Santa Cruz City Council
November 14, 2023

CITY OF SANTA CRUZ
809 Center Street
Santa Cruz, California 95060

CITY COUNCIL AGENDA
Regular Meeting - November 14, 2023
12:45 P.M. CLOSED SESSION, ZOOM/COURTYARD CONFERENCE ROOM 1:45 P.M. ORAL COMMUNICATIONS, CONSENT, PUBLIC HEARING, AND GENERAL

BUSINESS, ZOOM/COUNCIL CHAMBERS
The meeting may be viewed remotely, using any of the following sources:
 Click on Zoom link (no time delay): https://zoom.us/j/94684401344  Online at http://www.cityofsantacruz.com/government/city-council/council-meetings  Online at Watch – Community Television of Santa Cruz County  Comcast Channel 25
Or: Call any of the numbers below. If one is busy, try the next one.  1-833-548-0276 (Toll Free)
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 Enter the meeting ID number: 946 8440 1344
 When prompted for a Participant ID, press #.
 Press *9 on your phone to “raise your hand” when the Mayor calls for public comment.  It will be your turn to speak when the Mayor calls on you. Press *6 to unmute yourself. The timer will then be set.

Correspondence to be included in the agenda packet must be received by 5:00 pm on Monday, November 13th
PLEASE NOTE:
 Council may take a break(s) as needed.
 Requests for extra speaking time on items other than Oral Communications must be made by 5:00 p.m. on Sunday, November 12th by emailing the Mayor and the City Clerk.

Approval will be confirmed via email.
[email protected] [email protected]
November 14, 2023 City Council 2
The City of Santa Cruz does not discriminate against persons with disabilities. Out of consideration for people with chemical sensitivities we ask that you attend fragrance free. Upon request, the agenda can be provided in a format to accommodate special needs. Additionally, if you wish to attend this public meeting and will require assistance such as an interpreter for American Sign Language, Spanish, or other special equipment, please call the City Clerk’s Department at 420-5030 at least five days in advance so that we can arrange for such special assistance, or email [email protected]. The CalRelay system number: 1-800-735-2922.

Si desea asistir a esta reunión pública y necesita ayuda - como un intérprete de lenguaje de señas americano, español u otro equipo especial - favor de llamar al Departamento de la Secretaría de la Ciudad al 420-5030 al menos cinco días antes para que podamos coordinar dicha asistencia especial o envié un correo electrónico a [email protected]. El número del sistema Cal-Relay es: 1-800-735-2922.

Agenda and Agenda Packet Materials: The City Council agenda and the complete agenda packet containing public records, which are not exempt from disclosure pursuant to the California Public Records Act, are available for review on the City’s website:
www.cityofsantacruz.com/government/city-council-meetings and at the Office of the City Clerk located at 809 Center Street, Room 9, Santa Cruz, California, during normal business hours.

Agenda Materials Submitted after Publication of the Agenda Packet: Pursuant to Government Code §54957.5, public records related to an open session agenda item submitted after distribution of the agenda packet are available at the same time they are distributed or made available to the legislative body on the City’s website at: www.cityofsantacruz.com/government/city-councilmeetings and are also available for public inspection at the Office of the City Clerk, 809 Center Street Room 8, Santa Cruz, California, during normal business hours, and at the Council meeting.

Need more information? Contact the City Clerk’s office at 831-420-5030.

Closed Session
12:45 PM
Closed Session

1. Conference With Legal Counsel – Liability Claims (Government Code §54956.95)
1) Claimant: Barbara Jeanne Lawrence
2) Claimant: Zita Morrow
Claims against the City of Santa Cruz

2. Conference With Legal Counsel – Anticipated Litigation (Government Code §54956.9(d)(2))
Significant exposure to litigation (two potential cases to be discussed) November 14, 2023 City Council 3
City Council
1:45 PM
Call to Order
Roll Call
Oral Communications Announcement – Members of the public may address Council on matters not on the agenda, but within the jurisdiction of the Council. 30 minutes is allocated for Oral Communications. No extra time for groups will be granted.

Oral Communications
Presentations

3. Arts and Economic Prosperity Study Results

4. Mayoral Proclamation Declaring November 25, 2023 as Small Business Saturday

5. Friends of the Library to Present a Check for the Branciforte and Garfield Park Library Projects
Presiding Officer's Announcements
Statements of Disqualification
Additions and Deletions
City Attorney Report on Closed Session
November 14, 2023 City Council 4
Council Meeting Calendar

6. The City Council will review the meeting calendar attached to the agenda and revise it as necessary.

Consent Agenda

7. Minutes of the October 24, 2023 City Council Meeting (CC) Motion to approve as submitted.

8. Resolution Setting the Regular Meeting Schedule for the Calendar Year 2024 (CC)
Resolution setting the 2024 City Council meeting calendar.

9. Cooperative Retail Management Fund Budget Adjustment (ED) Resolution amending the FY 2024 budget to allocate $190,000 of Cooperative Retail Management assessment funding to the Downtown Management Corporation.

10. Award Contract for Elevator Maintenance Services (FN) Motion to:
1) Award a contract, via a cooperative purchasing agreement, for the citywide purchases for Elevator Maintenance Services to Otis Elevator Company in Monterey, California for a 3-year term; and
2) Authorize the City Manager or designee to execute the agreement and any amendments within the approved operating budget.

11. Award Contract for Fuel, Oil, and Lubricants (FN)
Motion to award a contract for citywide purchases for on-call fuel, oil, and lubricants, to Tom Lopes Distributing, Inc. DBA Western States Oil (Western States Oil), San Jose, California in the amount not to exceed $1.5 million over 5 years and to authorize the City Manager to execute an agreement in a form approved by the City Attorney with Tom Lopes Distributing, Inc. DBA Western States Oil.

November 14, 2023 City Council 5
Consent Agenda (continued)

12. Liability Claims Filed Against the City of Santa Cruz (FN) Motion to reject the liability claims of 1) Barbara Jeanne Lawrence, and 2) Zita Morrow, based on staff recommendation.

13. Consideration to Add a Single-Family Residence Located at 118 Ortalon Circle in the R-1-10 (Single-Family Residence) Zone District to the City's Historic Building Survey. (Environmental Determination: Not a Project Subject to CEQA (Sec. 15061(b)(3), General Rule/Common Sense Exemption) Owners: Michael and Rachel Lewis, Filed 8/9/2023 (PL) Resolution adding the residence located at 118 Ortalon Circle to the City's Historic Building Survey, based on the noted findings.

14. San Lorenzo Park Redesign (c301907) – First Amendment to Agreement for Landscape Architectural Services and Budget Adjustment (PR) Motion to:
1) Approve and authorize the City Manager to execute an amendment to the professional services agreement with Bionic Landscape, Inc. for redesigning San Lorenzo Park, in a form approved by the City Attorney.

The Director of Parks and Recreation is authorized to execute contract amendments within the approved project budget; and
2) Adopt a resolution amending the FY 2024 budget and appropriating $40,000 from the Parks Facilities Tax Fund account and amending the Parks and Recreation Capital Investment Program budget from $100,000 to $140,000 in c301907 (San Lorenzo Park Redesign).

15. Award Contract for Trailer Jet (PW)
Motion to award a contract for the purchase of one replacement Trailer Jet from O’Brien Hydro-Jetting and Vacuum Systems, (Marietta, OH) in the amount of $107,856.69.

16. Striping Improvements at San Lorenzo Boulevard (c400809) (PW) Motion to approve the design and installation of traffic striping at San Lorenzo Boulevard (between Laurel Street and Jessie Street).

End Consent Agenda
November 14, 2023 City Council 6
Public Hearing

17. Amendments to Title 18 of the Municipal Code Creating an Energy Reach Code for Newly Constructed Buildings with the Intent to Provide Developers with a Range of Options that Will Meet Goals to Reduce Greenhouse Gas Emissions Associated with Fossil Fuel Citywide (PL/CM) Motion to introduce for publication an ordinance amending Municipal Code Title 18 – Buildings and Construction, amending Section 18.04.030 and adding Chapter 18.15 to adopt local amendments to Title 24, Part 6 of the California Code of Regulations (California Energy Code) implementing an energy reach code with an intent to provide developers with a range of options that will also meet goals to reduce greenhouse gas emissions associated with fossil fuel use citywide. CEQA determination: These amendments are consistent with the Negative Declaration approved for the City of Santa Cruz 2030 Climate Action Plan adopted by City Council on September 13, 2022. The ordinance is also exempt from CEQA under the general rule, 15061(b)(3) and per CEQA Guidelines Section 15308, Class 8, Actions by Regulatory Agencies for Protection of Natural Resources.

General Business

18. FY 2023 Development Impact Fee Annual Report for Childcare and Public Safety Impact (Police and Fire) Fees (PL)
Motion to:
1) Accept and approve the attached FY 2023 Impact Fee Report for the Childcare and Public Safety Impact Fees; and
2) Provide feedback to staff on the potential applicability of the Public Safety Impact Fee to 100 percent affordable housing projects.

19. An Ordinance Requiring Delivery Companies to Provide a Service Enabling Customers to Tip Delivery Drivers (CN)
Introduce for publication an ordinance adding Chapter 5.11 to the Santa Cruz Municipal Code to require delivery companies to offer a tipping option to residential delivery customers.

Adjournment
November 14, 2023 City Council 7

INFORMATION ITEMS PREVIOUSLY DISTRIBUTED TO CITY COUNCILMEMBERS ADDENDUM TO CITY COUNCIL AGENDA – NOVEMBER 14, 2023

20. City Clerk: Annual Advisory Body Appointments - 10/26/23 (CCFYI 220)

21. City Manager: Quarterly Grant Report – Fiscal Year 2023 as of June 30, 2023 - 10/31/23 (CMFYI 266)

22. Finance Department: Portfolio Management Report – Pooled Cash and Investments as of September 30, 2023 - 10/23/23 (FNFYI 375)

MAYOR'S PROCLAMATIONS
ADDENDUM TO CITY COUNCIL AGENDA – NOVEMBER 14, 2023

23. Proclaiming October 21, 2023 as “TransFamilies Day” and encouraging all citizens to join in congratulating it for being selected by The Diversity Center as a Gala honoree.

24. Proclaiming October 21, 2023 as “Santa Cruz County Office of Education Day” and encouraging all citizens to join in congratulating it for being selected by The Diversity Center as a Gala honoree.

25. Proclaiming Sunday, November 8, 2023 as “International Live Looping Day” and urging all citizens to join in supporting the work of these innovative artists from around the world, welcoming them to perform here, and thanking them all for their tireless work to innovate in this emerging global musical form.

26. Proclaiming Saturday, November 11, 2023 as “City Veteran Appreciation Day” and encouraging all citizens to join in saying “thank you” to these employees for their dedicated service to our country and continued service to our community and committing to causes that are greater than self and promoting public service.

November 14, 2023 City Council 8
MAYOR'S PROCLAMATIONS (continued)

27. Proclaiming Saturday, November 25, 2023 as “Small Business Saturday Day” and encouraging all citizens to join in shopping local today and throughout the year.

Advisory Body Appointments
The following positions are vacant. Council will make the appointments at a future meeting.

County Latino Affairs Commission One opening – at-large nomination Historic Preservation Commission One opening – at-large nomination Sister Cities Committee Three openings – at-large nominations Water Commission One opening – to be appointed by Vice
Mayor Golder
Public Hearing
If, in the future, you wish to challenge in court any of the matters on this agenda for which a public hearing is to be conducted, you may be limited to raising only those issues which you (or someone else) raised orally at the public hearing or in written correspondence received by the City at or before the hearing.

Any person seeking to challenge a City Council decision made as a result of a proceeding in which, by law, a hearing is required to be given, evidence is required to be taken, and the discretion in the determination of facts is vested in the City Council, shall be required to commence that action either 60 days or 90 days following the date on which the decision becomes final as provided in Code of Civil Procedure Section 1094.6 Please refer to code of Civil Procedure 1094.6 to determine how to calculate when a decision becomes “final.” The 60-day rule applies to all public hearings conducted pursuant to the City’s Zoning Ordinance, Title 24, Santa Cruz Municipal Code. The 90-day rule applies to all other public hearings.

Economic
Impact of the Arts
in the City of Santa Cruz FY2022

3.1 impact study
CIVIC INVESTMENT =
ECONOMIC IMPACT3.2
3 Total Economic
Impact of the Arts
City of Santa Cruz
Direct Economic Activity $38 million
Jobs 981
Local Tax Revenue $2,190,697
Event-Related Spending by Arts and Culture
Audiences (not including admission) $8 million
Spending by Arts and Culture Organizations $30
million
Photo: Cabrillo Festival of Contemporary Music 3.3
4 City Investment in
the Arts in 2023
Photo: Kuumbwa Jazz Center
General Fund $115,474
CIP Funds $109,078
Arts Council Grant $70,875
Tannery
Coordination
$35,000
Total $330,427
Multiplied!

3.4 5
Jurisdiction Comparison
12345
Arts & Economic Impact 3.5
6 Comparable Regions Audience Spending

3.6 THANK YOU
Jim Brown
Executive Director
831.475.9600
[email protected]

3.7 Meeting Type
Holiday
Jewish Holiday
Regular Meeting
Special Meeting
Study Session (will be added as scheduled)
Budget Hearing
DATE Location Meeting Type
Courtyard Conf. Room Closed Session ‐ Closed to the Public Zoom/Council Chambers Council Regular Meeting ‐ Open to the Public November 23
November 24
December 7/8
Courtyard Conf. Room Closed Session ‐ Closed to the Public Zoom/Council Chambers Council Regular Meeting ‐ Open to the Public December 25
City Council Meeting Calendar for 2023
November 28
December 12
City Hall Closure ‐ Thanksgiving Day
City Hall Closure ‐ Day After Thanksgiving Day
Please note: Meeting times are not final and are likely to change December 26 Meeting Cancelled ‐ CITY COUNCIL DARK
City Hall Closure ‐ Christmas Day
Hanukkah (City observed ‐  sundown to sundown)

6.1 MINUTES ARE UNOFFICIAL UNTIL APPROVED BY COUNCIL
City of Santa Cruz
809 Center Street
Santa Cruz, California 95060

MINUTES OF A CITY COUNCIL MEETING
October 24, 2023
1:40 PM
Mayor Keeley opened the City Council Closed Session at 1:41 p.m. in a public meeting via Zoom and in Council Chambers, for the purpose of announcing the agenda, and receiving public testimony.

Roll Call

Present: Councilmembers Newsome, Brown, Watkins, Brunner, KalantariJohnson; Mayor Keeley.

Absent: Vice Mayor Golder.

Staff: City Manager M. Huffaker, Assistant City Manager L. Schmidt, City Attorney T. Condotti, Finance Director E. Cabell, Director of Information Technology K. Morgan, Director of Parks and Recreation T. Elliot, Chief of Fire R. Oatey, Chief People Officer S. De Leon, Deputy City Clerk Administrator J. Wood, City Clerk Administrator B. Bush.

Public Comment
Mayor Keeley opened the public comment period at 1:42 p.m. The following person spoke:

Kathleen Gould spoke regarding item 1.

Mayor Keeley closed the public comment period at 1:47 p.m., at which time the meeting was closed to the public and Council adjourned to the Courtyard Conference Room.

7.1 October 24, 2023 CITY COUNCIL MINUTES 6599
Closed Session

1. Conference With Legal Counsel – Liability Claims (Government Code §54956.95) Claimant: Kathleen Gould
Claim against the City of Santa Cruz
Council received a status report, took up under agenda item 8, and no reportable action was taken.

7.2 October 24, 2023 CITY COUNCIL MINUTES 6600
City of Santa Cruz
809 Center Street
Santa Cruz, California 95060

MINUTES OF A CITY COUNCIL MEETING
October 24, 2023
1:45 PM
Call to Order – Mayor Keeley called the meeting to order at 1:57 p.m. in Council Chambers.

Roll Call

Present: Councilmembers Newsome, Brown, Watkins, Brunner (left at 2:57 p.m.), Kalantari-Johnson; Vice Mayor Golder (arrived at 2:47 p.m.); Mayor Keeley.

Absent: None.

Staff: City Manager M. Huffaker, Assistant City Manager L. Schmidt, City Attorney T. Condotti, Finance Director E. Cabell, Director of Information Technology K. Morgan, Director of Parks and Recreation T. Elliot, Chief of Fire R. Oatey, Chief People Officer S. De Leon, Deputy City Manager L. Murphy (via Zoom), Director of Public Works N. Nguyen, Director of Planning and Community Development L. Butler, Chief of Police B.

Escalante (via Zoom), Assistant Director of Public Works/City Engineer K. Crossley, Sustainability and Climate Action Manager T. Wise-West (via Zoom), Senior Planner R. Bane, Assistant Director of Planning and Community Development E. Marlatt, Development Manager N. Daly, Transportation Manager M. Starkey, Deputy City Clerk Administrator J.

Wood, City Clerk Administrator B. Bush.

Oral Communications Announcement - The Mayor provided a brief announcement about Oral Communications.

7.3 October 24, 2023 CITY COUNCIL MINUTES 6601
Oral Communications
At 1:58 p.m. Mayor Keeley opened Oral Communications for members of the public who wished to speak regarding items not listed on the City Council agenda.

James Ewing Whitman spoke regarding the Citizen Rule Book.

Rachael Sotos spoke regarding a COVID Truth Commission that she would like the City Council to establish.

Garrett spoke regarding analyzing Council actions against similarities to revolutionaries who actively pursue the destruction of this country.

At 2:04 p.m. Mayor Keeley closed Oral Communications.

Presiding Officer's Announcements
Statements of Disqualification – Councilmember Brunner announced she is recusing herself from items 25 and 26 as these items have an impact on her employer, the Downtown Association.

Additions and Deletions – None.

City Attorney Report on Closed Session – See page 6599 for the report.

Council Meeting Calendar

2. The City Council reviewed and did not revise the meeting calendar attached to the agenda.

7.4 October 24, 2023 CITY COUNCIL MINUTES 6602
Consent Agenda
Councilmember Watkins made a comment on item 5.

Councilmember Brown pulled item 20 for further discussion.

Mayor Keeley made a comment on items 4, 5, and 9.

Mayor Keeley opened the public comment period. The following people spoke:

James Ewing Whitman spoke regarding items 3 and 4.

Unidentified person spoke regarding item 3.

Garrett spoke regarding items 9, 12, and 4.

Michelle Kibrick spoke regarding item 4.

Steve Palmisano spoke regarding item 4.

Robert Kibrick spoke regarding item 4.

Mayor Keeley closed the public comment period.

MOTION: Councilmember Brown moved, seconded by Councilmember Watkins, to approve the remaining Consent Agenda, with the below amendment to the minutes of the October 10, 2023 Council meeting related to item 18, and direct staff to issue a press release regarding the adoption of the resolution urging California Public Employees’ Retirement System (CalPERS) to invest in sustainable energy and divest from fossil fuels.

From:
 Reduce the height from 9 feet to 8 feet to help with perceived massing.

To:
 Reduce the first-floor height from 9 feet to 8 feet to help with perceived massing.

ACTION: The motion carried with the following vote.

AYES: Councilmembers Newsome, Brown, Watkins, Brunner, KalantariJohnson; Mayor Keeley.

NOES: None.

ABSENT: Vice Mayor Golder.

DISQUALIFIED: None.

7.5 October 24, 2023 CITY COUNCIL MINUTES 6603
Consent Agenda (continued)

3. Minutes of the October 10, 2023 City Council Meeting (CC) Motion carried to approve as amended.

4. Resolution Urging California Public Employees’ Retirement System (CalPERS) to Invest in Sustainable Energy and Divest from Fossil Fuels and Support Climate-Safe California Goals (CN)
Motion carried to:
 Adopt Resolution No. NS-30,216 urging CalPERS to invest in sustainable energy and divest from fossil fuels, and
 Encourage State and Federal legislation that supports Climate-Safe California goals.

5. Appointments to Housing for Health Partnership Board (CN) Motion carried to appoint Mayor Keeley and Councilmember Kalantari-Johnson to the Santa Cruz County Housing for Health Partnership (H4HP) Policy Board.

6. Impact Report on Effect of Housing for People Ballot Initiative (CN) Motion carried to direct the preparation of an impact report on the effect of the proposed Housing for People initiative which would amend the City’s Municipal Code to: (1) prohibit the City Council from amending the City’s General Plan or Zoning Ordinance in a way that increases allowable height limits or floor area ratios without a prior vote of the people; and (2) increases the City’s inclusionary housing requirements to at least 25% for developments with 30 or more units.

7.6 October 24, 2023 CITY COUNCIL MINUTES 6604
Consent Agenda (continued)

7. USDA, Forest Service Type 6 Fire Truck (Engine) – Congressionally Designated Project - Grant Acceptance, Authorization and Appropriation (FD) Motion carried to:
 Adopt Resolution No. NS-30,217 authorizing the City Manager to apply for, accept, and appropriate funds from the USDA Forest Service Grant to purchase a Type 6 Fire Engine and additional equipment; and  Adopt Resolution No. NS-30,218 amending the FY 2024 budget to appropriate a $400,000 grant from USDA Forest Service to purchase a Type 6 Fire Engine and additional equipment.

8. Liability Claim Filed Against the City of Santa Cruz (FN) Motion carried to reject the liability claim of Kathleen Gould, based on staff recommendation.

9. Award Contract for Investment Management Services (FN) Motion carried to:
 Award a contract for Investment Management Services to PFM Asset Management LLC, San Francisco, California for fiscal years ending June 30, 2023, 2024, 2025, 2026, and 2027 with five option years; and  Authorize the City Manager to execute an agreement in a form approved by the City Attorney with PFM Asset Management LLC for Investment Management Services.

10. Year-End Budget Adjustment for FY 2023 (FN)
Resolution No. NS-30,219 was adopted amending the FY 2023 budget where annual revenues and expenditures need adjustments in various funds.

7.7 October 24, 2023 CITY COUNCIL MINUTES 6605
Consent Agenda (continued)

11. Resolution Amending the City of Santa Cruz Personnel Complement and Classification and Compensation Plan for the City Manager’s Office, Information Technology, Parks and Recreation, Public Works, and Economic Development and Housing – Budget Adjustment (HR/FN)
Motion carried to:
 Adopt Resolution No. NS-30,220 amending the Classification and Compensation Plans and the Fiscal Year 2024 Budget Personnel Complement for Information Technology, the City Manager’s Office, Parks and Recreation, Public Works, and Economic Development and Housing; and  Adopt Resolution No. NS-30,221 amending the FY 2024 budget in the amount of $636,046 to adjust personnel budgets for Information Technology, City Manager’s Office, Parks and Recreation, Public Works, and Economic Development and Housing.

12. Award Agreement for Fee Study for the Departments of Public Works, Parks and Recreation, Economic Development and Housing, Fire, Finance, City Manager’s Office, and Planning and Community Development (PL) Motion carried to:
 Award agreement for citywide Fee Study to MGT of America Consulting, LLC (MGT) in the amount of $139,874; and
 Authorize the City Manager, or designee, to execute the agreement and any amendments within the approved operating budget and authorized amendments budget, in a form approved by the City Attorney.

13. Recycling Center Storm Water Quality Improvements (c402111) – Award Contract (PW)
Motion carried to accept the bid of Clear Water Services (Rodeo, CA) for providing storm water treatment system rental at the Resource Recovery Facility Recycling Center in the amount of $129,204.00. The City Manager is hereby authorized and directed to execute the contract in a form approved by the City Attorney. The Director of Public Works is authorized to execute change orders within the approved project budget.

7.8 October 24, 2023 CITY COUNCIL MINUTES 6606
Consent Agenda (continued)

14. Encroachment Permit – Installation of Retaining Wall and Stairs (PW) Resolution No. NS-30,222 was adopted granting an encroachment permit to Christen & W.F. Docker to install a retaining wall and stairs in the public rightof-way at 215 4th Avenue.

15. Encroachment Permit – Installation ADA Access Ramp/Sidewalk (PW) Resolution No. NS-30,223 was adopted granting an encroachment permit to Lissner Properties, Inc. to install an ADA access ramp/sidewalk in the public right-of-way at 320 Cedar Street (Birch Alley).

16. Front-Spruce-Pacific 54-Inch Sewer Rehabilitation (c401606) – Approval of Plans and Specifications, Authorization to Advertise and Award Contract, California Environmental Quality Act Exemption, and Budget Adjustment (PW) Motion carried to:
 Approve the plans and specifications for the Front-Spruce-Pacific 54-Inch Sewer Rehabilitation (c401606), authorize staff to advertise for bids, award the contract. The City Manager is hereby authorized and directed to execute the contract, in a form approved by the City Attorney, and as authorized by Resolution No. NS-27,563. The Director of Public Works is authorized to execute change orders within the approved project budget;  Find the project exempt under the California Environmental Quality Act (CEQA); and
 Adopt Resolution No. NS-30,224 amending the FY 2024 budget and appropriating $8,100,000 from supporting project, c402204 (City WWTF Headworks Replacement), to fund c401606 (Front-Spruce-Pacific 54-Inch Sewer Rehabilitation).

7.9 October 24, 2023 CITY COUNCIL MINUTES 6607
Consent Agenda (continued)

17. Front-Spruce-Pacific 54-Inch Sewer Rehabilitation Project and Wastewater Treatment Facility Headworks Rehabilitation Project – Loan Application and Acceptance (c401606 and c402204) (PW)
Resolution No. NS-30,225 was adopted authorizing the Public Works Department to apply for and accept a loan from the California Infrastructure and Economic Development for the Front-Spruce-Pacific 54-Inch Sewer Rehabilitation and Wastewater Treatment Facility Headworks Rehabilitation Projects (c401606 and c402204) in the amount of $33,500,000 and authorizing the City Manager to execute an agreement in a form approved by the City Attorney with California Infrastructure and Economic Development Bank for said loan and its repayment.

18. Route 1/9 Intersection Improvement Project (c400805) - Notice of Completion (PW)
Motion carried to accept the work of Granite Rock, Inc. (Watsonville, CA) as completed per the plans and specifications and authorize the filing of the Notice of Completion for Route 1/9 Intersection Improvement Project (c400805).

19. Branciforte Branch Public Library Renovation (c351801) – Notice of Completion (PW)
Motion carried to accept the work of JPB Designs, Inc. (Orangevale, CA) as completed per plans and specifications and authorizing the filing of a Notice of Completion for the Branciforte Branch Public Library Renovation Project (c351801).

7.10 October 24, 2023 CITY COUNCIL MINUTES 6608
Consent Agenda (continued)

20. Retaining Wall Reconstruction Project -141 Archer Drive (g402402) (PW) Assistant Director of Public Works/City Engineer K. Crossley and Director of Public Works N. Nguyen responded to Council questions.

Mayor Keeley opened the public comment period. There were no speakers.

Mayor Keeley closed the public comment period.

MOTION: Councilmember Brown moved, seconded by Councilmember Watkins, to:
 Adopt Resolution No. NS-30,226 approving the Application for Federal Assistance SF-424 and Advance of Funds/Reimbursement Agreement for Emergency Watershed Protection Program and authorizing the City Manager to execute said agreements and any amendments in a form acceptable to the City Attorney; and
 Adopt Resolution No. NS-30,227 amending the FY 2024 budget and appropriating $414,000 for the Retaining Wall Reconstruction Project - 141 Archer Drive (g402402).

Assistant Director of Public Works/City Engineer K. Crossley informed Council that the deposit intended to be provided by the property owner was going to, in part, recoup the cost of staff time which has not yet been covered on this project. In addressing concerns raised by Council, he proposed that the City could absorb those costs up to now to get the project to this point, and charge for staff time moving forward. After discussion, the staff recommendation was incorporated into the motion.

MOTION: Councilmember Brown moved, seconded by Councilmember Watkins, to:
 Adopt Resolution No. NS-30,226 approving the Application for Federal Assistance SF-424 and Advance of Funds/Reimbursement Agreement for Emergency Watershed Protection Program and authorizing the City Manager to execute said agreements and any amendments in a form acceptable to the City Attorney; and
 Adopt Resolution No. NS-30,227 amending the FY 2024 budget and appropriating $414,000 for the Retaining Wall Reconstruction Project - 141 Archer Drive (g402402).
 Direct staff to absorb the cost of staff time to get the project current to this point, and charge for staff time moving forward.

7.11 October 24, 2023 CITY COUNCIL MINUTES 6609
Consent Agenda (continued)

20. Retaining Wall Reconstruction Project -141 Archer Drive (g402402) (PW) (continued)
ACTION: The motion carried with the following vote.

AYES: Councilmembers Newsome, Brown, Watkins, Brunner,
Kalantari-Johnson; Mayor Keeley.

NOES: None.

ABSENT: Vice Mayor Golder.

DISQUALIFIED: None.

21. Award Agreement for Fisheries Biology Support from Hagar Environmental Science (WT)
Motion carried authorizing the City Manager to execute an agreement in a form to be approved by the City Attorney with Hagar Environmental Science for ongoing fisheries biology support of the City of Santa Cruz's Habitat Conservation Plan development and Incidental Take Permitting, and to authorize the Water Director to execute up to four annual agreement renewals.

End Consent Agenda
Consent Public Hearings
Councilmember Brown pulled item 25 for further discussion and made a comment on item 24.

Sustainability and Climate Action Manager T. Wise-West responded to Council questions on item 24.

Councilmember Newsome made a comment on item 22.

Mayor Keeley opened the public comment period. The following people spoke:

Garrett spoke regarding item 24.

Unidentified person spoke regarding item 24.

Judi Young spoke regarding item 24.

Mayor Keeley closed the public comment period.

7.12 October 24, 2023 CITY COUNCIL MINUTES 6610
Consent Public Hearings (continued)
MOTION: Councilmember Newsome moved, seconded by Vice Mayor Golder, to approve the remaining Consent Public Hearings Agenda.

ACTION: The motion carried unanimously with the following vote.

AYES: Councilmembers Newsome, Brown, Watkins, Brunner, KalantariJohnson; Vice Mayor Golder; Mayor Keeley.

NOES: None.

ABSENT: None.

DISQUALIFIED: None.

22. Tax Equity and Fiscal Responsibility Act (TEFRA) Hearing for Approval of the California Municipal Finance Authority for Issuance of Tax-Exempt Bonds for the Benefit of the Sycamore Street Commons and La Playa Residential Affordable Housing Projects (ED)
Motion carried to:
 Conduct the public hearing under the requirements of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the Internal Revenue Code of 1986, as amended (the “Code”); and
 Adopt Resolution No. NS-30,228 to approve the issuance of Tax-Exempt Revenue Bonds by the California Municipal Finance Authority (“CMFA”) for the benefit of Mercy Housing California 72, L.P., a California limited partnership, or another entity to be established by Mercy Housing California or an affiliate thereof (collectively, the “Borrower”), in an amount not to exceed thirty million dollars ($30,000,000) to provide financing for Sycamore Street Commons and La Playa Residential (the “Project”), such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Code, and the California Government Code Section 6500.

7.13 October 24, 2023 CITY COUNCIL MINUTES 6611
Consent Public Hearings (continued)

23. Mission Gardens Apartments Amendment to HOME Investment Partnership Regulatory Agreement and Assumption Agreements (ED)
Motion carried to adopt Resolution No. NS-30,229 to:
 Authorize the City Manager to execute any and all amendments necessary, in a form to be approved by the City Attorney, to change the Managing Agent from John Stewart Company to Rose Community Management LLC including but not limited to Exhibit D of the HOME Investment Partnership Regulatory Agreement, upon close of escrow should Rose Affordable Housing Preservation Fund V Mission Gardens L.P. take ownership of the property located at 90 Grandview Street; and
 Authorize the City Manager to execute any and all agreements necessary, in a form to be approved by the City Attorney, for Rose Affordable Housing Preservation Fund V Mission Gardens, L.P. to assume all existing affordability requirements currently recorded against 90 Grandview Street and extend the City Redevelopment Agency affordability requirements in perpetuity.

24. Housing and Urban Development (HUD) Pathways to Removing Obstacles to Housing Grant Program: Authorization for Application, Acceptance, and Appropriation of Grant Funds for Preserving and Promoting Housing Affordability and Climate Resilience in Front Line Communities of Santa Cruz,

CA (CM)
Resolution No. NS-30,230 was adopted authorizing the City Manager to apply for, accept, and appropriate funds from the Housing and Urban Development (HUD) Pathways to Removing Obstacles to Housing Grant Program to carry out a project entitled “Preserving and Promoting Housing Affordability and Climate Resilience in Front Line Communities of Santa Cruz, CA.” At this time, Councilmember Brunner recused herself and left the dais.

7.14 October 24, 2023 CITY COUNCIL MINUTES 6612
Consent Public Hearings (continued)

25. A23-0001: Downtown Plan Amendments Related to Removing Public Hearing Requirements for Day Care and Supportive Housing, Consistent with State Law; Expanding Hotel, Residential, and Recreational Use Allowances; Revising Additional Height Criteria; Adding Language to Encourage Activated Roof Top Amenities; and Amending Landscape Requirements to Allow More Flexibility with Landscaping and Tree Selection (PL)
Director of Planning and Community Development L. Butler introduced the item and responded to Council questions.

Senior Planner R. Bane and Assistant Director of Planning and Community Development E. Marlatt gave a presentation and responded to Council questions.

Mayor Keeley opened the public comment period. The following people spoke.

Susan Monheit
Rick Longinotti
James Ewing
Allison Buchter
Candace Brown
Unidentified person
Unidentified person
Mayor Keeley closed the public comment period.

