Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
15 Packet Pg. 392 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Community
Services
Junior Museum and Zoo (JMZ) Guest Services Staffing
This action will freeze 1.00 FTE Program Assistant I position at the Junior Museum & Zoo (JMZ) for three years. This position was added during the FY 2025 Mid‐Year Budget Review. The position was intended to support customer service, membership oversight, re
servation booking, event coordination, and admissions. To address these responsibilities, the Community Services Department will reassign another 1.00 FTE Program Assistant I from the Lucie Stern Community Center to the JMZ for up to 50% of their time.
The amount of time that the Lucie Stern position can devote to the JMZ is s
till to be determined, however; it can be expected that less revenue will be achieved through reservation bookings and membership oversight, and there will be less support for visitor services and events at the JMZ. (Annual savings: $133,000) ‐$ (125,612)$
Community
Services
Junior Museum and Zoo (JMZ) Access S taffing
This action freezes one 0.48 FTE Staff Specialist, working as the JMZ Access Coordinator, for three years. This position was originally grant funded for two years, starting in FY 2024, with an expected transition to General Fund support. With the grant period now concluded, the position will be eliminated. This action w ill reduce outreach capacity in underserved communities such as East Palo Alto, Menlo Park, and Redwood City. The role supported building relationships with community partners, developing inclusion strategies, and raising awareness of JMZ programs. Without it, these efforts may continue at a smaller scale or be shared among existing staff. (Annual sav ings: $42,000)
‐$ (41,716)$
Community
Services
Pets in Need (PIN) Contract Alignment
This action reduces the allocated funding for the Pets in Need (PIN) Contract within the Community Services Department. A review of the contract terms and corresponding budget determined that fewer resources are necessary for the City to uphol d its obligations to PIN and the community. This reduction will not impact the current service levels. (Annual savings: $50,000)
‐$ (50,000)$
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
16 Packet Pg. 393 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Community
Services
Printed and Mailed Catalogs
This action eliminates the printing and mailing of recreation catalogs, phased over two years. In FY 2026, the frequency of printed and mailed catalogs will decrease from four times per fiscal year to twice. In FY 2027, the catalog will transition to an online‐ only format. Limited r emaining funds will be used to send postcards to residents as reminders about sign‐up periods and to direct them to the online catalog and potentially to print a limited number of catalogs for placement in City facilities. (Annual savings:
$80,000)
‐$ (60,000)$
Community
Services
General Expense Reduction
This reduction covers various program areas within CSD within the contract services, supplies and materials, and general expense groups. The impact is anticipated to be minimal, as many of these are adjustments align the budget with historical actuals. (Annual savings: $50,000)
‐$ (55,000)$
Fire Fire Fig hter Trainee Staffing
This action freezes two of the three Firefighter Trainee positions.
These positions were added in FY 2023 to create a hiring pipeline and allow for vacancies to be filled sooner, thereby reducing overtime costs and mandatory overtime for current firefighters.
However, these trainee positions have been vacant excep t recently when several current staff were temporarily on limited assignment duties. This action will retain one of the three trainee positions for flexibility and enable the Department to maintain current service levels while continuing to hire and train firefighters as needed to fill vacancies in the absence of these positions. (Annual ne t savings:
$343,000)
(76,143)$ (400,751)$
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
17 Packet Pg. 394 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Human Resources Recruitment Division Staffing
This action freezes 1.00 FTE Human Resources Technician position in the Recruitment Division for three years. This action is anticipated to reduce capacity for ongoing work and for progress on strategic recruitment plan initiatives. As staffing levels decline, departments face increased pressure to expedite recruitment, which increases strai n on the recruitment team. This action is anticipated to result in longer recruitment timelines, reduced responsiveness to departmental needs and production of vacancy‐ related reports. The Recruitment Team, already supported by temporary staff, will experience an increased workload, raising the likelihood of burnout, reducing quality control, and limiting efforts to imp
rove process and data integrity. Careful monitoring, adaptive planning, and continued evaluation of staffing needs will be essential to minimize disruption and maintain core recruitment services during this period. (Annual savings: $137,000) ‐$ (133,640)$
Various Information Technology Manager Freeze
This represents the General Fund's portion of allocated charges funding the In formation Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual savings: $153,000)
‐$ (149,147)$
Human Resources Reallocation of Staff to Benefit Funds
This action reallocates 1.00 FTE Manager Employee Benefits and
1.00 FTE Senior Human Resources Administrator from the General Fund. The posi
tions will be allocated to the General Benefits Fund
and Worker's Compensation Fund 75%/25% respectively. This aligns positions with duties. General Fund savings presented here will be partially offset by allocated charges from these pass‐ through funds for the cost of employees. (Annual savings: $376,00) ‐$ (365,601)$
Library Library S taffing
This action freezes 1.00 FTE Library Associate in the Library Department. This action is anticipated to reduce staffing flexibility at smaller branches (e.g., Downtown, College Terrace, and Children's), particularly on weekends and during public programs.
Core functions like customer service, technology support, and facility oversight will be absorbed by flexing r esponsibilities among existing staff. This will stretch capacity and limit the Library's ability to maintain programming or respond quickly to community needs.
Library staff will continually assess staffing allocations to minimize visible service impacts. (Annual savings: $133,000)
‐$ (125,587)$
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
18 Packet Pg. 395 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Library General Expense Reduction
This action will reduce general support expenses in collections which will result in fewer new materials and longer wait times for patrons to obtain popular print titles. (Annual savings: $50,000) ‐$ ( 50,000)$
Office of
Emergency Services
General Expense Reduction
This reduction will impact potential expenses related to the new Pub
lic Safety Building as it is anticipated that there will be a few expenses still needed for full functionality of the new space. The Department will absorb these anticipated expenses and work around any deficiencies during the budget reduction period. (Annual savings: $25,000)
‐$ (
25,000)$
Office of
Transportation
Use Measure B Funding for SRTS Planner
On June 16, 2025, Santa Clara
Valley Transportation Authority
(VTA) approved the use of Measure B Local Streets and Roads (LSR) funding for a Planner position working the elementary school Safe Routes to School (SRTS) program. Using LSR funding for SRTS has no direct service impact beyond the City hav ing less funding available for street maintenance. The City's average pavement condition index (PCI) is above 80, which allows LSR funds to be used for other transportation related programs. (Annual savings: $71,000) 66,754$ ‐$
P
lanning and
Development
Services
Planning Staffing Freeze
This action freezes 1.00 FTE Planner in Current Planning for three year
s and 1.00 FTE Planner in Long‐Range Planning for one year. In Current Planning, the freeze continues recent staffing vacancies, limiting the program to application processing and statutory deadlines while shifting code development and ordinance updates (e.g., SB9, telecom work) to Long‐Range Planning. In Long‐Range P
lanning, the freeze will delay or defer current and uninitiated Council priorities, with remaining staff focused on Housing Element implementation and state mandates. Impacts include reassignment or delay of projects such as Matadero Creek Affordable Housing Options, Innovative Housing Typologies, and ordinance updates for seismic safety and retail. (Annual net savings: $168, 000) (8,344)$ (333,771)$
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
19 Packet Pg. 396 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Police Police Reserve Staffing
This action freezes 0.12 FTE Reserve Officer in the Police Department. Retired full‐time police officers can serve as part‐time reserve officers, benefiting the community with their experience.
These positions often handle tasks such as transporting prisoners to and from the jail in San Jose, which allows full‐ti me officers to remain available for service in the city. Additionally, they may work traffic roles during Stanford events. Eliminating one vacant reserve position is unlikely to significantly affect service levels or the quality of police services. However, there may be a modest impact on overtime costs for events like Stanford Athletics, whic h are subject to a cost‐sharing agreement with the University. (Annual savings: $14,900)
‐$ (
14,654)$
Police Hire Ahead Program
This action eliminates the Police Hire Ahead Program. This is a new program in FY 2026 and has no anticipated immediate impacts to current service level. Currently, there are seven (7 ) sworn position vacancies to focus on filling. (Annual savings: $150,000) ‐$ (
150,000)$
Police General Expense Reduction
This reduction covers several small programs that collectively represent a modest expense. The most significant program is the regular maintenance of a backup analog radio system, which the Department recommends pausing indefinitely. The primary di gital system already includes built‐in redundancy and is highly reliable.
Notably, most cities in the county do not utilize an analog backup system. Other affected programs include a scouting explorer program, citizens academy, and various community service initiatives that were offered pre‐pandemic, when the Department had more authorized p olice officers, but have not been offered since. Given that the Department does not expect to be able to restore authorized officer positions to pre‐pandemic levels in the coming years, these programs would be expected to remain unavailable. As a result, the community is not expected to experience any immediate changes in servi ce levels. (Annual savings: $90,000)
‐$ (
90,000)$
Public Works Fire Engine Purchase Adjustment
This represents the General Fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ ( 460,000)$
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
20 Packet Pg. 397 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
GENERAL FUND (102 & 103)
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Public Works Tree Trimmer
This action freezes 1.00 FTE Tree Trimmer in the Public Services Urban Forestry Division. The division has seven tree trimmer positions and one lead position with two tree trimmer positions currently vacant. Freezing one of the positions while continuing to leverage the City’s tree trimming contract, currently through West Coast Arborist, shoul
d have only a modest impact on the annual
maintenance of the City’s trees. The contract term is through October 17, 2026. The tree trimming program has a goal of maintaining trees on a 7‐year cycle. While the position reduction can be expected to reduce the number of trees main tained annually, Urban Forestry staff will track the tree trimming cycle to ensure there are no significant negative effects. The reduction is also expected to have some impact on Palo Alto 311 tree‐related response times, staff availability for after‐hours emergency response, and tree planting. (Annual savings: $146,000) ‐$ (
138,110)$
Public Works Capital Program Staffing
This action freezes 1.00 FTE Engineer in the Engineering Services Division. This position is one of six positions involved in construction of streets, sidewalks, and transportation capital projects. As part of the overall $6 million reduction in FY 2026, $3.2 million of capital projects are r ecommended to be deferred from FY 2026 to future years of the 5‐year CIP, and the proposed FY 2026 capital budget included a one‐year reduction in the sidewalks project. Workload needs should not be impacted in FY 2026; however, impacts to projects in future years of the 5‐year CIP may happen due to re
duced staff capacity to manage projects. Recently,
staff determined this position is 100% funded by Fund 471. (Annual savings: $0)
‐$ ‐$
Non‐Departmental General Fund Op
erating
This action removes the $2.7 million placeholder reduction that had been included in the FY 2026 Adopted Operating Budge t. (Annual savings: $1.0 million)
‐$ 2,
744,000$
Fund Balance Adjustment to Fund Balance (Budget Stabilization Reserve) This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 419,
601$
GENERAL FUND (102 & 103) SUBTOTAL (17,733)$ (17,733)$
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
21 Packet Pg. 398 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
ENTERPRISE FUNDS
AIRPORT FUND (530)
Information
Technology
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual Savings: $1,900)
‐$ (1,876)$
Fund Balanc
e Adjustment to Fund Balance
This action adjusts the fund balance to offset ad justments recommended in this report.
‐$ 1,876$
AIRPORT FU
ND (530) SUBTOTAL ‐$ ‐$
UTILITIES ADMINISTRATION FU
ND (521)
Information
Technology
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual Savings: $113,000)
0 (109,542)
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments r
ecommended in this report.
‐$ 109,542$
UTILITIES
ADMINISTRATION FUND (521) SUBTOTAL ‐$ ‐$ ELECTR
IC FUND (513 & 523)
Utilities Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (82,341)$
Fund Balanc
e Adjustment to Fund Balance
This action adjusts the fund balance to o ffset adjustments recommended in this report.
‐$ 82,341$
ELECTR
IC FUND (513 & 523) SUBTOTAL ‐$ ‐$
GAS FU
ND (514 & 524)
Utilities Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (64,787)$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
22 Packet Pg. 399 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 64,787$
GAS FU
ND (514 & 524) SUBTOTAL ‐$ ‐$
RE
FUSE FUND (525)
Information
Technology
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual Savings: $9,000)
‐$ (8,725)$
Public
Works Fire Engine Purchase Adjustment
This represents the fund's share of the reducti on in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (21,214)$
Fund
Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 29,939$
RE
FUSE FUND (525) SUBTOTAL ‐$ ‐$
STORMWATER MANAGEMENT FUND (528)
Information
Technology
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual Savings: $4,100)
‐$ (3,980)$
Utilities Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges support
ing the fire engine purchase. For more details,
refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (32,446)$
Fund
Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 36,426$
STORMWATER MANAGEMENT FU
ND (528) SUBTOTAL ‐$ ‐$
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
23 Packet Pg. 400 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
ENTERPRISE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET WASTEWATER COLLECTION FUND (527)
Utilities Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (42,304)$
Fund Balanc
e Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 42,304$
W
ASTEWATER COLLECTION FUND (527) SUBTOTAL ‐$ ‐$ WA
STEWATER TREATMENT FUND (526)
Information
Technology
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual Savings: $20,000)
‐$ (19,082)$
Utilities Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges
supporting the fire engine purchase. For more details,
refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (15,661)$
Fund Balanc
e Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 19,082$
W
ASTEWATER TREATMENT FUND (526) SUBTOTAL ‐$ (15,661)$ WATER FUND (522)
Utilities Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (52,329)$
Fund Balanc
e Adjustment to Fund Balance
This action adjusts the fund balance to o ffset adjustments recommended in this report.
‐$ 52,329$
WATE
R FUND (522) SUBTOTAL ‐$ ‐$
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
24 Packet Pg. 401 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
SPECIAL REVENUE FUNDS
CALIFORNIA AVENUE PARKING PERMITS FUND (237)
Administrative
Services
Division Manager Freeze
This action will freeze an ASD division manager position in the Revenue Collections Division, which impacts division oversight and management. The Revenue Manager position is vacant and in FY 2026, division management and oversight will be supported through acting role assignment(s). ASD is reviewing organizational structure and se rvice delivery models during this time, in order to maximize efficiencies while managing operational risks. (Annual savings: $11,000)
‐$ (10,430)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
‐$ 10,430$
CALIFORNIA AVENUE PARKING PERMITS FUND (237) SUBTOTAL ‐$ ‐ $ RES
IDENTIAL PARKING PERMITS FUND (239)
Administrative
Services
Division Manager
This action will freeze an ASD division manager position in the Revenue Collections Division, which impacts division oversight and management. The Revenue Manager position is vacant and in FY 2026, division management and oversight will be supported through acting role assignment(s). ASD is reviewing organizational structure and service de livery models during this time, in order to maximize efficiencies while managing operational risks. (Annual savings: $24,000)
‐$ (23,467)$
Office of
Transportation
Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in th e Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (478)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
‐$ 23,945$
RESIDENTIAL PARKING PERMITS FUND (239) SUBTOTAL ‐$ ‐ $ CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
25 Packet Pg. 402 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
SPECIAL REVENUE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET UNIVERSITY AVENUE PARKING PERMITS FUND (236)
Administrative
Services
Division Manager
This action will freeze an ASD division manager position in the Revenue Collections Division, which impacts division oversight and management. The Revenue Manager position is vacant and in FY 2026, division management and oversight will be supported through acting role assignment(s). ASD is reviewing organizational structure and service de livery models during this time, in order to maximize efficiencies while managing operational risks. (Annual savings: $40,000)
‐$ (39,112)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset the actions recommended in this report.
‐$ 39,112$
UNIVERSITY AVENUE PARKING PERMITS FUND (236) SUBTOTAL ‐$ ‐$
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
26 Packet Pg. 403 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
INTERNAL SERVICE FUNDS
GENERAL BENFITS FUND (687)
Non‐
Departmental
Reallocation of Staff to Benefit Funds
This action reallocates 1.00 FTE Manager Employee Benefits and
1.00 FTE Senior Human Resources Administrator from the
General Fund. The positions will be allocated to the General Benefits Fund and Worker's Compensation Fund 75%/25%
respectively. This aligns positions with duties. General Fund savings will be partially offset by allocate d charges from these pass‐through funds for the cost of employees. (Annual costs:
$282,000)
‐$ 274,201$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ (274,201)$
GENERAL BENFITS FUND (687) SUBTOTAL ‐$ ‐ $ PRINTING & MAILING FUND (683)
Administrative
Services
Division Manager
This action will freeze an ASD division manager position in the Revenue Collections Division, which impacts division oversight and management. The Revenue Manager position is vacant and in FY 2026, division management and oversight will be supported through acting role assignment(s). ASD is reviewing
organizational structure and service de livery models during this time, in order to maximize efficiencies while managing
operational risks. (Annual savings: $27,000)
‐$ (26,075)$
Information
Technology
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Services Funds section of this Exhibit. (Annual Savings
: $1,000)
(984)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 27,059$
PRINTING & MAILING FUND (683) SUBTOTAL ‐$ ‐ $ CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
27 Packet Pg. 404 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
INTERNAL SERVICE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET WORKERS' COMPENSATION FUND (688)
Non‐
Departmental
Reallocation of Staff to Benefit Funds
This action reallocates 1.00 FTE Manager Employee Benefits and
1.00 FTE Senior Human Resources Administrator from the
General Fund. The positions will be allocated to the General Benefits Fund and Worker's Compensation Fund 75%/25%
respectively. This aligns positions with duties. General Fund savings will be partially offset by allocated charges from these pass‐through funds for the cost of employees. (Annual costs:
$94,000)
‐$ 91,400$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ (91,400)$
WORKERS' COMPENSATION FUND (688) SUBTOTAL ‐$ ‐ $ TECHNOLOGY FUND (682)
Information
Technology
Department
Information Technology Manager Freeze
This action freezes one vacant Information Technology Manager, which has been unfilled since May 2025 due to retirement. The recently filled Assistant Director will help mitigate some of the impacts related to IT government and project assignments. While overall capacity is reduced, some project timelines may be adjust
ed as workload is redistributed. Because the Technology Fund is an internal service fund that allocates costs to other departments, reductions are reflected in the funds receiving the allocations. (Annual net savings: $0)
(302,803)$ (302,803)$
Information
Technology
Department
Fire Engine Purchase Adjustment
This represents the fund's share of the reduction in allocated charges supporting the fire engine purchase. For more details, refer to the Vehicle Fund in the Internal Service Funds section of this attachment. (Annual savings: $0)
‐$ (1,685)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
302,803$ 304,488$
TECHNOLOGY FUND (
682) SUBTOTAL ‐$ ‐$
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
28 Packet Pg. 405 of 690
ATTACHMENT A, EXHIBIT 1
Revenues Expenses
Department Adjustment Adjustment
INTERNAL SERVICE FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET VEHICLE REPLACEMENT & MAINTENANCE FUND (681)
Public Works Fire Engine Purchase Adjustment
This action includes the purchase of one (1) diesel fire engine instead of an electric hybrid engine in the FY 2026 vehicle replacement CIP project. In the FY 2025 project, the City’s first hybrid fire engine purchase is planned, although costs and equipment lead times remain under conside ration before finalizing the decision. The shift from hybrid to diesel in FY 2026 for the second apparatus would yield one‐time cost savings. Staff and Committee discussed current fire engine fleet (frontline and reserves) need while balancing fleet electrification and greater cost impacts. Alternatives include buying a used fire eng ine and/or deferring the purchase altogether for another year however, with current fleet inventory, staff maintains this recommendation of a diesel engine in FY26 while also actively working with other public agencies for the potential of acquiring a used fire engine. Because the Vehicle Fund is an internal service fund that allocate s costs to other funds, reductions are reflected in the funds receiving the allocations. (Annual savings: $0) ‐$ (780,000)$
Information
Technology
Department
Information Technology Manager Freeze
This represents this fund’s share of allocated charges supporting the Information Technology Manager position. For more details, refer to Fund 682 in the Internal Se rvices Funds section of this Exhibit. (Annual Savings: $9,800)
‐$ (9,495)$
Fund Balance Adjustment to Fund Balance
This action adjusts the fund balance to offset adjustments recommended in this report.
‐$ 789,495$
‐$ ‐ $ VEHICLE REPLACEMENT & MAINTENANCE FUND (681) SUBTOTAL
Item 18
Attachment A, Exhibit 1 - FY
2026 Recommended
Operating Budget
Adjustments
Item 18: Staff Report
Pg.
29 Packet Pg. 406 of 690
ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment
CAPITAL IMPROVEMENT FUNDS
CAPITAL IMPROVEMENT FUND (471)
Capital PF‐93009 Americans with Disabilities Act Compliance This action reduces appropriation from $600,000 to $450,000.
While deferred funding would delay progress on accessibility upgrades, funding is reserved for time‐critical needs such as code required improvements identified for active construction projects or urgent path‐of‐travel corrections. (One‐time savings:
$150,000)
‐$ (150,000)$
Capital OS‐09002 Baylands Levee Repair
This action postpones the project from FY 2026 to FY 2028. While postponing could increase the risk of deterioration, this deferral allows concentration of resources on higher priority projects. In the interim, routine inspections and maintenance protocols will be maintained to mitigate risk unt il the project resumes in FY 2028. (One‐time savings: $288,000)
‐$ (288,000)$
Capital PG‐06001 Athletic Courts Resurfacing
This action reduces appropriation from $365,000 to $315,000 while continuing repairs in FY 2027 through FY 2030 at about $240,000 annually. Although the reduction may delay or extend schedules for full court resurfa cing enhancements,
the phased repair strategy ensures that safety and usability improvements continue on an annual basis through FY 2030. This approach balances short‐term fiscal limitations with the ongoing need to maintain athletic facilities. This work safeguards user safety and extends the lifespan while addressing time‐sensitive maintenance needs. Maintenance tr eatments like applying an overcoat at the right time can add five to seven years of useful life to the pavement, delaying the need for full reconstruction and significantly reducing lifecycle costs. (One‐time savings:
$50,000)
‐$ (50,000)$
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET
Item 18
Attachment A, Exhibit 2 - FY
2026 Recommended Capital
Budget Adjustments
Item 18: Staff Report
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ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment
CAPITAL IMPROVEMENT FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Capital PG‐06003 Benches, Signage, Walkways, Perimeter Landscaping, and Site Amenities
This action reduces appropriation from $262,000 to $212,000.
While reducing the scope and budget will limit the number of immediate upgrades to park aesthetics and user amenities, it preserves critical funds for essential maintenance and high priority projects across the parks. This ensures that while some enhancements might be scaled back or deferred, the continued investment in core operational and safety improvements is maintained, supporting overall user experience and facility functionality in the short term. (One‐time savings: $50,000) ‐$ (50,000)$
Capital PE‐26000 Foothills Nature Preserve Restroom
This action defers replacement of three rest rooms at the Foothills Nature Preserve by one year (from FY 2027 to FY 2028) to focus on more time‐sensitive projects. Staff will monitor conditions to ensure restrooms remain safe and functional in the interim. (One‐ time savings: $300,000 in FY 2027 and $900,000 in FY 2028) ‐$ ‐$
Capita
l OS‐09001 Off‐Road Pathway Repair
This action reduce appropriation from $208,000 to $133,000 while continuing repairs in FY 2027 and FY 2028 at $185,000 and $208,000, respectively. The reduced budget will limit the number of off‐road paved trail segments addressed but will still enable repairs at the most degraded sect ions with safety concerns.
Maintaining on‐going funding addresses overall network usability and prevents further deterioration of Palo Alto’s nine miles of off‐ road paved trail system that are 35 years old. (One‐time savings:
$75,000)
‐$ (75,000)$
Capital PE‐21002 Johnson Park
This action defers from FY 2026 and FY 2027 to FY 2028 the renova
tion of existing park elements including asphalt concrete and pathways, furnishing and playground equipment and
resurfacing, fencing and irrigation to focus on more time‐sensitive projects. Staff will continue to monitor safety and accessibility needs in the interim and as a contingency plan use the ADA C
ompliance capital project to make any emergency repairs needed as a stop gap. (One‐time savings: $250,000 in FY 2026 and $1.4 million in FY 2027)
‐$ (250,000)$
Item 18
Attachment A, Exhibit 2 - FY
2026 Recommended Capital
Budget Adjustments
Item 18: Staff Report
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ATTACHMENT A, EXHIBIT 2
Revenues Expenses
Department Adjustment Adjustment
CAPITAL IMPROVEMENT FUNDS
CITY OF PALO ALTO
RECOMMENDED AMENDMENTS TO THE CITY MANAGER'S FY 2026 ADOPTED BUDGET Capital PG‐22000 Werry Park Playground
This action defers by two years from FY 2026 to FY 2028 replacement and accessibility improvements of the existing playground to focus on more time‐sensitive projects. The existing play area remains serviceable and safe for use. The delay allows for advancement of higher‐priority playgrounds and
in
frastructure with more critical needs while maintaining Werry Park in the capital queue for future improvements. (One‐time savings: $350,000)
‐$ (350,000)$
Capital PE‐13014 Streetlight Condition Assessment
This action defers $220,000 of funding for comprehensive assessment from FY 2026 to FY 2028 while retaining funding in the Street Light Improvements project (PO‐05054) to replace street light poles, foundations, luminaries, and wiring as needed. (One‐time savings: $220,000)
‐$ (220,000)$
Capita
l PL‐04010 Bicycle and Pedestrian Transportation Plan
Implementation
This action adds $2.4 million of approved Measure B Local Streets and Roads (LSR) revenue from the Valley Transportation Agency (VTA). (One‐time savings: $2,400,000)
2,400,000$ ‐$
Capit
al AS‐10000 Capital Improvement Fund Administration Capital Program Staffing
This action freezes 1.00 FTE Engineer in the Engineering Services Division. This position is one of six positions involved in construction of streets, sidewalks, and transportation capital projects. As part of the overall $6 million reduction in FY 2026, $3.2 million of capital projects are recommended to be deferred from FY 2026 to future yea rs of the 5‐
year CIP, and the proposed FY 2026 capital budget included a one‐year reduction in the sidewalks project. Workload needs should not be impacted in FY 2026; however, impacts to projects in future years of the 5‐year CIP may happe n due to reduced staff capacity to manage projects. (Annual savings: $220,000)
‐$ (217,267)$
Capital AS‐10000 Capital Improvement Fund Administration This action removes the $3.2 million placeholder reduction that had been included in the FY 2026 Adopted Capital Budget. (Annual savings: $1.0 million)
‐$ 3,200,000$
Fund Balance Adjustment to Fund Balance (Infrastructure Reserve) This action adjusts the fund balance to offset adjustments recommended in this report .
‐$ 850,267$
CAPITAL IMPROVEMENT FUND (471) SUBTOTAL 2,400,000$ 2,400,000$
Item 18
Attachment A, Exhibit 2 - FY
2026 Recommended Capital
Budget Adjustments
Item 18: Staff Report
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Summary of Positions & Vacancy by Department
Department Fiscal Year Adopted FTE Filled FTE Total Footnote City Attorney
2019 11.00 11.00 ‐
2020 11.00 11.00 ‐
2021 11.00 10.00 1.00
2022 11.00 11.00 ‐
2023 11.00 11.00 ‐
2024 13.00 11.00 2.00
2025 13.00 13.00 ‐
2026 13.00 13.00 ‐
City Auditor
2019 6.00 6.00 ‐
2020 5.00 4.00 1.00
2021 4.00 4.00 ‐
2022 1
2023
2024
2025
2026
City Clerk
2019 5.00 5.00 ‐
2020 5.00 4.00 1.00
2021 5.00 4.00 1.00
2022 5.00 5.00 ‐
2023 5.00 4.00 1.00
2024 5.00 3.00 2.00
2025 5.
00 5.00 ‐
2026 5.00 5.00 ‐
City Manager
2019 12.00 12.00 ‐
2020 10.75 7.75 3.00
2021 10.00 7.00 3.00
2022 9.00 4.00 5.00
2023 12.00 11.00 1.00
2024 13.00 12.25 0.75
2025 14.00 14.00 ‐
2026 14.00 14.00 ‐
Administrative Services
2019 58.50 58.50 ‐
2020 58.50 50.00 8.50
2021 59.50 52.00 7.50
2022 53.50 46.50 7.00
2023 55.50 46.50 9.00
2024 57.00 51.50 5.50
Source: FY 2019‐2026 Adopted Operating Budget Books ‐ De pt Org Charts, At Place Memos ‐ Vacancy Reports as of April of that Calendar Year Vacant FTE
Attachment B
Item 18
Attachment B - Adopted
Budget FTE and Vacancy
Item 18: Staff Report
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Department Fiscal Year Adopted FTE Filled FTE Total Footnote Vacant FTE
2025 60.00 51.50 8.50
2026 60.
00 60.00 ‐
C
ommunity Services
2019 78.60 78.60 ‐
2020 78.
60 74.60 4.00
2021 78.
60 74.95 3.65
2022 71.
25 63.25 8.00
2023 74.
35 70.60 3.75
2024 82.
25 79.50 2.75 2
2025 82.
25 77.25 5.00
2026 84.
50 84.50 ‐
De
velopment Services
2019 20.00 20.00 ‐
2020 3
2021
2022
2023
2024
2025
2026
Fi
re
2019 103.70 103.70 ‐
2020 103.
50 99.50 4.00
2021 105.
50 103.50 2.00
2022 94.
50 89.50 5.00
2023 107.
50 99.50 8.00
2024 110.
50 92.50 18.00 4 2025 113.50 103.50 10.00
2026 122.50 122.50 ‐ 5
Hum
an Resources
2019 17.00 17.00 ‐
2020 17.
00 16.00 1.00
2021 17.
00 16.25 0.75
2022 16.
00 12.00 4.00
2023 17.
00 14.00 3.00
2024 19.
75 17.75 2.00
2025 19.
75 18.75 1.00
2026 20.
75 20.75 ‐
In
for mation Technology
2019 33.00 33.00 ‐
2020 33.
00 31.00 2.00
2021 33.
00 33.00 ‐
2022 29.
00 24.00 5.00
2023 31.
00 29.00 2.00
2024 34.
00 32.00 2. 00
2025 35.
00 31.00 4.00
Attachment B
Item 18
Attachment B - Adopted
Budget FTE and Vacancy
Item 18: Staff Report
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Department Fiscal Year Adopted FTE Filled FTE Total Footnote Vacant FTE
2026 35.00 35.00 ‐
Li
brary
2019 47.50 47.50 ‐
2020 46.
50 46.50 ‐
2021 47.
50 43.50 4.00
2022 40.
50 32.00 8.50
2023 46.
50 35.50 11.00
2024 49.00 39.00 10.00
2025 49.00 43.00 6.00
2026 49.
00 49.00 ‐
O
ffice of Emergency Services
2019 3.00 3.
00 ‐
2020 3.
00 3.
00 ‐
2021 3.
00 3.
00 ‐
2022 2.
00 2.
00 ‐
2023 2.
00 2.
00 ‐
2024 3.
00 3.
00 ‐
2025 3.
00 3.
00 ‐
2026 3.
00 3.
00 ‐
O
ffice of Transportation
2019 6
2020
15.00 15.00 ‐
2021 15.
00 15.00 ‐
2022 15.
00 13.00 2.00
2023 15.
00 15.00 ‐
2024 17.
00 15.00 2.00
2025 18.
00 16.00 2.00
2026 19.
00 19.00 ‐
P
lanning & Development Services
2019 42.46 42.46 ‐ 7
2020 51.
00 33.50 17.50
2021 51.00 46.00 5.00
2022 45.
00 41.00 4.00
2023 52.
00 39.00 13.00
2024 56.00 47.00 9.00
2025 61.
00 50.00 11.00 8 2026 62.00 62.00 ‐
P
olice
2019 156.50 156.50 ‐
2020 150.
50 128.50 22. 00
2021 148.50 144.50 4.00
2022 125.
50 116.50 9.00
2023 134.
50 120.50 14.00
2024 140.50 124.50 16.00 9 2025 140.50 131.50 9.00
2026 140.
50 140.50 ‐
Attachment B
Item 18
Attachment B - Adopted
Budget FTE and Vacancy
Item 18: Staff Report
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Department Fiscal Year Adopted FTE Filled FTE Total Footnote Vacant FTE
Public Works
2019 202.00 202.00 ‐
2020 199.
50 181.50 18.00
2021 198.25 176.00 22.25
2022 193.25 158.00 35.25
2023 200.50 177.00 23.50
2024 207.00 179.00 28.00
2025 208.00 185.00 23.00
2026 212.00 212.00 ‐
U
tilities
2019 244.50 244.50 ‐
2020 245.
00 215.00 30.00
2021 245.00 212.00 33.00
2022 245.00 198.00 47.00
2023 253.50 199.50 54.00
2024 257.00 219.00 38.00
2025 267.00 225.00 42.00
2026 266.00 266.00 ‐
R
econciling Difference (org chart vs to tal FTE)
2019 (0.59)
2020 (2.00)
2021 (3.00)
2022 (0.50)
2023 (0.50)
2024 0.90
2025
(3.10)
2026 1.90
Total for 2019 1,041.35 1,040.76 ‐
Total for 2020 1,034.85 920.85 112.00
Total for 2021 1,034.85 944.70 87.15
Total for 2022 956.00 815.75 139.75 Total for 2023 1,017.85 874.10 143.25 10 Total for 2024 1,063.10 926.00 138.00 11 Total for 2025 1,092.10 967.50 121.50
Total for 2026 1,104.35 1,106.25 ‐
Grand Total 8,344.45 7,595.91 741.65
Attachment B
Item 18
Attachment B - Adopted
Budget FTE and Vacancy
Item 18: Staff Report
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Department Footnote Description
City Auditor 1 After conducting a competitive process Council selected Baker Tilly as the City's Auditing firm. This function remains with Baker Tilly through the writing of this report.
Community Services
2 FY23 and FY24 CSD had significant position resotrations including Assistant Director and Division Manager level classifications frozen during the pandemic. FY24 also saw small increases in services/positions within Art Center, JMZ, and Theaters.
Development
Services 3 The Development Services Department was combined with the Planning and Community Environment Department in FY 2020 to form the Planning and Development Services Department.
Fire 4 The vacancy number reflects 18 vacancies but 8 of those were newly hired firefighters in the onboarding process and not yet reflected in the report. We typically hire more than 8 firefighters at a time.
Fire
5 Addition of 7.0 FTE positions to create the initial/pilot Single Role EMS Division of the Fire Department and 3.0 FTE Fire Captain positions to permanently cross staff Engine 64 and Medic 64 (per council directive in FY25).
Office of
Transportation 6 In FY 2020 Office of Transportation was created within the City Manager's office, these positions were transfered from Planning and Community Environment.
Planning and
Development
Services
7 See footnote 3.
Planning and
Development
Services
8 In FY23 planning underwent an organizational structure review and analysis resulting in changes to the structure and needed classification to meet increasing planning demands in long term planning and development services. These changes were implemented in FY24 consistent with this review and the recommendaitons.
Police
9 Restoredvarious positions including 2.00 Public Safety Dispatchers to the Dispatching Servicing Team due to the high volume of calls for service and restored 2.00 Police Officers to the Traffic Enforcement Division due to increasing community concern regarding traffic safety around the City.
Total for 2023
10 FY 2022, the City Council approved amendments to realign the budget with a more optimistic economic outlook and proactively reinvest in activities that addressed the most immediate needs of the City and its residents into FY2023.
Total for 2024 11 FY 2024 Budget continues to invest in staffing resources that support City services and Council priorities.
Attachment B
Item 18
Attachment B - Adopted
Budget FTE and Vacancy
Item 18: Staff Report
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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: September 8, 2025
Report #:2507-5020
TITLE
Adoption of an Emergency Ordinance Amending Palo Alto Municipal Code (PAMC) Chapter
16.04 to Add Local Administrative Amendments Related to Certificates of Occupancy and Definitions to the 2022 California Building Code, and an Emergency Ordinance Amending PAMC Chapter 16.17 to Adopt the 2025 California Energy Code and Local Amendments Thereto. CEQA Status – Exempt Under CEQA Guidelines Section 15061(b)(3) and 15308.
RECOMMENDATION
Staff recommends that the City Council:
1. Adopt, by a four-fifths majority, the attached emergency ordinance (Attachment E) to incorporate administrative amendments into Palo Alto Municipal Code 16.04, which implements the California Building Code, and
2. Adopt, by a four-fifths majority, the attached emergency ordinance (Attachment F) amending PAMC Chapter 16.17 to incorporate the 2025 Edition of the California Energy Code with local amendments related to energy efficiency.
EXECUTIVE SUMMARY
Staff requests Council consideration of two emergency amendments to the California Building Standards Code (CBSC) in response to new state law, ahead of the scheduled October triennial update. The first amendment addresses definitions and certificate of occupancy requirements, while the second introduces new energy reach codes for single-family homes, focusing on air conditioning unit replacement and FlexPath requirements for major remodels.
The CBSC (CCR, Title 24) is updated every three years, and local jurisdictions may adopt it as published or with more stringent amendments. The City has historically adopted stronger Energy and Green Building standards to promote sustainable, low-emissions construction.
AB 130 (2025) restricts local amendments to residential building standards after October 1, 2025, unless certain exemptions apply. The proposed administrative amendments to the City’s 2022 building code must be adopted before September 30 to remain eligible for renewal, while Item 19
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early adoption of energy reach codes is recommended to strengthen climate resilience.
Additional climate-related amendments will be brought forward in October when model code language becomes available, and other amendments related to new construction will be considered in 2026 following completion of statewide cost-effectiveness studies.
BACKGROUND
Every three years, California updates its Building Standards Code, known as Title 24, to incorporate the latest technology, best practices, and policy goals for safe, efficient, and sustainable buildings. Title 24 includes requirements for building safety, energy efficiency, and green building practices. The California Green Building Standards Code (CALGreen) sets the statewide baseline for sustainable design, such as water efficiency and waste reduction, while the California Energy Code establishes minimum energy efficiency standards for insulation, heating and cooling systems, lighting, and solar. The Energy Code increasingly uses metrics such as “source energy” to account for the total fossil fuels and other resources consumed in supplying energy to a building.
State law requires that local amendments to the Energy Code be both energy-saving and cost- effective relative to the base codes. To make these findings, the City relies on cost-effectiveness studies, generally performed by the California Energy Codes and Standards Statewide Utility Program working group, which provide the technical basis to justify higher standards. Using these studies, local governments may adopt “reach codes,” ordinances that exceed the state’s minimum requirements, to meet community-specific sustainability and energy goals.
The City of Palo Alto updates its building codes every three years in alignment with the state’s code cycle and often adopts local amendments that go beyond state minimum requirements. In 2008, Palo Alto established its first Energy Reach Code, and since then has regularly expanded its local green building and energy reach codes to advance climate action priorities, including those in the Sustainability and Climate Action Plan (S/CAP). The proposed amendments for the 2026–2028 Building Standards Code Cycle continue this approach and are detailed later in this report.
Timing Considerations
In most code cycles, local amendments to the Energy Code for single-family, multi-family, and non-residential building types are adopted together and take effect on January 1 of the first year of the cycle. For the upcoming 2026–2028 cycle, however, two factors will alter the timing and sequencing of some amendments.
First, the California Legislature passed AB 130 in June 2025, limiting the ability of local jurisdictions to adopt most new local amendments to Title 24 building standards affecting residential units after October 1, 2025. To ensure these proposals can be considered by the City Council before that deadline, staff is advancing the single-family Energy Reach Code recommendations now.
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Second, reach codes for all residential building types cannot yet be proposed because Energy Code amendments depend on the completion of cost-effectiveness studies. These studies, typically completed by June of the year before the code cycle, are essential for justifying standards that exceed the state minimum. This year, the studies for multi-family residential and non-residential new construction have been delayed until late 2025 or early 2026, preventing staff from developing multi-family reach code proposals in time for the AB 130 deadline.
As a result, any new reach codes for multi-family residential new construction will likely need to be adopted after October 1, 2025, using one of AB 130’s exemptions. The non-residential provisions are not subject to AB 130’s moratorium. This staged approach is intended to keep Palo Alto aligned with the state’s triennial code updates while advancing local amendments that reflect the City’s sustainability priorities and climate action goals.
Phased Implementation Strategy
To address both the timing constraints created by AB 130 and the City’s long-term sustainability objectives, staff recommends the following phased approach for adopting California Building Standards and local code amendments:
September 2025: Adopt select local amendments to the 2022 California Building Code, effective immediately, and 2025 California Energy Code, effective January 1, 2026. October 2025: Propose adoption of the remaining parts of the 2025 California Building Standards Code, including re-adoption of currently active reach code amendments, also effective January 1, 2026.
Spring 2026: Propose additional local amendments to the new construction Energy Code for all building types, with an effective date of July 1, 2026, pending completion of cost-effectiveness studies to support potential changes.
Proposed September 2025 Urgency Ordinance Amendments
This item includes adoption of two separate emergency ordinances:
1.Administrative Amendments to PAMC Chapter 16.04: These targeted changes, which clarify certificate of occupancy requirements and applicability of certain definitions, are intended to improve clarity and streamline code application. Although administrative in nature, they are subject to AB 130’s moratorium on new amendments to Title 24 provisions that apply to residential units, and must be adopted prior to October 1, 2025 to remain enforceable without restriction. Adoption as an urgency ordinance would allow them to take effect immediately and later serve as the basis for renewed local amendments under AB 130’s exemptions.
2.Local Amendments to the California Energy Reach Code for Single-Family Homes, Duplexes, and Townhomes: These proposals, supported by cost-effectiveness analysis, include:
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oAir Conditioner Time-of-Replacement Requirement – Requires specified energy efficiency measures or installation of a heat pump system as the primary heating source when replacing or installing an air conditioner. Exceptions are provided for electrical panel limitations or oversized heating needs. oFlexPath for Major Remodels – Requires additions or alterations over 1,000 square feet to incorporate a flexible package of efficiency or electrification upgrades selected from an approved menu of measures, allowing for customization based on project scope and building characteristics. oTogether, these amendments are intended to reduce fossil fuel reliance, lower greenhouse gas emissions, and prepare homes for a more efficient, electric- ready future, while aligning with state requirements, advancing Palo Alto’s climate action targets, and supporting timely adoption before AB 130’s October 1, 2025 deadline. While adopting these amendments before October 1 (via an emergency ordinance) may allow the City to avoid the AB 130 moratorium, AB 130 is a new law and its interpretation is untested. City staff will be prepared to bring the energy reach code for re-adoption later on using exemptions to the moratorium if necessary.
Table 1 below provides an overview of the timeline for adoption of the proposed local reach code amendments.
Table 1. Local Code Amendment Timeline
Table 1: Local Code Amendment Timeline
Local Code AmendmentsAdoption
Date Green Building Reach Code Energy Reach Code
September
2025
None Air Conditioner Time of
Replacement
FlexPath
October
2025
Carry forward previous local Green
Building Code amendments1 (including
CALGreen Tier 1 & 2 adoption)
LEED Certification Alternative
Compliance Pathway
Embodied Carbon Threshold
EV Readiness
Carry forward previous local
Energy Code amendments, as
supported by cost effectiveness
studies
Spring 2026
None Potential additional Energy Code
amendments as supported by
newly available cost
effectiveness studies and model
1 More detail provided in Attachment A
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Table 1: Local Code Amendment Timeline
Local Code AmendmentsAdoption
Date Green Building Reach Code Energy Reach Code
code language. E.g., Gas
Water Heater Time of
Replacement
ANALYSIS
Administrative Amendments to PAMC Chapter 16.04
PAMC Chapter 16.04 implements the California Building Code within the City. Staff are proposing targeted amendments to improve the code’s clarity. The proposed changes include:
Certificate of Occupancy Requirements – Clearly establishing which types of buildings or occupancies must obtain a certificate of occupancy prior to use. Definitions – Clarifying applicability of certain definitions.
These amendments refine both the administrative and technical provisions of the adopted codes that fall within the City’s local authority. Adoption prior to AB 130’s October 1, 2025 deadline is intended to keep these provisions enforceable without restriction. Staff recommends the Council adopt an ordinance codifying these changes, which staff will promptly file with the California Building Standards Commission. By adopting the ordinance as an emergency ordinance, Council intends the changes to take effect before AB 130’s October 1, 2025 deadline, allowing the City to renew these local amendments in the future.
Local Amendments to the California Energy Reach Code for Single-Family Homes, Duplexes, and Townhomes
Potential Energy Code local amendments require cost-effectiveness studies before they can be adopted. They must be more stringent than the California Energy Code, generally using the metrics established by that code (such as source energy). At this time, staff are proposing two different types of energy code amendments that are supported by the appropriate cost- effectiveness studies:
Time of replacement requirements for air conditioners that would require either energy efficiency measures or installation of heat pumps when equipment is replaced. Time of remodel requirements that would require a flexible combination energy efficiency or electrification measures known as ”FlexPath”.
AC to Heat Pump Time of Replacement Requirement
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The proposed ordinance would require that projects in single-family homes, duplexes and townhomes involving replacement or alteration of an existing air conditioning system or installation of a new air conditioning system must either include a heat pump space conditioner Item 19
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as the primary heating system or install specific energy efficiency measures. The attached study commissioned by the California Codes and Standard Program (see Attachment B) has found that the proposed requirements are cost-effective and will result in a reduction in Long-Term System Cost (LSC)3 energy. Heat pumps are far more efficient than gas furnaces and result in fewer greenhouse gas emissions.
