.Oct
Winter Off-Peak: Nov, Feb, Mar
Winier On.Peak: Dec, Jan
Advice Leiter: 4589-G
Decision 21 -1 1-016
GRC 2020 Ph II [Application 19-11 -019]
Filed: Nov 22. 2019
Winter Off-Peak
(Nov, Feb, Mar)
Effective Nov. 1, 2022
1.01 0.67
0.87 0.61
1.01 1.28
0.71 0.67
1.01 Winter On-Peak
(Dec, Jan)
Effective Dec. 11 2022
2.19 2.00
1.81 1 94
1.68 1.71
1.68 2.00
2.58 Winter On-Peak
(Dec, Jan)
Effective Dec. 1, 2022
1.1 3
0.77 1.16
0.65 1. 10
1.32 0.87
0.77 1.13
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 53 2025/06/09
Attachment 1
Gas and
Electric Compa.ny·
U 39 Oekland, Gafifomia
Revised
cancelling Revised
Gal. P.UC. Sheet No.
Gal. P.U.C. Sheet No.
5912().E
58758-E
EIUECTRIC SCHEDULE E-TOU-C Sheet 2
RESIDENTIAL TIME-OF-USE (PEAK :PRICING 4 - 9 p.m. EVERY DAY) RATES: (Cont'd} E-TOU-CTOTAL BUNDLED RATES
Total Energy Rates ($ per kWh)
Summer
Total Usage
Baseline Credlt (Applied to Baseline Usage Only)
\Mnter
Total Usage
Base1tne Credit (Applied to Baseline Usage Only)
Delivery Minimum Bill Amourrt ($ per meter per day)
California Climate Credit (per household, per semi annua1 payment occurring in the Apnl and October bill cycles}
PEAK OFF-PEAK
ro.oong (R ) S0.50429 (R)
($0.10135) (R ) (SO 10135) (R)
$0.49312 (R ) S0.46312 (R )
($.0.10135) (R ) (S0.10135) (R )
$,0.39167
($58.23) ,(R)
Total bund ed: service charges shO'Wll on customer s bills are unb 111dled according to the component rates shOWTil, below. lMlere the del1very minimum bi[I ammmt appr es, the ,customer's bill wi[I equal tile sum of (1 ) lhe delivery minimum bill amount plus (2) for bundled service, the generation rate times the number of kWh used. For revenue aroounling purposes, tile revenues from the delivery minimum bi[I amount wm be assigned to the Transmission, Transmission Rate Adj;ustments, Reliability Services, Public Purpose Programs, Nuclear Derommissiontng,, Competition Transition Charges, E111ergy Cost Recovery Amount, Wil'.dfire Fund Ciharg:e, arnd New System Generation Charges based on kWh usage times the correspmding unbundled rate compo111ent per kWh, with any residual revenue assigned to Distribution.
Advice 7469-E
Dedsion
Issued by
Shi/pa Ramaiya
Vice President
Regulatory Proceedings ana Rates
Submitted
Effective
Resolution
(Continued)
December 30, 2024
January 1, 2025
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 54 2025/06/09
Attachment 1
Gas and
Elec.tric Company" Revised
Cancelling Revised
Gal. P.U.C. Shee.t No.
Gal. P.U.C. Shee.t No.
u 39 Dakland, Galifomia
ElJECTRIC SCHEDULE E-TOU-C Sheet 3
IRESIDENT AL TIME-OF-USE (PEAK PRICING 4 - 9 p.m. EVERYDAY) RATES: (Cont'd.) UNBUNDLING OF E-TOU-C l OTAL RAlES
5nergy Rates by Com,ponent (S pe:r kWh)
Generation:
Summer (a'II usag.e)
Wi:nter (al l usage)
Distribution••.:
Summer (a'II usage)
Wi:nter (all u,sage)
PEAK
$0.24730
$0.18725
$0.24056
$0.HIM 5
Conservation Incentive Adj'u,stment (Basel ine Usage)
Conservation Incentive Adjlllstment (OYer Baseline Usage) T,ransm·ission* (all u.sage)
Transmission Rate Adjustments• {am usage)
Reliability Services•· (a us age)
Publ'lc Purpose Programs (all usage)
Nuc,lear Decommissioning (all usage)
Competition Transition Charges (all usage)
Energy Cost Recov-e:ry Amou rrt (all usage)
Wfldlire Fund Charge (all usage)
New System, Generation Charge (all usage)""
Wrldlire Hardening Charge (a I usage)
Recove.ry IBond Charge-(a'II usa,9e)
Recove.ry IBond Credit (all usage)
Bundled Power Charge I ndifferem:e Adjus1ment (al usage)~ .. (I)
(I)
(I)
(I)
OFF-PEAK
$0. 16430
$0. 16057
$0.22056
$0.18313
(S0.03733) (I}
S0.06402 (I)
S0.051 22 (I)
(S0.0 1509) (R )
S0.00032 (I}
S0.02tl44 (R )
(SO.OC>D•13) (I}
(S0.000 172) (R )
so.0000 1 (I)
S0.00595 (I)
S0.005,74 (R )
S0.00494
SO.OC>650
(SO.OC>650)
(S0.02327) (R )
(I)
(I)
(IJ
(I)
.. Transmission, Transmission Rate Adjustments and Reliability Service charges are combined tor pFesentation on customer bills, H Distribution andl Mew System Generation Oharges are combi ed for presentation on customer lbfllls . • ,.. Direct Access, Commu ity Choice AggreQ!iltion and Transilional Bundled Service customers pay th.e .applicable Vintaged Power Chafge lnoifference Adjustment. Generation and BuncUed PCIA aFe combined for presentation on bundled customer bills. 59121-E
58759-E
(Continuecl)
Advice
Decision
7469-E Issued by
Shilpa Ramaiya
Vice President
Regulatory Proceedings and Rates
Submitted
Effective
Resolution
December 30. 2024
January 1. 2025
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 55 2025/06/09
Attachment 1
Gas and
Electric ,Company·
Revised
Cancelling Revised
Caf. P.U.C. Sheet No.
Caf. P.U.C. Sheet No.
59109-E
58755-E
U 3.9 Oakland, Ga!ifomia
ELECTRIC SCHEDULE E-ELEC Sheet 2
RESIDENTIAL TIME-OF-USE (ELECTRIC HOME)
SERVICE FOR CUSTOMERS WITH QUALIFYING ELECTRIC TE CHNOLOGIES RATES :{Con.t'd .)
Direct Access (DA) and Community Choice Aggregation {CCA) charges s ha~ be calrula!ed in accordance with the paragraph in this rate schedul e 1i!i1ed Bi ling.
TOTAL BU NDLED RATES
Base Services Charge ($ pe, me er per day) $0.4Q2S1
Total Em,.-QiY Rates ($ per kWh) PEAK PP.RT-PEAK OFF-PEAK Summ er Usage $0.60728 (R) ll0.44540 (R ) $0.38872 (1R) Win er Usage $0.375n {R) $0.35368 (R ) $0.33982 {R )
Cs i omia Cfima e Credit (per hou ,;e'hold, per
semi-annual paym ent occurring in the Apri l an,d
October bill cycles)
($58.23) (R)
Total trundled service ch arges shown on a. custome,'s bi Is are un bundlied according to lhe co111ponen.t rates sh own below.
UNBUINDLING OF TOTAL RATES
En ergy Rates by Compone:nl ($ per· kW h) PEAK PP.RT-PEAK OFF-PEAK Gene.ration:
Summer Usag,e- $0.3 165-ll (I) $0-21748 (I) $0.17238
Winter 'Usage $0.15446 (I) $0. 13449 (I) $0.12 114
Distribution••:
Summer Usagoe- $0.23528 (I) $0. 1725 1 (I) $0.16093
Winter IIJsa.ge $0.1651l0 (I) $0. 16378 (I) $0.16327
Transm ission,• (all usa.g:e) $0.05 1122 (I) $0.05122 (I) $0.05 122 Transm ission, Rate Adj u,stm ents• (s I usage) ($0.0 1501l) (R) ($0.01 509) (R ) ($0.0 1501l) Reli ab il ity Services• {all usagoe) $0.00032 (I) $0.00032 (I) $0.00032 Public Pu rpose Programs ,(all usag e) $0.02644 (R) $0.02644 (R ) $0.02644 Nluc lear Decommission ing (all usage} ($0.00013~ (I) ($0.000 13~ (I) ($0.00013~ Competition Transition Charges (all usagoe") {$0.00072 (R) ($0.00072 (R ) ($0.00072 IEner g;y Cost Recover;y A mou nt {all usage) $0.00001 (I) $0.0000 1 (I) $0.00001 Wildfire Fund Charge (al usage) $0.005Q5 (I) $0.00595 (I) $0.005g5 Nlew Syst em Generation Char ge (a I usage}" $0.00574 {R) $0.00574 (R ) $0.00574 Wildfire Ha:rder,ing Charge (all usage) $0.0049'4 $0.00494 $0.00494 IRecov er;y Bond Charge (all usage) $0.00650 S0.00650 $0.00650 IRecover;y Bond Credit (all ,usage) ($0.00650l ($0.00650~ ($0.00650~ Bundled Power C harge Indifference {$0.023-27 {R) ($0.02327 (R ) ($0.02327 Adjustmen t (al l usage}"'
Transmissiom. Transmission Rale Adjustments and Rel" ·1ity Se.rvice ch~ are combined for p,esen ation on cusAorner bills.
Dis ·bulioo and N,ew System Generation Ciharges e combined fur presentation on ru~torner bills.
Direcl Access. Community Cboice Aggregation amd Transition Bum.med Se<Vice Customers pay 1tte applicabl.e Vimiaged P.ower Charge Indifference Adjus1ment. Gemeration ar>d Bundled PC IA are combined for presentation oo bundl'.e,d custcmer bills.
(I)
(I)
{I)
(I)
(I)
(R }
{I)
(R }
(I)
(R }
(I)
{I)
(R }
(R }
{Continued)
AcMce
Decision
7469-E Issued by
Shi/pa Ramaiya
Vice President
Regulatory Proceedings and Rates
Submitted
Effective
Resoiutfon
December 30, 2024
January 1, 2025
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 56 2025/06/09
Attachment 1
Gas and
Electric ,Compan(
Original ca,: P.UC. Sheet No. 54738-E
U 39 San FrancisC(); Cafitomia
ELECTRIC SCHEDULE E-ELEC Sheet 3 (N)
RESIDENTIAL TIME-OF-USE (ELECTRIC HOME) (N)
SERVICE FOR CUSTOMERS WITH QUA!LIFYING ELECTRIC TECiHNOLOOllES SPECIA L 1. TIME PERIODS: Tim es ofli'le year and ( mes of !he day are defined as fol ows:
CON DITIION S:
Advice
Decision
All Year:
Pee : 4 :00 p.m. to Q:00 p.m. ~ery day in:cludin,g weekends and lu:J idays.
Partial-Peak: 3:0D p.m . to 4 :00 p.m. an d Q:00 p.m. to 12:00 a.m. e·very day includin11 weekends .end oo 1d!sys .
Olf-Pes_ : All olhe.r hours.
2. SEASONAL CHANGES: T1he summ er season is Ju:ne 1i 1hrough Septem ber 30 and t he ~,inter s,a-ason is October 1 lhroug'h May 3,1. When b·lrng include.s use ·n both lhe summer and winter periods, charges will be pra-ated based u:pon t he num be.r of days in e<acli pe.iod.
3. A DD ITIONAL METERS: If a re.siden ·s1 dwelling unit is served by more t han -o.ne electric meter. t he cuslomer must desilJnat,a-whl ch meter is lhe primary me er an.d which is (are) he addition.al meter(s).
4. Bl LLING : A custo:mer"s b.11 is csJculs.ted based on lhe oplion applicable to the custo:mer.
Bundled Servi.Ce Cu.stomers receive generation and delivery seniice.s solely from PG&E. The custo:mer"s b.11 is based on the U nbun.dling o Total Rates set orth .above.