7.15 October 24, 2023 CITY COUNCIL MINUTES 6613
Consent Public Hearings (continued)

25. A23-0001: Downtown Plan Amendments (PL) (continued) MOTION: Vice Mayor Golder moved, seconded by Councilmember Newsome, to:
 Adopt Resolution No. NS-30,231 approving the amendments to the Downtown Plan and the Local Coastal Program to clarify and update various sections, remove obsolete sections and references, streamline application processes, and bring the Downtown Plan into conformity with State law, finding that the public necessity, and the general community welfare, and good zoning practice shall be served and furthered with the adoption of the Downtown Plan amendments; and that the proposed amendments are in general conformance with the principles, policies, and land use designation set forth in the General Plan, Local Coastal Program, and the Downtown Plan. The amendments include but are not limited to removing public hearing requirements for day care and supportive housing, consistent with state law; expanding hotel, residential, and recreational use allowances; revising additional height criteria; adding language to encourage activated roof top amenities; and amending landscape requirements to allow more flexibility with landscaping and tree selection. An Addendum to the 2017 Downtown Plan Amendments Program Environmental Impact Report (EIR) has been prepared pursuant to California Environmental Quality Act (CEQA) Guidelines sections 15162 and 15164.
 Adopt Resolution No. NS-30,232 authorizing and directing the City Manager to submit the above Local Coastal Program Implementation Plan amendments to the Downtown Plan to the California Coastal Commission for final certification.

7.16 October 24, 2023 CITY COUNCIL MINUTES 6614
Consent Public Hearings (continued)

25. A23-0001: Downtown Plan Amendments (PL) (continued) FRIENDLY AMENDMENT: Councilmember Newsome requested to add the following to the Downtown Plan Development Standards and Design Guidelines:

Add to H. Additional Height Zones, Section 1. Additional Height Zone A:
b. vi. Affordable Housing Public Benefit Fee for Non-Residential Projects. An application for additional height is voluntary. Because an applicant requesting additional height is receiving a benefit in the form of increased height and intensity, and to ensure that non-residential projects which are granted additional height reasonably contribute to the City’s need for affordable housing, non-residential projects that are granted additional height shall be required to pay an in-lieu public benefit fee in the amount of $5.00 per square foot of gross floor area occurring above the 55-foot Base Height limit (i.e., the additional gross floor area occurring within the project on levels that exceed the 55- foot Base Height limit). The fee shall be paid prior to occupancy of the project. All fees provided collected under this section shall be deposited in the City of Santa Cruz’s affordable housing trust fund.

Add to H. Additional Height Zones, Section 2. Additional Height Zone B. b. vii. Affordable Housing Public Benefit Fee for Non-Residential Projects. An application for additional height is voluntary. Because an applicant requesting additional height is receiving a benefit in the form of increased height and intensity, and to ensure that non-residential projects which are granted additional height reasonably contribute to the City’s need for affordable housing, non-residential projects that are granted additional height shall be required to pay an in-lieu public benefit fee in the amount of $5.00 per square foot of gross floor area occurring above the 50-foot Base Height limit (i.e., the additional gross floor area occurring within the project on levels that exceed the 50- foot Base Height limit). The fee shall be paid prior to occupancy of the project. All fees provided collected under this section shall be deposited in the City of Santa Cruz’s affordable housing trust fund.

Vice Mayor Golder accepted the friendly amendment.

7.17 October 24, 2023 CITY COUNCIL MINUTES 6615
Consent Public Hearings (continued)

25. A23-0001: Downtown Plan Amendments (PL) (continued) ACTION: The motion as amended carried with the following vote.

AYES: Councilmembers Newsome, Brown, Watkins, KalantariJohnson; Vice Mayor Golder; Mayor Keeley.

NOES: None.

ABSENT: None.

DISQUALIFIED: Councilmember Brunner.

Council took a break at 3:55 p.m. and returned at 4:07 p.m.

General Business

26. METRO Downtown Transit Center Interim Operations Plan - Approval of Plans and Specifications and Related Actions (ED)
Development Manager N. Daly gave a presentation and responded to Council questions.

Mayor Keeley opened the public comment period. The following people spoke.

James Ewing
Ron Goodman
Brandon Freeman
Candace Brown
Daniel Zaragoza
Unidentified person
Zennon Ulyate-Crow
Unidentified person
Mayor Keeley closed the public comment period.

7.18 October 24, 2023 CITY COUNCIL MINUTES 6616
General Business (continued)

26. METRO Downtown Transit Center Interim Operations Plan - Approval of Plans and Specifications and Related Actions (ED) (continued) MOTION: Councilmember Kalantari-Johnson moved, seconded by Councilmember Watkins, to:
1) Adopt Resolution No. NS-30,233 approving plans and specifications for the METRO Downtown Transit Interim Operations Plan (Plan) pursuant to Government Code Section 830.6 (design immunity), and authorizing removal of unlawfully parked vehicles when the Plan is implemented and schedule implementation of the plan such that it will minimize impact on businesses and residents during the upcoming peak holiday season; 2) Direct staff to review the potential impacts of the plan on parking revenue and supply with the Downtown Commission, and also provide regular updates on the overall functioning of the Plan to the Downtown Commission, Downtown Association, and Downtown Management Corporation;
3) Direct staff to return to the Transportation and Public Works Commission with an update on the conditions of the Plan after it has been implemented; 4) Authorize the City Manager, or designee, to negotiate and enter into a commercial lease with the Santa Cruz Metropolitan Transportation District (METRO) for a storefront facility at 603 and 605 Front Street for a METRO ticket sales/call center function, in a form approved by the City Attorney; 5) Adopt Resolution No. NS-30,234 amending the FY 2024 budget to allocate $500,000 of METRO funding to the Pacific Station North Project for the METRO Interim Operations Plan;
6) Authorize the City Manager to enter into a Memorandum of Understanding with METRO and For the Future Housing/EDEN that defines roles and financing commitments for the Plan; and
7) Direct staff to explore and implement increased safety measures along River Street South and the adjacent river levee.

7.19 October 24, 2023 CITY COUNCIL MINUTES 6617
General Business (continued)

26. METRO Downtown Transit Center Interim Operations Plan - Approval of Plans and Specifications and Related Actions (ED) (continued) ACTION: The motion carried with the following vote.

AYES: Councilmembers Newsome, Brown, Watkins, KalantariJohnson; Vice Mayor Golder; Mayor Keeley.

NOES: None.

ABSENT: None.

DISQUALIFIED: Councilmember Brunner.

Adjournment – Vice Mayor Golder moved, seconded by Councilmember Newsome, to adjourn. By consensus City Council adjourned at 4:52 p.m.

Respectfully Submitted:

Julia Wood, Deputy City Clerk Administrator
Attest:

Bonnie Bush, City Clerk Administrator
Approved:

Fred Keeley, Mayor

7.20 City Council

AGENDA REPORT
DATE: 10/23/2023
AGENDA OF: 11/14/2023
DEPARTMENT: City Clerk
SUBJECT: Resolution Setting the Regular Meeting Schedule for the Calendar Year 2024 (CC)
RECOMMENDATION: Resolution setting the 2024 City Council meeting calendar.

BACKGROUND: Each year the City Council adopts its regular meeting schedule, which includes calling for a mid-year break in July and an end-of-year break in December.

DISCUSSION: The regular meeting dates of July 9 and 23 will be cancelled, as well as the second regular meeting on December 24. Cancellation of these meetings enables both staff and Councilmembers to plan ahead with respect to work flow. A July recess also applies to City advisory bodies, unless a time-sensitive issue, such as an appeal, requires a decision prior to the next regular meeting.

Council Policy 14.6 "Jewish Holidays - Meeting and Event Scheduling" sets forth City observance of the Jewish holidays of Passover, Rosh Hashanah, Yom Kippur, and Hanukkah to be the first day only, beginning at sundown of the previous day. In 2024, the April 23rd Council meeting conflicts with the City’s observation of Passover, which is observed from sundown on April 22nd to sundown on April 23rd. Therefore, the April 23rd meeting will be moved to April 30, 2024.

Regarding Council Study Sessions, they will be agendized as needed, typically on the first Tuesdays of each month with the exception of July 2, which will not be held due to the Council recess.

FISCAL IMPACT: None.

Prepared By:

Bonnie Bush
City Clerk
Submitted By:

Laura Schmidt
Assistant City Manager
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. RESOLUTION.DOC

2. CITY COUNCIL MEETING CALENDAR 2024 - FULL.PDF

8.1 RESOLUTION NO. NSRESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ SETTING THE 2024 CITY COUNCIL MEETING SCHEDULE
WHEREAS, the City Council meets regularly on the second and fourth Tuesdays of each month; and
WHEREAS, in anticipation of a lack of quorum and possible lack of items needing immediate Council action, the City Council will cancel two regular meetings on July 9 and July 23, and the regular meeting on December 24 to allow for proper scheduling of workflow and vacations; and
WHEREAS, Per Council Policy 14.6 “Jewish Holidays – Meeting and Event Scheduling,” the April 23, 2024 regular meeting date conflicts with the observation of Passover (sundown on April 22, 2024 to sundown on April 23, 2024); and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Cruz that two regular meetings on July 9 and July 23, and the second regular meeting on December 24 are hereby cancelled and the meeting that would regularly fall on April 23, 2024 will be held on April 30, 2024.

BE IT FURTHER RESOLVED the City Council hereby approves the 2024 City Council Meeting Schedule as submitted.

PASSED AND ADOPTED this 14th day of November, 2023, by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: ______________________________
Fred Keeley, Mayor
ATTEST: _________________________________
Bonnie Bush, City Clerk Administrator

8.2 Meeting Type
Holiday
Jewish Holiday
Regular Meeting
Special Meeting (will be added as scheduled)
Study Session (will be added as scheduled)
Budget Hearing
DATE Location Meeting Type
December 25
January 1
Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public January 15
Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public February 19
Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public April 22/23
Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public May 27
Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public May 29 Council Chambers Budget Hearing
Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public June 19
Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public July 4
Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public September 2
Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public October 2/3 Rosh Hashanah (City observed ‐  sundown to sundown) City Hall Closure ‐ Labor Day
August 27
July 9 and 23 Meetings Cancelled ‐ CITY COUNCIL DARK
City Hall Closure ‐ Independence Day
City Hall Closure ‐ Memorial Day
Passover (City observed ‐ sundown to sundown)
August 13
March 12
March 26
May 14
April 9
April 30
June 11
City Hall Closure ‐ New Year’s Day
January 9
City Hall Closure ‐ Martin Luther King Jr. Day
January 23
City Hall Closure ‐ Christmas Day
May 28
City Council Meeting Calendar for 2024
June 25
September 10
September 24
February 13
City Hall Closure ‐ Presidents' Day
February 27
City Hall Closure ‐ Juneteenth
Please note: Meeting times are not final and are likely to change

8.3 Meeting Type
Holiday
Jewish Holiday
Regular Meeting
Special Meeting (will be added as scheduled)
Study Session (will be added as scheduled)
Budget Hearing
DATE Location Meeting Type
City Council Meeting Calendar for 2024
Please note: Meeting times are not final and are likely to change Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public Octoberr 11/12
Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public November 11
Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public November 28
November 29
Courtyard Conf. Room Closed Session ‐ Closed to the Public Council Chambers Council Regular Meeting ‐ Open to the Public December 25/26
December 25
December 24 Meeting Cancelled ‐ CITY COUNCIL DARK
City Hall Closure ‐ Christmas Day
November 12
October 8
October 22
City Hall Closure ‐ Veteran's Day (observed)
Hanukkah (City observed ‐  sundown to sundown)
Yom Kippur (City observed ‐  sundown to sundown)
November 26
December 10
City Hall Closure ‐ Thanksgiving Day
City Hall Closure ‐ Day After Thanksgiving Day

8.4 City Council

AGENDA REPORT
DATE: 10/24/2023
AGENDA OF: 11/14/2023
DEPARTMENT: Economic Development and Housing
SUBJECT: Cooperative Retail Management Fund Budget Adjustment (ED) RECOMMENDATION: Resolution amending the FY 2024 budget to allocate $190,000 of Cooperative Retail Management assessment funding to the Downtown Management Corporation.

BACKGROUND: On June 13, 2023 the City Council approved the Downtown Management Corporation (DMC) FY 2023 Annual Report/Plan and adopted a resolution stating its intention to levy cooperative retail management (CRM) assessments for FY 2024. A public hearing was held June 27, 2023 to tabulate the votes for an increased assessment and expanded district. The assessment payers approved increasing the assessment rates and expanding the District boundaries to capture the new development occurring on Front and Cedar Streets, fully serve the Downtown area with clean, safe, and welcoming services, and ensure the District has sustainable funding to cover the expanded area and increases in costs for services. The assessment formula and rates had not changed in almost a decade prior to this approval.

The CRM District now includes all real property used for commercial or business purposes on parcels with street frontage on Pacific Avenue between Laurel and Water Streets and located on Soquel Avenue; Locust, Cooper, Church, Walnut, Lincoln, Cathcart, Elm and Maple Streets; Plaza, Locust, Commerce, Elm and Birch Lanes; Pearl Alley; and Lincoln-Cathcart and PacificFront alley ways and parcels with street frontage on Cedar Street, Front Street, the south side of Mission Street and Water Street, and the north side of Laurel Street be annexed into the District.

The CRM rates are now $7.0393 per linear foot, $.0811 per lot square foot and $.0718 per building square foot for property fronting Pacific Avenue and $5.2795 per linear foot, $.0608 per lot square foot and $.0538 per building square feet for property with frontage on side streets and alleys.

In accordance with Council Policy 12.6, any revisions that increase the total budget appropriation of any department and fund, must be approved by Council, except as allowed by Council Policy 12.10 and Council Policy 14.3.

DISCUSSION: The Economic Development and Housing Department is requesting to increase the budgeted revenue and the corresponding appropriation for the Cooperative Retail Management Assessment by $190,000 to capture the projected revenue from the assessment. The

9.1 projected increased revenue is generated from the expansion of CRM District boundaries and increases to the assessment rates that were approved for FY 2024 in June 2023.

FISCAL IMPACT: There is no fiscal impact to the City. Revenues collected from the assessment are passed through to the DMC to provide clean, safe, and welcoming services in the District. Payments to DMC are based on actual revenues collected. Because of new properties in the CRM district, collected revenues in October are already above 83% of budgeted revenues.

Prepared By:

Rebecca Unitt
Economic Development
Manager
Submitted By:

Bonnie Lipscomb
Director of Economic
Development and Housing
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. BUDGET ADJUSTMENT.PDF

9.2 City of Santa Cruz

BUDGET ADJUSTMENT REQUEST
$GPLQLVWUDWLYH$SSURYDO
)LVFDO<HDU

ACCOUNT 352-(&71$0(
LIDSSOLFDEOH
255(9(18($&&28177,7/(
ACCOUNT 352-(&71$0(
LIDSSOLFDEOH
25EXPENDITURE ACCOUNT TITLE
NET: $

REQUESTED BY DEPARTMENT HEAD

APPROVAL

BUDGET/ACCOUNTING
5(9,(:('

FINANCE DIRECTOR

APPROVAL

CITYMANAGER

APPROVAL
5HVR

352-(&7
352-(&7
$02817
$02817
&RXQFLO$SSURYDO

TOTAL EXPENDITURE

TOTALREVENUE
'DWH

1VSQPTF
3FWJTFE
/PWFNCFS


 Clear Form
2024
11/14/2023
To increase the budgeted revenue and the corresponding appropriation for the Cooperative Retail Management Assessment.

Actual payments are base on actual revenues collected. The projected increased revenue is due to the expansion of CRM District boundaries and increases to the assessment rates that were approved for FY 24 in June 2023. Because of new properties in the CRM district, collected revenues in October are already above 83% of budgeted revenues. 122-51-81-1506-41932 Co-op Retail Management Fund CRM Assessment 190,000 190,000
122-51-80-1506-54990 Co-op Retail Management Fund Misc supplies and services 190,000 190,000
0 Rebecc
a Unitt
Digitally signed
by Rebecca Unitt
Date: 2023.10.19
16:23:08 -07'00'
Kathryn Mintz
Digitally signed
by Kathryn Mintz
Date: 2023.10.19
16:42:52 -07'00'
Tracy
Cole
Digitally signed by Tracy Cole
DN: cn=Tracy Cole, o=City of
Santa Cruz, ou=Finance,
[email protected],
c=US
Date: 2023.10.24 15:10:33
-07'00'
Elizabet
h Cabell
Digitally signed by Elizabeth Cabell
DN: cn=Elizabeth Cabell, o=City of Santa Cruz,
ou=Finance Department,
[email protected], c=US
Date: 2023.10.24 16:31:01 -07'00'

9.3 City Council

AGENDA REPORT
DATE: 10/26/2023
AGENDA OF: 11/14/2023
DEPARTMENT: Finance
SUBJECT: Award Contract for Elevator Maintenance Services (FN) RECOMMENDATION: Motion to:
1) Award a contract, via a cooperative purchasing agreement, for the citywide purchases for Elevator Maintenance Services to Otis Elevator Company in Monterey, California for a 3-year term; and
2) Authorize the City Manager or designee to execute the agreement and any amendments within the approved operating budget.

BACKGROUND: Elevator maintenance is an essential service that affects multiple staff members in various departments citywide. City departmental operations require a vendor that is reliable for compliance as well as liability purposes, and dependable for the safety of City Staff as required. In alignment with best procurement practices and the City’s purchasing procedures, staff were able to source a cooperative agreement contract between Omnia Partners and Otis Elevator Company to provide Elevator Maintenance Services at fair and reasonable pricing.

DISCUSSION: The City must provide elevator maintenance services for employees working in jobs that require the use of working elevators for work-related, and primarily safety purposes.

Section 3.08.170 of the Municipal Ordinance allows the City to utilize cooperative purchasing agreements when is in the best interest of the City to do so. A cooperative purchasing agreement results from a procurement process, that is compliant with state statutes and formal procurement methods and is completed by a consortium or a single agency that is authorized for use by other government agencies.

The University of California conducted a request for proposal and awarded the contract to Otis Elevator Company on October 1, 2019 as the most responsive and cost-effective proposal in terms of “maintenance”.

The City of Santa Cruz is authorized to use this contract through their membership in this buying group which results in a savings of time, money, and Finance department resources for the City.

FISCAL IMPACT: The City spent approximately $45,000 on elevator maintenance services in FY 2023. Funds for elevator maintenance services are budgeted in FY 2024's operating budget.

10.1 Prepared By:

Emmanuel Fluker
Buyer II
Submitted By:

Elizabeth Cabell
Finance Director
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. COOPERATIVE PURCHASE AGREEMENT OTIS ELEVATOR COMPANY.PDF

10.2 10.3

10.4 10.5

10.6 10.7

10.8 10.9

10.10 10.11

10.12 10.13

10.14 10.15

10.16 10.17

10.18 10.19

10.20 10.21

10.22 10.23

10.24 10.25

10.26 10.27

10.28 10.29

10.30 10.31

10.32 10.33

10.34 10.35
City Council

AGENDA REPORT
DATE: 10/25/2023
AGENDA OF: 11/14/2023
DEPARTMENT: Finance
SUBJECT: Award Contract for Fuel, Oil, and Lubricants (FN) RECOMMENDATION: Motion to award a contract for citywide purchases for on-call fuel, oil, and lubricants, to Tom Lopes Distributing, Inc. DBA Western States Oil (Western States Oil), San Jose, California in the amount not to exceed $1.5 million over 5 years and to authorize the City Manager to execute an agreement in a form approved by the City Attorney with Tom Lopes Distributing, Inc. DBA Western States Oil.

BACKGROUND: Staff make significant efforts to source companies that deliver the right products, at the right time, and at the right price that provide the greatest value to the City. Fuel, oil, and lubricants are used to support multiple departments within the City of Santa Cruz. The existing fuel contract has been in place since 2012. Therefore, in alignment with best procurement practices and the City’s purchasing procedures, staff issued a competitive solicitation for a new on-call contract as a replacement for the existing contract.

Purchasing Staff issued an Invitation for Bid (IFB) document that was posted on the City of Santa Cruz’s new e-procurement website www.open.gov on August 30, 2023. Nineteen vendors viewed the bid, and a total of six bids were received by the due date and time. A public bid opening was held at 3:00 PM Pacific Standard Time on October 11, 2023. During the public bid opening, Western States Oil was deemed the apparent low bidder. City staff completed the due diligence by checking references listed on the Bid Form of the apparent low bidder and further reviewed the bid submittals for responsiveness. After the review, Western States Oil was confirmed by staff to be the lowest responsive bidder. Purchasing issued an intent to award notification to a bid list of all vendors on October 17, 2023.

DISCUSSION: City Council has the authority to award contracts for one-time purchases and/or cumulative purchases throughout a fiscal year that are over the formal bid limit of $100,000. An on-call contract allows departments throughout the city to utilize the goods and services provided under the contract as they are needed to support operations.

Staff recommends awarding a contract to the lowest responsive bidder, Western States Oil, to be effective on December 1, 2023.

FISCAL IMPACT: Funds are available in department budgets for the purchase of these items which are necessary for routine operations.

11.1 Prepared By:

Emmanuel Fluker
Buyer
Submitted By:

Elizabeth Cabell
Finance Director
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. BID TABULATION - IFB NO. FIN0030 - FUEL, OIL, AND LUBRICANTS.PDF

2. GENERAL SERVICES CONTRACT FOR FUEL, OIL, AND LUBRICANTS.PDF

11.2 City of Santa Cruz
Purchasing

EVALUATION TABULATION
IFB No. IFB No. FIN-0030
Fuel, Oil, & Lubricants
RESPONSE DEADLINE: October 11, 2023 at 3:00 pm
Report Generated: Wednesday, October 25, 2023

SELECTED VENDOR TOTALS
Vendor Total
Western States OIl $16,196.64
Toro Petroleum Corp $20,394.97
Pinnacle Petroleum, Inc. $23,786.678
Merrimac Petroleum, Inc.
dba Merrimac Energy
Group
$52,532.4972
FUEL
Basis of Award
Vendor Total
Western States OIl $16,148.50
Toro Petroleum Corp $20,349.25
Pinnacle Petroleum, Inc. $23,739.718
Merrimac Petroleum, Inc.
dba Merrimac Energy
Group
$52,493.97

11.3 EVALUATION TABULATION
IFB No. IFB No. FIN-0030
Fuel, Oil, & Lubricants

EVALUATION TABULATION
Invitation For Bid - Fuel, Oil, & Lubricants

MOTOR OIL
Basis of Award
Vendor Total
Toro Petroleum Corp $24.72
Merrimac Petroleum, Inc.
dba Merrimac Energy
Group
$28.462
Pinnacle Petroleum, Inc. $29.30
Western States OIl $32.54

INDUSTRIAL OIL
Basis of Award
Vendor Total
Merrimac Petroleum, Inc.
dba Merrimac Energy
Group
$10.0652
Western States OIl $15.60
Pinnacle Petroleum, Inc. $17.66
Toro Petroleum Corp $21.00

SUPPLEMENTEL ITEMS
Items listed below are considered supplemental items and services. Items in this table are not included in the Basis of Award.

11.4 EVALUATION TABULATION
IFB No. IFB No. FIN-0030
Fuel, Oil, & Lubricants

EVALUATION TABULATION
Invitation For Bid - Fuel, Oil, & Lubricants

Vendor Total
Merrimac Petroleum, Inc.
dba Merrimac Energy
Group
$0.00
Pinnacle Petroleum, Inc. $0.00
Toro Petroleum Corp $0.00
Western States OIl $0.00

VENDOR QUESTIONNAIRE PASS/FAIL
Question Title Blick Art
Materials LLC
Capp Usa Merrimac
Petroleum, Inc.
dba Merrimac
Energy Group
Pinnacle
Petroleum, Inc.

Toro Petroleum
Corp
Western States
OIl
Flyers Energy
LLC
(Disqualified)
Safety-Kleen
Systems Inc.
(Disqualified)
Bid Form No Response No Response Pass Pass Pass Pass Pass Non-Collusion
Declaration
No Response No Response Pass Pass Pass Pass
Compliance
By confirming,
the bidder's
company accept
the City's
Standard Terms
and Conditions.

No Response No Response Pass Pass Pass Pass

11.5 EVALUATION TABULATION
IFB No. IFB No. FIN-0030
Fuel, Oil, & Lubricants

EVALUATION TABULATION
Invitation For Bid - Fuel, Oil, & Lubricants

Question Title Blick Art
Materials LLC
Capp Usa Merrimac
Petroleum, Inc.
dba Merrimac
Energy Group
Pinnacle
Petroleum, Inc.

Toro Petroleum
Corp
Western States
OIl
Flyers Energy
LLC
(Disqualified)
Safety-Kleen
Systems Inc.
(Disqualified)
By confirming,
the bidder's
company accept
the City's
Insurance
Requirements.

No Response No Response Pass Pass Pass Pass
General
Information
Year Business
Established*
No Response No Response Pass Pass Pass Pass Pass
Number of
Employees
No Response No Response Pass Pass Pass Pass Pass
Annual Sales* No Response No Response Pass Pass Pass Pass Pass Federal Tax ID No Response No Response Pass Pass Pass Pass Pass References No Response No Response Pass Pass Pass Pass Pass Delivery No Response No Response Pass Pass Pass Pass
Emergency
Contact
Information
No Response No Response Pass Pass Pass Pass

11.6 EVALUATION TABULATION
IFB No. IFB No. FIN-0030
Fuel, Oil, & Lubricants

EVALUATION TABULATION
Invitation For Bid - Fuel, Oil, & Lubricants

Question Title Blick Art
Materials LLC
Capp Usa Merrimac
Petroleum, Inc.
dba Merrimac
Energy Group
Pinnacle
Petroleum, Inc.

Toro Petroleum
Corp
Western States
OIl
Flyers Energy
LLC
(Disqualified)
Safety-Kleen
Systems Inc.
(Disqualified)
List all
subcontractors
to be used. If
you will
subcontract
portions of the
work, list all
subcontractors
below. Include
business name,
address and
phone number.

No Response No Response Pass Pass Pass Pass
Environmental
Conservation
and Sustainable
Living
No Response No Response Pass Pass Pass Pass
Optional
“Piggyback”
Contracting
No Response No Response Pass Pass Pass Pass
City of Santa
Cruz Business
Tax Certificate
Contractor's
Sale and/or
service contract
(Optional)
No Response No Response No Response Pass No Response No Response No Response No Response

11.7 EVALUATION TABULATION
IFB No. IFB No. FIN-0030
Fuel, Oil, & Lubricants

EVALUATION TABULATION
Invitation For Bid - Fuel, Oil, & Lubricants

Question Title Blick Art
Materials LLC
Capp Usa Merrimac
Petroleum, Inc.
dba Merrimac
Energy Group
Pinnacle
Petroleum, Inc.

Toro Petroleum
Corp
Western States
OIl
Flyers Energy
LLC
(Disqualified)
Safety-Kleen
Systems Inc.
(Disqualified)
Does your
company have a
City of Santa
Cruz Business
Tax Certificate?
No Response No Response Pass Pass Pass Pass
City of Santa
Cruz Business
Tax Certificate
Number
No Response No Response No Response No Response Pass Pass Expiration Date No Response No Response No Response No Response Pass Pass LOCAL

PREFERENCE

CERTIFICATION
Does the
business have
an office with at
least one
employee
located in the
City of Santa
Cruz?
No Response No Response Pass Pass Pass Pass
Business
Address:

No Response No Response No Response No Response No Response No Response No Response

11.8 EVALUATION TABULATION
IFB No. IFB No. FIN-0030
Fuel, Oil, & Lubricants

EVALUATION TABULATION
Invitation For Bid - Fuel, Oil, & Lubricants

Question Title Blick Art
Materials LLC
Capp Usa Merrimac
Petroleum, Inc.
dba Merrimac
Energy Group
Pinnacle
Petroleum, Inc.

Toro Petroleum
Corp
Western States
OIl
Flyers Energy
LLC
(Disqualified)
Safety-Kleen
Systems Inc.
(Disqualified)
Is the business
current in the
payment of all
taxes, charges,
assessments, or
fees owed to
the City of Santa
Cruz?
No Response No Response Pass Pass Pass Pass
Does the
business hold a
valid City of
Santa Cruz
business
license?
No Response No Response Pass Pass Pass Pass
DBA/license
number:

No Response No Response No Response No Response Pass No Response Locally Owned
Businesses
No Response No Response Pass Pass Pass Pass No Response By submitting
information for
Local
Preference, I
represent that I
qualify as a
(check all that
apply):

No Response No Response Pass Pass Pass Pass

11.9 EVALUATION TABULATION
IFB No. IFB No. FIN-0030
Fuel, Oil, & Lubricants

EVALUATION TABULATION
Invitation For Bid - Fuel, Oil, & Lubricants

I understand
that by
submitting false
information or
failing to
disclose
material
information in
order to qualify
for the
preference my
business will be
1) required to
pay the city any
difference
between the
contract
amount and
what the city’s
cost would have
been if the
contract had
been properly
awarded, and 2)
prohibited from
bidding on any
city contract or
receiving any
city contract for
a period of
three years of
the discovery of
facts supporting
the same.

No Response No Response Pass Pass Pass Pass

11.10 EVALUATION TABULATION
IFB No. IFB No. FIN-0030
Fuel, Oil, & Lubricants

EVALUATION TABULATION
Invitation For Bid - Fuel, Oil, & Lubricants

Question Title Blick Art
Materials LLC
Capp Usa Merrimac
Petroleum, Inc.
dba Merrimac
Energy Group
Pinnacle
Petroleum, Inc.

Toro Petroleum
Corp
Western States
OIl
Flyers Energy
LLC
(Disqualified)
Safety-Kleen
Systems Inc.
(Disqualified)

EMERGENCY

RESOURCE

AGREEMENT
Please provide
manager's or
owner's name,
home address,
email address
and phone
number
No Response No Response Pass Pass Pass Pass

11.11 EVALUATION TABULATION
IFB No. IFB No. FIN-0030
Fuel, Oil, & Lubricants

EVALUATION TABULATION
Invitation For Bid - Fuel, Oil, & Lubricants

Question Title Blick Art
Materials LLC
Capp Usa Merrimac
Petroleum, Inc.
dba Merrimac
Energy Group
Pinnacle
Petroleum, Inc.

Toro Petroleum
Corp
Western States
OIl
Flyers Energy
LLC
(Disqualified)
Safety-Kleen
Systems Inc.
(Disqualified)
By confirming
this agreement,
the vendor
agrees to
charge the City
of Santa Cruz a
rate that is fair
market value.

The vendor also
agrees to
provide the City
of Santa Cruz
with all
available
supplies,
materials,
equipment
and/or services
on a priority
basis.

No Response No Response Pass Pass No Response Pass
Emergency
Resource List
No Response No Response Pass Pass Pass Pass

11.12 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 1
Professional Services Agreement With
TOM LOPES DISTRIBUTING, INC. DBA WESTERN STATES OIL COMPANY For FUEL, OIL, & LUBRICANTS
THIS AGREEMENT for professional services is made by and between the City of Santa Cruz (“City”) and Tom Lopes Distributing, Inc. dba Western States Oil Company (“Consultant”) (each is referred to individually as a “Party” and collectively, as the “Parties”) as of November 14, 2023 (the “Effective Date”).

NOW, THEREFORE, in consideration of each other’s mutual promises, the Parties hereto agree as follows:

SECTION 1: SCOPE OF WORK
Consultant will furnish services as defined and described in the Scope of Work, attached hereto as Exhibit A and incorporated herein.

SECTION 2: RESPONSIBILITIES OF CONSULTANT
All work performed by Consultant, or under Consultant’s direction, shall be rendered in accordance with the generally accepted practices, and to the standards of, Consultant's profession. Consultant represents and agrees that Consultant: (i) is fully experienced and properly qualified to perform the work and services provided for herein, (ii) has the financial capability required for the performance of the work and services, and (iii) is properly equipped and organized to perform the work and services in a competent, timely, and proper manner, in accordance with the requirements of this Agreement.

Consultant shall not undertake any work beyond the Scope of Work set forth in Exhibit A unless such additional work is approved in advance and in writing by City. The cost of such additional work shall be reimbursed to Consultant by City on the same basis as provided for in Section 4.

If, in performing the work, it is necessary to conduct field operations, security and safety of the job site will be the Consultant's responsibility excluding, the security and safety of any facility of City within the job site which is not under the Consultant's control.

Consultant shall meet with _________ [DEPT HEAD NAME], Director of the [______] Department, hereinafter called "Director", or other designated and authorized City personnel, or third parties as necessary, on all matters connected with carrying out of Consultant’s services described in Exhibit A. Such meetings shall be held at the request of either Party. Review and City approval of completed work shall be obtained monthly, or at other intervals as may be mutually agreed upon during the course of this Agreement. Review, approval, or acceptance of Consultant’s work by City or others shall not relieve Consultant from responsibility for errors and omissions in Consultant’s work.

SECTION 3: RESPONSIBILITIES OF THE CITY
City shall make available to Consultant all necessary data and information in the City's possession and shall actively assist Consultant in obtaining such information from other agencies and individuals as needed. Consultant is entitled to reasonably rely upon the accuracy and completeness of such data and information, and Consultant shall provide City prompt written notice of any known defects in such data and information.

The Director may authorize a staff person to serve as his or her representative. The work in progress shall be reviewed at such intervals as may be mutually agreed upon between the Parties. The City will be the sole judge of acceptable work, provided that such approval will not be unreasonably withheld or delayed. If the work is not acceptable, City will inform Consultant of the changes or revisions necessary to secure approval.