If a project applicant installed a heat pump (an air conditioner that is also configured to function as a space heater) they could either replace the furnace with an air handler unit or leave the furnace in place to serve as the air handler for the heat pump and as a back-up heating system. California Energy Code requirements would apply; these vary depending upon whether the duct system is replaced at the same time.
Alternatively, a project could comply by installing an air conditioner but relying on a gas furnace for space heating. Again, certain California Energy Code requirements would apply when replacing an air conditioner. In addition, this alternative would require other energy efficiency measures including attic insulation and air sealing.
Table 2 presents four different compliance paths. Note that additional requirements would apply where the air conditioner is not configured as a heat pump space conditioner.
Table 2: Summary of Requirements
System Ducts
Condition State Code Requirements Additional Local Code Requirements
Existing
Duct sealing (10% leakage)
Airflow efficiency (300 CFM/ton)
Refrigerant charge verification
None
Heat
Pump
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
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
AC
New Duct sealing (5% leakage) Refrigerant charge verification 3 Formerly known as Time Dependent Valuation (TDV) energy cost savings, LSC reflects the Energy Commission’s current LCC methodology, which is intended to capture the total value or cost of energy use over 30 years. This method accounts for the hourly cost of marginal generation, transmission and distribution, fuel, capacity, losses, and cap-and-trade-based CO2 emissions (California Energy Commission, 2023). This is the methodology used by the Energy Commission in evaluating cost-effectiveness for efficiency measures in the 2025 Energy Code.
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Table 2: Summary of Requirements
System Ducts
Condition State Code Requirements Additional Local Code Requirements
Airflow efficiency (350 CFM/ton)
Fan efficacy (0.45 W/CFM)
Attic Insulation (R-49)
Air sealing
R-8 Duct insulation
Fan efficacy (0.35 watts/CFM)
The 2025 Single Family AC to HP Cost Effectiveness Study attached as Attachment B finds some incremental costs associated with converting to a heat pump, but these costs can be offset by utility bill savings over the lifetime of the equipment. The lifetime of a furnace and air conditioner are about the same, so it often makes economic sense to replace both if the furnace is near the end of its life. In this scenario, the cost of the furnace replacement is assumed as part of the base project cost. Alternatively, a heat pump could be configured to operate as the primary heating source using the air handler in the existing furnace and using the furnace for supplemental heating on very cold days. Table 3 below compares the incremental cost and lifecycle savings (net present value of utility bill savings less incremental cost) for each approach assuming a modest gas rate escalation.
Table 3. Economic Costs and Savings
Approach Incremental Cost Lifecycle
Savings
Heat pump with new air handler (furnace removed) $652 $556 Heat pump with existing furnace retained $1,670 $2,132 The costs may be able to be further offset by incentives offered through local utility rebate programs, depending on whether these are retained after the mandate takes effect.
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 generated using the statewide Cost Effectiveness Explorer tool.
Table 4. Greenhouse Gas Reductions
Climate
Zone Approach
GHG Reduction
(tons annually)
GHG Reductions
(%)
CZ04 Heat pump & new air handler (furnace removed) 0.84 30% CZ04 Heat pump with existing furnace retained 0.63 22%
The proposed policy offers two general exceptions. The first is for situations where the electrical panel capacity is insufficient to meet the load of a heat pump. The second is where the heat pump would need to be sized more than 12,000 Btu/hr (1 ton) over the air conditioner Item 19
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that would be installed. There are also exceptions to the duct sealing and airflow requirements that specify alternative methods of compliance. All applicable exceptions in the California Energy Code apply.
The statewide cost-effectiveness study for the air conditioner time of replacement requirements is included in Attachment B. Staff is recommending adoption at this time of a replacement requirement to be effective starting on January 1, 2027, allowing more time to launch and run programs to support heat pump HVAC adoption.
FlexPath
Staff proposes that single-family residential major additions and alterations5 greater than 1,000 square feet be required to include certain energy efficiency measures. Depending on the project scope, applicants of these types of projects typically already have an architect, engineer, and energy code compliance expert on their design team who can help facilitate compliance with the FlexPath energy code amendment. As proposed, qualifying single-family projects would be required to complete any combination of energy-related measures from Table 5 below totaling 12 or more points. Additional measure descriptions can be found in Attachment C.
Table 5. Measures
Building Vintage Measures
Pre-1978 1978-1991 1992-2010
Water Heating Package 1 1 1
Air Sealing 2 1 1
R-38 Attic Insulation 7 3 1
R-49 Attic Insulation 7 3 1
Duct Sealing 6 4 1
New Ducts, R-6 Insulation + Duct Sealing 10 7 2
New Ducts, R-8 Insulation + Duct Sealing 11 8 3
Windows 6 5 3
Wall Insulation 6 - -
R-19 Raised floor insulation 8 8 -
R-30 Raised floor insulation 9 9 -
Radiant Barrier Under Roof 3 2 1
Heat Pump Water Heater Replacing Gas 12 12 12
High Eff. Heat Pump Water Heater Replacing Gas 13 13 13 5 Alterations include raising the plate height, historic restoration, changes or rearrangements of the structural parts or elements, and changes or rearrangement of bearing walls and full height partitions. Normal maintenance, reroofing, painting or wall papering, floor finishes, replacement-in-kind of mechanical, plumbing and electrical systems, or replacing or adding new kitchen counter and similar furniture, plumbing fixture to the building are excluded
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Table 5. Measures
Building Vintage Measures
Pre-1978 1978-1991 1992-2010
Heat Pump Water Heater Replacing Electric 4 4 4
High Eff. Heat Pump Water Heater Replacing Electric 5 5 5 Heat Pump Space Conditioning System 21 16 13
High Eff. Heat Pump Space Conditioning System 23 18 15
Dual Fuel Heat Pump Space Conditioning System 15 11 10
Heat Pump Clothes Dryer 1 1 1
Induction Cooktop 1 1 1
Solar PV 17 17 15
To accommodate the wide variability in existing buildings, staff proposes the following exemptions (the list below provides a brief overview of exemptions which are described in greater detail in Attachment F):
New Units
1. Mobile Homes, Manufactured Housing, or Factory-built Housing
2. Repairs
3. Emergency Housing
4. Technological or Economic Infeasibility
5. Energy usage of alternative proposed design better than requirement
6. Pre-Compliance
7. Covenant Restrictions
8. New Construction
9. Improvement projects limited to solar PV, EV charging, or battery storage
10. Hardship for Low-Income Owners
11. Historic Buildings
12. Hazard Mitigation (i.e. Seismic upgrades)
13. Alterations that consist solely of roof and/or window projects
14. State-exempted ADUs per SB1211
The CEC provides two different cost effectiveness metrics. “On-bill” cost effectiveness refers to the direct cost experienced by the homeowner. For something to be cost effective “on-bill”, the energy bill savings of a measure must at least pay for the cost of that measure over a 20-year period. The other approach is “Long-Term Systemwide Cost” (LSC). LSC considers the cost to install energy efficiency measures, the on-bill savings from those measures, and larger system costs that everyone pays for like energy infrastructure costs and the impacts of climate change.
For CEC approval, a local amendment to the California Energy Code must show a compliance pathway that is either “on-bill” or “LSC” cost effective. As described below, staff’s proposed policy has “on-bill” and “LSC” cost effective compliance pathways.
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In support of reach code development, the California Energy Codes and Standards Statewide Utility Program, which includes the State's Investor-Owned Utilities (Pacific Gas, and Electric (PG&E), San Diego Gas and Electric (SDG&E), and Southern California Edison (SCE), under the auspices of the California Public Utilities Commission) developed and published the 2025 Single Family Cost Effectiveness Report, provided as Attachment C and further supported by an updated memo provided as Attachment D. This study and the associated cost-effectiveness data are highly detailed and are included in the record to support Council’s findings and policy decisions.
Based on the study, staff recommends finding the proposed local additions and alterations amendments to the 2025 California Energy Code to be cost-effective and consume less energy than otherwise permitted by Title 24, Part 6. The target score of 12 points can be achieved cost- effectively for all building vintages through the installation of a heat pump water heater or heat pump space conditioner replacing a corresponding gas appliance. The 12-point target can also be met only through the installation of energy efficiency improvements without the need for fuel-substitution measures. For example, R-30 raised floor insulation combined with R-49 attic insulation in any pre-1991 building. Estimates of the incremental costs and lifecycle savings associated with FlexPath compliance pathways mentioned above are included in Table 6. Each unique combination of measures and building vintages will have its own associated costs and savings. Additional measure information, including incremental cost estimates, is available through a Cost-Effectiveness Explorer7 tool published by the California Energy Codes and Standards Statewide Utility Program working group.
Table 6. FlexPath Compliance Pathway Costs and Savings
Measures Incremental Cost Lifecycle
Savings
Heat pump water heater $4,332 $5,358
R-30 raised floor insulation + R-49 attic insulation $7,725 $14,403
FISCAL/RESOURCE IMPACT
Development and implementation of local amendments to the 2026-2028 State Energy and Green Building Standards Codes is planned to be absorbed within existing budgets for Planning and Development Services and Utilities. Resource needs are anticipated to include about 0.5 FTE in staff time and $248,000 in professional services costs spread across FY 2025 and FY 2026.
Resource needs are under continued evaluation and may result in an additional funding request if deemed necessary.
7 Cost Effectiveness Explorer;
https://explorer.localenergycodes.com/policies/4287/requirements?per_component_name=PolicyExistingBuilding sWithFlexiblePathRequirements&per_climate_zone_raw=4-CPAU&per_custom_combination_id=22972 Item 19
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STAKEHOLDER ENGAGEMENT
Staff hosted two community meetings on the Building Standards Code update. The first, a focus group with approximately 10 design professionals, was held on August 12, 2025. The second, a hybrid community meeting on August 13, 2025, drew 13 attendees. Meetings were advertised via the City website, Uplift Local newsletter, City calendar, NextDoor, Facebook, and targeted email notices to approximately 100 community members and design professionals.
Feedback covered all 2025 proposals, including Green Building Code amendments scheduled for Council review in October. Key themes included:
FlexPath: Stakeholders suggested adding/removing measures or adjusting point values.
Staff explained changes would require new cost-effectives studies and could be considered in the future.
Water Heaters: Questions focused on alignment with Bay Area Air District Zero-NOx standards (2027). Staff expects statewide model code language will incorporate exemptions. A request to allow electric resistance water heaters in ADUs was discussed; staff noted this option is inefficient and rarely complaint under state Energy Code. Water Conservation: Suggestions were made to add elective CALGreen Tier 1 and 2 measures (e.g., toilet efficiency). Staff clarified these are already permissible under “innovative concepts” and will improve applicant guidance. Other Suggestions: Additional future considerations included requiring electric stoves at replacement, regulating gas appliances under air quality authority, adopting passive house standards, adjusting EV readiness requirements, and updating electric load calculations.
Staff is reviewing these suggestions for possible inclusion in October local amendments or in future round of amendments.
ENVIRONMENTAL REVIEW
The recommended action in this report is exempt from the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines section 15308 as an action by the City for the protection of the environment, and under section 15061(b)(3) on the grounds that the proposed standards are more stringent than the State standards, there are no reasonably foreseeable adverse environmental impacts and there is no possibility that the activity in question may have a significant adverse effect on the environment.
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ATTACHMENTS
Attachment A: GBC Applicability and Existing Reach Code Amendments Attachment B: 2025 Cost-Effectiveness Study: Single Family AC to Heat Pump Replacement Attachment C: 2022 Cost - Effectiveness Study: Existing Single Family Building Upgrades Attachment D: Application of the 2022 Studies to the 2025 Energy Code: Existing Single Family Building Upgrades
Attachment E: Emergency Ordinance Amending PAMC Chapter 16.04 to Adopt Administrative Amendments to the 2022 California Building Code
Attachment F: Emergency Ordinance Amending PAMC Chapter 16.17 to Adopt the 2025 California Energy Code and Local Amendments, Adding FlexPath and Air Conditioner Time-of- Replacement Requirement
APPROVED BY:
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Green Building Code Applicability Requirements and Existing Local Amendments Single Family CalGreen Code Applicability
Scope of Work Current requirements
ADU conversions, alterations, additions CalGreen Mandatory Alterations / Additions that Increase conditioned
area and do not trigger Tier 1 requirements
CalGreen Mandatory
Additions / Alterations1 >1000 sf CalGreen Mandatory + Tier 1 New construction or substantial remodel CalGreen Mandatory + Tier 2 Multi-Family CalGreen Code Applicability
Scope of Work Current requirements
Alterations / Additions that Increase conditioned
area and do not trigger Tier 1 requirements
CalGreen Mandatory
Additions / Alterations1 >1000 sf CalGreen Mandatory + Tier 1 New construction or substantial remodel CalGreen Mandatory + Tier 2 Non-Residential CalGreen Code Applicability
Scope of Work Current requirements
Tenant Improvements (Tis), Renovations, Alterations
w/ $200,000 permit valuation and do not trigger Tier
1 or Tier 2 requirements
CalGreen Mandatory
TIs, Renovations, Alterations > 5,000 SF w/
replacement of two systems: HVAC system, building
envelope, hot water system, lighting system
CalGreen Mandatory + Tier 1
Additions > 1,000 SF CALGreen Mandatory + Tier 2
New construction CalGreen Mandatory + Tier 2
1 Alterations include raising the plate height, historic restoration, changes or rearrangements of the structural parts or elements, and changes or rearrangement of bearing walls and full height partitions.
Normal maintenance, reroofing, painting or wall papering, floor finishes, replacement-in-kind of mechanical, plumbing and electrical systems, or replacing or adding new kitchen counter and similar furniture, plumbing fixture to the building are excluded for the purposes of establishing scope of Tier 1 projects (PAMC 16.14.080).
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Applicability and Existing
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Existing Local Amendments to the Green Building Code
Applies To:
Single
Family
Multi
Family
Non
Res
Third-party Green Building Special Inspector required for all projects (PAMC 16.14.080) X X X
Low-carbon concrete requirements for Tier 1 and Tier 2 projects (PAMC 16.14.080, PAMC 16.14.240) X X X
Deconstruction and construction materials management (PAMC
16.14.150, PAMC 5.24) X X X
Cement and concrete made with recycled products (PAMC 16.14.420) X Enhanced construction waste reduction of 80% X X X
Local storm water pollution prevention for new construction and additions (PAMC 16.14.290) X
Invasive species prohibited (PAMC 16.14.330) X
Indoor Air Quality Management Plan (PAMC 16.14.390) X X Recycled water infrastructure for irrigation X X
Cooling tower water use X X
Swimming pool and spa covers – vapor retardant cover required (PAMC 16.14.100) X X
Non-residential enhanced water budget (PAMC 16.14.340) X Energy STAR portfolio manager profile for energy and water use, energy and water performance reviews (PAMC 16.14.360, 370, 380) X Full electrification of outdoor grills, stoves, and barbeques (PAMC
16.14.090) X X X
Electric readiness requirements (PAMC 16.14.190/410, PAMC 16.17) X X X Enhanced EV Charging requirements
(PAMC 16.14.160, PAMC 16.14.400) X X X
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Summary of Enhanced EV Charging Requirements in the Green Building Code For clarity, the table below summarizes the EV charging requirements in the Green Building Code at a high level and are accurate for most projects. For precise requirements see PAMC 16.14.160 and
16.14.400.
Single
Family
Multi-family Hotels/Motels Nonresidential
New
Construction
of Any Size
(including
substantial
remodel for
residential)
Install 1 EV
Ready
Space
OR
Install 1
Level 2 EV
Charger
Exception:
Accessory
Dwelling
Unit (ADU)
Resident Parking: For
each residential unit,
install one Level 2 EV
Charger
OR
Install one Level 2 EV
Ready Space for each
residential unit
AND
Guest Parking: 25% EV
Capable, EV Ready, EV
Chargers
AND
10% EV Chargers
Installed
40% EV Ready
AND
10% Level 2 EV
Chargers
Installed
10 to 20 parking
spaces: 20% EV
Capable or EV
Ready Space
AND
20% Level 2 EV
Chargers Installed
OR
Over 20 parking
spaces: 15% EV
Capable or EV
Ready Space
AND
15% EV Chargers
Installed
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2025 Cost-
Effectiveness 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
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1 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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 privately-
owned 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
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2 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement Acronym List
AC – Air conditioner
ACH50 – Air Changes per
Hour at 50 pascals pressure
differential
AFUE – Annual Fuel
Utilization Efficiency
B/C – Lifecycle Benefit-to-
Cost 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
CO
2 – 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
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1 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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
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10 20
30 40
50 2 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
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
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3 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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
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4 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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. On- Bill 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
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5 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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.
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6 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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 cost- effectiveness in many climate zones in the oldest vintage relative to standard efficiency equipment. However, in more efficient newer homes, where cost- effectiveness 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 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.
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].
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7 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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 California 1 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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8 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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].
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9 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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10 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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 CBECC- Res 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 cost- effectiveness 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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11 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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13 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
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-trade- based 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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14 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement • 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 cooling- dominated, whereas Climate Zones 1 and 16 were heating-dominated. In these heating- 4 https://www.energy.gov/articles/doe-finalizes-energy-efficiency-standards-residential-furnaces-save- americans-15-
billion#:~:text=These%20furnace%20efficiency%20standards%20were,heat%20for%20the%20living %20space.
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15 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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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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17 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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-response- dr/demand-flexibility-rulemaking
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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 AFUE
6. 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-save- americans-15-
billion#:~:text=These%20furnace%20efficiency%20standards%20were,heat%20for%20the%20livin g%20space.
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19 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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20 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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21 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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22 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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23 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
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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24 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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25 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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26 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
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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27 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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28 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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 cost- effectiveness 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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29 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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30 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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
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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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32 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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33 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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 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 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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34 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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 cost- effectiveness in many climate zones in the oldest vintage relative to standard efficiency equipment. However, in more efficient newer homes, where cost- effectiveness 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 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 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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36 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 5 References
BAAD. (2025, May 7). Rules 9-4 and 9-6 Building Appliances. Retrieved from Bay Area Air District: https://www.baaqmd.gov/en/rules-and-compliance/rule- development/building-appliances
California Air Resources Board. (2022, August 12). 2022 State Strategy for the State Implementation Plan (2022 State SIP Strategy). Retrieved from California Air Resources Board Web site: https://ww2.arb.ca.gov/sites/default/files/2022- 11/Proposed_2022_State_SIP_Strategy.pdf
California Energy Commission. (2017). Rooftop Solar PV System. Measure number: 2019- Res-PV-D Prepared by Energy and Environmental Economics, Inc. Retrieved from https://efiling.energy.ca.gov/getdocument.aspx?tn=221366 California Energy Commission. (2021b). Final Express Terms for the Proposed Revisions to the 2022 Energy Code Reference Appendices. Retrieved from https://efiling.energy.ca.gov/Lists/DocketLog.aspx?docketnumber=21-BSTD-01 California Energy Commission. (2023). 2025 Energy code Hourly Factors. Retrieved from https://www.energy.ca.gov/files/2025-energy-code-hourly-factors California Energy Commission. (2023). Draft 2025 Energy Code Express Terms. Retrieved from
https://efiling.energy.ca.gov/GetDocument.aspx?tn=252915&DocumentContentId=88 051
California Energy Commission. (2025). Final Express Terms for the Proposed Revisions to 2025 Title 24, Part 11 (CALGreen). Retrieved from
https://efiling.energy.ca.gov/GetDocument.aspx?tn=261229&DocumentContentId=97 592
California Public Utilities Commission. (2021a). Utility Costs and Affordability of the Grid of the Future: An Evaluation of Electric Costs, Rates, and Equity Issues Pursuant to P.U. Code Section 913.1. Retrieved from https://www.cpuc.ca.gov/-/media/cpuc- website/divisions/office-of-governmental-affairs-division/reports/2021/senate-bill-695- report-2021-and-en-banc-whitepaper_final_04302021.pdf
California Public Utilities Commission. (2021b). Database for Energy-Efficient resources (DEER2021 Update). Retrieved April 13, 2021, from
http://www.deeresources.com/index.php/deer-versions/deer2021 Department of Energy. (2023). DOE Finalizes Energy Efficiency Standards for Residential Furnaces to Save Americans $1.5 Billion In Annual Utility Bills. Retrieved from www.energy.gov: https://www.energy.gov/articles/doe-finalizes-energy-efficiency- standards-residential-furnaces-save-americans-15-billion 2025/06/09
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37 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement E-CFR. (2020). https://www.ecfr.gov/cgi-
bin/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/cgi-
bin/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-HVAC- Performance.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/default- source/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_CASE- Report-_MF-DHW-Final-1.pdf
Statewide CASE Team. (2023). Residential HVAC PErformance. Retrieved from https://title24stakeholders.com/wp-
content/uploads/2023/11/Revised_2025_T24_Final-CASE-Report-RES-HVAC- Performance.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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38 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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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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40 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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41 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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42 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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43 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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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44 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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
2025/06/09
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Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
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45 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
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
2025/06/09
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Family AC to Heat Pump
Replacement
Item 19: Staff Report
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46 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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
2025/06/09
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Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
65 Packet Pg. 479 of 690
47 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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
2025/06/09
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Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
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48 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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
2025/06/09
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Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
67 Packet Pg. 481 of 690
49 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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
2025/06/09
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Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
68 Packet Pg. 482 of 690
50 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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
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Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
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51 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
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 $/therm was applied on a monthly basis according to the rates shown in Table 35. The gas rates were developed based on the latest available gas rate for January 2025 and a curve to reflect how natural gas prices fluctuate with seasonal supply and demand. The seasonal curve was estimated from PG&E’s monthly residential tariffs between 2015 and 2024. 12-month curves were created from monthly gas rates for each of the ten years. The ten annual curves were then averaged to arrive at an average normalized annual curve. The baseline and excess transmission charges were found to be consistent over the course of a year and applied for the entire year based on January 2025 rates. The costs presented in Table 35 were then derived by establishing the baseline and excess rates from the latest January 2025 tariff as a reference point, and then using the normalized curve to estimate the cost for the remaining months relative to the January rates.
Corresponding CARE tariffs reflect the 20 percent discount per the GL-1 tariff. 2025/06/09
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Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
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52 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement Table 35. PG&E Monthly Gas Rate ($/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 $3.23
2025/06/09
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Attachment B - 2025 Cost-
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Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
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ial
GAS
Baseline Territories and Quantities 11
Effective A ril 1, 2022 • Present
BASELINE QUANITTIES (Therms Per Day Per Dwelling Unit)
ln divid ualli M etered
Baseline Summer Winie r Off-Peak
Territor ies (April-October) (Nov, Feb, Mar)
Effective Al!r, 1, 2022 Effective Nov. 11 2022
p 0.39 1.88
Q 0.56 1.48
R 0.36 1.24
s 0 39 1.38
T 0.56 1.31
V 0.59 1.51
w 0.39 1.14
X 0.49 1.48
y 0.72 2.22
Master Metere d
Baseline Summer
Territories (April-October)
Elfecllve Apr. 1, 2022
p 0.29
Q 0.56
R 0.33
s 0.29
T 0 56
V 0.59
w 0 26
X 0.33
y 0.52
Summer Season: Apr.Oct
Winter Off-Peak : Nov, Feb, Mar
Winier On.Pea k: Dec, Jan
Advice Leit er: 4589-G
Decision 21 -1 1-016
GRC 2020 Ph II [Application 19-11 -019]
Filed: Nov 22. 2019
Winter Off-Pea k
(Nov, Feb, Mar)
Effective Nov. 1, 2022
1.01 0.67
0.87 0.61
1.01 1.28
0.71 0.67
1.01 Winter On-Peak
(Dec, Jan)
Effective Dec. 11 2022
2.19 2.00
1.81 1 94
1.68 1.71
1.68 2.00
2.58 Winter On-Peak
(Dec, Jan)
Effective Dec. 1, 2022
1.13 0.77
1.16 0.65
1. 10
1.32 0.87
0.77 1.13
53 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
72 Packet Pg. 486 of 690
Gas and
Electric Compa.ny·
U 39 Oekland, Gafifomia
Revised
cancel ling Revised
Gal. P.UC. Sheet No.
Gal. P.U.C. Sheet No.
5912().E
58758-E
EIUECTRIC SCHEDULE E-TOU-C Sheet 2
RESIDENTIAL TIME-OF-USE (PEAK :PRICING 4 - 9 p.m. EVERY DAY) RATES:
(Cont'd}
E-TOU-CTOT AL BUNDLED RATES
Total Energy Rates ($ 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 appres, 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
54 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
73 Packet Pg. 487 of 690
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
5ne rgy Rates by Com,ponent (S pe:r kWh )
Generati on:
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
Conservatio n Incentive Adj'u ,stment (Basel ine Usage) Conservatio n Incentive Adjlllstment (OYer Baseline Usage) T,ransm·ission* (all u.sage)
Transmission Rate Adjustme nts• {am usag e)
Reliability Serv ices•· (a us age)
Publ'lc Purpose Progra m s (all usage)
Nuc,lear Deco mmissioning (all usage)
Com petition Transition Charges (all usage )
Energy Cost Reco v-e:ry Amou rrt (all usage)
W fldlir e Fund Charge (all usage )
New System , Generat ion Charge (all usage)""
Wrldlire Harde ning Charge (a I usage)
Recove.ry IBond Charge -(a'II usa,9e)
Recove.ry IBond Credit (all usage)
Bundled Power Cha rge I ndifferem :e A dju s1ment (al usag e)~ .. (I)
(I)
(I)
(I)
OFF-PEAK
$0. 16430
$0. 16057
$0.22056
$0.18313
(S0.03733 ) (I}
S0.06402 (I)
S0.051 22 (I)
(S0.0 1509) (R )
S0.00032 (I}
S0.02tl 44 (R )
(SO.OC>D•13) (I}
(S0.000 172 ) (R )
so.000 0 1 (I)
S0.00595 (I)
S0.005,74 (R )
S0.0049 4
SO.OC>650
(SO.OC>650)
(S0.023 27) (R )
(I)
(I)
(IJ
(I)
.. Transmission, Transmission Rate Adjustments and Reliability Service charges are combined tor pFesentation on customer bills,
H Distribution andl Mew System Generation Oharges are combi ed for presentation on customer lbfllls .
• ,.. Direct Access, Commu ity Choice AggreQ!iltion and Transilional Bundled Service customers pay th.e .applicable Vintaged Power Chafge lnoifference Adjustment. Generation and BuncUed PCIA aFe combined for presentation on bundled customer bills. 59121-E
58759-E
(Continuecl)
Advice
Decision
7469-E Issued by
Shilpa Ramaiya
Vice President
Regulatory Proceedings and Rates
Submitted
Effective
Resolution
December 30. 2024
January 1. 2025
55 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
74 Packet Pg. 488 of 690
Gas and
Electric ,Company·
Revised
Cancelling Revised
Caf. P.U.C. Sheet No.
Caf. P.U.C. Sheet No.
59109-E
58755-E
U 3.9 Oakland, Ga!ifomia
ELECTRIC SCHEDULE E-ELEC Sheet 2
RESIDENTIAL TIME-OF-USE (ELECTRIC HOME)
SERVICE FOR CUSTOMERS WITH QUALIFYING ELECTRIC TE CHNOLOGIES RATES :{Con.t'd .)
Direct Acce ss (DA) and Community Choice Agg regation {CCA ) charges s ha~ be calrula!ed in acco rdance with the paragraph in this rate schedul e 1i!i1ed Bi ling.
TOTAL BU NDLED RA TES
Base Serv ice s Charge ($ pe, me er per day) $0.4Q2S1
PE AK PP.RT-PEAK OFF-PEAK Tota l Em,.-QiY Rates ($ per kWh) Summ er U sage $0.607 28 (R) ll0.44540 (R ) $0.38872 (1R) Win er Usage $0.375n {R) $0.35368 (R ) $0.33982 {R )
Cs i omia C fima e Credit (per hou ,;e'hold, per
semi-annual paym ent occurring in the Ap ril an,d
Octob er bill cyc les)
($58.23) (R)
Total trundled serv ice ch arges shown on a. custome,'s bi Is are un bundlied accord ing to lhe co111pon en.t rate s sh own below.
UNBUINDLING OF TOTAL RA TES
En ergy Rates by Com pone:nl ( $ per· kW h) PEAK PP.RT-PEAK OFF-PEAK Gene.ration :
Summer Usag,e- $0.3 165-ll (I) $0-217 48 (I) $0.17238
Winter 'Usage $0.15446 (I) $0. 13449 (I) $0.12 114
Distribution••:
Summer Usagoe- $0.2352 8 (I) $0. 1725 1 (I) $0.16093
Winter IIJsa.ge $0.1651l0 (I) $0. 16378 (I) $0.16327
T ransm ission,• (all usa.g:e) $0.05 1122 (I) $0.05122 (I) $0.05 122 T ransm ission, Rate Adj u,stm ents• (s I usage) ($0.0 1501l) (R) ($0.01 509) (R ) ($0.0 1501l) Reli ab ility Serv ices• {all usagoe) $0.00032 (I) $0.00032 (I) $0.00032 Pub lic Pu rpose Pr ogram s ,(all usag e) $0.02644 (R) $0.02644 (R ) $0.02644 Nluc lear Decomm ission ing (all usag e} ($0.00013 ~ (I) ($0.000 13~ (I) ($0.00013~ Competitio n Transi tion Charges (all usagoe") {$0.00072 (R) ($0.00072 (R ) ($0.00072 IEner g;y Cost Recover;y A mou nt {all usage) $0.000 01 (I) $0.0000 1 (I) $0.0000 1 Wildfire Fund Charge (al usage) $0.005Q5 (I) $0.00595 (I) $0.005g5 Nlew Syst em Generation Cha r ge (a I usag e}" $0.00574 {R) $0.00574 (R ) $0.00574 Wildfire Ha:rder,ing C harge (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 Cred it (all ,usag e) ($0.00650 l ($0.0065 0~ ($0.006 50~ Bundled Powe r C harge Indifferen ce {$0.023-27 {R) ($0.02327 (R ) ($0.02327 Adjustmen t (all 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
56 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
75 Packet Pg. 489 of 690
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 SP ECIA L 1. TIME PER IODS : 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 .
Part ial-Pea k: 3:0D p.m . to 4 :00 p.m. an d Q:00 p.m. to 12:00 a.m. e·very day includin11 weeke nds .end oo 1d!sys .
Olf-Pes _ : All olhe.r hours.
2. SEASONA L CH ANGES: T1he summ er season is Ju:ne 1i 1hrough Septe m 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 dwe lling unit is served by more t han -o.ne electric meter . t he cuslomer must desilJnat,a-whl ch mete r 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 base d on lhe oplion app licab le to the custo:mer.
Bundled Serv i.Ce Cu.stomers receive generation and delivery seni ice.s solely from PG& E. The custo:mer"s b.11 is bas ed on the U nbun.dling o T otal Rates set orth .abo ve.
Tr-ansiliona Bund ed Service (TBS) Customers take TBS as p:resc ribed in Rules 22 .. 1 and 23,. 1. or tak•e PG&E bund led service prior to th e end oi li'te· six (6) m on1h advance notice period required to eleci PG&.E bundled serv ice as prescn."bed in Rules 22 .. 1 and 23,.1. TBS ,cust arners sha ll pay all ch arges soown in !he Unbundling ,of Tota l Raf es -excep or ·lne-Bund d Power Charge In.difference Adj ustme.nt andl !he gen era lion cha rge. TBS cuslomers shall also pay fo:r their a,pplica'ble Vi:n aged lf>,ower Charge Indiffere nce Adj,:,isbn-e,nt provided in the table bel ow. a:nd t he short.te rm 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
57 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
76 Packet Pg. 490 of 690
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 CAU FORiNIA. Al TEIRiNA TE RA TES FOR EJNERGY (CAR;E)
CUSTOMBRS
AW,l lCABILITY: This sched is applicable to singl~ese and pol~se re-sidential .service in single-famiJy dK'Elinga and i111 flalll and apeltmEtilll separatEfy rnelefed by PG&E and domeslic i;;:ub1111eterad tenants r,es.iding-n mul 1ila rmyaccom1111odal i □ 11.S . mohileh□ 1111e perks and to q,u ifying recraa t i □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.ib lic 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 maslBr meier-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 i - □n , 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~pa 11.Sibility of he master-me ered wstome r 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
58 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
77 Packet Pg. 491 of 690
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-I TEM DISCOUNT FOR CAU FO~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.fil E 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 lillllS t 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 Proae eding,s and Rate s
Svbmitted Deoernbe.r 30, .2024
f':.fmctivs Janu811V 1 . . 2025
"1eoolution
59 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
78 Packet Pg. 492 of 690
Summe r Daily Allocations (June throug h September) Winter Daily Allocations (October through May) All-
Daily 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-O F-USE
DOMES TIC
(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 All-
Daily 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)
60 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
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
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
79 Packet Pg. 493 of 690
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, Opiion 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 Ernerg(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: ld ■ V
C •AlkN'n l• C ■ m.ac.a C: r ■,c:H s .,,.
C..•Man1I• A 11 .. ,,.. •• R .-... ri:ar
ti:Cla.tQ",' D l ■.c:o!I.IDt - '!JI.
Siumm• r :S..•.1111.0r1 - On.-P••k
.... ld.P,a;a k
ON-.P,a;a k
Wlru-. r S.•.11-..an - .... ld-{P•a k
ON-'P••k
SiilupM"-ON-.P•• k
Siln.:gl•-Famlly RAl..&ki.Anc.a
Mi.a-11 1- S:am lty R•..&ldllH'I C.-
!.llnlil l• Fam lly R..--..&ld,anc.a
MLaill l- Fam lty R•.&ld-•nc.a
Siil lnlil l• Famlly R.a-.a ld•nc.a
MLJilll- Fam lly 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.-.d lL
On-P•.ak Gn•rir.- C.-.cl ll - SJk Wrl
o.~!5154 41•
0 .!15.~4 tli•
O . !>U? ◄ tli•
O .!l:51~-'li tli•
O . !>U? ◄ tli•
0 .2.G5 1!l ·Ii·
(O . QD5 1 ◄ ~ ( IJ'
0 .91.!tG
0 .914G
0 .'1 7.Ji
0 .'1 7.Ji
O .~ ◄ 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 .0000 0
' ~ 100% of the di=<:rll ~ m 5h:MTI i11 the ~p~ Special c:-.oo.itioo ct fio SclrmlJle.
Toe I nimlrn C/age is aJ:l:li<3ile, ,.,tr,,,, ihe DeWl!f}' SeM:z! llellergf ~e-. ~ the "FP~ 18'!"" Cllarge ,is '"'" !hon ihe- Pdnin:un ~ Toe~ ~inn T""15ifian Onarge CJC el ClQ.ll(l(lf8) I""' kWh is~ i11 the UG COltfDM"1I cf Gene-raibn. iR) Toe l3=li1o o..di l ~ 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. " "Tho t.la:<a-num Availal:il,, a-..dil is h!· oal'f"'d <>:ml asn:,unl far OFIP ~ liJal !""'i""'"~ in cila-mnantl =1"'""' ~ 1 Tclllll ~ T<li.ol M""')" Seni::e ral= ...., . ~ble io Bu:,:lled Ser,;c,, , [X...,.;i I= (DA) and Comiruriily Chcico ~~(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,-,ual l)'. 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 rus iomeor5 ...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 ____ _
61 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
80 Packet Pg. 494 of 690
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
Summe r ~
MCAM ~.,• , $,l<'!M-i
Blllsic Chaif9" • &iMet=I D")'
Scb,ecdule,,IDJJ;O
TIME-Of-USE
D.QMESI &C
(Con ·n,ued}
On,.P=k
M d ,Peoik
Off,Peoik
M d 'Peoik
Off,P=k
~ r.off,Peoik
Ff\/ t.ll!le r 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 Cred i!'
c..'lifaorm AJtem,;t,, _,, for
Esnergy Ci=Junl • %
F"~mily EJ~dri::; ~ l:e As!iistance DisCDUrn'I. • %
Medi<,;,! Line Item Disa,u rtt • %
Opllil111 PRIME:.C PP
CPP g,,.,m, E~y C h"'B" • $\k,Wh
s..nm..-CP.P Non-E vent C...,.fi1
Qn.Pealk Eenetrgy C...,.fil , $il<Vl!h
Delivt,ry S,, n,ja,
Taia l'
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...:t i • 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 (MCMl l chargi, re<XM0:5 u,.,.,. 1 coo1 .. ~...; •l"'lemreli.ul ily 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 --------
62 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
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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 (11) 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 (11) the Fixed Recovery Charge o 0.00 98, ~ :'Nh.. (II)
(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 -------
63 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
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64 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
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 $/therm applied in this analysis is shown in Table 38. The gas rates were developed based on the latest available gas rate for January 2025 and a curve to reflect how natural gas prices fluctuate with seasonal supply and demand. The seasonal curve was estimated from SoCalGas’s monthly residential tariffs between 2015 and 2024. 12-month curves were created from monthly gas rates for each of the ten years. The ten annual curves were then averaged to arrive at an average normalized annual curve.
Long-term historical natural gas rate data was only available for SoCalGas’ procurement charges.8 The baseline and excess transmission charges were found to be consistent over the course of a year and applied for the entire year based on January 2025 rates. The costs presented in Table 38 were then derived by establishing the baseline and excess rates from the latest January 2025 tariff as a reference point, and then using the normalized curve to estimate the cost for the remaining months relative to the January rates. CARE tariffs reflect the 20 percent discount per the GR tariff.
8 The SoCalGas procurement and transmission charges were obtained from the following site:
https://www.socalgas.com/for-your-business/energy-market-services/gas-prices RES2023.xlsx (live.com)
2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
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65 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement Table 38. SoCalGas Monthly Gas Rate ($/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 $/therm was applied on a monthly basis according to the rates shown in Table 40. The gas rates were developed based on the latest available gas rate for January 2025 and a curve to reflect how natural gas prices fluctuate with seasonal supply and demand. The seasonal curve was estimated from SDG&E’s monthly residential tariffs between 2015 and 2024. 12-month curves were created from monthly gas rates for each of the ten years. The ten annual curves were then averaged to arrive at an average normalized annual curve. The baseline and excess transmission charges were found to be consistent over the course of a year and applied for the entire year based on January 2025 rates. The costs presented in Table 40 were then derived by establishing the baseline and excess rates from the latest January 2025 tariff as a reference point, and then using the normalized curve to estimate the cost for the remaining months relative to the January rates.
CARE tariffs reflect the 20 percent discount per the G-CARE tariff. 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
84 Packet Pg. 498 of 690
66 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement Table 40. SDG&E Monthly Gas Rate ($/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
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
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85 Packet Pg. 499 of 690
S Diego Gas & Eleciric C=pany
s.. Di,gc,, c.mr""raa
RA1E S
Total Ra\e:s:
~;pt l: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=:i i,.,Adju51menl0t:<l il l.fl b
130% ol 8=:iine-
Wm 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- IIOCTota l
CARiE R.lilii,
S □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.,tmen l Coodl up le (0.10543)
130% ol 8=:iiie-
Wm 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-US E
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
0.4 14'.l9 0.0066 1 0. 14115
0.4 14!.19 ll.0066 1 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..41136 0.119968
0.00000 0.1819.2 0..47014
0.00000 0.067 41 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,
0.7 051!1
o.A7fi7fi
o.:lSS;M
Oli 611lS
0.49!128
0.48 133
(0.1054-'.l)
(0.1054-'.l)
0.3!12
T.t11ial
IEffi!di,. .I!,
~ •Rat!!
0.413249 R
0.3llllffl2 R
0.22627 R
0Jl8 526 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 0.005111 + 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 Skope c
Senior Vice Pre911!1ent
Regulatory Affah
Submitted
Effective
Resolution o.
Jan 1. 2005
67 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
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HB□UllE TOU-OR1
RES ID:ENTIAL TIME-O F-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 Dislnb ution COOi\pany Tof Rates (IJDC Total} shown above a:re comprise d o the follolNing compo nems (if ,ap ca'ble)c (1) Transm ission (Trans ) Oharg;es. ( 2) Disbibwon (Dis r) Charges , (3), Pub c P rpose Program (PPP ) Charges,. (4) Nuclear Decomm issio ning (MD) Charge . (5) Ong;aing Compe hlion Transiticm Oh arges (CTCI, (6) Loca ll Generation Charge (LGC) . (7) R 1ability SelVices (RS). and f8) the Total Rate Ad" s me:n Compo n.ent (TRAC ).
Ousfomers taking seIVice under t his .Sched may be• e.ligi • or a California A lternate Rafes for Energy (CARE) discount on lhe ir bi , if they· qu ify to receive service under-ln e• ams and cond i ions of Schedu le E. GAR E.. In add ition, qua li 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 add ition medic b8!5'ellne s atmeri t for Ydiich they qualify and wil r,eceive the total e· ective CARE , medics baser e discounts idenlilied in Sohed e• E-CAR E.
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 stia l 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
68 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
87 Packet Pg. 501 of 690
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•
69 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-Effectiveness
Study Single Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
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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-LJ PPP) 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
70 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
Pg.
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·• ....,JE
San Diego Gas & Electric Co,npany
San Diego, Califom ie
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
Within the entire territory served t>y the UHlity.
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 W ildfire Fund Charge (WF-NBC), Vehic e-Grid Integration (VGI) costs, and California Solar Initiative• (CSI) and (t>) a 50% minimum bill relative to N.on CARE.
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 Regulatory Affairs R.esolutllon No.
T
N
N
71 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
Item 19
Attachment B - 2025 Cost-
Effectiveness Study Single
Family AC to Heat Pump
Replacement
Item 19: Staff Report
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72 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
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
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:Sm.E U L IEIJEC fRH: ' KR I C 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. T ER:Rn'OR :
C.
Thi rate chedule appli.e everywhe.re the Ci f Palo Alto pro ide.s E.!earic Se • ce.
DLKD· RAT ES:
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
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0.0$642,
0.08079
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(UICl549
(UICl549
Tolal
.19461
0.21868
4.64 D·. ~l'IOCI . L OT ··:
l . C afe11I 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.
Cafe11I 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
O
C IT YOF
PALO AL.:,T'O
UTILI T-IES
{Entl}
Sheet No E-1-l
Effocti e 7-1-20-24
73 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 2025/06/09
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idential Time-of -Day Service
Rate Schedule R-TOD
II. Firm Serv ice 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'ed i\1:' M ut Ji ■ ury l .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.ti lnltt ur e fiiM'd Ulillle p~r ,_,,. tli pu JffC'.tu $23.50 Pl.IS S24.80 S2S.50 Detlriti ty 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 S0.1183 $0.12.U
S uJ1111N!r Sr.uo n (Jur,i:, • Sepll-mbcr)
B.
S:i,-s 1e1a lnfntilnl .ctu r e fiud <:lJtrtt! prr l'ND'.n tb pu l'ff.tu $23.50 $24.IS $24.80 S2S.50 Ott1ric.i1 y 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 $0.2021
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" prices 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 Elect ric Vehicle C n.-dil (n l.e cal.L-go.-ics RT02 and RTC l ) 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 Crcdj t . _____ ... --- ·--·. ___ ____ __ _ .... .... .... -$0.0 ISO/kWh Ill. Electrlclty Usage Surcharges
Refer to the following rn.le. schcdu]cs fo.-drta ils on these surcharges.
A. H)"dm Genc.-ation Adju!tl.mtni (HCA }. RcfCf" to Rate Scha:luJe HGA.
IV. Rate OpUon Menu
A. Energy A.s!dsla nc.e Prog.n11m R :ll'k, Refer to Rate Schedule EAPR.
0. J\ t r::dicsl Equip mtnl Di!icOunt P.-ognm . Refer lo Rate Sc.hcdu]e MED.
C. J oin t P:ut icipation in Medical Equipmen t Diseo un i and E'..nr r gy Allis tancr Pragn.rn Rate. R.cfcrlo Rate Schedule MED.
SACRAM ENTO MUNICIPAL UTILITY DISTRI CT
Resolution No. 23-09-09 adopted September 21 , 2023
Sheet No. R-T00 -2
Effective: September 22, 2023
74 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
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.
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. Conditions ,of Service
Peak Wcckclays bclwccn 5:00 p.m. ancl. 8:00 p .m.
... umm u ·
idl-P~-ak \Vcckcleys bclwccn noon lllld midnight =□cp l clurin • ·lhc (.!Ju n 1 - . i;pt 30) ~,al,: hour.;_
0 I -Peak All othe r hours. includ in£ wce'kc.ml!s lllld holidays 1.
1.1 ~ umm r r 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 holidays l. . -1 Sec Scclmn V. Conc'btLons of Se:rv,oc
75 V
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76 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement
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.