Tr-ansiliona Bund ed Service (TBS) Customers take TBS as p:rescribed in Rules 22 .. 1 and 23,. 1. or tak•e PG&E bundled service prior to the end oi li'te· six (6) m on1h advance notice period required to eleci PG&.E bundled service as prescn."bed in Rules 22 .. 1 and 23,.1. TBS ,cust arners shall pay all charges soown in !he Unbundling ,of Total Raf es -excep or ·lne-Bund d Power Charge In.difference Adj ustme.nt andl !he gen eralion charge. TBS cuslomers shall also pay fo:r their a,pplica'ble Vi:n aged lf>,ower Charge Indifference Adj,:,isbn-e,nt provided in the table bel ow. a:nd t he short.term comm odity prices as set forth in Schedule TBGC.
(N)
(Oontim.100)
6768-E
D.21-11"0116
Issued by
Meredith Allen
Vice President, Regufato,y Affairs
Submitted
Effective
Resolution
November 18, 2022
December 1i. 2022
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 57 2025/06/09
Attachment 1
cific Gas and
Electtic Companf Revised
Cam;e/11119 Revised
Cal. P_U'..C. Sheef MJ_
Cal. P_LJ'..C. Sheet MJ_
59329-E
50086-E
U 39 Oakland. CalifDmia
ELEC11RIC: SCHEDULE O.CAR!E Sheet 1
LI.NEJITEM DISCOUNT FOR CAUFORiNIA. Al TEIRiNA TE RA TES FOR EJNERGY (CAR;E)
CUSTOMBRS
AW,llCABILITY: This sched is applicable to singl~ese and pol~se re-sidential .service in single-famiJy dK'Elinga and i111 flalll and apeltmEti lll separatEfy rnelefed by PG&E and domeslic i;;:ub1111eterad tenants r,es.iding -n ul 1ila rmyaccom1111odal 11.S . mohileh□1111e perks and to q,u ifying recraa □n al vehide ?SllB and mSJ!Das ,BIil! 11D fBrm servi.ae on lhe premise5i opa-ated by me person Ml se re-sidence is i;;:uppied llrurc!qjh lh.e same 1111e er. Where ·Ille applicant qu: es for California Alternate Raisa or Enet'QIY (CA.RE) ul!lder lhe ,eligibiity and celtifica!io111 ,c::ritetria set forth in l:!lectllicRuie 19.L CARiE ser,,ice is avai le on SclriedUlea E-1. E-TOU-B.
E-TOLJ-C. E-TOLJ-0. EV2. E-ELEC. EIM\ IES. ESR. ET &11d IEM-TOU_ TERiRITORY: This rate schedute ,applies eVEl"'J!Nhetre PG&E j!rowles electric seMCB..
RAT1ES: Cusllllrnars takimg ear.ice oo 1lili5i rale schedule whose 01Jrleiwisa BJ1pliceille rate sched h.as no IDeivetry inmum Bill Amounl (Scln.ecMe IE-ELEC) wil reoaiYe a CAIRE petraelllege dioootnt of 38.351% (IR) on lheir at.al bundled ,charges (exoepl for the Califolllllia Climate Cradi . id! ·will not be discoonted) .. Customers tIDamg SEHrvioe oo lhia rate 6-Chedule whose olherwise appica}!je rate .schedule has a Oeivet!)' Minimum Bill Amount (al other sched'ule!i) will receive ,e CAIRE percentage discount r p;: or "C" below) on llrles at.al bundled ,charges less charges from wtach they are e:,;e!11lt (Wildm,e IFumd Cherg/31, IRE!CO'o'BI'}' Sood Cl1arge.
ReGOYB[)' B«ld Credit, and he C/!IRJE i;;:urdlerge poltion of the p.iblic purpose i-ogram charge used o fund Iha CAIRE diSCOO!it) oo ·lfle.ir odrlEtwise .eppliceille rate scli,edule (e,ooept ·for Iha C oonia Cli1111ete Cre,:f • l!lhim will nal be disoou111.ted) 811d also wil reoaive a ~ disoounl ("iB" or "O' below) oo he deli'le.ry 1111inimum ~ B11T1 u111.t. if applicable_ The CARE dis.couni wil be calcueted for direct acoesa and com1111unity choice e,ggregatio111 aJSlomers based on 1lne tot.al charges es if lhey were i;;:umjecl o, bundl seMOe rales. Oioootnlll will be applied as ,e reduction o, disiribuiioo ,merges. These oondi ions also ,eppl:;o to maslBrmeier-ed oustorne1E and lo, quali 1ed Elm-metered IBnants wlrLetre he master-meter customer is jcintly seNe<I ul!lder PG&E'a Ra e Sdnedule D-CAIRE ,end either Scl!,edule EM, ES. ESR. ET. or EIM-TOU.
Adwoe 7"516-E
Oecision
For 1111estE!t'-me ered oost 1111ers where one or more of the subme ered tenenlls qualifies ror CAIRE rste!l uJ!ldEJ he eligibiJJly and aertificati n critetlia .set forth in Rule 119.. 1. 19.2. or 19.3. lln.e CARiE disooulll is equal ·to a perae1111!ege (~c· below) m the otal bundled merges. 1111Ultiplied by he nurmer of CARiE units cf"IVide<I D')' lln.e to1BI 11UJJT1ber of unilll. In add , 1111ester-m.eterad customera eligible for O'-C.ARE wil reoaiYB a pernetlltag;e disoounl or below) on lhe deli,YBI)' millWllUIITl bill am001t, if .ep,pliceille.
II is lhe r~pa11.Sibility of he master-me ered wstomer ID ,advise PG&E within 15 days ·follwmg any dtlange in lhe nu1111bet' of d'welq units and/or any decrease in me nu1111iletr of q,ualifyi1119 CARiE applicants ltiat resullll wf:ten sud! ewlicants move out of heir swmetef8d or ooo-subrnetered dwellq unit. or i;;:ub1111eterad permane1111-reaide11oe RV or per1111enent-msidence ooa.t lssuedby
Shi tpa Ramaiya
Vice F:re.sidertl:
Regulalo,:y ProoeadingB and Rales
S-ubmitted
l!:tfecm,a
ili!esal!Jtioo
(Con.ti111Ued}
Fe'brue!)' 26, 2025
Meroh 1, .2025
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 58 2025/06/09
Attachment 1
Gas and
Electdc Campanv· Cancel/frig
Revise
Revise
Cal. P.IJ..C. S'heeJ MJ.
Cal. fi'.U.C. S'heeJ MJ.
50087-E
58198-E
U 39 OaMand, California
Ei1LEC11RIC SCHEDULE D.CARiE Sheet 2
LINE-ITEM DISCOUNT FOR CAUFO~IA Al T18RJNA TE RA TES FOR ENERGY (CAR!E)
CUSTO BRS
A. D-CARE Disooullll:
B. Deiveqr Miwnim Bill Disooulll:
C. taster-Meter 0-C.ARIE Discoont:
D. t.1.asl er-Meter Delivery MiJlli,mu,m
Bill Discount:
3!lu000
S0..000
as..,ooo
so.,ooo
% (Percent} (II
% ~P,erc:ent)
% ~P,erc:ent} (I)
% (Percent}
SPECIAL 1. OTI-IERWISE APiPLICA.filE SCHEDULE: Th.e Speci Candi iall1.8 of ·the CO DJTIONS: Customer's. otherwis.e ewlicable rate schedule Ml apj!ly to this. sr:hedula Advioe 7'469-E
Oeci.s-ioo
2. BLIGIBILITY: To be efigible to receive D-CARE the applicant lillllSt qualify undE!lf 1he criteria s.et ·fol1lrl in PG&E's IBlecillic Rules 1 Q_ 1. 19-2. aJl1d 19.3 .ellld meet llne oertifica - n requirements hereof l.o 1he selisfactioo of PG&E ,Quatifying Daect Aooes5!., Community Chai.OB Aggreg,;Uioo Setl'llioe, BM TrsnsiliooSI Bundled Servioe custo,me1a are also ,eligiNe in, im:s s.ervica on Sdnedule D-CA.RE Af1plice11J 1, rnay qµaify fur D-CAIRE .el their primary residence ol!lly. Cu'Sl arnera or au , l'lllll1.a-ed anBlll1!i panicipating in lln.e Famiy Electric Rate A.ssistanoe (FERA,\ pragll'Bm ,cannot ooncurrsruly panicipale m he CARE J]fOgl'am. (B,, /Jedby
S-bilpa Rameiya
VH:e PTesidellt
Regulalt:Ny Proaeeding,s and Rates
Svbmitted Deoernbe.r 30, .2024
f':.fmctivs Janu811V 1 . . 2025
"1eoolution
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 59 2025/06/09
Attachment 1
Summer Daily Allocations (June through September) Winter Daily Allocations (October through May) AllDaily kWh Electric
Baseline Region Number Allocation Allocation Baseline Region Number 5 6
8 9
10 13
14 15
16 17.2 17.9
11.4 8.8
12.6 9.8
16.5 12.4
18.9 15.8
22.0 24.6
18.7 18.3
46.4 24.1
14.4 13.5
SPECIAL CONDITIONS
5 6
8 9
10 13
14 15
16 Schedule TOU-D
TIME-OF-USE
DOMESTIC
(Continued)
1. Applicable rate time periods are defined as follows:
Option 4-9 PM. Option 4-9 PM-CPP. Option PRIME. Option PRIME-CPP :
Sheet 12
TOU Period Weekdays Weekends and Holidays
Summer Winter Summer Winter
On-Peak 4 p.m. - 9 p.m. NIA NIA NIA
Mid-Peak NIA 4 p.m. - 9 p.m. 4 p.m. - 9 p.m. 4 p.m. - 9 p.m.
Off-Peak All other hours 9 p.m. - 8 a.m. All other hours 9 p.m. - 8 a.m.
Super-Off-Peak NIA 8 a.m. - 4 p.m. NIA 8 a.m. - 4 p.m.
CPP Event 4 p.m. - 9 p.m. 4 p.m. - 9 p.m. NIA NIA Period AllDaily kWh Electric
Allocation Allocation
18.7 29.1
11 .3 13.0
10.6 12.7
12.3 14.3
12.5 17.0
12.6 24.3
12.0 21 .3
9.9 18.2
12.6 23.1
(T)
(T)
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 60
6.3.2 Southern California Edison
The following pages provide details on the SCE electricity tariffs applied in this study. Table describes the baseline territories that were assumed for each climate zone. A net surplus compensation rate of $ 0.01532/ kWh was applied to any net annual electricity generation based on a one-year average of the rates between February 2024 and January 2025.
Table 36. SCE Baseline Territory by Climate Zone
Climate
Zone
Baseline
Territory
CZ06 6
CZ08 8
CZ09 9
CZ10 10
CZ14 14
CZ15 15
2025/06/09
Attachment 1
G.a:lifomia Edison
Rosemead, California (IJ .338-E)
Revised
Cancellling Revised
Scrn,e.dule,,IOJ,Y)
TIIME-OF-USE
DDMESHC
(Continued)
CaL PUC Sheet No.
Cal. PUC Sheet No.
Sheet 2
89278-E
88856-E
Cus,tomers receiving service under tihis Sdhed e wi I lbe ,cfliilrged lhe app icable rates under Option 4-'9 PM, Option 4!-9 IPMLCPP, Op ion 5-8 PM, Option 5-8, PM-CPP, Option PRIME, Opi ion PIRIME-CPP Opti'o:n .A, Option A-CPP, Oplion B, or Option B-CPP, as listed belO\v. OPP Event Char,ges wlll appGy to all ener,gy usage durirng CPP Event Einergy Charg~ periods and CPiP Non-Even Ern erg(Y Credils will apply as a r,educlion on CPP Non-Even Energy Cred'it Periods, during Summer Seasorn days, 4!:00 p.mL to 9·,00 p.m., as described in Special Corndi ·ans 1 and 3, below:
iA,pQen ◄◄ PY I Qqf;JPIJ =:A PM::Cee
11:1..rQ-,, Ch•ra• - .SJkWh
lvl C'.A. lvl Char,g,a• - s.ik..._, h
1lvUn'"1um C.h.a-"liil• ... - S: d■ V
C •AlkN'nl• m.ac.a C: ,c:H .,,.