11.13 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 2
SECTION 4: FEES AND PAYMENT
For services actually performed, the City will compensate Consultant at the rates set forth in the Fee Schedule detailed in Exhibit B and in accordance with the terms set forth therein. Payment for Consultant's services in carrying out the entire Scope of Work shall be made within the budget limit, or limits shown, upon Exhibit B. Such payment shall be considered the full compensation for all personnel, materials, supplies, and equipment used by Consultant in the Scope of Work.

Consultant agrees that the payments to Consultant specified in this Section 4 will constitute full and complete compensation for all obligations assumed by Consultant under this Agreement. Where conflicts regarding compensation may occur, the provisions of this section apply.

Variations from the budget for each task which are justified by statements indicating personnel time expended and submittal of a revised budget are only allowed with prior City approval; however, in no event shall the total fee charged for the Scope of Work set forth in Exhibit A exceed the budget of $DOLLAR without advance written City authorization in the form of an amendment or change order.

Invoices shall detail the time worked by each class of employee on each task and the expenses incurred for which billing is made. Invoices shall indicate the percentage completion of each work task as identified in the Scope of Work in Exhibit A and the overall percentage of completion of the total required services. Unless otherwise specified in the fee schedule, payments shall be made monthly by the City within 30 days based on itemized invoices from the Consultant which list the actual costs and expenses.

All invoices shall contain the following affidavit signed by Consultant (if individual) or by a principal of Consultant’s firm (if Consultant is an entity):
"I hereby certify [or as principal of Consultant] that the charge of (Insert invoice amount) as summarized above and shown in detail on the attachments is a fair and reasonable use of public funds, is in accordance with the terms of Agreement dated (Insert Agreement Date), and has not been previously paid."
This Agreement is contingent upon the appropriation of sufficient funding by the City for the services covered by this Agreement. If funding is reduced or deleted by the City for the services covered by this Agreement, the City has the option without penalty or liability to either terminate this Agreement or to offer an amendment to this Agreement indicating the reduced amount.

SECTION 5: TRAVEL REIMBURSEMENT POLICY
The City shall not be responsible for any travel, meal, or lodging reimbursements to Consultant and/or Consultant’s employees unless otherwise specified in the Scope of Work.

SECTION 6: CHANGES IN WORK
City may negotiate changes in the Scope of Work. No changes in the Scope of Work shall be made without the written approval of City and Consultant. Any change requiring compensation in excess of the sum specified in Exhibit B shall be approved in advance in writing by the City. Only City’s authorized representative(s) is authorized to approve changes to this Agreement on behalf of City.

11.14 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 3
SECTION 7: TERM AND SCHEDULE
The term of this Agreement shall be on the effective date of this Agreement and terminating on November 14, 2028.

At the option of the City, this Agreement may be renewed annually under the same contractual terms and conditions by letter agreement.

Consultant shall begin work as specified in a written authorization (e.g., Notice to Proceed) to perform services. The written authorization to perform work shall not be issued until after this Agreement has been approved and authorized by the City.

The Work Schedule for completion of the work shall be as shown upon Exhibit C. In the event that major changes are ordered, the schedule for completion as stated in Exhibit C may be adjusted by City so as to allow Consultant a reasonable period of time within which to complete any additional work which may be required as a result of the ordered changes.

Neither party will be held responsible for delay or default caused by declared emergencies, natural disasters, or any Force Majeure event which is beyond the party's reasonable control. Consultant will, however, make all reasonable efforts to remove or eliminate such a cause of delay or default and will, upon the cessation of the cause, diligently pursue performance of its obligations in this Agreement.

The City reserves the right to obtain the item(s) and/or services covered by this Agreement from another source during any on-going suspension of service due to the circumstances outlined above.

Consultant acknowledges that it is necessary for Consultant to complete its work on or before the completion date set forth in Exhibit C in order to allow the City to achieve its objectives for entering into this Agreement. The Parties therefore agree that time is of the essence in the performance of this Agreement.

SECTION 8: TERMINATION
The City may terminate the Agreement for any reason by providing written notice to Consultant not less than 10 calendar days prior to an effective termination date.

The Consultant may terminate the Agreement for cause by providing written notice to the City` not less than 30 calendar days prior to an effective termination date.

The City may, at its option, allow Consultant to cure its failure to perform within 10 business days (or longer period authorized in writing by the City) from the date of the City’s termination notice. The termination shall be become effective if Consultant has not cured within the specified time period to the City’s satisfaction.

Consultant may terminate this Agreement for cause if the City fails to cure a material default in performance within a period of 30 calendar days (or such longer period agreed to by the Consultant), from date of the Consultant’s written termination notice specifying the default in performance.

Upon notice of termination by either the City or Consultant, the Consultant will immediately act to not incur any additional obligations, costs or expenses, except as may be reasonably necessary to terminate its activities. The City’s only obligation to the Consultant will be just and equitable payment for services authorized by, and received to the satisfaction of, the City up to and including the effective date of termination less any amounts withheld. All finished or unfinished work or documents procured or produced under the Agreement will become property of the City upon the termination date. In the event of Consultant’s failure to perform pursuant to the Agreement, the City reserves the right to obtain services elsewhere and Consultant will be liable for the difference between the prices set forth in the terminated Agreement and the actual cost to the City. Termination of the Agreement pursuant to this

11.15 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 4
paragraph shall not relieve the Consultant of any liability to City for additional costs, expenses, or damages sustained by City due to failure of the Consultant to perform pursuant to the Agreement. City may withhold any payments to Consultant for the purpose of set-off until such time as the exact amount of damages due City from Consultant is determined. After the effective date of termination, Consultant will have no further claims against the City under the Agreement. No other compensation will be payable for anticipated profit on unperformed services.

SECTION 9: INSURANCE
Prior to the beginning of and throughout the duration of the Agreement, Consultant will maintain and comply with the Insurance Requirements as set forth in Exhibit D. Consultant will insure the City against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder. The insurance coverages required shall not in any way limit the liability of the Consultant.

SECTION 10: INDEMNIFICATION
Consultant agrees, to the fullest extent permitted by law, to indemnify, defend, and hold harmless the City, its officials, officers, employees, agents, and volunteers (collectively, “Indemnitees”) from and against any and all liability, claim, action, loss, injury, damage, judgment, or expense, including attorneys’ fees and costs (“Losses”) caused by or resulting from the negligence, recklessness, or willful misconduct of Consultant, Consultant’s officers, employees, agents, or subcontractors in any way related to this Agreement. Consultant’s duty to indemnify and hold harmless Indemnitees shall not apply to the extent such Losses are caused by the sole or active negligence or willful misconduct of Indemnitees. Consultant’s obligation to defend shall arise regardless of any claim or assertion that Indemnitees caused or contributed to the Losses.

In the event this Agreement involves the performance of design professional services by Consultant, Consultant’s officers, employees, agents, or subcontractors, Consultant’s costs to defend Indemnitees shall not exceed the Consultant’s proportionate percentage of fault per Civil Code §2782.8. This section shall survive the termination or expiration of this Agreement.

SECTION 11: EQUAL EMPLOYMENT OPPORTUNITY/NON-DISCRIMINATION POLICIES City’s policies promote a working environment free from abusive conduct, discrimination, harassment, and retaliation; and require equal opportunity in employment for all regardless of race, religious creed (including religious dress and grooming practices), color, national origin (including language use restrictions), ancestry, religion, disability (mental and physical), medical condition, sex, gender (including gender identity and gender expression), physical characteristics, marital status, age, sexual orientation, genetic information (including family health history and genetic test results), organizational affiliation, and military or veteran status, or any other consideration made unlawful by local, State or Federal law. City requires Consultant to comply with all applicable Federal and State and local equal employment opportunity laws and regulations, and Consultant is responsible for ensuring that effective policies and procedures concerning the prevention of abusive conduct, discrimination, harassment, and retaliation exist in Consultant’s business organization. The City’s current Equal Employment Opportunity and Non-Discrimination policies to which this Section applies may be viewed at http://www.codepublishing.com/CA/SantaCruz/?SantaCruz09/SantaCruz0983.html and http://www.cityofsantacruz.com/home/showdocument?id=59192.

SECTION 12: LEGAL ACTION/ATTORNEYS’ FEES
If any action at law or in equity is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief. The laws of the State of California, with jurisdiction in the Santa Cruz County Superior Court, shall govern all matters relating to the validity, interpretation, and effect of this Agreement and any authorized or alleged changes, the performance of any of its terms, as well as the rights and obligations of Consultant and the City.

11.16 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 5
SECTION 13: AMENDMENTS
This Agreement may not be amended in any respect except by way of a written instrument which expressly references and identifies this particular Agreement, which expressly states that its purpose is to amend this particular Agreement, and which is duly executed by the City and Consultant. Consultant acknowledges that no such amendment shall be effective until approved and authorized by the City’s authorized representative. No representative of the City is authorized to obligate the City to pay the cost or value of services beyond the scope of services set forth in Exhibit A.

Such authority is retained solely by the City Manager, Director, or their designee. Unless expressly authorized by the City Manager or Director, Consultant’s compensation shall be limited to that set forth in Exhibit B, Fee Schedule.

SECTION 14: MISCELLANEOUS PROVISIONS

1. Project Manager/Key Staff. Director reserves the right to evaluate and confer with Consultant regarding the project manager or other key staff assigned by Consultant to perform the work under this Agreement. Consultant shall replace the project manager or key staff upon Director’s request due to Director’s concern about their performance, or City shall have the right to terminate this Agreement. Otherwise, no change in assignment by the Consultant may occur without prior written approval of the City.

2. Consultant Services Only. Consultant is employed to render professional services only and any payments made to Consultant are compensation solely for such professional services.

3. Independent Contractor. In the performance of this Agreement, it is expressly understood that Consultant, including each of Consultant’s employees, agents, subcontractors or others under Consultant’s supervision or control, is an independent contractor solely responsible for its own acts and omissions, and shall not be considered an employee of the City for any purpose. Consultant agrees to comply with AB5, codified at Labor Code section 2750.3, and shall indemnify, defend and hold harmless the City, its officials, officers, employees, and agents against any claim or liability, including attorneys’ fees and costs, arising in any manner related to this Agreement that an employee, agent or others under Consultant’s supervision or control was misclassified.

4. Consultant Not an Agent. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever.

5. Subcontractors. Consultant shall obtain prior approval of the City prior to subcontracting of any work pursuant to this Agreement. If at any time, the City determines any subcontractor is incompetent or unqualified, Consultant will be notified and will be expected to immediately cancel the subcontract. Consultant shall require and verify that all subcontractors maintain insurance meeting all of the requirements stated herein, including naming the City of Santa Cruz, its officers, officials, employees, agents, and volunteers as additional insureds. Any modification to the insurance requirements for subcontractors must be agreed to by the City in writing.

6. Assignment. This Agreement shall not be assigned without first obtaining the express written consent of the Director or after approval of the City Council. Neither party may assign this Agreement unless this Agreement is amended in accordance with its terms.

7. Conflicts of Interest. Consultant agrees to comply with conflict of interest lawsin performing the work and services under this Agreement. Consultant covenants (on behalf of Consultant and Consultant’s employees, agents, representatives, and subcontractors) that there is no direct or indirect interest, financial or otherwise, which would conflict in any manner or degree with the performance of services required under this Agreement. Consultant acknowledges and agrees to comply with applicable provisions of conflict of interest law and regulations, including the CA Political Reform Act, Sections 1090 and 87100 of the Government Code, and the City’s conflict of interest

11.17 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 6
code. Consultant will immediately advise City if Consultant learns of a conflicting financial interest of Consultant during the term of this Agreement.

8. City Property. The work, or any portion, of Consultant in performing this Agreement shall become the property of City. The Consultant may be permitted to retain copies of such work for information and reference in connection only with the provision of services for the City. All materials and work product, whether finished or unfinished, shall be delivered to City upon completion of contract services or termination of this Agreement for any reason.

Consultant acknowledges and agrees that the work product shall be considered a work made for hire within the meaning of the patent and copyright laws of the United States; and Consultant agrees that all copyrights which arise from creation of project-related documents and materials pursuant to this Agreement shall be vested in the City and Consultant waives and relinquishes all claims to copyright or other intellectual property rights in favor of City. Any work product related to this Agreement shall be confidential, not to be used by the Consultant on other projects or disclosed to any third party, except by agreement in writing by the City, or except as otherwise provided herein.

Consultant’s final deliverables shall comply with Section 508 (29 U.S.C. Section 794d) accessibility requirements, as applicable.

9. Intellectual Property and Indemnity. Consultant represents to City that, to the best of Consultant’s knowledge, any Intellectual Property (including but not limited to: patent, patent application, trade secret, copyright and any applications or right to apply for registration, computersoftware programs or applications, tangible or intangible proprietary information, or any other intellectual property right) in connection with any services and/or products related to this Agreement does not violate or infringe upon any Intellectual Property rights of any other person or entity.

To the fullest extent permitted by law, Consultant agrees to indemnify, defend, and hold harmless City, its officials, officers, employees, and agents, from any and all claims, demands, actions, liabilities, damages, or expenses (including reasonable attorneys’ fees and costs) arising out of a claim of infringement, actual or alleged, direct or contributory, of any Intellectual Property rights in any way related to Consultant’s performance under this Agreement or to the City’s authorized intended or actual use of Consultant’s product or service under this Agreement. This provision shall survive termination or expiration of this Agreement.

If any product or service becomes, or in the Consultant’s opinion is likely to become, the subject of a claim of infringement, the Consultant shall, at its sole expense: (i) provide the City the right to continue using the product or service; or (ii) replace or modify the product or service so that it becomes non-infringing; or (iii) if none of the foregoing alternatives are possible even after Consultant’s commercially reasonable efforts, in addition to other available legal remedies, City will have the right to return the product or service and receive a full or partial refund of an amount equal to the value of the returned product or service, less the unpaid portion of the purchase price and any other amounts, which may be due to the Consultant. City shall have the right to retrieve its data and proprietary information at no charge prior to any return of the product or termination of service.

10. Confidentiality.
a. Consultant shall not acquire any ownership interest in data and information (“City Data”) received by Consultant from City, which shall remain the property of the City. Certain information may be considered confidential (“Confidential Information”). Confidential Information shall mean all information or proprietary materials (in every form and media) not generally known to the public and which has been or is hereafter disclosed or made available directly or indirectly to Consultant through any means of communication, either verbally or in writing even if it has not been designated in writing as “Confidential” to Consultant in connection with this Agreement. Unless otherwise required by law, Consultant shall not, without City’s written permission, use or disclose City Data and/or Confidential Information other than in the performance of the obligations under this Agreement. As between Consultant and City, all City

11.18 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 7
Confidential Information shall remain the property of the City. Consultant shall not acquire ownership interest in the City’s Confidential Information.
b. Consultant shall be responsible for ensuring and maintaining the security and confidentiality of City Data and Confidential Information, protect against any anticipated threats or hazards to the security or integrity of City Data and Confidential Information, protect against unauthorized access to or use of City Data and Confidential Information that could result in substantial harm or inconvenience to City or any end users; and ensure the proper return and/or disposal of City Data and Confidential Information upon termination of this Agreement with notice to the City.
c. Consultant shall take appropriate action to address any incident of unauthorized access to City Data and Confidential Information, including addressing and/or remedying the issue that resulted in such unauthorized access, notifying City as soon as possible of any incident of unauthorized access to City Data and Confidential Information, or any other breach in Consultant’s security that materially affects City or end users; and be responsible for ensuring compliance by its officers, employees, agents, and subcontractors with the confidentiality provisions hereof. Should confidential and/or legally protected City Data be divulged to unauthorized third parties, Consultant shall comply with all applicable federal and state laws and regulations, including but not limited to California Civil Code sections 1798.29 and 1798.82 at Consultant’s sole expense. Consultant shall not charge City for any expenses associated with Consultant’s compliance with these obligations.

d. Consultant shall defend, indemnify and hold harmless City, its officials, officers, employees and agents against any claim, liability, loss, injury or damage (including attorneys’ fee and costs) arising out of, or in connection with, the unauthorized use, access, and/or disclosure of City Data and/or Confidential Information by Consultant and/or its agents, employees or subcontractors, excepting only loss, injury or damage caused by the sole negligence or willful misconduct of the City. This provision shall survive the termination or expiration of this Agreement.

11. Consultant's Records. Consultant shall maintain accurate accounting records and other written documentation pertaining to the costs incurred relating to this Agreement for examination and audit by the City, State, or federal government, as applicable, during the period of this Agreement, and for a period of at least five (5) years from the date of the final City payment for Consultant's services, or date of the termination of this Agreement, whichever is later. If Consultant engages a subcontractor to perform work related to this Agreement with a cost of $10,000 or more over a 12-month period, such subcontract shall contain these same requirements. This provision shall survive the termination of this Agreement.

12. California Public Records Act. City is a public agency subject to the disclosure requirements of the California Public Records Act (“CPRA”). If Consultant’s proprietary information is contained in documents or information submitted to City, and Consultant claims that such information falls within one or more CPRA exemptions, Consultant must clearly mark such information “Confidential and Proprietary,” and identify the specific lines containing the information. In the event of a request for such information, City will make best efforts to provide notice to Consultant prior to such disclosure. If Consultant contends that any documents are exempt from the CPRA and wishes to prevent disclosure, it is required to obtain a protective order, injunctive relief, or other appropriate remedy from a court of law in Santa Cruz County before the City is required to respond to the CPRA request. If Consultant fails to obtain such remedy within the time the City is required to respond to the CPRA request, City may disclose the requested information without any liability. Consultant further agrees that it shall defend, indemnify and hold City harmless against any claim, action or litigation (including but not limited to all judgments, costs, and attorney’s fees) that may result from denial by City of a CPRA request for information arising from any representation, or any action (or inaction), by the Consultant.

11.19 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 8

13. Compliance with Laws. All activities of Consultant, its employees, subcontractors and/or agents will be carried out in compliance with all applicable federal, state, and local laws and regulations. Consultant further agrees to comply with the covenant of good faith and fair dealing and other provisions of Santa Cruz Municipal Ordinance chapter 3.09, or otherwise Consultant may be subject to penalties including being declared an irresponsible contractor.

14. Licensure. Consultant agrees that Consultant, its subcontractors and/or agents (if any) has/have complied with all applicable federal, state, and local licensing requirements and agrees to provide proof of a current City of Santa Cruz Business Tax Certificate if:
• Consultant, its subcontractor(s) and agent(s) or its business is/are located in the City of Santa Cruz; • Will perform actual work in the City of Santa Cruz for 6 or more days annually; or • Will use company vehicles to deliver within the City of Santa Cruz for 6 or more days annually.

For additional information and licensing requirements, view the City’s Business Licenses and Permits webpage or call the Revenue and Taxation division at 831/420-5070.

15. Living Wage. Every contract for services to the City for $10,000 or more, is subject to City of Santa Cruz Living Wage Ordinance number 2000-25. If applicable, Consultant agrees to comply with the requirements of the Living Wage ordinance as provided in Santa Cruz Municipal Code Chapter 5.10.

16. Prevailing Wages for Public Work. To the extent that the work or services to be performed under this Agreement may be considered a “public work” (construction, alteration, demolition, or repair work) pursuant and subject to Labor Code section 1720 et seq., Consultant (and any subconsultant performing the work or services) shall conform to any and all prevailing wage requirements applicable to such work/and or services under this Agreement. Consultant (and any subconsultant) shall adhere to the prevailing wage determinations made by the Director of Industrial Relations (DIR) pursuant to California Labor Code Part 7, Chapter 1, Article 2, applicable to the work, if any. All workers employed in the execution of a public works contract (as such term is defined California Labor Code section 1720 et seq. and section 1782(d)(1)) must be paid not less than the specified prevailing wage rates for the type of work performed. (CA Labor Code sections 1720, 1774 and 1782.) To the extent applicable to the scope of work and services under this Agreement, Consultant agrees to be bound by the state prevailing wage requirements, including, but not limited to, the following:
a. If a worker is paid less than the applicable prevailing wage rate owed for a calendar day (or any portion thereof), Consultant shall pay the worker the difference between the prevailing wage rate and the amount actually paid for each calendar day (or portion thereof) for which the worker(s) was paid less than the prevailing wage rate, as specified in Labor Code section 1775; b. Consultant shall maintain and make available payroll and worker records in accordance with Labor Code sections 1776 and 1812;
c. If Consultant employs (and/or is legally required to employ) apprentices in performing the work and/or services under this Agreement, Consultant shall ensure compliance with Labor Code section 1777.5; d. Consultant is aware of the limitations imposed on overtime work by Labor Code sections 1810 et seq. and shall be responsible for any penalties levied in accordance with Labor Code section 1813 for failing to pay required overtime wages;
e. Consultant shall post a copy of the applicable wage rates at each jobsite at a location readily available to its workers.

11.20 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 9
f. Any failure of Consultant and/or its subconsultant to comply with the above requirements relating to a public work project shall constitute a breach of this Agreement that excuses the City’s performance of this Agreement at the City’s sole and absolute option and shall be at the sole risk of Consultant. Consultant on behalf of itself and any subconsultant, agree to indemnify, defend and hold harmless the City and its officials, officers, employees, and agents from and against any and all claims, liabilities, losses, costs, expenses, attorney’s fees, damages, expenses, fines, financial consequences, interest, and penalties, of any kind or nature, arising from or relating to any failure (or alleged failure) of the Consultant and any subconsultant to pay prevailing wages or to otherwise comply with the requirements of prevailing wage law relating to a public work.
g. Consultant acknowledges that it and/or any subconsultant may not engage in the performance of any contract for public work unless currently registered with the DIR and qualified to perform public work pursuant to Labor Code section 1725.5 [with limited exceptions from this requirement for bid purposes only under Labor Code section 1771.1(a)].

17. Storm Water Requirements. To the extent applicable to the Scope of Work under this Agreement, Consultant, Consultant’s employees, subcontractors, and agents are required to abide by the applicable City of Santa Cruz Storm Water Best Management Practices (BMPs) for the duration of the work. The City’s mandatory Storm Water BMPs, which are listed according to the type of work, operations, or business, are located on the City website at: https://www.cityofsantacruz.com/government/city-departments/public-works/stormwater/bestmanagement-practices

18. Dispute Resolution. The Parties agree to attempt in good faith to resolve through negotiation any dispute, claim or controversy arising out of or relating to this Agreement. Either party may initiate negotiations by providing written notice in letter form to the other party, setting forth the subject of the dispute and the relief requested.

Promptly upon such notification, the Parties shall meet at a mutually agreeable time and place in order to exchange relevant information and perspective, and to attempt to resolve the dispute. In the event that no resolution is achieved, and if, but only if, the parties mutually agree, then prior to pursuing formal legal action, the parties shall make a good faith effort to resolve the dispute by non-binding mediation or negotiations between representatives with decision-making power, who, to the extent possible, shall not have had substantive involvement in the matters of the dispute. To the extent that the dispute involves or relates to a public works project, the Parties agree to attempt to resolve the dispute by complying with the claims process as set forth in Public Contract Code sections 9204(e), 20104-20104.6, but without waiving the requirements of the California Tort Claims Act, Gov’t Code section 800 et seq. unless otherwise agreed to by the Parties.

19. Force Majeure. Neither party hereto shall be considered in default in the performance of its obligation hereunder to the extent that the performance of any such obligation is prevented or delayed by an act of God, natural disaster, pandemic, acts of terrorism, war, a strike, lockout or other labor difficulty, or other peril, which is beyond the reasonable control of the affected party and without the negligence of the respective Parties. Each party hereto shall give notice promptly to the other of the nature and extent of any Force Majeure claimed to delay, hinder or prevent performance of the services under this Agreement. Each Party will, however, make all reasonable efforts to remove or eliminate such a cause of delay or default and will, upon the cessation of the cause, diligently pursue performance of its obligations in this Agreement. In the event either party is prevented or delayed in the performance of its respective obligation by reason of such Force Majeure, the only remedy is that there may be an equitable adjustment of the schedule based on City’s sole discretion.

20. Complete Agreement. This Agreement, along with any attachments, is the full and complete integration of the Parties’ agreement with respect to the matters addressed herein, and that this Agreement supersedes any previous written or oral agreements between the Parties with respect to the matters addressed herein. Unless otherwise stated,

11.21 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 10
to the extent there is any conflict between this Agreement and any other agreement (written or oral), the terms of this Agreement shall control.

21. Severability. The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not render the other provisions unenforceable, invalid or illegal.

22. Waiver. Waiver by any party of any portion of this Agreement shall not constitute a waiver of the same or any other portion hereof.

23. Governing Law. This Agreement shall be governed by and interpreted in accordance with California law.

24. Contract Interpretation. Each party acknowledges that it has reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

25. MacBride Principles/Peace Charter. City of Santa Cruz Resolution NS-19,378 (7/24/90) encourages all companies doing business in Northern Ireland to abide by the MacBride Principles and Peace Charter.

26. Notices. If either party shall desire or is required to give notice to the other such notice shall be given in writing, via email, and concurrently delivered by: (a) personal delivery, in which case notice is effective upon delivery; (b) overnight courier (i.e., Federal Express) with charges prepaid or charged to the sender’s account, in which case notice is effective when delivered; (c) priority U.S. Mail, in which case notice shall be deemed delivered on the second business day after the deposit thereof with the U.S. Postal Service. Notices shall be addressed to recipient as follows:

To CITY:

Finance
Emmanuel Fluker
1200 Pacific Ave,
Santa Cruz, Ca 95060
[email protected]
To CONSULTANT:

Western States Oil
Robin Jackson
1790 S. 10th Street,
San Jose, Ca 95112
Email/Phone
Changes to the above information shall be given to the other party in writing ten (10) business days before the change is effective.

27. Counterparts. The Parties may execute this Agreement in two or more counterparts, which shall, in the aggregate, be deemed an original but all of which, together, shall constitute one and the same instrument. A scanned, electronic, facsimile or other copy of a party’s signature shall be accepted and valid as an original.

28. Warranty of Authority. The signatories to this Agreement warrant and represent that each is authorized to execute this Agreement and that their respective signatures serve to legally obligate their respective representatives, agents, successors and assigns to comply with the provisions of this Agreement. [SIGNATURES ON FOLLOWING PAGE]

11.22 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 11

2. Signature Requirements for Business Entity:
a. Corporation – 2 officer signatures required (one from each group, unless person signing holds officer positions in both Group 1 and 2):

Group 1: Chief Executive Officer, Chairman of the Board, President, or Vice President Group 2: Secretary, Assistant Secretary, Chief Financial Officer, Treasurer, Assistant Treasurer Approved As To Form:

By: _____________________________ Date: __________________ Office of the City Attorney

CITY OF SANTA CRUZ
By: _____________________________ Date: __________________ Matt Huffaker
City Manager

CONSULTANT
By: _____________________________ Date: __________________ Printed: ___________________________ Title: __________________

11.23 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 12
EXHIBIT A: SCOPE OF WORK

11.24 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 13
EXHIBIT B: FEE SCHEDULE

11.25 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 14
EXHIBIT C: TERMS AND CONDITIONS

11.26 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 15
EXHIBIT D: INSURANCE REQUIREMENTS
Consultant shall procure and maintain insurance against claims for injuries to persons or damages to property and otherwise which may arise from or in connection with the performance of the work under this Agreement and the results of that work by Consultant, its agents, representatives, employees, or subcontractors.

A. CERTIFICATE REQUIREMENTS
The City will be issued a Certificate of Insurance (a Memorandum of Understanding will not be accepted) with the following minimum requirements:
• Certificate(s) will show current policy number(s) and effective dates, • Coverage and policy limits will meet, or exceed, requirements below, • The Certificate Holder will be City of Santa Cruz, Risk Management, 1200 Pacific Ave., Suite 290, Santa Cruz, CA 95060,
• Certificate will be signed by an authorized representative, • An endorsement, if required below, will be provided to show the City, its officers, officials, employees, and volunteers as additional insureds, and
• Coverages must be maintained during the term of the Agreement with the City, unless a longer duration is required as specified below.

B. MINIMUM SCOPE AND LIMITS OF INSURANCE
Consultant acknowledges that the insurance coverage and policy limits set forth in this section constitute the minimum amount of coverage required. If Consultant maintains broader insurance coverage and/or higher limits than the minimums shown below, the City of Santa Cruz requires and shall be entitled to the broader insurance coverage and/or higher limits maintained by Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City of Santa Cruz.

Coverage will be at least as broad as:
• COMMERCIAL GENERAL LIABILITY (CGL): $1,000,000 PER OCCURRENCE; $2,000,000 AGGREGATE Proof of coverage for $1 Million per occurrence and $2 Million in the aggregate including products and completed operations, property damage, bodily injury, personal and advertising injury will be provided on Insurance Services Office (ISO) Form CG 00 01 covering CGL. • PROFESSIONAL LIABILITY (ERRORS AND OMISSIONS): $2,000,000 PER OCCURRENCE OR CLAIM, $2,000,000 AGGREGATE.

Consultant will maintain insurance appropriate to Consultant’s profession; with limit no less than $2,000,000 per occurrence or claim, $2,000,000 aggregate. Insurance must be maintained, and evidence of insurance must be provided for at least five (5) years after date of completion of the services under this Agreement. If coverage is canceled or non-renewed and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date or start of work date, Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of the contract of work.
• AUTOMOBILE LIABILITY:

Proof of coverage for $1,000,000 provided on ISO Form Number CA 00 01 covering any auto (Code 1), or if Consultant has no owned autos, hired, (Code 8) and non-owned autos (Code 9), per accident for bodily injury and property damage.
• WORKERS’ COMPENSATION AS REQUIRED BY THE STATE OF CALIFORNIA, WITH STATUTORY LIMITS, AND EMPLOYER’S LIABILITY INSURANCE: $1,000,000 per accident for bodily injury or disease.

11.27 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 16
The Worker’s Compensation policy must be endorsed with a waiver of subrogation in favor of the City for all work performed by the Consultant and its employees. (Not required if Consultant provides written verification it has no employees) - If Consultant has no employees, Consultant shall complete and sign a Workers’ Compensation Exemption Declaration and Release of Liability.
[OPTIONAL - ADD when Environmental Hazard or Digging is Involved]:
• CONTRACTORS’ POLLUTION LIABILITY and/or ASBESTOS POLLUTION LIABILITY (CPL) (if project involves environmental hazards) with limits no less than $2,000,000 per occurrence or claim, and $2,000,000 policy aggregate.

1. If the services involve lead-based paint or asbestos identification / remediation, the Pollution Liability shall not contain lead-based paint or asbestos exclusions. If the services involve mold identification / remediation, the Pollution Liability shall not contain a mold exclusion and the definition of “Pollution” shall include microbial matter including mold.

2. The Automobile Liability policy shall be endorsed to include Transportation Pollution Liability insurance, covering hazardous materials to be transported by Consultant pursuant to the Agreement. This coverage may also be provided on the Consultant’s Pollution Liability policy.

C. OTHER INSURANCE PROVISIONS
The insurance policies are to comply with the following provisions:
• ADDITIONAL INSURED STATUS
The City, its officers, officials, employees, agents, and volunteers are to be covered as additional insureds on the CGL [OPTIONAL: ,CPL, and automobile insurance (if transporting hazardous materials] policy[(ies)] with respect to liability arising out of work or operations performed by or on behalf of Consultant including materials, parts, or equipment furnished in connection with such work or operations, products and completed operations. General liability coverage will be provided in the form of an endorsement to Consultant’s insurance at least as broad as ISO Form CG 20 10 11 85, or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 (if a later edition is used).
o PRIMARY COVERAGE
For any claims related to this Agreement, Consultant’s and all subcontractor’s insurance coverage will be primary and non-contributory as respects the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents, or volunteers will be excess of Consultant’s and all subcontractor’s insurance and will not contribute with it.
• NOTICE OF CANCELLATION
Each insurance policy required above shall state that the coverage shall not be canceled, except with notice to the City.
• WAIVER OF SUBROGATION
Consultant hereby grants to the City a waiver of any right to subrogation, except as otherwise not applicable, which any insurer of said Consultant may acquire against the City by virtue of the payment of any loss, including attorney’s fees under such insurance. Consultant agrees to obtain any endorsement that may be necessary to effectuate this waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.

11.28 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 17
• EXCESS LIABILITY/UMBRELLA INSURANCE POLICIES
Consultant may use excess liability/umbrella policies to meet the required liability limits on the condition that they provide all of the insurance coverages required herein, including, but not limited to, primary and non-contributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The excess liability/umbrella insurance policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying CGL insurance. No insurance policies maintained by the additional insureds, whether primary or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the Consultant’s primary and excess liability policies are exhausted. • DURATION OF COVERAGE
CGL & Excess Liability/Umbrella policies for any construction related work, including, but not limited to, maintenance, service, or repair work, shall continue coverage for a minimum of 5 years for Completed Operations liability coverage. Such Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work. • SELF-INSURED RETENTIONS (SIR)
Self-insured retentions must be declared to and approved by the City. City may require Consultant to purchase coverage with a lower retention or provide proof of ability to pay losses and related expenses.

The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City.
• ACCEPTABILITY OF INSURERS
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A: VII, unless otherwise acceptable to the City.
• CLAIMS MADE POLICIES
If any of the required policies provide coverage on a claims-made basis:

1. The Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work.

2. Insurance must be maintained, and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.

3. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of contract work. • VERIFICATION OF COVERAGE
Consultant will furnish the City with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy (and CPL, automobile and any Excess Liability/Umbrella policies, as applicable) listing all policy endorsements to be approved by the City before work commences. However, failure to obtain the required documents prior to the work beginning will not waive the Consultant’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.