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77 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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%
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78 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement 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%
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79 Cost-effectiveness Analysis: Single Family AC to Heat Pump Replacement Get In Touch
The adoption of reach codes can differentiate
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Revision: 1.0
Last modified: 2025/06/09
2025/06/09
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Last modified: 2024/04/25
Revision: 1.0
Prepared by:
Ada Shen, Alea German, Rebecca Evans, & Marc Hoeschele, Frontier Energy, Inc Misti Bruceri, Misti Bruceri & Associates, LLC
Prepared for:
Kelly Cunningham, Codes and Standards Program, Pacific Gas and Electric Item 19
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2 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 2024 , Pacific Gas and Electric Company. All rights reserved, except that this document may be used, copied, and distributed without modification.
Neither PG&E nor any of its employees makes any warranty, express or implied; or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any data, information, method, product, policy or process disclosed in this document; or represents that its use will not infringe any privately-owned rights including, but not limited to, patents, trademarks or copyrights.
Acronym List
2023 PV$ – Present value costs in 2023
ACH50 – Air Changes per Hour at 50 pascals pressure differential ACM – Alternative Calculation Method
ADU – Accessory Dwelling Unit
AFUE – Annual Fuel Utilization Efficiency
B/C – Lifecycle Benefit-to-Cost Ratio
BEopt – Building Energy Optimization Tool
BSC – Building Standards Commission
CA IOUs – California Investor-Owned Utilities
CASE – Codes and Standards Enhancement
CBECC-Res – Computer program developed by the California Energy Commission for use in demonstrating compliance with the California Residential Building Energy Efficiency Standards CEER – Combined Energy Efficiency Rating
CFI – California Flexible Installation
CFM – Cubic Feet per Minute
CO2 – Carbon Dioxide
CPAU – City of Palo Alto Utilities
CPUC – California Public Utilities Commission
CZ – California Climate Zone
DFHP – Dual Fuel Heat Pump
DHW – Domestic Hot Water
DOE – Department of Energy
DWHR – Drain Water Heat Recovery
EDR – Energy Design Rating
EER – Energy Efficiency Ratio
EF – Energy Factor
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3 GHG – Greenhouse Gas
HERS Rater – Home Energy Rating System Rater
HPA – High Performance Attic
HPSH – Heat Pump Space Heater
HPWH – Heat Pump Water Heater
HSPF – Heating Seasonal Performance Factor
HVAC – Heating, Ventilation, and Air Conditioning
IECC – International Energy Conservation Code
IOU – Investor Owned Utility
kBtu –British thermal unit (x1000)
kWh – Kilowatt Hour
LBNL – Lawrence Berkeley National Laboratory
LCC – Life Cycle Cost
LLAHU – Low Leakage Air Handler Unit
VLLDCS – Verified Low Leakage Ducts in Conditioned Space LSC – Long-term Systemwide Cost
MF – Multifamily
MSHP – Mini-Split Heat Pump
NEEA – Northwest Energy Efficiency Alliance
NEM – Net Energy Metering
NPV – Net Present Value
NREL – National Renewable Energy Laboratory
PG&E – Pacific Gas and Electric Company
POU – Publicly-Owned-Utilities
PV – Photovoltaic
SCE – Southern California Edison
SDG&E – San Diego Gas and Electric
SEER – Seasonal Energy Efficiency Ratio
SF – Single Family
SMUD – Sacramento Municipal Utility District
SoCalGas – Southern California Gas Company
TDV – Time Dependent Valuation
Therm – Unit for quantity of heat that equals 100,000 British thermal units Title 24 – Title 24, Part 6
TOU – Time-Of-Use
UEF – Uniform Energy Factor
VCHP – Variable Capacity Heat Pump, Title 24 compliance credit ZNE – Zero-net Energy
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4 Summary of Revisions
Date Description Reference (page or section)
4/25/2024 Original Release N/A
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5 TABLE OF CONTENTS
Executive Summary..........................................................................................................................................................1 1 Introduction................................................................................................................................................................6 2 Methodology and Assumptions ...............................................................................................................................7
2.1 Analysis for Reach Codes..................................................................................................................................................... 7
2.1.1 Modeling ....................................................................................................................................................................... 7
2.1.2 Prototype Characteristics.............................................................................................................................................. 7
2.1.3 Cost-Effectiveness Approach...................................................................................................................................... 10
2.1.4 Utility Rates................................................................................................................................................................. 11
2.1.5 Measure Cost Data Collection Approach .................................................................................................................... 12
2.2 Measure Details and Cost................................................................................................................................................... 12
2.2.1 Building Envelope & Duct Measures........................................................................................................................... 13
2.2.2 PV Measures .............................................................................................................................................................. 14
2.2.3 Equipment Fuel Substitution Measures – Heat Pump Equipment............................................................................... 15 3 Results......................................................................................................................................................................21
3.1 Cost-Effectiveness Results ................................................................................................................................................. 22
3.1.1 HPSH Measures ......................................................................................................................................................... 22
3.1.2 HPWH Measures ........................................................................................................................................................ 24
3.2 Climate Zone Case Studies ................................................................................................................................................ 26
3.2.1 HPSH Cost-Effectiveness ........................................................................................................................................... 27
3.2.2 HPWH Cost-Effectiveness .......................................................................................................................................... 28
3.2.3 Envelope & Duct Improvement Cost-Effectiveness..................................................................................................... 29
3.2.4 Sensitivities................................................................................................................................................................. 30
3.3 Gas Pathways for Heat Pump Replacements..................................................................................................................... 31 4 Recommendations and Discussion.......................................................................................................................33 5 References ...............................................................................................................................................................37 6 Appendices ..............................................................................................................................................................38
6.1 Map of California Climate Zones......................................................................................................................................... 38
6.2 Utility Rate Schedules......................................................................................................................................................... 39
6.2.1 Pacific Gas & Electric.................................................................................................................................................. 40
6.2.2 Southern California Edison ......................................................................................................................................... 48
6.2.3 Southern California Gas.............................................................................................................................................. 52
6.2.4 San Diego Gas & Electric............................................................................................................................................ 54
6.2.5 City of Palo Alto Utilities.............................................................................................................................................. 64
6.2.6 Sacramento Municipal Utilities District (Electric Only)................................................................................................. 66
6.2.7 Fuel Escalation Assumptions...................................................................................................................................... 68 Item 19
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6 LIST OF TABLES
Table 1. Prototype Characteristics........................................................................................................................................................ 8 Table 2. Efficiency Characteristics for Three Vintage Cases ................................................................................................................ 9 Table 3. Measure Cost Assumptions – Efficiency & Duct Measures .................................................................................................. 14 Table 4. Measure Descriptions & Cost Assumptions – PV ................................................................................................................. 15 Table 5. Lifetime Analysis Replacement Assumptions for DFHP (Existing Furnace) Scenario .......................................................... 16 Table 6. System Sizing by Climate Zone ............................................................................................................................................ 17 Table 7. Ducted HVAC Measure Cost Assumptions – 4-Ton Electric Replacements......................................................................... 18 Table 8. Non-Ducted HVAC Measure Cost Assumptions – 4-Ton Electric Replacements ................................................................. 18 Table 9. Water Heating Measure Cost Assumptions – Existing Gas .................................................................................................. 19 Table 10. Water Heating Measure Cost Assumptions – Existing Electric Resistance ........................................................................ 20 Table 11. HPSH CZ 12 [1992-2010]................................................................................................................................................... 27 Table 12. HPSH CZ 16 [1992-2010]................................................................................................................................................... 27 Table 13. HPWH CZ 12 [1992-2010] .................................................................................................................................................. 28 Table 14. HPWH CZ 16 [1992-2010] .................................................................................................................................................. 28 Table 15. Envelope and Duct Measures CZ 3 [Pre-1978] .................................................................................................................. 29 Table 16. Envelope and Duct Measures CZ 10 [Pre-1978]................................................................................................................. 29 Table 17. Envelope and Duct Measures CZ 12 [Pre-1978]................................................................................................................. 29 Table 18. Sensitivity Analysis Results for On-Bill NPV Cost-Effectiveness in Climate Zone 12, PG&E.............................................. 30 Table 19. Electric Panel Upgrade Sensitivity for CZ 12 [1992-2010] .................................................................................................. 30 Table 20. PG&E Baseline Territory by Climate Zone.......................................................................................................................... 40 Table 21. PG&E Monthly Gas Rate ($/therm)..................................................................................................................................... 40 Table 22: SCE Baseline Territory by Climate Zone ............................................................................................................................ 48 Table 23. SoCalGas Baseline Territory by Climate Zone ................................................................................................................... 52 Table 24. SoCalGas Monthly Gas Rate ($/therm) .............................................................................................................................. 52 Table 25. SDG&E Baseline Territory by Climate Zone ....................................................................................................................... 54 Table 26. SDG&E Monthly Gas Rate ($/therm) .................................................................................................................................. 54 Table 27. CPAU Monthly Gas Rate ($/therm)..................................................................................................................................... 64 Table 28: Real Utility Rate Escalation Rate Assumptions, CPUC En Banc and 2022 TDV Basis ...................................................... 68 Table 29: Real Utility Rate Escalation Rate Assumptions, 2025 LSC Basis ....................................................................................... 69 Item 19
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7 LIST OF FIGURES
Figure 1: DFHP with Existing Furnace............................................................................................................................................ 22 Figure 2: Standard Efficiency HPSH............................................................................................................................................... 22 Figure 3: High Efficiency HPSH...................................................................................................................................................... 23 Figure 4: Ducted MSHP.................................................................................................................................................................. 23 Figure 5: HPSH + PV...................................................................................................................................................................... 23 Figure 6: 240V Federal Minimum HPWH........................................................................................................................................ 24 Figure 7: 240V Market Standard NEEA HPWH .............................................................................................................................. 24 Figure 8: 120V Market Standard NEEA HPWH .............................................................................................................................. 24 Figure 9: 240V Federal Minimum HPWH + PV............................................................................................................................... 24 Figure 10: R-6 Ducts....................................................................................................................................................................... 26 Figure 11: 10% Duct Leakage ........................................................................................................................................................ 26 Figure 12: R-13 Wall Insulation....................................................................................................................................................... 26 Figure 13: R-49 Attic Insulation....................................................................................................................................................... 26 Figure 14. Heat pump space heater path compared to the air conditioner path. ............................................................................ 32 Figure 15. Heat pump water path compared to gas with solar thermal........................................................................................... 32 Figure 16. Map of California climate zones..................................................................................................................................... 38 Item 19
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1 Executive Summary
The California Codes and Standards (C&S) Reach Codes program provides technical support to local governments considering adopting a local ordinance (reach code) intended to support meeting local and/or statewide energy efficiency and greenhouse gas (GHG) reduction goals. The program facilitates adoption and implementation of the code when requested by local jurisdictions by providing resources such as cost-effectiveness studies, model language, sample findings, and other supporting documentation.
This report documents cost-effective measure upgrades in existing single family buildings that exceed the minimum state requirements. It evaluates efficiency measures such as adding insulation, replacing windows, and duct upgrades, fuel substitution measures that upgrade space heating and water heating to heat pumps, and solar photovoltaics (PV) across all 16 California climate zones. A 1,665 square foot single family home prototype with an attached garage was evaluated in this study.
This analysis used two different metrics to assess the cost-effectiveness of the proposed upgrades. Both methodologies require estimating and quantifying the incremental costs and energy savings associated with each energy efficiency measure over a 30-year analysis period. On-Bill cost-effectiveness is a customer-based lifecycle cost (LCC) approach that values energy based upon estimated site energy usage and customer utility bill savings using today’s electricity and natural gas utility tariffs. Long-term Systemwide Cost (LSC) is the California Energy Commission’s LCC methodology for the 2025 Title 24, Part 6 (Title 24) code cycle (previously referred to as Time Dependent Valuation (TDV)), which is intended to capture the long-term projected cost of energy including costs for providing energy during peak periods of demand, carbon emissions, grid transmission and distribution impacts. This is the methodology used by the Energy Commission in evaluating cost-effectiveness for efficiency measures in Title 24 code development.
The following summarizes key results from the study:
Conclusions and Discussion:
1. Envelope measures. Improving envelope performance is very cost-effective in many older homes. In addition to reducing utility costs, these measures provide many other benefits such as improving occupant comfort and satisfaction and increasing a home’s ability to maintain temperatures during extreme weather events and power outages. Below is a discussion of the results of specific measures. a. Adding attic insulation is cost-effective based on both LSC and On-Bill in many climate zones in homes with no more than R-19 existing attic insulation levels. Increasing attic insulation from R-30 to R-49 was still found to be cost-effective based on at least one metric in the colder and hotter climates of Climate Zone 10 (SDG&E territory only) through 16.
b. Insulating existing uninsulated walls is very cost-effective based on both metrics everywhere except Climate Zones 6 and 7 (in Climate Zone 8 it’s only cost-effective based on LSC). c. Adding R-19 or R-30 floor insulation is cost-effective based on LSC in the older two vintages (Pre-1978 and 1978-1991) in all CZ except CZ 6-10.
d. Replacing old single pane windows with new high-performance windows has a very high cost and is typically not done for energy savings alone. However, energy savings are substantial and justify cost - effectiveness of this measure based on at least one metric in Climate Zones 4, 8 through 12 (PG&E territory only), and 13 through 16.
e. At time of roof replacement, a cool roof with an aged solar reflectance of 0.25 was found to be cost - effective in Climate Zones 4, 6 through 12 (PG&E territory only), and 13 through 15. When the roof deck is replaced during a roof replacement, adding a radiant barrier is low cost and provides substantial cooling energy savings, and was found to be cost-effective in almost all climate zones and homes.
2. Duct measures: Many older homes have old, leaky duct systems that should be replaced when they reach the end of life, typically 20-30 years. In this case, installing new ducts was found to be cost-effective based on at least one metric (both in most cases) everywhere except mild Climate Zone 7 and Climate Zones 5 and 6 in California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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2 the 1978-1991 vintage. If duct systems still have remaining life they should be sealed and tested to meet 10% leakage or lower; however, duct upgrades alone were only found to be cost-effective for newer homes in Climate Zones 10 (SDG&E territory only), 11, and 13 through 16. Duct upgrades may be able to be coupled with other measures to reduce the cost.
3. Heat pump space heating: HPSHs were found to be LSC cost-effective in many cases. The Dual Fuel Heat Pump (existing furnace) was LSC cost-effective everywhere except Climate Zone 15. The HPSH was LSC cost-effective everywhere except Climate Zones 8 and 15. a. Challenges to On-Bill cost-effectiveness include higher first costs and higher first-year utility costs due to higher electricity tariffs relative to gas tariffs. SMUD and CPAU are two exceptions where first year utility costs are lower for heat pumps than for gas equipment. Table 11 shows the impact of utility rates on cost-effectiveness of HPSH where the standard and high efficiency HPSH and the HPSH + PV measures are cost-effective under SMUD but not PG&E. Even with higher first year utility bills, there were some cases that still proved On-Bill cost-effective including the DFHP with an existing furnace in the central valley and northern coastal PG&E territories, the ducted MSHP in the central valley as well as Climate Zone 14 in SDG&E territory, and the HPSH + PV measure in CZ 3-5 (PGE), 7-11, and 12 (SMUD) – 15.
b. The ductless MSHPs were only found to be cost-effective based on either metric in Climate Zones 1 and 16. Ductless MSHPs have a high incremental cost because it is a more sophisticated system than the base model of a wall furnace with a window AC unit. However, the ductless MSHP would provide greater comfort benefits if properly installed to directly condition all habitable spaces (as is required under the VCHP compliance credit as evaluated in this study) which may be an incentive for a homeowner to upgrade their system.
c. Higher efficiency equipment lowered utility costs in all cases and improved cost-effectiveness in many cases, particularly with a ducted MSHP.
4. Heat pump water heating: All the HPWH measures were LSC cost-effective in all climate zones. Most measures were not On-Bill cost-effective with the exception of the HPWH + PV which was cost-effective On- Bill in CPAU, SMUD, and SDG&E territories in addition to Climate Zones 11, 13, 14, and 15. The HPWH measures share many of the same challenges as the HPSH measures to achieving cost -effectiveness including high first costs and utility rates and assumptions. Table 13 shows the impact of utility rates on cost- effectiveness where some HPWH measures are cost-effective under SMUD utility rates but are not cost- effective anywhere under PG&E rates in Climate Zone 12. a. Various HPWH locations were also explored, however there are some factors outside of cost - effectiveness that should also be considered.
i. HPWHs in the conditioned space can provide benefits such as free-cooling during the summer, reduced tank losses, and shorter pipe lengths, and in some cases show improved cost-effectiveness over garage located HPWHs. However, there are various design considerations such as noise, comfort concerns, an additional heating load in the winter, and condensate removal. Ducting the inlet and exhaust air resolves comfort concerns but adds costs and complexity. Split heat pump water heaters address these concerns, but currently there are limited products on the market and there is a cost premium relative to the packaged products.
ii. Since HPWHs extract heat from the air and transfer it to water in the storage tank, they must have adequate ventilation to operate properly. Otherwise, the space cools down over time, impacting the HPWH operating efficiency. This is not a problem with garage installations but needs to be considered for water heaters located in interior or exterior closets. For the 2025 Title 24 code the CEC is proposing that all HPWH installations meet mandatory ventilation requirements (California Energy Commission, 2023).
5. The contractor surveys revealed overall higher heat pump costs than what has been found in previous analyses. This could be due to incentive availability raising demand for heat pumps and thereby increasing the price. This price increase may be temporary and may come down once the market stabilizes. There are also California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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3 new initiatives to obtain current costs including the TECH Clean California program 1 that publishes heat pump data and costs; however, at the time of this analysis, the TECH data did not contain incremental costs because it only had the heat pump costs but not the gas base case costs.
6. Table 18 shows how CARE rates and escalation rate assumptions will impact cost -effectiveness. a. Applying CARE rates in the IOU territories has the overall impact to increase utility cost savings for an all-electric building compared to a code compliant mixed fuel building, improving On-Bill cost- effectiveness. This is due to the CARE discount on electricity being higher than that on gas. The reverse occurs with efficiency measures where lower utility rates reduce savings and subsequently reduce cost-effectiveness.
b. If gas tariffs are assumed to increase substantially over time, in-line with the escalation assumption from the 2025 LSC development, cost-effectiveness substantially improves for the heat pump measures over the 30-year analysis period and many cases become cost-effective that were not found to be cost-effective under the CPUC / 2022 TDV escalation scenario. There is much uncertainty surrounding future tariff structures as well as escalation values. While it’s clear that gas rates will increase, how much and how quickly is not known. Future electricity tariff structures are expected to evolve over time, and the CPUC has an active proceeding to adopt an income-graduated fixed charge that benefits low-income customers and supports electrification measures for all customers. 2 The
CPUC will make a decision in mid-2024 and the new rates are expected to be in place later that year or in 2025. While the anticipated impact of this rate change is lower volumetric electricity rates, the rate design is not finalized. While lower volumetric electricity rates provide many benefits, it also will make building efficiency measures harder to justify as cost-effective due to lower utility bill cost savings.
7. Under NBT, utility cost savings for PV are substantially less than what they were under prior net energy metering rules (NEM 2.0); however, savings are sufficient to be On-Bill cost-effective in all climate zones except Climate Zones 1 through 3, 5, and 6.
a. Combining a heat pump with PV allows the additional electricity required by the heat pump to be offset by the PV system while also increasing on-site utilization of PV generation rather than exporting the electricity back to the grid at a low rate.
b. While not evaluated in this study, coupling PV with battery systems can be very advantageous under NBT increasing utility cost savings because of improved on-site utilization of PV generation and fewer exports to the grid.
Recommendations:
1. There are various approaches for jurisdictions who are interested in reach codes for existing buildings. Some potential approaches are listed below along with key considerations. a. Prescriptive measures: Non-preempted measures that are found to be cost-effective may be prescriptively required in a reach code. One example of this type or ordinance is a cool roof requirement at time of roof replacement. Another example is requiring specific cost -effective measures for larger remodels, such as high-performance windows when new windows are installed or duct sealing and testing when ducts are in an unconditioned space. b. Replacement equipment: This flavor of reach code sets certain requirements at time of equipment replacement. This study evaluated space heating and water heating equipment. Where a heat pump measure was found to be cost-effective based on either LSC or On-Bill, this may serve as the basis of a reach code given the following considerations.
i. Where reach codes reduce energy usage and are not just fuel switching, cost -effectiveness calculations are required and must be based on equipment that does not exceed the federal minimum efficiency requirements.
ii. Where reach codes are established using cost-effectiveness based on LSC, utility bill impacts and the owner’s first cost should also be reviewed and considered. 1 TECH Public Reporting Home Page (techcleanca.com)
2 https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/demand-response-dr/demand-flexibility-rulemaking California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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4 iii. A gas path should also be prescriptively allowed to safely satisfy federal preemption requirements considering the CRA v. Berkeley case. 3 Additional requirements may apply to the gas path, as described in Section 3.3, as long as the paths are reasonably energy or cost equivalent.
c. “Flexible Path”, minimum energy savings target: This flexible approach establishes a target for required energy savings based on a measure or a set of measures that were found to be cost -effective based on either LSC or On-Bill. A points menu compares various potential upgrades ranging from efficiency, PV, and fuel substitution measures, based on site or source energy savings. The applicant must select upgrades that individually or in combination meet the minimum energy savings target. The maximum target value shown in the Cost-effectiveness Explorer is based on a combination of cost- effective, non-preempted measures.
2. Equipment replacement ordinances should consider appropriate exceptions for scenarios where it will be challenging to meet the requirements, such as location of the HPWH, total project cost limitations, or the need for service panel upgrades that wouldn’t have been required as part of the proposed scope of work in absence of the reach code.
3. Consider extending relevant proposals made by the CEC for the 2025 Title 24 code (California Energy Commission, 2023) in ordinances that apply under the 2022 Title 24 code, such as the following:
a. Mandatory ventilation requirements for HPWH installations (Section 110.3(c)7). The cost -effectiveness analysis can be found in the Multifamily Domestic Hot Water CASE report (Statewide Team, 2023). b. Requirement for HERS verified refrigerant charge verification for heat pumps in all climate zones (Table 150.1-A
4). The cost-effectiveness analysis can be found in the Residential HVAC Performance CASE report (Statewide Team, 2023).
4. When evaluating reach code strategies, the Reach Codes Team recommends that jurisdictions consider combined benefits of energy efficiency alongside electrification. Efficiency and electrification have symbiotic benefits and are both critical for decarbonization of buildings. As demand on the electric grid is increased through electrification, efficiency can reduce the negative impacts of additional electricity demand on the grid, reducing the need for increased generation and storage capacity, as well as the need to upgrade upstream transmission and distribution equipment.
5. Education and training can play a critical role in ensuring that heat pumps are installed, commissioned, and controlled properly to mitigate grid impacts and maximize occupant satisfaction. Below are select recommended strategies.
a. The Quality Residential HVAC Services Program
5 is an incentive program to train California
contractors in providing quality installation and maintenance while advancing energy -efficient technologies in the residential HVAC industry. Jurisdictions can market this to local contractors to increase the penetration of contractors skilled in heat pump design and installation. b. Educate residents and contractors of available incentives, tax credits, and financing opportunities. c. Educate contractors on code requirements. Energy Code Ace provides free tools, training, and resources to help Californians comply with the energy code. Contractors can access interactive compliance forms, fact sheets, and live and recorded trainings, among other things, on the website:
https://energycodeace.com/. Jurisdictions can reach out to Energy Code Ace directly to discuss offerings.
6. Health and safety
a. Combustion Appliance Safety and Indoor Air Quality: Implementation of some of the recommended measures will affect the pressure balance of the home which can subsequently impact the safe operation of existing combustion appliances as well as indoor air quality. Buildings with older gas appliances can present serious health and safety problems which may not be addressed in a remodel 3 https://www.publichealthlawcenter.org/sites/default/files/2024-01/CRA-v-Berkeley-Ninth-Circuit-Opinion-Jan2024.pdf 4 This requirement does not show up in the Express Terms for alterations in Section 150.2(b)1F, but the Statewide Reach Codes Team expects that it will be added to the next release of the proposed code language in the 45-day language as it aligns with the proposal made by the Codes and Standards Enhancement Team (Statewide CASE Team, 2023). 5 https://qualityhvac.frontierenergy.com/
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5 if the appliances are not being replaced. It is recommended that the building department require inspection and testing of all combustion appliances located within the pressure boundary of the building after completion of retrofit work that involves air sealing or insulation measures . b. Jurisdictions may consider requiring mechanical ventilation in homes where air sealing has been conducted. In older buildings, outdoor air is typically introduced through leaks in the building envelope.
After air sealing a building, it may be necessary to forcefully bring in fresh outdoor air using supply and/or exhaust fans to minimize potential issues associated with indoor air quality.
Local jurisdictions may also adopt ordinances that amend different Parts of the California Building Standards Code or may elect to amend other state or municipal codes. The decision regarding which code to amend will determine the specific requirements that must be followed for an ordinance to be legally enforceable. For example, reach codes that amend Part 6 of the CA Building Code and require energy performance beyond state code minimums must demonstrate the proposed changes are cost-effective and obtain approval from the Energy Commission 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. Although a cost-effectiveness study is only required to amend Part 6 of the CA Building Code, this study provides valuable context for jurisdictions pursuing other ordinance paths to understand the economic impacts of any policy decision. This study documents the estimated costs, benefi ts, 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 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].
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Cost Effectiveness Analysis: Existing Single Family Building Upgrades Introduction
6 1 Introduction
This report documents cost-effective measure upgrades in existing single family buildings that exceed the minimum state requirements, the 2022 Building Energy Efficiency Standards, effective January 1, 2023. 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. This report was developed in coordination with the California Statewide Investor-Owned Utilities (IOUs) Codes and Standards Program, key consultants, and engaged cities—collectively known as the Statewide Reach Codes Team.
The focus of this study is on existing single family buildings and does not apply to low or high-rise multifamily buildings.
Each jurisdiction must establish the appropriate structure and threshold for triggering the proposed requirements.
Some common jurisdictional structures include triggering the requirements at major remodels, additions, or date- certain (upgrades must be completed by a specific date). Some of these measures could be triggered with a permit for another specific measure, such as a re-roofing project. The analysis includes scenarios of individual measures and identifies cost-effective options based on the existing conditions of the building in all 16 California Climate Zones (CZ) (see Cost - Effectiveness Results for a graphical depiction of climate zone locations).
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/.
The California Codes and Standards (C&S) Reach Codes program provides technical support to local governments considering adopting a local ordinance (reach code) intended to support meeting local and/or statewide energy efficiency and greenhouse gas 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.
The California Building Energy Efficiency Standards Title 24, Part 6 (Title 24) (CEC, 2019) is maintained and updated every three years by two state agencies: the California Energy Commission (the Energy Commission) and the Building Standards Commission (BSC). In addition to enforcing the code, local jurisdictions have the authority to adopt local energy efficiency ordinances—or reach codes—that exceed the minimum standards defined by Title 24 (as established by Public Resources Code Section 25402.1(h)2 and Section 10-106 of the Building Energy Efficiency Standards).
Local jurisdictions must demonstrate that the requirements of the proposed ordinance are cost -effective and do not result in buildings consuming more energy than is permitted by Title 24. In addition, the jurisdiction must obtain approval from the Energy Commission and file the ordinance with the BSC for the ordinance to be legally enforceable.
The Department of Energy (DOE) sets minimum efficiency standards for equipment and appliances that are federally regulated under the National Appliance Energy Conservation Act, including heating, cooling, and water heating equipment (E-CFR, 2020). Since state and local governments are prohibited from adopting higher minimum efficiencies than the federal standards require, the focus of this study is to identify and evaluate cost -effective packages that do not include high efficiency heating, cooling, and water heating equipment. High efficiency appliances are often the easiest and most affordable measure to increase energy performance. While federal preemption limits reach code mandatory requirements for covered appliances, in practice, builders may install any package of compliant measures to achieve the performance requirements.
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Cost Effectiveness Analysis: Existing Single Family Building Upgrades Methodology and Assumptions
7 2 Methodology and Assumptions
2.1 Analysis for Reach Codes
This section describes the approach to calculating cost-effectiveness including benefits, costs, metrics, and utility rate selection.
2.1.1 Modeling
The Reach Codes Team performed energy simulations using the 2025 research version of the Residential California Building Energy Code Compliance software (CBECC). The 2025 version of CBECC was used instead of the 2022 version to take advantage of updated weather files and metrics. Site energy results are similar between CBECC -Res 2022 and 2025; however, the 2025 compliance metrics applies assumptions reflective of an electrified future, such as high escalation for natural gas retail rates, which favors electric buildings. In addition, in 2025 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.
Three unique building vintages are considered: pre-1978, 1978-1991, and 1992-2010. The vintages were defined based on review of historic Title 24 code requirements and defining periods with distinguishing features. Prospective energy efficiency measures were identified and modeled to determine the projected site energy (therm and kWh), source energy, GHG emissions, and LSC (long-term systemwide cost) impacts. Annual utility costs were calculated using hourly data output from CBECC, and current (as of 11/01/2023) electricity and natural gas tariffs for each of the investor-owned utilities (IOUs) appropriate for that climate zone.
Equivalent CO2 emission reductions were calculated based on outputs from the CBECC-Res 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 lbs CO2-equivalent (CO2e) emissions.
The Statewide Reach Codes Team designed the analysis approach and selected measures for evaluation based on the 2019 existing building single family reach code analysis (Statewide Reach Codes Team, 2021) and work to support the 2025 Title 24 code development cycle as well as from outreach to architects, builders, and engineers.
2.1.2 Prototype Characteristics
The Energy Commission defines building prototypes which it uses to evaluate the cost- effectiveness of proposed changes to Title 24 requirements. Average home size has steadily increased over time, 6 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 1 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 Title 24, Part
6. The CEC has proposed changes to the 2025 Energy Code that would remove the allowance of gas space heating and water heating equipment for additions and instead require additions to follow the same space heating and water heating equipment requirements as new construction (California Energy Commission, 2023). The proposed prescriptive requirements for single family new construction homes are heat pump space heaters and water heaters, with gas equipment only allowed in the performance approach. 6 https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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8 Table 1. Prototype Characteristics
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 determined based on either prescriptive requirements from Title 24 that were in effect or standard construction practice during that time period.
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 2 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. o Scenarios with an existing natural gas wall furnace without AC were also evaluated. • Small storage natural gas water heater.
o Scenarios with an existing electric resistance storage water heater were also evaluated. • Gas cooktop, oven, and clothes dryer.
The methodology applied in the analyses begins with a design that matches the specifications as described in Table 2 for each of the three vintages. Prospective energy efficiency measures were modeled to determine the projected energy performance and utility cost impacts relative to the baseline vintage. In some cases, where logical, measures were packaged together.
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9 Table 2. Efficiency Characteristics for Three Vintage Cases Building Component Efficiency
Feature
Vintage Case
Pre-1978 1978-1991 1992-2010
Envelope
Exterior Walls 2x4, 16-inch on center wood frame,
R-0a
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/SHGCb 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 a Pre-1978 wall modeled with R-5 cavity insulation to better align wall system performance with monitored field data and not overestimate energy use. b 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: Existing Single Family Building Upgrades 10 Methodology and Assumptions
2.1.3 Cost-Effectiveness Approach
2.1.3.1 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 (the numerator in the benefit cost calculation):
Utility Bill Impacts (On-Bill): This customer-based lifecycle cost (LCC) approach values energy based upon estimated site energy usage and customer utility bill savings using the latest electricity and natural gas utility tariffs available at the time of writing this report. Total savings are estimated over a 30-year duration and include discounting of future utility costs, as well as assumed energy cost inflation over time.
Long-term Systemwide Cost (LSC): Formerly known as Time Dependent Valuation (TDV) energy cost savings, LSC reflects the Energy Commission’s current LCC methodology, which is intended to capture the total value or cost of energy use over 30 years. This method accounts for the hourly cost of marginal generation, transmission and distribution, fuel, capacity, losses, and cap-and-trade-based CO2 emissions (California Energy Commission, 2023).
This is the methodology used by the Energy Commission in evaluating cost-effectiveness for efficiency measures in the 2025 Energy Code.
2.1.3.2 Costs
The Reach Codes Team assessed the incremental costs of the measures and packages over a 30- year analysis period. Incremental costs represent the equipment, installation, replacement, and maintenance costs of the proposed measure relative to the 2022 Title 24 Standards minimum requirements or standard industry practices. Present value of replacement cost is included only for measures with lifetimes less than the 30-year evaluation period. In cases where at the end of the analysis period the measure has useful life remaining, the value of this remaining life is calculated and credited in the total lifetime cost.
2.1.3.3 Metrics
Cost-effectiveness is presented using net present value (NPV) and benefit-to-cost (B/C) ratio metrics.
NPV: Equation 1 demonstrates how lifetime NPV is calculated. If the NPV of a measure or package is positive, it is considered cost-effective. A negative value represents a net increase in costs over the 30-year lifetime.
B/C Ratio: This is the ratio of the present value of all benefits to the present value of all costs over 30 years ( present value benefits divided by present value costs). A value of one indicates the NPV of the savings over the life of the measure is equivalent to the NPV of the lifetime incremental cost of that measure. A value greater than one represents a positive return on investment. The B/C ratio is calculated according to Equation 2.
Equation 1
𝑁𝑁𝑁𝑁𝑁𝑁 = 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑝𝑝 𝑜𝑜𝑜𝑜 𝑣𝑣𝑙𝑙𝑜𝑜𝑝𝑝𝑝𝑝𝑙𝑙𝑙𝑙𝑝𝑝 𝑏𝑏𝑝𝑝𝑝𝑝𝑝𝑝𝑜𝑜𝑙𝑙𝑝𝑝 − 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑝𝑝 𝑜𝑜𝑜𝑜 𝑣𝑣𝑙𝑙𝑜𝑜𝑝𝑝𝑝𝑝𝑙𝑙𝑙𝑙𝑝𝑝 𝑐𝑐𝑜𝑜𝑝𝑝𝑝𝑝 Equation 2
𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑝𝑝 𝑜𝑜𝑜𝑜 𝑣𝑣𝑙𝑙𝑜𝑜𝑝𝑝𝑝𝑝𝑙𝑙𝑙𝑙𝑝𝑝 𝑏𝑏𝑝𝑝𝑝𝑝𝑝𝑝𝑜𝑜𝑙𝑙𝑝𝑝 𝐵𝐵𝑝𝑝𝑝𝑝𝑝𝑝𝑜𝑜𝑙𝑙𝑝𝑝 − 𝑝𝑝𝑜𝑜 − 𝐶𝐶𝑜𝑜𝑝𝑝𝑝𝑝 𝑅𝑅𝑣𝑣𝑝𝑝𝑙𝑙𝑜𝑜 = 𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑝𝑝 𝑜𝑜𝑜𝑜 𝑣𝑣𝑙𝑙𝑜𝑜𝑝𝑝𝑝𝑝𝑙𝑙𝑙𝑙𝑝𝑝 𝑐𝑐𝑜𝑜𝑝𝑝𝑝𝑝 Improving the efficiency of a project often requires an initial incremental investment. In most cases the benefit is represented by annual On-Bill utility or LSC savings, and the cost is represented by incremental first cost and future replacement costs. Some packages result in initial construction cost savings relative to the assumed base case scenario, and either energy cost savings (positive benefits), or increased energy costs (negative benefits). In cases where both construction costs and energy-related savings are negative, the construction cost savings are treated as the ‘benefit’ while the increased energy costs are the ‘cost.’ In cases where a measure or package is cost- effective immediately (i.e., upfront construction cost savings and lifetime energy cost savings), B/C ratio cost- effectiveness is represented by “>1”.
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The lifetime costs or benefits are calculated according to Equation 3.
Equation 3
(𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴 𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐 𝑐𝑐𝑜𝑜 𝑏𝑏𝑏𝑏𝐴𝐴𝑏𝑏𝑏𝑏𝑏𝑏𝑐𝑐)𝑡𝑡 𝐴𝐴 𝑁𝑁𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝𝑝 𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑣𝑝𝑝 𝑜𝑜𝑜𝑜 𝑣𝑣𝑙𝑙𝑜𝑜𝑝𝑝𝑝𝑝𝑙𝑙𝑙𝑙𝑝𝑝 𝑐𝑐𝑜𝑜𝑝𝑝𝑝𝑝 𝑜𝑜𝑝𝑝 𝑏𝑏𝑝𝑝𝑝𝑝𝑝𝑝𝑜𝑜𝑙𝑙𝑝𝑝 = ∑𝑐𝑐=0 (1+𝑜𝑜)𝑡𝑡 Where:
1. n = analysis term in years
2. r = discount rate
The following summarizes the assumptions applied in this analysis to both methodologies.
3. Analysis term of 30 years
4. Real discount rate of three percent
Both base case measures and alternative energy efficiency measures may have different lifetime assumptions which impact life cycle economics. Future costing of many of the evaluated electrification measures are only based on current cost assumption, which may be overly conservative as the expected growth in heat pump- based technologies is growing rapidly and will likely lead to future cost reductions (at least relative to current fossil fueled equipment) as production volumes increase.
2.1.4 Utility Rates
In coordination with the CA IOU rate team (comprised of representatives from Pacific Gas and Electric (PG&E), Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E)) and two Publicly -Owned-Utilities (POUs) (Sacramento Municipal Utility District (SMUD) and City of Palo Alto Utilities (CPAU)), the Reach Codes Team determined appropriate utility rates for each climate zone to calculate utility costs and determine On-Bill cost- effectiveness for the proposed measures and packages. The utility tariffs, summarized in Chapter 6.2, were determined based on the appropriate rate for each case in each territory. Utility rates were applied to each climate zone based on the predominant IOU serving the population of each zone, with a few climate zones evaluated multiple times under different utility scenarios. Climate Zones 10 and 14 were evaluated with both SCE for electricity and Southern California Gas Company (SoCalGas) for gas and SDG&E tariffs for both electricity and gas since each utility has customers within these climate zones. Climate Zone 5 is evaluated under both PG&E and SoCalGas natural gas rates.
Two POU or municipal utility rates were also evaluated: SMUD in Climate Zone 12 and CPAU in Climate Zone 4.
For cases with onsite generation (i.e. solar photovoltaics (PV)), the approved NBT tariffs were applied along with monthly service fees and hourly export compensation rates for 2024. 7 In December 2022, the California Public Utilities
Commission (CPUC) issued a decision adopting NBT as a successor to NEM 2.0 that went into effect April of 20238 Ut
ility rates are assumed to escalate over time according to the assumptions from the CPUC 2021 En Banc hearings on utility costs through 2030 (California Public Utilities Commission, 2021a). Escalation rates through the remainder of the 30-year evaluation period are based on the escalation rate assumptions within the 2022 TDV factors. The Statewide Natural Gas Residential Average Rate for 2023 through 2030 is projected to be 4.6%. The Electric Residential Average Rate for PG&E, SCE and SDG&E for 2023 through 2030 is projected to be 1.8%,1.6% and 2.8% respectively. A second set of escalation rates were also evaluated to demonstrate the impact that utility cost changes have on cost-effectiveness over time. This utility rate escalation sensitivity analysis, presented in Section 3.2.4, was based on those used within the 2025 LSC factors (LSC replaces TDV in the 2025 code cycle) which assumed steep 7 Hourly export compensation rates were based on the NBT spreadsheet model created by E3 for the CPUC. https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/net-energy-metering- nem/nemrevisit/nbt-model--12142022.xlsb
8 https://www.cpuc.ca.gov/nemrevisit
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increases in gas rates in the latter half of the analysis period. See Appendix 6.2.7 Fuel Escalation Assumptions for details.
Future electricity tariff structures are expected to evolve over time, and the CPUC has an active proceeding to adopt an income-graduated fixed charge that benefits low-income customers and supports electrification measures. 10 These were not included in this analysis but may be evaluated later in 2024 once the rates are finalized.
2.1.5 Measure Cost Data Collection Approach
To support this effort, a detailed cost study was completed in the summer of 2023 to gather data from a range of contractors to inform actual installed costs in the areas they provide services. These areas include HVAC, plumbing, envelope and air-sealing, and PV installation. Home performance contractors were also approached to collect this data. Collecting this type of data is challenging, both due to contractor reticence to share cost information and due to the timing of the survey which unfortunately coincided with the summer busy season for most contractors , especially HVAC installers. With these known challenges, the outreach effort focused on leveraging existing relationships between the analysis team and contractors to both gain access and provide assurance that all cost data would remain confidential and aggregated. Contractors that provided feedback were nominally compensated for their time.
The collected cost data was intended to represent recent costs for a “typical” retrofit installation. Each home in which a contractor does work has different site-specific issues that will likely affect costs. In addition, different jurisdictions have different levels of building department installation oversight and permit fees. Finally, each contractor typically has a different manufacturer product line they prefer to install. All these factors will influence installed costs
11. The most detailed and broad cost request was for the HVAC contractors, as there are a wide range of equipment replacement scenarios available for an existing ducted gas furnace with central split-system air conditioning. Options range from a base case scenario (like for like swap out), split-system heat pump replacement, dual fuel heat pumps (DFHP), ducted mini-split heat pumps, non-ducted mini-splits, etc. For plumbing contractors, a range of scenarios existed for water heater replacements including like-for-like replacement, HPWHs (in different locations- garage, indoor), need for electrical upgrade for HPWH installation, need for HPWH ducting, etc. Envelope measures focused on attic and wall insulation, window replacement, re-roofing (with Cool Roof materials or not), and attic ceiling plane air- sealing. PV costing included different system sizes, panel upgrades costs, and battery costs. Home performance contractors were asked to provide as much data as they could on the different measure options. All costing information requested was intended to represent most recent installations, in an effort to capture current pricing as best as possible.
The contractors that responded with their cost estimates work in different regions of the state, operate in different markets with (potentially) different local efficiency incentives, do varying amounts of work based on the size of their company, target different market demographic sectors, and install different brands of equipment. All these factors will contribute to price variability. The Team considered applying climate zone specific cost adjustments to reflect some of these differences, but ultimately decided not to since a climate zone is not a monolithic entity with uniform customer pricing throughout. The Team recognizes that “zip code” pricing is a reality, but for simplicity, as well as consistency with Title 24, Part 6 code development costing approaches, applied uniform statewide costs to all measures.
2.2 Measure Details and Cost
This section describes the details of the measures and documents incremental costs. All measure costs were obtained from the contractor survey unless otherwise noted. All contractor provided costs reflect the cost to the customer and 10 https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/demand-response-dr/demand- flexibility-rulemaking
11 One HVAC contractor mentioned that equipment brand alone may contribute to a +/ -%5 variation in the total bid cost.
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include equipment, labor, permit fees, and required HERS testing. Additional details of the measures can be found in Appendix Section Error! Reference source not found..
All measures are evaluated assuming they are not otherwise required by Title 24. For example, duct sealing is required by code whenever HVAC equipment is altered. For this analysis duct sealing was evaluated for those projects where it is not already triggered by code (i.e., no changes to the heating or cooling equipment). Where appropriate, measure requirements align with those defined in Title 24. In some cases, cost-effective measures were identified that exceed Title 24 requirements, such as attic insulation, cool roofs, and duct sealing.
2.2.1 Building Envelope & Duct Measures
The following are descriptions of each of the efficiency upgrade measures applied in this analysis.
Attic Insulation: Add attic insulation in buildings with vented attic spaces to meet either R-38 or R-49. The pre-1978 vintage assumes an existing condition of R-11, the 1978-1991 vintage assumes an existing condition of R-19, and the 1992-2010 vintage assumes R-30 as the existing insulation level. For pre-1978 vintage homes this measure was also evaluated to include air sealing of the attic. A 14% leakage reduction was modeled such that 15 ACH50 was reduced to 12.9 ACH50 in this measure. The costs for this measure include removing existing insulation .
Air Sealing and Weather-stripping: Apply air sealing practices throughout all accessible areas of the building. For this study, it was assumed that older vintage homes would be leakier than newer buildings and that approximately 30 percent improvement in air leakage is achievable through air sealing of all accessible areas. For modeling purposes, it was assumed that air sealing can reduce infiltration levels from 15 to ten air changes per hour at 50 Pascals pressure difference (ACH50) in the oldest vintages (pre-1978), to ten to seven ACH50 for the 1978-1991 vintage, and seven to five ACH50 in the 1992-2010 vintage.
Cool Roof: For steep slope roofs, install a roofing product rated by the Cool Roof Rating Council (CRRC) with an aged solar reflectance of 0.20 or 0.25 and thermal emittance of 0.75 or higher. This measure only applies to buildings that are installing a new roof as part of the scope of the remodel; the cost and energy savings associated with this upgrade reflects the incremental step between a standard roofing product with one that is CRRC rated with an aged solar reflectance of 0.20 or 0.25. This is similar to cool roof requirements in 2022 Title 24 Section 150.2(b)1Ii but assumes a higher solar reflectance.
Radiant Barrier: Add radiant barrier to any existing home vintage. This measure only applies to buildings that are installing a new roof as part of the scope of the remodel; the cost and energy savings associated with this upgrade reflects the incremental step between a standard roofing product with one that includes a laminated radiant barrier.