C..•Man1I• A 11 .. ,,.. •• R .-... ri:a r
ti:Cla.tQ",' .c:o!I.IDt - '!JI.
Siumm•r :S..•.1111.0r1 - On.-P••k
.... ld.P,a;ak
ON-.P,a;ak
Wlru-.r S.•.11-..an - .... ld-{P•ak
ON-'P••k
SiilupM"-ON-.P••k
Siln.:gl•-Famlly RAl..&ki.Anc.a
Mi.a-11 1- S:amlty R•..&ldllH'I C.-
!.llnlill• Famlly R..--..& ld,anc.a
MLailll- Famlty R•.&ld-•nc.a
Siil lnlill• Famlly R.a-.a ld•nc.a
MLJilll- Famlly R..all::l_•nc.a
S:- iun..it,' k.1-.cuic. R:"-•• A• .. ••n.c• D1i&Co.u~u - '%. ~ t ,. ~M!:Ctt
C PP 1r;;;._,..nt r;;;,n•rgy Chara• - s.J11.'\!i!iho
!.umm•r CPP IN,an-~ .. an., C.-.dlL
On-P•.ak Gn•rir.- C.-.clll - SJkWrl
o.~!5154 41• 0 .!15.~4 tli•
!>U? ◄ tli•
O .!l:51~-'li tli•
!>U? ◄ tli•
0 .2.G5 1!l ·Ii·
(O QD5 ~ ( IJ'
0 .91.!tG
0 .914G
0 .'1 7.Ji
0 .'1 7.Ji
.~ H-'li 4R . 0 . 1 2.D-tlll 4R.
O.Qll,D7G 4R .
0 . 1 72".3? CR •
o .oi;,,0,0,2 CR •
0 .07T7lil CR •
0 .111000(1
40. 1 5tHiJ
O .i>OOOQ
O.i>OOOO
O.i>OOOO
O .BOOOQ
0 .00000
0 .00000
' ~ 100% of the di=<:rll ~ m 5h:MTI i11 the ~p~ Special c:-.oo.itioo ct fio SclrmlJle.
Toe~
Toe I nimlrn ~inn
C/age is aJ:l:li<3ile,
T""15ifian ,.,tr,,,, Onarge ihe CJC
DeWl!f}' el ClQ.ll(l(lf8) SeM:z! llellergf
I""' kWh
~eis~ . ~ the
i11
"FP~
the UG COltfDM"1I
18'!"" Cllarge cf Gene-raibn,is '"'" !hon . ihe- Pdnin:un ~ iR)
Toe l3=li1o o..dil ~ i"" up lb t 00%d the Basel'ne A:ICIC!lion,. ,._.a.,., afTmed,I.Jlsa ( m, p,,ri::d. Ad<loonal 13ase1;,,.,.~ :owl!' fer iCusbners ..a~ ~"l' Waler~~ uni!l,r ihis Op&:,n. lt.. Baseline-1111:ic:a'!ii:m; ase sl!fl blh.., Ptelinnsiy ~ Pal1i H. 1 " "Tho
T
~
clllll t.la:<a-num ~ T<li.ol M""')"
Availal:il,, Seni::e a-..dil ral= is h!
....,
· oal'f"'d
. ~ble <>:mio
l asn:,unl
Bu:,:lled
far
Ser,;c,,
OFIP ~
, [X...,.;i I=
liJal !""'i""'"~
(DA) and Comiruri in cila-mnantl ily Chcico ~~
=1"'""' ~
(CCI, Sernce)
l9Cep! DI< ;s,:l CCASemco Cu.lmier.,'""' rd ""bjed ~,. lb, Cl!M<8C 1111'1<!· ""'1:f0"'11t cf lhis Sdte:lulo bllt irnolis,d :,11h<, IJl'ffi8G as µ,m;do,:l by Scl\ed'ule- DA,ORS a- Schet:l\rji, CCA,CRS. 2 Ge...-..tioo = Tilo Gen"''"" are ,app,:;ablo <JOiy lo Bunt'll!d Serooe C...II:mer.<. See Special Cooatioo bew ~ PCII\ ~ - 3 IJ!1'11u;c = ~1 ct Waler R=:uoes IDWR) isne,gy Oretl~ - i<ar m:xe ~ on lho ~ siergy Oeit~ • ..,.. the Billh;J ,Cz,lcuJaoon Sp,,::;ill Caxl of Lhis Sd'ied'ule. 4 l<ppied on an, o,q.al bmis, I""' ITa.I,dd:l, ,en:i,-,uall)'. See· 1h Sp,,m,11 Condiibns ol lhi• Scl\ed'ulo, ID: n:ui, illimr:ma,. & Tilo ll.lodfi eo.; A:l'cc:,tjoo ~ledw!i,m (MCl•M! charge- re<XM0:5 1h ""' oos'I ... soa:-=t w 51¢,em ref:ltilily pro:ul!fll51i oo:lered by ihe CP,UC Iha! SOE b... FflJCUl"d on ~ JI ol rusiomeor5 ...ms,, !1"f11"1'."loo ..,..,..,.,. are· J!flMde:I l>,<oertain Ell,ctri:: S.S..:., 1'1-tM:le,s ar Camnu-ily Oooicz, .ol,;,g~Lcn.
(Tio be insen.ed by u lity)
Advice _5449 "-'-'-'-....C-E"------- Decision
(Con ·mred),
Issued by
Midh...el Backslrom
Viice President
(To be inserted by c..t. PUC)
Date Submitted Dec 30, 2024
Effective a:n 1 , 2025
Resolutiorn -=Ec....c ·-5c..c2cc1cc. 7 ____ _
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 61 2025/06/09
Attachment 1
ern California Edison
Rosemead, California (U 338-E}
Revised
Canoell"ng Revised
Cal. PUC Sheet N:o.
Cal. PUC Sheet N:o.
89282"E
88860-E
RA TES (Continued)
Opiloo PRIME' r OntlQn PBIME.C:PP
Energy °""''11" • ~'M.,L,,rJDay
Summer ~
MCAM ~.,• , $,l<'!M-i
Blllsic Chaif9" • &iMet=ID")'
Scb,ecdule,,IDJJ;O
TIME-Of-USE
D.QMESI &C
(Con ·n,ued}
On,.P=k
Md,Peoik
Off,Peoik
Md 'Peoik
Off,P=k
~ r.off,Peoik
Ff\/ t.ll!ler Credii {Seyar.:,t,,ly Me!ered EV Op1icn) • $1M<,L,,ri'Da.y Ff\/ Sul:,mel,,r Credil O SfMel,,r;Oay
c..'lifarria, Olirrn,;e Credi!'
c..'lifaorm AJtem,;t,, _,, for
Esnergy Ci=Junl • %
F"~mily EJ~dri::; ~ l:e As!iistance DisCDUrn'I. • %
Medi<,;,! Line Item Disa,urtt • %
Opllil111 PRIME:.CPP
CPP g,,.,m, E~y C h"'B" • $\k,Wh
s..nm..- CP.P Non-Event C...,.fi1
Qn.Pealk Eenetrgy C...,.fil , $il<Vl!h
Delivt,ry S,,n,ja,
Taial'
0•.28716 (1)
o,.2a?16 (1)
0•.20039 (1)
0,.29:246 (1)
o,.rs1215 (1)
0•.19-215 (I)
0,.0019!1 (1)
0,.00160 (1)
0.539 (R)
(0.(08)(1)
(0.139)(1)
j56.00} (IR)
100.00"
00.00 100..000
Slleet 6,
11.28317 (R)
0.100n (R)
0.067.28 (R)
11.24759 (R)
ll.05686 (R)
0.05886 (R)
6.1!0000
(0..15 170)
(O.J54821) (R)
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
Reix=rn 1Cl!I% di th<, cisooullt ~3""" "11<,,,,m 01 1th<, ~" Spociol Candilo, d 11-i• Sd,ed_j..._ The ~119 ~lion Tran,iiioo Charge (CTC) of ($11•.00058) per k!/lh i,o. re<XM<ed in lie UG ~ of Gener•lion. lR) The Ma>:irru:nA""l.:tie c...:ti • the '-',l'pecl c:red~ ,illtD.A11. fa- Cl?P Cu,;iorn,r.; did palili<i~ 01 .,u,.,,- d'emand "'"i""'<"' -=· Total = Tdlal Dl,l~Ser,,era1e5,.,,,~.,1o -..:lSernoo, C.<!dkoe .. (OA) ~ Camrruil.y CJioioo~SeMCO (OCAs..rro.) Ou~ e,;u:epl DA and CC\ Se,,,e OJst.cn,ers ""' na: subjed lb the ClM'RllC raile· ~ ct lhi• Schedle bui .,,.,., y lhe DWRBC ... ~~Sched.h,D,lt,.CRSarSchm,loOCA,CRS .
2 ~a,~ The Gen - ,..,, ~c.,bli, rrly ID E!uirllerl SernCll!• ~ See Spociol Can,Hii:m lbelow b PCIA ~ - 3 D'l\lREC • D,,partmenl cf Ylouor Remu"""' (l:M'Rl Energy Clredl: - F« ....-e infi:mlOlioo "" lhe Ol'/IR Ernu'f a-..a~ ..,. lhe Bilrg C.tculalioo Spociol Candilo, d 11-i• -~-
4 ~ed"" :m ""lual • is, pi,r ir>:>u5t!hdd, ~~ See tho Sp<riil Coodlioco, ct 11'15 SdlOO!Je b more iibmaiian. 6 The lMcdfi C...,Ata:.,ticnModiarni,m (MCMll chargi, re<XM0:5 u,.,.,.1 coo1 .. ~...; •l"'lemreli.ulily pn:a.romsitorderedibyOH,0POC ihal SOE I=~ on t,,lialf of =iomo,, .-.h,.., ger;,,rJlioo some"" ....,. pro,i:lod 1,y.,,,11an Elt,,::ri:; Sen.i,e -"' ar Camnuiily Choic:z, ·~•=-
(Tio be inserted by u "lity)
Advice _5449 "-·'-'· -'--"E'------ Decision
(Con ·mied)
Issued by
Micha.el Bac:blrom
\Ace President
(To be ·nserted by Cal. PUC)
Date Submitted Dec 30,1 2024
Effective J!a:n 1 , 202.5
Resolution E-5217 --------
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 62 2025/06/09
Attachment 1
0150
Southern Clillifornia, !Edison Revised Call PUC Sheet No. 892n-E Rosemead, Califorria (U 338-IE) Canoe! 1'1Q Revised Cal. PUC Sheet No. 88502-E • • '.ule 0-CAAE Sheet 1
CAUFORN TE RA.TES FOR ENERGY
Sil"IC SERVICE
APPLICABIUTY
Appli.cable to domestic •senooe to Califomia All:emate Ra. es fot" Energy CARE) households residing ,in a pennanent Sio9e-Fa ily Acoommoda00111 Of" Multifam Acoommodaoon where e ,011Js-tomer meets all the Special Cood lions of lhis Sd'ledule. customers enroled in the CARE program are not eligible for the Family Electric Rate Ass.istance FERA) program.
Pur..uant to Special Cond lion 2 luerein, customers rec:eMng service under this Schedule are eligible to receive the Cal forn"a a1mate Credit as shown in the Rates seotioo below_
TERRITORY
Wrthio the entire territory served.
The applicable diarges set fo " Schedu D shat ~pply 'lo Oustomera served under this Schedule.
