6.16.2025
City Council
1 Staff Recommendation
Receive an informational report on the "Electrify San Mateo: Sustainable Building Strategy" project and provide direction on the policy pathways for inclusion in the final Sustainable Building Strategy.
2 Project
Overview
Electrify San Mateo Background
• Building energy use represents 38% of San Mateo's GHG emissions • Building electrification is key in reducing fossil gas use and switching to clean carbon-free electricity provided by Peninsula Clean Energy • Co-benefits of electric buildings
4 Local Policy Context Paves the Way for Building
Decarbonization
• City of San Mateo Reach Codes
• New Construction
• City of San Mateo Policy: Climate Action
Plan (CAP)
• BE 1: All-electric new construction
• BE 2: All-electric existing buildings
• BE 2 = most significant driver of
GHG reductions
• Bay Area Air District (formerly BAAQMD)
Zero NOx Space and Water Heating
Requirements
• Zero NOx water heating by 2027
• Zero NOx space heating by 2029
5 Sustainable Buildings Strategy Goals
• Develop an actionable roadmap with
concrete steps for City of San Mateo to
electrify existing buildings
• Align approach to meet climate goals
while balancing costs and other impacts
• Use best available science and data
• Listen to the community: engage early
and often, two phases of community
outreach
6 Strategy Development Timeline
Summer 2023 Fall 2023 Winter
23-24
Spring
2025
Summer
2025
• Development of Equity
+ Effectiveness
Criteria
• Identify range of
feasible policy options
• Building Inventory and
Market Segmentation
Analysis
• Phase 1: Community
Outreach: Effectiveness +
Equity Criteria Feedback
• Results of building
inventory and market
segmentation
• Draft prioritized policies list
• Incorporation of community
feedback for equity and
effectiveness criteria
• Draft policies & pathways list -
Community feedback
• Phase 2: Outreach:
Community feedback on
policy pathways
• Incorporation of community
feedback in prioritized policy
list
• Drafting of pathway
• Upcoming Council
meeting: Sustainable
Building Strategy
adoption
7 Community Engagement
▪ Phase I
o Understand Community Values and Concerns in
following engagement:
▪ Sustainability and Infrastructure Commission meeting
▪ Five General Plan Town Hall meetings
▪ Online survey
▪ City Council meeting
▪ Phase II
o Present Five Policy Pathways, Understand Community
Concerns and Needed Support in following
engagement:
▪ One in-person and one virtual community feedback
meeting
▪ Commerical Building Performance Standard Info meeting ▪ Presentations at partner meetings and community
meetings
▪ Online survey
▪ Three Commission meetings
8 Existing Building Decarbonization Policy Types
Option 1: Business
as Usual
Option 2: Reach
Codes for
Renovations
Option 3: Zero NOx
Equipment
Requirements
Option 4:
Commercial Building
Performance
Standards
Option 5: Municipal
Electric First Policy
9 Phase II: Community Concerns
▪ Installation Cost
• Short-term investment can be high due to
unexpected repairs/ upgrades
▪ Installation and Electric Infrastructure Challenges
• Lack of space or need to upgrade electric panels
▪ On-bill Costs
• long term operational costs of electric appliances
▪ Grid Reliability
• Power outages from PSPS and increased electricity
demand could strain the grid
▪ Lack of Education
• Need for a "help-desk" and peer-to-peer coaching
10 On-Bill Cost Impacts
▪ Water heaters and
HVAC save money on
bill with PCE.
▪ Rate choice is important
(choose e-elec).
▪ Gas rates expected to
increase faster than
electricity rates over
time.
11 Educational Resources
▪ Under each policy the City would expand engagement and direct the community to robust resources
▪ PCE "Concierge Service” “https://www.peninsulacleanenergy.com/residential/home -upgrade-services/ 12 Existing Building
Electrification
Policy Pathways
Option 1: Business as Usual
• Continue to adopt new construction "reach codes"
(ordinances that surpass the state's buildings code) to require more sustainable new buildings than the state
code; AB 306 impacts
• Focus on education, outreach, and incentives for
existing buildings
• Current incentives: Peninsula Clean Energy,
Inflation Reduction Act, and California TECH
$(7,500) savings
compared to
mixed-fuel
$0 (pre-wiring
required
by code)
~1,070 MT CO2e/yr by
2030 if all new buildings
had no natural gas
14 Option 1: Business As Usual
Community Engagement
Engagement Event
Online Survey
In-Person Community Feedback Meeting
Virtual Community Feedback Meeting
San Mateo United Homeowners Association Feedback Meeting Senior Advisory Commission
Sustainability and Infrastructure Commission
Community Relations Commission
Level of Support
Highly
Favorable
Favorable
Polarized
Unfavorable
Highly
Unfavorable
15 Option 2: Reach Codes for Renovations – AC to HP
• Requires new air conditioning units to
provide heating and cooling; AB 306
impacts
• Heat pump is cost parity or up to
$1,500 more than traditional AC
• PCE has a $1,500 rebate
• Avoids cost of furnace under future
BAAD rules ($10,000+)
$0 to $(1,500) savings
compared to AC
$0 (same as AC)
~2,200 MT CO2e/yr
by 2030
16 Option 2: Reach Codes for Renovations – Flex
• Required for large retrofits (e.g. $75,000+)