D. SUBCONTRACTORS
Consultant shall include their subcontractor(s) as additional insured(s) under the policies or shall furnish separate certificates and endorsements for each contractor and subcontractor. Consultant shall require and verify that all contractors and subcontractors maintain insurance meeting all the requirements stated herein,

11.29 City of Santa Cruz Professional Services Agreement for Fuel, Oil, & Lubricants October 2023 (Form Rev.01/23 ) Page 18
and Consultant shall ensure that City, its officers, officials, employees, agents, and volunteers are named as additional insureds on insurance required from its contractor(s) and subcontractor(s).

E. SPECIAL RISKS/CIRCUMSTANCES
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances and provide notice to Consultant.

11.30 City Council

AGENDA REPORT
DATE: 10/23/2023
AGENDA OF: 11/14/2023
DEPARTMENT: Finance
SUBJECT: Liability Claims Filed Against the City of Santa Cruz (FN) RECOMMENDATION: Motion to reject the liability claims of 1) Barbara Jeanne Lawrence, and 2) Zita Morrow, based on staff recommendation.

DISCUSSION: Claims to be rejected:

1. Claimant: Barbara Jeanne Lawrence
Date of occurrence: 09/07/23
Date of claim: 09/28/23
Amount of claim: $178.50
Claimant seeks compensation for personal items allegedly damaged by wet paint in roadway.

Self-Represented

2. Claimant: Zita Morrow
Date of occurrence: 07/16/23
Date of claim: 10/09/23
Amount of claim: Unspecified
Claimant seeks general damages and reimbursement for medical expenses allegedly caused by a trip and fall.

Represented by legal counsel.

FISCAL IMPACT: No fiscal impact.

Prepared By:

Ross Brandon
Risk & Safety Manager
Submitted By:

Elizabeth Cabell
Finance Director
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

None.

12.1 City Council

AGENDA REPORT
DATE: 11/09/2023
AGENDA OF: 11/14/2023
DEPARTMENT: Planning and Community Development
SUBJECT: Consideration to Add a Single-Family Residence Located at 118 Ortalon Circle in the R-1-10 (Single-Family Residence) Zone District to the City's Historic Building Survey. (Environmental Determination: Not a Project Subject to CEQA (Sec. 15061(b)(3), General Rule/Common Sense Exemption)) Owners: Michael and Rachel Lewis, Filed 8/9/2023 (PL) RECOMMENDATION: Resolution adding the residence located at 118 Ortalon Circle to the City's Historic Building Survey, based on the noted findings.

BACKGROUND: The subject site is a 176,483 square foot lot located on the northern end of Ortalon Circle. The site is currently developed with a single-family home and is surrounded by single-family homes to the east, south, and west and borders the Pogonip open space to the north.

On June 7, 2023, the Zoning Administrator approved a Minor Land Division, Large Home Design Permit, and Heritage Tree Removal Permit to divide a 176,483 square foot lot with an existing single family home into four lots, to remove 15 heritage trees, and to construct a new home exceeding 4,000 square feet on one of the new lots on the subject site.

The approved project included preservation of the existing house on one of the proposed lots (labeled Lot 3 in the Tentative Subdivision Map), which was constructed in 1954, and remains in largely unaltered condition, with
no substantial additions or
alterations. Based on the attached
historic assessment prepared by
Seth Bergstein of Past
Consultants, dated June 20, 2021,
the residence is eligible for listing
on the California Register of
Historic Resources under Criteria
2 (Associations with significant
persons) and 3 (Associations with
significant architecture and/or
design). The project permit CP21-0160 included as Attachment Condition of Approval No. 24 requires the existing house to be considered by the Historic Preservation for listing on the City’s Historic Building Survey prior to approval of the parcel map. The designation to the City's Historic

13.1 Building Survey will apply only to the proposed Lot 3, which contains the historic home. The historic designation will not apply to the entirety of the 176,483 square foot lot to be subdivided.

Following recordation of the final map for the minor land division, the Historic Building Survey will be updated to reflect the new APN assigned to Lot 3, containing the historic house.

On October 18, 2023, the Historic Preservation Commission (HPC) reviewed the nomination to add 118 Ortalon Circle to the city’s Historic Building Survey and recommended that the property be listed by a vote of 5-0, with two commissioners absent. The agenda report and action summary from the October 18th HPC meeting are included as attachments.

DISCUSSION:

California Register of Historical Resources. The attached historic assessment and associated DPR523 forms prepared by Past Consultants evaluated the property’s eligibility for listing on the California Register of Historical Resources, and found the property to be eligible for listing under Criteria 2 and 3, as summarized below:
 CR-2: Association with significant persons. The subject property is associated with Norman S. and Margaret S. Lezin, who owned and operated one of the most successful tannery businesses in the United States. Additionally, Norman S. Lezin influenced the Santa Cruz area as city councilmember, mayor and civic leader in other institutions while residing in the subject property. The subject property is significant under California Register Criterion 2.
 CR-3: Association with significant architecture and/or design. The subject property contains a Second Bay Region/California Ranch-style house designed by master architect Joseph Esherick. The subject house was constructed early in Esherick’s career and represents the architect’s use of Japanese architecture and space planning, combined with Esherick’s modular construction methodology expressed in wood.

Santa Cruz Historic Building Survey. Section 24.12.440 of the Santa Cruz Municipal Code establishes procedures and criteria to add or remove a property from the Santa Cruz Historic Building Survey. Subsection (2)(a) authorizes the City Council to adopt a resolution amending the Historic Building Survey by either adding or deleting buildings or properties following a recommendation by the Historic Preservation Commission (HPC), based on consistency with required criteria established in subsection (c). Any action taken by the HPC or City Council to amend the City’s Historic Survey shall occur at a duly noticed public hearing.

City of Santa Cruz Historic Building Survey – Listing Criteria The attachments historic assessment and associated DPR523 forms were prepared by Past Consultants evaluate the residence’s eligibility for listing on the City of Santa Cruz Historic Building Survey, and find the residence to be eligible for listing based on Citeria 1, 3, 4, 5, 6, and 7 of Section 24.12.440(2)(c), as summarized below. Aside from compliance with the below criteria, there are no additional findings that must be made in order to list a property.

The property is either a building, site, or object that is:
 Criterion 1. Recognized as a significant example of the cultural, natural, archaeological, or built heritage of the city, state, or nation: The subject property

13.2 contains an intact example of master architect Joseph Esherick’s early Second Bay Region/California Ranch-style designs and is a significant example of the built heritage of Santa Cruz and California.
 Criterion 3. Associated with a person or persons who significantly contributed to the development of the city, state, or nation: The subject property is associated with the work of Norman S. and Margaret S. Lezin, who both had significant occupational and civic contributions to the Santa Cruz region.
 Criterion 4. Associated with an architect, designer, or builder whose work has influenced the development of the city, state, or nation: The subject residence is associated with the work of master architect Joseph Esherick whose work has influenced the development of the Santa Cruz region and the state of California.  Criterion 5. Recognized as possessing special aesthetic merit or value as a building with quality of architecture and that retains sufficient features showing its architectural significance: The house on the subject property is an intact example of a Joseph Esherick-designed house, displaying Second Bay Region/California Ranch-stylistic details in excellent condition, giving it aesthetic merit.  Criterion 6. Recognized as possessing distinctive stylistic characteristics or workmanship significant for the study of a period, method of construction, or use of native materials: The subject house possesses distinctive stylistic characteristics, representing the Esherick’s use of Japanese architecture and space planning, combined with modular construction methodology expressed in wood.  Criterion 7. Retains sufficient integrity to accurately convey its significance: The subject house retains all seven aspects of historic integrity: Location, Design, Setting, Workmanship, Materials, Feeling and Association.

CEQA Review. California Environmental Quality Act Section 15061(b)(3) establishes that a project or activity is exempt from CEQA where it can be seen with certainty that there is no possibility that the project or activity in question may result in a significant effect on the environment. The act of listing an existing building on a historic register has no possibility of having a significant effect on the environment, therefore the project is exempt from CEQA.

Summary. The property at 118 Ortalon Circle contains a largely unchanged residence that is historically significant based on its architectural features and associations with significant persons within Santa Cruz’s history. The property is anticipated to be eligible for listing on the California Register of Historical Resources and is consistent with six out of the seven criteria for listing on the City’s Historic Survey. Therefore, staff recommends that the City Council adopt a resolution of the City of Santa Cruz to add the property located at 118 Ortalon Circle to the City's Historic Building Survey.

FISCAL IMPACT: None.

13.3 Prepared By:

Brittany Whitehill
Senior Planner
Submitted By:

Lee Butler
Planning and Community
Development Director
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. RESOLUTION

2. CONDITION OF APPROVAL NO. 24.PDF

3. OCTOBER 18, 2023 HISTORIC PRESERVATION COMMISSION AGENDA REPORT.PDF

4. OCTOBER 18, 2023 HISTORIC PRESERVATION COMMISSION MEETING ACTION SUMMARY.PDF

5. HISTORIC ASSESSMENT FOR 118 ORTALON CIRCLE, BY SETH BERGSTEIN OF PAST CONSULTANTS LLC.PDF

6. LIST OF PROPERTIES IN VOLUME III HISTORICAL BUILDING SURVEY BY ADDRESS, WITH OPT-OUTS INDICATED.PDF

13.4 RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ

ACKNOWLEDGING THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)

DETERMINATION AND AMENDING THE CITY OF SANTA CRUZ HISTORIC BUILDING SURVEY TO ADD THE RESIDENCE LOCATED AT 118 ORTALON CIRCLE, ON A SITE IN THE R-1-10 ZONE DISTRICT (APPLICATION NO. CP23-0125)
WHEREAS, on August 9, 2023, Charles Eadie, applicant for property located at 118 Ortalon Circle, also known as Assessor’s Parcel Numbers 001-161-22 (“applicant”), has nominated the property to be listed on the City of Santa Cruz Historic Building Survey, on behalf of the current property owners, Michael and Rachel Lewis; and WHEREAS, the property at 118 Ortalon Circle contains a largely unchanged residence that is historically significant based on its architectural features and associations with significant persons within Santa Cruz’s history; the property is anticipated to the eligible for listing on the California Register of Historical Resources, is consistent with six out of the seven criteria for listing on the City’s Historic Building Survey, and listing the property on the Santa Cruz Historic Building Survey would be consistent with the City’s historic preservation policies set forth in the municipal code and the Cultural Resources Element of the General Plan; and
WHERAS, the act of listing the property on the City’s Historic Building Survey is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA Guidelines (“Common Sense” Exemption), as described fully in the staff report; and

WHEREAS, the Historic Preservation Commission conducted a duly noticed public hearing on October 18, 2023 to consider the potential listing and by a vote of 5-0 with two commissioners absent, made a recommendation of to the City Council to list the property on the City of Santa Cruz Historic Building Survey; and
WHEREAS, the City Council conducted a duly noticed public hearing on November 14, 2023 to consider the nomination and the full public record; and WHEREAS, the City Council now makes the following findings:

FINDINGS
With regard to the Environmental Determination
The decision-making body has considered the CEQA Exemption and finds that there is no substantial evidence that the project will have a significant impact on the environment and that the act of amending the City of Santa Cruz Historic Building Survey to add the property at 118 Ortalon Circle is exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines (“Common Sense” Exemption).

13.5 With regard to the Amendment of the City Hstoric Survey, Section 24.12.440 (2) The decision-making body determines that the property is eligible to be listed on the City of Santa Cruz Historic Building Survey based on Citeria 1, 3, 4, 5, 6, and 7 of Section 24.12.440(2)(c) of the Santa Cruz Municipal Code, as described below. Aside from compliance with the below criteria, there are no additional findings that must be made in order to list a property.

The property is either a building, site, or object that is:
 Criterion 1. Recognized as a significant example of the cultural, natural, archaeological, or built heritage of the city, state, or nation; and/or The subject property contains an intact example of master architect Joseph Esherick’s early Second Bay Region/California Ranch-style designs and is a significant example of the built heritage of Santa Cruz and California.
 Criterion 3. Associated with a person or persons who significantly contributed to the development of the city, state, or nation; and/or
The subject property is associated with the work of Norman S. and Margaret S. Lezin, who both had significant occupational and civic contributions to the Santa Cruz region.  Criterion 4. Associated with an architect, designer, or builder whose work has influenced the development of the city, state, or nation; and/or The subject property is associated with the work of master architect Joseph Esherick whose work has influenced the development of the Santa Cruz region and the state of California.  Criterion 5. Recognized as possessing special aesthetic merit or value as a building with quality of architecture and that retains sufficient features showing its architectural significance; and/or
The house on the subject property is an intact example of a Joseph Esherick-designed house, displaying Second Bay Region/California Ranch-stylistic details in excellent condition, giving it aesthetic merit.
 Criterion 6. Recognized as possessing distinctive stylistic characteristics or workmanship significant for the study of a period, method of construction, or use of native materials; and/or
The subject house possesses distinctive stylistic characteristics, representing the Esherick’s use of Japanese architecture and space planning, combined with modular construction methodology expressed in wood.
 Criterion 7. Retains sufficient integrity to accurately convey its significance; and/or The subject house retains all seven aspects of historic integrity: Location, Design, Setting, Workmanship, Materials, Feeling and Association.

13.6 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Cruz that it hereby acknowledges the CEQA determination and amends the City of Santa Cruz Historic Building Survey to add the property located at 118 Ortalon Circle. The listing shall apply exclusively to Lot 3 of the approved Tentative Map associated with Planning Application No.

CP21-0160.

PASSED AND ADOPTED this 14th day of November 2023, by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: ______________________
Fred Keeley, Mayor
ATTEST: _________________________
Bonnie Bush, City Clerk Administrator

13.7 EXHIBIT "A"

CONDITIONS OF APPROVAL FOR THE PROJECT ON PROPERTY AT
118 Ortalon Circle – CP21-0160
Minor Land Division, Large Home Design Permit, and Heritage Tree Removal Permit to divide a 176,483 square foot lot with an existing single family home into four lots with a modification to minimum lot size for two lots, to remove 15 heritage trees, and to construct a new home exceeding 4,000 square feet on one of the new lots on a site in the R-1-10 (Single-Family Residence - 10,000 sq. ft. min) zone district. (Environmental Determination: Exempt pursuant to CA Public Resources Code Section 21083.3/CEQA Guidelines Section 15183)
P:\_Public\PACKETS\2023\ZA\6-7-23\2. PROJECT - 118 Ortalon Circle - CP21-0160\Ortalon Cir 118 CP21-0160 COA.docx General:

1. If one or more of the following conditions is not met with respect to all its terms, then this approval may be revoked.

2. All plans for future construction which are not covered by this review shall be submitted to the City Planning and Community Development Department for review and approval.

3. The Design Permit and Heritage Tree Removal Permit shall be exercised within three (3) years of the date of final approval or it shall become null and void. When a building permit is required, a zoning permit shall be considered exercised following the issuance of a valid building permit.

When only an occupancy permit is required, a zoning permit shall be considered exercised when the occupancy permit is issued.

4. The Minor Land Division permit shall be exercised within twenty-four (24) months of the date of final approval, unless extended by city ordinance or state law, or it shall become null and void.

5. The applicant shall be responsible for the completeness and accuracy of all forms and supporting material submitted in connection with any application. Any errors or discrepancies found therein may result in the revocation of any approval or permits issued in connection therewith.

6. All final working drawings shall be submitted to the Zoning Administrator for review and approval in conjunction with building permit application. The plans submitted for building permits shall have the same level of articulation, detailing, and dimensionality as shown in the approved plans. All approved exterior finishes and materials shall be clearly notated on the building permit plans.

7. The applicant and contractor who obtains a building permit for the project shall be required to sign the following statement at the bottom of these conditions, which will become conditions of the building permit:
“I understand that the subject permit involves construction of a building (project) with an approved Design Permit. I intend to perform or supervise the performance of the work allowed by this permit in a manner which results in a finished building with the same level of detail, articulation, and dimensionality shown in the plans submitted for building permits. I hereby acknowledge that failure to construct the building as represented in the building permit plans, may result in delay of the inspections process and/or the mandatory reconstruction or alteration of any portion

13.8 CONDITIONS OF APPROVAL
For 118 Ortalon Circle – CP21-0160
P:\_Public\PACKETS\2023\ZA\6-7-23\2. PROJECT - 118 Ortalon Circle - CP21-0160\Ortalon Cir 118 CP21-0160 COA.docx of the building that is not in substantial conformance with the approved plans, prior to continuation of inspections or the building final.”
Signature of Building Contractor Date

8. The development of the site shall be in substantial accordance with the approved plans submitted and on file in the Department of Planning and Community Development of the City of Santa Cruz. All aspects of construction must be completed prior to occupancy. Major modifications to plans or exceptions to completion may be granted only by the City authority which approved the project.

9. All requirements of the Building, Fire, Public Works and Water Departments shall be completed prior to occupancy and continuously maintained thereafter.

10. All utilities and transformer boxes shall be placed underground in accordance with the provisions of Section 24.12.700 through 24.12.740 of the Zoning Ordinance.

11. Construction activity resulting in a land disturbance of one acre or more, or less than one acre but part of a larger common plan of development or sale must obtain the Construction Activities Storm Water General Permit (2009-0009-DWQ Permit). Construction activity includes clearing, grading, excavation, stockpiling, and reconstruction of existing facilities involving removal and replacement. Construction activity does not include routine maintenance such as, maintenance of original line and grade, hydraulic capacity, or original purpose of the facility.

12. The applicant shall dedicate to the City of Santa Cruz, that portion of the subject property which is necessary for street widening or other purposes, as determined by the Department of Public Works.

13. In accordance with the State Subdivision Map Act, the Zoning Administrator has imposed the requirements associated with the parcel map, because it finds that such construction is necessary for reasons of public health and safety and/or because the required construction is a necessary prerequisite to the orderly development of the surrounding area.

14. The property owner and/or project applicant agree(s) as a condition and in consideration of the approval of this discretionary development permit that it will, pursuant to agreement and/or statutory provisions as applicable, including but not limited to Government code Section 66474.9, defend, indemnify and hold harmless the City of Santa Cruz or its agents, officials, officers and employees from any claim, action or proceeding against the City or its agents, officials, officers or employees to attack, set aside, void or annul this approval, which action is brought within the time period provided for under law, including but not limited to, Government Code Section 66499.37, as applicable. The property owner and/or project applicant will reimburse the City for any court costs and attorney’s fees, which the City may be required by a court to pay as a result of such action. City may, at its sole discretion, participate in the defense of such action; but such participation shall not relieve the property

13.9 CONDITIONS OF APPROVAL
For 118 Ortalon Circle – CP21-0160
P:\_Public\PACKETS\2023\ZA\6-7-23\2. PROJECT - 118 Ortalon Circle - CP21-0160\Ortalon Cir 118 CP21-0160 COA.docx owner and/or project applicant of these obligations under this condition. An agreement to this effect shall be recorded upon demand of the City Attorney or concurrent with the issuance of building permits, use of the property, filing of the final map, whichever occurs first and as applicable. The City shall promptly notify the property owner and/or project applicant of any such claim, action or proceeding and the City shall cooperate fully in the defense thereof. If the City fails to promptly notify the property owner and/or project applicant of any such claim, action or proceeding or fails to cooperate fully in the defense thereof, the property owner and/or project applicant shall not thereafter be responsible to defend, indemnify or hold the City harmless.

15. The applicant shall follow all recommendations from the arborist report by Nigel Belton dated January 23, 2023.

16. This permit authorizes the removal of 15 heritage trees, including 12 trees due to poor condition (#52, 53c, 60, 64, 65, 67, 68, 69, 71, 77, 78, 79) as described in the arborist report by Nigel Belton dated January 23, 2023) and three trees impacted by construction of the private road improvements (Trees #20 and #21) and new house on Lot 4 (#53).

17. Development of the site shall follow all recommendations of the geotechnical report by Dees and Associates dated August 11, 2021.

Prior to parcel map approval:

18. A parcel map showing the original parcel and the parcels being created by the minor land division, with pertinent supporting data, shall be filed with the Planning Department with the appropriate recording fees as set by the County Recorder. Said parcel map shall be a reproducible tracing prepared by a licensed land surveyor or a registered civil engineer.

19. The applicant shall apply to the Public Works Department for the segregation of any and all existing assessment upon the subject property, at the time of submission of the parcel map.

20. Prior to recordation of the parcel map, the applicant shall submit improvement plans for review and approval as required by the Department of Public Works, or an improvement agreement shall be entered into with the City Council, together with the necessary improvement security as set forth in Chapter 23.24 of the Subdivision Ordinance. The plans shall include but not be limited to:
 Undergrounding of utilities.
 Installation or repair of curbs, gutters and sidewalks.  Streetlights as necessary along the project frontage.

21. The owner shall comply with the inclusionary housing requirements as outlined in Section

24.26.010 of the Zoning Ordinance. A Participation Agreement establishing compliance with inclusionary housing requirements shall be entered into prior to recordation of the final subdivision map and recorded prior to either sale of the first subdivision lot or final occupancy of the first unit, whichever occurs first.

13.10 CONDITIONS OF APPROVAL
For 118 Ortalon Circle – CP21-0160
P:\_Public\PACKETS\2023\ZA\6-7-23\2. PROJECT - 118 Ortalon Circle - CP21-0160\Ortalon Cir 118 CP21-0160 COA.docx

22. An HOA shall be formed to manage and maintain the common area parcel that includes the new private street. The applicant shall submit a copy of the CC&Rs with the parcel map application.

The CC&Rs shall be consistent with SCMC section 23.24.030.13(g)(1).

23. Prior to parcel map approval, the parcel map shall show replacement the number, location, species and size of replacement trees, or the applicant shall demonstrate payment of in-lieu fees, as required by the City Urban Forester, for the heritage trees to be removed related to the minor land division improvements. Replacement trees shall be provided at a ratio of one 24-inch box tree or three 15-gallon trees for each heritage tree to be removed.

24. Prior to parcel map approval, the applicant shall bring to a public hearing with the Historic Preservation Commission a review of the existing house to decide on whether to recommend listing the property on the Santa Cruz Historic Building Survey.

25. Prior to parcel map approval, the applicant shall submit a review letter from the geotechnical engineer referring to the final revision date of the parcel map and confirming that the parcel map and associated documentation are consistent with the geotechnical report recommendations for the private road construction.

Prior to building permit issuance:

26. A copy of the recorded deed of the new parcels shall be submitted to the Department of Planning and Community Development of the City of Santa Cruz.

27. Adequate provisions shall be made to supply water to each of the premises covered by this application. The design of water facilities shall be to standards of the Water Department, and plans therefore must be submitted to the Water Department Director for review and approval prior to the issuance of a building permit.

28. Plans submitted for building permit issuance shall show all exterior site lighting locations and fixture details. All exterior building lighting shall be shielded and contained in a downward direction. No exterior lighting shall produce off-site glare.

29. Landscape and irrigation plans shall be submitted at the time of the building permit application and will be reviewed by both the Planning Department and Water Department.

The landscape and irrigation plans shall demonstrate compliance with all requirements of the City’s Water-Efficient Landscaping Ordinance in Chapter 16.16 of the Santa Cruz Municipal Code prior to issuance of the building permit.

30. New single family and two-unit residential development projects on a parcel of land less than 10,000 square feet shall be required to meet only provisions listed in Section 16.16.070(j) of the Santa Cruz Municipal Code. These provisions include specifications on plant type, turf limits, spray irrigation setbacks, irrigation equipment and mulching requirements. Building plans shall contain references to these provisions showing that the conditions have been met.

31. A drainage plan shall be submitted in conjunction with application for building permits.

13.11 CONDITIONS OF APPROVAL
For 118 Ortalon Circle – CP21-0160
P:\_Public\PACKETS\2023\ZA\6-7-23\2. PROJECT - 118 Ortalon Circle - CP21-0160\Ortalon Cir 118 CP21-0160 COA.docx

32. Plans submitted for building permits shall demonstrate compliance with Stormwater Best Management Practice (BMP) and Low Impact Development (LID) requirements for single family residential dwelling projects contained in “Chapter 6 of the Best Management Practices Manual for the City’s Storm Water Management Program” dated October 2011. At a minimum, downspouts shall be disconnected from underground pipes or prohibited from directly flowing onto impervious surfaces and instead be redirected to landscaping or bioswales. Pervious walkway surfaces and driveways shall be installed where possible. Show all implemented LID measures on the plans.

33. The applicant shall be responsible for filing a Notice of Intent (NOI) with the State Regional Water Quality Control Board (RWQCB) and for developing a Storm Water Pollution Prevention Plan (SWPPP) prior to commencement of any soil disturbing activities at the site.

Prior to issuance of a building permit, the applicant shall provide the City with proof of coverage under the state’s Construction Activities Storm Water General Permit, including a copy of the letter of receipt and Waste Discharger Identification (WDID) number issued by the State Regional Water Quality Control Board (SWQCB) that acknowledges the property owner’s submittal of a complete Notice of Intent (NOI) package.

34. Final colors shall be approved by the Zoning Administrator prior to application for building permits.

35. Prior to the issuance of a building permit, the applicant shall pay the Park and Recreation Facility Tax pursuant to Chapter 5.72 of the City of Santa Cruz Municipal Code based on the final building permit plans.

36. Installation and testing of the sewer lines, water systems, and fire hydrants must also be conducted to satisfy the requirements of the Fire, Public Works, and Water Departments, prior to the issuance of building permits.

37. All street improvements, as required by the Public Works Department (i.e., curbs, gutters, sidewalks, paving, etc.), shall be completed prior to the issuance of further permits; and a bond shall be posted with the Public Works Department to secure construction of such street improvements.

38. Prior to approval of the first building permit on the new lots, the applicant shall demonstrate that the replacement trees have been planted for those heritage trees removed associated with private road construction.

39. Prior to building permit approval, the landscaping plan in the final building permit plans for the new house on Lot 4 shall show the number, location, species, and size of replacement trees, or the applicant shall demonstrate payment of in-lieu fees, as required by the City Urban Forester, for the heritage tree removals associated with construction of the house. Replacement trees shall be planted at a ratio of one 24-inch box tree or three 15-gallon trees for each heritage tree to be removed.

40. Prior to approval for the first building permit for any new lot, the applicant shall submit a review letter from the project arborist confirming all recommendations and replacement plantings

13.12 CONDITIONS OF APPROVAL
For 118 Ortalon Circle – CP21-0160
P:\_Public\PACKETS\2023\ZA\6-7-23\2. PROJECT - 118 Ortalon Circle - CP21-0160\Ortalon Cir 118 CP21-0160 COA.docx associated with the new private road and any associated common area improvements have been met.

41. Prior to approval of building permit for the first new house to be constructed on the new lots, the applicant shall submit a letter from the geotechnical engineer confirming that the private road has been constructed consistent with the recommendations from the geotechnical report.

42. Prior to approval of building permit for each new dwelling on the new parcels, the applicant shall submit a review letter from the geotechnical engineer referring to the final revision date of the building permit plans and confirming that the plans and associated documentation are consistent with the geotechnical report recommendations for new dwellings on the site.

43. Final building permit plans for the new single-family home on Lot 4 shall demonstrate consistency with the City of Santa Cruz Bird-Safe Building Design Standards.

During construction (private road or new structures):

44. If project site work occurs anytime between February 1 and August 31, the applicant shall submit documentation of a pre-construction nesting bird survey by a qualified biologist prior to the start of work. The survey shall be described in the biotic report prepared by Biotic Resources Group dated January 28, 2022 and shall be completed no more than seven days before the start of any project construction activities on the site (including tree removal, clearing, and excavation) and shall include observations of any nesting activities on the site. Site work may commence once the Planning Department has accepted the report and confirmed that there are no nesting birds on the site or that an appropriate buffer zone around any active nests has been recommended by the biologist and physically established on the site.

45. Prior to site grading or any disturbance all trees and/or tree stands indicated for preservation or approved plans shall be protected through fencing or other approved barricade. Such fencing shall protect vegetation during construction and shall be installed to the satisfaction of the Director of Planning and Community Development.

46. All refuse and recycling activities during construction shall be done in accordance with Chapter

6.12 of the Santa Cruz Municipal Code. Be aware that private companies offering refuse or debris box services are not allowed to operate within the City limits, except under certain limited circumstances detailed in Chapter 6.12.160.

47. Any person exercising a development permit or building permit who, at any time in the preparation for or process of excavating or otherwise disturbing earth, discovers any human remains of any age or any artifact or any other object which reasonably appears to be evidence of an archaeological/cultural resource or paleontological resource, shall:
a. Immediately cease all further excavation, disturbance, and work on the project site; b. Cause staking to be placed completely around the area of discovery by visible stakes not more than ten feet apart forming a circle having a radius of not less than one hundred feet from the point of discovery; provided, that such staking need not take place on adjoining property unless the owner of the adjoining property authorizes such staking;

13.13 CONDITIONS OF APPROVAL
For 118 Ortalon Circle – CP21-0160
P:\_Public\PACKETS\2023\ZA\6-7-23\2. PROJECT - 118 Ortalon Circle - CP21-0160\Ortalon Cir 118 CP21-0160 COA.docx c. Notify the Santa Cruz County sheriff-coroner and the city of Santa Cruz planning director of the discovery unless no human remains have been discovered, in which case the property owner shall notify only the planning director; d. Grant permission to all duly authorized representatives of the sheriff-coroner and the planning director to enter onto the property and to take all actions consistent with this section.

48. Grading shall be done during periods of dry weather and protective measures shall be incorporated during grading to prevent siltation from any grading project halted due to rain.

49. The removal of Heritage trees approved for removal specifically because of impacts associated with the new private road (Trees #20 and #21) shall be completed after parcel map approval.

50. The removal of Heritage tree #53 approved for removal specifically due to impacts associated with construction of the new dwelling on Lot 4 shall be completed after building permit issuance for that dwelling.

Prior to building permit final:

51. All landscaping shall be installed prior to final utility release or issuance of occupancy permits.

52. All trees shall be a minimum 15-gallon size.

53. All new mechanical equipment and appurtenances, including gas and water meters, electrical boxes, roof vents, air conditioners, antennas, etc. visible from the public way and from adjacent properties, shall be screened with material compatible with the materials of the building and shall be subject to the approval of the Zoning Administrator.

54. Prior to building permit final for the new house on Lot 4, the applicant shall submit a review letter from the project arborist confirming that all recommendations and replacement plantings associated with construction of the new house have been met.

55. Prior to building permit final for each new dwelling on the new lots, the applicant shall submit a letter from the geotechnical engineer confirming that the dwelling was constructed in accordance with the geotechnical report recommendations.

13.14 HISTORIC PRESERVATION COMMISSION

AGENDA REPORT
DATE: October 13, 2023
AGENDA OF: October 18, 2023
ITEM NO: CP23-0125 118 Ortalon Circle
RECOMMENDATION: That the Historic Preservation Commission recommend the City Council adopt a resolution adding the property located at 118 Ortalon Circle to the City's Historic Building Survey. based on the Findings listed below.

PROJECT DATA:

Property Owner: Michael and Rachel Lewis APN: 001-161-22 Applicant: Charles Eadie
Application Type: Consideration to add a single-family residence located at 118 Ortalon Circle in the R-1-10 (Single-Family Residence) zone district to the City's Historic Building Survey.

Zoning: R-1-10 (Single-Family Residence)
Project Consistency: The building possesses significant aesthetic, cultural, and architectural features of an historical nature and listing the building on the City’s Historic Building Survey would be consistent with the City’s historic preservation policies set forth in Section 24.12.400 of the municipal code.

General Plan: L (Low Density Residential)
Project Consistency: Listing the building on the City’s Historic Building Survey would support the historic preservation policies set forth in the Cultural Resources Element of the General Plan.

Land Use - existing: Single-Family Residence
- proposed: Single-Family Residence
- Surrounding: Single-Family Residences and Pogonip Open Space

13.15 2.1

AGENDA REPORT
HPC Meeting of October 18, 2023
SUBJECT: 118 Ortalon Circle
Project No. CP23-0125
PAGE 2
Environmental
Determination: The act of listing the property on the City's Historic Building Survey does not have the potential to result in impacts to the environment, therefore the consideration is not a project subject to CEQA (Sec. 15061(b)(3), General Rule/Common Sense Exemption).

Planning Staff: Brittany Whitehill, Senior Planner

PROJECT DESCRIPTION/BACKGROUND
The subject site is a 176,483 square foot lot located on the northern end of Ortalon Circle. The site is currently developed with a single-family home and is surrounded by single-family homes to the east, south, and west and borders the Pogonip open space to the north.

On June 7, 2023, the Zoning Administrator approved a Minor Land Division, Large Home Design Permit, and Heritage Tree Removal Permit to divide a 176,483 square foot lot with an existing single family home into four lots, to remove 15 heritage trees, and to construct a new home exceeding 4,000 square feet on one of the new lots on the subject site (CP21-0160).

The approved project included preservation of the existing house, which was constructed in 1954, and remains in a largely unaltered condition, with no substantial additions or alterations. Based on an historic assessment prepared by Seth Bergstein of Past Consultants, dated June 20, 2021 (Attachment 2), the residence is eligible for listing on the California Register of Historic Resources under Criteria 2 (Associations
with significant persons) and 3
(Associations with significant
architecture and/or design). The
project CP21-0160 included a
Condition of Approval No. 24 that
required the existing house to be
considered by the HPC for listing
on the City’s Historic Building
Survey prior to approval of the
parcel map.