CARE Discount
A 32.5 percelilt discou • t is, appl ed to ai CARE Customer's bi poor to the application of the Public U~ili~ies (1) Commission Re' bu sement Fee (PUCRF) and any .:qiplicable user fees, taxes, and late payment charges. CAR!E Customers are required lO pay lhe PUORF and any applicable user fees. tax.es, and late payment charges in ful. addition CARE Customers are exempt from paying, ~he CARE Surcharge of 0.01435, per 'Wh. lhe Widfire fund on-Bypass.able Charge of $0.0DSQ.5 per Wh, arnd (1) the Fixed Recovery Charge o 0.00 98, ~ :'Nh.. (I)
(To be inserted by uti ily)
Advice 5449-E
Decision ---------
Coil " ued
~edby
ichael BackslrOm
Vice Aresideot
(To be inserted by car. PUG)
Date Subnutted Dec 30. 2024
Effedille Jan 1, 2025
Resolution E.5217 -------
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 63 2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 64
6.3.3 Southern California Gas
Following are the SoCalGas natural gas tariffs applied in this study. Table 37 describes the baseline territories that were assumed for each climate zone.
Table 37. 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 $/therm applied in this analysis is shown in Table 38. The gas rates were developed based on the latest available gas rate for January 2025 and a curve to reflect how natural gas prices fluctuate with seasonal supply and demand. The seasonal curve was estimated from SoCalGas’s monthly residential tariffs between 2015 and 2024. 12-month curves were created from monthly gas rates for each of the ten years. The ten annual curves were then averaged to arrive at an average normalized annual curve.
Long-term historical natural gas rate data was only available for SoCalGas’ procurement charges.8 The baseline and excess transmission charges were found to be consistent over the course of a year and applied for the entire year based on January 2025 rates. The costs presented in Table 38 were then derived by establishing the baseline and excess rates from the latest January 2025 tariff as a reference point, and then using the normalized curve to estimate the cost for the remaining months relative to the January rates. CARE tariffs reflect the 20 percent discount per the GR tariff.
8 The SoCalGas procurement and transmission charges were obtained from the following site:
https://www.socalgas.com/for-your-business/energy-market-services/gas-prices RES2023.xlsx (live.com)
2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 65 Table 38. SoCalGas Monthly Gas Rate ($/therm)
Month Procurement
Charge
Transportation Charge Total Charge
Baseline Excess Baseline Excess
January $0.45 $0.98 $1.40 $1.43 $1.85
February $0.31 $0.98 $1.40 $1.29 $1.71
March $0.26 $0.98 $1.40 $1.24 $1.66
April $0.21 $0.98 $1.40 $1.19 $1.62
May $0.22 $0.98 $1.40 $1.20 $1.62
June $0.25 $0.98 $1.40 $1.23 $1.65
July $0.26 $0.98 $1.40 $1.24 $1.66
August $0.29 $0.98 $1.40 $1.27 $1.70
September $0.27 $0.98 $1.40 $1.25 $1.67
October $0.26 $0.98 $1.40 $1.24 $1.66
November $0.29 $0.98 $1.40 $1.27 $1.69
December $0.33 $0.98 $1.40 $1.31 $1.73
6.3.4 San Diego Gas & Electric
Following are the SDG&E electricity and natural gas tariffs applied in this study. Table 39 describes the baseline territories that were assumed for each climate zone. A net surplus compensation rate of $ 0.01837/ kWh was applied to any net annual electricity generation based on a one-year average of the rates between February 2024 and January 2025.
Table 39. SDG&E Baseline Territory by Climate Zone
Climate
Zone
Baseline
Territory
CZ07 Coastal
CZ10 Inland
CZ14 Mountain
The SDG&E monthly gas rate in $/therm was applied on a monthly basis according to the rates shown in Table 40. The gas rates were developed based on the latest available gas rate for January 2025 and a curve to reflect how natural gas prices fluctuate with seasonal supply and demand. The seasonal curve was estimated from SDG&E’s monthly residential tariffs between 2015 and 2024. 12-month curves were created from monthly gas rates for each of the ten years. The ten annual curves were then averaged to arrive at an average normalized annual curve. The baseline and excess transmission charges were found to be consistent over the course of a year and applied for the entire year based on January 2025 rates. The costs presented in Table 40 were then derived by establishing the baseline and excess rates from the latest January 2025 tariff as a reference point, and then using the normalized curve to estimate the cost for the remaining months relative to the January rates.
CARE tariffs reflect the 20 percent discount per the G-CARE tariff. 2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 66 Table 40. SDG&E Monthly Gas Rate ($/therm)
Month Total Charge
Baseline Excess
January $2.07 $2.36
February $2.01 $2.30
March $1.93 $2.22
April $1.86 $2.16
May $1.88 $2.18
June $1.94 $2.24
July $1.95 $2.25
August $2.02 $2.32
September
October
$1.97 $2.27
$1.94 $2.24
November $1.97 $2.27
December $2.07 $2.37
2025/06/09
Attachment 1
S Diego Gas & Eleciric C=pany
s.. Di,gc,, c.mr""raa
RA1ES
Total Ra\e:s:
~;ptl:oo,- TOU DR.11
Summe- _
o.,.p.,..1;
OJI.P.,..k
Super Oll,P,,
Wnte: .
On.P .... 'k
OJl.p...,1;
Super Of!.P<!~
St.nim58=:ii,.,Adju51menl0t:<lil l.fl b
130% ol 8=:iineWm 811...tir,e AdjU5lmJ!llt 0.-d~ Lf' lo 130% ol 8=:iine-
~mum Bil f$1d'a•l
~;ptl:oo - TOU O:R.11- IIOCTotal
CARiE R.lilii,
Jllllllll!'I - CARiE Rates.:
On.P...,k 0.28222
Qll,P...,1; 0.28222
Super 011,P,, 0.28222
WJoter - CARiE Rates:
On.P....'k 0.4 143!1
OJI.P...,k 0.4 1 3!I
Super 011,P,, 0.4 143!1
S=met 8;,,s,ili,.,
i,u.,tmenl Coodl up le (0.10543)
130% ol 8=:iiieWm 811...tino AdjU5lmJ!llt
Ci'edlt up iD 13llll'l'. a:r (0.10543)
B ...... Jim,
, ... ,mum Bil ($1d'a•l 0. 196
Nma:
Revised Cat f:) .U.C. Sheel t>lo.
Ca111aelin!!I Revised Ce1. f:) .U.C. Sheel t>lo.
SCHEDULIE TOU-DR1
RE:SIDENTIAJL T[ME-OF-USE
DWR8C + IIIOC il'oial 1ta1,; Wl'-INBC EIECC:Ral'<i
0.28222 0.00661 0.41738
ll.28222 ll.~1 ll. 1,&792
ll.28222 o.~1 0.0674,1
0.414'.l9 0.00661 0. 14115
0.414!.19 ll.00661 0.019.28
ll.414'.!9 0.00661 (1.06133
(0.11l543}
(0.11)543}
0..392
OWR BC • • r o1 · EECCfitafo WF' BC Rat;;,
0.00000 0..4 1136 0.119968
0.00000 0.1819.2 0..47014
0.00000 0.06741 0.34!163
0.00000 0.14115 0Ji5564
0..00000 0..117928 0..49367
0.00000 0..116133 0..47572
(0.10543)
(0.10543)
0. 196
62500-E
62360-E
Sheet .2
TOI
R.l,ja,
0.7051!1
o.A7fi7fi
o.:lSS;M
Oli611lS
0.49!128
0.48133
(0.1054-'.l)
(0.1054-'.l)
0.3!12
T.t11ial
IEffi!di,..I!,
~ •Rat!!
0.413249 R
0.3llllffl2 R
0.22627 R
0Jl8526 R
0.32350 R
0.31138 R
(ll.01111} I
(ll.01111} l
0.1911
(1) Tcml Ft.I= a:a,m, _,. LDC, SchodLt,, DWF!..SC {Depa-....L cl Wai.-r Re50Ula,,; &o::t Oha-9"~ Sct-etY. Wf'- BC (CA WJifi,. FLn:t d.sge) and Smeoile EECC ts-i" E=w Ccrnm::11:lly Co,;ij 1es. EECC r.,I= ,., .. "flP""'tl" ta btm::lled a.mcJITlef5. C111ly.
See Special Condli:n 111 r..- Pctll (Per.el- a-El" lril&rence AdJ=enl} """""""Y- (2) Talal Rat.,,. p-.,.,,.,b,d ,are- for a.is'iomons llal ..,.,,,;,,, ""'""1Cld~y st1pp't/ i3nd do!Msy...,,,.,. rrom itr- (3) v.'R.BC "'1d Vi'r•NBC cha~ do ool app:Jr lo CARE ciesl'om..-.._ (4) A,; idettlifo.-d i11 t,,, ,raii,,, • wsl.an>er bi n l ,me .mduode ""' ii,,m sLE1111...- ..,c1 MniN czed~s rr. u~" up lo 100% e r basm,e ta fCWD•.:1" 0... rah,, ,ping b..,.,r.is ad'qll:ed by ll=n:tJl.r Bill 1)[ and S.,nab,, Bill 119l>. (5) WI' BC .- is 0.00511 1 + DWR,BC Bait! er.mg,, ;,. ll.00000 . 2}jf(J
Ad'lice Ur. No. <1582-E
0.24-05-028
Cotrl!lnued
l!ISUl!d by
Dan Skopec
Senior Vice Pre911!1ent
Regulatory Affah
Submitted
Effective
Resolution o.
Jan 1. 2005
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 67 2025/06/09
Attachment 1
HB UllE TOU-OR1
RES ID:ENTIAL TIME-OF-USE
Sheet 5
The minimum bill to recover rnstribulion aoo TRAC cos s is calculated as lhe minim m bill clia:r,g;e of io-4182 per day Ii s the number of days • the bi in,g cyc'le with a 50% discoont applie • or CARE o:r Family E!lectric Rate Assistance Program (FERA) cusfo rs res ·ng in a miir1imum bill ch.arge of io.201 per day.
Ra e Compooems
The U ify Dislnbution COOi\pany Tof Rates (IJDC Total} shown above a:re comprised o the follolNing componems (if ,ap ca'ble)c (1) Transmission (Trans) Oharg;es. (2) Disbibwon (Dis r) Charges, (3), Pub c P rpose Program (PPP) Charges,. (4) Nuclear Decommissioning (MD) Charge. (5) Ong;aing Compehlion Transiticm Oh arges (CTCI, (6) Locall Generation Charge (LGC). (7) R 1ability SelVices (RS). and f8) the Total Rate Ad" s me:n Compon.ent (TRAC).
Ousfomers taking seIVice under t his .Sched may be• e.ligi • or a California Alternate Rafes for Energy (CARE) discount on lheir bi , if they· qu ify to receive service under-lne• ams and condi ions of Schedule E. GARE.. In addition, quali 1ed CARiE cusfomers e e:X!em:p from paying the CARE surch ge o io.o 123-D Pe:r kWih. Customers t a:re , g l e a:nd receive ba CARE and medi:cal baseline wil be given 'the addition medic b8!5'ellne s atmerit for Ydiich they qualify and wil r,eceive the total e· ective CARE , medics baser e discounts idenlilied in Sohed e• E-CARE.
Franch ise Fee Differe.n
A. Rranc'hise Fee Diffeirenlial of 5.78/II, will be app lied to the manfHly bil gs 'Lllated under thi s Sdhed' e ar all ,cusfomers within ihe corporate imils o • lhe Oity of San o· go. Suc'h Franchise Ree Diftereriti stial be so • d"ICS ed and added as a :separate item to bills rendered to such customers.
Al • e periods li'sted are ,applicable to loc ·me. The de 11r1ifioo ,of lime I be based upon the date service is reooe.red.
TOU Periods - Weekdays
On-Peak
Off-Peak
Super Off~Pea
Su er O:ff~Pea'k
Seasons: Summe.r
Winter
d
Summer
4::0D 'liYL - 9:00 .m.
6,:00 aJm. - 4.:00 111.m.;
QtOO pum. - midnighi
idnighl - 6,:00 aJm.