Raised Floor Insulation: In existing homes with raised floors and no insulation (pre-1978 and 1978-1991 vintages), add R-19 insulation. An upgraded R-30 floor insulation, assuming no current insulation, was evaluated in the pre-1978 and 1978-1991 vintages.
Wall Insulation: Blow-in R-13 wall insulation in existing homes without wall insulation (pre-1978 vintages).
Window Replacement: Replace existing windows with a non-metal dual-pane product, which has a U-factor equal to
0.28 Btu/hour-ft
2-°F or lower and a Solar Heat Gain Coefficient (SHGC) equal to 0.23 or lower, except in heating dominated climates (Climate Zones 1, 3, 5, and 16) where an SHGC of 0.35 was evaluated.
Duct Sealing, New Ducts, and Duct Insulation: Air seal all ductwork to meet the requirements of the 2022 Title 24, Part 6 Section 150.2(b)1E. For this analysis, final duct leakage values of ten percent (proposed revised leakage rate for 2022 Title 24) was evaluated. The pre-1978 and 1978-1992 vintages assume leaky existing ducts (25-30% leakage).
The 1992-2010 vintage assumes moderately leaky existing ducts (15-20% leakage).
Replacing existing ductwork with entirely new ductwork to meet Sections 150.2(b)1Di and 150.2(b)1Diia of the 2022 Title 24 was also evaluated. This assumed new ducts meet 5% duct leakage and the option of R-6 and R-8 duct insulation in all climate zones.
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Table 3 summarizes the cost assumptions for the building envelope and HVAC duct improvement measures evaluated.
All the measures in Table 3 assume a 30-year effective useful life.
Table 3. Measure Cost Assumptions – Efficiency & Duct Measures Measure Performance Level
Incremental Cost –
Single Family Building
Pre 1978 1978 – 1991 1992 - 2010
Wall Insulation R-13 $2,950 N/A N/A
Raised Floor
Insulation
R-19 $3,633 $3,633 N/A
R-30 $4,113 $4,113 $4,113
Attic Insulation
R-38 $6,762 $2,555 $1,781
R-49 $7,446 $3,612 $1,827
Air Sealing
10 ACH50 $4,684 N/A N/A
7 ACH50 N/A $4,684 N/A
5 ACH50 N/A N/A $4,684
Cool Roof
0.25 Aged Solar Reflectance
CZs 1-3,5-7,16 $2,407 $2,407 $2,407
0.25 Aged Solar Reflectance
CZs 4, 8-15 $1,203 $1,203 $1,203
Window
U-factor/SHGC
0.28 U-factor. 0.23 SHGC in
CZs 2,4,6-15. $11,463 $11,463 $11,463
0.28 U-factor. 0.35 SHGC in
CZs 1,3,5,26 $11,871 $11,871 $11,871
Radiant Barrier Add Radiant Barrier $893 $893 $893
Duct Sealing 10% nominal airflow $2,590 $2,590 $1,400
All New Duct
System
R-6 ducts;
5% duct leakage $4,808 $4,808 $4,808
R-8 ducts;
5% duct leakage $6,311 $6,311 $6,311
2.2.2 PV Measures
Installation of on-site PV is required in the 2022 Title 24 code for new construction homes, but there are no PV requirements for additions or alterations to existing buildings. PV was evaluated in CBECC-Res according to the California Flexible Installation (CFI) 1 assumptions and 98% solar access. To meet CFI eligibility, the requirements of 2022 Reference Appendices JA11.2.2 (California Energy Commission, 2021b) must be met. A 3 kW PV system was modeled both as a standalone measure as well as coupled with heat pump installations .
The costs for installing PV are summarized in Table 4. They include the first cost to purchase and install the system, future inverter replacement costs, and annual maintenance costs. Upfront solar PV system costs are estimated from the contractor surveys to be $4.58/WDC and are reduced by 30 percent to account for the federal income Residential Clean Energy Credit. The solar panels are estimated to have an effective useful life of 30 years and the inverter 25 years. The inverter replacement cost of $7,000 (future value) is also from the contractor surveys. System maintenance costs are taken from the 2019 PV CASE Report (California Energy Commission, 2017) and are assumed to be California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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$0.31/WDC present value. These costs do not include costs associated with electrical panel upgrades, which will be necessary in some instances.
Table 4. Measure Descriptions & Cost Assumptions – PV
Measure Performance
Level
Incremental Cost
Pre 1978 1978 – 1991 1992 - 2010
PV 3 kW $9,608
2.2.3 Equipment Fuel Substitution Measures – Heat Pump Equipment The fuel substitution measures are evaluated as replacements at the end of the life of the existing equipment. This means the baseline compared against is usually a like-for-like change-out of the natural gas equipment, and the upgrade is a heat pump.
For most of the space heating and water heating cases, costs for electrical service panel upgrades are not included as it is assumed many existing homes have the service capacity to support converting one appliance from gas to electric.
For homes with existing air conditioners, any incremental electric capacity necessary to support a heat pump space heater is marginal. The same applies for homes with existing electric resistance equipment. Section 3.2.4 presents the impacts for select cases where an upgrade to the electric panel is required.
Heat Pump Space Heating
All the heat pump space heater (HPSH) measures are described below. All were evaluated with HERS verified refrigerant charge aligned with the proposed code requirements for the 2025 Title 24 code. Dual fuel heat pumps (DFHPs) were controlled to lockout furnace operation above 35°F.
DFHP (Existing Furnace): Replace existing ducted air conditioner (AC) with an electric heat pump and install controls to operate the heat pump to use the existing gas furnace for backup heat. 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).
DFHP (New Furnace): Replace existing ducted AC and natural gas furnace with an electric heat pump and new gas furnace plus controls to operate the heat pump and use the new gas furnace for backup heat. A minimum federal efficiency (14.3 SEER2, 11.7 EER2, 7.5 HSPF2) heat pump and furnace (80 AFUE) were evaluated to replace existing equipment. Savings are compared to a new ducted AC and natural gas furnace (14.3 SEER2, 11.7 EER2, 80 AFUE).
Heat Pump Space Heater: Replace existing ducted AC and natural gas furnace with an electric heat pump. Minimum federal efficiency (14.3 SEER2, 11.7 EER2, 7.5 HSPF2) and 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).
Ducted Mini-Split Heat Pump (MSHP): Replace existing ducted AC and natural gas furnace with a ducted high efficiency MSHP (16.5 SEER2, 12.48 EER2, 9.5 HSPF2). Savings are compared to a new ducted AC and natural gas furnace (14.3 SEER2, 11.7 EER2, 80 AFUE).
Ductless MSHP: In a home without AC, replace existing wall furnace with a ductless MSHP. A standard efficiency unit meeting minimum federal efficiency standards (14.3 SEER2, 11.7 EER2, 7.5 HSPF2) was evaluated by modeling the variable capacity heat pump (VCHP) compliance credit in CBECC-Res. A premium, higher efficiency upgrade was also California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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evaluated using CBECC-Res’ detailed VCHP model12 by simulating the performance of a representative high efficiency product (14.3 SEER2, 11.7 EER2, 7.5 HSPF2). Savings are compared to a new natural gas wall furnace with fan distribution (75% AFUE) and window AC (9 CEER).
Over the 30-year analysis period, certain changes are assumed when the equipment is replaced that impact both lifetime costs and energy use. Table 5 presents the lifetime scenario for the DFHP (existing furnace) measure. 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 AFU E
13. 5 years later the air conditioner reaches the end of its life and is replaced with a new air conditioner.
For the DFHP upgrade case, after 10 years when the furnace fails it’s expected that the furnace will be 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 would be replaced with a new aftermarket unit and would operate another 5 years until the heat pump fails and is replaced with a new heat pump and air handler.
The other ducted heat pump cases similarly apply a 95 AFUE furnace in the baseline when the furnace reaches its EUL after 20 years.
Table 5. Lifetime Analysis Replacement Assumptions for DFHP (Existing Furnace) Scenario Year Baseline Upgrade
0 AC fails, install new AC,
keep existing furnace
AC fails, install new HP,
keep existing furnace
10 Furnace fails, install new
95AFUE furnace
Furnace fails, replace fan
motor
15 AC fails, install new AC HP fails, install new HP
and air handler
Costs were applied based on the system capacity from heating and cooling load calculations in CBECC -Res as presented in Table 6. Air conditioner nominal capacity was calculated as the CBECC-Res cooling load, rounded up to the nearest half ton. Heat pump nominal capacity was calculated as the maximum of either the CBECC -Res heating or cooling load, rounded up to the nearest half ton. In both cases a minimum capacity of 1.5- ton was applied as this represents the typical smallest available split system heat pump equipment. Load calculations demonstrated that Climate Zones 2 - 15 were cooling-dominated while Climate Zones 1 and 16 were heating-dominated. In the heating dominated climate zones the heat pump needed to be upsized relative to an air conditioner that only provides cooling. 12 The detailed VCHP option allows for the user to input detailed specifications based on the published National Energy Efficiency Partnership (NEEP) manufacturer specific performance data. It is not currently available for compliance analysis.
13 https://www.energy.gov/articles/doe-finalizes-energy-efficiency-standards-residential-furnaces-save-americans-15- billion#:~:text=These%20furnace%20efficiency%20standards%20were,heat%20for%20the%20living%20space.
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Table 6. 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
Table 7 presents estimated first and lifetime costs for the various ducted 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 8 presents estimated first and lifetime costs for the ductless baseline and 2 heat pump scenarios, also for 4-ton heat pump equipment. EULs are based on 20 years for the gas wall furnace, 10 years for the window AC, and 15 years for the heat pump.
14 14 The gas wall furnace and heat pump EULs were based on DEER (California Public Utilities Commission, 2021b) .
Gas wall furnace lifetime was assumed to be the same as for central gas furnace equipment. Room air conditioner EUL was based on the DOE’s latest rulemaking for room air conditioned (Department of Energy, 2023) . DOE determined an average lifetime of 9.3 years, which was rounded up to 10 years for this analysis.
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Table 7. Ducted HVAC Measure Cost Assumptions – 4-Ton Electric Replacements Case AC + Coil
Gas
Furnace
/AC
DFHP
(Existing
Furnace)
DFHP (New
Furnace)
Min. Eff.
Heat Pump
High Eff.
Heat
Pump
Ducted
MSHP
Base Case - - AC + Coil
Gas
Furnace
/AC
Gas
Furnace
/AC
Gas
Furnace
/AC
Gas
Furnace
/AC
First Cost $10,402 $16,653 $12,362 $20,676 $17,825 $20,802 $18,075 Replacement Cost
(Future Value) $19,365 $19,365 $19,025 $19,025 $16,825 $19,802 $18,075 Replacement Cost
(Present Value) $13,346 $11,639 $12,334 $12,897 $10,800 $12,710 $11,601 Remaining Value
at Year 30 $0 ($1,846) $0 ($1,846) $0 $0 $0
Total Lifecycle
Cost $23,748 $26,446 $24,696 $31,727 $28,625 $33,512 $29,676 Incremental Cost - - $948 $5,281 $2,179 $7,066 $3,230
Table 8. Non-Ducted HVAC Measure Cost Assumptions – 4-Ton Electric Replacements Wall Furnace
+ Window AC
Min. Eff.
Ductless
MSHP
High Eff.
Ductless
MSHP
First Cost $4,075 $17,412 $21,342
Replacement Cost (Future Value) $4,075 $17,412 $21,342
Replacement Cost (Present Value) $3,365 $11,176 $13,698 Remaining Value at Year 30 ($532) $0 $0
Total Lifecycle Cost $6,908 $28,588 $35,040
Incremental Cost - $21,680 $28,132
Heat Pump Water Heating:
The heat pump water heater (HPWH) measures are described below, and costs are presented in Table 9 and Table
10. The most typical scenario in California is a home with existing natural gas storage tank water heaters. However, there are also many existing homes with existing electric resistance storage tank water heaters and this work considers both baselines. This analysis evaluates the following 65-gallon replacement HPWHs:
1. HPWH that meets the federal minimum efficiency requirements of UEF 2.0
2. HPWH that meets the Northwest Energy Efficiency Alliance (NEEA) 15 Tier 3 rating (3.45 UEF)
3. HPWH that meets the NEEA Tier 4 rating and that has demand response (DR) or load shifting control capability (4.02 UEF)
4. 120V HPWH that meets the NEEA Tier 3 rating (3.3 UEF). 15 Based on operational challenges experienced in the past, NEEA established rating test criteria to ensure newly installed HPWHs perform adequately, especially in colder climates. The NEEA rating requires an Energy Factor equal to the ENERGY STAR® performance level and includes requirements regarding noise and prioritizing heat pump use over supplemental electric resistance heating.
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Cost Effectiveness Analysis: Existing Single Family Building Upgrades 19 Methodology and Assumptions
The four cases above were evaluated with the HPWH located within an attached garage. Additionally, three separate cases for the federal minimum efficiency HPWH were analyzed to consider the impacts of location on performance and cost-effectiveness. These locations included the following:
1. Exterior closet.
2. Interior closet, no ducting.
3. Interior closet, ducted to the outside.
Additional costs for providing electrical wiring to these locations and for providing ductwork were included. Savings are compared to a new 50-gallon natural gas storage water heater (UEF 0.63) or a new 50-gallon electric water heater (UEF 0.92).
For this analysis, a HPWH that just meets the federal minimum efficiency standards of close to 2.0 Uniform Energy Factor (UEF) was evaluated in order to satisfy preemption requirements. However, the Reach Codes Team is not aware of any 2.0 UEF products that are available on the market. The lowest UEF reported for certified products in the Northwest Energy Efficiency Alliance (NEEA)
16 database is 2.73. In fact, of the four certification tiers offered by NEEA for high efficiency HPWHs, those meeting Tier 3 or Tier 4 are the dominant product s on the market today. According to NEEA all major HPWH manufacturers are represented in NEEA’s qualified product list 17 and there are fewer than 10 integrated products certified as Tier 1 or Tier 2, all of which have UEFs greater than 3.0. 18 Therefore, in this analysis, we refer to the NEEA rated HPWH as the “market standard” HPWH.
The HPWH costs for the 120V and NEEA certified units are based on a larger (60 or 65 gallon) HPWH, as most contractors are upsizing the HPWH tank size relative to an equal volume, but higher capacity gas storage water heater.
Costs include all material and installation labor including providing a new 240 V electrical service to the water heater location (not needed for the 120V product). Water heating equipment lifetimes are based on DOE’s recent water heater rulemaking (Department of Energy, 2022) and assume 15-year EULs for both the baseline water heaters and the HPWHs.
19 Future replacement costs for 240V HPWHs do not include any initial costs associated with 240V electrical service, condensate disposal, etc.
Table 9. Water Heating Measure Cost Assumptions – Existing Gas Gas
Storage
Water
Heater
240V
Fed.
Min.
HPWH
240V
Market
Std. NEEA
HPWH
240V
Market
Std. NEEA
HPWH +
DR
120V
Market
Std. NEEA
HPWH
240V Fed.
Min.
HPWH,
Exterior
Closet
240V Fed.
Min. HPWH,
Interior
Closet, Not
Ducted
240V Fed.
Min. HPWH,
Interior
Closet,
Ducted
First Cost $2,951 $7,283 $8,144 $8,144 $5,844 $7,702 $7,363 $8,442 Replacement Cost
(Future Value) $2,951 $6,413 $7,274 $7,274 $5,101 $6,413 $6,413 $6,413 Replacement Cost
(Present Value) $1,894 $4,116 $4,669 $4,669 $3,274 $4,116 $4,116 $4,116 Total Lifecycle Cost $4,845 $11,399 $12,813 $12,813 $9,118 $11,818 $11,479 $12,558 Incremental Cost - $6,554 $7,968 $7,968 $4,273 $6,973 $6,634 $7,713 16 Based on operational challenges experienced in the past, NEEA established rating test criteria to ensure newly installed HPWHs perform adequately, especially in colder climates. The NEEA rating requires products comply with ENERGY STAR and includes requirements regarding noise and prioritizing heat pump use over supplemental electric resistance heating.
17 https://neea.org/success-stories/heat-pump-water-heaters 18 As of 12/21/23: https://neea.org/img/documents/residential-unitary-HPWH-qualified-products-list.pdf 19 The recent DOE rulemaking references a lifetime of 14 years for gas storage water heaters and 14.8 years for electric storage water heaters. 15 years for each was used in this analysis for both types for simplification.
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Cost Effectiveness Analysis: Existing Single Family Building Upgrades 20 Methodology and Assumptions
Table 10 presents similar costs to Table 9, except that the costs assume replacement of an existing 50-gallon electric storage water heater and does not include the 240 V electrical service cost.
Table 10. Water Heating Measure Cost Assumptions – Existing Electric Resistance Electric
Storage
Water
Heater
240V
Fed. Min.
HPWH
240V
Market
Std. NEEA
HPWH
240V
Market
Std. NEEA
HPWH +
DR
120V
Market
Std. NEEA
HPWH
240V Fed.
Min.
HPWH,
Exterior
Closet
240V Fed.
Min. HPWH,
Interior
Closet, Not
Ducted
240V Fed.
Min. HPWH,
Interior
Closet,
Ducted
First Cost $2,583 $6,413 $7,274 $7,274 $5,101 $6,413 $6,413 $7,492 Replacement Cost
(Future Value)
$2,583 $6,413 $7,274 $7,274 $5,101 $6,413 $6,413 $6,413 Replacement Cost
(Present Value)
$1,658 $4,116 $4,669 $4,669 $3,274 $4,116 $4,116 $4,116 Total Lifecycle Cost $4,241 $10,529 $11,943 $11,943 $8,375 $10,529 $10,529 $11,608 Incremental Cost - $6,288 $7,702 $7,702 $4,134 $6,288 $6,288 $7,367 California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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3 Results
The primary objective of the evaluation is to identify cost-effective energy upgrade measures and packages for existing single family buildings, to support the design of local ordinances requiring upgrades, which may be triggered by different events, such as at the time of a significant remodel or at burnout of mechanical equipment. In this report, the 1992-2010 vintage is shown for the equipment measures because it is the most conservative case (lowest loads) , while the pre-1978 vintage is shown for the envelope and duct measures because some of those measures only apply to the pre-1978 vintage. 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/.
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3.1 Cost-Effectiveness Results
The extensive analysis for this type of report leads to an overwhelming number of scenarios including different base cases, house vintages, replacement options, and climate zones. To simplify the reporting, the Statewide Reach Codes Team has relied on graphical representation of select key cases indicating high level measure cost effectiveness from either an On-Bill perspective, an LSC perspective, both metrics, or neither. Figure 1 through Figure 13 present this reduced set of results of the LSC and On-Bill cost-effectiveness conclusions across the 16 climate zones. In the cases where there are multiple utilities serving a single climate zone, an asterisk “*” label is added to separately show the alternate utility cases. These graphs provide a general sense of the findings. 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/.
3.1.1 HPSH Measures
Figure 1 through Figure 5 show the cost-effectiveness of space heating equipment replacement measures for the 1992-2010 vintage including the following cases. The 1992-2010 vintage results are presented here as this is the most conservative scenario for HPSH measures. In general, where a HPSH measure is cost -effective for a new home it was also found to be cost-effective for older homes.
• Dual fuel heat pump with existing furnace as backup.
• Standard efficiency ducted central heat pump replacement. • High efficiency ducted central heat pump replacement. • Ducted mini-split heat pump replacement.
• Standard efficiency ducted central heat pump replacement with 3kW PV system.
Figure 1: DFHP with Existing Furnace Figure 2: Standard Efficiency HPSH California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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Figure 3: High Efficiency HPSH Figure 4: Ducted MSHP
Figure 5: HPSH + PV
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3.1.2 HPWH Measures
Figure 6 through Table 11 show the cost-effectiveness of water heater measures for the 1992-2010 vintage including the following cases. HPWH energy savings and LSC cost-effectiveness is not sensitive to home vintage but rather depends on the magnitude of hot water loads, which are typically driven by the number of occupants. On-Bill cost- effectiveness does vary slightly by vintage due to the impact of the electrification tariff relative to the load profile of the existing home. The impact is largest for the HPWH + PV case where On-Bill cost-effectiveness improves for older homes or homes with overall higher energy use resulting in less exports to the grid for a fixed size PV system. • 240V federal minimum HPWH
• 240V market standard NEEA HPWH
• 120V market standard NEEA HPWH
• 240V federal minimum HPWH with 3kW PV
Figure 6: 240V Federal Minimum HPWH Figure 7: 240V Market Standard NEEA HPWH Figure 8: 120V Market Standard NEEA HPWH Figure 9: 240V Federal Minimum HPWH + PV California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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• Envelope and Duct Measures
Figure 10 through Figure 13 show the cost-effectiveness results of envelope and duct measures for the pre-1978 vintage including the following measures. The pre-1978 vintage is presented as representing the most favorable existing conditions for cost-effective upgrades. Newer homes with higher performing envelope may still benefit from these types of upgrade measures, but cost-effectiveness is reduced. Some measures, like R-13 wall insulation, aren’t applicable to newer homes which would have been constructed originally with insulated walls. • New R-6 ducts
• 10% duct leakage
• R-13 wall insulation
• R-49 attic insulation
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Figure 10: R-6 Ducts
Figure 11: 10% Duct Leakage
Figure 12: R-13 Wall Insulation Figure 13: R-49 Attic Insulation
3.2 Climate Zone Case Studies
To better understand the details of the results, a few climate zones were selected to provide a more detailed presentation of cost-effectiveness results. Section 3.2.1 through 3.2.3 show the first-year incremental cost, first-year utility savings, and NPV for a variety of cases. Section 3.2.4 shows the sensitivity of the cost effectiveness results due to varying utility escalation rates, the impact of CARE rates, future equipment cost assumptions, and the need for electrical panel upgrades. The climate zones were selected to be representative of areas of significant reach code activity. Please refer to the Cost-Effectiveness Explorer (Statewide Reach Codes, 2023) or the source dataset for the full analysis.
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3.2.1 HPSH Cost-Effectiveness
Cost-effectiveness of heat pump space heating measures for Climate Zones 12 and 16 is summarized in Table 11 and Table 12 below. In Climate Zone 12, HPSH measures are cost-effective based on LSC in all cases except the ductless MSHP cases and are cost-effective On-Bill with SMUD rates in all cases except the DFHP case with a new furnace and the ductless MSHP cases. These measures are cost-effective On-Bill with PGE for the DFHP with an existing furnace and ducted MSHP measures. Climate Zone 16 provides an example of HPSH cost-effectiveness in a cold climate where almost all HPSH measures are cost effective based on LSC but not cost-effective On-Bill.
Table 11. HPSH CZ 12 [1992-2010]
Measure
First
Incremental
Cost
2025 LSC
NPV
PGE SMUD
First-year
Utility
Savings
On-Bill
NPV
First-year
Utility
Savings
On-Bill
NPV
DFHP Existing Furnace $1,960 $7,093 ($19) $1,633 $247 $7,693 DFHP New Furnace $4,023 $3,915 ($34) ($3,134) $234 $2,979 HPSH (Std Efficiency) $1,172 $6,990 ($147) ($2,151) $246 $6,812 HPSH (High Efficiency) $4,149 $5,366 $13 ($3,368) $300 $3,160 Ducted MSHP $1,421 $9,136 $10 $378 $298 $6,951
Ductless MSHP (Std Efficiency) $13,336 ($9,175) $30 ($18,039) $276 ($12,428) Ductless MSHP (High Efficiency) $17,266 ($6,753) $409 ($15,853) $423 ($15,532) HPSH + PV $10,780 $5,289 $452 ($59) $885 $9,821
Table 12. HPSH CZ 16 [1992-2010]
Measure
First
Incremental
Cost
2025 LSC
NPV
PGE
First-year
Utility Savings On-Bill NPV
DFHP Existing Furnace $2,397 $7,289 ($116) ($1,891)
DFHP New Furnace $4,757 $2,457 ($133) ($6,322)
HPSH (Std Efficiency) $2,725 $11,142 ($480) ($8,532)
HPSH (High Efficiency) $5,701 $12,099 ($204) ($7,125)
Ducted MSHP $2,155 $16,554 ($221) ($2,853)
Ductless MSHP (Std Efficiency) $13,336 ($134) ($170) ($19,742) Ductless MSHP (High Efficiency) $17,266 $9,397 $539 ($10,031) HPSH + PV $12,333 $10,640 $316 ($1,949)
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3.2.2 HPWH Cost-Effectiveness
Cost-effectiveness of heat pump water heating measures for Climate Zones 12 and 16 is summarized in Table 13 and Table 14 below. This sensitivity study looks at a wider range of HPWH tank locations and whether or not the unit has ducting for supply and exhaust air. All the HPWH measures in Climate Zones 12 and 16 are cost effective based on LSC.
Table 13. HPWH CZ 12 [1992-2010]
Measure
First
Incremental
Cost
2025 LSC
NPV
PGE SMUD
First-Year
Utility
Savings
On-Bill
NPV
First-Year
Utility
Savings
On-Bill
NPV
240V Fed. Min. HPWH $4,332 $3,536 ($213) ($8,738) $191 $477 240V Market Std. NEEA
HPWH $5,193 $4,304 ($82) ($7,164) $230 ($56)
240V Market Std. NEEA
HPWH + DR $5,193 $5,536 ($21) ($5,773) $248 $362
120V Market Std. NEEA
HPWH $2,893 $9,730 ($2) ($1,651) $254 $4,203
240V Fed. Min. HPWH
(Exterior Closet) $4,751 $2,834 ($224) ($9,431) $186 ($78) 240V Fed. Min. HPWH
(Interior Closet) $4,413 $3,123 ($71) ($6,138) $188 ($235) 240V Fed. Min. HPWH
(Interior Closet, ducted) $5,492 $3,359 ($202) ($9,505) $205 ($231) 240V Fed. Min. HPWH + PV $13,940 $3,567 $577 ($2,300) $831 $3,486 Table 14. HPWH CZ 16 [1992-2010]
Measure
First
Incremental
Cost
2025 LSC
NPV
PGE
First-Year Utility
Savings On-Bill NPV
240V Fed. Min. HPWH $4,332 $4,186 ($250) ($9,307)
240V Market Std. NEEA HPWH $5,193 $4,088 ($160) ($8,652) 240V Market Std. NEEA HPWH + DR $5,193 $5,653 ($79) ($6,804 120V Market Std. NEEA HPWH $2,893 $10,646 ($13) ($1,602) 240V Fed. Min. HPWH (Exterior Closet) $4,751 $3,317 ($268) ($10,154) 240V Fed. Min. HPWH (Interior Closet) $4,413 $5,004 ($18) ($4,690) 240V Fed. Min. HPWH (Interior Closet,
ducted) $5,492 $4,857 ($202) ($9,174)
240V Fed. Min. HPWH + PV $13,940 $5,049 $620 ($1,043)
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3.2.3 Envelope & Duct Improvement Cost-Effectiveness
Cost-effectiveness of envelope and duct measures for Climate Zones 3, 10, and 12 is summarized in Table 15 through Table 17.
Table 15. Envelope and Duct Measures CZ 3 [Pre-1978]
Measure
First
Incremental
Cost
2025 LSC
NPV
PG&E
First-year Utility
Savings On-Bill NPV
R-6 Ducts $4,808 $2,851 $188 $463
R-8 Ducts $6,311 $1,747 $198 ($776)
10% Duct Sealing $2,590 $1,956 $104 $397
R-13 Wall Insulation $2,950 $3,476 $144 $1,221
R-38 Attic Insulation $6,762 ($1,567) $127 ($3,178)
R-49 Attic Insulation $7,446 ($1,768) $139 ($3,520)
R-30 Raised Floor Insulation $4,113 $9,008 $224 $2,975
Cool Roof (0.20 Ref) $893 ($2,419) ($18) ($1,811)
Table 16. Envelope and Duct Measures CZ 10 [Pre-1978]
Measure
First
Incremental
Cost
2025 LSC
NPV
SCE/SCG SDGE
First-year
Utility
Savings
On-Bill
NPV
First-
year
Utility
Savings
On-Bill
NPV
R-6 Ducts $4,808 $7,463 $783 $13,168 $1,100 $22,155
R-8 Ducts $6,311 $6,326 $800 $12,076 $1,125 $21,268
10% Duct Sealing $2,590 $3,438 $370 $5,969 $518 $10,166 R-13 Wall Insulation $2,950 $1,795 $179 $1,476 $250 $3,494 R-38 Attic Insulation $6,762 $664 $416 $2,951 $582 $7,654 R-49 Attic Insulation $7,446 $796 $467 $3,435 $655 $8.756 R-30 Raised Floor Insulation $4,113 ($999) ($29) ($4,235) ($46) ($4,687) Cool Roof (0.20 Ref) $893 $428 $174 $2,647 $246 $4,656
Table 17. Envelope and Duct Measures CZ 12 [Pre-1978]
Measure
First
Incremental
Cost
2025 LSC
NPV
PG&E SMUD
First-year
Utility
Savings
On-Bill
NPV
First-
year
Utility
Savings
On-Bill
NPV
R-6 Ducts $4,808 $11,609 $804 $14,727 $413 $5,816
R-8 Ducts $6,311 $10,722 $828 $13,849 $427 $4,711
10% Duct Sealing $2,590 $6,418 $397 $7,280 $222 $3,281
R-13 Wall Insulation $2,950 $5,774 $262 $4,054 $187 $2,342 R-38 Attic Insulation $6,762 $3,727 $499 $5,461 $261 $19 R-49 Attic Insulation $7,446 $4,092 $552 $6,063 $288 $33 R-30 Raised Floor Insulation $4,113 $5,245 $27 ($1,176) $156 $1,175 Cool Roof (0.20 Ref) $893 ($354) $154 $2,123 $44 ($386) California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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3.2.4 Sensitivities
Table 18 shows the On-Bill NPV results of Climate Zone 12 with PG&E utility rates and the impacts of escalation rates, and CARE rates. The “Standard Results” in Table 18 assumes the escalation rates used in the analysis presented elsewhere in this report. Table 19 shows the impact of electrical panel upgrades. The “Standard Results” in Table 19 does not assume a panel upgrade is required.
Table 18. Sensitivity Analysis Results for On-Bill NPV Cost-Effectiveness in Climate Zone 12, PG&E Measure Vintage Standard
Results
2025 LSC
Escalation CARE
DFHP Existing Furnace 1992-2010 $1,063 $8,443 $1,884
DFHP New Furnace 1992-2010 ($6,770) $383 ($5,846)
HPSH (Std Efficiency) 1992-2010 ($2,151) $6,011 ($220)
HPSH (High Efficiency) 1992-2010 ($3,368) $4,987 ($2,721) Ducted MSHP 1992-2010 $378 $8,729 $1,057
Ductless MSHP (Std Efficiency) 1992-2010 ($18,039) ($10,732) ($17,623) Ductless MSHP (High Efficiency) 1992-2010 ($15,853) ($8,091) ($18,460) HPSH + PV 1992-2010 ($59) $8,822 ($1,255)
240V Fed. Min. HPWH 1992-2010 ($8,738) ($2,433) ($6,448) 240V Market Std. NEEA HPWH 1992-2010 ($7,164) ($694) ($5,918) 240V Market Std. NEEA HPWH + DR 1992-2010 ($5,773) $770 (5,014) 120V Market Std. NEEA HPWH 1992-2010 ($1,651) $4,930 (1,038) 240V Fed. Min. HPWH (Exterior Closet) 1992-2010 ($9,431) ($3,184) ($7,055) 240V Fed. Min. HPWH (Interior Closet) 1992-2010 ($6,138) ($1,000) ($5,098) 240V Fed. Min. HPWH (Interior Closet, ducted) 1992-2010 ($9,505) ($2,836) ($7,271) 240V Fed. Min. HPWH + PV 1992-2010 ($2,300) $4,952 ($4,858) R-6 Ducts Pre-1978 $14,727 $18,685 $8,592
R-8 Ducts Pre-1978 $13,849 $17,990 $7,532
10% Duct Sealing Pre-1978 $7,280 $9,752 $4,294
R-13 Wall Insulation Pre-1978 $4,054 $6,898 $2,196
R-38 Attic Insulation Pre-1978 $5,461 $8,126 $1,668
R-49 Attic Insulation Pre-1978 $6,063 $8,978 $1,864
R-30 Raised Floor Insulation Pre-1978 ($1,776) $2,468 ($1,602) Cool Roof (0.20 Ref) Pre-1978 $2,123 $1,848 $851
Table 19. Electric Panel Upgrade Sensitivity for CZ 12 [1992-2010] Measure Standard Results Electric Panel Upgrade
On-Bill NPV LSC NPV On-Bill NPV LSC NPV
HPSH (Std Efficiency) ($2,151) $6,990 ($4,931) $4,210
240V Fed. Min. HPWH ($8,738) $3,536 ($11,624) $756
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3.3 Gas Pathways for Heat Pump Replacements
Many jurisdictions are exploring policy options to accelerate the decarbonization of existing homes. A recent Ninth Circuit Court ruling in California Rest. Ass'n v. City of Berkeley 20 invalidated Berkeley’s ordinance banning the installation of gas infrastructure in new construction. The ruling stated that the ordinance effectively banned covered products and was preempted by the Energy Policy and Conservation Act (“EPCA”), 42 U.S.C. § 6297(c). Given the possible impacts of that ruling, the Reach Codes Team analyzed policy options targeting equipment replacements that allow for the installation of either electric or gas-fueled equipment. These packages include gas equipment combined with additional efficiency measures resulting in options that are reasonably energy or LSC cost equivalent, to the extent feasible.
For space heating, the heat pump path is a DFHP (existing furnace).. The gas pathway is a new air conditioner with the following list of efficiency upgrades:
• 400 cfm/ton system airflow (HERS verified).
• 0.35 W/cfm fan efficacy (HERS verified).
• Refrigerant charge verification (HERS verified).
• R-8 ducts, 5% leakage (HERS verified).
• R-49 (from R-30) attic insulation.
• Air sealing of the ceiling from 7 to 6.5 ACH50.
The two pathways are presented in Figure 14 comparing total LSC energy use relative to the existing home for the 1992-2010 vintage. In most climate zones, the DFHP (existing furnace) path results in higher energy savings, in the milder climates the air conditioner path saves marginally more energy. 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 air conditioner as long as the performance measures listed above are met. Note that in this analysis a DFHP (existing furnace) was used; however, a reach code could require a different heat pump measure for the heat pump path. This approach aligns with the CEC’s proposal for the 2025 Title 24 code cycle for heat pump alterations in single family homes (California Energy Commission, 2023).
20 California Rest. Ass'n v. City of Berkeley, 65 F.4th 1045 (9th Cir. 2023) amended by 89 F.4th 1094 (9th Cir. 2024).
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Cost Effectiveness Analysis: Existing Single Family Building Upgrades 32 Results
Figure 14. Heat pump space heater path compared to the air conditioner path.
For water heating, the federal minimum HPWH case was used to develop the package. The HPWH was compared to a new gas storage water heater with a 50% solar thermal backup system.
Figure 15. Heat pump water path compared to gas with solar thermal.
The two pathways are presented in Figure 15 comparing total LSC energy use relative to the existing home for the 1992-2010 vintage. In all climate zones, the heat pump path results in higher energy savings than the gas path. A reach code that establishes requirements when a water heater is replaced could allow for either a HPWH to be installed or a gas water heater in combination with a solar thermal system that meets the solar fraction requirements listed above.
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4 Recommendations and Discussion
This analysis evaluated the feasibility and cost-effectiveness of retrofit measures in California existing homes built before 2010. The Statewide Reach Codes Team used both On-Bill and LSC-based LCC 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. Envelope measures. Improving envelope performance is very cost-effective in many older homes. In addition to reducing utility costs these measures provide many other benefits such as improving occupant comfort and satisfaction and increasing a home’s ability to maintain temperatures during extreme weather events and power outages. Below is a discussion of the results of specific measures. a. Adding attic insulation is cost effective based on both LSC and On-Bill in many climate zones in homes with no more than R-19 existing attic insulation levels. Increasing attic insulation from R-30 to R-49 was still found to be cost-effective based on at least one metric in the colder and hotter climates of Climate Zone 10 (SDG&E territory only) through 16.
b. Insulating existing uninsulated walls is very cost-effective based on both metrics everywhere except Climate Zones 6 and 7 (in Climate Zone 8 it’s only cost-effective based on LSC). c. Adding R-19 or R-30 floor insulation is cost-effective based on LSC in the older two vintages (Pre-1978 and 1978-1991) in all climate zones except Climate Zones 6-10. d. Replacing old single pane windows with new high-performance windows has a very high cost and is typically not done for energy savings alone. However, energy savings are substantial and justify cost- effectiveness of this measure based on at least one metric in Climate Zones 4, 8 through 12 (PG&E territory only), and 13 through 16.
e. At time of roof replacement, a cool roof with an aged solar reflectance of 0.25 was found to be cost- effective in Climate Zones 4, 6 through 12 (PG&E territory only), and 13 through 15. When the roof deck is replaced during a roof replacement, adding a radiant barrier is low cost and provides substantial cooling energy savings to be cost-effective in almost all climate zones and homes.
2. Duct measures: Many older homes have old, leaky duct systems that should be replaced when they reach the end of life, typically 20-30 years. In this case, installing new ducts was found to be cost-effective based on at least one metric (both in most cases) everywhere except mild Climate Zone 7 and Climate Zones 5 and 6 in the 1978-1991 vintage. If duct systems still have remaining life they should be sealed and tested to meet 10% leakage or lower; however, duct upgrades alone were only found to be cost-effective for newer homes in Climate Zones 10 (SDG&E territory only), 11, and 13 through 16. Duct upgrades may be able to be coupled with other measures to reduce the cost.
3. Heat pump space heating: HPSHs were found to be LSC cost-effective in many cases. The DFHP (existing furnace) was LSC cost-effective everywhere except Climate Zone 15. The HPSH was LSC cost-effective everywhere except Climate Zones 8 and 15.
a. Challenges to On-Bill cost-effectiveness include higher first costs and higher first-year utility costs due to higher electricity tariffs relative to gas tariffs. SMUD and CPAU are two exceptions where first year utility costs are lower for heat pumps than for gas equipment. Table 11 shows the impact of utility rates on cost-effectiveness of HPSH where the standard and high efficiency HPSH and the HPSH + PV measures are cost-effective under SMUD but not PG&E. Even with higher first year utility bills, there were some cases that still proved On-Bill cost-effective including the DFHP with an existing furnace in the central valley and northern coastal PG&E territories, the ducted MSHP in the central valley as well as Climate Zone 14 in SDG&E territory, and the HPSH + PV measure in CZ 3-5 (PGE), 7-11, and 12 (SMUD) – 15.
b. The ductless MSHPs, evaluated for homes with existing ductless systems, were only found to be cost- effective based on either metric in Climate Zones 1 and 16. Ductless MSHPs have a high incremental cost because it is a more sophisticated system than the base model of a wall furnace with a window AC unit. However, the ductless MSHP would provide greater comfort benefits if properly installed to California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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Cost Effectiveness Analysis: Existing Single Family Building Upgrades 34 Recommendations and Discussion
directly condition all habitable spaces (as is required under the VCHP compliance credit as evaluated in this study) which may be an incentive for a homeowner to upgrade their system. c. Higher efficiency equipment lowered utility costs in all cases and improved cost-effectiveness in many cases, particularly with a ducted MSHP.
4. Heat pump water heating: All the HPWH measures were LSC cost-effective in all climate zones. Most measures were not On-Bill cost-effective with the exception of the HPWH + PV which was cost-effective On- Bill in CPAU, SMUD, and SDG&E territories in addition to Climate Zones 11, 13, 14, and 15. The HPWH measures share many of the same challenges as the HPSH measures to achieving cost-effectiveness including high first costs and utility rates and assumptions. Table 13 shows the impact of utility rates on cost- effectiveness where some HPWH measures are cost-effective under SMUD utility rates but are not cost- effective anywhere under PG&E rates in Climate Zone 12. a. Various HPWH locations were also explored, however there are some factors outside of cost- effectiveness that should also be considered.
i. HPWHs in the conditioned space can provide benefits such as free cooling during the summer, reduced tank losses, and shorter pipe lengths, and in some cases show improved cost-effectiveness over garage located HPWHs. However, there are various design considerations such as noise, comfort concerns, and condensate removal. Ducting the inlet and exhaust air resolves comfort concerns but adds costs and complexity. Split heat pump water heaters address these concerns, but currently there are limited products on the market and there is a cost premium relative to the packaged products. ii. Since HPWHs extract heat from the air and transfer it to water in the storage tank, they must have adequate ventilation to operate properly. Otherwise, the space cools down over time, impacting the HPWH operating efficiency. This is not a problem with garage installations but needs to be considered for water heaters located in interior or exterior closets. For the 2025 Title 24 code the CEC is proposing that all HPWH installations meet mandatory ventilation requirements (California Energy Commission, 2023).
5. The contractor surveys revealed overall higher heat pump costs than what has been found in previous analyses. This could be due to incentive availability raising demand for heat pumps and thereby increasing the price. This price increase may be temporary and may come down once the market stabilizes. There are also new initiatives to obtain current costs including the TECH Clean California program 21 that publishes heat pump
data and costs; however, at the time of this analysis, the TECH data did not contain incremental costs because it only had the heat pump costs but not the gas base case costs.
6. Table 18 shows how CARE rates and escalation rate assumptions will impact cost -effectiveness. a. Applying CARE rates in the IOU territories has the overall impact to increase utility cost savings for an all-electric building compared to a code compliant mixed fuel building, improving On-Bill cost- effectiveness. This is due to the CARE discount on electricity being higher than that on gas. The reverse occurs with efficiency measures where lower utility rates reduce savings and subsequently reduce cost-effectiveness.
b. If gas tariffs are assumed to increase substantially over time, in-line with the escalation assumption from the 2025 LSC development, cost-effectiveness substantially improves for the heat pump measures over the 30-year analysis period and many cases become cost-effective that were not found to be cost-effective under the CPUC / 2022 TDV escalation scenario. There is much uncertainty surrounding future tariff structures as well as escalation values. While it’s clear that gas rates will increase, how much and how quickly is not known. Future electricity tariff structures are expected to evolve over time, and the CPUC has an active proceeding to adopt an income-graduated fixed charge that benefits low-income customers and supports electrification measures for all customers. 22 The
CPUC will decide in mid-2024 and the new rates are expected to be in place later that year or in 2025. 21 TECH Public Reporting Home Page (techcleanca.com)
22 https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/demand-response-dr/demand- flexibility-rulemaking
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Cost Effectiveness Analysis: Existing Single Family Building Upgrades 35 Recommendations and Discussion
While the anticipated impact of this rate change is lower volumetric electricity rates, the rate design is not finalized. While lower volumetric electricity rates provide many benefits, it also will make building efficiency measures harder to justify as cost-effective due to lower utility bill cost savings.
7. Under NBT, utility cost savings for PV are substantially less than what they were under prior net energy metering rules (NEM 2.0); however, savings are sufficient to be On-Bill cost-effective in all climate zones except Climate Zones 1 through 3 and 5 through 6.
a. Combining a heat pump with PV allows the additional electricity required by the heat pump to be offset by the PV system while also increasing on-site utilization of PV generation rather than exporting the electricity back to the grid at a low rate.
b. While not evaluated in this study, coupling PV with battery systems can be very advantageous under NBT increasing utility cost savings because of improved on-site utilization of PV generation and fewer exports to the grid.
Recommendations:
1. There are various approaches for jurisdictions who are interested in reach codes for existing buildings. Some potential approaches are listed below along with key considerations. a. Prescriptive measures: Non-preempted measures that are found to be cost-effective may be prescriptively required in a reach code. One example of this type or ordinance is a cool roof requirement at time of roof replacement. Another example is requiring specific cost-effective measures for larger remodels, such as high-performance windows when new windows are installed or duct sealing and testing where ducts are in unconditioned space. b. Replacement equipment: This flavor of reach code sets certain requirements at time of equipment replacement. This study evaluated space heating and water heating equipment. Where a heat pump measure was found to be cost-effective based on either LSC or On-Bill, this may serve as the basis of a reach code given the following considerations.
i. Where reach codes reduce energy usage and are not just fuel switching, cost-effectiveness calculations are required and must be based on equipment that does not exceed the federal minimum efficiency requirements.
ii. Where reach codes are established using cost-effectiveness based on LSC, utility bill impacts and the owner’s first cost should also be reviewed and considered. iii. A gas path should also be prescriptively allowed to safely satisfy federal preemption requirements considering the CRA v. Berkeley case.
23 Additional requirements may apply to
the gas path, as described in Section 3.3, as long as the paths are reasonably energy or cost equivalent.
c. “Flexible Path”, minimum energy savings target: This flexible approach establishes a target for required energy savings based on a measure or a set of measures that were found to be cost-effective based on either LSC or On-Bill. A points menu compares various potential upgrades ranging from efficiency, PV, and fuel substitution measures, based on site or source energy savings. The applicant must select upgrades that individually or in combination meet the minimum energy savings target . The measures used to set the target should be non-preempted measures.
