City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-00673 6/13/2023 Consent Item 19.
Contract: Sacramento Municipal Utility District Contract for Implementation of “TECH” Clean California Quick Start Grant Funds for the Sacramento Housing Anti-displacement and Energy Equity Pilot
File ID: 2023-00673
Location: Zip codes: 95817, 95820, 95824, 95828; District 5, Represented by Councilmember Maple; District 6, Represented by Vice Mayor Guerra; District 6, Represented by Mayor Steinberg Recommendation: Pass a Motion authorizing the City Manager or the City Manager’s designee to execute an agreement with Sacramento Municipal Utility District (SMUD) for home electrification services for a total not-to-exceed amount of $350,000 to implement the “TECH” Clean California Quick Start Grant scope by April 2024 as part of the Sacramento Housing Anti-displacement and Energy Equity Pilot.
Contact: Jennifer Venema, Climate Action Lead, 916-808-1859, [email protected], Office of Climate Action and Sustainability; Leslie Fritzsche, Economic Investment Manager, (916) 808-5450, [email protected]; Axel Magallanes, Housing Analyst, (916) 808-1844, [email protected], Office of Innovation & Economic Development; Sarah Kolarik, Sustainability Analyst, (916) 808-1421, [email protected], Office of Climate Action and Sustainability
Presenter: None
Attachments:
1-Description/Analysis
2-SMUD Contract
Description/Analysis
Issue Detail: The City of Sacramento, in partnership with SMUD, applied for and has been awarded $350,000 in grant funding through the “TECH” Clean California Quick Start Grant (QSG) to further education and installation of heat pumps in low-income households. The grant program is supported with funding from California’s Cap-and-Trade program, administered by Energy Solutions with oversight and management from the California Public Utilities Commission. Grant funding will support
File ID: 2023-00673 6/13/2023 Consent Item 19.
the Sacramento Housing Anti-displacement and Energy Equity Pilot (Pilot), to advance the market for heat pump space and water heating by completing heat pump installations, home repairs, and other electrification and energy efficiency retrofits for at least 25 low-income single-family homeowners in the targeted zip codes (i.e., 95817, 95820, 95824, 95828) surrounding the Aggie Square project on Stockton Boulevard. Staff is recommending entering into a contract with SMUD in a total not-toexceed amount of $350,000 to implement the Pilot, and to provide additional elements to the City’s anti-displacement and home rehabilitation efforts to ensure housing stability and affordability for lowincome homeowners in the area. SMUD will coordinate with Habitat for Humanity of Greater Sacramento (Habitat) on the implementation of this Pilot, complementing their rehabilitation work in the area.
Policy Considerations: This agreement will further the City’s objectives to achieve carbon neutrality by 2045 (Resolution No. 2019-0465) by working with SMUD and Habitat to electrify existing lowincome housing in an equitable and inclusive manner. By partnering with SMUD to implement residential electrification and leveraging the City’s home rehabilitation program for the Stockton Boulevard area, the City seeks to disburse funding in a cost-effective, holistic and equitable manner for income-eligible households. Lessons from this Pilot will inform the City's Existing Building Electrification Strategy, which is currently under development. City Council adopted a framework for building electrification (Resolution No. 2021-0166) that commits to an equitable transition, prioritizing health and resilience and historically marginalized, low-income communities.
Economic Impacts: This investment is estimated to add 6 jobs to the local economy, including 4 direct and 2 indirect. Use of these funds in assisting low-income homeowners with steps towards home electrification will reduce and stabilize housing costs for these households, furthering their spending power locally and their stability in avoiding homelessness, which has negative impacts.
Environmental Considerations: The City’s establishment of a funding mechanism for the Local Projects (contracts) is not a project pursuant to CEQA Guidelines section 15378(b)(4) because it qualifies as the creation of government funding mechanisms or other government fiscal activities, which does not involve any commitment to any specific project, which may result in a potentially significant physical impact on the environment.
Sustainability: Energy use in the built environment represents 38% of Sacramento’s greenhouse gas emissions. Electrifying buildings is a foundational strategy to reduce Sacramento’s greenhouse gas emissions. Electric appliances can be cheaper to operate, saving residents money on utility bill costs while improving home comfort. By leveraging home rehabilitation investments with energy efficiency and electrification, the City can maximize benefits with home stabilization and ensure that people of all income levels enjoy the benefits of newer, efficient technology.
Commission/Committee Action: Not applicable.
File ID: 2023-00673 6/13/2023 Consent Item 19.
Rationale for Recommendation: Staff pursued the QSG funding because it provides the opportunity for the City and partners to align and leverage complementary efforts to advance electrification and climate equity with housing anti-displacement and affordability programming. By entering into an agreement with SMUD to implement the electrification scope, the City can costeffectively work toward these goals and leverage additional financial and in-kind resources for the Pilot. SMUD and Habitat will coordinate implementation in conjunction with existing programs.
This Pilot will advance the deployment of equity-oriented electrification as a priority in the City’s climate action efforts, with a focus on providing quality of life improvements and on-bill savings to low -income homeowners. Outreach for this program will include direct communication with low-income customers already enrolled in SMUD’s Energy Assistance Program Rates (EAPR), as well as outreach to other low-income homeowners in the area who are eligible but not yet connected to EAPR. Outreach will also be done through the organizations involved in the City’s Aggie Square Antidisplacement efforts (Habitat, Step-up, Salvation Army, and Unseen Heroes) and local neighborhood organizations.
Financial Considerations: On January 24, 2023, the City adopted Resolution No. 2023-0017 to receive $350,000 of QSG grant funding to augment the budget in the FY 2022/23 Stockton Boulevard Housing Anti-Displacement Funding Project (I02189030) to be used with the Home Repairs and Electrification Program for low-income homeowners in the Stockton Boulevard area.
To cost-effectively implement the electrification improvements identified in the QSG scope, staff recommend entering into an agreement with SMUD to provide electrification services at a total cost not-to-exceed $350,000. Sufficient funding is available in the FY2022/23 Stockton Boulevard Housing Anti-Displacement Funding Project (I02189030) in the Operating Grant Fund (Fund 2702).
Local Business Enterprise (LBE): Not applicable.