Summer
4::0D nn. - 9:00 .m.
2:00 p1Jm. - 4:CIO 111.rm.; • • lill
Ju ne 1 - O :ober 3 1
:ove.m'beir 1 - May 31
W...ier
4·:00 .ra. - 9:.00 .m.
6:00 ill. . - 4:.00 p.m.
Ex 10:00 a.m. - 2:00 p. . i'I March and April; 9:00 • • Midlii~ - ,. ' acme
0:00 ai.,lill.. - 2:.00 .m. in Mareh anlil
W...ier
4:00 .ra. - 9:00 .m.
2: • I) pJm, •- 4:CIO p.m.;
9:00 ht
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 68 2025/06/09
Attachment 1
l)».lqi.11,..~]r, nt,,t~l,l(!Cr,_· _,.,,;.,,_. !h~~~EY-'rOV-S-iiihtQM."""111'~ .. ,.ll~ illldW'F-N8C 11,o;UCJC • aJIT1PC)l"lll'bPf.-ad""' MM0111nis~EV--lOU-5nP1 • fnh •lllrilfl>oox. ~)~ ~ t~..tw:i - ~...,olht<p~-."'~~[.OA)111~Clw;ict;ll,gg!tgaili;viCOCAJ ~~~1>;1!1'@¥$00,I, •~"-- fl'lt T 'r;,u,1 fno,v, 0-V- b- anllriKn:hd cullDmll • U0C. F ' .C, OV.'R-BC arid ~w Ch.>qt;o lrd WIC4I ~ (PCIAI s-. PCU!. , t.,, ~ , hludod babw - Sct!oddlH Dll.al:Sar OCi!r l;~!o,,-~~ PQIA•
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 69 2025/06/09
Attachment 1
HEDULE EV-TOU-5 Sheet 4
COST-BASED DOMESTIC TIME~OF-USE FOR HOUSEHOLDS WITH ELECTRIC VEHIClES Notes: l"ransrnlssfon !Energy charges in.dude lhe TmnsmiSSion Revenue Balan.olng Account Ad1ustment (TRBAA) of $(0 00289} per lcWh and the 1iransmlssfon Access Charge Balan.dng Account Adjus1men1 (TACBAA) of $(0.01656} per kWh. PPP Energy charges includes Low Income PPP mle (LI-PPP) $0.015151kWn, Non-low Income PPP rate (Non-LJPPP) So.00031/licWh (pursuant to PU Code Seotion 399.8, the t\lon.U-PPP rate may nol exceed January 1, 2000 leve.ls), and Cal[fomla Solar Initiative rate (CSI) of $(0.00075)/l(Wh and Self-Genera~on Incentive Program rate (SGIP) $0.00149Jkl/Yh. 1illle basic service fee of 16 per montlll is applied to a customer's bill and a 50% discount is applied fot CARE, Medical Baseline, or Family Electric Rate Assislance Program (IFERA) custorriers resulting, in lheir basic sef\lice fees to be 8 per month.
Rate Components
The Utility Distribution Company Total Rates (UDC Total) shown above are comprised of the following components (if applicable): (1) Transmission (Trans) Charges, (2} Distribution (Distr) Charges, (3) Public Purpose Program (PPP) Charges, (4) Nuclear Decommissioning (ND) Charge, (5) Ongoing Competition Transition Charges (CTC), (6) Local Generation Charge (LGC). (7) Reliability Services (IRS},. and (8) the Total Rate Adjustment Component (TRAC).
Gertain Direct Access customers are exempt from the TRAC, as defined in Rule 1 - Definitions.
Franchise Fee Differential
A Franchise F,ee Differential of 5. 78% will be applied to the monthly billings calculated under this schedule for all customers within the corporate limits of the City of San Diego. Such Franchise Fee Differential shall be so indicated and added as a separate item to bills rendered to such customers.
Time Periods:
All time periods listed are applicable to actual "clock" time) TOU Period - Weekdays Summer Winter
On•Peak 4:00 p.m. - 9:00 p.m. 4:00 p.m. - 9:00 p.m.
6:00 a.m. - 4:00 p.m.; 6:00 a.m. - 4:00 p.m.
Off.Peak Excluding 10:00 a.m.- 2:00 p.m.in March and April; 9:00 p.m. - midnight 9:00 p.m. - midnight Super ~Off-Peak Midnight - 6:00 a.m. Midnight - 6:00 a.m. 10:00 a.m.. - 2:.00 p.m. in March and April
TOU Period - Weekend.s Summer Winier and Holidays
On•Peak 4:00 p.m. - 9:00 p.m. 4:00 p.m. - 9:00 p.m.
Off-Peak 2:00 p.m. - 4:00 p.m .. ; 2:00 p.m. - 4:00 p.m. 9:00 p.m. - midnight 9:00 p.m. - midnight
Super .Off.Peak Midnight - 2:00 p.m. Midnight - 2:00 p.m.
Seasons:
Summer June 1 - October 31
Winter November 1- May 31
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 70 2025/06/09
Attachment 1
·• ....,JE
San Diego Gas & Electric Co,npany
San Diego, Califomie
R1wlsed Cal. F'·.U.C. ShHI No.
Cancel 9 RevJsed Cal. F'·.u .c. ShHI No.
SCHEDULE E CARE
CAL IFORNIAALiERNA.TE RATES FOR ENERGY
APPLICABILITY
62755-E
35718~E
Sheet 1
lhis schedule provides a California Alternate Rates for Energy (CARE) disrount to each of the following types of customers listed below that meet the· requirements for CARE eligibility as defined in Huie 1, Definitions, and herein, and is taken in conjunction with the customer's otherwise applicable· service schedule.
1) Customers resi.ding in a permanent single~family accommodation, separately metered by the Utility.
2) Multi-famcly dwelling units and mobile home parks supplied throug.h one meter on a single premises where the individual unit is submetered.
3) Non-profit group living facilities.
4) Agri oultura I employee housing facilities.
l ERIRITORY
With in the entire territory served t>y the UHl ity.
DISCOUNT
1) Residential! CARE:
Pursuant to D.24-05-028, the applicable GARE discount rate is to be· between 30% and 35%, with the intended CARE discount rate to be 35% for SDG&E, specifically, applied as a fixed CARE line~item discount.
1H6
In add'ition to the CARE line-item discount, the total effective GARE discount consists of: (a) exemptions from paying the CARE Surcharge, Department of Water Resources Bond Charge (DWiR-BC), California Wildfire Fund Charge (WF-NBC), Veh ic e-Grid Integration (VGI) costs, and California Solar Initiative• (CSI) and (t>) a 50% minimum bill relative to N.onCARE.
Oontlrrued
Issued by Submitted Jan 24. 2025
Advice Ur. No. 4572-E-A Dan1Skopec Effective Jan 1, 2025 Senlo.r Vice F'resldeni
Decision No. D.24-05-028 Reg ulatory Affairs R.esolutllon No.
T
N
N
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 71 2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 72
6.3.5 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 41. The gas rates were developed based on the latest available gas rate for January 2025 and a curve to reflect how natural gas prices fluctuate with seasonal supply and demand. The seasonal curve was estimated from CPAU’s monthly residential tariffs between 2018 and 2024. 12-month curves were created from monthly gas rates for each of the seven years. The seven annual curves were then averaged to arrive at an average normalized annual curve. 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 January 2025 rates. The costs presented in Table 41 were then derived by establishing the baseline and excess rates from the latest January 2025 tariff as a reference point and then using the normalized curve to estimate the cost for the remaining months relative to the January rates. The monthly service charge applied was $16.93 per month per the January 2025 G-1 tariff.
Table 41. CPAU Monthly Gas Rate ($/therm)
Month G1 Volumetric
Total Baseline
G1 Volumetric
Total Excess
January $1.74 $3.02
February $1.33 $2.53
March $1.24 $2.43
April $1.21 $2.39
May $1.21 $2.39
June $1.23 $2.42
July $1.31 $2.64
August $1.37 $2.71
September $1.36 $2.71
October $1.38 $2.72
November $1.45 $2.80
December $1.57 $2.96
2025/06/09
Attachment 1
:Sm.E U L IE IJEC fRH: ' KR IC E
U1"[UTY RATE SCHEIDULE E-1
A. .Pl"U(' . BEUTY:
This Rate Sch dule app!.i to sep rarely m t.ered in ,Je- mil· resi!fen11ial d/ llin - receiving Electric Se • ice Imm dlle iiy of Palo Alto Utilities.
B. TER:Rn'OR :
C.
Thi rate chedule appli.e everywhe.re the Ci f Palo Alto pro ide.s E.!earic Se • ce.
DLKD· RATES:
Tier I u:sag.e
Tier2u:sage
All}' II age O .er Ti.er I
Customer Chari.,<.e
( monili)
Commodi
0.10-270
0.13240
Di tr1bu1ion
0.0$642,
0.08079
Public Be-ilefits
(UICl549
(UICl549
Tolal
.19461
0.21868
4.64 D·. ~l'IOCI . L OT ··:
l . Cafe11 I tio olf Co t Co ponen .
The crual bill. amount i calculated. based on. th.e applicable • te i.n Section C above and adju ted for any pplkable oliscounl , sureharge and/or ta. e . On a Cu tomer' bill talem.enl the bill amount may be broken clown into appropriate componenl as ,eaklllated under Secti.on C.
Cafe11 I tio olf oe-Tie
Tier 1 -1.ecttidty usage haM be calrulated and biUed. based. upon. a 1eve4. o,f 15 kWh per day proratecl b Meter reooing days of S ice. As an example for a 30-<l'ay bill, ihe Tier I level \¥OUM be 450 Wh. for furd1er discus ion of bill c.alculation and proration, refe-r to Rule ancl Regul tion 11 .
Is ued by the Cil)• Council
Supe.l':!i~ Sl'l8el'Nt, E-1-1
tJatecJ 7-1-WZJ
Tm U TIES OC ITYOF
PALO AL.:,T'O
UTI LI T-IES
{Entl}
Sheet No E-1-l
Effocti e 7-1-20-24
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 73 2025/06/09
Attachment 1
idential Time-of-Day Service
Rate Schedule R-TOD
II. Firm Service Rates
A. Timc'-<lf-D•y (5-S p.m.) Rak
Of't"tliW" id ot ftr«1i~ 1e1 ut £Kttti ,rti ut lim-cliw all or fl'l'edi\1:' M ut Ji ur .2tlH J anlbn l.2tH l\bt.\' 1. 2124 JiUluar~•J. 2025 ll,bt' l . 2(1?5 N,., 11n11aer Se~oo (Oc1ober - Ma}'J
S~i lt!1n lntr.tilnlttur e fiiM'd Ulillle p~r ,_,,. tli pu JffC'.tu $23.50 Pl.IS S24.80 S2S.50 Detlritity lJsW11tr U ii.rji.1!
f"e.11lt.$11:IH1 lb.ISO S0.IS90 lb.HOO S0.. 161f!
OO-Pir.11lt.S/llf-1r S0.1120 SO.II.SI S0. 11 83 $0. 12.U S uJ1111N!r Sr.uon (Jur,i:, • Sepll-mbcr)
B.
S:i,-s 1e1a lnfntilnl.ctur e fiud <:lJtrtt! prr l'ND'.n tb pu l'ff.tu $23.50 $24.IS $24.80 S2S.50 Ott1ric.i1y l illl:rCbrji.e
f>c,kS/1 11~ lb.3219 lb.l:wl $0.3462 $0..lSS?
M.t-l-..k $/llf~ lb.lllfi-l S0. 1914 $0.1967 $0.202 1
Ofl'f>c,Ull II~ lb.mo SO. llll7 $0.142.S $0.1'164
Optional Critica l Peak Pricing Ra tc
1. ThC' CPP Rate base prices per time-of-day pcriod a.re the same as thC" pri ces per time-of-day period for TOD (S-8 p.m.).