2. Equipment replacement ordinances should consider appropriate exceptions for scenarios where it will be challenging to meet the requirements, such as location of the HPWH, total project cost limitations, or the need for service panel upgrades that wouldn’t have been required as part of the proposed scope of work in absence of the reach code.
3. Consider extending relevant proposals made by the CEC for the 2025 Title 24 code (California Energy Commission, 2023) in ordinances that apply under the 2022 Title 24 code, such as the following:
a. Mandatory ventilation requirements for HPWH installations (Section 110.3(c)7). 23 https://www.publichealthlawcenter.org/sites/default/files/2024-01/CRA-v-Berkeley-Ninth-Circuit-Opinion-Jan2024.pdf California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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Cost Effectiveness Analysis: Existing Single Family Building Upgrades 36 Recommendations and Discussion
b. Requirement for HERS verified refrigerant charge verification for heat pumps in all climate zones (Table 150.1-A24).
4. When evaluating reach code strategies, the Reach Codes Team recommends that jurisdictions consider combined benefits of energy efficiency alongside electrification. Efficiency and electrification have symbiotic benefits and are both critical for decarbonization of buildings. As demand on the electric grid is increased through electrification, efficiency can reduce the negative impacts of additional electricity demand on the grid, reducing the need for increased generation and storage capacity, as well as the need to upgrade upstream transmission and distribution equipment.
5. Education and training can play a critical role in ensuring that heat pumps are installed, commissioned, and controlled properly to mitigate grid impacts and maximize occupant satisfaction. Below are select recommended strategies.
a. The Quality Residential HVAC Services Program
25 is an incentive program to train California
contractors in providing quality installation and maintenance while advancing energy -efficient technologies in the residential HVAC industry. Jurisdictions can market this to local contractors to increase the penetration of contractors skilled in heat pump design and installation. b. Educate residents and contractors of available incentives, tax credits, and financing opportunities. c. Educate contractors on code requirements. Energy Code Ace provides free tools, trainings, and resource to help Californians comply with the energy code. Contractors can access interactive compliance forms, fact sheets, and live and recorded trainings, among other things, on the website:
https://energycodeace.com/. Jurisdictions can reach out to Energy Code Ace directly to discuss offerings.
6. Health and safety
a. Combustion Appliance Safety and Indoor Air Quality: Implementation of some of the recommended measures will affect the pressure balance of the home which can subsequently impact the safe operation of existing combustion appliances as well as indoor air quality. Buildings with older gas appliances can present serious health and safety problems which may not be addressed in a remodel if the appliances are not being replaced. It is recommended that the building department require inspection and testing of all combustion appliances located within the pressure boundary of the building after completion of retrofit work that involves air sealing or insulation measures. b. Jurisdictions may consider requiring mechanical ventilation in homes where air sealing has been conducted. In older buildings, outdoor air is typically introduced through leaks in the building envelope.
After air sealing a building, it may be necessary to forcefully bring in fresh outdoor air using supply and/or exhaust fans to minimize potential issues associated with indoor air quality. 24 This requirement does not show up in the Express Terms for alterations in Section 150.2(b)1F , but the Statewide Reach Codes Team expects that it will be added to the next release of the proposed code language in the 45 -day language as it aligns with the proposal made by the Codes and Standards Enhancement Team (Statewide CASE Team, 2023).
25 https://qualityhvac.frontierenergy.com/
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Cost Effectiveness Analysis: Existing Single Family Building Upgrades 37 References
5 References
California Energy Commission. (2017). Rooftop Solar PV System. Measure number: 2019-Res-PV-D Prepared by Energy and Environmental Economics, Inc. Retrieved from https://efiling.energy.ca.gov/getdocument.aspx?tn=221366 California Energy Commission. (2021b). Final Express Terms for the Proposed Revisions to the 2022 Energy Code Reference Appendices. Retrieved from https://efiling.energy.ca.gov/Lists/DocketLog.aspx?docketnumber=21- BSTD-01
California Energy Commission. (2022b). 2022 Reference Appendices for the 202 Building Energy Efficiency Standards.
CEC-400-2022-010-AP. Retrieved from https://www.energy.ca.gov/sites/default/files/2022-08/CEC-400- 2022-010-AP.pdf
California Energy Commission. (2022c, Feb). 2022 Single-Family Residential Alternative Calculation Method Reference Manual. CEC-400-2022-008-CMF-REV. Retrieved from https://www.energy.ca.gov/publications/2022/2022- single-family-residential-alternative-calculation-method-reference-manual California Energy Commission. (2023). 2025 Energy code Hourly Factors. Retrieved from https://www.energy.ca.gov/files/2025-energy-code-hourly-factors California Energy Commission. (2023). Draft 2025 Energy Code Express Terms. Retrieved from https://efiling.energy.ca.gov/GetDocument.aspx?tn=252915&DocumentContentId=88051 California Public Utilities Commission. (2021a). Utility Costs and Affordability of the Grid of the Future: An Evaluation of Electric Costs, Rates, and Equity Issues Pursuant to P.U. Code Section 913.1. Retrieved from https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/office-of-governmental-affairs- division/reports/2021/senate-bill-695-report-2021-and-en-banc-whitepaper_final_04302021.pdf California Public Utilities Commission. (2021b). Database for Energy-Efficient resources (DEER2021 Update). Retrieved April 13, 2021, from http://www.deeresources.com/index.php/deer-versions/deer2021 Department of Energy. (2022). Preliminary Analysis Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment. Retrieved from https://www.regulations.gov/document/EERE-2017-BT-STD-0019-0018 Department of Energy. (2023). Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment: Room Air Conditioners. Retrieved from https://www.regulations.gov/document/EERE-2014-BT-STD-0059-0053 E-CFR. (2020). https://www.ecfr.gov/cgi-
bin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt10.3.431&r=PART&ty=HTM L#se10.3.431_197. Retrieved from Electronic Code of Federal Regulations: https://www.ecfr.gov/cgi- bin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt10.3.431&r=PART&ty=HTM L#se10.3.431_197
Statewide CASE Team. (2023). Residential HVAC Performance. Codes and Standards Enhancement (CASE) Initiative 2025 California Energy Code. Prepared by Frontier Energy. Retrieved from https://title24stakeholders.com/wp-content/uploads/2023/11/Revised_2025_T24_Final-CASE-Report-RES- HVAC-Performance.pdf
Statewide Reach Codes. (2023). Cost Effectiveness Explorer. Retrieved from Cost Effectiveness Explorer:
https://explorer.localenergycodes.com/
Statewide Reach Codes Team. (2021). 2019 Cost-Effectiveness Study: Existing Single Family Residential Buidling Upgrades. Retrieved from https://localenergycodes.com/content/resources California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
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lding Climate Zones
California , 2017
cJ Building Climate Zones
[] County Boundary
SOurc.. C.~omll Ene,gyCOmm-
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 38 Appendices
6 Appendices
6.1 Map of California Climate Zones
Climate zone geographical boundaries are depicted in Figure 16. The map in Figure 16 along with a zip-code search directory is available at: https://ww2.energy.ca.gov/maps/renewable/building_climate_zones.html Figure 16. Map of California climate zones.
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2023 Electric California Climate Credit Sched ule
PG&E
SCE
SDG&E
February or
March
$38.39
$71.00
$60.70
April May June July
Residential Natural Gas California Climate Credit
Aug
In 2023, the 2023 Natura l Gas Califo rn ia Climate Credit will be distributed in February or March instead of April.
Sept Oct
$38.39
$71.00
$60.70
2019 2020 2021 2022 2023 Total Value Received Per Household 2018 -2023 PG&E $30 $25 $27 $25 $48 $52.78 $208
SDG&E $34 $21 $18 $43 $43.40 $162
Southwest Gas $22 $25 $27 $28 $49 $56.35 $207
SoCalGas $50 $26 $22 $44 $50.77 $194
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 39 Appendices
6.2 Utility Rate Schedules
The Reach Codes Team used the CA IOU and POU rate tariffs detailed below to determine the On-Bill savings for each package. The California Climate Credit was applied for both electricity and natural gas service for the IOUs using the 2023 credits shows below.26 The credits were applied to reduce the total calculated annual bill, including any fixed fees or minimum bill amounts.
Electricity rates reflect the most recently approved tariffs. Monthly gas rates were estimated based on recent gas rates (November 2023) and a curve to reflect how natural gas prices fluctuate with seasonal supply and demand. The seasonal curve was estimated from monthly residential tariffs between 2014 and 2023 (between 2017 and 2023 for CPAU). 12-month curves were created from monthly gas rates for each of the ten years (Seven years for CPAU).
These annual curves were then averaged to arrive at an average normalized annual curve. This was conducted separately for baseline and excess energy rates. Costs used in this analysis were then derived by establishing the most recent baseline and excess rate from the latest tariff as a reference point (November 2023), and then using the normalized curve to estimate the cost for the remaining months relative to the reference point rate . 26 https://www.cpuc.ca.gov/industries-and-topics/natural-gas/greenhouse-gas-cap-and-trade-program/california- climate-credit
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6.2.1 Pacific Gas & Electric
The following pages provide details on the PG&E electricity and natural gas tariffs applied in this study. Table 20 describes the baseline territories that were assumed for each climate zone. A net surplus compensation rate of $0.07051/ kWh was applied to any net annual electricity generation based on a one- year average of the rates between December 2022 and November 2023.
Table 20. 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 $/therm was applied on a monthly basis according to the rates shown in Table 21.
These rates are based on applying a normalization curve to the November 2023 tariff based on ten years of historical gas data. Corresponding CARE rates reflect the 20 percent discount per the GL-1 tariff.
Table 21. PG&E Monthly Gas Rate ($/therm)
Month Total Charge
Baseline Excess
January $2.05 $2.43
February $2.08 $2.46
March $1.92 $2.31
April $1.80 $2.20
May $1.77 $2.18
June $1.78 $2.18
July $1.80 $2.20
August $1.85 $2.26
September $1.92 $2.33
October $1.99 $2.40
November $2.06 $2.46
December $2.05 $2.44
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GAS
Baseline Territories and Quantities 11
---
Effective April 1, 2022 - Present
BASELINE QUANTITIES (Therms Per Day Per Dwelling Unit)
Individually Metered
Baseline Summer Winte r Off.Peak
Territories (April-October) (Nov, Feb, Mar)
Effective Apr. 1, 2022 Effective Nov. 1, 2022
p 0.39 1.88
Q 0.56 1.48
R 0.36 1.24
s 0.39 1.38
T 0.56 1.31
V 0.59 1.51
w 0.39 1.14
X 0.49 1.48
y 0.72 2.22
Master Metered
Baseli ne Summer
Territor ies (April-October)
Effective Apr. 1, 2022
p 0.29
Q 0.56
R 0.33
s 0.29
T 0.56
V 0.59
w 0.26
X 0.33
y 0.52
Summer Season: Apr-Oct
Winter Off-Peak : Nov, Feb, Mar
Winter On-Peak : Dec, J an
Advice Letter: 4589-G
Decision 21-11-016
GRC 2020 Ph II [Application 19-11-019]
Filed: Nov 22, 2019
Winter Off.Peak
(Nov, Feb, Mar)
Effective Nov. 1, 202.2
1.01 0.67
0.87 0.61
1.01 1.28
0.71 0.67
1.01 Winter On-Peak
(Dec, Jan)
Effective Dec, 1, 2022
2.19 2.00
1.81 1.94
1.68 1.71
1.68 2.00
2.58 Winter On-Peak
(Dec, Jan)
Effective Dec. 1, 2022
1.13 0.77
1.16 0.65
1.10 1.32
0.87 0.77
1.13 Cost Effectiveness Analysis: Existing Single Family Building Upgrades 41 Appendices
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Gas and
Electric Company·
Revised
Cancelling Revised
Cal. P.V.-C. Sheet No.
Cal. P.V.C. Sheet No.
U 39 Oakland , Ca/ifomia
ELECTRIC SCHEDULIE E-TOU-C Sheet 2
RESIDENTIAL TIME-OF-US E (PEft/K PRICING 4 - Q, p.m. EVERY DAY) RATES:
(Cont'd .)
E-TOU-C TOTAL B UNDLED RATES
Tot al Energy Rates ($ PE!f kWh)
Summer
Total Usage
Baseline Credit (Applied 1o Baseline Usage Only)
Winter
Total Usage
Baseline Credil (Applied 1o Baseline Usage Only)
Delivei:y Minimum Bil Amount ($ per meter per day)
California Climate Cred".rt (per hoosehold. per sem i
annual paymenl ocourring, in the Marcil ' and October
bill cydes)
PEAK
$0.53933 (I)
(S0.08S5 t ) {R)
$0.43662 (I)
($0.08S5 1 ), (R)
$0.37612
($38.39)
OF:F-PEAK
$0.4558Q (I)
($0.08851) ,(R)
S0.40827 (I)
($0.08851) ,(R)
56550-E
5622:Q-'E
Total bundled service charges shown on customE!f's bills are unbundled acoording to the component rates shown bel'ow. Where the defive:ry minimum bill amoun t applies . lhe customer's bill will equal lhe• sum of ( 1) the delivery minimum bill amounl plus (2) for bundled servic:e, the generat ion rate times the number of kWh used. For revenue• accou nting purposes. lne r·evenues from the delivery minimum billl amounl will be assigned lo the Transmiss ion. Transmiss ion Rate Adjustments. Reliability Services, Public Purpose P, ograms , Nuclear Ole-commissioning, Competition Transit ion Charg:es, Energy Cost Rec overy Amou:nl. W ildfire Fund Charge , and New System Gene,ralion Charges based on kWh usage limes the corresponding unbundled rate, component per k Wh, w'ith any residual revenue assigned 1o Disb:ibution.
• Pursuant to D.23-02-0 14. disbursement of the April 2023 residential Climate Credit shall begin by March 1. 2023 .
Advice
Decision
7009-E Issued by
Mereru th Allen
Vice President , Regulatory Affaint
Submitted
Effective
Resolution
(Continued)
August 25. 2023
Septembe r 1, 2023
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 42 Appendices
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Single Family Building
Upgrades
Item 19: Staff Report
Pg.
148
Packet Pg. 562 of 690
-
ific Gas and
Electric Campany'
Revised
Caooe1!ing Revised
Cal. P.LJ.C. Stteet No.
Cal. P. LJ. C. Street No.
U 39 Oal<Jand, Ga!lfomia
EL ECTRIC SCHEDULE E-lOU-C Sheet 3
RATES:
(Cont'd.)
IRESID8NTIAL TIME-OF-USE (PEAK PRICING 4 - Q p.m. EVERY DAY} UHBUNDLIHG OF E-TOU-C TOTAl!..IRAl ES
Enargy Rllll!s by Companor,l IS I"" l \'llh) PEAK OFF-PEAK c;e_,...r.mon:;
Sun:sner 1• usage) so.19ns
W..ler f•u••ge) $0.14918
Disuibtit i'on•it:
Surmruor (d u•oge) $0.17029
w .,1e;r 1• u••ge) $0.11618
ConH•rv..tion ln<Hll i-.. Adjus'lnmnl (&...tino Usage)
Consl!'JV>dioo lnc:l!'llliY<I Adjustrruont (Ow!r B.uelin" I.Jsa!ll") Tran smi u iod (al " ""9")
Tran smission llbrte AIIJu!ltmenls" (all usa;a)
'Reli;abiltiy Se-rviioes ' (all usa,~ )
Public PulJ>Ose P.ograms (al usage >
'Ml,cl9r Decomm is sionin9 1• u•"9")
C'ampetman Tran sili0<1 Charges (211 usage)
'En"'V)' Cosl ROGOYK)' Amount (all usagr,)
Wildfire FtJnd Ch..-g,e (aD usage)
New Sys'!=> G=-eral l0t1 Cb..-90 (all ..,_.,9"r'
Wildfire H;udon lng Ch;u-ge {all U5"!11!)
Reconry IBond Ch..-ge (•II usztgel
Rec:onry lBond Credit (al u•ag•)
Bundlod P,owK Charg1t lncll~, enc-e Adjustmoenl (all u.age )""" (I)
(I)
W.13432:
$0.12 413-
ro.15029
$0.112811
(S0..02:216) ( I)
S0..061135 (I)
$1)..(15254
S0.00059
S0..00069
$1)..(12578
$0.00 135
S0.00030
($1),,000711
$1)..00530
$1),,00046
$0 00254
Sl).0052:8 (R)
($ll..0052:8) ( I)
$1),,0 1309
(I)
(I)
• Transmission, Transmission Rate ~ ls and R~ Selvice dnarges are combined for presenliltion on ,aJStx>mer bills.
llistrilutio n and New Sys1em Gena-ation Charges are conm.ed for iwesentation on c115tomer bills .
.. • Direct Aca», Corn-nunity Chcioe J¼lgr,,g;,tion and T ransillonal Bundliod Senrioe Cuslomen pay a,., ""'plicab le V°"1laged Power Clmrge lndi!ll!femc., Adjus11111!nl.. Gen""'51ion "r>:f Bur>:fled PCIA are mmbilllkl far pr6"'tt:a tion on bundled customer bills.
Advice
Dea~
7009-E ~ .sued by
Meredith Allen
V-.ice Pn:-sidenf, Regulato,y Alfilifs
Submitted
Effective
Re:whmon
(Continued)
August 25. 2023
September 1. 2023
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 43 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
149
Packet Pg. 563 of 690
-
ific Gas and
Electric Company·
Revised
Cancelling Revised
Cal. P.U.C. Sheet No.
Cal. P.U.C. Sheet No.
56547-E
56226-E
u 39 Oakland, California
ELECTRIC SCHEDULE E-ELEC Sheet 2
RESIDENTIAL TIME-OF-USE (ELECTRIC HOME)
SERVICE FOR CUSTOMERS WITH QUALIFY ING ELECTRIC TECHNOLOGIES RA TES:(Cont'd.)
TOTAL BUNDLED RATES
Base Services Charge (S per meter per day) $0.49281
PEAK PART-PEAK OFF-PEAK Total Energy Rates($ per kWh)
Summer Usage
Winter Usage
$0.56589 (I)
$0.33438 (I)
$0.40401 (I)
$0.31229 (I)
$0.34733 (I)
$0.29843 (I)
California Climate Credit (per household, per
semi-annual payment occurring in the March'
and October bill cydes)
($38 .39)
Total bundled service charges shown on a customer's bills are unbundled according to the component rates shown below.
UNBUNDLING OF TOT AL RA TES
Energy Rates by Component($ per kWh) PEAK PART-PEAK OFF-PEAK t
Generation:
Summer Usage $0.28164 $0.18253 $0.13743
Winter Usage $0.11951 $0.09954 $0.086 19
Distribution- :
Summer Usage $0.17932 (I) $0.11655 (I) $0.10497
Winter Usage $0.10994 (I) $0.10782 (I) $0.10731
Transmission* (all usage) $0.05254 $0.05254 $0.05254
Transmission Rate Adjustments* (all usage) $0.00059 $0.00059 $0.00059 Reliability Services• (all usage) $0.00069 $0.00069 $0.00069 Public Purpose Programs (all usage) $0.02578 $0.02578 $0.02578 Nuclear Decommissioning (all usage) $0.00135 $0.00 135 $0.00 135 Competition Transition Charges (all usage) $0.00030 $0 00030 $0.00030 Energy Cost Recovery Amount (all usage) ($0.00071) ($0 .00071) ($0.0007 1) Wildfire Fund Charge (all usage) $0.00530 $0.00530 $0.00530 New System Generation Charge (all usager $0 00346 $0.00346 $0.00346 Wildfire Hardening Charge (all usage) $0.00254 $0.00254 $0.00254 Recovery Bond Charge {all usage) $0 00528 (R) $0.00528 {R) $0.00528 Recovery Bond Credit (all usage) ($0.00528) (I) ($0 .00528) (I) ($0.00 528) Bundled Power Charge Indifferen ce $0 01309 $0 01309 $0.01309 Adjustment (all usage)* ..
Transmission , Transmission Rate Adjustments and Reliability Service charges are combined for presentation on custome r bilts.
Distribution and New System Generation Charges are combined for presenlat ion on oustome r bills.
Direct Access , Commu nity Choice Aggregation and Transitional Bundled Service Customers pay the applica·ble Vintaged Power Charge Indifference Adjustment. Generation and Bundled PCIA are combined for presenla tion on bundled customer bills.
Pursuant to D.23-02-014 , disbursement of the April 2023 residential Climate Credit shall begin by March 1, 2023 . (I)
(I)
(R)
(I)
(Continued )
Advice
Decision
7009-E Issued by
Meredith Allen
Vice President, Regulatory Affairs
Submitted
Effective
Resolution
August25 , 2023
September 1, 2023
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 44 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
150
Packet Pg. 564 of 690
-
Gas and
Electric Company·
Original Cal. P.U.C. Sheet No. 54738-E
U 39 San Francisco, California
ELECTRIC SCHEDULE E-ELEC Sheet 3 (N)
RESIDENTIAL TIME-OF-USE (ELECTRIC HOME) (N)
SERVICE FOR CUSTOMERS WITH QUALIFYING ELECTRIC TECHNOLOGIES
SPECIAL
CONDITIONS:
1. TIME PERIODS: Times of the year and limes of the day are defined as follows: (N) Advice
Decision
All Year:
Peak: 4:00 p.m. to 9:00 p.m. every day including weekends arid holidays.
Partial-Peak: 3:00 p.m. to 4:00 p.m. and 9:00 p.m. to 12:00 a.m. every day including weekends and holidays.
Off-Peak: All other hours.
2. SEASONAL CHANGES: The summer season is June 1 through September 30 and the winter season is October 1 through May 31. When biUing includes use in both the summer and winter periods, charges will be prorated ba.sed upon the number of days in each period.
3. ADDITIONAL METERS: If a residential dwelling unit is served by more than one elecbic meter, the customer must designate which meter is the primary meter and which is (are) the additional meter(s).
4. BILLING: A customer's bill is calculated based on the option applicable to the customer.
Bundled Service Customers receive generation and delivery services solely from PG&E. The customer's bill is based on the Unbundling of Total Rates set forth above.
Transi tional Bundled Service (TBS) Customers take TBS as prescribed in Rules
22.1 and 23.1, or take PG&E bundled service prior to the end of the six (6) month advance notice period required to elect PG&E bundled service as prescribed in Rules
22.1 and 23.1. TBS customers shall pay all charges shown in the Unbundling of Total Rates except for the Bundled Power Charge Indifference Adjustment and the generation charge. TBS customers shall also pay for their applicable Vintaged Power Charge Indifference Adjustment provided in the table below, and the short-term commodity prices as set forth in Schedule TBCC.
(N)
(Continued}
6768-E
D.21-11-016
Issued by
Meredith Allen
Vice President, Regulatory Affairs
Submitted
Effective
Resolution
Nove mber 18, 2022
Decembe r 1, 2022
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 45 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
151
Packet Pg. 565 of 690
-
Gas and
Electric Company·
Revised
Cancelling· Revised
Cal. P.U.C. Sheet No.
Cal. P.U.C. Sheet No.
54734-E
53424-E
U 39 San Francisco, Cafifom;a
ELECTRIC SCHEDULE 0-CARE Sheet 1
LINE-ITEM IJl1SOOUNT FOR CALIFORN IAALTERNA TE RAT1ES FOR ENERGY (CARE)
CUSTO MERS
APPUCAB ILHY: This sclledu le is applicable to single-phase andl polyphase residential service in single.family dwellings and in flats and apantments separa tely metered by PG&E and domestic submetered tenants residing in multifa mily accommodat ions, mobi!ehom e parks and to q,ualifying recreationa l ·vehicle par:ks and marinas and to tarm selVice on the premises operated by lhe person whose residence is supplied lhrough the same meter, where the applicanl qualifies for Cerrfomia Ailternate Rates for Energy (CAR E) under the eligibility and certificat ion criteria set forth in Electric Rule HI. 1. CARE service is available on Schedules E- ~. E~. IE-TOU-lB, E-TOU-C . E-TOU-0 . EV2. E-ELEC. EM . ES. ESR. Eir and EM-TOU. (T) TE:RRITORY :
RATES:
This rate schedule applies everywhere PG&E provides electric serv.ice.
Customers. taking seN ice on this rate schedule whose o.therwi.se applicable rate scll edule has no Delivery Minimum Bill Amo unt (Sched ul e E-El EC) will receive a CARE percentage disooont of 35.000% on ·their total bundled dlarges (except tor ihe Californ ia Climate Credit, which will no! be d'iscounted). Custom ers takil)Q service on this rate schedule whose otherw ise applicable rate schedu'le has e Delivery Minimum Bi!I Amount (el l other sched'ules) will receive e CARE percentage di soount ('A" or ·c· below) on, lheir total bund led charg es on ,their otherw ise applicable rate schedule (except tor the Califomie Climate Credit .. which will not be discounted ) and .also will receive a percentage discounl ("8" or ·o· below), on the delivery minimum biU amoun t. ,if epp1icabte. The CARIE discount will be celoolated for direct a.ooess and community choice aggJegation customers based on the total charges as 1if they were subjecl to bundled service rafes.
D iscounts will be applied es a 1residual reduction to distribulion cllarg es .. afte:r 0 - CARE customers are exem pted from the Wil'dfire Fund Charge, Reco..,ery Bond Charge , Rec0'.lery Bond Credit. end !tie CARE surcharg;e portion of the public purpose program chmge used to fund ltie CARE discount These conditions al.so apply to master-mete red customers and to, qualified sub-metered tenants where the maste r-meter custom er i s join1fy served under PG&Es Rate Sclledu le 0- CARE and either Schedule EM. ES. ESR. ET. ,or EM-TOU .
for master-m etered custom ers where one or more of t he submetered tenants qualffie-s. for CARE rates under the eligibility and certifi.celion crit eria sel forth in R ule HU, 19.2. or 19.3. the CARE discount is equal to a percentage re· below) of the total bundled charges , multiplied by t he numbe:r of CARE unfts divided by lhe lota ll number ot unils. In addition, m aster-metered customers eligible for D-CARIE will receive· a percentage discount ("O" below) on the delivery minim um biD amount. if applicable .
Iii is the respons ibility of the master-metered customer to advise PG&E within 15 days following any chall!Je in the number of dweOing units andfo r any decrease· in ihe num ber of qualify ill!J CARE e,pplicants that results when such applicants move out of their su'.bmetered or ncn-s ubmetered dwelfing unit. or ·submeter,ed permanent-r esidence RV or permanent- reside.nee boat.
(N)
I
I
(N)
(T)
I
(T)
(T)
(l )
I
(L}
(Continued )
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 46 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
152
Packet Pg. 566 of 690
-
Gas and
Electric Company•
Revised
Cancelling Revised
Cal. P . U. C. Sheet No.
Cal. P.U.C. Sheet No.
56208-E
56020, E
U 39 5.in Francisco , Californ ia
ELECT RIC SCHEOUl E D-CARE Sheet 2
LINE-ITEM DISCOUNT FOR CALI FORNIA .A/LllERNATE RATES FOR ENERGY (CARE)
CUSTOMERS
RATES: (Cont'd)
SPECIAL
CONOITIONS:
Advice
Decision
6968-E
A. D-CARE Discount
B. Delivery Minim11m Bill Discount:
C. Master-Meter D-CA RE Discount
D. Master -Meter Delivery MinimYm
BiD Discount:
34.965
50.000
34.965
50.000
'% (Percent) (I)
% {Percent)
'% (Percent) (I)
% {P,ercent)
1. OTHERW,ISE APPLICABL E SCHEDULE: The Special Cond[ti<lns of t he Ou.stomer's otherw ise applicab le rate schedule will appl'y lo this schedule.
2. ELIGIBILITY: To be eligible to receive D-CARE the .applicant nnusl qualify \llooer lhe criteria set forth in PG&E·s IElectric Rules 19.1. H>.2. and Ul.3 and meel 1he cerlifica lion requirements I1-lereof to the s.alisfacticm of PG&E. Qualifying Direct Acces s. CommYnity Choice Agg regation, SeN ice. and Tran sitiona l Bundled Service customers are also eligible to take s.ervice on Sdled'ule D-CARE.
Appl icanls may q11alifyfor D-CARE at their primary residence ,onl'y. Customers or sub-met ered ten ants partic ipating in the F amily Electric Rate Assistance {FERA) program cannot concurren tly partic ipate in Ille CARE program .
Issued by
.Meredi th A lferi
Vice Pn,sident, Regulata<y Affairs
Submitted
Effective
ResoJution
June-23. 2023
July 1, 2023
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 47 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
153
Packet Pg. 567 of 690
-
Summer Daily Allocations (June through Septem ber)
Baseline Region Number
5 6
8 9
10 13
14 15
16 SPECIAL CONDITIONS
All-
Daily kWh Electric
Allocation Allocation
17.2 179
11.4 8.8
12.6 9 8
16.5 12.4
18 9 1 5.8
22.0 24.6
18.7 18.3
46.4 24.1
14.4 13.5
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 :
Winter Daily Allocations (October through May)
All -
Daily kWh Electric
Baseline Region Number All ocation All ocation
5 18.7 20.1
6 11.3 13.0
8 10.6 12.7
9 12.3 14.3
1C 12.5 17.0
12 12.6 243
14 12.0 21.3
1~ 9.9 18.2
Hi 12.6 23.1
Sheet 12 (T)
(T)
TOU Period Weekdays Weekends and Holidays
Summer Winter Summer Winter
On-Peak 4 p.m. - 9 p.m. N/A NIA NIA
Mid-Peak N/A 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 N /A 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 Cost Effectiveness Analysis: Existing Single Family Building Upgrades 48 Appendices
6.2.2 Southern California Edison
The following pages provide details on the SCE electricity tariffs applied in this study. Table 22 describes the baseline territories that were assumed for each climate zone. A net surplus compensation rate of $ 0.06030/ kWh was applied to any net annual electricity generation based on a one-year average of the rates between December 2022 and November 2023
Table 22: SCE Baseline Territory by Climate Zone
Climate Baseline
Zone Territory
CZ06 6
CZ08 8
CZ09 9
CZ10 10
CZ14 14
CZ15 15
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
154
Packet Pg. 568 of 690
-
rn Cslifo mis Edison
Ros,emead. Caritom ia (U 338-E )
Revised
Car1Celli"9 Revised
Cal. PUC Sheet No_ 85111--E
CaL PUC Sheet No_ 74502-E
RATES
Schedule IOV:P
TIME-OF-USE
DOMEST IC
(Continued )
Sh eet 2
Customers receiving servic e under ihis Sched ule will be charged the applicable rates under O ption 4-9 1PM, Option 4-Q PM-CPP . Op1ion 5-8 PM , Option 5-8 PM·CPP, Op tion PRIME .. Option PRIME-CPI? Option A, Option A-CPP. Oplioll B. or- Option B-CRP. as listed beww. CPP Event C h arges will apply to all energy usage during CPP Event Energy C harge periods alld CPP Non,-Event Energ y Credits will apply as a reduction or, CPP f'lon-<Event Energy Credit Periods during Summer Season days. 4:00 p_m_ to Q:OCl p.m .. as desc ribed ill Sp ecial Conditions 1 and 3. below:
,Qplfpn +R FM J NIAJ +R PM::¢FP
1::,n..,W °'1-w■ • 1.ik.W.h
8t.Jrnm•t S .. •on - On.-~.._ O.UDYI lfiJ
h1hl-h.a. 0 .7'1~11 IIRJ
O il,.P.,o1, 0.:1' ..... 1!2' IA I
W11ntat Sauan - 1.1Jt11-~-. O.Ul~s, IIRJ
Ofi.~_,. D.2441-82' tA:J
~upt1r..Off..P.._., 0 .221)11) tR)
8-;; .. ic Ctta~• - S~•Y
Sangl__,.affllly R-idanca O.O·~ 1
MuN..,.-•md'I Raalidanca 0 .024
Manunum CNlrg ■ ·- • Sid•~
:Sine• ... nm., R_ld.,c::• o.34s
IMYlt~■md)' R_Ki.,c• O.:!M8
MW11m:um Cha"R• -4.t.t ed1c .. 8 ..... lln■ )"" ~ • $Jday "!lmv·• lf'■mlly A--=t .. c:• 0 . 1 rs
1M 1.ifb-F■md)' R--=t_.c::• 0 . 1 tS
C.bfam .. , A'tt■rr:1111ta R ... ■ '°'
En4N1iJY Ooccu.-.l • '%,
t--,,111 t:.~1r.c KIib■ Aaaa.1•nc::• ~ Ill
·Qpbpp +I: PM:CPP
CP~ EvwnJ: En..rw,Ch.,1:1" - SJkWh
:kJrnm•r CT•P Non-iE'Hnll c,..c111
On-""";ak t:..1-vr e ... sW - SIII.Wh
Mlil:dmum A V Mllim'l-tl C r•dtl . Sncw,,·--·
~umrnar !s•aaan
11 1,00) «•►
1DU.00"'
10000
O 2-eS-43'Ctt
0 .1 1101 Cit
0 .1 1 :US::i Cit
0~21,~:l CIJ
0 .136~1 Cit
0 1 1 800Ct ►
ouooou
oilOOOo
( 0 .'l !lil n:tl
o .OUOOO
o.ooouo
<),C>l)O(l(J
0 .00000
<l.OUOllo
0 .00000
I
• Rtlanlill'.G 1~ a1 IIMI dsic<l<Jnl !"'"'""'.age aoa - In.,_ awlk•lllo Spod•1 c«dlxin ol lhls _,._ •• Tllo ~li>llffllln Olal!J• IS"~ - .,. Dolt."Gf) - .. El\ll!Q', Chal\jll , p"5 Iha ~ a....: Ch•rge i. loss - .,. Mlninum Charg,a. ••• Tho.,,_ CompoOlon Tranollon Ol•Jtl• CTC ol CW.00000) po, l Y/11 Is ,__ In lho UG com- ol -,lion. (Tl ••••Tna Baalna Cra.S1.a~L1p,U> 1001'. alrana l!.-alna.Ali0caUon. ro91nU15•of lima4...US. lDapa,'ald. Adlldan,alB.11MIAbaAlbc..nofl1111f:'lP)'ID' CUMDmars wll'I Ha.al Purn_p w.-, HuNn. sar¥ad t.ftiar a..s Optl0ft Thu ~Dina A.lloc~llons ara 5411 b1h ift fl.ra«hin;a~ SQlamon l, Part H . . .......... -A.-Ctodh rs Ncoppo<lu.<il"mwMlorCPPC.... lamond.lal P•~-119mod'-«dllllo>nd .... pan .. --· 1 To"'l = Jo1.110olt.•!)I S.000 , .... •"' app-• loBrdad S.W...lli111c1Acoass (DAI and Comm•"')> 000.,0 ~ s.n<oo (OCA - ) CUStama.rs, timi:01 DA ilnd Cc.A Sa~ Ousmm.Gf'S .lll'lllnot SJ.bioa: tDlhA OL\lR9C nat■ compona.m at'lla k'hodub but.btllildp;lf lha OWR9Cm .,,.-,idad l¥ S-IQ DA-CRS « SCIIOdUII OCA-CRS .
2 GanGrallor1 = Tha Gon '"""' •111 applic.atia oott ID 6'.rlded 54rnce OJslomws . Sff !lpeclot C<ntt.on bal:lw tor !'CIA,._ ~ m\REC.=~011111. , .. - iIJ'IIR) lE""f0 c.-, _~or,_. llflOnnalxin OR lhJI D\YR &>orirt en.cu, - h ea,,q ~ SpQd•l COodllonOll lhl• ~ -
4 ~lid on an iftq~ bi1Sdo, per~ sam~t, . SM: b Spoci.111 c«dUXIS ,O'I au,; &:.hOdUlt fOf' a'ICt'e: ~ (To be in serted by uliliiyl
Advice 4Q2Q•E
-----------Decision
:!tnJ
(Continued)
Issued by
Michae l Backstrom
~ ice P residen t
(To be iMerled by Cal. PU C}
Date Submitted Dee 28, 2022
Effective
Resolution
Jan 1, 2023,
E-5217
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 49 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
155
Packet Pg. 569 of 690
-
"
- IVff>ll.~ • nCl!'LIILC--
Southem California Edison
Rosemead, California (U 338-E) Cancelling
Revised
Revised
Cal. PUC Sheet No.
Cal. PUC Sheet No.
RA TES (Continued)
Schedule TOU-D
TIME-OF-USE
DOMESTIC
(Continued)
Option PRIME I Option PRIME-CPP
Energy Cllarge - $/kWh/Mete r/Day
Summer Season
I
D e'livery Service
Total'
On-Peak 0.22789 (I)
Mid-Peak 0.22789 (I)
Off.Peak 0.151111 (I)
Winter Season
Mid-Peak 0.23353 (I)
Off-Peak 0.14530 (I)
Super-Off-Peak 0.14530 (I)
Fixed Re<oYery Charge - $'1<Wh 0.00260 (I)
Ba•ic Cllarge - S/MeterJDay 0.427 (I)
EV Meter Crl'cfrt (Sep,arately Met..,ed E (0.323 ) (N)
EV Submele r Credit - S/Mell'JiDay (0. 111) (R)
Caifom ia Climate Credit '0 (71.00 )
Caifom ia Alternate Rates fo,
Energy Disoount - '- 100.00'
Family Electri<: Rate A••istonce Di•cou 100.00
Medical Lile Item Discount - % 100.000
Option PRIME-CPP
CPP Event Energy Charge - $'1<Wh
Summer CPP Non-Even t Credit
On.Peak Energy Credit - $/kWh
Maximum AY&ilable Credit - $/kWh"••
Summe r Season
Generation
UG" I DWRE~-
0.42769 (1) 0.00000
0.15221 (I) 0.00000
0.10162 (1) 0.00000
0.38028 (1) 0.00000
0.08630 (1) 0.00000
0.08630 (1) 0.00000
0.80000
(0. 71812) (R)
R~p,es.MtS 100% of the discount peroe,rmge as shown SI the applic.ible Special Condition Qf Bas Schedule. • • The CflllO'ng Ganpelition T tanSition Charge (CTC) ct (S0.00003) peer kWh is tee:OYered in lhe UG companen1 al Gener.nion.
Sheet 6
I
I
"" The MillCinun Available Credit is lhe capped aedit amount lor CPP Cu5lomers dual p;,rticip;r.ire in other demand response pr _ _ 86132-E
85624-E
I Tcc.,i = Tccal Delivery Servicl' -• are appicable 10 Buncled Service. llRd Acee•• (DA) and Comn unity Choice Aggregation Service (CCA SeMce) ~ exoept DA and CCA SeMce Custome<,; are n01 subject to me DWRBC rate compcnen, ct lhs SdledJle bu! instead pay the DWRBC as provided by Sche<l.je OA-CRS er SchecUe CCA-CRS.
2 Genera:ion = The Gen me• are ~ Oliy to Buncled SeMce Customers. See Special Condition below for PClA reoovery. 3 O'WREC = Department al Waler Resources (!>WR) Energy C.edit - Fer more information on the DWR Energy Crecil. ""' the Billing Calcw:ion Specia l Caiciticn ct this Schedu le.
4 Applied on an equal basis. per household , semi-annually. See the Specia l Conditions of this SchedlAe lor more infonnalion. (To be inserted by utility)
Advice -'50=-.c.41'--E=-----
Decision
-
(Continued)
Issued by
Michael Backstrom
Vice President
(To be inserted by Cal. PUC)
Date Submitted May 30, 2023
Effective Jun 1, 2023
Resolution
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 50 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
156
Packet Pg. 570 of 690
-
Caflfomia Edison Revised Cal. PUC Sheet N'o. 85618-E
Rosemead , Californ ia (U 338-E) Cancelling Revised Cal. PUC Sheet No. -85109-E Scbedu;te,D;CABE Sheet 1
CALIFORtNIA AL TERNA TE RA TES FOR ENERGY
DOMESTIC SERV ICE
APPLICAB ILITY
Applicable to domes tic service to CARE househo fds residing in a pennartenl Single- Family Accommodation DI' Mul1ifami ly Accommodation where the customer meels all the Special Col'\di:tions of this Sched ule. Custom ers enrolled in the CARE program are not eligible for !he Family Electric Rate Assistance (FERA) program.
P•ursuartt to Special Coooi1iion 12 herein, customers receiving servioe under this Schedule are e'-olble lo receive the Califom ia Clunate Credit as shown in t he Rates section below.
JEBBIIPBY
Wrthin the entire territory s&Ved .
The applicable charg es set forth in Schedufe D shall apply to Customer s served under this Schedule .
CARE Discount:
A 29.8 percent discount is eppliedl to a CARE Customer 's bill prior to the application of lhe Public Utilities Commiss ion Reimburs.emenl Fee (PUCRF) artd any applicab le user f ees. t axes. and late payment charges . CARE Ci.istom ers are re.:iuired to :pay the PIJCRF and any .applicable, user f ees. taxes . and late paymertt charges in full. In addition . CARE Customers .are exempt from paying lhe CARE Surd'la rge of $0.00888, per kWh aoo the Wildfire Furld Nor..Bypassable Cha:r,ge of $0.00530 per kWh.. (R) The 2{1.8 percent discount, in additior1 to these exemp1ions result in an average effective• CARE Disco.mt of 32.5 percenl
(To, be inserted by utility)
Advice 4!977-lE
----------O e c i sio n 23-01--002
lh J2 22-12•031
(Continued)
Issued by
Michael Backstrom
Vice Ptesident
(To be inserted by Cal. PUC)
Date Submitted Feb 27. 2023
Effective
Resolution
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 51 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
157
Packet Pg. 571 of 690
-
utliern California Gas Company
Residential Rates
NoY-23
Procurement Transponallon N&w Rate New Rate Absolute
Customer Type Commod ity Rate Charge Charge Elfedlve Elfec11ve Rate % I Rate Schedule Charge Type ¢/therm ¢/therm 111112023 1011/2023 Change Change Rasklentlal lndlvldually Metered
Schedule No. GR GR BaseDne 67.806 86.490 154296 125.096 29.200 23.3% Res. SelVlce GR NonBaselne 67.806 131-037 198.843 169.726 29.117 17.2% GT-R Basel ne 00.000 86.490 86.490 87.038 -00.548 -0.6% GT-R Non Basel ne 00.000 131.037 131.037 131.668 -00.631 -0.5% Cost Effectiveness Analysis: Existing Single Family Building Upgrades 52 Appendices
6.2.3 Southern California Gas
Following are the SoCalGas natural gas tariffs applied in this study. Table 23 describes the baseline territories that were assumed for each climate zone.
Table 23. SoCalGas Baseline Territory by Climate Zone
Climate Baseline
Zone Territory
CZ05 2
CZ06 1
CZ08 1
CZ09 1
CZ10 1
CZ14 2
CZ15 1
The SoCalGas monthly gas rate in $/therm was applied on a monthly basis according to the rates shown in Table 24.
These rates are based on applying a normalization curve to the November 2023 tariff based on ten years of historical gas data. Long-term historical natural gas rate data was only available for SoCalGas’ procurement charges. 27 The baseline and excess transmission charges were found to be consistent over the course of a year and applied for the entire year based on 2023 rates. CARE rates reflect the 20 percent discount per the GR tariff.
Table 24. SoCalGas Monthly Gas Rate ($/therm)
Month Procurement
Charge
Transportation Charge Total Charge
Baseline Excess Baseline Excess
January $0.72 $0.86 $1.31 $1.92 $2.36
February $0.50 $0.86 $1.31 $1.57 $2.02
March $0.44 $0.86 $1.31 $1.48 $1.93
April $0.39 $0.86 $1.31 $1.39 $1.84
May $0.41 $0.86 $1.31 $1.43 $1.87
June $0.46 $0.86 $1.31 $1.49 $1.93
July $0.47 $0.86 $1.31 $1.51 $1.96
August $0.51 $0.86 $1.31 $1.58 $2.03
September $0.46 $0.86 $1.31 $1.52 $1.96
October $0.45 $0.86 $1.31 $1.48 $1.92
November $0.48 $0.86 $1.31 $1.54 $1.99
December $0.57 $0.86 $1.31 $1.63 $2.08
27 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)
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
158
Packet Pg. 572 of 690
-
ine Usage: The following quantities of gas used in individually metered residences are to be billed at the baseline rates:
All Customers:
Summer (May to Oct)
Winter On-Peak (Dec, Jan & Feb)
Winter Off-Peak (Nov, Mar, & Apr)
Daily Therm
Allowance
0.359
1.233
0.692
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 54 Appendices
6.2.4 San Diego Gas & Electric
Following are the SDG&E electricity and natural gas tariffs applied in this study. Table 25 describes the baseline territories that were assumed for each climate zone. A net surplus compensation rate of $0.04542/ kWh was applied to any net annual electricity generation based on a one-year average of the rates between December 2022 and November 2023.
Table 25. SDG&E Baseline Territory by Climate Zone
Climate Baseline
Zone Territory
CZ07 Coastal
CZ10 Inland
CZ14 Mountain
The SDG&E monthly gas rate in $/therm was applied on a monthly basis according to the rates shown in Table
26. These rates are based on applying a normalization curve to the November 2023 tariff based on ten years of historical gas data. CARE rates reflect the 20 percent discount per the G-CARE tariff.