ANALYSIS
California Register of Historical Resources
The historic assessment and associated DPR523 forms prepared by Past Consultants evaluated the property’s eligibility for listing on the California Register of Historical Resources, and found the property to be eligible for listing under Criteria 2 and 3, as summarized below and described in detail in Attachment 2:

Figure 1: Residence at 118 Ortalon Circle

13.16 2.2

AGENDA REPORT
HPC Meeting of October 18, 2023
SUBJECT: 118 Ortalon Circle
Project No. CP23-0125
PAGE 3
• CR-2: Association with significant persons. The subject property is associated with Norman S. and Margaret S. Lezin, who owned and operated one of the most successful tannery businesses in the United States. Additionally, Norman S. Lezin influenced the Santa Cruz area as city councilmember, mayor and civic leader in other institutions while residing in the subject property.
• CR-3: Association with significant architecture and/or design. The subject property contains a Second Bay Region/California Ranch-style house designed by master architect Joseph Esherick. The subject house was constructed early in Esherick’s career and represents the architect’s use of Japanese architecture and space planning, combined with Esherick’s modular construction methodology expressed in wood.

Santa Cruz Historic Building Survey
Section 24.12.440 of the Santa Cruz Municipal Code establishes procedures and criteria to add or remove a property from the Santa Cruz Historic Building Survey. Subsection (2)(a) authorizes the City Council to adopt a resolution amending the Historic Building Survey by either adding or deleting buildings or properties following a recommendation by the Historic Preservation Commission, based on consistency with required criteria established in subsection (c). Any action taken by the HPC or City Council to amend the City’s Historic Survey shall occur at a duly noticed public hearing.

City of Santa Cruz Historic Building Survey – Listing Criteria The historic assessment and associated DPR523 forms prepared by Past Consultants evaluated the property’s eligibility for listing on the City of Santa Cruz Historic Building Survey, and found the property to be eligible for listing based on Citeria 1, 3, 4, 5, 6, and 7 of Section 24.12.440(2)(c), as summarized below and described in detail in Attachment 2:

The property is either a building, site, or object that is:
• Criterion 1. Recognized as a significant example of the cultural, natural, archaeological, or built heritage of the city, state, or nation: The subject property contains an intact example of master architect Joseph Esherick’s early Second Bay Region/California Ranch-style designs and is a significant example of the built heritage of Santa Cruz and California.
• Criterion 3. Associated with a person or persons who significantly contributed to the development of the city, state, or nation: The subject property is associated with the work of Norman S. and Margaret S. Lezin, who both had significant occupational and civic contributions to the Santa Cruz region.
• Criterion 4. Associated with an architect, designer, or builder whose work has influenced the development of the city, state, or nation: The subject property is

13.17 2.3

AGENDA REPORT
HPC Meeting of October 18, 2023
SUBJECT: 118 Ortalon Circle
Project No. CP23-0125
PAGE 4
associated with the work of master architect Joseph Esherick whose work has influenced the development of the Santa Cruz region and the state of California. • Criterion 5. Recognized as possessing special aesthetic merit or value as a building with quality of architecture and that retains sufficient features showing its architectural significance: The house on the subject property is an intact example of a Joseph Esherick-designed house, displaying Second Bay Region/California Ranch-stylistic details in excellent condition, giving it aesthetic merit. • Criterion 6. Recognized as possessing distinctive stylistic characteristics or workmanship significant for the study of a period, method of construction, or use of native materials: The subject house possesses distinctive stylistic characteristics, representing the Esherick’s use of Japanese architecture and space planning, combined with modular construction methodology expressed in wood. • Criterion 7. Retains sufficient integrity to accurately convey its significance: The subject house retains all seven aspects of historic integrity: Location, Design, Setting, Workmanship, Materials, Feeling and Association.

CEQA Review
California Environmental Quality Act Section 15061(b)(3) establishes that a project or activity is exempt from CEQA where it can be seen with certainty that there is no possibility that the project or activity in question may result in a significant effect on the environment.

The act of listing an existing building on a historic register has no possibility of having a significant effect on the environment, therefore the project is exempt from CEQA.

SUMMARY
The property at 118 Ortalon Circle contains a largely unchanged residence that is historically significant based on its architectural features and associations with significant persons within Santa Cruz’s history. The property is anticipated to be eligible for listing on the California Register of Historical Resources and consistent with six out of the seven criteria for listing on the City’s Historic Survey. Therefore, staff recommends that the Historic Preservation Commission recommend the City Council adopt a resolution to add the property located at 118 Ortalon Circle to the City's Historic Building Survey.

Submitted by:

Brittany Whitehill
Senior Planner
Attachments:

13.18 2.4

AGENDA REPORT
HPC Meeting of October 18, 2023
SUBJECT: 118 Ortalon Circle
Project No. CP23-0125
PAGE 5

1. Draft Resolution to amend the Circle City of Santa Cruz Historic Building Survey to add the property at 118 Ortalon Circle

2. Historic Assessment for 118 Ortalon Circle, Santa Cruz, CA – APN. 001-16-122, prepared by Seth Bergstein of PAST Consultants LLC

13.19 2.5

CITY OF SANTA CRUZ
City Hall
809 Center Street
Santa Cruz, California 95060

HISTORIC PRESERVATION COMMISSION
Regular Meeting

ACTION SUMMARY
October 18, 2023
7:00 P.M. GENERAL BUSINESS AND MATTERS OF PUBLIC INTEREST, COUNCIL

CHAMBERS
Call to Order-The meeting was called to order at 7:00 p.m.

Roll Call-Commissioners Durant, Kusz, Michalak, and Zwart were present.

Commissioners Lauritson and Narath were absent with notification.

Statements of Disqualification-None.

Oral Communications-None.

Approval of Minutes

1. Approval of the Minutes of September 20, 2023.

MOTION: Motion made by Commissioner Michalak, seconded by Commissioner Zwart to approve the minutes of September 20, 2023.

ACTION: The motion passed by the following vote:

AYES: Durant, Kusz, Michalak, Zwart, Subocz
NOES: None
ABSENT: Lauritson, Narath
Consent Public Hearing Agenda

2. 118 Ortalon Circle Project Number: CP23-0125 Consideration to add a singlefamily residence located at 118 Ortalon Circle in the R-1-10 (Single-Family Residence) zone district to the City's Historic Building Survey.

13.20 MOTION: Motion made by Commissioner Zwart, seconded by Commissioner Michalak, to the City Council adopt a resolution adding the property located at 118 Ortalon Circle to the City's Historic Building Survey. based on the Findings listed in the staff report dated October 13, 2023.

ACTION: The motion passed by the following vote:

AYES: Durant, Kusz, Michalak, Zwart, Subocz
NOES: None
ABSENT: Lauritson, Narath

3. 1020 River Street Project Number: CP21-0080 Historic Alteration Permit for a new 5,400 square foot dance studio building at the Tannery Arts Center in the IG/PER / FP-O (General Industrial Performance Overlay Zone / Flood Plain Overlay) zone district.

MOTION: Motion made by Commissioner Kusz, seconded by Commissioner Durant, to approve the Historic Alteration Permit based on the Findings listed below and the Conditions of Approval attached as Attachment 1 of the staff report dated October 11, 2023.

ACTION: The motion passed by the following vote:

AYES: Durant, Kusz, Michalak, Zwart, Subocz
NOES: None
ABSENT: Lauritson, Narath
Public Hearings

4. Revised Santa Cruz Wharf Master Plan and Environmental Determination (FEIR – Volume 2) Project Number: AP20-0010 (continued from September 20, 2023, item 6)
MOTION: Motion made by Commissioner Michalak, seconded by Commissioner Kusz to add the following language to the Historic Preservation Commission Wharf Master Plan Subcommittee Recommendations dated October 6, 2023 (additions noted in underlined text):

The Historic Preservation Commission recommends that City Council consider the following points in its review and adoption of the Wharf Master Plan and related certification of the accompanying Final Environmental Impact Report and adoption of related CEQA Findings and Mitigation Monitoring Program:

The Historic Preservation Commission (HPC) recommends the following language regarding development review on the historic Wharf, and the proposed Western Walkway.

13.21 Development Review
All development on the Wharf is subject to either an Administrative Historic Alteration Permit or an Historic Alteration Permit in accordance with historic alteration permit requirements applicable to other historic sites in the City.

Administrative Historic Alteration Permits are reviewed and approved by staff without Commission review. Historic Alteration Permits require review and approval by the HPC during a public hearing. For the Landmark Building, the Events Pavilion and the Gateway Building, the applicant shall gather input from the HPC and a consulting historic architect as early as possible in the design process. Changes to a property that have acquired historic significance in their own right shall be retained and preserved.

Western Walkway
The proposed Western Walkway should not be constructed because it will have a significant impact on the iconic view of the Wharf from West Cliff Drive. This is the only remaining view of the Wharf that dates to the period of significance, which has been identified as 1914-1964. This view not only shows the structural components of the wharf, but it also emphasizes the end of the Wharf which is bent to the west creating the hallmark L-shape, part of the original design.

ACTION: The motion passed by the following vote:

AYES: Durant, Kusz, Michalak, Zwart, Subocz
NOES: None
ABSENT: Lauritson, Narath
MOTION: Motion made by Commissioner Kusz, seconded by Commissioner Michalak, to reject the staff recommendations listed in the staff report dated October 12, 2023.

ACTION: The motion passed by the following vote:

AYES: Durant, Kusz, Michalak, Zwart, Subocz
NOES: None
ABSENT: Lauritson, Narath
MOTION: Motion made by Commissioner Kusz, seconded by Commissioner Michalak, to adopt and incorporate the following language with regard to the Western Walkway into the HPC Wharf Master Plan Subcommittee’s report dated October 6, 2023:

The addition of the 815-foot, Western Walkway would significantly compromise the integrity of Master Engineer, Henry John Brunnier’s unique design. The proposed lengthy, highly visible walkway would degrade the visual character of the wharf by introducing an appendage to the wharf that is incompatible with its original historic design. The proposed walkway

13.22 would cause a substantial adverse change to the visual character of the 109- year-old Santa Cruz Wharf, the longest wooden pier structure in California.

Appendix F: Historical Resources Reviews, part of the Santa Cruz Wharf Master Plan Draft EIR, March 2020, includes three separate analyses of the wharf’s history. All of these reports address the design elements of the Santa Cruz Wharf indicating that the structure retains integrity of design in addition to other aspects of integrity as determined by the Secretary of the Interior. These reports are unequivocal.
1) “The structure retains integrity of location and overall design, workmanship, feeling and association.”, Maley, Bridget, Principal, architecture+history, llc., Memorandum, Santa Cruz Wharf Master Plan, September 26, 2017, p. 8.
2) “Integrity Discussion …the Santa Cruz Wharf appears to retain a high degree of integrity of setting, and location, and sufficient degree of design, materials, workmanship, feeling, and association.” DPR 523, Santa Cruz Municipal Wharf, Steffen, Fallin, Dudek, November 19, 2019. p. 10. 3) “While many of the original materials, both above and below deck, have been replaced over time in order to maintain the Municipal Wharf as a functioning structure (and, as such, lacks integrity of materials and workmanship), the Wharf does maintain its integrity of location, design, setting, feeling, and association.” DPR 523, Santa Cruz Municipal Wharf, URS Corporation, December 10, 2012, p. 4 of 12.,
ACTION: The motion passed by the following vote:

AYES: Durant, Kusz, Michalak, Subocz
NOES: Zwart
ABSENT: Lauritson, Narath
MOTION: Motion made by Commissioner Kusz, seconded by Commissioner Durant, to forward the HPC Wharf Master Plan Subcommittee’s report n as amended above to the City Council as the recommendation of the Historic Preservation Commission for the Wharf Master Plan item.

ACTION: The motion passed by the following vote:

AYES: Durant, Kusz, Michalak, Subocz
NOES: Zwart
ABSENT: Lauritson, Narath
Information Items

5. Update on 106 Manor

13.23 Associate Planner Rina Zhou presented the update to the Commission. No action taken.

6. Update on 555 Soquel Retaining Wall
Item continued to the next regular meeting.

Subcommittee/Advisory Body Oral Reports-None.

Items Initiated by Members for Future Agendas-None.

Adjournment-The meeting adjourned at 9:54 p.m.

13.24 P.O. Box 721
Pacific Grove, CA 93950
www.pastconsultants.com
Seth A. Bergstein
415.515.6224
[email protected]
________________________________________________________________________________ June 20, 2021
Jim Larson
Email: [email protected]
Re: Historic Assessment for 118 Ortalon Circle, Santa Cruz, CA APN. 001-16-122
Dear Mr. Larson:

This letter presents the results of our intensive historic assessment of the property located at 118 Ortalon Circle, in Santa Cruz, CA. The attached DPR523 forms provide the formal assessment of the subject property and conclusions of historic significance.

The subject property contains the Norman Lezin House, constructed circa-1954 in the California Ranch/Second Bay Region styles. Our intensive survey concludes that the house on the subject property qualifies as an individual historic resource under California-register Criterion 1 for its association with prominent Santa Cruz businessman and public servant, Norman S. Lezin; and Criterion 3, under the category of architecture as an intact and representative example of the work of noteworthy architect Joseph Esherick. The house retains nearly all of its intact character-defining features and maintains all seven aspects of historic integrity.

Please see the attached DPR523 forms for detailed property description, list of character defining features and evaluation of historic significance.

Please contact me if you have any questions about this evaluation.

Sincerely,
Seth A. Bergstein, Principal

13.25 State of California ⎯ The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI #
PRIMARY RECORD Trinomial
NRHP Status Code
Other Listings
Review Code Reviewer Date

P1. Other Identifier:
*P2. Location: p Not for Publication nUnrestricted *a. County: Santa Cruz and (P2b and P2c or P2d. Attach a Location Map as necessary.) *b. USGS 7.5' Quad: N/A Date: N/A T ; R ; ¼ of ¼ of Sec ; M.D. B.M. c. Address: 118 Ortalon Circle City: Santa Cruz Zip: 95060 d. UTM: Zone: 10 ; mE/ mN (G.P.S.)
e. Other Locational Data: (e.g., parcel #, directions to resource, elevation, etc., as appropriate) Elevation: A.P.N. 001-161-22 *P3a. Description: (Describe resource and its major elements. Include design, materials, condition, alterations, size, setting, and boundaries) Located on a 4.9-acre property surrounded by woodlands, the Lezin House is a wood-framed residence designed by Joseph Esherick in a hybrid California Ranch/Second Bay Region style. El-shaped in plan, the house resembles a Japanese pavilion, with an attached garage on the south elevation, connected to the living quarters by an engawa (veranda) with a wood-slatted Japanese screen serving as the connecting element. The garage’s south elevation contains a floor-to-ceiling window that also harkens to Japanese design. The primary entrance is through a simple wood door to the east of the engawa. The house has gable roofs with exposed beams and wide fasciae. The east elevation features a wall of glass in the living-room gable end and a northeast corner window. The north elevation features a wide brick chimney and bank of wood-framed windows facing the wooded view.

Fenestration consists of wood-framed, fixed and casement windows. Wood shingles and replaced wood shakes finish the walls and roof, respectively. See continuation sheet, page 3 for photographs (Figures 1 – 6). *P3b. Resource Attributes: (List attributes and codes) HP2 *P4. Resources Present: nBuilding oStructure oObject oSite oDistrict oElement of District oOther (Isolates, etc.) P5b. Description of Photo: (View, date, accession #) Front (south and west) elevations, 2021 *P6. Date Constructed/Age and Sources:
nHistoric
oPrehistoric oBoth
1954: Assessor Records
*P7. Owner and Address:

Jim  Larson
118  Ortalon  Circle
Santa  Cruz,  CA  95060
*P8. Recorded by: (Name, affiliation, and address)
PAST Consultants, LLC
P.O. Box 721
Pacific Grove, CA 93950
*P9. Date Recorded: 6/16/21
*P10. Survey Type: (Describe)
Owner Requested

*P11. Report Citation: None
*Attachments: oNONE oLocation Map oSketch Map nContinuation Sheet nBuilding, Structure, and Object Record oArchaeological Record oDistrict Record oLinear Feature Record oMilling Station Record oRock Art Record oArtifact Record oPhotograph Record o Other (List):

DPR 523A (1/95) *Required information
P5a. Photo or Drawing (Photo required for buildings, structures, and objects.)

13.26 DPR 523B (1/95) *Required information
State of California ⎯ The Resources Agency Primary #
DEPARTMENT OF PARKS AND RECREATION HRI#

BUILDING, STRUCTURE, AND OBJECT RECORD

*Resource Name or # (Assigned by recorder) 118 Ortalon Circle B1. Historic Name: Norman Lezin House
B2. Common Name:

B3. Original Use: Residential B4. Present Use: Residential *B5. Architectural Style: California Ranch/Second Bay Region *B6. Construction History: (Construction date, alterations, and date of alterations) The building was completed in 1954. It remains in largely unaltered condition, with no substantial additions or alterations. *B7. Moved? nNo oYes oUnknown Date: Original Location: Same *B8. Related Features: N/A
B9a. Architect: Joseph Esherick b. Builder: Unknown
*B10. Significance: Theme: Residential Architecture Area: Santa Cruz Period of Significance: 1954 Property Type: House Applicable Criteria: Local (Discuss importance in terms of historical or architectural context as defined by theme, period, and geographic scope. Also address integrity.) See continuation sheet, pages 4 - 11.

B11. Additional Resource Attributes: (List attributes and codes) *B12. References:

See continuation sheet, page 12.

B13. Remarks:

*B14. Evaluator: PAST Consultants, LLC

*Date of Evaluation: 6/16/21

(This space reserved for official comments.)

13.27 State of California ⎯ The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI#
CONTINUATION SHEET Trinomial

*Recorded by: PAST Consultants, LLC *Date: 6/16/21 n Continuation o Update DPR 523L (1/95) *Required information
P3a. Description: Photographs

Figure 1. Garage and Japanese veranda, south elevation. Figure 2. Looking east through veranda toward entrance.

Figure 3. Rear (east) elevation, taken from southeast corner. Figure 4. Rear (north) elevation at living room.

Figure 5. Rear (north) elevation, showing Japanese screen. Figure 6. West elevation at garage, showing glazing resembling. that connects the main house to the garage. a Japanese Shoji screen.

13.28 State of California ⎯ The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI#
CONTINUATION SHEET Trinomial

*Recorded by: PAST Consultants, LLC *Date: 6/16/21 n Continuation o Update DPR 523L (1/95) *Required information
B10. Significance: Significance Statement
Postwar Development in the Project Area
The introduction to Volume One of the Santa Cruz Historic Building Survey notes the changing nature of economics in Santa Cruz following World War II. Returning servicemen and women and the subsequent baby boom would increase the city’s population significantly: the city had 14,395 residents in 1930. By 1960, the city population nearly doubled to 25,596 citizens. With the nature of tourism changing and the substantial demand for new housing for the returning servicemen and servicewomen, the major economic forces driving the built character of the city was the growth of government, the construction of new freeways and the resulting urban redevelopment, and the development of the University of California, which opened in 1965.

Residential development in the project vicinity developed slowly after World War II, with much of the construction utilizing the principles of postwar suburbanization: the laying out of subdivisions with more generous lot sizes, the emphasis on the automobile for access to the homes, and the popularization of the California Ranch style, whose sprawling horizontal lines – many with attached garages – were suitable to the suburban development. The Meadow Park, Track #143 subdivision, in which the subject property resides, was developed in 1954. The homes within the track resemble the common variants of the California Ranch style, with sprawling horizontal lines, gable roofs, attached garages, stucco or wood siding and relatively little or no ornamentation (Figure 7).

Figure 7. Parcel map showing the subject property with an arrow.

13.29 State of California ⎯ The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI#
CONTINUATION SHEET Trinomial

*Recorded by: PAST Consultants, LLC *Date: 6/16/21 n Continuation o Update DPR 523L (1/95) *Required information
B10. Significance: Significance Statement (continued)
Development of the Subject Property
Norman S. and Margaret Salz Lezin moved to Santa Cruz in 1948, with Norman taking a position in the A.K. Salz Tannery, owned and operated by his wife’s father, Ansley K. Salz, who became sole owner of the business in 1929. The couple resided at 410 13th Street, in Santa Cruz at this time, but in 1953 they hired notable architect Joseph Esherick to design a home on a newly-purchased 4.9-acre site north of downtown Santa Cruz, nestled in the wooded foothills of the Meadow Subdivision. The drawings were completed by 1954, shown below (Figures 8 and 9).

Figure 8. Scan of original elevation drawings by Joseph Esherick (Courtesy: Jim Larson, owner).

13.30 State of California ⎯ The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI#
CONTINUATION SHEET Trinomial

*Recorded by: PAST Consultants, LLC *Date: 6/16/21 n Continuation o Update DPR 523L (1/95) *Required information
B10. Significance: Significance Statement (continued)
Development of the Subject Property
The drawings were completed by 1954 building plan appears below (Figure 9).

Figure 9. Scan of original plan drawings by Joseph Esherick (Courtesy: Jim Larson, owner).

Comparison of the drawings with the existing building reveals that the project was completed largely as designed, with the exception of a row of skylights that appear above the southern bedroom wing. Two small rectangular skylights were installed in the roof, rather than the bank of roof-peak skylights that appear on the drawings.

Aside from a partial reroofing of select building sections, the house is in essentially unaltered condition, with no major additions or alterations to the original design.

13.31 State of California ⎯ The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI#
CONTINUATION SHEET Trinomial

*Recorded by: PAST Consultants, LLC *Date: 6/16/21 n Continuation o Update DPR 523L (1/95) *Required information
B10. Significance: Significance Statement (continued)
Norman S. and Margaret Salz Lezin
Born to Ben and Estell Lezin of Cleveland, Ohio, Norman Sigmund Lezin (1924-2018), Norman S. Lezin attended Queen Ann High School in Seattle, and entered Reed College in Portland, Oregon before being called to World War II service in 1943. He entered into the army, serving a military intelligence post under General Douglas MacArthur, until the close of the war.

Following the war, Norman S. Lezin returned to Reed College, where he earned a degree in political science.

He also met his lifelong partner, Margaret Salz, the daughter of A.K. Salz, president and owner of the A.K.

Salz Tannery, one of the most successful tannery businesses in the United States. Norman quickly took a liking to the business, enjoyed the creative process of making craft leathers, and rose to president of the company by the early 1950s. It was this time of prosperity that the Lezins purchased the subject property and hired Joseph Esherick to design their family home. The family resided in the home until the passing of Norman S. Lezin in 2018.

While employed at the Salz Tannery, Norman S. Lezin expanded the artisanal business into one of the largest tannery operations in the United States. With the company’s success and the increasing demand for the natural beauty and longevity of artisanal leather, the company grew to over 400 employees by 1969, with work ongoing around the clock. He also took an environmental- and labor-friendly approach to his leadership, offering bicycles to his employees through company-financed loans. His approach drew Life Magazine to cover the company’s strong environmental stance in 1971. When the company closed its doors in 2001 it was the last operating leather tannery west of the Mississippi River.

Norman S. Lezin was active in local politics and civic institutions. He won a seat on the Santa Cruz City Council in 1962 and was elected mayor two years later. Norman served as President of the Santa Cruz Citizen’s Health Council, was appointed by Governor Edmund G. Brown, Sr. to the California Industrial Welfare Commission, was a democratic superdelagate in the 1956 National Convention, and was chairman of the Santa Cruz Planning Advisory Committee. In 1989, Norman and Margaret Salz were named Man and Woman of the Year by the Santa Cruz Chamber of Commerce. Norman Lezin was also instrumental in recommending the former Cowell Ranch as the site for the University of California, Santa Cruz. He aided in fundraising for the new campus location and was given an honorary fellowship at UCSC’s Adlai E.

Stevenson College for his efforts promoting the university throughout his lifetime.

The business, civic and community success of Norman S. and Margaret S. Lezin all were achieved while the couple occupied the subject property.

13.32 State of California ⎯ The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI#
CONTINUATION SHEET Trinomial

*Recorded by: PAST Consultants, LLC *Date: 6/16/21 n Continuation o Update DPR 523L (1/95) *Required information
B10. Significance: Significance Statement (continued)
Joseph Esherick (1914 - 1998): Architect
Born in Philadelphia in 1914, Joseph Esherick graduated with a degree in architecture from the University of Pennsylvania in 1937. The Beaux-Arts traditional architectural approach was not to Esherick’s liking, as his uncle, Wharton Esherick, a well-known woodworker and sculptor gave the young Joseph a love of wood and of handcraftsmanship. Esherick left the East in 1938 and moved to San Francisco, taking positions in the office of famed structural engineer Walter Steilberg, who was also head draftsman for Julia Morgan’s projects. Steilberg introduced Esherick to the First Bay Region of Craftsman architects, including Morgan and Bernard Maybeck. Esherick also visited William Wurster, while he occupied a small apartment in Willis Polk’s woodsy Russian Hill house.

Esherick was fascinated by structural form and he subsequently took a position with the influential architect, Gardner Dailey, helping design early Modernist buildings such as the Owens House (1939) and the Coyote Point Training School (1943), the latter emphasizing modular building construction using wood. This period also saw the young Esherick travelling the California countryside, becoming enamored by vernacular barn and agricultural forms – firmly rooting him in the woodsy, Bay Region style. After brief service in the United States Navy in World War II, Esherick returned to San Francisco and opened his own practice in 1945. The firm was successful and grew steadily. By 1953, Esherick became President of Joseph Esherick Associates. The firm would retain this name until 1972 when Esherick joined forces with noteworthy midcentury architects, forming the firm of Esherick, Homsey, Dodge and Davis (EHDD), which produced numerous important buildings in the region into the 1990s. Examples include The Cannery in San Francisco (1987), Sea Ranch (1966) and the Monterey Bay Aquarium (1984). Examples of the firm’s educational buildings include the Adlai Stevenson College at UCSC (1966), and Wurster Hall, the architectural school at the University of California, Berkeley. The architect one an AIA Gold Medal in 1989 and was elected a Fellow of the American Institute of architects (AIA).

Joseph Esherick taught at the University of California, Berkeley from 1952 – 1985, serving as the Dean of the School of Architecture from 1977 – 1981.

The subject house is an example of Joseph Esherick’s early, Second Bay Region residential designs. The approach is practical and functional, extending the First Bay Region design influences of Maybeck, Morgan and others in a composition that emphasize the expression of structural form and the extensive use of wood, both as a structural and a decorative material. The Lezin House also display Modernist design elements coming to the architectural forefront in the 1950s, including the sensitive placement of the house within the landscape and the promotion of what has been described by architectural historian David Gebhard as “the Long View,” which allowed the landscape to be observed from multiple rooms within the house. The Lezin House also celebrates Esherick’s fascination with Japanese design, both for its use of wood for architectural expression and for the layout of the individual living quarters as a pavilion, with a detached garage linked by an open veranda, or engawa, with a thin Japanese screen forming a wall that connects the garage to the main house. Additional Japanese design elements include the use of a glazed wall on the garage’s south elevation, which resembles a Japanese shoji screen. The house takes the mundane expression of the Ranch form seen in the surrounding streets, adding elements of the Japanese and Second Bay Region traditions to create an outstanding example of the California Ranch style.

13.33 State of California ⎯ The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI#
CONTINUATION SHEET Trinomial

*Recorded by: PAST Consultants, LLC *Date: 6/16/21 n Continuation o Update DPR 523L (1/95) *Required information
B10. Significance: Evaluation of Historic Significance
California Register of Historical Resources

1. CR-1: Association with significant events, patterns or trends.

The subject property is not historic under this Criterion as no significant event led to the subject property’s development. Although constructed during the postwar building boom in the Santa Cruz area, the property was developed by a successful family seeking to build their home in the town of their employment. Norman and Margaret Lezin purchased the property independent of the population expansion and subsequent rise in housing construction in the Santa Cruz area and not as a result of a significant event or pattern of events.

2. CR-2: Association with significant persons.

The subject property is historically significant under California Register Criterion 2 for its association with Norman S. and Margaret S. Lezin. Norman S. Lezin. Norman S. Lezin owned and operated one of the most successful tannery businesses in the United States. While the tannery buildings exist as a rehabilitated project in Santa Cruz today, the subject property is also eligible, as Norman S. Lezin achieved his significant contributions while residing at the subject property. In addition, Norman S. Lezin was active both politically and philanthropically in the Santa Cruz area, as city councilmember, mayor and civic leader in other institutions. All of these accomplishments occurred while he resided in the subject property. The subject property is significant under California Register Criterion 2.

3. CR-3: Association with significant architecture and/or design The subject property is historically significant under California Register Criterion 3, in the area of architecture, for its intact Second Bay Region/California Ranch-style house by master architect Joseph Esherick. The subject house was constructed early in Esherick’s career and represents the architect’s use of Japanese architecture and space planning, combined with Esherick’s modular construction methodology expressed in wood. The subject house possesses a substantial amount of historic integrity.

Conclusions
The subject property is eligible for the California Register under Criteria 2 and 3.

13.34 State of California ⎯ The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI#
CONTINUATION SHEET Trinomial

*Recorded by: PAST Consultants, LLC *Date: 6/16/21 n Continuation o Update DPR 523L (1/95) *Required information
B10. Significance: Evaluation of Historic Significance
City of Santa Cruz Historic Preservation Criteria

1. Recognized as a significant example of the cultural, natural, archaeological, or built heritage of the City, State or Nation; and/or
The subject property contains an intact example of master architect Joseph Esherick’s early Second Bay Region/California Ranch-style designs and is a significant example of the built heritage of Santa Cruz and California.

2. Associated with a significant local, State or National event; and/or The subject property is not associated with a significant event.

3. Associated with a person or persons who significantly contributed to the development of the City, State, or nation; and/or
The subject property is associated with the work of Norman S. and Margaret S. Lezin for both their occupational and civic contributions to the Santa Cruz region.

4. Associated with an architect, designer, or builder whose work has influenced the development of the City, State or Nation; and/or
The subject property is associated with the work of master architect Joseph Esherick whose work has influenced the development of the Santa Cruz region and the state of California.

5. Recognized as possessing special aesthetic merit or value as a building with quality of architecture and that retains sufficient features showing its architectural significance; and/or The house on the subject property is an intact example of a Joseph Esherick-designed house, displaying Second Bay Region/California Ranch-stylistic details in excellent condition, giving it aesthetic merit.

6. Recognized as possessing distinctive stylistic characteristics or workmanship significant for the study of a period, method of construction, or use of native materials; and/or; The subject house does possess distinctive stylistic characteristics.

7. Retains sufficient integrity to accurately convey its significance.

The subject house retains all seven aspects of historic integrity.

Conclusions
The subject property is eligible according to Santa Cruz Historic Preservation Criteria 1,3,4,5,6, and 7.

13.35 State of California ⎯ The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI#
CONTINUATION SHEET Trinomial

*Recorded by: PAST Consultants, LLC *Date: 6/16/21 n Continuation o Update DPR 523L (1/95) *Required information
B10. Significance:

Historic Integrity

1. Location. The house is in its original location and maintains integrity of location.

2. Design. The house is nearly unaltered, possesses its original character defining features and has integrity of design.

3. Setting. The house remains in its residential setting and maintains integrity of setting.

4. Workmanship. The house displays integrity of workmanship in its Japanese and Second Bay Region stylistic elements and handcrafted architectural elements rendered in wood.

5. Materials. The house displays integrity of materials in its wood-clad construction, wood details, Japanese-design stylistic elements and original wood windows.

6. Feeling. The house retains its feeling as an early example of Joseph Esherick’s residential designs.

7. Association. The house maintains historic association as an example of Joseph Esherick’s early house designs because it maintains all of its original character defining features.

Conclusions
The subject property maintains all seven aspects of historic integrity.

13.36 State of California ⎯ The Resources Agency Primary # DEPARTMENT OF PARKS AND RECREATION HRI#
CONTINUATION SHEET Trinomial

*Recorded by: PAST Consultants, LLC *Date: 6/16/21 n Continuation o Update DPR 523L (1/95) *Required information
B12. References:
- American Institute of Architects, AIA Historical Directory of American Architects. - Blumenthal, Ralph, “Joseph Esherick, 83 an Acclaimed Architect (obituary),” New York Times, 12/25/98. - Chase, John Leighton, The Sidewalk Companion to Santa Cruz Architecture, 2005. - City of Santa Cruz, Building and Planning Department files, Santa Cruz, California. - Joseph Esherick Collection: 1933-1985, Online Archive of Calilfornia. - Lehman, Susan, Fully Developed Context Statement for ther City of Santa Cruz, 2000. - “Norman S. Lezin: 1924 – 2018 (obituary),” Santa Cruz Sentinel, 1/14/2018. - Charles Hall Page & Associates, Inc., Santa Cruz Historic Building Survey – Volume 1, 1976. - Polk’s Santa Cruz City Directories, 1950 – 1980.
- Santa Cruz County Assessor Records.
- Population Statistics for Santa Cruz County and Cities, Santa Cruz Public Libraries Local History. - Treib, Marc, Appropriate – The Houses of Joseph Esherick, Berkeley Design Book #4. William Stout Publishers, San Francisco, 2008.
- Woodbridge, Sally and David Gebhard, Bay Area Houses. Peregrine Smith Books, Salt Lake City, 1998.