2. The CPP Rate provides :::i discount per kWh on the Mid-Peak nnd Off-Peak prices during summer months.
3. During CPP Events, cu.stomCl"S wi11 be charged for energy used i:it the npplici:ible time--of-di:iy period rate plus I.he CPP Rate E"·cnt Pric.epcr kWh as shown on www_smud_org...
$26.20
S0..17'-A
S0..1248
$26.20
$0.36$5
$0.1077
$0.1505
4. During CPP E'\-·enls, cne.-gy exported lo the grid will be compensated at the CPP Rate Event Price per kWh as shown on www_smud.org..
5. The CPP Rate E"·cnt Price and djsco,mt will be updated annually a.I SMUD's discretion and posted on www.smud.org.
C. Plug-In Electric Vehicle Cn.-d il (n l.e cal.L-go.-ics RT02 and RTCl ) This credit is for rcsidentia.l customers who ha~·c a licensed passenger battery electric plug-in or plug-in hybrid electric "·chicle.
Credit applies to alJ clcctricl1y usage charges from midnjg.ht to 6:00 a .m. daily .
Electric Vchjcle Crcdjt . _____ ... --- ·--·. ___ ____ __ _ .... .... .... -$0.0 ISO/kWh Ill. Electrlclty Usage Surcharges
Refer to the following rn.le. schcdu]cs fo.-drtails on these surcharges.
A. H)"dm Genc.-ation Adju!tl.mtni (HCA}. RcfCf" to Rate Scha:l uJe HGA.
IV. Rate OpUon Menu
A. Energy A.s!dsla nc.e Prog.n11m R:ll'k, Refer to Rate Schedule EAPR.
0. J\ tr::dicsl Equipmtnl Di!icOunt P.-ognm. Refer lo Rate Sc.hcdu]e MED.
C. J oint P:ut icipa tion in Medical Equipment Diseouni and E'..nrr gy Allistancr Pragn.rn Ra te. R.cfcrlo Rate Schedule MED.
SACRAMENTO MUNICIPAL UTILITY DISTRICT
Resolution No. 23-09-09 adopted September 21 , 2023
Sheet No. R-T00-2
Effective: September 22, 2023
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 74
6.3.6 Sacramento Municipal Utilities District (Electric Only) Following are the SMUD electricity tariffs applied in this study. The rates effective January 2025 were used.
2025/06/09
Attachment 1
. Conditions ,of Service
Peak Wcckclays bclwccn 5:00 p.m. ancl. 8:00 p .m.
... ummu · idl-P~-ak \Vcckcleys bclwccn noon lllld midnight cpl clurin • ·lhc (.!Ju n 1 - . i;pt 30) ~,al,: hour.;_
0 I-Peak All other hours. includ in£ wce'kc.ml!s lllld holidays 1.
1.1 ~ ummrr Peak Wcckclays bclwccn 5.:00 p.m. ancl. 8,00 p .m. (Oct 1 - 1.ay 3O 0 I-Pea · All other hours, includin£ wce'kcnd!s lllld holidaysl. . - 1 Sec Scclmn V. Conc'btLons of Se:rv,oc 75 V
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 76
6.3.7 Fuel Escalation Assumptions
The average annual escalation rates in Table 42 and Table 43 were used in this study. Table 42 rates 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 43 rates are based on the escalation rate assumptions within the 2025 LSC factors from 2026 through 2055.9 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 the year 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.
9https://www.energy.ca.gov/files/2025-energy-code-hourly-factors. (California Energy Commission, 2023). Actual escalation factors were provided by consultants E3.
2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 77 Table 42. Real Utility Rate Escalation Rate Assumptions, CPUC En Banc and 2022 TDV Basis Statewide Natural
Gas Residential
Average Rate
(%/year, real)
Electric Residential Average Rate
(%/year, real)
PG&E SCE SDG&E
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%
2054 1.8% 0.6% 0.6% 0.6%
2055 1.8% 0.6% 0.6% 0.6%
2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 78 Table 43. 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)
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%
2054 -0.6% 1.1%
2055 -0.6% 1.1%
2025/06/09
Attachment 1
Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 79 Get In Touch
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Revision: 1.0
Last modified: 2025/06/09
2025/06/09
Attachment 1
Cost-Effectiveness Study Results
The analysis compares two heat pump options against the baseline of simply replacing an old air conditioner. The financial metrics, such as "Incremental Cost" and "Lifecycle Savings," are the primary indicators of cost-effectiveness.
• Dual Fuel Heat Pump (DFHP) Existing Furnace: This is the option where a new electric heat pump is installed alongside the existing gas furnace. The heat pump acts as the primary heating and cooling source, but the furnace is retained as a backup for cold weather. A key technical detail is that the furnace is set to activate only when the outside temperature drops below 35°F.
• Standard Efficiency Heat Pump Space Heater: This is the all-electric option. It involves completely replacing the existing gas furnace with an electric heat pump and a new air handler. The heat pump handles all heating and cooling.
Cost-Effectiveness and Savings in Climate Zone 4
Compliance
Option Description
First
Incremental
Cost
Lifecycle
Savings Benefits
Option 1: DualFuel Heat
Pump
Install a new heat pump to
work as an air conditioner and
heater, keeping the existing
gas furnace for backup on
very cold days. $1,670 $7,322
Reduces energy use
and greenhouse gas
emissions.
Option 2: Full
Heat Pump
System
Install a new heat pump that
replaces both the air
conditioner and the gas
furnace entirely, using a new
air handler. $652 $8,680
Higher long-term
savings and
significant
greenhouse gas
reductions.
The costs presented in the table above are incremental costs, meaning they are the additional amount a homeowner would pay to install a heat pump instead of just replacing an old air conditioner. While these costs are partially offset by a homeowner's personal utility bill savings over the equipment's lifetime, the full financial benefits are much broader.
From a societal perspective, these incremental costs are more than offset by the long-term savings that benefit all utility billpayers, such as reductions in the cost of utility infrastructure and energy generation.
The approach to installation depends on the age of the existing furnace. The lifespan of a typical furnace and air conditioner is about the same (10-15 years). Therefore, if a furnace is nearing the end of its life, it often makes economic sense to replace both units at the same time.
Alternatively, a heat pump can be configured as a primary heating source that works with the existing furnace, using the furnace only for supplemental heating on extremely cold days. The incremental costs and savings for both of these approaches are detailed in the table above.
Greenhouse Gas Reductions by Vintage of Home
Metric Tons Percentage
Approach 1978-
1991
1992-
2010
Pre19781978-
1991
1992-
2010
Pre1978
Heat pump & new air handler (no furnace) 1.30 0.97 0.84 37% 32% 30% Heat pump with existing furnace as backup 0.94 0.69 0.63 26% 22% 22% In terms of greenhouse gas emissions, heat pumps can provide significant reductions.
This is because heat pumps are far more efficient than gas furnaces (and electric resistance heat) and electricity in California is derived from low-carbon energy sources.
Table 4 shows greenhouse gas reductions for both approaches. The table shows greenhouse gas reductions in metric tons (for the first year) and as a percentage of total emissions for homes of different ages (vintages), the oldest, pre-1978, pre-dates the California Energy Code. The values were generated for typical homes using the California Building Energy Code Compliance software (CBECC).
City Council Staff Report
Meeting Date: October 28, 2025
Prepared By: Anthony Carnesecca
Approved By: Gabe Engeland
Subject: Discuss Los Altos Chamber of Commerce Contract Amendment
COUNCIL PRIORITY AREA
Business Communities
RECOMMENDATION
Amend contract with Los Altos Chamber of Commerce
ENVIRONMENTAL IMPACT
This report is exempt from environmental review pursuant to Section 15061(b)(3) of the State Guidelines implementing the California Environmental Quality Act of 1970.
FISCAL IMPACT
This contract is currently incorporated into the approved FY25-26 budget.
PREVIOUS COUNCIL CONSIDERATION
May 23, 2023, September 12, 2023, & October 14, 2025
BACKGROUND
At the May 23, 2023 City Council meeting, City Council directed City staff to draft a contract with the Los Altos Chamber of Commerce in the amount of $67,500 annually for five years.
City staff worked with the Chamber of Commerce to draft a contract that will execute specific objectives and achieve accomplishments regarding tourism and visitor attraction on an annual basis.
At the September 12, 2023 City Council meeting, City Council unanimously directed the City Manager to sign a contract with the Los Altos Chamber of Commerce in the amount of $67,500 annually for five years as previously directed during the budget process, which was intended to be for Tourism and Visitor Attraction services that support visitor attraction efforts of the City and will increase the amount of visitors supporting our local economy.
ANALYSIS
DISCUSSION
Per the staff report from September 12, 2023, the City of Los Altos and Los Altos Chamber of Commerce entered into an agreement, which is attached to this staff report, requiring the following items to be completed on a fiscal year basis.
Service Topic Expense
Printing 20,000 copies of full color high-quality destination guide: Los Altos Magazine. This includes
1. A two-page spread for the City of Los Altos on a topic agreed upon with City staff (ex. “Doing Business in Los Altos”)
2. A Recreation Department full-page ad. The Los Altos Magazine is a destination guide for the community that builds a stronger local economy through shopping, dining, and hotel stays through sales and hotel (TOT) tax.
Magazine $44,155
Distribution of 16,000 Los Altos Magazines to households in Los Altos and neighboring communities
Magazine $6,735
Distribution of 4,000 Los Altos Magazines for local pickup at hotels, coffee shops
Magazine $1,110
Creation of a digital copy of the Los Altos Magazine for electronic use promoting the community to support tourism.
Magazine $1,500
Operation of the Visitors Center at the office located at 321 University Avenue. Prominently located at the intersection of Foothill Expressway & Main Street. Supporting tourism by providing information and answering questions for both residents and visitors to our community both in person, by phone, and by email. Maintaining a community calendar of events to aid the community in scheduling events & festivals.
Visitors
Center
$14,000
Total $67,500
The Los Altos Chamber of Commerce successfully completed these tasks in fulfillment of their obligations for Fiscal Year 23-24.
In Fiscal Year 24-25, the Los Altos Chamber of Commerce was able to successfully operate the Visitors Center, but was unable to complete the tasks outlined relating to the Los Altos Magazine due to extenuating circumstances. Their staff has requested an extension that would allow them to complete these tasks from Fiscal Year 24-25 before the end of this calendar year.
City staff believes this would accomplish their required tasks outlined in the contract if the amendment is approved by the City Council.
At the October 14, 2025 City Council meeting, the City Council directed staff to return with a review of the contract with the Chamber of Commerce.
The Chamber will discuss alternatives to the annual publication of the magazine with the City Council at this meeting. Staff has not received the proposals at the time of publication of the agenda packet, but will amend the packet if they are received before the meeting.
ATTACHMENTS
1. Attachment 1 - City of Los Altos Contract with Chamber of Commerce
City of Los Altos 2025 Tentative Council Agenda Calendar All items and dates are tentative and subject to change unless a specific date has been noticed for a legally required Public Hearing.
Items may be added or removed from the shown date at any time and for any reason prior to the publication of the agenda.
November 18, 2025 - 7:00 p.m.
CONSENT:
• Pro-Housing Grant Application Approval
• Adoption of Resolution – Sanitary Truck Driver and Helper Union Local 350 PUBLIC HEARINGS:
• 996 Loraine Ave – Tentative Map
• 4898 El Camino Real – Tentative Map
DISCUSSION ITEMS:
• Drone as a First Responder Program
• Los Altos Commissions Review
• Presentation on Parental Leave
• Shuttle Service in Los Altos
December 2, 2025 – 7:00 p.m.
CONSENT:
• Award Woodland Library Contract
• Approve the 2026 City Council Meeting Date Calendar
• Adoption of Resolution – Adoption of Personnel Rules and Regulations December 9, 2025 – 7:00 p.m. - City Council Reorganization Ceremony The remaining 2025 City Council agenda calendar items are pending and will be published at a later date.