Table 26. SDG&E Monthly Gas Rate ($/therm)
Month Total Charge
Baseline Excess
January $2.34 $2.63
February $2.28 $2.57
March $2.21 $2.51
April $2.14 $2.45
May $2.18 $2.48
June $2.23 $2.55
July $2.26 $2.57
August $2.32 $2.62
September $2.26 $2.59
October $2.21 $2.55
November $2.24 $2.57
December $2.38 $2.70
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
159
Packet Pg. 573 of 690
-
,.,,,,..'E
San Diego Gas & Electric Campany
S•n Diego. Calif"'".,
Totell Rates :
Descri ption - JOU DR1
Summer:
On,Pe, k
Olf0 Peok
Super Off,Pe>k
Winter.
a.,.P,,:,k
Olf-Ploal<
&Jper Off,Peak
Summer B:,seliM Adju,tmenl C:relfll up to
130% ol B:,seline
Win'ler 8 03<!lin~ 1u:1,.,stniml Credit up ID
130% ol 8:,seJiM
t.i.,imum Bill (S/day)
Description - JOU DR1- UDC Tot;>!
CARE Rate
Summe.r - CARE lbtes:
O.,,Pe:ik 0.25682
Off0 Peok 0.25682
Super Off.J>e•k 0.25682
Winter - CARE Rates :
°'1•Pe•k 0.43739
Olf,Pe;ak 0.43739
Super Off•Pe•k 0.4-1739
Summer B~~ine
Ad),slm"'1l Cradil up ID
130% ol Bueline
(0.117241
Win'le-r B.iseline Adju!1itme11l
C:n,rfit up ID 110% cd
Ba~fine
[0. 11724►
taii1T11Jm Bill ($/day) 0.190
Note:
Revised C aL P.U.C. Sheet No.
Canceling Revised CaL P.U.C. Sheet No.
SCHEDULE 10ll-OR 1
RESIOENrTIAl TIME-OF-USE
lJOC Tota l Rau DWR IBC• E:ECC IR.ato ♦
Wl'.t.lBC DWR Cn,d at
0.25752 R 0.00530 I 0.57043
0.25752 R 0.00530 I 0.25697
0.25752 R 0.00530 I 0.09233
0.43809 I 0.00530 I 0.19307
0.43809 I 0.00530 I 0.10855
0.4-3809 I 0.00530 I 0.08402
(0.11724) R
(0.11724) R
0.380 I
DWR BC+ EECCRate • T,ot•I
WF-NBC DWR.Cnodlt IR:alo•
R 0..00000 0.57043 I 0.82725
R 0.00000 0.25697 I 0.5 137!1
R 0..00000 0.09233 I 0.34915
I 0 .00000 0.19307 I 0.630441
I 0.00000 0.10855 I 0.54594
I O .QOOOO 0.08402 I 0.5214 1
R (0.11724)
R (0.11724)
I ,0.190
[
[
[
[
[
[
37022-E
36337 -E
Sheet 2
Total
Rai-e
0.33326 I
0.51979 I
0.35515 I
0.63646 I
0.55194 I
0.52741 I
(0.11724 ) IR
(0.11724) It
0.380 I
Total
Effedive
,care ltllte
l 0..55366 l
I 0.33'965 I
l 0.22725 l
I O.A1930 I
l 0..36160 l
I 0..34485 I
R (0.08004) R
R (0.08004) R
I 0.190 I
(1) Jai,,f R>""' ax,,isl ol LDC, Schedul~ D\'/R-8C (Ol!Jl•rtml!nll ol W:,1i,r Re,..,..101!< Bond Cll:iri,, I, Sdled.JI!! WF -HBC (CA Wldfre Fund d!"'JliO) and SdledJI!! EEOC~ Eneogy Commoditt Casl) r.sles, ,,.;th 'lho EECC rote• relledi~ .a DWR Cledtt. EECC rarles ""' ;>pplicobh, IO t:undl!!d OJ.tomen only Sae Special CondlllOn HI b POIA (Fl'o,,o.., ct...rg~ ~ iWerence Adju.aii er11) reC:Jve<y. (2) Talal R•tes p,esenli:d ...e lor w,slcmen !hat reooiYe commocily ~ ""d dewory """'°' rromUIJily. (l } DWR-8C •nd WF,NllC chorgos do not apply lo CARE ru, lomo,rs. (4) As idenb6oil 11 11,a RIies labh,s., amomer bih ..,11 also jncl,di, lim, oi,em •llllTVller ,.r,d winier medtts lo< ll»fl'! lljl ID 130111 of ba2line ID prDWGe Iha ral<! cappmg bane fils nd~d by Assembly Bill l X and Senllle Bil 1195-. (6} WF •N'BC r•te is 0.00630 • DWR-BC 8ond °'"'9" is 0.00000 .
Continued.
2C8 ISasued by Submitted Dec 30, 2022
Advice Ur. No. 4 129-E Dan Skopec Effective Jan 1. 2023 Seflior Vioe Presidenl
Decision Na. R.egu1atary A.ffai-s Resolrtion No. E-5217 R, I
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 55 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
160
Packet Pg. 574 of 690
-
Time Periods
All time periods listed are applicable to local time. The definition of time will be based upon the date service is rendered_
TOU Periods - Weekdays
On-Peak
Off-Peak
Super Off-Peak
TOU Period - Weekends and
Holidays
On-Peak
Off-Peak
Super Off-Peak
Seasons: Summer
Winter
Summer
4:00 p_m_ - 9:00 pm_
6:00 a.m. - 4:00 p.m.;
9:00 p.m. - midnight
Midnight - 6 :00 a.m.
Summer
4:00 o.m. - 9 :00 o.m.
2:00 p_m_ - 4:00 p.m.;
9:00 p.m. - midnight
Midniqht - 2:00 p m.
June 1 - October 31
November 1 - May 31
Winter
4:00 p_m_ - 9:00 p_m_
6:00 a.m. - 4:00 p.m.
Excluding 10:00 a.m. - 2:00 p.m. in March and April;
9:00 p.m. - midnight
Midnight - 6 :00 a.m.
10:00 a.m. - 2:00 p_m in March and April
Winter
4:00 o.m. - 9 :00 o.m.
2:00 p.m. - 4:00 p.m.;
9:00 p.m. - midnight
Midnight - 2:00 p_m_
15. Baseline Usage: The following quantities of electricity are used to calculate the baseline adjustment credit.
Baseline Allowance For Climatic Zones•
Coastal Inland Mountain Desert
Basic Allowance
Summer (June 1 to October 31) 9.0 10.4 13.6 15.9
Winter (November 1 to May 31) 9.2 9.6 12.9 10.9
Alli Elecmic,..
Summer (June 1 to October 31) 6.0 8.7 15,2 17.0
Winter (November 1 to May 31) 8.8 12.2 22.1 17.1
" ""
a lmatic Zones are shown on the Tenilory Served, Map No. 1.
All Electric allowances are available upon appEcatlon to those customers who have permanently Installed spaoe healing or who have electrlc water heating1 and receive no enes-gy from another source.
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 56 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
161
Packet Pg. 575 of 690
-
....,.f
San Diego Gas & Elecbic Company
San Diego, California
Revised CaL PU.C. Sheet No. 37217-E
Canceling Revised CaL PU.C. Sheet No. 37016-E
SCHEDULE EV-TOU-5 Sheet 1
COST-BASED DOMESTIC TIME-OF-USE FOR HOUSEHOLDS WITH ELECTRIC VEHICLES
APPLICABILITY
Service under this schedule is specifically limited to customers who require service for charging of a currently registered Motor Vehicle, as defined by the California Motor Vehicle Code, which is: 1) a battery electric vehicle ( BEV) or plug-in hybrid electric vehicle (PHEV) recharged via a recharging outlet at the customer's premises: or 2) a natural gas vehicle (NGV) refUeled via a home refueling appliance (HRA) at the customer's premises. This schedule is not available to customers with a conventional charge sustaining (battery recharged solely from the vehicle's on-board generator) hybrid electric vehicle (HEY).
Residential customers taking service on Schedule NBT, who are required to utilize EV-TOU-5 as their otheiwise applicable schedule (OAS) for electric service, do not require a qualifying motor vehicle, as described above to participate on Sched ule EV-TOU-5 .
Customers on this schedule may also qualify for a semi-annual California Climate Credit $(60. 70) per Schedule GHG-ARR.
TERR ITORY
Within the entire territory served by the utility.
Total Rates:
UDC Total DWRBC+ Description - EV-TOU-S Rates Rate WF-NBC Basic Service Fee 16.00
Summer
On-Peak 028032 I 0.00530
Off-Peak 0.28032 I 0.00530
Super Off-Peak 0.05588 I 0.00530
Winter
On-Peak 028032 I 0.00530
Off-Peak 028032 I 0.00530
Super Off-Peak 0.05588 I 0.00530
1C5
Advice Ur. No. 4154-E
Decision No. D.22-12-056
EECC Rate +
DWR Credit
I 0.53067 I
I 0.19567 I
I 0.09233 I
I 0.22587 I
I 0.16213 I
I 0.08402 I
Continued
Issued by
Total
Rate
16.00 0.81629 I
0.4812 9 I
0.15351 I
0.5114 9 I
0.44775 I
0.14520 I
Submitted
Effective
Resolution No.
Jan 30, 2023
Mar 1, 2023
N
N
N
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 57 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
162
Packet Pg. 576 of 690
-
....,,/E Revised Cal. P.U.C. Sheet No_
San Diego Gas & Electnc Company
San Diego, Cal~omia Canceling Revised Cal. P.lJ.C. Sheet No. 35912-E SCHEDULE EV-TOU-5 Slleet 4
COST-BASED DOMESTIC TIME-OF-USE FOR HOUSEHOLDS WITH ELECTRIC VEHICLES Notes: Transmission Energy charges indude the Transmission Revenue Balancing Account Adjustment (l;RBAA) of S(0.00242) per kWh and lhe Transmissicm Access Charge Balancing Account Adjustment (TACBAA) of S(0.01631) per kWh. PPP Energy charges includes Low Income PPP rate (LI-PPP) S0.01669/kWh, Non-low Income PPP rate (Non-U PPP) S0_00333"'Wh (pursuant to PU Code Section 399.8, lhe Non-LI-PPP rate may not exceed January 1, 2000 levels), Procurement Energy Efficiency Surcl\arge Rate of SQ.00422 /kWh, Galifom1a Solar lnrtiative rate (CSI) of $0.00000/kWh and Self-Generation Incentive Program rate (SGIP) $0.00122/kWh. The basic service fee of $16 per monlh is applied to a customer's bil and a 50% discount is applied for CARE, Medical Baseline, 0< Family Electric Rate Assistance Program (FERA) customers resumng in their basic service fees to be SB per monlh.
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) Ongoin9 Competition Transition Cnarges (CTC). (6) Local Generation Charge (LGC), (7) Reliability Services (RS), and (8) the Total Rate Adjustment Component (TRAC).
Certain Direct Access customers are exempt from the TRAC, as defined in Rule 1 - Definitions.
Franchise Fee Differential
A Franchise Fee Differential of 5.78% will be applied to the monthly b illings 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 &ills 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.
b:w a.m. - 4:UU p.m.
Off-Peak 6:00 a.m. - 4 :00 p.m.;
9:00 p.m. - midnight Exduding 10:00 a.m.-2:00 p.m.in March and April; 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
I uu t"enuu - vveeKenas Summer Winter 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.;
9:00 p.m. - midnight
2:00 p.m. - 4 :00 p.m.
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
Continued
4C8 Issued by Submitted Dec 30, 2022
Advice Llr. No. 4129-E Dan Skopec Effective Jan 1, 2023 Senior Vice President
Decision No. Regulatory Affairs Resolution No. E-5217
R,R
I
R
I
I
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 58 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
163
Packet Pg. 577 of 690
-
-f
s.., Die90 Gas & Elecliic; Cttnpa n)'
San Diego. califmria
Orjglnel Cal. P.U.C. Sheel No. 37195-'E
Canceling Cal. P.U.C. Sheel No.
SCHEDULE TOU-ELIEC Sheet 11
DOMEST1IC llt,IE-OFJUSE FOR HOI..IS8HOLOS Wln-t ELECTR IC VEHICUES. EN ERGY STORAG E.
OR !ELECTRIC HEAT Pll!Jt.tPS
ARPLICA BILllY
Service under this scl'ledul'e is available on a volun1ary basis. for all resiidential ruslomBfS who meet one or more of Iha tollowing c~eria: 1) require sernce for clhargin,g or a currenlly ragislarad Motor Va'hida. as de'1ned by the California Motor Vehicle C-ooe, 'Whkh ris: a) a battery el.ectric VBhlcle (BEV) or plug-,ln hybrid eleciric ve:hicle (f>HEV) recharged via a recharging ou1Jet at the customer 's premises : or b) a natural gas \lehide (NGV) refoeled I/fa a home rerualing applia nce (HRA) al 11\e customer's premises; 2) have a bahind lhe-miiler energy storage device th.at is intsrconnecied through Elednie Rule 21; or 3) have an electric heat pump •for water lhaatlng or climate controL This sc'had ule iS not available to customa-rs with a conventional charge sw;taining (battery teeharged solsly from, the vehicle"s on-board generatot) hybrid a!iicittic vehidle (HEV).
This schedule is also available lo, customers who meet ll'le above c riteria ,as wel as quality for lhe Cal ifornia Alla-mate Rates for Energy {CARE) Program as outline<I in Schedule E-CARE , and/or Medical IBasa!ine as oullineo in Special Conchoon (SC) 5. The ra!es for CARE customers anc:llor Medical IBas8line are ident.-lild in lhe rate rabies below as TOU-ELEC-CARE and TOU-8 LEC-MB rates. respectiv1tty. lbiire is a cap of 10,00CI customers w'ho may take service on lrns rats. as d.e6ned rn SC 10.
Pu.rsuant to, o .22-·11-022. customilrs that opt-in to seheduta TOU-ElEC Within its fust year or b8in9 offered have the qplion to return to lheir previous rate sdledu le prior lo lhe 12-month imquiremenL See $C4 Tern,s or SGl'\rioe lor al requuaments.
CtJstomM; on Ill.is schedule may also qualify re, a sem..a.nnual California Cllmate Credit $(611'.70) per Sdiedu.e GHG-AR R.
iERRJTORY
Within lhe entire terrilory seNed by lhe utility.
RATES
Total Rates:
lltiotiptian- TOU-.El.EC Rams UDC TOUI DWRBC•
R.al1> WF0 N8C
Mcn!hty SeMCB f;ee 18..00
Summer
On-Pmk D.22228 0.00530
011°Pmk 0.22228 0.00530
Super Off~""k 0.22228 0.00530
WJnter
O..,Peak 0.22228 0,00530
Oll>Pmk 0.22228 0.00530
Super Off~""k 0.22228 0,00530
tH6
Adw:e Ur. No. 4 152-E
OedSIOfl No. 0.22-11-022
EECC Riite
0.61588
0.14644
0.09785
0.27480
0.13323
0.08905
Conlin11ed
Issued by
T-
Rate
18.00 0.74328
0.3740:2
0.32543
0.50218
0.36081
0.31663
Submitted
ElfeciJve
Resolution l'lo.
Jan 31. 2023
Jan 31. 2003
N
N
N
N
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 59 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
164
Packet Pg. 578 of 690
-
San Diego Gas & Elecrric Canp;any
San IJiesa. ~rcrri.s
Original
Canoe.ling
CaL P.U.C. Sheel No.
CaL P.U.C. Sheel No.
SCHED ULE TOU-ELEC
37196-E
Sheet 2
DOMESTIC TIME -OF-USE FOR HOUSEHOLDS Wllll ELEC1R IC VEHICLES. ENERGY STORAGE .
OR ELIECTRIC HEAT PUMPS
.BAIES. ·(Contiru.ie<J)
Description - TOU,E:LE.C CARE UDC Toial DWRIIIC ♦ TO!lal Tow EEOC Fttu, Eff;;ctl.,. Rates Rat,, WF.JiBC Rm CARERm
Monlhly SeMCe Fee HUX! 16.00 16.00
Summe r - CAR,E Rates:
OII.P<>ak 0.221158 0.00000 0.515611 0.73726 0 .. 49222
Qa.P""k 0.221158 0.00000 0..14644 0.36Ml2 0.2401!
&l"'f Ofl.P,ea 0.22158 0.00000 0..09735 0;31943 0.20698 Winter- CAAE Rates:
a,,,p,.,,k 0.221158 0·.00000 0.27480 DA9618 0.32763
Cla.PRl< 0.221158 0,00000 0..13323 0.35481 0.23U1
s.,""' Otl,.Pea 0.221158 0,00000 0..08905 0.31063 0.201195 Description - TOU,E:LEC MB UDC Total DWRIIIC • Total Tow EECC Rat,i, Elf6ctM MB Rates Rat,, WF-HBC Raia
-· Monlhly SeMCe Fee HI.DO 16.00 16.00
Summe r -MB Rates:
o,,,p..,,, 0.22228 0,00000 0.515611 0.73796 0.59037
Qa,P.,.ak 0.22228 0.00000 0..14644 0,38872 0..29498
s.,""' Ofl.Poa 0.22228 0.00000 0..09735 0:320 13 0.251110 Winter - MB Rates:
a,,.p..,,, 0.22228 0.00000 0.27480 OA96118 0.39760
Qa.Pe.il< 0.22228 0.00000 0..1332:3 0-35551 0.28441
Silp<!f QIW'<,al 0.22228 0.00000 0.08905 0.31133 0.24906 Noll!:
(1) Toltlt Rates oo,.,,is1 d UOC. &hodiJi<- OWR.SC {~ cl W:tr.t Re"'°1le5 Bcnl Ctwg,,) . Schedule \'IF.NBC (CA 'Mklft"' FLnf chag!!) and Sdled:Jle · E:ECC jElec:lric Ens9)' Canm:xfily CMQ ral!ts. EECC rai..s .,., "l'f'lica~ II, bundl!,d cummon t11ly.
SeeSp:dal Ooodilla, 9roi PCIA(P<lWer Cliar~ ~hljustmenl) """'Yefl' • (2) T olOI Roil!s P"'""""'d ,.,., lbt __,,,., lhai ...,.,;,,, oormncxliiy "'4'f'ly and di!lw,ry ~ llom UBty . o..,.,rces in tmt.ol r,,11,s paid by Oiled! AazS> (DA) an! Canrrunity O!aice Aggr9bDn (OCA) aJslameB ""' i:!,n tifrod in Sdledi.e llA.CRS and OCA.
CRS, ,,,,spec•,.;,.
($) DWR<BC a,d WF-NBC chorg,,s do not a.l'\lly lo CA.RE or Medical B:ISl!line """1<lrlH!n. (4) ltW"-"IBC raleis0Jl0530 + C111/R.SC BandOusg,, is 0.00000 2HS l!lsued by
Adw:e Llr. No. 4152-E
DeclSiOO No. D.22-1i~
Submitted
Effective
Resolution No.
Jan 31. 2023,
Jan 31. 2023
N
N
N
N
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 60 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
165
Packet Pg. 579 of 690
-
llio(IO G.,s & IElecbic Cmnp,o11J
S.m Dw,go. Califmna
Orlglnel
Canceling
Cel. P.U.C. Sheet No.
Cel P U C Sheet No ..
SCHEDULE TOl!J-ELEC
37197-E
Sheel3
DOMESTIC TIME-OF-USE FOR HOUSEHOLDS Willi ELEClRIC VEHtCLES, ENERGY STORAGE,
RATES (CONTINUED)
UDC RalH
Oe5U11flm - Trmism Distr JOU-El.EC
MonlNyS- fN 18-CIO 1$11.kl)
StJmmer.
On.P .. .u 0.07340 0.10796
Ol.f'e-ak 0.07340 D.10796
~pe,OM'eak 0.07340 0.10798
Winur.
On.f' .. .u 0.07340 0.10796
OI.P .. .u 0.07340 0.10796
&ipe,Otf.l'l,al 0.07340 0.10798
Dastnplian -
TOU-ELE C • CARE Transna Dlsb:
Ribls
~S-fN
lll1.kl ,a..oo
S<Jmnl«C-6!RiE
lb lle3:
On.f'e;; k 0.07340 0 .10726
OI.P..,;,k 0.07340 0.10726
&!per Ot!.l'l,al 0.07340 0.10726
W111~r ~I! Rain:
On.f'-l!'ak 0.07340 0.10726
Ol-k 0.07340 0.10726
&ipe,Ot!.1'1,a 0.07340 0.10726
Deoacr(pllon -
TOU-ELE C • l&S - T~m Dlsb:
~ SeNi>I f.M 16,.00 15'1.kl))
5.,....,,.. - MB-Ral<l,o
On.f'-1!'.u 0.073-44) 0.107911
OI.P ... ak 0.073-44) 0.107911
&iper Ot!.1'1,-. 0.073441 0 .107911
W.inucr ,. M:B R:iltas
On.P ....... 0.073441 0 .107911
Ol.f'!!cl 0.0~ 0.107911
&i.per Ot!.1'1,a 0..073-44) 0.107911
3Htl
Adwce Llr. ND. 4 152-E
Decision No. 0.22-11-022
OR ELECTRIC HEAT PUMPS
PPP ND CTC
D,02548 0.00007 0.00 153
0,02546 0.00007 0.00 153
0,02546 0.00007 0.00 153
0,02546 000007 0.00 153
0·,02548 000007 0.00 153
0,02548 000007 0.00 153
PPP ND CTC
0.02548 0•.00007 0.00 153
0.02548 0.00007 0.00153
0.0254t 0.00007 0 .00163,
0.0254t 0.00007 0 .00153,
0.02548 0.00007 0 .00163,
OJl2546 0.00007 0.00163,
PPP ND CTC
0.0254t 11.00007 0.00153,
0.0254t 11.00007 0.00163,
0 .0254t 0.00007 0.00153,
0.02548 0.00007 0.00163
0.0254t 0.00007 0.00163
0.0254t 0.00007 0..00153
(Cootlnued l
l~!IUl!d by
LGC RS
0.01383 0.00000
0.01383 0.00000
0.01383 0.00000
0.01383
0.01383
0.01383
ILGC
0.01383
0.01383
0.01383
0.01383
0.01383
0,01383
1LGC
0.01383
0.01383
0.01383
0.01383
0.01383
0.01383
0.00000
0.00000
0.00000
R:S
0.00003
0.00003
0.00003
0.00003
0.00000
D..00003
R:S
D..00003
0.00000
D..00003
D..00003
D..00003
D..00003
Submitted
Effective
TRAC
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
TRAC
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
TRAC
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
Resolution No.
uoc
Total
18_()1)
0.22228
0.22228
0.22228
0.22228
0.22228
0.22228
UDC
Toial
16..00
0.22161!
0.22161!
0.22161!
G.22161!
Q.22161!
0.22161!
UDC
Total
16..00
D.22228
G.22228
0.22228
0.22228
G.22228
0.22228
Jan 31. 2023
Jen 31. 2023
N
N
N
N
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 61 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
166
Packet Pg. 580 of 690
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l Cel. P.U.C. Sheet No. 37198-E
Canceling Cel. P.U.C. Sheet No.
SCHEDULE TOU-ELEC Sheel4
DOMESTIC TIME-OF-USE FOR HOUSEHOLDS WITl·t ELEClRIC VEHICLES . ENERGY STORAGE,
OR ELECTRIC HEAT PUMPS
Note..: Tran!lrrl!l!IIOM, Energy i:narges linmJCle he Transmission R'e~ Balancing Acoan Adjuslrmnt (TRBAA) al ${0.oo2A2) per kWh and lhe Transml!ism Aooesa Charge Balan~ Aa:ol.lll f141as~ (TACSAA) of $(0.01631) per kWh. PPP EnEfllY charges~ law Income PPP ra11! (LI-PPP) S0.01668/k:Wh, Non-low lnoome PPP rera (Non-U PPP) S0..0033JJkWh (pursuant 1D PU Code Section 399.8. lhe Non-4..1-PPP ra1a may not exceed Ja,uary 1. 2000 levels).
Procurement Energy 6flcieocy SWdlerge, Rate of $0.00422 /kWh, California Soler tnitia11ve rate (CSI) cl $0.0000MWh and Self.Generabo11, Incentive 1Pr<9am rate (SGIPj $0.00122/kWh.
Rate Component$
The Utility 0islribu'liion Company Totall IRates (UDC Total) shown above are comp,rised c:11 the ldllowing components (ii appUcabJe): (1) Transmission (Trans) Charges, (2) Distlib<Ulion (Dislt) Oiarges.. (3) Public P,wpose Program (PPP) Charges .. (4) Nuclear Oooommissioning (ND) Charge, (5) O"-)oin,g Competition Tratwlion Charges (CTC), ·(6) Local Genetalion Chat9e (LGC). (7) Reliability Services (RS), and (8) lhe Total Rate Adjustm811lCornponent (llRAC) .
Certain DilectAocess .customers are !Hlempt from lhe TRAC, M def111ed in Rule 1 - Daf111ilions ..
EcaOdlist fee Piftere01,;a1
A Franchi:se Fee Differential of 5. 78% wiD be applied lo Iha monthly billings calculaled under 'thiss schedule ror all custome<:s wilhin Ille oorporate limits ol lhe City or San Diego. Suc:11 IFfaochiH Fee Differential shall be so indicated a.nd added as a separale [tern lo bills rendered to sudh cus'klmer!;.
Tlma Periods:
All time periods listed are applicable Lo actual "dock" lime) TOU Period - Wae'kdayt; SummBf Wini.er
On-Peak 4i00 Ip.m. - 9 :001rn;_ 4:00 p.m. - 9i00 p•.m.
16:00a..m . -4:00p •.m. 6:00 a.m. - 4 :00 p.m,; Off.P-eak 9~00 Ip.m. - midnighl Exdlidin,g 10:00 a.rn.-2:00 p.m.i:n Marth aoo April; '9:00 p.m. - midnight
Midnight - 6 :00 am. Super-Off.P1tak Midnight - 6:00 rum. 10:00 ajm. -2:00 p.m. in March andApr li TOU Penod - Weekend~ SummBf and Holidays
On..f>-eak 4i00 Ip.m. - 9 :00 p.m, 4:00 p.m. - 9:00 p•.m.
Ott-Peak 2l00 Ip.m. - 4 :00 p.rn,; 2:00p.m. - 4 :00 p-.rn. 9~00 Ip.m. - midnighl '9:00 p.m. - midnight
Super-Off..P1tak Midnigh.t - 2:00 p.m. Midnight - 2 :00 p.rn.
Seasons;
Summer June l - Odober 31
Winter Novernbe r 1 - May 3-1
Continued
4H1 Issued by
Adw:e Llr. No. 4152-E
D.22-tt-022
Winl8r
Submitted
Effective
Resolution No.
Jen 31. 2023
Jan 31. 2023
N
N
N
N
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 62 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
Pg.
167
Packet Pg. 581 of 690
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•1111111/E Revised Cal. P.U.C. Sheet No.
San Diiago Gas & Electric Compa ny
San Diego, Califomia Canceling Revised Cal. P.U.C. Sheet No.
APPLICABILITY
SCHEDULE E-CARE
CALIFORNIA AL TERNA TE RA TES FOR ENERGY
35718-E
32576-E
Sheet 1
This schedule provides a California Alternate Rates for Energy (CARE) discount to each of the following types of customers listed below that meet the requirements for CARE eligibility as defined in Rule 1 , Definitions, and herein, and is taken 1in conjunction with the customer's otherwise applicable service schedule.
1) Customers residing in a permanent single-family accommodation, separately metered by the Ullllty.
2) Multi-family dwelling units and mobile home parks supplied through one meter on a single premises where the individual unit is submetered.
3) Non-profit group living facilities.
4) Agricultural employee housing facilities.
TERR ITORY
Within the entire territory served by the Utility.
DISCOUNT
1) Residential CARE: Qualified residential CARE customers will receive a total effective discount according to the following:
2015 2016 2017 2.018 2019 2020 and
beyond
crrect1ve 40% 39% 38% 38% 36% R 35% Discou nt
1C5
Pursuant to Commission Decision (D.) 15-07-001, the average effective CARE discount for residential customers will decrease 1% each year until an average effective discount of 35% is reached in 2020.
The average effective CARE discount consists of: (a) exemptions from paying the CARE Surcharge, Department of Water Resources Bond Charge (DWR-BC), Vehlde-Grid Integration (VGI) costs, and California Solar !I nitiative (CSI); (b) a 50% minimum bill relative to Non-CARE; (c) the California Wildfire Fund Charge (WF-NBC) and (d) a separate line- T item bill discount for all qualified residential CARE customers with the exclusion of CARE Medical Baseline customers taking service on tiered rates schedules. D.15~07-001 retained the rate subsidies in Non-CARE Medical Baseline tiered rates and thereby a separate line-item discount is provided for these GARE Medical Baseline customers Continued
Dec 30, 2021
Advice ltr. No. 3928-E
Issued by
Dan Skopec
Submitted
Effective Jan 1, 2022
\/if"Q PrP---t;i.if'tir;,n t
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 63 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
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Packet Pg. 582 of 690
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Cost Effectiveness Analysis: Existing Single Family Building Upgrades 64 Appendices
6.2.5 City of Palo Alto Utilities
Following are the CPAU electricity and natural gas tariffs applied in this study. The CPAU monthly gas rate in $/therm was applied on a monthly basis according to the rates shown in Table 27. These rates are based on applying a normalization curve to the October 2023 tariff based on seven years of historical gas data. The monthly service charge applied was $14.01 per month per the November 2023 G-1 tariff.
Table 27. CPAU Monthly Gas Rate ($/therm)
Month G1 Volumetric
Total Baseline
G1 Volumetric
Total Excess
January $1.83532 $3.35639
February $1.38055 $2.59947
March $1.32506 $2.47695
April $1.29680 $2.44038
May $1.29511 $2.43804
June $1.32034 $2.45406
July $1.35688 $2.61519
August $1.40696 $2.67944
September $1.42130 $2.70301
October $1.42310 $2.48300
November $1.46286 $2.45547
December $1.62415 $2.62128
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
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Packet Pg. 583 of 690
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. APPLICABILITY:
RESIDENTIAL ELECTRJC SERVICE
UTILITY RATE SCHEDULE E-1
This Rate Schedule applies to separately metered single-fami ly residential dwellings receiving Electric Service from the City of Palo Alto Utilities.
B. TERRJTORY:
This rate schedule applies everywhere the City of Palo Alto provides Electric Service.
C. UNBU DLED RA TES:
Per kilowatt-hour (kWh) Commodity
Tier l usage
Tier 2 usage
Any usage over Tier l
Minimum Bill ($/day)
D. SPECIAL NOTES:
$ 0.09999
0.13873
I. Calculation of Cost Components
Distribution Public Benefits
$ 0.06954 $ 0.00568
0. 10225 0.00568
Total
$ 0.17521
0.24666
0.4181
The actual bill amount is calculated based on the applicable rates in Section C above and adjusted for any applicable discounts, surcharges and/or taxes.
On a Customer's bill
statement, the bill amount may be broken down into appropriate components as calculated under Section C.
2. Calculation of Usage Tiers
Tier I Electricity usage sha ll be calculated and billed based upon a level of 11 kWh per day, prorated by Meter reading days of Service. As an example, for a 30-day bill, the Tier I level would be 330 kWh. For further discussion of bill calculation and proration, refer to Rule and Regulation 11.
ClTY OF PALO ALTO UTILITIES
Issued by the City Council
Supersedes Sheet No E-1-1
dated 7-1-2022
O
CITYOF
PALO A LTO
UTILITIES
{End}
Sheet o E-1-1
Effective 7-1-2023
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 65 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
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Firm Service Rates
A. Tim.,..,r-D•;v (S-ll p.m.) R•le
Residential Time-of -Day Service
Rate Schedule R-TOD
•l'rf'.ctiwlt!I ul O'htlle Id J Of'ttlhir•li ul El'kct.lw u at fflntiwn u/ h■uryl.lOU JJtns· I. JU• .\1a\' 1. 2•u J101uar, l.lGlS ~b,d.2015 IHIIMG!MINl5lh
Nu•S•nantr Stbun (Octohn-• M:ty)
s,1 lfnl lntraslrvcru.rt fl....ed Clriilrlt prr ""1fl ,A p#!'rlM.tU lltt1rlcii1~1 l.lt- f' O.artt
P.,l$/lH~
Off.Peak SIi H"'
Summer SrbOd (June-• Sep1mftr }
S~'J ltrd lntrascrucru.rt fi.1.-ed('kartt pb' "'°'1tA pn-mnu ll« lril"i.l~ 11'11(t.t Cliara.e
P.,l$ /1H~
Mod-l',,ak$/Hll
Off.Peak Sil it•
B. Optional Critical P~'8k Pricing Rate
m.so $24.IS $24.llO W.30
SO.ISO SO.Im S0.16" $0.1678
S0.1120 $0.IISI S0.1183 S0.1215
m.so $24.IS $2◄.llO $2S.$0
SO.l-"79 S0.33<,9 S0.3462 $0.JS57
$0.11164 $0.1914 $0.1967 $0.2001
$0.13$0 S0.1387 SO. 14:!S $0.1464
I. The CPP R.ale base prices per time-or-<lay period arc lhe same as lhe prices per time-or-day period for TOD (S--8 p.m. ).
2. The CPP Ra1e prosidcs o discount per kWb on the Mid-Peak and Off-Peak prices during summer months.
3. During CPP EvenlS. customers will be charged for ""''llY used 31 the applicable Li~r-<la y period rate plus the CPP Ralc Event Price per k \l.'h :as :sho"'TI on www .srnud._org.. $26.20
$0.17'..A
$0.1248
$2t,.20
$0.36S5
$0.2077
$0.ISQS
4. During CPP EvenlS. energy exported lo the grid will be compensated al the CPP Rate Event Price per kWh as shown oo www.smud.org..
S. The CPP Rale Event Price and discount will be upda1ed annu.ally al SMUD's discn,1ion and posted on www.smud.org.
C. Plug-In Ell-d ric Vehicle CndH (r•k cafl-gorin RTOl an d RTC I) Thi!i credit is for l"Qidcntia.l customcn. who have a licensed passenger battery electric plug-in or plug-in hybrid dt'Clric ,·chide.
Cred.iL applies lo all clcclricity usage charges from midnight to 6,00 a.m. daily.
Electric Vehicle Credit.. ................ ... .. ........... ........................ -$0.0ISOlkWh Ill. Electricity Usage Surcharges
Refer to the follo\\'Jng rate schedu1es for deta ils on these: surcharges_ A. Hydro Gcnr •tion Adju5fmenl (HCA). Refor to Rate Schedule HGA.
IV. Rate OpUon Menu
A~ E:nt rgy A.ni5htncc Pn ~nm R ide. Refer to Rate Schedule EAPR.
B. Medi0tl Equipmt nt Di,count Program. Rder to Rate Schedule MED.
C. J oint Partici pation in Mnli CJiJ Equipment Di~ unt a nd Encr-gy Assi!!itance Pl"o-gr:iim Rate. Refer lo Rate Schedule MED.
SACRAMEN TO MUNICIPAL UTILITY DISTRICT
Resolution No. 23-09.09 adopted September 21, 2023
Sheet No. R-TOD-2
Effective: Septembe r 22, 2023
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 66 Appendices
6.2.6 Sacramento Municipal Utilities District (Electric Only) Following are the SMUD electricity tariffs applied in this study. The rates effective January 2023 were used.
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
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. 11,ne-of-Da~ (5--8 p.m.) Rate (r111e category RT0-2)
1. The TOD (5-8 p.m.) Rate is tbe standard rate for SMUD's res_idential customers. Eligjble customers can elect the fixed .Rate under Rate Schedule Ras an alternative m1e.
2. The TOD (5-8 p.m.) .Rate is an optional rate for cm,tomers who have an e-ligible renewable electrical generation facility under Rate Schedule NEM I that was approved for installation by SMUD prior 10 January I, 2018.
3. This rate has five kilowan-h.ou:r (kWh) prices, depending on rhe rime-of-day and season as shown below. Holidays are de10iled in Section V. Conditions of Service.
Peak Weekdays be1ween 5:00 p.m. and 8,00 p.m.
Summ e:r Mid-Pe11J.: Weekdays between noon and midnight ex.cept d'uring lhe {JUl'I E - Sept 30) Pe.ak hours.
Off-Peak All other hours, including weekerids and '1olidays1. on-Somm er Peak Weekdays belween 5:00 p.m. and 8,00 p.m. (Ocl l - May JIJ Off-Peak AH other hours, including weekends and holidays1. 1 See Section V. Condi1ion:s of Service
Cost Effectiveness Analysis: Existing Single Family Building Upgrades 67 Appendices
California Energy Codes & Standards | A statewide utility program 2024-04-25 Item 19
Attachment C - 2022 Cost -
Effectiveness Study Existing
Single Family Building
Upgrades
Item 19: Staff Report
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Cost Effectiveness Analysis: Existing Single Family Building Upgrades 68 Appendices
6.2.7 Fuel Escalation Assumptions
The average annual escalation rates in Table 28 were used in this study. These are based on assumptions from the CPUC 2021 En Banc hearings on utility costs through 2030 (California Public Utilities Commission, 2021a) . Escalation rates through the remainder of the 30-year evaluation period are based on the escalation rate assumptions within the 2022 TDV factors. No data was available to estimate electricity escalation rates for CPAU and SMUD, therefore electricity escalation rates for PG&E and statewide natural gas escalation rates were applied. Table 29 presents the average annual escalation rates used in the utility rate escalation sensitivity analysis shown in Section 3.2.4. Rates were applied for the same 30-year period and are based on the escalation rate assumptions within the 2025 LSC factors from 2027 through 2053.28 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 years 2024, 2025, and 2026 and so the CPUC En Banc assumptions were applied for those years using the average rate across the three IOUs for statewide electricity escalation.
Table 28: 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
2024 4.6% 1.8% 1.6% 2.8%
2025 4.6% 1.8% 1.6% 2.8%
2026 4.6% 1.8% 1.6% 2.8%
2027 4.6% 1.8% 1.6% 2.8%
2028 4.6% 1.8% 1.6% 2.8%
2029 4.6% 1.8% 1.6% 2.8%
2030 4.6% 1.8% 1.6% 2.8%
2031 2.0% 0.6% 0.6% 0.6%
2032 2.4% 0.6% 0.6% 0.6%
2033 2.1% 0.6% 0.6% 0.6%
2034 1.9% 0.6% 0.6% 0.6%
2035 1.9% 0.6% 0.6% 0.6%
2036 1.8% 0.6% 0.6% 0.6%
2037 1.7% 0.6% 0.6% 0.6%
2038 1.6% 0.6% 0.6% 0.6%
2039 2.1% 0.6% 0.6% 0.6%
2040 1.6% 0.6% 0.6% 0.6%
2041 2.2% 0.6% 0.6% 0.6%
2042 2.2% 0.6% 0.6% 0.6%
2043 2.3% 0.6% 0.6% 0.6%
2044 2.4% 0.6% 0.6% 0.6%
2045 2.5% 0.6% 0.6% 0.6%
2046 1.5% 0.6% 0.6% 0.6%
2047 1.3% 0.6% 0.6% 0.6%
2048 1.6% 0.6% 0.6% 0.6%
2049 1.3% 0.6% 0.6% 0.6%
2050 1.5% 0.6% 0.6% 0.6%
2051 1.8% 0.6% 0.6% 0.6%
2052 1.8% 0.6% 0.6% 0.6%
2053 1.8% 0.6% 0.6% 0.6%
28https://www.energy.ca.gov/files/2025-energy-code-hourly-factors. Actual escalation factors were provided by consultants E3.
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Table 29: Real Utility Rate Escalation Rate Assumptions, 2025 LSC Basis Year
Statewide Natural
Gas Residential
Average Rate
(%/year, real)
Statewide
Electricity
Residential
Average Rate
(%/year, real)
2024 4.6% 2.1%
2025 4.6% 2.1%
2026 4.6% 2.1%
2027 4.2% 0.6%
2028 3.2% 1.9%
2029 3.6% 1.6%
2030 6.6% 1.3%
2031 6.7% 1.0%
2032 7.7% 1.2%
2033 8.2% 1.1%
2034 8.2% 1.1%
2035 8.2% 0.9%
2036 8.2% 1.1%
2037 8.2% 1.1%
2038 8.2% 1.0%
2039 8.2% 1.1%
2040 8.2% 1.1%
2041 8.2% 1.1%
2042 8.2% 1.1%
2043 8.2% 1.1%
2044 8.2% 1.1%
2045 8.2% 1.1%
2046 8.2% 1.1%
2047 3.1% 1.1%
2048 -0.5% 1.1%
2049 -0.6% 1.1%
2050 -0.5% 1.1%
2051 -0.6% 1.1%
2052 -0.6% 1.1%
2053 -0.6% 1.1%
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Get In Touch
The adoption of reach codes can differentiate jurisdictions as efficiency leaders and help accelerate the adoption of new equipment, technologies, code compliance, and energy savings strategies.
As part of the Statewide Codes & Standards Program, the Reach Codes Subprogram is a resource available to any local jurisdiction located throughout the state of California.
Our experts develop robust toolkits as well as provide specific technical assistance to local jurisdictions (cities and counties) considering adopting energy reach codes. These include Cost-effectiveness research and analysis, model ordinance language and other code development and implementation tools, and specific technical assistance throughout the code adoption process.
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Application of the 2022
Studies to the 2025
Energy Code:
Existing Single Family
Building Upgrades
Prepared by:
Frontier Energy, Inc
Misti Bruceri & Associates, LLC
Prepared for:
Kelly Cunningham, Codes and
Standards Program, Pacific Gas
and Electric
Revision: 1.0
Last modified: 2025/08/15
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Table 1 Summary of Revisions
Date Description Reference (page or section)
8/15/2025 Original Release N/A
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 privately-
owned rights including, but not
limited to, patents, trademarks or
copyrights.
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Acronym List
B/C – Lifecycle Benefit-to-Cost
Ratio
CASE – Codes and Standards
Enhancement
CFL – Compact Fluorescent
Lamps
CPAU – City of Palo Alto Utilities
CPUC – California Public Utilities
Commission
CZ – California Climate Zone
kWh – Kilowatt Hour
NPV – Net Present Value
PG&E – Pacific Gas and Electric
Company
PV – Photovoltaic
SCE – Southern California
Edison
SDG&E – San Diego Gas and
Electric
SMUD – Sacramento Municipal
Utility District
SoCalGas – Southern California
Gas Company
Therm – Unit for quantity of heat
that equals 100,000 British
thermal units
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Table of Contents
1 Summary ...................................................................................................................... 2 2 Air Sealing at the Ceiling ............................................................................................. 4 3 Lighting Measures ..................................................................................................... 10 4 Water Heating Package .............................................................................................. 14 5 PV ................................................................................................................................ 15 6 References ................................................................................................................. 22
List of Tables
Table 1 Summary of Revisions ............................................................................................. 1 Table 2. [Pre-1978] Air Sealing at the Ceiling (Std) ............................................................... 4 Table 3. [1978-1991] Air Sealing at the Ceiling (Std) ............................................................ 5 Table 4. [1992-2010] Air Sealing at the Ceiling (Std) ............................................................ 6 Table 5. [Pre-1978] Air Sealing at the Ceiling (CARE) .......................................................... 7 Table 6. [1978-1991] Air Sealing at the Ceiling (CARE) ........................................................ 8 Table 7. [1991-2010] Air Sealing at the Ceiling (CARE) ........................................................ 9 Table 8. [All Vintages] LED Lamp vs. CFL ........................................................................... 11 Table 9. [All Vintages] Exterior Photosensor ........................................................................12 Table 10. [All Vintages] LED and Photosensor ....................................................................13 Table 11. [All Vintages] Water Heating Package ..................................................................14 Table 12. [Pre-1978] 3 kW PV without Solar Tax Credit (Std) ..............................................16 Table 13. [1978-1991] 3 kW PV without Solar Tax Credit (Std) ...........................................17 Table 14. [1992-2010] 3 kW PV without Solar Tax Credit (Std) ............................................18 Table 15. [Pre-1978] 3 kW PV without Solar Tax Credit (CARE) ..........................................19 Table 16. [1978-1991] 3 kW PV without Solar Tax Credit (CARE) .......................................20 Table 17. [1992-2010] 3 kW PV without Solar Tax Credit (CARE) .......................................21 List of Figures
No table of figures entries found.
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1 Summary
The California Codes and Standards (C&S) Reach Codes program provides technical support to local governments considering adopting a local ordinance (reach code) intended to support meeting local and/or statewide energy efficiency and greenhouse gas 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.