13.37 * Street Addresses and Assessor’s Parcel Numbers for walls, stairways, steps and curbs indicate the primary address/APN for such features which may also extend beyond the primary address/apn.
** Comment Legend: Opt Out indicates property owner submitted Opt Out form prior to February 11, 2013. Opt Out properties are not on the City Historic Property List and are therefore not subject to City historic ordinance requirements or eligible for use of historic zoning incentives.

EXHIBIT "A"

LIST OF PROPERTIES IN VOLUME III

HISTORICAL BUILDING SURVEY

BY ADDRESS, WITH OPT-OUTS INDICATED
Street Address APN Vol./Page # Name/Style Comments**
Buildings
114 Alhambra Avenue 010-281-10 3/23 McKay House Opt Out 307 Berkeley Way 009-221-39 3/24 Pilkington House Opt Out 203 Blackburn Street 004-031-10 3/25 Trolley Car House Opt Out 1010 North Branciforte Avenue 009-234-41 3/26 National Style House 1106 North Branciforte Avenue 009-181-12 Newman House
423 Broadway 005-941-07 3/27 Bowman House
700 Block of Broadway 010-111-14 3/28 New Broadway Apartments 104 Bronson Street 011-164-06 3/29 Santa Cruz Fruit & Olive Canning Company
Opt Out
430 Caledonia Street 010-063-14 3/30 Zamzow House
214 California Avenue 004-153-01 3/31 Santa Cruz Market 711 California Street 006-491-09 3/32 Howe House
831 California Street 006-481-06 3/33 Wenban House Opt Out 320 Cedar Street 005-144-13 3/34 Modern Baking Company Opt Out 517-519 Center Street 005-132-03 3/35 All Souls Unitarian Church 918 Center Street 005-047-01 3/36 Dr. Nelson Dental Office 313 Chestnut Street 006-502-10 3/37 Vossberg House
516 Chestnut Street 005-071-20 3/38 Stick Style House Opt Out 223 Church Street 005-072-49 3/39 Wessendorf & Son Mortuary Opt Out 220 Cleveland Street 006-201-08 3/40 Dickinson House Opt Out 200 Coral Street 001-044-34 3/41 Cameron Engineering Opt Out Delaware Avenue between
Shaffer Road and Natural
Bridges Drive
003-061-13/
003-061-14
3/42 Antonelli’s Pond
213 Elm Street 005-147-12 3/43 Colonial Revival Style House 404 Escalona Drive 006-081-41 3/44 Canfield House Opt Out 1211 Fair Avenue 003-043-24 3/45 Kitchen’s Castle
122 Fern Street 008-161-13 3/46 Oliver House
118 First Street 007-213-07 3/47 Walsh House (Boca Del Cielo Inn) 75-81 Front Street 007-151-05 3/48 Pacific View Court Opt Out 418 Front Street 005-151-39 3/50 Huston & Weymouth Garage Opt Out 428 Front Street 005-151-22 3/51 Fulmer’s Furniture Store 429 Front Street 005-152-01 3/51 Thrash Pontiac Motors
514-518 Front Street 005-151-37 3/52 Ward & Thrash Oakland & Pontiac Sales
Opt Out
705/725 Front Street 005-081-59/
005-081-60
3/53 Santa Cruz County Jail
423 High Street 006-081-11 3/54 Snyder House
801 High Street 006-061-09 3/55 Messiah Lutheran Church Opt Out 900 High Street 001-022-40 3/56 First Congregational Church Opt Out 606 Highland Avenue 001-081-42 3/57 Wagner House

13.38 EXHIBIT "A"

LIST OF PROPERTIES IN VOLUME III

HISTORICAL BUILDING SURVEY

BY ADDRESS, WITH OPT-OUTS INDICATED
* Street Addresses and Assessor’s Parcel Numbers for walls, stairways, steps and curbs indicate the primary address/APN for such features which may also extend beyond the primary address/apn.
** Comment Legend: Opt Out indicates property owner submitted Opt Out form prior to February 11, 2013. Opt Out properties are not on the City Historic Property List and are therefore not subject to City historic ordinance requirements or eligible for use of historic zoning incentives. *** Following recordation of the final map for the minor land division located at 118 Ortalon Circle (CP21-0160), the APN will be updated to reflect the new APN for Lot 3.

Street Address APN Vol./Page # Name/Style Comments**
Buildings
123 Jordan Street 006-162-02 3/58 Notley House
425 King Street 006-221-32 3/59 Mission Hill Middle School Opt Out 532 King Street 006-142-08 3/60 Church House
1504 King Street 002-183-01 3/60 Lachman House Opt Out
229 Laurel Street 007-021-01 3/61 Fosters Freeze Opt Out 1121 Laurel Street 004-011-07 3/62 Rhein House Opt Out
1125 Laurel Street 004-011-06 3/63 Devlin House
512 Lincoln Street 006-472-09 3/64 Clark House Opt Out
120 Maple Street 005-143-16 3/65 Heath House / First Advent Christian Church Rectory
220 Maple Street 005-147-06 3/66 Gardner House Opt Out
438 Market Street 008-271-44 3/67 Villa Maio Cottages / Sherman Villa Cottages
Opt Out
226 Marnell Avenue 009-351-20 3/68 Whaley House & Poultry Farm Opt Out 350 Mission Street 006-171-44 3/69 First Presbyterian Church 1500 Mission Street 006-181-89 3/70 McClure’s Gas Station Opt Out 1604 Mission Street 002-235-20 3/71 Bay’N Mission Market 1901 Mission Street 004-123-51 3/72 County Bank of Santa Cruz Opt Out 2541 Mission Street 003-031-07 3/73 Coast Drum & Box Company 111 Mott Avenue 010-283-04 3/74 Pait House Opt Out
118 Ortalon Circle 001-161-
22***
Lezin House
231 Otis Street 006-202-01 3/75 Miller House
1129 Pacific Avenue 005-141-01 3/76 Morris Abrams Store 1344 Pacific Avenue 005-081-35 3/77 Palomar Hotel
1534 Pacific Avenue 005-051-02 3/78 Hugo Hühn Building
240 River Street 008-311-35 3/79 Petroff Motel Opt Out
538 Seabright Avenue 011-163-13 3/80 Seabright Cash Store/Seabright Post Office
Opt Out
541 Seabright Avenue 010-212-06 3/80 Youngman Building
1307 Seabright Avenue 010-092-10 3/81 Church of God Building 321 Second Street 007-213-04 3/82 Modern Manor Apartments Opt Out 510 Soquel Avenue 010-051-07 3/83 Bear Service Auto Repair 514 Soquel Avenue 010-051-07 3/84 Auto Wrecking House
526 Soquel Avenue 010-051-51 3/85 Medical Arts Building 536 -540 Soquel Avenue 010-051-12 3/86 Cedar Medical Clinic / Walter’s Prescription Pharmacy
555 Soquel Avenue 010-012-45 3/87 Santa Cruz Hospital Opt Out 622 Soquel Avenue 010-561-03 3/88 Espindola Grocery #7 (Shopper’s Corner)
723 Soquel Avenue 010-022-37 3/89 Kaiser Upholstery

13.39 EXHIBIT "A"

LIST OF PROPERTIES IN VOLUME III

HISTORICAL BUILDING SURVEY

BY ADDRESS, WITH OPT-OUTS INDICATED
* Street Addresses and Assessor’s Parcel Numbers for walls, stairways, steps and curbs indicate the primary address/APN for such features which may also extend beyond the primary address/apn.
** Comment Legend: Opt Out indicates property owner submitted Opt Out form prior to February 11, 2013. Opt Out properties are not on the City Historic Property List and are therefore not subject to City historic ordinance requirements or eligible for use of historic zoning incentives. *** Following recordation of the final map for the minor land division located at 118 Ortalon Circle (CP21-0160), the APN will be updated to reflect the new APN for Lot 3.

Street Address APN Vol./Page # Name/Style Comments**
910 Soquel Avenue 010-071-02 3/90 Gebhart’s Grocery Store 1103 Soquel Avenue 010-042-20 3/91 Eastside Fire Station 1114-1116 Soquel Avenue 010-081-02 3/92 West Coast Realty / White House Creamery
Buildings
1127 Soquel Avenue 010-042-35 3/93 Beeler’s Hardware
1129 Soquel Avenue 010-042-15 3/94 Sivley & Perry Vulcanizing 1134 Soquel Avenue 010-081-07 3/95 Sommers House/ Eastside Drug Store 1141 Soquel Avenue 010-042-14 3/96 Tastee Freez
1142 Soquel Avenue 010-081-08 3/97 Quality Store/Ebert’s Opt Out 603 Third Street 007-271-03 3/98 Ferris-Whitcomb House Opt Out 229 Union Street 005-032-06 3/99 Severio House
328 Union Street 006-402-39 3/100 National Style Cottage 341 Union Street 006-401-03 3/101 Fagen Family House Opt Out 130 Walnut Avenue 005-072-46 3/102 W. H. Crowe & Sons Garage/ Chase Mortuary
Opt Out
512 Walnut Avenue 006-431-10 3/103 Effey/Alzina House
624 Walnut Avenue 006-212-18 3/104 Daubenbiss House Opt Out 349 Washington Street 007-011-01 3/105 Brazelton House
514 Washington Street 005-133-11 3/106 Chambers House Opt Out 550 Water Street 005-252-36 3/107 Water Street Medical Plaza Building A 005-252-28 3/107 Water Street Medical Plaza Opt Out Building B 005-252-35 3/107 Water Street Medical Plaza Opt Out Building C 005-252-23 3/107 Water Street Medical Plaza Opt Out Building D 005-252-43
and -44
3/107 Water Street Medical Plaza Opt Out
Building E 005-252-32 3/107 Water Street Medical Plaza Opt Out Building F 005-252-34 3/107 Water Street Medical Plaza Opt Out Building G 005-252-33 3/107 Water Street Medical Plaza Opt Out Building H 005-252-30 3/107 Water Street Medical Plaza Opt Out Building I 005-252-42 3/107 Water Street Medical Plaza Opt Out Building J 005-252-42 3/107 Water Street Medical Plaza Opt Out Building K 005-252-39/
005-252-41
3/107 Water Street Medical Plaza Opt Out
Building L 005-252-39 3/107 Water Street Medical Plaza Opt Out 1055 Water Street 009-244-13 3/108 Charm Salon/ Ferrell’s Donut Shop 114 Wendell Street 008-093-30 3/109 Hamber House Opt Out 112 West Cliff Drive 004-311-05 3/110 Castagnola-Olivieri House Opt Out 116 West Cliff Drive 004-311-06 3/111 Canepa House Opt Out 120 West Cliff Drive 004-311-07 3/112 Dabadie-Pieracci House 1168 West Cliff Drive 003-292-13 3/113 Petersen House
1802 West Cliff Drive 003-273-45 3/114 Casa Mañana Opt Out

13.40 EXHIBIT "A"

LIST OF PROPERTIES IN VOLUME III

HISTORICAL BUILDING SURVEY

BY ADDRESS, WITH OPT-OUTS INDICATED
* Street Addresses and Assessor’s Parcel Numbers for walls, stairways, steps and curbs indicate the primary address/APN for such features which may also extend beyond the primary address/apn.
** Comment Legend: Opt Out indicates property owner submitted Opt Out form prior to February 11, 2013. Opt Out properties are not on the City Historic Property List and are therefore not subject to City historic ordinance requirements or eligible for use of historic zoning incentives. *** Following recordation of the final map for the minor land division located at 118 Ortalon Circle (CP21-0160), the APN will be updated to reflect the new APN for Lot 3.

Street Address* APN* Vol./Page # Name/Style Comments**
Walls, Stairways, Steps, and Curbs 3/115
407 Cliff Street 007-112-09 Cliff Crest wall
150 Emmett Street 006-362-01 Mission Hill Wall
124 First Street 007-213-08 Edric wall
80 Front Street (across from) Across Third Street from
007-152-02
Pacific Bluffs Wall
80 Front Street 007-152-02 Sunshine Villa wall
81 Front Street 007-151-10 Quarry and Tidestone wall
and stairs
102 Green Street 006-404-03 Young’s wall
123 Green Street 006-402-18 Reynolds-Hug wall
126 High Street 001-122-23 Mission stone arch Opt Out
104 King Street 006-163-07 D.H. Clark wall
110 King Street 006-163-08 Cobblestone wall
405 Leibrandt Street 007-103-09 Granite Rock wall Opt Out 121 Main Street 007-221-01 Seabeach wall
315 Main Street 007-131-05 Carmelita Cottage curb
2015 North Pacific Avenue 006-362-07 3/118 Anthony’s Flight stairs 35 Pacific Avenue (north of) North of 004-091-25 Blackburn Terrace wall (portion of)
217 Pacific Avenue 007-151-10 Cottage Cliff stairs
401 Pacific Avenue (across
from)
Across from 007-023-20 3/116 Lanterncliff Wall
100-104 Pine Place 006-412-03/006-412-02/
006-412-04
Rincon Park Walls
308-310 Second Street 007-112-14/
007-112-15
Second Street wall
202 South Branciforte 010-132-11 Peck Terrace Wall
611 Third Street 007-271-01 Rio Vista wall
924 Third Street 007-033-12 3/119 Golden Gate Wall
152 Walnut Avenue 005-072-48 3/117 Pratchner wall and stairs 334-340 Walnut Avenue 006-421-04/
006-421-05
Towne wall and stairs
415 Walnut Avenue 006-473-01 Santa Cruz High School
wall
130 West Cliff Drive 004-311-08 Jarboe’s Flight & Concha

13.41 EXHIBIT "A"

LIST OF PROPERTIES IN VOLUME III

HISTORICAL BUILDING SURVEY

BY ADDRESS, WITH OPT-OUTS INDICATED
* Street Addresses and Assessor’s Parcel Numbers for walls, stairways, steps and curbs indicate the primary address/APN for such features which may also extend beyond the primary address/apn.
** Comment Legend: Opt Out indicates property owner submitted Opt Out form prior to February 11, 2013. Opt Out properties are not on the City Historic Property List and are therefore not subject to City historic ordinance requirements or eligible for use of historic zoning incentives. *** Following recordation of the final map for the minor land division located at 118 Ortalon Circle (CP21-0160), the APN will be updated to reflect the new APN for Lot 3.

Street Address* APN* Vol./Page # Name/Style Comments**
Del Mar wall
174 West Cliff Drive 004-081-18 3/120 Lynch House wall
Hitching Posts, Hitching Rails, and Mounting Blocks
208 Escalona Drive 006-161-17 3/122 hitching post
123 Green Street 006-402-18 3/124 mounting block
419 Locust Street 006-411-13 3/123 hitching post
236 Ocean View Ave 010-131-21 3/125 hitching post
303 Ocean View Ave 010-102-26 3/126 hitching post
406 Windham Street 010-141-15 3/128 hitching rail Opt Out

13.42 City Council

AGENDA REPORT
DATE: 10/25/2023
AGENDA OF: 11/14/2023
DEPARTMENT: Parks and Recreation
SUBJECT: San Lorenzo Park Redesign (c301907) – First Amendment to Agreement for Landscape Architectural Services and Budget Adjustment (PR) RECOMMENDATION: Motion to:
1) Approve and authorize the City Manager to execute an amendment to the professional services agreement with Bionic Landscape, Inc. for redesigning San Lorenzo Park, in a form approved by the City Attorney. The Director of Parks and Recreation is authorized to execute contract amendments within the approved project budget; and 2) Adopt a resolution amending the FY 2024 budget and appropriating $40,000 from the Parks Facilities Tax Fund account and amending the Parks and Recreation Capital Investment Program budget from $100,000 to $140,000 in c301907 (San Lorenzo Park Redesign).

BACKGROUND: As part of the FY 2019 Budget, $100,000 was allocated for the master planning for the redesign of San Lorenzo Park. The project subsequently was put on hold due to delays in the Parks Master Plan 2030 process, staff time constraints, and the COVID-19 pandemic.

In April 2022, the City released a Request for Proposals (RFP) inviting consulting firms to submit a proposal to undertake the planning process. The RFP was sent to 28 firms and posted on the City’s purchasing website. Two proposals were received and were ranked by an interdepartmental review panel. Bionic Landscape ranked the highest through the process and was selected to undertake the project. The agreement was finalized in November 2022 and the project kicked-off in January 2023. The Director of Parks and Recreation executed the agreement because the $95,460 cost of services rendered in the agreement was less than the City’s $100,000 formal purchasing threshold.

On August 8, 2023, the City Council received an update and accepted recommendations on the draft guiding principles and design goals for the San Lorenzo Park Redesign process. The City Council unanimously accepted the guiding principles and design goals and directed staff to incorporate language into the guiding principles and design goals to preserve and enhance the flood control component of the park.

DISCUSSION: The Parks and Recreation Department staff have hired Environmental Science Associates (ESA) to assist in the review and conceptual design of potential flood management

14.1 and natural restoration improvements to the riverlands area of the park. ESA specializes in flood management and natural restoration work in river environments. As part of their scope-of-work, ESA will meet Bionic and staff from Public Works and Parks and Recreation to discuss design ideas, compile hydraulic information and river modeling data, prepare a preliminary engineering memorandum regarding potential restoration and flood management opportunities for the site.

Additionally, they will provide a roadmap of the feasibility analyses, hydraulic modeling and geomorphic analysis, design, and permitting that will need to be completed at a future time.

Preliminary findings from this assessment will inform the recommendations and conceptual plans in the draft San Lorenzo Park redesign plan. The cost of these services is $20,045.

Additionally, the agreement with Bionic Landscape will need to be amended to coordinate with ESA, incorporate their feedback into conceptual drawings, and for adding an additional City Council meeting into the redesign process. The cost of these services is $9,495. The total amount of the services for Bionic Landscape, Inc. ($95,460 + $9,495 = $104,955) now exceeds the City’s formal purchasing threshold and requires City Council approval.

Staff is also requesting an additional $15,000 as a project contingency in case other minor scopeof-work adjustments or project needs arise through the final steps of the process. Any unused funds will be returned to the Parks Facilities Tax Fund upon project completion.

FISCAL IMPACT: An additional $40,000 will be transferred from the Parks Facilities Tax Fund to Capital Investment Program project c301907 (San Lorenzo Park Redesign).

Prepared By:

Noah Downing
Park Planner
Submitted By:

Tony Elliot
Director of Parks and
Recreation
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. BUDGET ADJUSTMENT.PDF

14.2 City of Santa Cruz

BUDGET ADJUSTMENT REQUEST
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REQUESTED BY DEPARTMENT HEAD

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BUDGET/ACCOUNTING
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TOTAL EXPENDITURE

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 Clear Form
2024
10/19/2023
Appropriate $40,000 from the Parks Facilities Tax Fund account and amend the Parks and Recreation Capital Investment Program budget for the San Lorenzo Park redesign project (c301907) from $100,000 to $140,000. 311-00-00-0000-49109 c301907-908-0-0 From Parks and Rec. Facilities Tax Fund 40,000 40,000
249-00-00-0000-59103 To General Capital Improvement Fund 40,000 311-30-41-9110-57312 c301907-100-2020-0 Park Improvements 40,000 80,000
-40,000
Lindsay
Bass
Digitally signed by Lindsay Bass
DN: cn=Lindsay Bass, o=City of Santa Cruz,
ou=Parks & Recreation Administration,
[email protected], c=US
Date: 2023.10.27 09:00:20 -07'00'
Anthony Elliot
Digitally signed
by Anthony Elliot
Date: 2023.10.27
09:33:29 -07'00'
Edward
Torres
Digitally signed by Edward Torres
DN: cn=Edward Torres, o=City of Santa Cruz, ou,
[email protected], c=US
Date: 2023.10.30 10:57:28 -07'00'
Elizabet
h Cabell
Digitally signed by Elizabeth Cabell
DN: cn=Elizabeth Cabell, o=City of Santa Cruz,
ou=Finance Department,
[email protected], c=US
Date: 2023.11.01 10:19:44 -07'00'

14.3 City Council

AGENDA REPORT
DATE: 10/26/2023
AGENDA OF: 11/14/2023
DEPARTMENT: Public Works
SUBJECT: Award Contract for Trailer Jet (PW)
RECOMMENDATION: Motion to award a contract, via a cooperative purchasing agreement, for the purchase of one replacement Trailer Jet from O’Brien Hydro-Jetting and Vacuum Systems (Marietta, OH), in the amount of $107,856.69.

BACKGROUND: The State Water Board General Order for Waste Discharge Requirements requires the City to implement a system-specific Sewer System Management Plan that includes provisions to provide proper and efficient management, operation, and maintenance of the sanitary sewer system. A key component of the maintenance work is the ability to use modern jetting equipment to maintain sanitary system sewer lines and to prevent sanitary sewer overflows.

DISCUSSION: The Wastewater Collection Division currently uses a Trailer Jet that was purchased in 2002. The Trailer Jet is past due on the equipment replacement schedule. The trailer mounted jetting equipment is used to clean sewer mains in areas too small to accommodate the sewer cleaner combination truck. These areas include sewer easements, the Municipal Wharf, the Delaveaga Golf Course and the Resource Recovery leachate facility.

Section 3.08.170 of the Municipal Ordinance allows the City of Santa Cruz (City) to buy from cooperative purchasing agreements when is in the best interest of the City to do so. National Joint Powers Alliance (NJPA) Sourcewell obtain competitively and formally, bid contracts which can be used by participating member municipal agencies, including the City. The NJPA Sourcewell quoted price from contract# 092922-CER, for the complete Trailer Jet is $111,094.79, which includes 9.25% sales tax. The NJPA Sourcewell Contract pricing is above the manufacture’s offered discount which provides a cost savings to the City of $3,238.10.

A lower bid was discarded when the manufacturer was unable to provide the equipment. A higher bid of $137,199.90 was rejected in favor of the lowest bid option.

FISCAL IMPACT: There are adequate funds in the Public Works Wastewater Enterprise Fund FY 2023 budget for this purchase. There is no impact to the General Fund.

Prepared By:

Anne Hogan
Wastewater System Manager
Submitted By:

Nathan Nguyen, P.E.

Public Works Director
Approved By:

Matt Huffaker
City Manager

15.1 ATTACHMENTS:

None.

15.2 City Council

AGENDA REPORT
DATE: 10/26/2023
AGENDA OF: 11/14/2023
DEPARTMENT: Public Works
SUBJECT: Striping Improvements at San Lorenzo Boulevard (c400809) (PW) RECOMMENDATION: Motion to approve the design and installation of traffic striping at San Lorenzo Boulevard (between Laurel Street and Jessie Street).

BACKGROUND: San Lorenzo Boulevard is a heavily traveled minor arterial street which serves as main corridor and critical link between downtown, the east side of Santa Cruz, and the Main Beach area. During summer season, heavy visitor traffic utilizes segments of this street as the primary access into and out of the beach area, accessing Highway 17 via Ocean St. This street also provides bike and pedestrian connections to the upcoming Rail Trail Segment 8 improvements along Beach St, and the San Lorenzo River levee path.

The 2023 Paving Rehabilitation Project (c400809) will resurface San Lorenzo Boulevard, as well as install new ADA compliant curb ramps at all intersections within the project area. The paving project provides an efficient opportunity to make improvements to bicycle and pedestrian facilities in this corridor.

At its May 15, 2023, meeting, the Transportation and Public Works Commission (TPWC) was presented the corridor plan. The commission discussed improvements to the bike facilities, including the use of green conflict markings, and a two-stage queue box at the San Lorenzo Boulevard and Ocean Street Intersection. The TPWC passed a motion to approve the Riverside Avenue and San Lorenzo Boulevard Striping Concept Plans for the 2023 Pavement Rehabilitation Project with the understanding that Commissioners comments will be considered and implemented in a way determined feasible by Staff. The Public Works Department evaluated that feedback from TPWC and made revisions to the plan.

DISCUSSION: Staff has developed a concept plan which proposes to improve bicycle and pedestrian facilities by narrowing the existing traffic lanes in many locations, creating the required width to install sections of buffered bike lane on San Lorenzo Boulevard between Laurel Street and Riverside Avenue, and a buffer for eastbound bicycles through the busy intersection at San Lorenzo Boulevard and Ocean Street. The plan includes the addition of new crosswalks at side streets which currently have none, green pavement markings at bicycle conflict zones, and a new bike box at the intersection of Riverside Avenue and San Lorenzo Boulevard. The plans also include improved markings at access points to the San Lorenzo River levee path which parallels San Lorenzo Boulevard.

16.1 The striping improvements were designed based on the California Manual on Uniform Traffic Control Devices and the National Association of City Transportation Officials Urban Street Design Guide.

This project is in alignment with and will assist in implementing components of the General Plan and Climate Action Plan. The General Plan calls for a “citywide interconnected system of safe, inviting, and accessible pedestrian ways and bikeways” (Goal M4). The Climate Action Plan includes the transportation objective to meet an 80% reduction in greenhouse gas (GHG) emissions by 2050 which will be accomplished largely by providing low-carbon transportation options that rival the efficiency and safety of the automobile.

FISCAL IMPACT: The project is funded in the FY 2024 Capital Investment Program budget, in the 2023 Paving Rehabilitation Project (c400809). There is no impact to the General Fund.

Prepared By:

Ricardo Valdes
Senior Professional Engineer
Submitted By:

Nathan Nguyen, P.E.

Director of Public Works
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. SAN LORENZO BLVD. STRIPING IMPROVEMENT PLAN.PDF

2. TRANSPORTATION AND PUBLIC WORKS COMMISSION MEETING MINUTES MAY 15, 2023.DOC

16.2 00+00 02+00 03+00 04+00
05+00
MATCHLINE STA 04+50 SAN LORENZO BLVD. LAUREL ST. 11.0' 13.5' 11.0' 11.0' 11.0' 01+00 6.0' 3.0' 3.0' 6.0' 6.0' 3.0' 3.0' 6.0' 5.0' 05+00 06+00 07+00 08+00 09+00 10+00 MATCHLINE STA 04+50 MATCHLINE STA 10+00 5.0' 5.5' 10.5' 10.5' 10.5' 11.0' 10.5' 5.0' 10.5' 2.0' 7.0' SAN LORENZO BLVD. 5.0' 09+00 10+00 12+00 13+00 14+00 15+00 16+00 17+00 18+00 MATCHLINE STA 10+00 RIVERSIDE AVE.

CANFIELD ST.

BIXBY ST. SAN LORENZO BLVD. 10.5' 10.5' 10.5' 5.0' 11.0' 10.5' 10.5' 10.5' 10.5' 10.5' 10.5' 10.5' 10.5' 10.5' 10.5' 11+00 MATCHLINE STA 18+00 10.5' 5.0' 10.5' 12.0' 12.0' 11.5' 11.5' 4.5' 5.0' 10.5' 5.0' 5.0' 5.0' 11.0' 12.5' 7.0' 13.0' 17.5' 16.5' 12.0' 10.5' 10.5' 6.0' 10.5' 5.0' REFERENCES DRAWING #: FIELD BOOK: DESIGN CHECKED DATE DRAWN VAULT NO. SCALE SHEET OF 809 Center Street, Room 201 Santa Cruz, CA 95060 REVISIONS P U B L I C W O R K S D E P A R T M E N T SANTACRUZ C I T Y O F C I T Y O F S A N T A C R U Z C A L I F O R N I A 1866 # SAN LORENZO BLVD. STRIPING AND SIGNAGE REHABILITATION PROJECT OCEAN ST. PAVEMENT # #7155 N. GOODMAN M. STARKEY N. GOODMAN 10/18/2023 1"=40' 1 2 STRIPING GENERAL NOTES: a. ALL STRIPING AND PAVEMENT MARKINGS SHALL BE THERMOPLASTIC AND MUST MEET 2018 CALTRANS SPECIFICATIONS b. PRIOR TO INSTALLING THERMOPLASTIC ONTO ANY CONCRETE, CLEAN AND APPLY PRIMER STRIPING NOTES: A1: CALTRANS ARROW TYPE 1 A4(L/R): CALTRANS ARROW TYPE 4 (LEFT/RIGHT) A7(L/R): CALTRANS ARROW TYPE 7 (LEFT/RIGHT) ONL: "ONLY" MARKING STP: "STOP" MARKING YLD: "YIELD" MARKING BG: BIKE W/ GREEN VIZIGRIP BLA: BIKE AND LEFT ARROW BLAG: BIKE AND LEFT ARROW W/ GREEN VIZIGRIP BTA: BIKE AND THROUGH ARROW BTAG: BIKE AND THROUGH ARROW W/ GREEN VIZIGRIP S25: 25 MPH SPEED LIMIT MARKING D9: DETAIL 9 (LANELINE) D22: DETAIL 22 (NO PASSING) D29: DETAIL 29 (MEDIAN ISLAND) D36B: ENTRANCE RAMP NEUTRAL AREA (INSIDE/OUTSIDE 8" WHITE HATCH, 45° ANGLE, 10' GAP) D37B: DETAIL 37B (LANE DROP) D38A: DETAIL 38A (CHANNELIZING LINE) D39: DETAIL 39 (BIKE LANE LINE) D39A: DETAIL 39A (INTERSECTION BIKE LANE LINE) D39G: DETAIL 39A (INTERSECTION BIKE LANE LINE W/ GREEN VIZIGRIP) D39Z: DETAIL 39Z (MODIFIED BIKE LANE LINE) D40: DETAIL 40 (LANE LINE EXTENSION) D41: DETAIL 41 (CENTER LINE EXTENSION) BBL1: BUFFERED BIKE LANE 1 (INSIDE/OUTSIDE DETAIL 39 AND 6" WHITE HATCH, 45° ANGLE, 12' GAP) BBL2: BUFFERED BIKE LANE 2 (INSIDE DETAIL 39A, OUTSIDE DETAIL 39 AND 6" WHITE HATCH, 45° ANGLE, 12' GAP) CRBR: RED CURB CWW: CROSSWALK (12" WHITE LINE) HAL: 4" HATCH LINE, 45° ANGLE, 8' GAP LL: LIMIT LINE (12" WHITE LINE) TEE: PARKING TEE (4" WHITE LINE, 20' SPACING) YL: YIELD LINE RMRK: REMOVE MARKING R4-4 R1-5L R3-5R & R3-7bP CONSTRUCTION NOTES: 1 INSTALL (N) 30"X36" R4-4 SIGN ON (N) CITY POST 2 INSTALL (N) 36"X30" R3-5R AND 12"X24" R3-7bP ON (N) CITY POST 3 INSTALL (N) 24"X24" R1-5L SIGN ON (N) CITY POST 4 RELOCATE (E) W11-2 AND W16-7PL SIGNS TO 5 INSTALL (N) 24"X24" R1-5L SIGN ON (E) POST 5 INSTALL (E) W11-2 AND W16 -7PL SIGNS FROM 4 ON (N) CITY POST 6 INSTALL SURFACE MOUNT CURB & POST, MIN 9' FROM CURB 7 REPLACE (E) LANE CONTROL SIGN ON OVERHEAD TRAFFIC SIGNAL WITH (N) 30"X36" R3-5L SIGN I A REENI GNE L C I V I L F CA I F L OR N FESS I O N A ET A PR E TS I GER ETS R D O O No. C 073883 R3-5L 16.3 18+00 19+00 20+00 21+00 OCEAN ST. 5.0' 6.0' 10.5' 10.5' 10.5' 10.5' 12.0' PEARL ST. JESSIE ST. 11.0' 10.5' 5.0' 11.0' 10.5' 10.0' 10.5' 10.5' 10.5' 13.5' 13.5' 12.0' MATCHLINE STA 18+00 4.0' 6.0' 4.0' 10.5' 10.5' 6.5' 6.8' 6.8' 8.0' 6.0' 12.0' 6.0' 5.5' 13.0' 13.0' 2.0' 7.0' 10.0' REFERENCES DRAWING #: FIELD BOOK: DESIGN CHECKED DATE DRAWN VAULT NO. SCALE SHEET OF 809 Center Street, Room 201 Santa Cruz, CA 95060 REVISIONS P U B L I C W O R K S D E P A R T M E N T SANTACRUZ C I T Y O F C I T Y O F S A N T A C R U Z C A L I F O R N I A 1866 # SAN LORENZO BLVD. STRIPING AND SIGNAGE REHABILITATION PROJECT OCEAN ST. PAVEMENT # #7155 N. GOODMAN M. STARKEY N. GOODMAN 10/18/2023 1"=40' 2 2 STRIPING GENERAL NOTES: a. ALL STRIPING AND PAVEMENT MARKINGS SHALL BE THERMOPLASTIC AND MUST MEET 2018 CALTRANS SPECIFICATIONS b. PRIOR TO INSTALLING THERMOPLASTIC ONTO ANY CONCRETE, CLEAN AND APPLY PRIMER R1-5L STRIPING NOTES: A1: CALTRANS ARROW TYPE 1 A4(L/R): CALTRANS ARROW TYPE 4 (LEFT/RIGHT) A7(L/R): CALTRANS ARROW TYPE 7 (LEFT/RIGHT) ONL: "ONLY" MARKING STP: "STOP" MARKING YLD: "YIELD" MARKING BLA: BIKE AND LEFT ARROW BLAG: BIKE AND LEFT ARROW W/ GREEN VIZIGRIP BTA: BIKE AND THROUGH ARROW BTAG: BIKE AND THROUGH ARROW W/ GREEN VIZIGRIP S25: 25 MPH SPEED LIMIT MARKING D9: DETAIL 9 (LANELINE) D22: DETAIL 22 (NO PASSING) D29: DETAIL 29 (MEDIAN ISLAND) D36B: ENTRANCE RAMP NEUTRAL AREA (INSIDE/OUTSIDE 8" WHITE HATCH, 45° ANGLE, 10' GAP) D37B: DETAIL 37B (LANE DROP) D38A: DETAIL 38A (CHANNELIZING LINE) D39: DETAIL 39 (BIKE LANE LINE) D39A: DETAIL 39A (INTERSECTION BIKE LANE LINE) D39G: DETAIL 39A (INTERSECTION BIKE LANE LINE W/ GREEN VIZIGRIP) D39Z: DETAIL 39Z (MODIFIED BIKE LANE LINE) D40: DETAIL 40 (LANE LINE EXTENSION) D41: DETAIL 41 (CENTER LINE EXTENSION) BBL1: BUFFERED BIKE LANE 1 (INSIDE/OUTSIDE DETAIL 39 AND 6" WHITE HATCH, 45° ANGLE, 12' GAP) BBL2: BUFFERED BIKE LANE 2 (INSIDE DETAIL 39A, OUTSIDE DETAIL 39 AND 6" WHITE HATCH, 45° ANGLE, 12' GAP) CRBR: RED CURB CWW: CROSSWALK (12" WHITE LINE) HAL: 4" HATCH LINE, 45° ANGLE, 8' GAP LL: LIMIT LINE (12" WHITE LINE) TEE: PARKING TEE (4" WHITE LINE) YL: YIELD LINE RMRK: REMOVE MARKING CONSTRUCTION NOTES: 1 INSTALL (N) 30"X36" R4-4 SIGN ON (N) CITY POST 2 INSTALL (N) 36"X30" R3-5R AND 12"X24" R3-7bP ON (N) CITY POST 3 INSTALL (N) 24"X24" R1-5L SIGN ON (N) CITY POST 4 RELOCATE (E) W11-2 AND W16-7PL SIGNS TO 5 INSTALL (N) 24"X24" R1-5L SIGN ON (E) POST 5 INSTALL (E) W11-2 AND W16 -7PL SIGNS FROM 4 ON (N) CITY POST 6 INSTALL SURFACE MOUNT CURB & POST, MIN 9' FROM CURB 7 INSTALL (N) 30"X24" R81(CA) AND 30"X12" R3-17bP SIGNS ON (E) POST 8 INSTALL (N) 30"X30" R4-11 SIGN ON (N) CITY POST 9 INSTALL (N) 12"X18" R9-5 SIGN ON (E) PEDESTRIAN SIGNAL NOTES: 1. GREEN THERMOPLASTIC SHALL BE APPLIED TO AC ONLY. PREMARK VIZIGRIP SHALL BE APPLIED ON CONCRETE. 2. WHITE THERMOPLASTIC STRIPING SHALL BE APPLIED TO AC ONLY. FOR CONCRETE AREAS, USE WHITE PAINT. 3. GREEN COLORED PAVEMENT WIDTH SHOWN ON PLAN. 6" WHITE THERMOPLASTIC STRIPE SEE NOTE 2. 2' VARIES SEE NOTE 3 2' 6' 2' 6' 2' GREEN THERMOPLASTIC SEE NOTE 1. SEE NOTE 3 VARIES DETAIL 39Z - MODIFIED DETAIL 39A R81(CA) & R3-17bP R4-11 I A REENI GNE L C I V I L F CA I F L OR N FESS I O N A ETA PR E TS I GER ET S R D O O No. C 073883 R9-5 16.4 May 15, 2023 – Transportation and Public Works Commission Minutes Transportation and Public Works Commission
Regular Meeting
Minutes
6:00 p.m., Monday, May 15, 2023
Council Chambers
Call to Order: 6:05 P.M.