PROGRAM SUB PROJECT INITIATION DATE HEU COMPLETION DATE STATUS Program 2.D: Encourage and streamline Accessory Dwelling Units (ADUs).
Budget & Hire Planning
Technician December 31, 2022 COMPLETED
Program 2.D: Encourage and streamline Accessory Dwelling Units (ADUs).
Amend ADU Ordinance
based upon HCD's letter 6 months or less COMPLETED
Program 6.G: Housing mobility
Allow more than one
JADU (at least two per
site)
with ADU Ordinance
Update COMPLETED
Program 3.H: Amend design review process and
requirements.
Eliminate 3rd Party
Architectural Review February 28, 2023 COMPLETED
Program 3.H: Amend design review process and
requirements.
Dismiss Design Review
Commission February 28, 2023 COMPLETED
Program 3.L: Eliminate the requirement of story poles. March 31, 2023 COMPLETED Program 2.E: Conduct annual ADU rental income surveys.
Budget & Hire Housing
Program 4.J: Facilitate alternate modes of transportation for Manager March 31, 2023 COMPLETED residents.
Adopt VMT Policy &
Transportation Demand June 30, 2023 COMPLETED
Program 2.D: Encourage and streamline Accessory Dwelling Units (ADUs).
RFP-Permit Ready ADU
Plans July 31, 2023 COMPLETED
Program 1.H: Facilitate housing on City-owned sites. Financial Analysis July 1, 2023 December 31, 2023 COMPLETED Program 3.D: Evaluate and adjust impact fees. August 1, 2023 December 31, 2024 COMPLETED Program 1.H: Facilitate housing on City-owned sites. Release RFP December 31, 2023 COMPLETED Program 6.C: Target housing development in highest
resource areas. Initial Outreach September 31, 2023 COMPLETED Program 6.D: Promote Housing Choice (Section 8) rental
assistance program. September 31, 2023 COMPLETED
Program 2.A: Continue to implement and enhance
inclusionary housing requirements. December 31, 2023 ONGOING Program 2.B: Establish an affordable housing in-lieu fee and commercial linkage fee. Housing in-lieu fee. December 31, 2023 COMPLETED Program 2.F: Water and Sewer Service Providers. December 31, 2023 COMPLETED Program 3.B: Modify building height in mixed-use zoning districts. Downtown Districts December 31, 2023 COMPLETED Program 3.E: Ensure that the density bonus ordinance
remains consistent with State law. December 31, 2023 ONGOING
Program 3.H: Amend design review process and
requirements. Code Amendments December 31, 2023 COMPLETED Program 3.K: Standardize multimodal transportation
requirements.
Bicycle Storage and
Charging Regulations December 31, 2023 COMPLETED
Program 3.K: Standardize multimodal transportation
requirements.
Remove CSC Review of
Housing Developments December 31, 2023 COMPLETED
Program 4.C: Allow Low Barrier Navigation Centers
consistent with AB 101. December 31, 2023 COMPLETED
Program 4.D: Allow transitional and supportive housing
consistent with State law. December 31, 2023 COMPLETED
Program 4.E: Allow employee/farmworker housing
consistent with State law. December 31, 2023 COMPLETED
Program 4.F: Reasonably accommodate disabled persons’
housing needs. December 31, 2023 COMPLETED
Program 6.B: Maintain and expand an inventory of affordable housing funding sources. Prepare Inventory. December 31, 2023 COMPLETED Program 6.E: Prepare and distribute anti-displacement
information. December 31, 2023 COMPLETED
Program 1.A: Rezone for RHNA shortfall. January 31, 2024 COMPLETED Program 1.G: Rezone housing sites from previous Housing Elements. January 31, 2024 COMPLETED
Program 3.G: Amend Conditional Use Permits findings
applicable to housing developments. March 31, 2024 COMPLETED Program 3.I: Allow residential care facilities consistent with State law. January 31, 2024 COMPLETED
Program 3.J: Explicitly allow manufactured homes consistent with State law. January 31, 2024 COMPLETED
Program 3.F: Reduce Conditional Use Permit requirement for residential mixed-use and
multi-family. September 31, 2024 COMPLETED
Program 1.B: Facilitate higher density housing in the
Commercial Thoroughfare (CT) District. January 31, 2024 COMPLETED Program 1.C: Allow housing in the Office Administrative (OA) District. January 31, 2024 COMPLETED
Program 1.E: Update the Loyola Corners Specific Plan. January 31, 2024 COMPLETED Program 2.D: Encourage and streamline Accessory Dwelling Units (ADUs).
Adopt-Permit Ready ADU
Plans December 31, 2024 COMPLETED
Program 3.A: Prepare a Downtown parking plan and update citywide parking requirements. Downtown Parking Plan December 31, 2024 COMPLETED Program 3.A: Prepare a Downtown parking plan and update citywide parking requirements.
Comprehensive Parking
Ordinance Update December 31, 2024 COMPLETED
Program 3.B: Modify building height in mixed-use zoning districts.
Commercial
Neighborhood (CN)
District December 31, 2024 COMPLETED
Program 3.C: Remove floor-to-area ratio (FAR) restriction at Rancho Shopping Center and
Woodland Plaza. December 31, 2024 COMPLETED
Program 3.M: Modify parking requirements for emergency
shelters consistent with State
law. December 31, 2024 COMPLETED
Program 2.B: Establish an affordable housing in-lieu fee and commercial linkage fee. Commercial linkage fee. December 31, 2025 COMPLETED Program 1.D: Allow housing on certain Public and
Community Facilities District sites and
facilitate housing on religious institution properties. December 31, 2025 IN-PROGRESS Program 6.G: Housing mobility
Allow housing on all
religious sites within the
City December 31, 2025 IN-PROGRESS
Program 1.F: Rezone Village Court parcel. December 31, 2025 COMPLETED Program 4.H: Provide additional density bonuses and
incentives for housing that accommodates special needs
groups. December 31, 2025 IN-PROGRESS
Program 4.I: Allow senior housing with extended care
facilities in multi-family and mixed-use zoning districts. December 31, 2025 IN-PROGRESS Program 1.I: Incentivize Downtown lot consolidation. July 31, 2026 Program 4.G: Assist seniors to maintain and rehabilitate their homes. July 31, 2026 ONGOING
Program 6.C: Target housing development in highest
resource areas. Follow-up Outreach September 31, 2026
Program 1.H: Facilitate housing on City-owned sites. Entitlement Review December 31, 2026 Program 3.N: Modify standards in the R3 zoning districts. December 31, 2026 COMPLETED Program 4.J: Facilitate alternate modes of transportation for residents.
Capital Improvement
Project for above head
pedestrian crossing
signals on San Antonio
Road near Downtown Los
Altos December 31, 2027
Program 5.F: Incentivize the creation of play areas for multifamily housing projects. December 31, 2027 Program 1.K: Participate in regional housing needs planning efforts. Ongoing ONGOING
Program 1.L: General Plan amendments. Ongoing ONGOING
Program 1.M: SB 9 implementation. Ongoing ONGOING
Program 1.N: Facilitate and monitor pipeline housing
projects. Ongoing ONGOING
Program 2.C: Assist in securing funding for affordable
housing projects. Ongoing ONGOING
Program 2.D: Encourage and streamline Accessory Dwelling Units (ADUs). Ongoing ONGOING
Program 2.E: Conduct annual ADU rental income surveys. Annual Survey Annually ONGOING Program 4.A: Support efforts to fund homeless services. Ongoing ONGOING Program 4.B: Continue to participate in local and regional forums for homelessness,
supportive, and transitional housing. Ongoing ONGOING
Program 5.A: Monitor condominium conversions. Ongoing ONGOING Program 5.B: Continue to administer the City’s affordable housing programs. Ongoing ONGOING
Program 5.C: Restrict commercial uses from displacing
residential neighborhoods. Ongoing ONGOING
Program 5.D: Implement voluntary code inspection program. Ongoing ONGOING Program 5.E: Help secure funding for housing rehabilitation and assistance programs. Ongoing ONGOING
Program 6.A: Assist residents with housing discrimination and landlord-tenant
complaints. Ongoing ONGOING
Program 6.B: Maintain and expand an inventory of affordable housing funding sources.
Inform, Evaluate
Apply/Submit Ongoing ONGOING
Program 6.F: Affirmatively market physically accessible units. Ongoing ONGOING Program 7.A: Promote energy and water conservation and
greenhouse gas reduction
through education and awareness campaigns. Ongoing ONGOING Program 7.B: Monitor and implement thresholds and
statutory requirements of climate change legislation. Ongoing ONGOING
DATE: 10/28/2025
TO: COUNCILMEMBERS
FROM: CITY MANAGER’SOFFICE
SUBJECT: COUNCIL Q&A FOR OCTOBER 28, 2025 CITY COUNCIL REGULAR
MEETING
Agenda Item 1 (Minutes):
• At the bottom of page 5 of the minutes, it incorrectly states the motion for #10 Dog Park; we did NOT agree to eliminate synthetic turf as an option, the motion was amended to still include turf.
Answer: Corrected.
Agenda Item 2 (Professional Service Agreement with Harris & Associate):
• Where is the electrical control box proposed for replacement? Does the location stay the same?
Answer: The electrical control panel is located behind Citi Bank at 130 Main Street next to the power pole.
• Which particular parts of Plazas 4, 5 and 6 do not meet the ADA maximum slope requirement?
Answer: Parking Plazas 4 and 5 have issues with the ADA path of travel. The existing asphalt pavement has been lifted in some locations and hinders clear path of travel in those areas.
In all of the parking plazas, the tree roots are lifting the pavement, which is causing water to pond, damaging the parking lot, hindering drainage, and creates unsafe walking conditions. The existing ADA failed to meet any past ADA standards that would be allowed and did not require upgrades.
Agenda Item 6 (Chamber Contract):
• It appears from the staff report that the City is a significant financial supporter of Chamber operations funding both the magazine and partial operations of the Visitor’s Center. What proportion do the City’s contributions, including our annual contract as well as the pilot LEAD program, represent of the Chamber’s annual operating budget this year? Answer from Chamber:
2022 – City Funds $67,500 / Income $341,000 = 20%
2023 – City Funds $67,500 / Income $171,000 = 39%
• What is the update on the status of the LEAD program? Answer from Chamber: The LEAD program was successfully launched in early October with the Chamber’s inaugural class of 26 incredibly enthusiastic LEADers! Sandra McGonagle hosted a fantastic opening session. Ou next session will be at the Krause Center for Innovation on November 5, and will overview all educational leadership opportunities. At the conclusion of each session our LEADers are asked to reflect on “How might we, as engaged community members make Los Altos an even stronger, more inclusive, and thriving place for all?” December will be business focused and January will be government with a visit to the City Council meeting on January 27. • The contract (Attachment 1, point #8) refers to insurance which it says is attached as Exhibit B but that exhibit is not included in the packet, please share Exhibit B. Also, do we require confirmation each year that the insurance is active? Answer from City staff: City staff did not include the original Exhibit B, but the full contract with Exhibit B is attached here for reference. The Chamber is required to maintain the active insurance coverages as laid out in the contract provisions for the duration of the contract.
• Please provide the Chamber’s most recent 990 tax filing, if available.
Answer from Chamber: We have not receive the most recent tax filing yet for the previous year, but I believe that the answer to question number 1 will address the underlying question about the significance of the city contract to the operations of the Chamber. I would also any entertain any additional questions directly prior to appearing in the public forum.
Answer from City staff: The Los Altos Chamber of Commerce Form 990 for 2023 is attached to this QA.
CITY OF LOS ALTOS
CITY COUNCIL MEETING MINUTES
TUESDAY, OCTOBER 14, 2025
7:00 p.m.
1 N. San Antonio Rd. ~ Los Altos, CA
Pete Dailey, Mayor
Neysa Fligor, Vice Mayor
Larry Lang, Councilmember
Sally Meadows, Councilmember
Jonathan D. Weinberg, Councilmember
CALL MEETING TO ORDER – Pete Dailey, Mayor, called the meeting to order at 7:00 p.m.