In April 2024, the Statewide Reach Codes Team published the 2022 Cost-Effectiveness Study: Existing Single Family Building Upgrades. This study focuses on existing single family buildings identifying cost-effective measures and measure package upgrades in all 16 California climate zones. The study was conducted to complement Part 6 of the California Building Code (the Energy Code) for the 2022 code cycle, effective January 1, 2023. In the 2019 code cycle the 2019 Cost-Effectiveness Study: Existing Single Family Residential Building Upgrades study included outdoor lighting and a water heater package that was discontinued in the 2022 study but has been brought back in this memo by request from jurisdictions. The studies document the estimated costs, benefits, energy impacts and greenhouse gas emission reductions that may result from implementing an ordinance to help local leadership, residents, and other stakeholders make informed policy decisions.
The Statewide Reach Codes Team reviewed the cost-effectiveness study for impacts of code changes implemented in the 2025 Energy Code. Measures that are now required by code may alter the results presented in the 2022 study. Below is a summary of the changes to the additions and alterations for residential buildings sections of the 2025 Energy Code. • Mandatory wall insulation R-value has been increased from R-13 to R-15. [Section 150.2(a) of the Energy Code]
• Prescriptive window U-factor has decreased from 0.30 to 0.27 in Climate Zones 1-5, 11-14, and 16. [Section 150.2(b)1B of the Energy Code]
The wall insulation measure has been re-evaluated with R-15 instead of R-13. There is generally a slight increase in utility cost savings as expected with the increase in efficiency.
However, there is not a substantial impact on the cost-effectiveness results.
For the prescriptive window U-factor, the original study modeled U-0.28 in all climate zones.
This updated memo drops the U-factor from 0.28 to 0.27 in all climate zones. The SHGC is maintained at 0.23 for climate zone 2, 4, and 6-15 and 0.35 for CZ 1, 3, 5, 16. There is minimal impact on the cost-effectiveness results due to this update. However, there are two instances in the 1978-1991 vintage where cost-effectiveness flips from cost-effective to not cost-effective. Climate zone 4 in PGE territory utilizing standard rates and the modest gas escalation is no longer cost-effective on-bill by the smallest margin. Climate zone 10 in SDGE territory utilizing CARE rates and the modest gas escalation has also become no longer cost-effective on-bill.
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The 2022 study included a whole building air sealing measure defined as a 30% reduction in air leakage. A new measure – air sealing of the ceiling floor, representing a 14% reduction in air leakage – is added in this memo. Further details and cost-effectiveness results are provided in Section 2.
Lighting measures were previously presented in the 2019 Cost-Effectiveness Study: Existing Single Family Residential Building Upgrades study but were not analyzed in the 2022 study.
Updated cost-effectiveness analysis for this measure is presented in Section 3.
The water heating package measure was previously presented in 2019 Cost-Effectiveness Study: Existing Single Family Residential Building Upgrades study. Updated cost- effectiveness analysis for this measure is presented in Section 4.
The 3 kW PV measure from the 2022 study is revised here with an updated cost- effectiveness analysis that accounts for the elimination of the Federal Solar tax credit December 31, 2025. Additional details and analysis are provided in Section 5.
The 2022 report, 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].
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2 Air Sealing at the Ceiling
Unlike full air sealing, which has previously been presented, air sealing of the ceiling floor may be an attractive measure for an attic remodel project. The whole building air sealing measure estimated a 30% reduction in air leakage, while air sealing at the ceiling measure results in a 14% reduction in air leakage.
Table 2 through Table 7 present the cost-effectiveness results for the air sealing at the ceiling plane measure. The estimated incremental cost for air sealing at the ceiling plane is $1,963 which is from the 2022 Residential Additions and Alterations CASE Report (Statewide CASE Team, 2020).
Table 2. [Pre-1978] Air Sealing at the Ceiling (Std)
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 $1,963 $33 ($465) ($997) ($432)
CZ02 PGE $1,963 $18 ($1,114) ($1,433) ($1,118)
CZ03 PGE $1,963 $17 ($1,180) ($1,463) ($1,171)
CZ04 PGE $1,963 $25 ($1,081) ($1,290) ($979)
CZ04 CPAU $1,963 $21 ($1,081) ($1,379) ($1,069)
CZ05 PGE $1,963 $16 ($1,230) ($1,500) ($1,235)
CZ05 PGE/SCG $1,963 $14 ($1,230) ($1,555) ($1,325)
CZ06 SCE/SCG $1,963 ($2) ($1,797) ($1,987) ($1,937)
CZ07 SDGE $1,963 ($3) ($1,813) ($2,008) ($1,934)
CZ08 SCE/SCG $1,963 $7 ($1,680) ($1,775) ($1,703)
CZ09 SCE/SCG $1,963 $10 ($1,597) ($1,693) ($1,592)
CZ10 SCE/SCG $1,963 $17 ($1,497) ($1,540) ($1,420)
CZ10 SDGE $1,963 $23 ($1,497) ($1,366) ($1,237)
CZ11 PGE $1,963 $32 ($1,014) ($1,120) ($816)
CZ12 PGE $1,963 $22 ($1,147) ($1,348) ($1,064)
CZ12 SMUD/PGE $1,963 $17 ($1,147) ($1,468) ($1,190)
CZ13 PGE $1,963 $31 ($1,114) ($1,162) ($918)
CZ14 SCE/SCG $1,963 $32 ($897) ($1,130) ($832)
CZ14 SDGE $1,963 $42 ($897) ($845) ($519)
CZ15 SCE/SCG $1,963 $40 ($1,297) ($1,041) ($946)
CZ16 PGE $1,963 $30 ($581) ($1,071) ($551)
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Table 3. [1978-1991] Air Sealing at the Ceiling (Std)
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 $1,963 $23 ($931) ($1,292) ($903)
CZ02 PGE $1,963 $13 ($1,364) ($1,570) ($1,341)
CZ03 PGE $1,963 $10 ($1,480) ($1,668) ($1,496)
CZ04 PGE $1,963 $16 ($1,330) ($1,522) ($1,292)
CZ04 CPAU $1,963 $13 ($1,330) ($1,575) ($1,356)
CZ05 PGE $1,963 $11 ($1,447) ($1,649) ($1,466)
CZ05 PGE/SCG $1,963 $10 ($1,447) ($1,684) ($1,522)
CZ06 SCE/SCG $1,963 ($1) ($1,830) ($1,967) ($1,934)
CZ07 SDGE $1,963 ($4) ($1,896) ($2,040) ($1,991)
CZ08 SCE/SCG $1,963 $4 ($1,797) ($1,860) ($1,813)
CZ09 SCE/SCG $1,963 $5 ($1,747) ($1,823) ($1,764)
CZ10 SCE/SCG $1,963 $10 ($1,663) ($1,722) ($1,652)
CZ10 SDGE $1,963 $14 ($1,663) ($1,603) ($1,517)
CZ11 PGE $1,963 $25 ($1,264) ($1,320) ($1,096)
CZ12 PGE $1,963 $16 ($1,380) ($1,520) ($1,314)
CZ12 SMUD/PGE $1,963 $12 ($1,380) ($1,604) ($1,402)
CZ13 PGE $1,963 $23 ($1,364) ($1,373) ($1,199)
CZ14 SCE/SCG $1,963 $22 ($1,230) ($1,397) ($1,182)
CZ14 SDGE $1,963 $28 ($1,230) ($1,212) ($974)
CZ15 SCE/SCG $1,963 $32 ($1,463) ($1,225) ($1,154)
CZ16 PGE $1,963 $21 ($1,014) ($1,357) ($1,001)
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Table 4. [1992-2010] Air Sealing at the Ceiling (Std)
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 $1,963 $14 ($1,314) ($1,550) ($1,309)
CZ02 PGE $1,963 $9 ($1,530) ($1,687) ($1,529)
CZ03 PGE $1,963 $7 ($1,613) ($1,744) ($1,618)
CZ04 PGE $1,963 $11 ($1,530) ($1,653) ($1,501)
CZ04 CPAU $1,963 $9 ($1,530) ($1,701) ($1,557)
CZ05 PGE $1,963 $7 ($1,613) ($1,759) ($1,637)
CZ05 PGE/SCG $1,963 $6 ($1,613) ($1,788) ($1,686)
CZ06 SCE/SCG $1,963 $1 ($1,863) ($1,936) ($1,911)
CZ07 SDGE $1,963 $0 ($1,896) ($1,944) ($1,911)
CZ08 SCE/SCG $1,963 $3 ($1,830) ($1,885) ($1,851)
CZ09 SCE/SCG $1,963 $3 ($1,780) ($1,892) ($1,853)
CZ10 SCE/SCG $1,963 $6 ($1,763) ($1,814) ($1,767)
CZ10 SDGE $1,963 $8 ($1,763) ($1,741) ($1,681)
CZ11 PGE $1,963 $14 ($1,530) ($1,581) ($1,437)
CZ12 PGE $1,963 $10 ($1,580) ($1,693) ($1,560)
CZ12 SMUD/PGE $1,963 $8 ($1,580) ($1,737) ($1,606)
CZ13 PGE $1,963 $12 ($1,580) ($1,643) ($1,531)
CZ14 SCE/SCG $1,963 $12 ($1,530) ($1,639) ($1,503)
CZ14 SDGE $1,963 $16 ($1,530) ($1,537) ($1,382)
CZ15 SCE/SCG $1,963 $17 ($1,680) ($1,572) ($1,532)
CZ16 PGE $1,963 $14 ($1,314) ($1,556) ($1,314)
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Table 5. [Pre-1978] Air Sealing at the Ceiling (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 $1,963 $26 ($465) ($1,212) ($766)
CZ02 PGE $1,963 $14 ($1,114) ($1,550) ($1,302)
CZ03 PGE $1,963 $13 ($1,180) ($1,574) ($1,343)
CZ04 PGE $1,963 $18 ($1,081) ($1,459) ($1,216)
CZ04 CPAU $1,963 $0 ($1,081) ($1,963) ($1,963)
CZ05 PGE $1,963 $12 ($1,230) ($1,604) ($1,395)
CZ05 PGE/SCG $1,963 $11 ($1,230) ($1,648) ($1,467)
CZ06 SCE/SCG $1,963 ($1) ($1,797) ($1,969) ($1,928)
CZ07 SDGE $1,963 ($1) ($1,813) ($1,976) ($1,918)
CZ08 SCE/SCG $1,963 $5 ($1,680) ($1,824) ($1,768)
CZ09 SCE/SCG $1,963 $8 ($1,597) ($1,764) ($1,686)
CZ10 SCE/SCG $1,963 $12 ($1,497) ($1,659) ($1,566)
CZ10 SDGE $1,963 $16 ($1,497) ($1,546) ($1,443)
CZ11 PGE $1,963 $23 ($1,014) ($1,353) ($1,116)
CZ12 PGE $1,963 $17 ($1,147) ($1,503) ($1,279)
CZ12 SMUD/PGE $1,963 $11 ($1,147) ($1,623) ($1,406)
CZ13 PGE $1,963 $22 ($1,114) ($1,394) ($1,205)
CZ14 SCE/SCG $1,963 $23 ($897) ($1,352) ($1,120)
CZ14 SDGE $1,963 $30 ($897) ($1,163) ($905)
CZ15 SCE/SCG $1,963 $27 ($1,297) ($1,334) ($1,266)
CZ16 PGE $1,963 $24 ($581) ($1,270) ($859)
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Table 6. [1978-1991] Air Sealing at the Ceiling (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 $1,963 $18 ($931) ($1,442) ($1,135)
CZ02 PGE $1,963 $10 ($1,364) ($1,658) ($1,477)
CZ03 PGE $1,963 $8 ($1,480) ($1,734) ($1,598)
CZ04 PGE $1,963 $12 ($1,330) ($1,627) ($1,446)
CZ04 CPAU $1,963 $0 ($1,330) ($1,963) ($1,963)
CZ05 PGE $1,963 $8 ($1,447) ($1,719) ($1,575)
CZ05 PGE/SCG $1,963 $7 ($1,447) ($1,746) ($1,619)
CZ06 SCE/SCG $1,963 ($0) ($1,830) ($1,959) ($1,933)
CZ07 SDGE $1,963 ($2) ($1,896) ($2,003) ($1,964)
CZ08 SCE/SCG $1,963 $3 ($1,797) ($1,886) ($1,848)
CZ09 SCE/SCG $1,963 $4 ($1,747) ($1,859) ($1,813)
CZ10 SCE/SCG $1,963 $7 ($1,663) ($1,790) ($1,736)
CZ10 SDGE $1,963 $10 ($1,663) ($1,710) ($1,641)
CZ11 PGE $1,963 $18 ($1,264) ($1,500) ($1,325)
CZ12 PGE $1,963 $12 ($1,380) ($1,631) ($1,469)
CZ12 SMUD/PGE $1,963 $8 ($1,380) ($1,716) ($1,558)
CZ13 PGE $1,963 $16 ($1,364) ($1,545) ($1,411)
CZ14 SCE/SCG $1,963 $16 ($1,230) ($1,545) ($1,378)
CZ14 SDGE $1,963 $20 ($1,230) ($1,422) ($1,233)
CZ15 SCE/SCG $1,963 $22 ($1,463) ($1,460) ($1,410)
CZ16 PGE $1,963 $16 ($1,014) ($1,491) ($1,211)
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Table 7. [1991-2010] Air Sealing at the Ceiling (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 $1,963 $11 ($1,314) ($1,642) ($1,452)
CZ02 PGE $1,963 $7 ($1,530) ($1,749) ($1,625)
CZ03 PGE $1,963 $6 ($1,613) ($1,793) ($1,693)
CZ04 PGE $1,963 $8 ($1,530) ($1,729) ($1,609)
CZ04 CPAU $1,963 $0 ($1,530) ($1,963) ($1,963)
CZ05 PGE $1,963 $5 ($1,613) ($1,804) ($1,708)
CZ05 PGE/SCG $1,963 $5 ($1,613) ($1,827) ($1,747)
CZ06 SCE/SCG $1,963 $1 ($1,863) ($1,940) ($1,920)
CZ07 SDGE $1,963 $0 ($1,896) ($1,944) ($1,918)
CZ08 SCE/SCG $1,963 $2 ($1,830) ($1,905) ($1,879)
CZ09 SCE/SCG $1,963 $2 ($1,780) ($1,908) ($1,878)
CZ10 SCE/SCG $1,963 $4 ($1,763) ($1,855) ($1,819)
CZ10 SDGE $1,963 $6 ($1,763) ($1,805) ($1,758)
CZ11 PGE $1,963 $10 ($1,530) ($1,685) ($1,572)
CZ12 PGE $1,963 $7 ($1,580) ($1,759) ($1,654)
CZ12 SMUD/PGE $1,963 $5 ($1,580) ($1,802) ($1,700)
CZ13 PGE $1,963 $9 ($1,580) ($1,732) ($1,644)
CZ14 SCE/SCG $1,963 $9 ($1,530) ($1,722) ($1,615)
CZ14 SDGE $1,963 $11 ($1,530) ($1,652) ($1,529)
CZ15 SCE/SCG $1,963 $12 ($1,680) ($1,696) ($1,667)
CZ16 PGE $1,963 $11 ($1,314) ($1,645) ($1,454)
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3 Lighting Measures
LED lighting and exterior lighting control measures were previously evaluated in the 2019 Cost-Effectiveness Study: Existing Single Family Residential Building Upgrades study.
These measures are not included in the 2022 Cost-Effectiveness Study: Existing Single Family Building Upgrades study, but have been re-evaluated and included in this memo.
The updated analysis follows the same methodology as the 2019 study, but with updated costs for equipment and updated utility rates.
The three measures evaluated are LED lighting, exterior photosensor, and LED lighting plus photosensor. Table 8 through Table 10 show the results for the different lighting measures evaluated. Each measure is explained in more detail below.
LED Lighting: Replace screw-in (A-based for lamps) incandescent lamps and compact fluorescent lamps (CFLs) with light-emitting diode (LED) A-lamps. This analysis was conducted external to the energy model and evaluated replacement of a 13 W CFL lamp with an 9.6 W LED lamp operating 620 hours annually. Annual hour estimates were based on whole building average hours of operation from a 2010 lighting study by KEMA (KEMA, 2010). Lifetime assumptions were 10,000 hours for CFLs and 25,000 hours for LED lamps.
For incremental cost calculations it was assumed CFLs have a lifetime of 15 years, are installed five years prior to the retrofit, and would need to be replaced at year ten and 25.
Exterior Lighting Controls/Photosensor: Evaluation of exterior lighting controls was completed on a per-luminaire basis external to the energy model and assumes a screw-in photosensor control is installed in outdoor lighting luminaires. Energy savings of 12.1 kWh per year was applied based on analysis done by the Consortium for Energy Efficiency, assuming LED lamps, 2.6 hours per day of operation, and that photosensor controls reduce operating hours on average 20 percent each day (CEE, 2014). Energy savings will be higher for incandescent or CFL luminaires.
Exterior Lighting Controls/Photosensor+LED: An additional evaluation was completed for exterior lighting controls on a per-luminaire basis external to the energy model and assumes a screw-in photosensor control is installed in outdoor lighting luminaires and incandescent lamps CFLs are replaced with light-emitting diode (LED) A-lamps. Energy savings of 14.3 kWh per year was applied based on the sum of the LED lighting and Exterior Lighting Controls with Photosensor kWh energy savings.
For the measures including a LED, a cost of $3.49 for LED dimmable A19 lamp 60 W equivalent is used. A cost of $1.74 is used for an equivalent CFL product which was used to estimate total replacement costs at years 10 and 25. Costs are based on a single LED lamp replacement. For the photosensor, an incremental cost of $12.62, based on a screw-in photosensor control, was obtained from an on-line product search of available products. A five-year lifetime for this type of control was assumed.
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Table 8. [All Vintages] LED Lamp vs. CFL
Climate
Zone
Electric/ Gas
Utility
Measure
Cost
Electricity
Savings
First Year
Utility
Cost
Savings
Customer On-Bill
Modest Gas Escalation
Customer On-Bill
High Gas Escalation
B/C Ratio NPV B/C Ratio NPV
CZ01 PGE $1.75 2.2 $0.77 10.05 $15.82 10.58 $16.74 CZ02 PGE $1.75 2.2 $0.86 11.26 $17.94 11.85 $18.98 CZ03 PGE $1.75 2.2 $0.78 10.14 $15.99 10.68 $16.92 CZ04 PGE $1.75 2.2 $0.80 10.39 $16.42 10.94 $17.38 CZ04 CPAU $1.75 2.2 $0.41 5.32 $7.56 5.60 $8.05
CZ05 PGE $1.75 2.2 $0.78 10.14 $15.99 10.67 $16.92 CZ05 PGE/SCG $1.75 2.2 $0.78 10.14 $15.99 10.67 $16.92 CZ06 SCE/SCG $1.75 2.2 $0.66 8.44 $13.01 8.99 $13.97 CZ07 SDGE $1.75 2.2 $0.95 13.15 $21.24 13.03 $21.04 CZ08 SCE/SCG $1.75 2.2 $0.74 9.51 $14.89 10.14 $15.98 CZ09 SCE/SCG $1.75 2.2 $0.71 9.17 $14.29 9.77 $15.33 CZ10 SCE/SCG $1.75 2.2 $0.73 9.38 $14.65 9.99 $15.72 CZ10 SDGE $1.75 2.2 $1.07 14.86 $24.24 14.74 $24.02 CZ11 PGE $1.75 2.2 $0.85 11.05 $17.57 11.63 $18.59 CZ12 PGE $1.75 2.2 $0.79 10.32 $16.29 10.86 $17.24 CZ12 SMUD/PGE $1.75 2.2 $0.47 6.08 $8.88 6.40 $9.44 CZ13 PGE $1.75 2.2 $0.86 11.27 $17.96 11.86 $19.00 CZ14 SCE/SCG $1.75 2.2 $0.74 9.58 $15.00 10.21 $16.10 CZ14 SDGE $1.75 2.2 $1.06 14.68 $23.93 14.56 $23.71 CZ15 SCE/SCG $1.75 2.2 $0.78 10.01 $15.75 10.66 $16.90 CZ16 PGE $1.75 2.2 $0.77 9.98 $15.71 10.51 $16.62
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Table 9. [All Vintages] Exterior Photosensor
Climate
Zone
Electric/ Gas
Utility
Measure
Cost
Electricity
Savings
First Year
Utility
Cost
Savings
Customer On-Bill
Modest Gas Escalation
Customer On-Bill
High Gas Escalation
B/C Ratio NPV B/C
Ratio NPV
CZ01 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74 CZ02 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74 CZ03 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74 CZ04 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74 CZ04 CPAU $54.03 12.1 $2.12 0.89 ($5.69) 0.94 ($3.15) CZ05 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74 CZ05 PGE/SCG $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74 CZ06 SCE/SCG $54.03 12.1 $3.48 1.45 $24.36 1.55 $29.48 CZ07 SDGE $54.03 12.1 $5.07 2.27 $68.58 2.25 $67.53 CZ08 SCE/SCG $54.03 12.1 $3.48 1.45 $24.36 1.55 $29.48 CZ09 SCE/SCG $54.03 12.1 $3.48 1.45 $24.36 1.55 $29.48 CZ10 SCE/SCG $54.03 12.1 $3.48 1.45 $24.36 1.55 $29.48 CZ10 SDGE $54.03 12.1 $5.07 2.27 $68.58 2.25 $67.53 CZ11 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74 CZ12 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74 CZ12 SMUD/PGE $54.03 12.1 $1.46 0.62 ($20.73) 0.65 ($18.98) CZ13 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74 CZ14 SCE/SCG $54.03 12.1 $3.48 1.45 $24.36 1.55 $29.48 CZ14 SDGE $54.03 12.1 $5.07 2.27 $68.58 2.25 $67.53 CZ15 SCE/SCG $54.03 12.1 $3.48 1.45 $24.36 1.55 $29.48 CZ16 PGE $54.03 12.1 $4.16 1.75 $40.75 1.85 $45.74
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Table 10. [All Vintages] LED and Photosensor
Climate
Zone
Electric/ Gas
Utility
Measure
Cost
Electricity
Savings
First Year
Utility Cost
Savings
Customer On-Bill
Modest Gas Escalation
Customer On-Bill High
Gas Escalation
B/C Ratio NPV B/C Ratio NPV
CZ01 PGE $55.77 14.3 $4.93 2.01 $56.57 2.12 $62.48 CZ02 PGE $55.77 14.3 $5.02 2.05 $58.70 2.16 $64.72 CZ03 PGE $55.77 14.3 $4.94 2.02 $56.74 2.12 $62.66 CZ04 PGE $55.77 14.3 $4.95 2.03 $57.17 2.13 $63.12 CZ04 CPAU $55.77 14.3 $2.53 1.03 $1.87 1.09 $4.90 CZ05 PGE $55.77 14.3 $4.94 2.02 $56.74 2.12 $62.66 CZ05 PGE/SCG $55.77 14.3 $4.94 2.02 $56.74 2.12 $62.66 CZ06 SCE/SCG $55.77 14.3 $4.13 1.67 $37.37 1.78 $43.45 CZ07 SDGE $55.77 14.3 $6.02 2.61 $89.82 2.59 $88.57 CZ08 SCE/SCG $55.77 14.3 $4.22 1.70 $39.25 1.82 $45.46 CZ09 SCE/SCG $55.77 14.3 $4.19 1.69 $38.65 1.80 $44.82 CZ10 SCE/SCG $55.77 14.3 $4.21 1.70 $39.01 1.81 $45.20 CZ10 SDGE $55.77 14.3 $6.14 2.66 $92.82 2.64 $91.55 CZ11 PGE $55.77 14.3 $5.00 2.05 $58.33 2.15 $64.33 CZ12 PGE $55.77 14.3 $4.95 2.02 $57.05 2.13 $62.98 CZ12 SMUD/PGE $55.77 14.3 $1.93 0.79 ($11.85) 0.83 ($9.54) CZ13 PGE $55.77 14.3 $5.02 2.05 $58.71 2.16 $64.73 CZ14 SCE/SCG $55.77 14.3 $4.22 1.71 $39.37 1.82 $45.58 CZ14 SDGE $55.77 14.3 $6.13 2.66 $92.51 2.64 $91.24 CZ15 SCE/SCG $55.77 14.3 $4.26 1.72 $40.12 1.83 $46.38 CZ16 PGE $55.77 14.3 $4.92 2.01 $56.46 2.12 $62.36
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4 Water Heating Package
This package includes the following:
• R-6 water heater blanket
• R-3 hot water pipe insulation
• Low flow fixtures: two low flow showerheads and three sink aerators.
This analysis assumes the homeowner installs these measures themselves and therefore no labor costs. Costs are based on Home Depot prices from August of 2025. The water heater package is evaluated over a 15-year analysis period and assumes the modest gas escalation rate.
Table 11. [All Vintages] Water Heating Package
Climate
Zone
Electric/ Gas
Utility
Measure
Cost
Gas
Savings
(therms)
Customer On-Bill
First Year Utility
Cost Savings B/C Ratio NPV
CZ01 PGE $125.68 14.69 $31.11 3.96 $371.76
CZ02 PGE $125.68 15.60 $35.20 4.48 $437.15
CZ03 PGE $125.68 15.70 $31.43 4.00 $376.88
CZ04 PGE $125.68 16.05 $32.62 4.15 $395.78
CZ04 CPAU $125.68 16.05 $31.99 4.07 $385.77
CZ05 PGE $125.68 15.83 $31.37 3.99 $375.88
CZ05 PGE/SCG $125.68 15.83 $28.29 3.60 $326.59
CZ06 SCE/SCG $125.68 16.67 $29.18 3.71 $340.84
CZ07 SDGE $125.68 16.75 $37.25 4.74 $469.81
CZ08 SCE/SCG $125.68 16.78 $29.36 3.74 $343.80
CZ09 SCE/SCG $125.68 16.66 $29.27 3.72 $342.34
CZ10 SCE/SCG $125.68 16.58 $28.99 3.69 $337.73
CZ10 SDGE $125.68 16.58 $37.77 4.80 $478.19
CZ11 PGE $125.68 15.87 $32.96 4.19 $401.32
CZ12 PGE $125.68 15.90 $32.85 4.18 $399.47
CZ12 SMUD/PGE $125.68 15.90 $32.85 4.18 $399.47
CZ13 PGE $125.68 16.32 $33.00 4.20 $401.93
CZ14 SCE/SCG $125.68 16.11 $29.79 3.79 $350.57
CZ14 SDGE $125.68 16.11 $39.23 4.99 $501.49
CZ15 SCE/SCG $125.68 17.40 $30.16 3.84 $356.50
CZ16 PGE $125.68 15.14 $31.75 4.04 $381.87
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5 PV
The results for 3 kW PV have been updated from the 2022 study to remove the federal solar tax credit from the cost-effectiveness calculations. The removal of the solar tax credit has a substantial impact on many climate zones across all vintages and will impact the FlexPath.
The following describes the impacts and changes to cost-effectiveness from the 2022 study.
These observations are utilizing standard rates. Previously, with the solar tax credit, the 3 kW PV measure in the pre-1978 vintage was on-bill cost effective in all climate zones using both the modest and high gas escalation rates. However, with the credit removed, Climate Zones 1-3, 5, 6, and 12 are no longer cost effective on-bill for both the modest and high gas escalations.
Previously for the 1978-1991 vintage the only cases that were not on-bill cost effective were climate zones 2 and 6 utilizing the modest gas escalation. Now, with the credit removed, many more climate zones are no longer cost effective. Using the modest gas escalation, climate zones 1-3, 5, 6, 12, and 16 are not cost effective on-bill. Using the high gas escalation, climate zones 1-3, 5, 6, and 12 (SMUD) are not cost effective on-bill.
Previously for the 1992-2010 vintage the following cases were not cost effective on-bill:
climate zones 1-3, 5, and 6 utilizing the modest gas escalation and climate zone 6 using the high gas escalation. With the credit removed an increased number of climate zones are no longer cost effective. Using the modest gas escalation, climate zones 1-3, 4 (PGE) 5-9, 10 (SCE/SCG),12, and 16 are not cost effective on-bill. Using the high gas escalation, climate zones 1-3, 4 (PGE), 5-7, 9, 12, and 16 are not cost effective on-bill.
The cost-effectiveness results are presented in Table 12 through Table 1717.
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Table 12. [Pre-1978] 3 kW PV without Solar Tax Credit (Std) Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
On-Bill Savings
On-Bill B/C
Modest Gas
Escalation
On-Bill NPV
Modest Gas
Escalation
On-Bill B/C
High Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $13,726 0.80 ($3,074) 0.85 ($2,410)
CZ02 PGE $13,726 0.80 ($3,072) 0.85 ($2,409)
CZ03 PGE $13,726 0.77 ($3,567) 0.81 ($2,930)
CZ04 PGE $13,726 1.11 $1,652 1.16 $2,564
CZ04 CPAU $13,726 1.38 $5,983 1.45 $7,123
CZ05 PGE $13,726 0.78 ($3,431) 0.82 ($2,786)
CZ05 PGE/SCG $13,726 0.78 ($3,431) 0.82 ($2,786)
CZ06 SCE/SCG $13,726 0.87 ($2,118) 0.92 ($1,231)
CZ07 SDGE $13,726 1.31 $4,886 1.30 $4,711
CZ08 SCE/SCG $13,726 1.30 $4,655 1.38 $5,984
CZ09 SCE/SCG $13,726 1.18 $2,821 1.26 $4,030
CZ10 SCE/SCG $13,726 1.29 $4,622 1.38 $5,948
CZ10 SDGE $13,726 1.99 $15,550 1.97 $15,284
CZ11 PGE $13,726 1.55 $8,684 1.64 $9,967
CZ12 PGE $13,726 1.07 $1,117 1.13 $2,002
CZ12 SMUD/PGE $13,726 0.93 ($1,109) 0.98 ($342)
CZ13 PGE $13,726 1.80 $12,597 1.90 $14,085
CZ14 SCE/SCG $13,726 1.58 $9,098 1.68 $10,717
CZ14 SDGE $13,726 2.15 $17,983 2.13 $17,695
CZ15 SCE/SCG $13,726 2.24 $19,477 2.39 $21,774
CZ16 PGE $13,726 1.04 $579 1.09 $1,435
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Table 13. [1978-1991] 3 kW PV without Solar Tax Credit (Std) Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
On-Bill Savings
On-Bill B/C
Modest Gas
Escalation
On-Bill NPV
Modest Gas
Escalation
On-Bill B/C
High Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $13,726 0.77 ($3,570) 0.81 ($2,932)
CZ02 PGE $13,726 0.71 ($4,549) 0.75 ($3,963)
CZ03 PGE $13,726 0.74 ($4,106) 0.78 ($3,497)
CZ04 PGE $13,726 1.00 $7 1.05 $833
CZ04 CPAU $13,726 1.35 $5,517 1.42 $6,633
CZ05 PGE $13,726 0.75 ($3,985) 0.79 ($3,369)
CZ05 PGE/SCG $13,726 0.75 ($3,985) 0.79 ($3,369)
CZ06 SCE/SCG $13,726 0.73 ($4,249) 0.78 ($3,501)
CZ07 SDGE $13,726 1.17 $2,623 1.16 $2,466
CZ08 SCE/SCG $13,726 1.20 $3,086 1.27 $4,313
CZ09 SCE/SCG $13,726 1.09 $1,487 1.17 $2,609
CZ10 SCE/SCG $13,726 1.18 $2,884 1.26 $4,097
CZ10 SDGE $13,726 1.85 $13,356 1.84 $13,108
CZ11 PGE $13,726 1.41 $6,420 1.48 $7,583
CZ12 PGE $13,726 0.97 ($512) 1.02 $287
CZ12 SMUD/PGE $13,726 0.93 ($1,109) 0.98 ($342)
CZ13 PGE $13,726 1.63 $9,953 1.72 $11,302
CZ14 SCE/SCG $13,726 1.42 $6,655 1.52 $8,115
CZ14 SDGE $13,726 2.00 $15,653 1.98 $15,386
CZ15 SCE/SCG $13,726 1.94 $14,686 2.06 $16,670
CZ16 PGE $13,726 0.95 ($737) 1.00 $49
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Table 1414. [1992-2010] 3 kW PV without Solar Tax Credit (Std) Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
On-Bill Savings
On-Bill B/C
Modest Gas
Escalation
On-Bill NPV
Modest Gas
Escalation
On-Bill B/C
High Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $13,726 0.71 ($4,475) 0.75 ($3,885)
CZ02 PGE $13,726 0.73 ($4,198) 0.77 ($3,593)
CZ03 PGE $13,726 0.72 ($4,411) 0.76 ($3,817)
CZ04 PGE $13,726 0.80 ($3,121) 0.84 ($2,459)
CZ04 CPAU $13,726 1.16 $2,477 1.22 $3,433
CZ05 PGE $13,726 0.73 ($4,299) 0.76 ($3,700)
CZ05 PGE/SCG $13,726 0.73 ($4,299) 0.76 ($3,700)
CZ06 SCE/SCG $13,726 0.61 ($6,143) 0.65 ($5,520)
CZ07 SDGE $13,726 0.94 ($931) 0.93 ($1,057)
CZ08 SCE/SCG $13,726 0.98 ($242) 1.05 $767
CZ09 SCE/SCG $13,726 0.88 ($1,890) 0.94 ($988)
CZ10 SCE/SCG $13,726 0.96 ($676) 1.02 $305
CZ10 SDGE $13,726 1.51 $8,054 1.50 $7,852
CZ11 PGE $13,726 1.10 $1,569 1.16 $2,477
CZ12 PGE $13,726 0.80 ($3,169) 0.84 ($2,510)
CZ12 SMUD/PGE $13,726 0.93 ($1,109) 0.98 ($342)
CZ13 PGE $13,726 1.27 $4,170 1.33 $5,215
CZ14 SCE/SCG $13,726 1.15 $2,295 1.22 $3,470
CZ14 SDGE $13,726 1.66 $10,386 1.65 $10,164
CZ15 SCE/SCG $13,726 1.37 $5,788 1.46 $7,191
CZ16 PGE $13,726 0.81 ($3,006) 0.85 ($2,338)
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Table 1515. [Pre-1978] 3 kW PV without Solar Tax Credit (CARE) Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
On-Bill Savings
On-Bill B/C
Modest Gas
Escalation
On-Bill NPV
Modest Gas
Escalation
On-Bill B/C
High Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $13,726 0.62 ($6,030) 0.65 ($5,522)
CZ02 PGE $13,726 0.64 ($5,707) 0.67 ($5,182)
CZ03 PGE $13,726 0.60 ($6,344) 0.63 ($5,853)
CZ04 PGE $13,726 0.83 ($2,725) 0.87 ($2,042)
CZ05 PGE $13,726 0.60 ($6,266) 0.63 ($5,771)
CZ05 PGE/SCG $13,726 0.60 ($6,266) 0.63 ($5,771)
CZ06 SCE/SCG $13,726 0.71 ($4,578) 0.75 ($3,852)
CZ07 SDGE $13,726 0.71 ($4,508) 0.71 ($4,604)
CZ08 SCE/SCG $13,726 0.97 ($483) 1.03 $510
CZ09 SCE/SCG $13,726 0.90 ($1,530) 0.96 ($605)
CZ10 SCE/SCG $13,726 0.97 ($465) 1.03 $530
CZ10 SDGE $13,726 1.19 $3,032 1.18 $2,872
CZ11 PGE $13,726 1.07 $1,150 1.13 $2,036
CZ12 PGE $13,726 0.79 ($3,324) 0.83 ($2,673)
CZ13 PGE $13,726 1.23 $3,587 1.29 $4,601
CZ14 SCE/SCG $13,726 1.17 $2,662 1.25 $3,861
CZ14 SDGE $13,726 1.28 $4,436 1.27 $4,264
CZ15 SCE/SCG $13,726 1.57 $8,962 1.67 $10,572
CZ16 PGE $13,726 0.79 ($3,342) 0.83 ($2,692)
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Table 1616. [1978-1991] 3 kW PV without Solar Tax Credit (CARE) Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
On-Bill Savings
On-Bill B/C
Modest Gas
Escalation
On-Bill NPV
Modest Gas
Escalation
On-Bill B/C
High Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $13,726 0.60 ($6,343) 0.63 ($5,851)
CZ02 PGE $13,726 0.56 ($6,845) 0.59 ($6,380)
CZ03 PGE $13,726 0.57 ($6,757) 0.60 ($6,287)
CZ04 PGE $13,726 0.76 ($3,715) 0.80 ($3,085)
CZ05 PGE $13,726 0.57 ($6,686) 0.60 ($6,213)
CZ05 PGE/SCG $13,726 0.57 ($6,686) 0.60 ($6,213)
CZ06 SCE/SCG $13,726 0.61 ($6,195) 0.64 ($5,575)
CZ07 SDGE $13,726 0.62 ($6,004) 0.61 ($6,087)
CZ08 SCE/SCG $13,726 0.91 ($1,483) 0.96 ($555)
CZ09 SCE/SCG $13,726 0.85 ($2,368) 0.90 ($1,497)
CZ10 SCE/SCG $13,726 0.90 ($1,597) 0.96 ($676)
CZ10 SDGE $13,726 1.10 $1,560 1.09 $1,413
CZ11 PGE $13,726 0.98 ($295) 1.03 $515
CZ12 PGE $13,726 0.72 ($4,320) 0.76 ($3,722)
CZ13 PGE $13,726 1.12 $1,893 1.18 $2,818
CZ14 SCE/SCG $13,726 1.07 $1,051 1.14 $2,144
CZ14 SDGE $13,726 1.18 $2,878 1.17 $2,719
CZ15 SCE/SCG $13,726 1.37 $5,735 1.45 $7,135
CZ16 PGE $13,726 0.74 ($4,126) 0.78 ($3,517)
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Table 1717. [1992-2010] 3 kW PV without Solar Tax Credit (CARE) Climate
Zone
Electric/ Gas
Utility
First
Incremental
Cost
On-Bill Savings
On-Bill B/C
Modest Gas
Escalation
On-Bill NPV
Modest Gas
Escalation
On-Bill B/C
High Gas
Escalation
On-Bill NPV
High Gas
Escalation
CZ01 PGE $13,726 0.56 ($6,963) 0.59 ($6,504)
CZ02 PGE $13,726 0.26 ($11,640) 0.20 ($12,611)
CZ03 PGE $13,726 0.55 ($6,997) 0.58 ($6,540)
CZ04 PGE $13,726 0.62 ($5,900) 0.66 ($5,385)
CZ05 PGE $13,726 0.56 ($6,932) 0.59 ($6,471)
CZ05 PGE/SCG $13,726 0.56 ($6,932) 0.59 ($6,471)
CZ06 SCE/SCG $13,726 0.51 ($7,652) 0.55 ($7,127)
CZ07 SDGE $13,726 0.48 ($8,115) 0.48 ($8,180)
CZ08 SCE/SCG $13,726 0.78 ($3,430) 0.83 ($2,629)
CZ09 SCE/SCG $13,726 0.72 ($4,462) 0.76 ($3,728)
CZ10 SCE/SCG $13,726 0.76 ($3,748) 0.81 ($2,968)
CZ10 SDGE $13,726 0.86 ($2,225) 0.85 ($2,340)
CZ11 PGE $13,726 0.79 ($3,259) 0.83 ($2,605)
CZ12 PGE $13,726 0.63 ($5,876) 0.66 ($5,359)
CZ13 PGE $13,726 0.89 ($1,678) 0.94 ($941)
CZ14 SCE/SCG $13,726 0.89 ($1,676) 0.95 ($761)
CZ14 SDGE $13,726 0.95 ($838) 0.94 ($964)
CZ15 SCE/SCG $13,726 0.99 ($142) 1.06 $873
CZ16 PGE $13,726 0.63 ($5,850) 0.66 ($5,333)
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6 References
California Energy Commission. (2017). Rooftop Solar PV System. Measure number: 2019- Res-PV-D Prepared by Energy and Environmental Economics, Inc. Retrieved from https://efiling.energy.ca.gov/getdocument.aspx?tn=221366 California Energy Commission. (2021b). Final Express Terms for the Proposed Revisions to the 2022 Energy Code Reference Appendices. Retrieved from https://efiling.energy.ca.gov/Lists/DocketLog.aspx?docketnumber=21-BSTD-01 California Energy Commission. (2023). 2025 Energy code Hourly Factors. Retrieved from https://www.energy.ca.gov/files/2025-energy-code-hourly-factors California Energy Commission. (2023). Draft 2025 Energy Code Express Terms. Retrieved from
https://efiling.energy.ca.gov/GetDocument.aspx?tn=252915&DocumentContentId=88 051
California Public Utilities Commission. (2021a). Utility Costs and Affordability of the Grid of the Future: An Evaluation of Electric Costs, Rates, and Equity Issues Pursuant to P.U. Code Section 913.1. Retrieved from https://www.cpuc.ca.gov/-/media/cpuc- website/divisions/office-of-governmental-affairs-division/reports/2021/senate-bill-695- report-2021-and-en-banc-whitepaper_final_04302021.pdf
California Public Utilities Commission. (2021b). Database for Energy-Efficient resources (DEER2021 Update). Retrieved April 13, 2021, from
http://www.deeresources.com/index.php/deer-versions/deer2021 E-CFR. (2020). https://www.ecfr.gov/cgi-
bin/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/cgi-
bin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt1
0.3.431&r=PART&ty=HTML#se10.3.431_197
Statewide CASE Team. (2020). Residential Energy Savings and Process Improvements for Additions and Alterations.
Statewide CASE Team. (2023). Multifamily Domestic Hot Water. Retrieved from https://title24stakeholders.com/wp-content/uploads/2023/08/2025_T24_CASE- Report-_MF-DHW-Final-1.pdf
Statewide CASE Team. (2023). Residential HVAC PErformance. Retrieved from https://title24stakeholders.com/wp-
content/uploads/2023/11/Revised_2025_T24_Final-CASE-Report-RES-HVAC- Performance.pdf
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Statewide Reach Codes Team. (2021). 2019 Cost-Effectiveness Study: Existing Single Family Residential Buidling Upgrades. Retrieved from
https://localenergycodes.com/content/resources
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Get In Touch
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Ordinance No.
Emergency Ordinance of the Council of the City of Palo Alto Amending Chapter 16.04 (California Building Code, California Code of Regulations, Title 24, Part 2, Volumes 1 & 2) of the Palo Alto Municipal Code to Add New Local Amendments and Associated Findings Related to Certificates of Occupancy and Definitions
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. Every three years, a new version of the California Building Standards Code (CBSC, or Title 24) is published. Local jurisdictions may enforce the model code as published or, subject to certain requirements, adopt local amendments.
B. Most recently, the City adopted the 2022 edition of the California Building Code with local amendments pursuant to Ordinance 5564. The purpose of this ordinance is to make additional local amendments to the Building Code to clarify types of projects exempted from Use and Occupancy certificates and make clarifying edits to the definitions section.
C. The changes shown in this ordinance are relative to the existing provisions of the Palo Alto Municipal Code (PAMC) as adopted by Ordinance 5564. The City’s local amendments are more restrictive building standards than those provided in the California Building Standards Code.
D. Recent legislation, Assembly Bill (AB) 130 (2025), limits local jurisdictions’ authority to amend the California Building Standards Code beginning October 1, 2025, and ending June 1, 2031. The Council desires to make these amendments effective before the AB 130 moratorium begins.
E. The Council declares that this emergency ordinance, which is effective immediately, is necessary as an emergency measure to preserve the public peace, health, or safety by ensuring that the City may enforce its local amendments to the California Building Code during the AB 130 moratorium.
F. California Health and Safety Code sections 17958.5 and 17958.7 requires that the City, in order to make changes or modifications in the requirements contained in the California Building Standards Code on the basis of local conditions, make express finding that such modifications or changes are reasonably necessary because of local climatic, geological, or topographical conditions. The required findings are attached to this ordinance as Exhibit A.
SECTION 2. Section 16.04.190 of Chapter 16.04 (California Building Code, California Code of Regulations, Title 24, Part 2, Volumes 1 & 2) of Title 16 (Building Regulations) of the Palo Alto Municipal Code is hereby amended as follows (additions Item 19
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underlined and deletions struck-through, bracketed ellipses indicate text of the California Building Code, 2022 Edition, that has been adopted as amended by Ordinance 5564 but is omitted for brevity):
16.04.190 Section 111.1 Use and occupancy.
111.1 Use and occupancy. A building or structure shall not be used or occupied, and a change in the existing occupancy of a building or structure or portion thereof shall not be made, until the chief building official has issued a certificate of occupancy therefor as provided herein. Issuance of a certificate of occupancy shall not be construed as an approval of a violation of the provisions of this code or of other ordinances of the jurisdiction.
Exception: Certificates of occupancy are not required or issued for:
1. Work exempted from permits under Section 105.2
2. Group R – Division 2, 3 occupancies Division 3 and Group U occupancies located on a single-family residential/agricultural lot.
3. Group U occupancies accessory to R3 and R2 occupancies. Non- residential “core and shell” or similar construction (exterior envelope and structural framework) without finalized tenant improvement(s).