• Flexible options (pick one)
• Electrification + Efficiency Options
• All required to save money over lifetime
Variable but usually
$2,000 to $4,000
$0 (non-electric options)
~730 MT CO2e/yr
by 2030
17 Option 2 Reach Codes for Renovations
Community Engagement
Engagement Event
Online Survey
In-Person Community Feedback Meeting
Virtual Community Feedback Meeting
San Mateo United Homeowners Association Feedback Meeting Senior Advisory Commission
Sustainability and Infrastructure Commission
Community Relations Commission
Level of Support
Highly
Favorable
Favorable
Polarized
Unfavorable
Highly
Unfavorable
18 Option 3: Zero NOx Equipment Requirements
• The Bay Area Air District (BAAD) will
require property owners in nine Bay
Area counties, including San Mateo,
to switch their water heaters
(starting in 2027) and space heating
equipment (starting in 2029) to
electric when they need to be
replaced
• This proposed policy would move
up the deadline so that this
requirement would be in effect in
ahead of BAAD’s requirements
~9,700 MT
CO2e/yr by 2030
19 Costs: Residential Upfront Water
Heating Electrification Costs
$2,500
$6,000Heat Pump Water Heater
Minus PCE Rebate
$2,000 Minus Fed. Tax Credit
$1,500Cost of HPWH - Rebates
$2,800Cost of Gas Water Heater
Water
heating
$(1,300) savings
compared to gas
$3,500 for panel
if needed
20 Costs: Residential Upfront HVAC
Electrification Costs
Space heating
$1,500
$17,910Heat Pump
Minus PCE Rebate
$2,000 Minus Fed. Tax Credit
$14,410 Cost of HP - Rebates
$13,632Cost of Furnace and AC
Cost of Furnace $6,132
$8,278 to $778 compared
to gas (depends if AC is
added)
$3,500 for panel
if needed
21 Option 3 Zero Nox Equipment Requirements
Community Engagement
Engagement Event
Online Survey
In-Person Community Feedback Meeting
Virtual Community Feedback Meeting
San Mateo United Homeowners Association Feedback Meeting Senior Advisory Commission
Sustainability and Infrastructure Commission
Community Relations Commission
Level of Support
Highly
Favorable
Favorable
Polarized
Unfavorable
Highly
Unfavorable
22 Year 1-2: Benchmark
Annually Report MT
CO2e and square
footage
Year 2-4: Retro-
commission Engineering
report on energy saving
opportunities
Year 4+: Performance Standard
Complete projects to reach the
threshold (GHG reduction/ SF)
Option 4: Commercial Building Performance Standards
• Adopt a policy standard for commercial buildings over a specific square footage (ex: 20,000 SF; 50,000 already mandated by AB 802) • Policy would require disclosing building energy use, increasing energy efficiency, and eventually, electrifying buildings as a phased approach $3,000
$0.30/SF
Variable
Variable
Less than
~83,660 MT
CO2e/yr by
2045
23 Option 4 Commercial Building Performance Standards
Community Engagement
Engagement Event Consensus
Online Survey
In-Person Community Feedback Meeting
Virtual Community Feedback Meeting
San Mateo United Homeowners Association Feedback Meeting Commercial Building Performance Standard Information Session Senior Advisory Commission
Sustainability and Infrastructure Commission
Community Relations Commission
Level of Support
Highly
Favorable
Favorable
Polarized
Unfavorable
Highly
Unfavorable
24 Community Engagement
• Advertised event with BPS information 1-pager
• Building owners had the following suggestions and
concerns:
▪ Desire for an individual threshold where buildings must reduce their emissions compared to their own historical emissions rather than meet a City or building type
average.
▪ Desire for a vintage threshold, exempting newer buildings that are already well- performing
▪ Concerns regarding space issues and complicated tenant and lease structures
25 Option 5: Municipal Electric First Policy
• Require City facilities to transition to electric equipment upon replacement
• Provides exemptions for infeasible projects
~145 MT CO2e/yr
by 2030
26 Option 5 Municipal Electric First Policy
Community Engagement
Engagement Event Consensus
Online Survey
In-Person Community Feedback Meeting
Virtual Community Feedback Meeting
San Mateo United Homeowners Association Feedback Meeting Senior Advisory Commission
Sustainability and Infrastructure Commission
Community Relations Commission
Level of Support
Highly
Favorable
Favorable
Polarized
Unfavorable
Highly
Unfavorable
27 Staff Recommendation
Receive an informational report on the "Electrify San Mateo: Sustainable Building Strategy" project and provide direction on the policy pathways for inclusion in the final Sustainable Building Strategy.
28 Existing buildings
making improvements
~1,070 MT CO2e
per year by 2030
HP: ~ 2,200 and Flex
Path: ~ 730 MT CO2e
per year by 2030
~9,700 MT CO2e
per year by 2030
Less than ~83,660
MT CO2e per year
by 2045
~145 MT CO2e per
year by 2030
Cost saving to not install
natural gas infrastructure
HP: savings/no cost differential w/rebates
Flex path: cost-efficient options; savings
over time but upfront costs
Time of replacement usually
cost-effective but high upfront
costs in some scenarios
Cost-efficiency due to flexible
path & phased implementation;
Equity considerations in MF
Exceptions for high-
cost scenarios
Highly Favorable
Favorable/
Polarized
Unfavorable
Favorable
Highly Favorable
29