ESTABLISH QUORUM – All Councilmembers were present.
PLEDGE OF ALLEGIANCE – Members of Girl Scout Troop 61074 led the Pledge of Allegiance.
REPORT ON CLOSED SESSION
There was no reportable action from the Closed Session meeting of October 14, 2025.
CHANGES TO THE ORDER OF THE AGENDA
There were no changes to the order of the agenda.
SPECIAL ITEMS
Issue Proclamation Recognizing October as Hindu Awareness and Appreciation Month Pete Dailey, Mayor, presented the proclamation to Pawan Deshpande, Los Altos Resident.
PUBLIC COMMENTS ON ITEMS NOT ON THE AGENDA
The following members of the public spoke during Public Comment:
• Anjali Sharma-Tiwari
• Caroline Horn
CONSENT CALENDAR
Sally Meadows, Councilmember, requested to pull Items 6 and 7 for discussion.
Pete Dailey, Mayor, placed Items 6 and 7 immediately following the Consent Calendar on the agenda.
Jonathan D. Weinberg, Councilmember, announced that he had a brief prior professional relationship with BKF Engineers but has had no further contact with BKF Engineers or any of their employees in over a year.
Motion by Lang and Second by Fligor to approve Items 1 – 5 of the Consent Calendar. Motion carried unanimously by roll call vote.
City of Los Altos
City Council Regular Meeting Minutes
October 14, 2025
1. Approval of Meeting Minutes
Approve the Draft Meeting Minutes for the Regular Meeting of September 30, 2025
2. Adoption of Resolution - Designating a Regular Meeting Date Adopt a Resolution Designating the City Council Meetings of November 18, 2025 and December 2, 2025 as Regular Meetings in Accordance with Los Altos Municipal Code Section 2.04.010 “Meetings.”
3. Adoption of Resolution – United Against Hate Week
Adopt a Resolution recognizing October 19 – 25, 2025 as United Against Hate Week
4. Adoption of Resolutions - Addendum No. 13 to Regional Water Quality Control Plant Basic Agreement
Two actions for Council consideration:
• Adopt a Resolution Authorizing the City Manager to Execute Addendum No.13 to the Regional Water Quality Control Plant Basic Agreement between the City of Palo Alto, the City of Mountain View, and the City of Los Altos; and find that the Council’s action is exempt from review under CEQA pursuant to CEQA Guidelines Section 15301 and that none of the circumstances in CEQA Guidelines Section 15300.2 applies; and
• Adopt a Resolution for the appropriation of $281,911 to the Sewer Operating Fund
5. Adoption of Resolution - Annual Streets Resurfacing Project Adoption a Resolution authorizing the City Manager to execute a professional services agreement with BKF Engineers for the FY2025-2026 Annual Street Resurfacing Project in the amount of $258,643.00 and authorize a project contingency of $25,864.00 for a total project amount not to exceed $284,507
DISCUSSION ITEMS
6. Adopt Zoning Code Amendments - Historic Preservation & Mills Act Adopt the three (3) draft ordinances, which include:
• An Ordinance of the City Council of the City of Los Altos Adding Chapter 14.93 (Historic Preservation) to the Los Altos Municipal Code; and • An Ordinance of the City Council of the City of Los Altos Adding Chapter 14.95 (Mills Act Program) to the Los Altos Municipal Code; and
City of Los Altos
City Council Regular Meeting Minutes
October 14, 2025
• An Ordinance of the City Council of the City of Los Altos Repealing in its Entirety Chapter 12.44 for Existing Historic Preservation Regulations; and • Find that the proposed amendments are exempt from environmental review pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines
Neysa Fligor, Vice Mayor, recused herself from the discussion and vote of the item due to a potential conflict of interest.
Sally Meadows, Councilmember, explained why she pulled the item for discussion.
The following members of the public spoke regarding the item:
• Jon Baer • Roberta Phillips
• Curt Riffle • Catherine Nunes
• Maria Bautista • Lois Baer
Motion by Meadows and Second by Weinberg to waive second reading and adopt an Ordinance of the City Council of the City of Los Altos Adding Chapter 14.93 (Historic Preservation) to the Los Altos Municipal Code. Motion carried 4-0 by roll call vote, with Vice Mayor Fligor recused.
Motion by Meadows and Second by Weinberg to waive second reading and adopt an Ordinance of the City Council of the City of Los Altos Adding Chapter 14.95 (Mills Act Program) to the Los Altos Municipal Code. Motion carried 4-0 by roll call vote, with Vice Mayor Fligor recused.
Motion by Meadows and Second by Weinberg to waive second reading and adopt an Ordinance of the City Council of the City of Los Altos Repealing in its Entirety Chapter 12.44 for Existing Historic Preservation Regulations. Motion carried 4-0 by roll call vote, with Vice Mayor Fligor recused.
Motion by Meadows and Second by Weinberg to waive second reading and adopt an Ordinance of the City Council of the City of Los Altos, finding that the proposed amendments are exempt from environmental review pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines. Motion carried 4-0 by roll call vote, with Vice Mayor Fligor recused.
7. Adoption of Resolution - Amend Contract with Los Altos Chamber of Commerce Amend contract with Los Altos Chamber of Commerce
There were no public speakers for this item.
Kim Moseley, President of the Los Altos Chamber of Commerce, discussed the item with the City Council.
City of Los Altos
City Council Regular Meeting Minutes
October 14, 2025
Item failed due to a lack of motion.
PUBLIC HEARING
8. 2025 Los Altos Building Code Updates
Three separate actions for Council consideration:
• Introduce an Ordinance of the City Council of the City of Los Altos Repealing in its Entirety Title 12 for Buildings and Construction of the Los Altos Municipal Code; and
• Introduce an Ordinance of the City Council of the City of Los Altos Adding Title 12 for Buildings and Construction to the Los Altos Municipal Code Including Chapters
12.04, 12.06, 12.08, 12.10, 12.12, 12.14, 12.16, 12.18, 12.20, 12.22, 12.24, 12.26,
12.28, 12.30, 12.32, 12.34, 12.36, 12.38, and 12.40 to Adopt by Reference the 2025 California Building Codes with Local Amendments; and Find that both actions are exempt from environmental review pursuant to Section 15061(b)(3) and 15308 of the California Environmental Quality Act (CEQA) Guidelines; and • Direct staff to place the introduced Ordinances on the October 28, 2025, meeting agenda for a public hearing, waiving of second reading, and adoption Veronica Tinoco, Building Official, presented the report.
Pete Dailey, Mayor, opened the Public Hearing.
The following members of the public spoke during the Public Hearing:
• Don Bray
• Connie Miller
Pete Dailey, Mayor, closed the Public Hearing.
Motion by Weinberg and Second by Fligor to waive first reading, by title only, and introduce an Ordinance of the City Council of the City of Los Altos Repealing in its Entirety Title 12 for Buildings and Construction of the Los Altos Municipal Code, as amended. Motion carried unanimously by roll call vote.
Motion by Weinberg and Second by Meadows to waive first reading, by title only, and introduce an Ordinance of the City Council of the City of Los Altos Adding Title 12 for Buildings and Construction to the Los Altos Municipal Code Including Chapters 12.04, 12.06, 12.08, 12.10,
12.12, 12.14, 12.16, 12.18, 12.20, 12.22, 12.24, 12.26, 12.28, 12.30, 12.32, 12.34, 12.36, 12.38, and 12.40 to Adopt by Reference the 2025 California Building Codes with Local Amendments; and find that both actions are exempt from environmental review pursuant to Section 15061(b)(3) and 15308 of the California Environmental Quality Act (CEQA) Guidelines.
Motion carried unanimously by roll call vote.
City of Los Altos
City Council Regular Meeting Minutes
October 14, 2025
Motion by Meadows and Second by Weinberg to direct staff to place the introduced Ordinances on the October 28, 2025, meeting agenda for a public hearing, waiving of second reading, and adoption. Motion carried unanimously by roll call vote.
DISCUSSION ITEMS
9. Approval of Formation of Council Subcommittee
Approve the formation of a Subcommittee of the City Council for the Annual City Manager Performance Review
Motion by Dailey and Seconded by Fligor to appoint Pete Dailey, Mayor, and Larry Lang, Councilmember, to form the Subcommittee of the City Council for the Annual City Manager Performance Review. Motion carried unanimously by roll call vote.
The City Council took a recess at 8:31 p.m.
The City Council reconvened at 8:41 p.m.
10. Dog Park Surfacing Discussion
Direct staff to complete one of these options:
Proceed with the Callander and Associates 95% submittal to construct the Hillview Dog Park using the synthetic turf ground covering as approved at the July 9, 2024 City Council meeting; or
Return the Hillview Dog Park to the pre-design/outreach stage and eliminate synthetic turf as an option for ground covering, and further direct staff to complete the proposed McKenzie Dog Park while Hillview Dog Park is proceeding through redesign Manuel Hernandez, Parks & Recreation Director, presented the report.
The following members of the public spoke regarding the item:
• Jim Sweeney • Barbara Doherty
• Dan Beyer • Maria Bautista
• Tami Mulcahy • Susan Hinton
• Cat Huong • Teresa Morris
• Jeanine Valadez
Motion by Fligor and Second by Dailey to return the Hillview Dog Park to the predesign/outreach stage and eliminate synthetic turf as an option for ground covering, and further direct staff to complete the proposed McKenzie Dog Park while Hillview Dog Park is proceeding through redesign. Motion carried 4-1 by roll call vote with Councilmember Meadows opposed.
City of Los Altos
City Council Regular Meeting Minutes
October 14, 2025
11. Woodland Library Expansion Plan
Authorize the City Manager to issue a formal bid for Woodland Library Patio Expansion Plan and find that the proposal is exempt from environmental review pursuant to California Environmental Quality Act Section 15301 (Existing Facilities consisting of the minor alteration of existing public structures and facilities) Jonathan D. Weinberg, Councilmember, recused himself from the discussion and vote on the item due to a potential conflict of interest.
Anthony Carnesecca, Assistant to the City Manager, and Freddie Wheeler, Los Altos Library Endowment Representative, presented the report.
There were no public speakers regarding the item.
Motion by Meadows and Second by Fligor to authorize the City Manager to issue a formal bid for Woodland Library Patio Expansion Plan and find that the proposal is exempt from environmental review pursuant to California Environmental Quality Act Section 15301 (Existing Facilities consisting of the minor alteration of existing public structures and facilities). Motion carried 4-0-1 by roll call vote with Councilmember Weinberg recused.
INFORMATIONAL ITEMS ONLY
There will be no discussion or action on Informational Items
12. Tentative Council Calendar and Housing Element Update Implementation Calendar
13. 10-14-2025 Council QA
COUNCIL/STAFF REPORTS AND DIRECTIONS ON FUTURE AGENDA ITEMS • Pete Dailey, Mayor – Requested future agenda items:
o Review of Los Altos Chamber Contract (Supported by all Council) o Send a request to the Environmental Commission to analyze a potential turf policy for the City (Supported by Fligor and Lang)
• Sally Meadows, Councilmember – Requested a future agenda item:
o Discuss the future agenda items section of the agenda, and other Council meetingrelated practices (Supported by Dailey and Fligor) • Councilmembers Lang and Weinberg reported on their attendance at the CalCities Annual Conference in Long Beach, CA.
ADJOURNMENT – The regular meeting adjourned at 10:07 p.m.
City of Los Altos
City Council Regular Meeting Minutes
October 14, 2025
The meeting minutes were prepared by Melissa Thurman, City Clerk, for approval at the regular meeting on October 28, 2025.
_________________________________ __________________________________ Pete Dailey Melissa Thurman, MMC
Mayor City Clerk
The October 14, 2025, City Council meeting recording may be viewed via the following external website: https://www.youtube.com/@CityofLosAltosCA
The City of Los Altos does not own or operate YouTube. The video referenced in these minutes was live at the time the minutes were published.