Roll Call: Chair Ron Goodman, Vice Chair Ryan Meckel; Commissioners: Candace Brown, Robert Orrizzi, and Susan Gilchrist
Absent with Notification: Commissioners Kyle Kelley and Zennon Ulyate-Crow Absent without Notification: None
Statements of Disqualification: None
Oral Communications
At 6:07 P.M. Chair Goodman opened oral communications, and the following people spoke:

Eric Grodberg
Jacob Dong
Fox Wong
At 6:13 P.M. Chair Goodman closed oral communications.

Announcements
Vice-Chair Meckel announced the beginning of Bike Month.

Director Nathan Nguyen announced Public Works Week, the unveiling of new Hyundai Santa Cruz Trucks, and gave an update on ongoing PW projects.

Presentations: None
Approval of Minutes:

1. April 17,2023 – Transportation and Public Works Commission Draft Minutes

16.5 May 15, 2023 – Transportation and Public Works Commission Minutes 2 MOTION: Vice-Chair Meckel moved, seconded by Commissioner Orrizzi, to approve the minutes of the April 17,2023 Transportation and Public Works Commission meeting with the corrected titles of Chair Goodman and ViceChair Meckel.

ACTION: The motion carried with the following vote:

AYES: Chair Goodman, Vice-Chair Meckel, Commissioners: Brown, Orrizzi, and Gilchrist.

NOES: None
ABSENT: Commissioners Kelley and Ulyate-Crow.

DISQUALIFIED:

Consent: None
General Business:

2. 2023 Pavement Rehabilitation Project – Riverside Ave. and San Lorenzo Blvd.

Striping Concept Plans (c400809) (PW)
At 6:22P.M., Chair Goodman opened public comment. There were no speakers and at 6:22 P.M., Chair Goodman closed public comment.

MOTION: Commissioner Orrizzi moved, seconded by Commissioner Gilchrist to approve the Riverside Ave and San Lorenzo Blvd Striping Concept Plans for the 2023 Pavement Rehabilitation Project with the understanding that Commissioners comments will be considered and implemented in a way determined feasible by Staff.

ACTION: The motion carried with the following vote:

AYES: Chair Goodman, Vice-Chair Meckel, Commissioners: Brown, Orrizzi, and Gilchrist.

NOES: None
ABSENT: Commissioners Kelley and Ulyate-Crow.

DISQUALIFIED:

Informational Items: None
Subcommittee/Advisory Body Oral Reports: None
Items Initiated by Members for Future Agendas:

Vice-Chair Meckel requested a presentation from staff on the Bcycle program once it has been installed and is running in the City.

Director Nathan Nguyen confirmed that a presentation on the levee FEMA

16.6 May 15, 2023 – Transportation and Public Works Commission Minutes 3 certification will be presented to the commission in roughly 5 months at the request of Commissioner Brown.

Adjournment: 7:16 P.M.

16.7 City Council

AGENDA REPORT
DATE: 11/10/2023
AGENDA OF: 11/14/2023
DEPARTMENT: Planning and Community Development/City Manager’s Office SUBJECT: Amendments to Title 18 of the Municipal Code Creating an Energy Reach Code for Newly Constructed Buildings with the Intent to Provide Developers with a Range of Options that will Meet Goals to Reduce Greenhouse Gas Emissions Associated with Fossil Fuel Citywide (PL/CM) RECOMMENDATION: Motion to introduce for publication an ordinance amending Municipal Code Title 18 – Buildings and Construction, amending Section 18.04.030 and adding Chapter 18.15 to adopt local amendments to Title 24, Part 6 of the California Code of Regulations (California Energy Code) implementing an energy reach code with an intent to provide developers with a range of options that will also meet goals to reduce greenhouse gas emissions associated with fossil fuel use citywide. CEQA determination: These amendments are consistent with the Negative Declaration approved for the City of Santa Cruz 2030 Climate Action Plan adopted by City Council on September 13, 2022. The ordinance is also exempt from CEQA under the general rule, 15061(b)(3) and per CEQA Guidelines Section 15308, Class 8, Actions by Regulatory Agencies for Protection of Natural Resources.

BACKGROUND: On April 14, 2020, City Council unanimously adopted the Natural Gas Prohibition Ordinance, adding Chapter 6.100 to the Santa Cruz Municipal Code (SCMC) which prohibits natural gas infrastructure in new buildings. The Ordinance was adopted as part of the City’s ongoing efforts to improve building energy efficiency, support renewable energy sources, and accelerate decarbonization. The ordinance is similar to that adopted by the City of Berkeley and other cities in California. Santa Cruz’s ordinance did provide exceptions that the Berkeley ordinance did not, including an exception for restaurants (for cooking purposes only).

The City’s Community Climate Action Plan 2030 (CAP 2030) was adopted in September 2022, and CAP 2030 measure BE-1 specifies enforcement of the City’s new construction natural gas prohibition in order for the City to reach its legal greenhouse gas (GHG) emissions target of a 40% reduction in GHG emissions from 1990 levels by 2030. The successful implementation of the ordinance resulted in over 1,000 all-electric housing units being submitted for permits.

On April 17, 2023, the California Ninth Circuit Court of Appeals struck down the City of Berkeley’s natural gas prohibition as part of the ruling in California Restaurant Association v.

City of Berkeley. The Ninth Circuit held that the Energy Policy and Conservation Act (EPCA) preempts the City of Berkeley’s ordinance because EPCA does not allow State and local

17.1 governments to prohibit an end-user from using natural gas products. Berkeley has appealed this ruling and is awaiting an en banc rehearing to determine the permanent fate of the ordinance.

Because Berkeley is a party to the case, Berkeley is under no obligation to act on the Ninth Circuit’s opinion until the district court issues a stay or injunction prohibiting enforcement of its ordinance. Accordingly, Berkeley has continued implementing the ordinance. However, the Ninth Circuit opinion is binding authority on other municipalities with similar ordinances. The City of Santa Cruz would therefore incur legal risk if it continued to enforce its own Natural Gas Prohibition Ordinance, given the similarities between its ordinance and the Berkeley ordinance.

Because of this ruling, on June 13, 2023, City Council adopted Resolution NS-30,156 temporarily suspending enforcement of the City’s Natural Gas Prohibition Ordinance. However, the City of Santa Cruz will be unable to reach its legal GHG emissions reduction target without addressing building energy performance as modeled during the CAP 2030 development. Staff has therefore drafted a new ordinance consistent with state and federal law in the form of a source energy reach code for new buildings to provide developers with a range of options with regard to the type of equipment and energy that will be supplied to new buildings and that will help to meet the CAP 2030 GHG emissions target.

DISCUSSION:

Proposed Regulations
The ordinance changes propose local modifications to the California Energy Code. The “reach code” triggers more stringent source energy (underlying fuel sources such as coal, natural gas, or solar used to power building systems and equipment) requirements for single-family residential, multi-family residential, and non-residential uses. The ordinance also requires that for nonresidential and multi-family residential buildings with central water heating where a gas appliance is installed, physical space and ventilation paths for future all-electric equipment must be provided, as well as sufficient electrical panel and transformer capacity for the future change.

A full discussion of the proposed energy reach code can be found in the attached agenda report for the October 19, 2023 Planning Commission meeting.

California Energy Commission Approval
After adoption by City Council, the proposed local amendments to the California Energy Code must be approved by the California Energy Commission prior to becoming effective. Public Resources Code Section 25402.1(h)(2) and Section 10-106 of the Building Energy Efficiency Standards establish a process that allows local adoption of energy standards that are more stringent than the statewide standards. Under this process, the California Energy Commission requires any local amendments to the California Energy Code that affect energy use in regulated buildings to be cost effective and use less energy than the standard requirements contained in Title 24, Part 6.

The attached cost-effectiveness studies published by the California Energy Codes and Standards Statewide Utility Program, which includes the State's Investor-Owned Utilities (PG& E, SDG&E, and SCE, under the auspices of the California Public Utilities Commission) show that reach codes such as the one proposed are cost-effective.

Community Outreach
In addition to extensive outreach conducted between 2019 and 2022 during the development of the 2020 ordinance prohibiting natural gas in new buildings and the CAP 2030, on October 11, 2023, staff conducted a virtual outreach meeting for builders, designers, developers, and

17.2 contractors who do business in the City of Santa Cruz. Approximately 14 individuals participated in the meeting. Staff also conducted outreach with the Mayor’s Community Climate Action Task Force on October 12, 2023, where 10 individuals participated. Staff presented the draft ordinance and discussed questions and comments from participants. Feedback included questions related to how gas cooking appliances and electric vehicle chargers factored into the ordinance, whether the ordinance applies to accessory dwelling units (ADUs), the scale of single family and multi-family development expected, available rebates, how source energy compliance margin points and percentages were determined, whether both heating and cooling were modeled, and heat pumps with central water heating. Staff also prepared newspaper and online noticing of the October 19, 2023 Planning Commission meeting to give the community an opportunity to provide feedback.

Planning Commission Feedback
The proposed ordinance was brought to the October 19, 2023 Planning Commission meeting to seek feedback and suggestions from commissioners as well as interested members of the community. With the Municipal Code changes occurring outside of the Zoning Ordinance, the Commission meeting was a courtesy referral only, intended to garner additional input from Commissioners, and was not a required meeting for the proposed changes. Three Planning Commissioners attended the meeting (Pete Kennedy, Julie Conway, and Timerie Gordon) as well as one member of the public, a representative from Central Coast Community Energy.

Commissioners and the public commenter all expressed support for the proposed changes.

Questions and comments from Commissioners included whether bonus points would be included for trainings, the possibility of public-private partnerships, whether the compliance margins could be increased further, consistency among local jurisdictions with regard to energy reach code regulations, and clarification on how the square footage threshold for ADUs was determined.

Minor Clarifying Edits Made Since Planning Commission
Since the Planning Commission meeting, minor, non-substantive changes were made to section

18.15.040, Energy Code modification section 160.9(e) of the proposed ordinance to clarify the intent of this section. These changes are shown in blue in the strikeout/underline ordinance.

Health in All Policies (HiAP)
HiAP is a collaborative approach to improving the health of all people by incorporating health considerations into decision-making across sectors and policy areas. HiAP is based on three pillars: equity, public health, and sustainability. The goal of HiAP is to ensure that all decisionmakers are informed about the health, equity, and sustainability impacts of various policy options during the policy development process. The municipal code amendments support the pillars of equity and public health by ensuring all buildings are safe and healthy while remaining cost effective. The amendments support sustainability by reducing GHG emissions and fossil fuel dependence citywide consistent with the CAP 2030. Therefore, the proposed code amendments are considered consistent with the three pillars of HiAP.

Environmental Review
The municipal code amendments are consistent with the Negative Declaration approved for the City of Santa Cruz 2030 Climate Action Plan adopted by City Council on September 13, 2022.

Therefore, no further environmental review under the California Environmental Quality Act (CEQA) is required. The ordinance is also exempt under exempt from CEQA under the general rule, 15061(b)(3), because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Further, this ordinance

17.3 is exempt per CEQA Guidelines Section 15308, Class 8, Actions by Regulatory Agencies for Protection of Natural Resources, since the proposed ordinance would institute regulatory requirements intended to protect the environment and natural resources.

Next Steps
If the City Council approves the first reading of the ordinance on November 14, 2023, it will then come back for a second reading on November 28, 2023. After approval by City Council, the ordinance will be submitted to the California Energy Commission (CEC) for approval as local modifications to the California Energy Code. Approval by the CEC is expected in February, 2024 and the ordinance is expected to go into effect by March 1, 2024.

FISCAL IMPACT: As the proposed ordinance provides more flexibility in building design than the currently-suspended natural gas prohibitions but less flexibility than the standard California Energy Code regulations, it could be argued that the policy could lead to an increase in development applications compared to those received during the natural gas prohibition and a decrease in applications compared to those received prior to implementation of any additional regulations beyond the standard state energy code. An increase in development applications will result in increased revenue for the City in the short term and increased tax basis over the longer term as redeveloped properties are reassessed. A decrease in development applications will result in decreased revenue for the City in the short term and decreased tax basis over the longer term as redeveloped properties are reassessed. Increased revenues would be offset by the fact that new development (housing especially) typically increases the need for City services. Overall, however, the implementation of this ordinance is unlikely to create cost shifts of a magnitude that would influence whether an applicant decides to move forward with a project or not, so the overall fiscal impact of the proposed ordinance is likely neutral.

Prepared By:

Tiffany Wise-West
Sustainability and Climate
Action Manager
Clara Stanger
Senior Planner
Submitted By:

Lee Butler, AICP
Planning & Community
Development Director
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. Proposed Ordinance - Clean

2. Proposed Ordinance – Track changes

3. Agenda report for October 19, 2023 Planning Commission meeting

4. 2022 Cost-Effectiveness Study: Single Family New Construction Study and associated costeffectiveness data

5. 2022 Cost-Effectiveness Study: Multifamily New Construction Study and associated costeffectiveness data

6. 2022 Code: Non-residential New Construction Reach Code Cost-effectiveness Study and associated cost-effectiveness data

17.4 ORDINANCE NO. 2023-

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ AMENDING SECTION 18.04.030 – ADOPTION OF CODES OF THE SANTA CRUZ MUNICIPAL CODE AND ADDING CHAPTER 18.15 - ENERGY CODE, ADOPTING LOCAL AMENDMENTS TO THE CALIFORNIA ENERGY CODE, PART 6 OF THE CALIFORNIA BUILDING

CONSTRUCTION AND FIRE PREVENTION CODE
BE IT ORDAINED By the City of Santa Cruz as follows:

Section 1. Section 18.04.030 of Chapter 18.04 of the Santa Cruz Municipal Code is hereby amended to read as follows:

18.04.030 ADOPTION OF CODES.

Subject to the modifications and deletions set forth in Section 18.04.040 and by the State of California Building Standards Commission, the following documents are hereby adopted as part of the Building Code of the city of Santa Cruz:

California Code of Regulations Title 24 (hereafter CCR T 24), Part 1, The 2022 California Administrative Code;
CCR T 24, Part 2, Volumes 1 and 2, The 2022 California Building Code, including Appendices H, I, and P except as modified herein (hereafter CBC);
CCR T 24, Part 2.5, The 2022 California Residential Code, including Appendices AH, AK, AQ, and AX, except as modified herein (hereafter CRC);
CCR T 24, Part 10, The 2022 California Existing Building Code, except as modified herein (hereafter CEBC);
CCR T 24, Part 11, The 2022 California Green Building Standards Code, except as modified herein (refer to Chapter 24.15, Green Building Regulations);
CCR T 24, Part 12, The 2022 California Referenced Standards Code; The Uniform Administrative Code, 1997 Edition, for the purpose of maintaining and administering the existing fee structure, except as modified herein (hereafter UAC); The Uniform Housing Code, 1997 Edition, except as modified herein (hereafter UHC); The Uniform Code for the Abatement of Dangerous Buildings, 1997 Edition, except as modified herein (hereafter UCADB);
One copy of each of the above documents is and shall be maintained on file in the office of the building official, for use and examination by the public.

17.5 Section 2. Chapter 18.15 of the Santa Cruz Municipal Code is hereby added to read as follows:

Chapter 18.15

ENERGY CODE

18.15.010 ENERGY CODE OF THE CITY OF SANTA CRUZ.

This chapter constitutes the Energy Code of the city of Santa Cruz.

18.15.030 ADOPTION OF THE ENERGY CODE.

The following documents are hereby adopted as part of the Energy Code of the City of Santa Cruz:

CCR T 24, Part 6, The 2022 California Energy Code, except as modified herein (hereafter CEnC).

One copy of the above documents is and shall be maintained on file in the office of the building official, for use and examination by the public.

18.15.040 ENERGY CODE - MODIFICATIONS
The following sections of the code as adopted in Section 18.15.030 are hereby modified as follows:

Section 100.1(b) of the CEnC is amended to add the following:

ELECTRIC HEATING APPLIANCE. A device that produces heat energy to create a warm environment by the application of electric power to resistance elements, refrigerant compressors, or dissimilar material junctions, as defined in the California Mechanical Code.

NET FREE AREA (NFA) is the total unobstructed area of the air gaps between louver and grille slats in a vent through which air can pass. The narrowest distance between two slats, perpendicular to the surface of both slats is the air gap height. The narrowest width of the gap is the air gap width.

The NFA is the air gap height multiplied by the air gap width multiplied by the total number of air gaps between slats in the vent.

Section 130.0 of the CEnC is amended to read as follows:
a) The design and installation of all lighting systems and equipment in nonresidential and hotel/motel buildings, outdoor lighting, and electrical power distribution systems within the scope of Section 100.0(a), shall comply with the applicable provisions of Sections 130.0 through 130.6.

NOTE: The requirements of Sections 130.0 through 130.6 apply to newly constructed buildings. Section 141.0 specifies which requirements of Sections 130.0 through 130.6 also apply to additions and alterations to existing buildings.

17.6 Subchapter 4 of the CEnC is amended to add Section 130.6 to be numbered, entitled, and to read as follows:
130.6 Electric Readiness Requirements for Systems Using Gas or Propane Where nonresidential systems using gas or propane are installed, construction drawings shall indicate electrical infrastructure and physical space accommodating the future installation of an electric heating appliance by including the following, as certified by a registered design professional or licensed electrical contractor:
a) Branch circuit wiring, electrically isolated and designed to serve all electric heating appliances in accordance with manufacturer requirements and the California Electrical Code, including the appropriate voltage, phase, minimum amperage, and an electrical receptacle or junction box within five feet of the appliance that is accessible with no obstructions. Appropriately sized conduit may be installed in lieu of conductors. b) Labeling of both ends of the unused conductors or conduit that includes the terms “For Future Electrical Appliance.”
c) Reserved circuit breakers in the electrical panel for each branch circuit, appropriately labeled (e.g., “Reserved for Future Electric Range”), and positioned on the opposite end of the panel supply conductor connection.
d) Connected subpanels, panelboards, switchboards, busbars, and transformers that are sized to serve the future electric heating appliances. The electrical capacity requirements shall be adjusted for demand factors in accordance with the California Electric Code. e) Physical space for future electric heating appliances, including equipment footprint, and if needed, a pathway reserved for routing of ductwork to heat pump evaporator(s), all of which shall be depicted on the construction drawings. The footprint necessary for future electric heating appliances may overlap with non-structural partitions and with the location of currently designed gas-fueled equipment.

Section 140.0 of the CEnC is amended to read as follows:

Nonresidential and hotel/motel buildings shall comply with all of the following:
a) The requirements of Sections 100.0 through 110.12 applicable to the building project (mandatory measures for all buildings).
b) The requirements of Sections 120.0 through 130.56 (mandatory measures for nonresidential and high-rise residential and hotel/motel buildings). c) Either the performance compliance approach (energy budgets) specified in Section 140.1 or the prescriptive compliance approach specified in Section 140.2. for the climate zone in which the building will be located. Climate zones are shown in Figure 100.1-A

17.7 NOTE to Section 140.0(c): The Commission periodically updates, publishes, and makes available to interested persons and local enforcement agencies precise descriptions of the Climate Zones, which is available by zip code boundaries depicted in the Reference Joint Appendices along with a list of the communities in each zone.

NOTE to Section 140.0: The requirements of Sections 140.1 through 140.10 apply to newly constructed buildings. Section 141.0 specifies which requirements of Section 140.1 through 140.10 also apply to additions or alterations to existing buildings.

Section 140.1 of the CEnC is amended to read as follows:

The following conditions are necessary for a building to comply with the performance approach:

1. The time-dependent valuation (TDV) energy budget calculated for the proposed design building under Subsection (b) is no greater than the TDV energy budget calculated for the Standard Design Building under Subsection (a); and

2. The source energy budget calculated for the proposed design building under Subsection (b) has a source energy compliance margin, relative to the energy budget calculated for the standard design building under Subsection (a), of at least 7 percent for all nonresidential occupancies.

EXCEPTION 1 to 140.1 item 2 A source energy compliance margin of at least 7 percent is not required when nonresidential occupancies are designed with single zone space-conditioning systems complying with Section 140.4(a)2.
(a) – (c): Subsections 140.1 (a) – (c) are adopted without modification.

Section 150.0 of the CEnC is amended as follows:

Single-family residential buildings shall comply with the applicable requirements of Sections 150(a) through 150.0(v).

NOTE: The requirements of Sections 150.0 (a) through (v) apply to newly constructed buildings.

Sections 150.2(a) and 150.2(b) specify which requirements of Sections 150.0(a) through 150.0(r) also apply to additions or alterations. The amendments to sections 150.0 (t) do not apply to additions or alterations.
(a) – (s): Subsections 150.0(a) – (s) are adopted without modification. (t) Heat pump space heater ready. Systems using a 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

17.8 as “240V ready.” All electrical components shall be installed in accordance with the California Electrical Code.

2. The main electrical service panel shall have a reserved space to allow for the installation of a double pole circuit breaker for a future heat pump space heater installation. The reserved space shall be permanently marked as “For Future 240V use.”

3. A designated exterior location for a future heat pump compressor unit with either a drain or natural drainage for condensate and adequate space to maintain the equipment in accordance with California Mechanical Code 304.1 & California Electrical Code 110.26.
(u) – (v): Subsections 150.0(u) – (v) are adopted without modification.

Section 150.1 of the CEnC is amended to read as follows:
(a) Section (a) is adopted without modification.
(b) Performance Standards. A building complies with the performance standards if the energy consumption calculated for the proposed design building is no greater than the energy budget calculated for the standard design building using Commission-certified compliance software as specified by the Alternative Calculation Methods Approval Manual.

1. Newly Constructed Buildings. The Energy Budget for newly constructed buildings is expressed in terms of the Energy Design Ratings, which are based on source energy and time-dependent valuation (TDV) energy. The Energy Design Rating 1 (EDR1) is based on source energy. The Energy Design Rating 2 (EDR2) is based on TDV energy and has two components, the Energy Efficiency Design Rating, and the Solar Electric Generation and Demand Flexibility Design Rating.

The total Energy Design Rating shall account for both the Energy Efficiency Design Rating and the Solar Electric Generation and Demand Flexibility Design Rating. The proposed building shall separately comply with the Source Energy Design Rating, Energy Efficiency Design Rating and the Total Energy Design Rating. A building complies with the performance approach if the TDV energy budget calculated for the proposed design building is no greater than the TDV energy budget calculated for the Standard Design Building with an EDR1 compliance margin of at least 9, relative to the Source Energy Design Rating 1 calculated for the Standard Design building.

EXCEPTION 1 to Section 150.1(b)1. A community shared solar electric generation system, or other renewable electric generation system, and/or community shared battery storage system, which provides dedicated power, utility energy reduction credits, or payments for energy bill reductions, to the permitted

17.9 building and is approved by the Energy Commission as specified in Title 24, Part 1, Section 10-115, may offset part or all of the solar electric generation system and demand flexibility Energy Design Rating required to comply with the Standards, as calculated according to methods established by the Commission in the Residential ACM Reference Manual.

EXCEPTION 2 to Section 150.1(b)1. A newly constructed building that does not require a PV system in accordance with section 150.1(c)14 does not need a Source Energy compliance margin of at least 9, relative to the Source Energy Design Rating 1 calculated for the Standard Design building.

2. Additions and Alterations to Existing Buildings. The Energy Budget for additions and alterations is expressed in terms of TDV energy.

3. Section (b)(3) is adopted without modification.
(c) Section (c) is adopted without modification.

Section 160.4 of the CEnC is amended to remove subsection (a) as follows:
(a) Reserved.

Sections (b) to (f) are adopted without amendments.

Section 160.9 Sections (a) to (c) of the CEnC are adopted without amendments. Sections (d) and (e) are added as follows:
(d) Systems using gas or propane water heaters to serve individual dwelling units shall include the following:

1. A dedicated 125-volt, 20-amp electrical receptacle that is connected to the electric panel with a 120/240-volt 3 conductor, copper branch circuit rated to 30 amps, within 3 feet from the water heater and accessible to the water heater with no obstructions.

A. Both ends of the unused conductor shall be labeled with the word “spare” and be electrically isolated.

B. A reserved single pole circuit breaker space in the electrical panel adjacent to the circuit breaker for the branch circuit in (A) above shall be included and labeled with the words “Future 240V Use.”

2. A condensate drain that is no more than 2 inches higher than the base of the installed water heater, and allows natural draining without pump assistance.

3. Construction drawings that indicate the reserved location of the future heat pump water heater with minimum interior dimensions of 39”x39”x96.”

4. A ventilation method that incorporates one of the following:

A. A space reserved for the future heat pump water heater with a volume of at least

17.10 700 cu. ft.

B. A space reserved for the future heat pump water heater that vents to a communicating space in the same pressure boundary via permanent openings with a minimum total net free area of 250 sq. in., so that the total combined volume connected via permanent openings is 700 cu. ft. or greater. The permanent openings shall be:
i. Fully louvered doors with fixed louvers consisting of a single layer of fixed flat slats; or
ii. Two permanent fixed openings, consisting of a single layer of fixed flat slat louvers or grilles, one commencing within 12 inches from the top of the enclosure and one commencing within 12 inches from the bottom of the enclosure.

C. A space reserved for the future heat pump water heater that includes two 8” capped ducts, venting to the building exterior.
i. All duct connections and building penetrations shall be sealed. ii. Exhaust air ducts and all ducts that cross pressure boundaries shall be insulated to a minimum insulation level of R-6 in compliance with California Mechanical Code 502.0.
iii. Airflow from termination points shall be diverted away from each other. (e) Central Heat Pump Water Heater Electric Ready. Water heating systems using gas or propane to serve multiple dwelling units shall meet the requirements of 160.9(e) and include the following for the future heat pump:

1. A system input capacity of the gas or propane water heating system that is determined as the sum of the input gas or propane capacity of all water heating devices associated with each gas or propane water heating system.

2. A space reserved that includes and complies with the following:

A. Heat Pump. The minimum space reserved shall include space for service clearances, air flow clearances, and compliant working spaces. Additionally, unless the space reserved is sufficient to support a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project, the space reserved shall comply with the following:
i. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, the minimum space reserved for the heat pump shall be 2.0 square feet per input 10,000 BTU/ HR of the gas or propane water heating system, and the minimum dimension of reserved spaces shall be 48 inches. ii. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, the minimum space reserved for the heat pump shall be 3.6 square feet per input 10,000 BTU/ HR of the gas or propane water heating system, and the minimum dimension of reserved spaces shall be 84 inches.

17.11 B. Tanks. The minimum space reserved shall include space for service clearances and keep outs. Additionally, unless the space reserved is sufficient to support a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project, the space reserved shall comply with the following:
i. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, the minimum space reserved for the storage and temperature maintenance tanks shall be 4.4 square feet per input 10,000 BTU/HR. of the gas or propane water heating system.
ii. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, the minimum physical space reserved for the storage and temperature maintenance tanks shall be 3.1 square feet per input 10,000 BTU/HR. of the gas or propane water heating system.

3. Ventilation, which shall be provided by including the following:

A. A physical space reserved for the heat pump located outside, or B. A pathway reserved for future routing of supply and exhaust air via ductwork from the reserved heat pump location to an appropriate outdoor location. Penetrations through the building envelope for louvers and ducts shall be planned and identified for future use. Additionally, unless the reserved pathway and penetrations are sized to serve a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project, the reserved pathway and penetrations through the building envelope shall be sized to comply with one of the following:
i. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, the minimum air flow rate shall be 70 CFM per input 10,000 BTU/HR of the gas or propane water heating system and the total external static pressure drop of ductwork and louvers shall not exceed 0.17” when the future heat pump water heater is installed.
ii. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, the minimum air flow rate shall be 420 CFM per input 10,000 BTU/HR of the gas or propane water heating system and the total external static pressure drop of ductwork and louvers shall not exceed 0.17” when the future heat pump water heater is installed.

4. Condensate drainage piping. An approved receptacle that is sized in accordance with the California Plumbing Code to receive the condensate drainage shall be installed within 3 feet of the reserved heat pump location, or piping shall be installed from within 3 feet of the reserved heat pump location to an approved discharge location that is sized in accordance with the California Plumbing Code. Additionally, unless the condensate drainage receptacles and piping are sized to serve a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project, the condensate drainage shall comply with the following:

A. If the system input capacity of the gas water heating system is less than 200,000

17.12 BTU/HR, condensate drainage shall be sized for 0.2 tons of refrigeration capacity per input 10,000 BTU/HR
B. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, condensate drainage shall be sized for 0.7 tons of refrigeration capacity per input 10,000 BTU/HR

5. Electrical.

A. Physical space shall be reserved on the bus system of the main switchboard or on the bus system of a distribution board to serve the future heat pump water heater system including the heat pump and temperature maintenance tanks. In addition, the physical space reserved shall be capable of providing adequate power to the future heat pump water heater as follows:
i. Heat Pump. For the Heat Pump, the physical space reserved shall comply with one of the following:

A. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, provide 0.1 kVA per input 10,000 BTU/HR B. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, provide 1.1 kVA per input 10,000 BTU/HR C. The physical space reserved supplies sufficient electrical power required to power a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project.
ii. Temperature Maintenance Tank. For the Temperature Maintenance Tank, the physical space reserved shall comply with one of the following:

A. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, provide 1.0 kVA per input 10,000 BTU/HR B. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, provide 0.6 kVA per input 10,000 BTU/HR C. The physical space reserved supplies sufficient electrical power required to power a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project.

The building electrical system shall be sized to meet the future electric requirements of the electric ready equipment specified in sections 160.9(a) – 160.9(e). To meet this requirement the building main service conduit, the electrical system to the point specified in each subsection, and any onsite distribution transformers shall have sufficient capacity to supply full rated amperage at each electric ready appliance in accordance with the California Electric Code.

17.13 Section 170.1 of the CEnC is adopted with amendments as follows:

A building complies with the performance approach if the TDV energy budget calculated for the proposed design building under Subsection (b) is no greater than the TDV energy budget calculated for the Standard Design Building under Subsection (a). Additionally,

1. The source energy budget of a newly constructed low-rise multifamily building shall be at least 10% lower than that of the Standard Design Building.