4. Site development without a building or buildings as defined in section 202.
[…]
SECTION 3. Section 16.04.235 (Section 202 Definitions) is added to Chapter 16.04 (California Building Code, California Code of Regulations, Title 24, Part 2, Volumes 1 & 2) of Title 16 Building Regulations) of the Palo Alto Municipal Code to read as follows (additions underlined, bracketed ellipses indicate text of the California Building Code, 2022 Edition, that has been adopted without amendment but is omitted for brevity):
16.04.235 Section 202 Definitions
[…]
FLOOR AREA, GROSS. The floor area within the inside perimeter of the exterior walls of the building under consideration, exclusive of vent shafts and courts, without deduction for corridors, stairways, ramps, closets, the thickness of interior walls, columns or other features.
The floor area of a building, or portion thereof, not provided with surrounding exterior walls shall be the usable area under the horizontal projection of the roof or floor above. The gross floor area shall not include shafts with no openings or interior courts. For the purposes of Title 18 (Zoning), the definition of “gross floor area” in Section 18.04.030 shall apply.
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[…]
FLOOR AREA, NET. The actual occupied area not including unoccupied accessory areas such as corridors, stairways, ramps, toilet rooms, mechanical rooms and closets. For the purposes of Title 18 (Zoning), the definition of “net floor area” in Section 18.04.030 shall apply.
[…]
SECTION 4. The Council adopts the findings for local amendments to the California Building Code, 2022 Edition, attached hereto as Exhibit “A” and incorporated herein by reference.
SECTION 5. The Council finds that this ordinance is exempt from the provisions of the California Environmental Quality Act (“CEQA”), pursuant to Section 15061(b)(3) of the CEQA Guidelines, because it can be seen with certainty that there is no possibility that the amendments herein adopted will have a significant effect on the environment.
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SECTION 6. Pursuant to Palo Alto Municipal Code Section 2.04.270, this ordinance shall be effective immediately upon adoption if passed by a vote of four-fifths of the council members present.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
____________________________ ____________________________ City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________ City Attorney or Designee City Manager
____________________________
Director of Planning and Development
Services
____________________________
Director of Administrative Services
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Exhibit A
FINDINGS FOR LOCAL AMENDMENTS TO CALIFORNIA BUILDING CODE, TITLE 24, PART 2, VOLUMES 1 AND 2
Section 17958 of the California Health and Safety Code provides that the City may make changes to the provisions of the California Building Standards Code. Sections 17958.5 and 17958.7 of the Health and Safety Code require that for each proposed local change to those provisions of the California Building Standards Code which regulate buildings used for human habitation, the City Council must make findings supporting its determination that each such local change is reasonably necessary because of local climatic, geological, or topographical conditions.
Local building regulations having the effect of amending the uniform codes, which were adopted by the City prior to November 23, 1970, were unaffected by the regulations of Sections 17958, 17958.5 and 17958.7 of the Health and Safety Code. Therefore, amendments to the uniform codes which were adopted by the City Council prior to November 23, 1970 and have been carried through from year to year without significant change, need no required findings. Also, amendments to provisions not regulating buildings used for human habitation do not require findings.
Code: California Building Code, Title 24, Part 2, Volumes 1 and 2 Chapter(s),
Section(s),
Table(s),
Appendices
Title Added Amended Deleted Justification
(See keys
below)
Ch. 1, Div. II,
Part 2, Section
111.1
Use and occupancy A
Ch. 2, Section
202
Definitions A
Key to Justification for Amendments to Title 24 of the California Code of Regulations
A This is an administrative amendment to clarify and establish civil and administrative procedures, regulations, or rules to enforce and administer the activities by the Palo Alto Building Inspection Department. These administrative amendments do not need to meet HSC 18941.5/17958/13869 per HSC 18909(c).
C This amendment is justified on the basis of a local climatic condition. The seasonal climatic conditions during the late summer and fall create severe fire hazards to the public health and welfare in the City. The hot, dry weather frequently results in wild land fires on the brush covered slopes west of Interstate 280. The aforementioned conditions combined with the geological characteristics of the Item 19
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hills within the City create hazardous conditions for which departure from California Building Standards Code is required. Natural gas combustion and gas appliances emit a wide range of air pollutants, such as carbon monoxide (CO), nitrogen oxides (NOx, including nitrogen dioxide (NO2)), particulate matter (PM), and formaldehyde, which according to a UCLA Study, have been linked to various acute and chronic health effects, and additionally exceed levels set by national and California-based ambient air quality standards. The burning of fossil fuels used in the generation of electric power and heating of buildings contributes to climate change, which could result in rises in sea level, including in San Francisco Bay, that could put at risk Palo Alto homes and businesses, public facilities, and Highway 101 (Bayshore Freeway), particularly the mapped Flood Hazard areas of the City.
Energy efficiency is a key component in reducing GHG emissions, and construction of more energy efficient buildings can help Palo Alto reduce its share of the GHG emissions that contribute to climate change. All-electric new buildings benefit the health, safety, and welfare, of Palo Alto and its residents. Requiring all-electric construction, without gas infrastructure will reduce the amount of greenhouse gas produced in Palo Alto and will contribute to reducing the impact of climate change and the associated risks. Due to decrease in annual rain fall, Palo Alto experiences the effect of drought and water saving more than some other communities in California. Embodied carbon of concrete is a significant contributor to greenhouse gas emissions and climate change, and this amendment includes a requirement to use low-carbon concrete. Providing additional capacity for electric vehicle use reduces use of gasoline which is a major contributor to climate change.
E Green building enhances the public health and welfare by promoting the environmental and economic health of the City through the design, construction, maintenance, operation and deconstruction of buildings and sites by incorporating green practices into all development. The green provisions in this Chapter are designed to achieve the following goals:
(a) Increase energy efficiency in buildings;
(b) Reduce the use of natural gas in buildings which improves indoor environmental quality and health;
(c) Reduce the use of natural gas which will reduce the natural gas infrastructure and fire risk over time;
(d) Reduce the embodied carbon of concrete which reduces greenhouse gas emissions;
(e) Increase water and resource conservation;
(f) Reduce waste generated by construction and demolition projects; (g) Provide durable buildings that are efficient and economical to own and operate; (h) Promote the health and productivity of residents, workers, and visitors to the city; Item 19
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(i) Recognize and conserve the energy embodied in existing buildings; (j) Increase capacity for use of electric vehicles which reduces greenhouse gas emissions and improves air quality;
(k) Encourage alternative transportation; and
(l) Reduce disturbance of natural ecosystems.
G This amendment is justified on the basis of a local geological condition. The City of Palo Alto is subject to earthquake hazard caused by its proximity to San Andreas fault. This fault runs from Hollister, through the Santa Cruz Mountains, epicenter of the 1989 Loma Prieta earthquake, then on up the San Francisco Peninsula, then offshore at Daly City near Mussel Rock. This is the approximate location of the epicenter of the 1906 San Francisco earthquake. The other fault is Hayward Fault.
This fault is about 74 mi long, situated mainly along the western base of the hills on the east side of San Francisco Bay. Both of these faults are considered major Northern California earthquake faults which may experience rupture at any time.
Thus, because the City is within a seismic area which includes these earthquake faults, the modifications and changes cited herein are designed to better limit property damage as a result of seismic activity and to establish criteria for repair of damaged properties following a local emergency. Reduction or eliminating of natural gas infrastructure over time will reduce maintenance costs and fire risk in difficult geological conditions.
T The City of Palo Alto topography includes hillsides with narrow and winding access, which makes timely response by fire suppression vehicles difficult. Palo Alto is contiguous with the San Francisco Bay, resulting in a natural receptor for storm and waste water run-off. Also, the City of Palo Alto is located in an area that is potentially susceptible to liquefaction during a major earthquake. The surface condition consists mostly of stiff to dense sandy clay, which is highly plastic and expansive in nature. The aforementioned conditions within the City create hazardous conditions for which departure from California Building Standards Code is warranted. In addition, the reduction or elimination of natural gas infrastructure reduces the likelihood of fire or environmental damage should they become disrupted due to challenging topographic conditions during construction or repair.
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Ordinance No. ____
Emergency Ordinance of the Council of the City of Palo Alto Amending Chapter
16.17 (California Energy Code, California Code of Regulations, Title 24, Part 6) of the Palo Alto Municipal Code to Adopt the 2025 California Energy Code, Along With Local Amendments Thereto, to Add FlexPath and Air Conditioner Time-of- Replacement Requirements.
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations.
A. The City of Palo Alto adopted a Sustainability and Climate Action Plan, or S/CAP, to meet the City's stated goal of "80 x 30": reducing greenhouse gas emissions 80% below 1990 levels by 2030.
B. The S/CAP outlines goals and key actions in eight areas, one of which is energy and more specifically, energy efficiency and electrification. The goals for the energy area of the S/CAP are to reduce GHG emissions from the direct use of natural gas in Palo Alto’s building sector by at least 60% below 1990 levels (116,400 MT CO2e reduction) and to modernize the electric grid to support increased electric demand to accommodate state- of-the-art technology.
C. One key action the City is taking to accomplish those goals is to use codes and ordinances - such as the energy reach code, green building ordinance, zoning code, or other mandates - to facilitate electrification in both existing buildings and new construction projects where feasible.
D. The purpose of this ordinance is to formally adopt California Code of Regulations, Title 24, Part 6, 2025 California Energy Code, with local amendments in furtherance of the City of Palo Alto’s S/CAP goals and other sustainability-related goals included in the City’s 2030 Comprehensive Plan. The amendments adopted herein are more restrictive than the building standards in Title 24, Part 6.
E. Recent legislation, Assembly Bill (AB) 130 (2025), limits local jurisdictions’ authority to amend the California Building Standards Code beginning October 1, 2025, and ending June 1, 2031. The Council desires to adopt these amendments before the AB 130 moratorium begins. The Council may in the future adopt additional amendments to the 2025 California Energy Code that are not subject to, or are exempt from, the AB 130 moratorium.
Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
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F. The Council declares that this emergency ordinance is necessary as an emergency measure to preserve the public peace, health, or safety by ensuring that the City may enforce its local amendments to the California Energy Code during the AB 130 moratorium. These local amendments are necessary to mitigate the public health and safety impacts of GHG emissions from natural gas usage by incentivizing energy efficiency and electrification.
G. Additionally, the Council finds that these changes or modifications to the California Energy Code are necessary to implement a local code amendment that is adopted to align with a general plan approved on or before June 10, 2025, and that permits mixed-fuel residential construction consistent with federal law while also incentivizing all-electric construction as part of an adopted greenhouse gas emissions reduction strategy. The City of Palo Alto’s Comprehensive Plan was adopted on November 13, 2017, and amended on December 19, 2022. The relevant policies and goals in the Comprehensive Plan include, but are not limited to: Goal N-7 (“A clean, efficient energy supply that makes use of cost- effective renewable resources”) and Goal N-8 (“Actively support regional efforts to reduce our contribution to climate change while adapting to the effects of climate change on land uses and city services”) contained in the Natural Environment Element and associated policies and programs. These include Policy N-7.4 (“Maximize the conservation and efficient use of energy in new and existing residences and other buildings in Palo Alto”), Program N-7.4.1 (“Continue timely incorporation of State and federal energy efficiency standards and policies in relevant City codes, regulations and procedures and higher local efficiency standards that are cost-effective”), Policy N-7.7: (“Explore a variety of cost-effective ways to reduce natural gas usage in existing and new buildings in Palo Alto in order to reduce associated greenhouse gas emissions”), and especially Policy N-
8.2 (“With guidance from the City’s Sustainability and Climate Action Plan (S/CAP) and its subsequent updates and other future planning efforts, reduce greenhouse gas emissions from City operations and from the community”).
H. California Health and Safety Code sections 17958.5 and 17958.7 require that the City, in order to make changes or modifications in the requirements contained in the California Building Standards Code on the basis of local conditions, make express finding that such modifications or changes are reasonably necessary because of local climatic, geological or topographical conditions. The required findings are attached to this ordinance as Exhibit A.
SECTION 2. Chapter 16.17 (California Energy Code, California Code of Regulations, Title 24, Part 6) of the Palo Alto Municipal Code is hereby amended by repealing in its entirety existing Chapter 16.17 and adopting a new Chapter 16.17 to read as follows:
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Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
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Conditioner Time-of-
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CHAPTER 16.17
CALIFORNIA ENERGY CODE,
CALIFORNIA CODE OF REGULATIONS, TITLE 24, PART 6
Sections
16.17.010 2025 California Energy Code, Title 24, Part 6 adopted.
16.17.020 Cross ‐ References to California Energy Code
16.17.030 Local Amendments
16.17.040 Administration & Enforcement of 2025 California Energy Code
16.17.050 Violations – Penalties
16.17.060 Subchapter 1 All Occupancies – General Provisions
16.17.070 Reserved
16.17.080 Reserved
16.17.090 Reserved
16.17.100 Reserved
16.17.110 Reserved
16.17.120 Subchapter 7 Single‐family Residential Building – Mandatory Features and Devices
16.17.130 Reserved
16.17.140 Subchapter 9 Single‐Family Residential Buildings—Additions And Alterations To Existing Residential Buildings
16.17.150 Reserved
16.17.160 Reserved
16.17.170 Infeasibility Exemption
16.17.180 Appeal
16.17.010 2025 California Energy Code, Title 24, Part 6 adopted.
The California Energy Code, 2025 Edition, Title 24, Part 6 of the California Code of Regulations together with those omissions, amendments, exceptions and additions thereto, is adopted and hereby incorporated in this Chapter by reference and made a part hereof the same as if fully set forth herein. Except as amended herein, all requirements of the California Energy Code, 2025 Edition, Title 24, Part 6 of the California Code of Regulations shall apply.
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Ordinance Amending PAMC
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2025 California Energy Code
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Unless superseded and expressly repealed, references in City of Palo Alto forms, documents and regulations to the chapters and sections of the former editions of the California Code of Regulations, Title 24, shall be construed to apply to the corresponding provisions contained within the California Code of Regulations, Title 24, 2025. Ordinance No. 5627 of the City of Palo Alto and all other ordinances or parts of ordinances in conflict herewith are hereby suspended and expressly repealed.
One copy of the California Energy Code, 2025 Edition, has been filed for use and examination of the public in the Office of the Chief Building Official of the City of Palo Alto.
16.17.020 Cross ‐ References to California Energy Code The provisions of this Chapter contain cross-references to the provisions of the California Energy Code, 2025 Edition, in order to facilitate reference and comparison to those provisions.
16.17.030 Local Amendments
The provisions of this Chapter shall constitute local amendments to the cross-referenced provisions of the California Energy Code, 2025 Edition, and shall be deemed to replace the cross- referenced sections of said Code with the respective provisions set forth in this Chapter.
16.17.040 Administration & Enforcement of 2025 California Energy Code Administration and enforcement of this code shall be governed by Chapter 1, Division II of the 2025 California Building Code as amended by Palo Alto Municipal Code Chapter 16.04.
16.17.050 Violations ‐ Penalties
It is unlawful for any person to violate any provision or to fail to comply with any of the requirements of this Chapter or any permits, conditions, or variances granted under this Chapter.
Violators shall be subject to any penalty or penalties authorized by law, including but not limited to: administrative enforcement pursuant to Chapters 1.12 and 1.16 of the Palo Alto Municipal Code; and criminal enforcement pursuant to Chapter 1.08 of the Palo Alto Municipal Code. Each separate day or any portion thereof during which any violation of this Chapter occurs or continues shall be deemed to constitute a separate offense.
When the chief building official determines that a violation of this Chapter has occurred, the chief building official may record a notice of pendency of code violation with the Office of the County Recorder stating the address and owner of the property involved. When the violation has been corrected, the chief building official shall issue and record a release of the notice of pendency of code violation.
16.17.060 Subchapter 1 All Occupancies – General Provisions Section 100.0 – SCOPE is amended to add new subsections (i) and (j) as follows:
(i) Single Family Building Remodel Energy Reach Code - Purpose and Intent.
In addition to all requirements of the California Energy Code applicable to Single Family building additions and alterations, the energy efficiency, renewable energy, and electric readiness measures specified in Sections 150.0(w) and 150.0(x) shall be required for Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
Replacement Requirement
Item 19: Staff Report
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certain single-family additions and alterations.
(j) SUBSTANTIAL REMODEL (or “50-50-50” RULE) Any project that affects the removal or replacement of 50% or more linear length of the existing exterior walls of the building, 50% or more linear length of the existing exterior wall where the plate height is raised, or 50% or more of the existing roof framing area is removed or replaced, over a 3-year period is considered a substantial remodel. a. Any permit(s) applied for will trigger a review of a 3-year history of the project. This review will result in determining if a substantial remodel has occurred.
b. The Chief Building Official or designee shall make the final determination regarding the application if a conflict occurs.
Section 100.1(b) of Subchapter 1 of the California Energy Code is amended by adding the following definitions:
COVERED SINGLE FAMILY PROJECT shall mean any project in a Single-Family residential building originally permitted for construction before 2011 that meets any of the following criteria:
1. All residential building additions and/or alterations exceeding 1000 square feet, as amended by this Chapter and as applicable to the scope of work.
For Covered Single Family Projects, the area of alterations will include any construction or renovation to an existing structure other than repair or addition.
Alterations include raising the plate height, historic restoration, changes or rearrangements of the structural parts or elements, and changes or rearrangement of bearing walls and full height partitions.
Normal maintenance, reroofing, painting or wall papering, floor finishes, replacement-in-kind of mechanical, plumbing and electrical systems, or replacing or adding new kitchen counter and similar furniture, plumbing fixture to the building are excluded for the purposes of establishing scope of Covered Single- Family Projects.
The area of alteration should be limited to the footprint of element(s) being altered.
The sum of the footprint of the elements being altered with respect to Covered Single Family Projects, shall be calculated using the following methodology:
1. Raising the plate height: The calculation with respect to raising of the plate height will be based on the area of the footprint in which the plate height is being increased. Plate height means the vertical distance measured from the top of the finished floor to the top of the plates.
2. Historic restoration: The calculation with respect to historic Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
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restoration will be based on the area of work covered in the California Historical Building Code (Title 24, Part 8).
3. Structural parts or elements: The calculation with respect to changes or rearrangements of the structural parts or elements will be based on the sum of the individual footprints of each structural change or rearrangement. The footprint shall be calculated based on the proposed design and inclusive of any demolished structural parts or elements.
4. Bearing walls and full height partition: The calculation with respect to changes or rearrangement of walls and full height partitions will be based on the footprint of any demolished wall or full height partition and any new wall or new full height partition.
Exception: Attached and detached Accessory Dwelling Units, ADU conversions of existing structures shall meet the California Energy Code Mandatory measures only.
CERTIFIED ENERGY ANALYST is a person registered as a Certified Energy Analyst with the California Association of Building Energy Consultants as of the date of submission of a Certificate of Compliance as required under section 10-103 of Building Energy Efficiency Standards for residential and nonresidential buildings.
ELECTRIC EQUIPMENT OR APPLIANCE means one or more devices that use electric energy to serve the needs for heating and cooling, water heating, cooking, and electric vehicle charging. In addition, ancillary equipment such as an electric panel, photovoltaic equipment, and energy storage systems that are deployed to support such devices shall be considered Electric Equipment or Appliance.
ELECTRIC HEATING APPLIANCE is a device that produces heat energy to create a warm environment by the application of electric power to resistance elements, refrigerant compressors, or dissimilar material junctions, as defined in the California Mechanical Code.
SUBSTANTIAL REMODEL (or “50‐50‐50” RULE) Any project that affects the removal or replacement of 50% or more linear length of the existing exterior walls of the building, 50% or more linear length of the existing exterior wall where the plate height is raised, or 50% or more of the existing roof framing area is removed or replaced, over a 3-year period is considered a substantial remodel. (Refer to Section 100.0 (j).
16.17.070 Reserved
16.17.080 Reserved
Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
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Item 19: Staff Report
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16.17.090 Reserved
16.17.100 Reserved
16.17.110 Reserved
16.17.120 SUBCHAPTER 7 SINGLE‐FAMILY RESIDENTIAL BUILDING –
MANDATORY FEATURES AND DEVICES
Section 150.0 MANDATORY FEATURES AND DEVICES
Section 150.0 of Subchapter 7 of the California Energy Code is amended to read as follows (additions underlined, deletions struck through):
Single-family residential buildings shall comply with the applicable requirements of Sections 150(a) through 150.0(x).
NOTE: The requirements of Sections 150.0 (a) through (v) apply to newly constructed buildings. Sections 150.2(a) and 150.2(b) specify which requirements of Sections 150.0(a) through 150.0(v) also apply to additions or alterations. The electric readiness requirements of Sections 150.0 (n), (t), (u) and (v) apply to residential remodels or additions when the applicable system is included in the remodel. In addition, Covered Single Family Projects shall also be required to comply with Section 150.0(w) and certain additions and alterations shall also be required to comply with Section 150.0(x).
Subsections 150.0 (a) – (s) are adopted without modification.
(t) Heat pump space heater ready. Systems using gas or propane furnace to serve individual dwelling units shall include the following:
1. A dedicated 240 volt branch circuit wiring shall be installed within 3 feet from the furnace and accessible to the furnace with no obstructions. The branch circuit conductors shall be rated at 30 amps minimum. The blank cover shall be identified as “240V ready.” All electrical components shall be installed in accordance with the California Electrical Code.
2. The main electrical service panel shall have a reserved space to allow for the installation of a double pole circuit breaker for a future heat pump space heater installation. The reserved space shall be permanently marked as “For Future 240V use.”
3. A designated exterior location for a future heat pump compressor unit.
Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
Replacement Requirement
Item 19: Staff Report
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Subsections 150.0 (u) – (v) are adopted without modification.
A new Subsection, (w), is added to Section 150.0 as follows:
(w) A Covered Single-Family Project shall install a set of measures based on the building vintage from the Measure Menu Table, Table 150.0-J, to achieve a total Measure Point Score that is equal to or greater than the Target Score in Table 150.0-I. In addition, all mandatory measures listed in Table 150.0-J shall be installed. Measure verification shall be explicitly included as an addendum to the Certificate of Compliance to be filed pursuant to 2025 Title 24, Part 6, Section 10-103.
Installed measures shall meet the specifications in Table 150.0-K.
Building vintage is the year in which the original construction permit for the building was submitted, as documented by building department records, or the permit issue date of an addition or alteration that satisfied the Performance Standards (California Energy Code, Title 24, Part 6, Section 150.1(b)) that were in effect at that time. Unless otherwise specified, the requirements shall apply to the entire dwelling unit, not just the additional or altered portion. Measures from the Measure Menu table that are to be installed to satisfy requirements under the California Energy Code, Title 24, Part 6, may not count towards compliance with these requirements. Where these requirements conflict with other California Energy Code requirements, the stricter requirements shall prevail.
Exception 1 to Section 150.0(w): Creation of a new accessory dwelling unit or junior accessory dwelling unit that is within the existing space of a single family dwelling or accessory structure and include an expansion of not more than 150 square feet beyond the same physical dimensions as the existing accessory structure. An expansion beyond the physical dimensions of the existing accessory structure shall be limited to accommodating ingress and egress. Or, if the project would not otherwise be a Covered Single Family Project were it not for the inclusion of an accessory dwelling unit or junior accessory dwelling unit that meets the criteria above.
Exception 2 to Section 150.0(w): Mobile Homes, Manufactured Housing, or Factory-built Housing as defined in Division 13 of the California Health and Safety 12 Code (commencing with Section 17000 of the Health and Safety Code).
Exception 3 to Section 150.0(w): Emergency Housing pursuant to Appendix P of the California Building Code.
Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
Replacement Requirement
Item 19: Staff Report
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Exception 4 to Section 150.0(w): An alteration that consists solely of roof and/or fenestration projects.
Exception 5 to Section 150.0(w): If the project includes circumstances which constitute hardship or infeasibility, the applicant may request an exemption. In applying for an exemption, the burden is on the applicant to show hardship or infeasibility. Circumstances that constitute hardship or infeasibility shall include one or more of the following:
(a) That the cost of achieving compliance exceeds 20% of the valuation of cost of the project;
(b) That it is technically infeasible to achieve compliance through all packages due to conditions specific to the project;
(c) That strict compliance with these standards would create or maintain a hazardous condition(s) and present a life safety risk to the occupants.
Applicants shall follow the Infeasibility procedures in PAMC
16.17.170.
Exception 6 to Section 150.0(w): If the applicant demonstrates, using Commission-certified compliance software as specified by Section 10- 109(c) and Section 10-116, that the Energy Budget of the Proposed Building Design would be less than or equal to the Energy Budget of the building under the project if it included any set of measures that would achieve compliance under this Section 150.0(w).
Certificate of Compliance. The Certificate of Compliance shall be prepared and signed by a Certified Energy Analyst and the energy budget for the Proposed Design shall be no greater than the Standard Design Building.
Exception 7 to Section 150.0(w): If the dwelling unit has previously installed measures from the Measure Menu, Table 150.0-J, and compliance can be demonstrated to the building official, then these measures shall not be required to be newly installed, and appropriate credit shall be included in the applicable compliance calculations.
Exception 8 to Section 150.0(w): A measure that is necessary for compliance is prohibited because of a covenant or other deed restriction on the property, such as a homeowners association covenant.
Exception 9 to Section 150.0(w): A Covered Single-Family Project, other than an addition, that would not otherwise be subject to this section 150.0(w) but for installation of solar PV, solar water heating, EV charging, electrical upgrades for solar PV or EV charging, or energy storage.
Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
Replacement Requirement
Item 19: Staff Report
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Exception 10 to Section 150.0(w): The project is solely related to a repair, as defined by Title 24 Part 2 Section 202.
Exception 11 to Section 150.0(w) and 150.0(x): A Covered Single Family Project that consists solely of medically necessary improvements or solely of seismic safety improvements.
TABLE 150.0‐I: TARGET SCORES
Building Vintage
Pre‐1978
1978‐1991
1992‐2010
Climate Zone 4 12 12 12
TABLE 150.0‐J: MEASURE MENU, CLIMATE ZONE 4
ID Measures Building Vintage
Pre‐
1978
1978‐
1991
1992‐
2010
E1 Lighting Measures Mandatory
E2 Water Heating Package 1 1 1
E3 Air Sealing 2 1 1
E4.A R-38 Attic Insulation 7 3 1
E4.B R-49 Attic Insulation 7 3 1
E5 Duct Sealing 6 4 1
E6.A New Ducts, R-6 Insulation + Duct Sealing 10 7 2
E6.B New Ducts, R-8 Insulation + Duct Sealing 11 8 3
E7 Windows 6 5 3
E8 R-15 Wall Insulation 6 -- --
E10.A R-19 Raised floor insulation 8 8 --
E10.B R-30 Raised floor insulation 9 9 --
E11 Radiant Barrier Under Roof (when re-roofing) 3 2 1
FS1 Heat Pump Water Heater Replacing Gas 12 12 12
FS2 High Eff. Heat Pump Water Heater Replacing Gas 13 13 13 FS3 Heat Pump Water Heater Replacing Electric 4 4 4
FS4 High Eff. Heat Pump Water Heater Replacing Electric 5 5 5 Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
Replacement Requirement
Item 19: Staff Report
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TABLE 150.0‐K: MEASURE SPECIFICATIONS
ID Measure Specification
Energy Efficiency Measures
E1 Lighting Measures – Install lighting with an efficiency of 45 lumens per watt or greater in all interior and exterior screw-in fixtures. Install photocell, occupancy sensor or energy management system controls that meet the requirements of 150.0(k)3 in all outdoor lighting permanently mounted to a residential building or to other buildings on the same lot.
E2 Water Heating Package: Insulate all accessible hot water pipes with pipe insulation a minimum of ¾ inch thick. This includes insulating the supply pipe leaving the water heater, piping to faucets underneath sinks, and accessible pipes in attic spaces or crawlspaces. Upgrade fittings in sinks and showers to meet current California Green Building Standards Code (Title 24, Part 11) Section 4.303 water efficiency requirements.
Exception: Upgraded fixtures are not required if existing fixtures have rated or measured flow rates of no more than ten percent greater than 2025 California Green Building Standards Code (Title 24, Part 11) Section 4.303 water efficiency requirements.
E3 Air Sealing: Seal all accessible cracks, holes, and gaps in the building envelope at walls, floors, and ceilings. Pay special attention to penetrations including plumbing, electrical, and mechanical vents, recessed can light luminaires, and windows. Weather-strip doors if not already present. Verification shall be conducted following a prescriptive checklist that outlines which building aspects need to be addressed by the permit applicant and verified by an inspector. Compliance can also be demonstrated with blower door testing conducted by a certified ECC Rater no more than three years prior to the permit application date that either: a) shows at least a 30 percent reduction from pre-retrofit conditions; or b) shows that the number of air changes per hour at 50 Pascals pressure difference (ACH50) does not exceed ten for Pre-1978 vintage buildings, seven for 1978 to 1991 vintage buildings and five for 1992-2010 vintage buildings. If combustion appliances are located within the pressure boundary of the building, conduct a combustion safety test by a certified ECC Rater or a professional certified by the Building Performance Institute, in accordance with the BPI Technical Standards for the Building Analyst Professional.
E4.A R-38 Attic Insulation: Attic insulation shall be installed to achieve a weighted assembly U-factor of 0.025 or insulation installed at the ceiling level shall have a thermal resistance of R-38 or greater for the insulation alone. Recessed downlight luminaires in the ceiling shall be covered with insulation to the same depth as the rest of the ceiling. Luminaires not rated for insulation contact must be replaced or fitted with a fire-proof cover that allows for insulation to be installed directly over the cover.
FS5 Heat Pump Space Conditioning System 21 16 13
FS6 High Eff. Heat Pump Space Conditioning System 23 18 15 FS7 Dual Fuel Heat Pump Space Conditioning System 15 11 10 FS8 Heat Pump Clothes Dryer 1 1 1
FS9 Induction Cooktop 1 1 1
PV Solar PV 17 17 15
Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
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Item 19: Staff Report
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Exception: In buildings where existing R-30 is present and existing recessed downlight luminaires are not rated for insulation contact, insulation is not required to be installed over the luminaires.
E4.B R-49 Attic Insulation: Attic insulation shall be installed to achieve a weighted assembly U-factor of 0.020 or insulation installed at the ceiling level shall have a thermal resistance of R-49 or greater for the insulation alone. Recessed downlight luminaires in the ceiling shall be covered with insulation to the same depth as the rest of the ceiling. Luminaires not rated for insulation contact must be replaced or fitted with a fire-proof cover that allows for insulation to be installed directly over the cover. Exception:
In buildings where existing R-30 is present and existing recessed downlight luminaires are not rated for insulation contact, insulation is not required to be installed over the luminaires.
E5 Duct Sealing: Air seal all space conditioning ductwork to meet the requirements of the 2025 Title 24, Part 6, Section 150.2(b)1E. The duct system must be tested by a ECC Rater no more than three years prior to the Covered Single Family Project permit application date to verify the duct sealing and confirm that the requirements have been met. This measure may not be combined with the New Ducts and Duct Sealing measure in this Table.
Exception: Buildings without ductwork or where the ducts are in conditioned space.
E6.A New Ducts, R-6 insulation + Duct Sealing: Replace existing space conditioning ductwork with new R-6 ducts that meet the requirements of 2025 Title 24 Section 150.0(m)11. This measure may not be combined with the Duct Sealing measure in this Table. To qualify, a preexisting measure must have been installed no more than three years before the Covered Single Family Project permit application date.
E6.B New Ducts, R-8 insulation + Duct Sealing: Replace existing space conditioning ductwork with new R-8 ducts that meet the requirements of 2025 Title 24 Section 150.0(m)11. This measure may not be combined with the Duct Sealing measure in this Table. To qualify, a preexisting measure must have been installed no more than three years before the Covered Single Family Project permit application date.
E7 Windows: Replace at least 50% of existing windows with high performance windows with an area- weighted average U-factor no greater than 0.27 in Climate Zones 4.
E8 R-15 Wall Insulation: Install wall insulation in all exterior walls to achieve a weighted U-factor of 0.095 or install wall insulation in all exterior wall cavities that shall result in an installed thermal resistance of R-15 or greater for the insulation alone.
E9 Reserved for future use
E10.
A
R-19 Floor Insulation: Raised-floors shall be insulated such that the floor assembly has an assembly U- factor equal to or less than U-0.037 or shall be insulated between wood framing with insulation having an R-value equal to or greater than R-19.
E10.
B
R-30 Floor Insulation: Raised-floors shall be insulated such that the floor assembly has an assembly U- factor equal to or less than U-0.028 or shall be insulated between wood framing with insulation having an R-value equal to or greater than R-30.
E11 Radiant Barrier: A radiant barrier that meets the requirements of Section 150.1(c)2 shall be installed under at least 50% of the roof surface.
Fuel Substitution and Solar PV Measures
FS1 Heat Pump Water Heater (HPWH) Replacing Gas: Replace existing natural gas water heater with a heat pump water heater that meets the requirements of Sections 110.3 and 150.2(b)1.H.iii.b.
Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
Replacement Requirement
Item 19: Staff Report
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FS2 High Efficiency Heat Pump Water Heater (HPWH) Replacing Gas: Replace existing natural gas water heater with heat pump water heater with a Northwest Energy Efficiency Alliance (NEEA) Tier 3 or higher rating that also meets the requirements of Sections 110.3 and 150.2(b)1.H.iii.c.
FS3 Heat Pump Water Heater (HPWH) Replacing Electric: Replace existing electric resistance water heater with a heat pump water heater that meets the requirements of Sections 110.3 and 150.2(b)1.H.iii.b.
FS4 High Efficiency Heat Pump Water Heater (HPWH) Replacing Electric: Replace existing electric resistance water heater with heat pump water heater with a Northwest Energy Efficiency Alliance (NEEA) Tier 3 or higher rating that also meets the requirements of Sections 110.3, and 150.2(b)1.H.iii.c.
FS5 Heat Pump Space Conditioning System: Replace all existing gas and electric resistance primary space heating systems with a heat pump system that meets the requirements of Sections 110.3, 150.2(b)1.C, 150.2(b)1.E, 150.2(b)1.F, and 150.2(b)1.G.
FS6 High Efficiency Heat Pump Space Conditioning System: Replace all existing gas and electric resistance primary space heating systems with an electric-only heat pump system that meets the requirements of Sections 110.3 and 150.2(b)1.C, 150.2(b)1.E, 150.2(b)1.F, and 150.2(b)1.G and one of the following:
A. A ducted heat pump system with a SEER2 rating of 16.5 or greater, an EER2 rating of 12.48 or greater and an HSPF2 rating of 9.5 or greater; or
B. A ductless mini-split heat pump system with a SEER2 rating of 14.3 or greater, an EER2 rating of
11.7 or greater and an HSPF2 rating of 7.5 or greater
FS7 Dual Fuel Heat Pump Space Conditioning System: Install a heat pump space conditioning system that meets the requirements of Sections 110.3 and 150.2(b)1.C, 150.2(b)1.E, 150.2(b)1.F, and 150.2(b)1.G and either:
A. Replaces all existing gas and electric resistance primary heating systems with a hybrid gas and electric heat pump system, or
B. Is an electric-heat pump system in tandem with a gas furnace and controls to use the gas furnace for backup heat only.
FS8 Heat Pump Clothes Dryer: Replace existing electric resistance or gas clothes dryer with heat pump dryer with no resistance element and cap gas line.
FS9 Induction Cooktop: Replace all existing gas and electric resistance stove tops with inductive stove top and cap the gas line.
PV.A Solar PV: Install a solar PV system that meets the requirements of Section 150.1(c)14.
A new Subsection, (x), is added to Section 150.0 as follows:
(x) Electric Readiness for Alterations
1. Electric range. Where branch circuits or receptacles are added or altered in a kitchen and the work requires a building permit, install electrical components in accordance with the California Electrical Code. The electrical components shall include either of the following:
A. A 125 volt, 20 amp electrical receptacle that is connected to the electric panel with a 120/240 volt 3 conductor branch circuit rated at 50 amps minimum, within 3 feet from the appliance and accessible to the appliance with no
obstructions. Both ends of the unused conductor shall be Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
Replacement Requirement
Item 19: Staff Report
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labeled with the word “spare” and be electrically isolated.
Space shall be reserved for a single pole circuit breaker in the electrical panel adjacent to the circuit breaker for the branch circuit and labeled with the words “Future Use”.
B. A pathway for a future 240 volt 50 amp minimum branch circuit that shall consist of either conductors or raceway from the main electrical service panel. The main electric panel shall have space reserved to allow for the installation of a double pole circuit breaker for a future electric range installation. The reserved space shall be permanently marked as “For Future 240V use”. The raceway or conductors shall terminate at a junction box within 3 feet of the appliance. The blank cover shall be identified as “240V ready”.
2. Electric dryer. Where a branch circuit is added or altered within 3 feet of a gas or propane clothes dryer and the work requires a building permit, install electrical components in accordance with the California Electrical Code. The electrical components shall include either of the following:
A. A dedicated 125 volt, 20 amp electrical receptacle that is connected to the electric panel with a 120/240 volt 3
conductor branch circuit rated at 30 amps minimum, within 3 feet from the appliance and accessible to the appliance with no obstructions. Both ends of the unused conductor shall be labeled with the word “spare” and be electrically isolated.
Space shall be reserved for a single pole circuit breaker in the electrical panel adjacent to the circuit breaker for the branch circuit and labeled with the words “Future Use”; or,
B. A pathway for a future 240 volt 30 amp minimum branch circuit that shall consist of either conductors or raceway from the main electrical service panel. The main electric panel shall have space reserved to allow for the installation of a double pole circuit breaker for a future heat pump dryer installation.
The reserved space shall be permanently marked as “For
Future 240V use”. The raceway or conductors shall terminate at a junction box within 3 feet of the appliance. The blank cover shall be identified as “240V ready”.
3. Heat pump water heater.
A. If wall framing is removed or replaced within 3 feet of a gas or propane water heating appliance, space suitable for the future installation of a heat pump water heater (HPWH) shall be provided. The space shall be at least 2.5 feet by 2.5 feet wide and 7 feet tall and shall include a condensate drain that is no more than 2 inches higher than the base of an installed water heater and allows natural draining without pump assistance or installed piping or tubing within 3 feet of the water heater Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
Replacement Requirement
Item 19: Staff Report
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location to a condensate drain or exterior location. If pump assistance is needed, a receptacle on a 120 volt, minimum 15 amp branch circuit for a condensate pump must be available within 3 feet of the water heater location.
B. Where branch circuits are altered or added within 3 feet of an existing gas or propane water heater or within 10 feet of the designated future location of a heat pump water heater as required under Section 150.0(x)3A, and the work requires a building permit, install electrical components in accordance with the California Electrical Code. The electrical components shall include either of the following:
i. A dedicated 125 volt, 20 amp electrical receptacle that is connected to the electric panel with a 120/240 volt 3
conductor, 10 AWG copper branch circuit rated at 30 amps minimum, within 3 feet from the water heater and
accessible to the water heater with no obstructions. Both ends of the unused conductor shall be labeled with the
word “spare” and be electrically isolated. Space shall be reserved for a single pole circuit breaker space in the electrical panel adjacent to the circuit breaker for the branch circuit and labeled with the words “Future 240V
Use”; or
ii. A pathway for a future 240 volt 30 amp minimum branch circuit that shall consist of either conductors or raceway from the main electrical service panel. The main electric panel shall have space reserved to allow for the
installation of a double pole circuit breaker for a future HPWH installation. The reserved space shall be
permanently marked as “For Future 240V use”. The
pathway shall terminate at a junction box within 3 feet of the appliance. The blank cover shall be identified as “240V ready”.
Exception 1 to Section 150.0(x): The project is the result of a repair as defined by Title 24 Part 2 Section 202.
Exception 2 to Section 150.0(x): If a building permit, is not otherwise required for the project other than compliance with this section.
Exception 4 to Section 150.0(x): The project is the result of a safety improvement to remove a known hazard.
Exception 5 to Section 150.0(x): Mobile Homes, Manufactured Housing, or Factory-built Housing as defined in Division 13 of the Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
Replacement Requirement
Item 19: Staff Report
Pg.
224
Packet Pg. 638 of 690
*NOT YET APPROVED*
16 0290179_20250826_ms29
California Health and Safety 12 Code (commencing with Section 17000 of the Health and Safety Code).
Exception 6 to Section 150.0(x): Emergency Housing pursuant to Appendix P of the California Building Code.
Exception 7 to Section 150.0(x): Creation of a new accessory dwelling unit or junior accessory dwelling unit that is within the existing space of a single family dwelling or accessory structure and includes an expansion of not more than 150 square feet beyond the same physical dimensions as the existing accessory structure. An expansion beyond the physical dimensions of the existing accessory structure shall be limited to accommodating ingress and egress. Or, if the project would not otherwise be a Covered Single Family Project were it not for the inclusion of an accessory dwelling unit or junior accessory dwelling unit that meets the criteria above.
16.17.130 Reserved
16.17.140 SUBCHAPTER 9 SINGLE‐FAMILY RESIDENTIAL BUILDINGS—ADDITIONS
AND ALTERATIONS TO EXISTING RESIDENTIAL BUILDINGS
The requirements of PAMC 16.17.140 shall apply to building permit applications submitted to the City on or after January 1, 2027 and shall apply to all building permit applications submitted to the City on or after that date.
Section 150.2 – ENERGY EFFICIENCY STANDARDS FOR ADDITIONS AND ALTERATIONS TO EXISTING SINGLE-FAMILY RESIDENTIAL BUILDINGS – of Subchapter 9 of the 2025 California Energy Code is adopted without amendment, except as follows (additions underlined, deletions struck through):
Section 150.2(b)1C is hereby amended to read:
C. EnƟrely new or complete replacement space‐condiƟoning systems installed as part of an alteraƟon, shall include all the system heaƟng or cooling equipment, including but not limited to: condensing unit cooling or heaƟng coil, and air handler for split systems; or complete replacement of a packaged unit; plus enƟrely new or replacement duct system (SecƟon 150.2(b)1Diia).
EnƟrely new or complete replacement space-condiƟoning systems shall meet the requirements of SecƟons 150.0(h), 150.0(i), 150.0(j)1, 150.0(j)2, 150.0(m)1 through 150.0(m)10; 150.0(m)12; 150.0(m)13, 150.1(c)7, 150.2(b)1Fii, 150.2(b)1G, and TABLE 150.2-A. AddiƟonally, where an enƟrely new or complete replacement space condiƟoning system includes a new or replacement air-cooled air condiƟoner in Climate Zones 1 through 14 and 16, Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
Replacement Requirement
Item 19: Staff Report
Pg.
225
Packet Pg. 639 of 690
*NOT YET APPROVED*
17 0290179_20250826_ms29
it shall meet the applicable requirements of SecƟon 150.2(b)1Fiv. Where an enƟrely new or complete replacement space condiƟoning system includes a new or replacement heat pump, it shall meet the applicable requirements of SecƟon 150.2(b)1Fv.
Section 150.2(b)1.F. is hereby amended to read:
F. Altered space‐conditioning system ‐ mechanical cooling. Alterations which install new or replacement air-cooled air conditioners shall meet the applicable requirements of subsections i and iv. Alterations which install new or replacement heat pumps shall meet the applicable requirements of subsections i, ii, iii, and v. All other alterations to refrigerant containing components such as the compressor, condensing coil, evaporator coil, refrigerant metering device, or refrigerant piping, shall meet the applicable requirements of subsections i, ii, and iii. When a space-conditioning system is an air conditioner or heat pump that is altered by the installation or replacement of refrigerant-containing system components such as the compressor, condensing coil, evaporator coil, refrigerant metering device or refrigerant piping, the altered system shall comply with the following requirements:
i. All thermostats associated with the system shall be replaced with setback thermostats meeting the requirements of Section 110.2(c). ii. Air-cooled air conditioners in Climate Zones 2 and 8 through 15 and air- source heat pumps in all climate zones, including but not limited to ducted split systems, ducted package systems, small duct high velocity air systems, and minisplit systems, shall comply with Subsections a and b, unless the system is of a type that cannot be verified using the specified procedures. Systems that cannot comply with the requirements of 150.2(b)1Fii shall comply with Section 150.2(b)1Fiii.
Exception to Section 150.2(b)1Fii: Entirely new or complete replacement packaged systems for which the manufacturer has verified correct system refrigerant charge prior to shipment from the factory are not required to have refrigerant charge confirmed through field verification and diagnostic testing. The installer of these packaged systems shall certify on the Certificate of Installation that the packaged system was pre-charged at the factory and has not been altered in a way that would affect the charge. Ducted systems shall comply with minimum system airflow rate requirement in Section 150.2(b)1Fiia, provided that the system is of a type that can be verified using the procedure specified in RA3.3 or an approved alternative in RA1. a. Minimum system airflow rate shall comply with the applicable Subsection I or II below as confirmed through field verification and diagnostic testing in accordance with the procedures specified in Reference Residential Appendix Section RA3.3 or an approved Item 19
Attachment F - Emergency
Ordinance Amending PAMC
Chapter 16.17 to Adopt the
2025 California Energy Code
and Local Amendments,
Adding FlexPath and Air
Conditioner Time-of-
Replacement Requirement