2. The source energy budget of a newly constructed high-rise multifamily building shall be at least 4% lower than that of the Standard Design Building.

Sub-sections (a) to (d) are adopted without amendments.

18.15.050 PERMIT FEES.

The chief building official shall charge and receive such fees for services, inspections, and permits relating to any work subject to this chapter as set forth in Chapter 3, Table 3C, of the Uniform Administrative Code as adopted in Section 18.04.030 and in the fee schedule established by city council resolution.

18.15.060 PENALTIES.

Any person, firm, or corporation violating any provisions of this chapter shall be subject to the penalties provided in Title 4 or alternatively delineated in the Santa Cruz County superior court uniform bail and penalty schedule for the city of Santa Cruz.

Section 3. This ordinance shall take effect and be in full force thirty (30) days after final adoption.

PASSED FOR PUBLICATION this 14th day of November, 2023, by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: __________________________
Fred Keeley, Mayor
ATTEST: ___________________________
Bonnie Bush, City Clerk Administrator

17.14 PASSED FOR FINAL ADOPTION this 28th day of November, 2023 by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: ___________________________
Fred Keeley, Mayor
ATTEST: ___________________________
Bonnie Bush, City Clerk Administrator
This is to certify that the above
and foregoing document is the
original of Ordinance No. 2023-XX
and that it has been published or
posted in accordance with the
Charter of the City of Santa Cruz.
___________________________
Bonnie Bush, City Clerk Administrator

17.15 ORDINANCE NO. 2023-XX

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ AMENDING SECTION 18.04.030 – ADOPTION OF CODES OF THE SANTA CRUZ MUNICIPAL CODE AND ADDING CHAPTER 18.15 - ENERGY CODE, ADOPTING LOCAL AMENDMENTS TO THE CALIFORNIA ENERGY CODE, PART 6 OF THE CALIFORNIA BUILDING CONSTRUCTION AND FIRE PREVENTION CODE.

BE IT ORDAINED By the City of Santa Cruz as follows:

Section 1. Section 18.04.030 of Chapter 18.04 of the Santa Cruz Municipal Code is hereby amended to read as follows:

18.04.030 ADOPTION OF CODES.

Subject to the modifications and deletions set forth in Section 18.04.040 and by the State of California Building Standards Commission, the following documents are hereby adopted as part of the Building Code of the city of Santa Cruz:

California Code of Regulations Title 24 (hereafter CCR T 24), Part 1, The 2022 California Administrative Code;
CCR T 24, Part 2, Volumes 1 and 2, The 2022 California Building Code, including Appendices H, I, and P except as modified herein (hereafter CBC);
CCR T 24, Part 2.5, The 2022 California Residential Code, including Appendices AH, AK, AQ, and AX, except as modified herein (hereafter CRC);
CCR T 24, Part 6, The 2022 California Energy Code, except as modified herein (hereafter CEnC);
CCR T 24, Part 10, The 2022 California Existing Building Code, except as modified herein (hereafter CEBC);
CCR T 24, Part 11, The 2022 California Green Building Standards Code, except as modified herein (refer to Chapter 24.15, Green Building Regulations); CCR T 24, Part 12, The 2022 California Referenced Standards Code; The Uniform Administrative Code, 1997 Edition, for the purpose of maintaining and administering the existing fee structure, except as modified herein (hereafter UAC); The Uniform Housing Code, 1997 Edition, except as modified herein (hereafter UHC); The Uniform Code for the Abatement of Dangerous Buildings, 1997 Edition, except as modified herein (hereafter UCADB);

17.16 One copy of each of the above documents is and shall be maintained on file in the office of the building official, for use and examination by the public.

Section 2. Chapter 18.15 of the Santa Cruz Municipal Code is hereby added to read as follows:

Chapter 18.15

ENERGY CODE

18.15.010 ENERGY CODE OF THE CITY OF SANTA CRUZ.

This chapter constitutes the Energy Code of the city of Santa Cruz.

18.15.030 ADOPTION OF THE ENERGY CODE.

The following documents are hereby adopted as part of the Energy Code of the City of Santa Cruz:

CCR T 24, Part 6, The 2022 California Energy Code, except as modified herein (hereafter CEnC).

One copy of the above documents is and shall be maintained on file in the office of the building official, for use and examination by the public.

18.15.040 ENERGY CODE - MODIFICATIONS
The following sections of the code as adopted in Section 18.15.030 are hereby modified as follows:

Section 100.1(b) of the CEnC is amended to add the following:

ELECTRIC HEATING APPLIANCE. A device that produces heat energy to create a warm environment by the application of electric power to resistance elements, refrigerant compressors, or dissimilar material junctions, as defined in the California Mechanical Code.

NET FREE AREA (NFA) is the total unobstructed area of the air gaps between louver and grille slats in a vent through which air can pass. The narrowest distance between two slats, perpendicular to the surface of both slats is the air gap height. The narrowest width of the gap is the air gap width. The NFA is the air gap height multiplied by the air gap width multiplied by the total number of air gaps between slats in the vent.

Section 130.0 of the CEnC is amended to read as follows:
a) The design and installation of all lighting systems and equipment in nonresidential and hotel/motel buildings, outdoor lighting, and electrical power distribution systems within

17.17 the scope of Section 100.0(a), shall comply with the applicable provisions of Sections 130.0 through 130.5130.6.

NOTE: The requirements of Sections 130.0 through 130.5130.6 apply to newly constructed buildings. Section 141.0 specifies which requirements of Sections 130.0 through 130.5130.6 also apply to additions and alterations to existing buildings.

Subchapter 4 of the CEnC is amended to add Section 130.6 to be numbered, entitled, and to read as follows:
130.6 Electric Readiness Requirements for Systems Using Gas or Propane Where nonresidential systems using gas or propane are installed, construction drawings shall indicate electrical infrastructure and physical space accommodating the future installation of an electric heating appliance by including the following, as certified by a registered design professional or licensed electrical contractor:
a) Branch circuit wiring, electrically isolated and designed to serve all electric heating appliances in accordance with manufacturer requirements and the California Electrical Code, including the appropriate voltage, phase, minimum amperage, and an electrical receptacle or junction box within five feet of the appliance that is accessible with no obstructions. Appropriately sized conduit may be installed in lieu of conductors. b) Labeling of both ends of the unused conductors or conduit that includes the terms “For Future Electrical Appliance.”
c) Reserved circuit breakers in the electrical panel for each branch circuit, appropriately labeled (e.g., “Reserved for Future Electric Range”), and positioned on the opposite end of the panel supply conductor connection.
d) Connected subpanels, panelboards, switchboards, busbars, and transformers that are sized to serve the future electric heating appliances. The electrical capacity requirements shall be adjusted for demand factors in accordance with the California Electric Code. e) Physical space for future electric heating appliances, including equipment footprint, and if needed, a pathway reserved for routing of ductwork to heat pump evaporator(s), all of which shall be depicted on the construction drawings. The footprint necessary for future electric heating appliances may overlap with non-structural partitions and with the location of currently designed gas-fueled equipment.

Section 140.0 of the CEnC is amended to read as follows:

Nonresidential and hotel/motel buildings shall comply with all of the following:
a) The requirements of Sections 100.0 through 110.12 applicable to the building project (mandatory measures for all buildings).
b) The requirements of Sections 120.0 through 130.56 (mandatory measures for nonresidential and high-rise residential and hotel/motel buildings).

17.18 c) Either the performance compliance approach (energy budgets) specified in Section 140.1 or the prescriptive compliance approach specified in Section 140.2. for the climate zone in which the building will be located. Climate zones are shown in Figure 100.1-A NOTE to Section 140.0(c): The Commission periodically updates, publishes, and makes available to interested persons and local enforcement agencies precise descriptions of the Climate Zones, which is available by zip code boundaries depicted in the Reference Joint Appendices along with a list of the communities in each zone.

NOTE to Section 140.0: The requirements of Sections 140.1 through 140.10 apply to newly constructed buildings. Section 141.0 specifies which requirements of Section 140.1 through 140.10 also apply to additions or alterations to existing buildings.

Section 140.1 of the CEnC is amended to read as follows:

The following conditions are necessary for a building to comply with the performance approach: A building complies with the performance approach if

1. The time-dependent valuation (TDV) energy budget calculated for the pProposed dDesign bBuilding under Subsection (b) is no greater than the TDV energy budget calculated for the Standard Design Building under Subsection (a); and

2. The source energy budget calculated for the proposed design building under Subsection (b) has a source energy compliance margin, relative to the energy budget calculated for the standard design building under Subsection (a), of at least 7 percent for all nonresidential occupancies.

EXCEPTION 1 to 140.1 item 2 A source energy compliance margin of at least 7 percent is not required when nonresidential occupancies are designed with single zone space-conditioning systems complying with Section 140.4(a)2.
(a) – (c): Subsections 140.1 (a) – (c) are adopted without modification.

Section 150.0 of the CEnC is amended as follows:

Single-family residential buildings shall comply with the applicable requirements of Sections 150(a) through 150.0(v).

NOTE: The requirements of Sections 150.0 (a) through (rv) apply to newly constructed buildings. Sections 150.2(a) and 150.2(b) specify which requirements of Sections 150.0(a) through 150.0(r) also apply to additions or alterations. The amendments to sections 150.0 (t) do not apply to additions or alterations.
(a) – (s): Subsections 150.0(a) – (s) are adopted without modification. (t) Heat pump space heater ready. Systems using a gas or propane furnace to serve individual dwelling units shall include the following:

17.19 1. A dedicated 240 volt branch circuit wiring shall be installed within 3 feet from the furnace and accessible to the furnace with no obstructions. The branch circuit conductors shall be rated at 30 amps minimum. The blank cover shall be identified as “240V ready.” All electrical components shall be installed in accordance with the California Electrical Code.

2. The main electrical service panel shall have a reserved space to allow for the installation of a double pole circuit breaker for a future heat pump space heater installation. The reserved space shall be permanently marked as “For Future 240V use.”

3. A designated exterior location for a future heat pump compressor unit with either a drain or natural drainage for condensate and adequate space to maintain the equipment in accordance with California Mechanical Code 304.1 & California Electrical Code 110.26.
(u) – (v): Subsections 150.0(u) – (v) are adopted without modification.

Section 150.1 of the CEnC is amended to read as follows:
(a) Section (a) is adopted without modification.
(b) Performance Standards. A building complies with the performance standards if the energy consumption calculated for the proposed design building is no greater than the energy budget calculated for the standard design building using Commission-certified compliance software as specified by the Alternative Calculation Methods Approval Manual.

1. Newly Constructed Buildings. The Energy Budget for newly constructed buildings is expressed in terms of the Energy Design Ratings, which are based on source energy and time-dependent valuation (TDV) energy. The Energy Design Rating 1 (EDR1) is based on source energy. The Energy Design Rating 2 (EDR2) is based on TDV energy and has two components, the Energy Efficiency Design Rating, and the Solar Electric Generation and Demand Flexibility Design Rating.

The total Energy Design Rating shall account for both the Energy Efficiency Design Rating and the Solar Electric Generation and Demand Flexibility Design Rating. The proposed building shall separately comply with the Source Energy Design Rating, Energy Efficiency Design Rating and the Total Energy Design Rating. A building complies with the performance approach if the TDV energy budget calculated for the proposed design building is no greater than the TDV energy budget calculated for the Standard Design Building with an EDR1 compliance margin of at least 9, relative to the Source Energy Design Rating 1 calculated for the Standard Design building.

17.20 EXCEPTION 1 to Section 150.1(b)1. A community shared solar electric generation system, or other renewable electric generation system, and/or community shared battery storage system, which provides dedicated power, utility energy reduction credits, or payments for energy bill reductions, to the permitted building and is approved by the Energy Commission as specified in Title 24, Part 1, Section 10- 115, may offset part or all of the solar electric generation system and demand flexibility Energy Design Rating required to comply with the Standards, as calculated according to methods established by the Commission in the Residential ACM Reference Manual.

EXCEPTION 2 to Section 150.1(b)1. A newly constructed building that does not require a PV system in accordance with section 150.1(c)14 does not need a Source Energy compliance margin of at least 9, relative to the Source Energy Design Rating 1 calculated for the Standard Design building.

2. Additions and Alterations to Existing Buildings. The Energy Budget for additions and alterations is expressed in terms of TDV energy.

3. Section (b)(3) is adopted without modification.
(c) Section (c) is adopted without modification.

Section 160.4 of the CEnC is amended to remove subsection (a) as follows:
(a) Reserved. Systems using gas or propane water heaters to serve individual dwelling units shall include the following components:

1. A dedicated 125 volt, 20 amp electrical receptacle that is connected to the electric panel with a 120/240 volt 3 conductor, 10 AWG copper branch circuit, within 3 feet from the water heater and accessible to the water heater with no obstructions. In addition, all of the following:

A. Both ends of the unused conductor shall be labeled with the word “spare” and be electrically isolated; and
B. A reserved single pole circuit breaker space in the electrical panel adjacent to the circuit breaker for the branch circuit in A above and labeled with the words “Future 240V Use”; and

2. A Category III or IV vent, or a Type B vent with straight pipe between the outside termination and the space where the water heater is installed; and

3. A condensate drain that is no more than 2 inches higher than the base of the installed water heater, and allows natural draining without pump assistance; and

4. A gas supply line with a capacity of at least 200,000 Btu/hr.

17.21 Sections (b) to (f) are adopted without amendments.

Section 160.9 Sections (a) to (c) of the CEnC are adopted without amendments. Sections (d) and (e) are added as follows:
(d) Systems using gas or propane water heaters to serve individual dwelling units shall include the following:

1. A dedicated 125-volt, 20-amp electrical receptacle that is connected to the electric panel with a 120/240-volt 3 conductor, copper branch circuit rated to 30 amps, within 3 feet from the water heater and accessible to the water heater with no obstructions.

A. Both ends of the unused conductor shall be labeled with the word “spare” and be electrically isolated.

B. A reserved single pole circuit breaker space in the electrical panel adjacent to the circuit breaker for the branch circuit in (A) above shall be included and labeled with the words “Future 240V Use.”

2. A condensate drain that is no more than 2 inches higher than the base of the installed water heater, and allows natural draining without pump assistance.

3. Construction drawings that indicate the reserved location of the future heat pump water heater with minimum interior dimensions of 39”x39”x96.”

4. A ventilation method that incorporates one of the following:

A. A space reserved for the future heat pump water heater with a volume of at least 700 cu. ft.

B. A space reserved for the future heat pump water heater that vents to a communicating space in the same pressure boundary via permanent openings with a minimum total net free area of 250 sq. in., so that the total combined volume connected via permanent openings is 700 cu. ft. or greater. The permanent openings shall be:
i. Fully louvered doors with fixed louvers consisting of a single layer of fixed flat slats; or
ii. Two permanent fixed openings, consisting of a single layer of fixed flat slat louvers or grilles, one commencing within 12 inches from the top of the enclosure and one commencing within 12 inches from the bottom of the enclosure.

C. A space reserved for the future heat pump water heater that includes two 8” capped ducts, venting to the building exterior.
i. All duct connections and building penetrations shall be sealed. ii. Exhaust air ducts and all ducts that cross pressure boundaries shall be insulated to a minimum insulation level of R-6 in compliance with California Mechanical Code 502.0.
iii. Airflow from termination points shall be diverted away from each other. (e) Central Heat Pump Water Heater Electric Ready. Water heating systems using gas or propane to serve multiple dwelling units shall meet the requirements of 160.9(e) and include the following for the future heat pump:

17.22 1. A system input capacity of the gas or propane water heating system that is determined as the sum of the input gas or propane capacity of all water heating devices associated with each gas or propane water heating system.

2. A space reserved that includes and complies with the following:

A. Heat Pump. The minimum space reserved shall include space for service clearances, air flow clearances, and compliant working spaces. Additionally, unless the space reserved is sufficient to support a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project, the space reserved shall comply with the following:
i. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, the minimum space reserved for the heat pump shall be 2.0 square feet per input 10,000 BTU/ HR of the gas or propane water heating system, and the minimum dimension of reserved spaces shall be 48 inches. ii. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, the minimum space reserved for the heat pump shall be 3.6 square feet per input 10,000 BTU/ HR of the gas or propane water heating system, and the minimum dimension of reserved spaces shall be 84 inches.

B. Tanks. The minimum space reserved shall include space for service clearances and keep outs. Additionally, unless the space reserved is sufficient to support a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project, the space reserved shall comply with the following:
i. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, the minimum space reserved for the storage and temperature maintenance tanks shall be 4.4 square feet per input 10,000 BTU/HR. of the gas or propane water heating system.
ii. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, the minimum physical space reserved for the storage and temperature maintenance tanks shall be 3.1 square feet per input 10,000 BTU/HR. of the gas or propane water heating system.

3. Ventilation, which shall be provided by including the following:

A. A physical space reserved for the heat pump located outside, or B. A pathway reserved for future routing of supply and exhaust air via ductwork from the reserved heat pump location to an appropriate outdoor location.

Penetrations through the building envelope for louvers and ducts shall be planned and identified for future use. Additionally, unless the reserved pathway and penetrations are sized to serve a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project, the reserved pathway and penetrations through the building envelope shall be sized to comply with one of the following:
i. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, the minimum air flow rate shall be 70 CFM per input 10,000 BTU/HR of the gas or propane water heating system and the total external static pressure drop of ductwork and louvers shall not exceed 0.17”

17.23 when the future heat pump water heater is installed. ii. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, the minimum air flow rate shall be 420 CFM per input 10,000 BTU/HR of the gas or propane water heating system and the total external static pressure drop of ductwork and louvers shall not exceed

0.17” when the future heat pump water heater is installed.

4. Condensate drainage piping. An approved receptacle that is sized in accordance with the California Plumbing Code to receive the condensate drainage shall be installed within 3 feet of the reserved heat pump location, or piping shall be installed from within 3 feet of the reserved heat pump location to an approved discharge location that is sized in accordance with the California Plumbing Code. Additionally, unless the condensate drainage receptacles and piping are sized to serve a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project, the condensate drainage shall comply with the following:

A. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, condensate drainage shall be sized for 0.2 tons of refrigeration capacity per input 10,000 BTU/HR
B. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, condensate drainage shall be sized for 0.7 tons of refrigeration capacity per input 10,000 BTU/HR

5. Electrical.

A. Physical space shall be reserved on the bus system of the main switchboard or on the bus system of a distribution board to serve the future heat pump water heater system including the heat pump and temperature maintenance tanks. In addition, the physical space reserved shall be capable of providing adequate power to the future heat pump water heater in accordance with the following as follows:
i. Heat Pump. For the Heat Pump, the physical space reserved shall comply with one of the following:

A. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, provide 0.1 kVA per input 10,000 BTU/HR B. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, provide 1.1 kVA per input 10,000 BTU/HR C. The physical space reserved supplies sufficient electrical power required to power a heat pump water heater system that meets the total building hot water demand as calculated and documented by the responsible person associated with the project.
ii. Temperature Maintenance Tank. For the Temperature Maintenance Tank, the physical space reserved shall comply with one of the following:

A. If the system input capacity of the gas water heating system is less than 200,000 BTU/HR, provide 1.0 kVA per input 10,000 BTU/HR B. If the system input capacity of the gas water heating system is greater than or equal to 200,000 BTU/HR, provide 0.6 kVA per input 10,000 BTU/HR C. The physical space reserved supplies sufficient electrical power required to power a heat pump water heater system that meets the total building hot

17.24 water demand as calculated and documented by the responsible person associated with the project.

The building electrical system shall be sized to meet the future electric requirements of the electric ready equipment specified in sections 160.9 a – e. To meet this requirement the building main service conduit, the electrical system to the point specified in each subsection, and any onsite distribution transformers shall have sufficient capacity to supply full rated amperage at each electric ready appliance in accordance with the California Electric Code.

Section 170.1 of the CEnC is adopted with amendments as follows:

A building complies with the performance approach if the TDV energy budget calculated for the proposed design building under Subsection (b) is no greater than the TDV energy budget calculated for the Standard Design Building under Subsection (a). Additionally,

1. The source energy budget of a newly constructed low-rise multifamily building shall be at least 10% lower than that of the Standard Design Building.

2. The source energy budget of a newly constructed high-rise multifamily building shall be at least 4% lower than that of the Standard Design Building.

Sub-sections (a) to (d) are adopted without amendments.

18.15.050 PERMIT FEES.

The chief building official shall charge and receive such fees for services, inspections, and permits relating to any work subject to this chapter as set forth in Chapter 3, Table 3C, of the Uniform Administrative Code as adopted in Section 18.04.030 and in the fee schedule established by city council resolution.

18.15.060 PENALTIES.

Any person, firm, or corporation violating any provisions of this chapter shall be subject to the penalties provided in Title 4 or alternatively delineated in the Santa Cruz County superior court uniform bail and penalty schedule for the city of Santa Cruz.

Section 3. This ordinance shall take effect and be in full force thirty (30) days after final adoption.

17.25 PASSED FOR PUBLICATION this 14th day of November, 2023, by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: __________________________
Fred Keeley, Mayor
ATTEST: ___________________________
City Clerk Administrator
PASSED FOR FINAL ADOPTION this 28th day of November, 2023 by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: ___________________________
Fred Keeley, Mayor
ATTEST: ___________________________
Bonnie Bush, City Clerk Administrator
This is to certify that the above
and foregoing document is the
original of Ordinance No. 2023-XX
and that it has been published or
posted in accordance with the
Charter of the City of Santa Cruz.
___________________________
City Clerk Administrator

17.26 PLANNING COMMISSION

AGENDA REPORT
DATE: October 13, 2023
AGENDA OF: October 19, 2023
DEPARTMENT: City Manager’s Office and Planning & Community Development ITEM NO: Municipal Code Amendments to Title 18 – Buildings and Construction Chapter 18.04: Building Code, Creating an Energy Reach Code for Newly Constructed Buildings
LOCATION: Citywide
CEQA
DETERMINATION:

These amendments are consistent with the Negative Declaration approved for the City of Santa Cruz 2030 Climate Action Plan adopted by City Council on September 13, 2022. The ordinance is also exempt under exempt from CEQA under the general rule, 15061(b)(3) and per CEQA Guidelines Section 15308, Class 8, Actions by Regulatory Agencies for Protection of Natural Resources, APPLICANT: City of Santa Cruz
RECOMMENDATION: That the Planning Commission review and provide feedback on amendments to the municipal code creating an energy reach code for newly constructed buildings with an intent to provide developers with a range of options that will also meet goals to reduce greenhouse gas emissions associated with fossil fuel use citywide.

BACKGROUND:

On April 14, 2020, City Council unanimously adopted the Natural Gas Prohibition Ordinance, adding Chapter 6.100 to the Santa Cruz Municipal Code (SCMC) which prohibits natural gas infrastructure in new buildings. The Ordinance was adopted as part of the City’s ongoing efforts to improve building energy efficiency, support renewable energy sources, and accelerate decarbonization. The ordinance is similar to that adopted by the City of Berkeley and other cities in California. Santa Cruz’s ordinance did provide exceptions that the Berkeley ordinance did not, including an exception for restaurants (for cooking purposes only).

The City’s Community Climate Action Plan 2030 (CAP 2030) was adopted in September 2022, and CAP 2030 measure BE-1 specifies enforcement of the City’s new construction natural gas prohibition in order for the City to reach its legal greenhouse gas (GHG) emissions target of a

17.27 2
40% reduction in GHG emissions from 1990 levels by 2030. The successful implementation of the ordinance resulted in over 1,000 all-electric housing units being submitted for permits.

On April 17, 2023, the California Ninth Circuit Court of Appeals struck down the City of Berkeley’s natural gas prohibition as part of the ruling in California Restaurant Association v.

City of Berkeley. The Ninth Circuit held that the Energy Policy and Conservation Act (EPCA) preempts the City of Berkeley’s ordinance because EPCA does not allow State and local governments to prohibit an end-user from using natural gas products. Berkeley has appealed this ruling and is awaiting an en banc rehearing to determine the permanent fate of the ordinance.

Because Berkeley is a party to the case, Berkeley is under no obligation to act on the Ninth Circuit’s opinion until the district court issues a stay or injunction prohibiting enforcement of its ordinance. Accordingly, Berkeley has continued implementing the ordinance. However, the Ninth Circuit opinion is binding authority on other municipalities with similar ordinances. The City of Santa Cruz would therefore incur legal risk if it continued to enforce its own Natural Gas Prohibition Ordinance, given the similarities between its ordinance and the Berkeley ordinance.

Because of this ruling, on June 13, 2023, City Council adopted Resolution N. NS-30,156 temporarily suspending enforcement of the City’s Natural Gas Prohibition Ordinance. However, the City of Santa Cruz will be unable to reach its legal GHG emissions reduction target without addressing building energy performance as modeled during the CAP 2030 development. Staff has therefore drafted a new ordinance consistent with state and federal law in the form of a source energy reach code for new buildings to provide developers with a range of options with regard to the type of equipment and energy that will be supplied to new buildings and that will help to meet the CAP 2030 GHG emissions target.

DISCUSSION:

The California Restaurant Association v. City of Berkeley ruling limits how the City can reduce GHG emissions from new buildings. Staff have identified increased building energy performance requirements via local amendments to the California Energy Code (also known as a “reach code”) as the preferred alternative approach. The California Energy Code establishes whole-building efficiency requirements, which account for a building’s water heater, HVAC (heating, ventilation, and air conditioning) system, solar generating system, and insulation, among other things.

However, it does not account for cooking equipment, laundry dryers, or other unregulated energy uses. As such, the proposed reach code does not regulate cooking equipment, laundry dryers, or other energy uses not addressed by the California Energy Code.

California Energy Code Energy Evaluation Metrics
The 2022 Energy Code contains energy and water efficiency requirements (and indoor air quality requirements) for newly constructed buildings, additions to existing buildings, and alterations to existing buildings. The California Energy Code provides different metrics for different types of buildings and is organized into three categories:
• Single-Family Residential: A new single-family residential building must meet or exceed all “Energy Design Ratings” (EDR). There are three EDR categories:
o EDR1 (Source Energy) – EDR1 is a score representing a building’s energy efficiency expressed in terms that serve as a proxy for greenhouse gas emissions.

17.28 3
o EDR2 (Efficiency) – EDR2 is a score representing a building’s energy efficiency expressed in terms of the value and cost of energy consumed at different times of the day and year.
o EDR Total (Total Energy Design Rating) is a score representing the building’s total energy expressed in terms of the value and cost of energy consumed at different times of the day and year while also factoring in solar and energy demand flexibility.
• Multi-Family Residential: A new multi-family residential building must meet or exceed a standard that combines the value and cost of energy consumed at different times of the day and year (referred to as Time Dependent Valuation of energy, or TDV), and the emissions from the building’s energy source. The 2022 Source Energy metric is new for all multifamily buildings, and it was added to support decarbonization and electrification policy goals.
• Non-Residential: A new non-residential building must also meet or exceed a standard that uses TDV energy and Source Energy emissions scores.

Proposed Energy Performance Enhancements
Public Resources Code Section 25402.1(h)(2) and Section 10-106 of the Building Energy Efficiency Standards establish a process that allows local adoption of energy standards that are more stringent than the statewide standards. Under this process, the California Energy Commission requires any local amendments to the California Energy Code that affect energy use in regulated buildings to be cost effective and use less energy than the standard requirements contained in Title 24, Part 6.

The proposed “reach code" would increase the required EDR1 score for single family residential buildings and the required Source Energy scores for all other buildings. As noted in Table 1, singlefamily residential new buildings would be required to exceed the standard design Total Source Energy Design Rating (EDR1) score by at least 9 points. Table 1 (below) also identifies Source Energy performance requirement for new multi-family residential buildings (10% better than code for three stories or fewer, 4% better for four stories or more), and 7% better for new non-residential buildings.

Because of how the EDR1 and Source Energy scores are calculated in the 2022 California Energy Code, the higher standards proposed in the reach code would incentivize new buildings to include additional electric appliances and/or mechanical systems, while also allowing mixedfuel buildings that include additional energy efficiency measures. The enhanced performance requirements would apply equally to mixed-fuel and all-electric buildings and are costeffectively achievable through the energy code’s performance pathway without requiring appliances that exceed federal efficiency standards.

17.29 4
Table 1. Proposed Improved Energy Performance Standards Building Type Performance Requirement
Single Family Residential buildings Exceed the standard EDR1 requirement by at least 9 points
Multi-Family Residential
(Low-rise, < 3 stories)
Exceed the standard Source Energy
requirement by 10%
Multi-Family Residential
(High-rise, > 4 stories)
Exceed the standard Source Energy
requirement by 4%
Non-Residential Exceed the standard Source Energy
requirement by 7%
Electric Ready Requirements
The 2022 California Energy Code requires certain mixed-fuel buildings to include “electric ready” components including electric outlets near natural gas appliances, appropriate ventilation for future heat pump appliances, and reserved and labelled breakers in the electrical panel for future electric appliances as follows:
• Single-Family Residential – heat pump hot water heaters are prescriptively required, and “electric ready” infrastructure is required for any new building that installs a gas-fueled furnace, clothes dryer, and/or cooktop.
• Multi-Family Residential – “electric ready” infrastructure is required in a newly constructed multi-family residential unit that installs a gas fueled space heater, water heater, clothes dryer, and/or cooktop. Centralized water-heating systems for multifamily buildings in which dwelling units do not have separate water heaters are exempt from these requirements.

During the drafting of this report, staff considered developing requirements for “electric ready” infrastructure for centralized water-heating systems in new multi-family residential buildings and for water heating systems in new non-residential buildings. Due to the complexity of these systems, uncertainty around the size and energy needs of future electric centralized water-heating systems, and uncertainty about the cost effectiveness standards required for such measures, staff is not recommending these requirements at this time. Instead, staff recommends that building permit applications identify a pathway for electrical conduit and dedicated future equipment space on construction drawings for fuel-fired central hot water heating systems in newly constructed buildings that aren’t currently subject to electric-ready requirements.

Practical Effect of the Reach Code
Because the City is working within the confines of the California Energy Code, the description of the proposed approach above is inherently technical. This section illustrates the practical effect of the proposed approach by providing a simplified example of how a single-family home designer would comply with the reach code.

Under the current California Energy Code, a building designer working on a single-family home built to the code minimum would likely include high efficiency LED lighting, rooftop solar, an electric heat pump hot water heater, a natural gas furnace, insulated walls, an insulated attic, and efficient windows, among other things. The designer would load the proposed building design into a computer model and estimate its energy performance. The energy modeling software would

17.30 5
provide standard reporting metrics, including an EDR1. The designer would then compare the EDR1 to a standard design building. In this case, the proposed designed building’s EDR1 score would be equal to the standard design building’s EDR1 score. To calculate the compliance margin, you subtract the standard design building’s EDR1 rating from the proposed designed building’s EDR1. In this example, that results in a compliance margin of 0, which meets the compliance requirement for that part of the California Energy Code.

With the proposed reach code in place, the designer would now need to achieve a compliance margin of 9 points. That means that the EDR1 of the proposed designed building needs to be 9 points better than the standard design building (i.e., an EDR1 compliance margin of 6 or greater).

If this building designer replaced the gas furnace with a commonly available heat pump HVAC system, the building would achieve a score that is 9 EDR1 points better than the code minimum standard design and would be consistent with the proposed reach code requirements. Alternately, the building designer could keep the gas furnace and install a battery storage system, which would also result in an increase of more than 9 EDR1 points. The building designer also has the option to develop a package of efficiency and solar measures; so long as the measures lead to an increase of 9 or more EDR1 points better than the code minimum standard design, it is consistent with the reach code.

This example is similar for the other building types where the compliance margins could be achieved by either installing electric heat pump HVAC equipment or installing some package of additional solar capacity, battery storage systems, and efficiency measures.

Cost Effectiveness
The California Energy Commission requires any local amendments to the California Energy Code that affect energy use in regulated buildings (e.g., reach codes) to be cost effective and to use less energy than the standard requirements. The CEC requires the local agency to adopt a determination that the energy standards are cost effective at a public meeting. The determination must subsequently be filed with the California Energy Commission.

One way to illustrate cost effectiveness is through the “Time Dependent Valuation” or “TDV” metric. The TDV metric is what the California Energy Commission uses in evaluating cost effectiveness for efficiency measures in the California Energy Code and includes the onsite costs and savings of the proposed energy measures, as well as the energy system costs and benefits of the energy measures. The metric is “time dependent” because energy use has different costs and impacts depending on the time of day and season. For example, electricity saved during peak periods has a much higher value than electricity saved during off-peak periods.

In support of reach code development, the California Energy Codes and Standards Statewide Utility Program, which includes the State's Investor-Owned Utilities (PG& E, SDG&E, and SCE, under the auspices of the California Public Utilities Commission) developed and published the:
• 2022 Cost-Effectiveness Study: Single Family New Construction Study and the associated cost-effectiveness data;
• 2022 Cost-Effectiveness Study: Multifamily New Construction Study and the associated cost-effectiveness data; and

17.31 6
• 2022 Code: Non-residential New Construction Reach Code Cost-effectiveness Study and the associated cost-effectiveness data.

These studies and the associated cost-effectiveness data are highly detailed and are included in the record to support the findings required for CEC approval. The studies and the associated costeffectiveness data include a calculated benefit-to-cost ratio for a wide variety of measures, building types, and climate zones. A benefit-cost value of “1” or greater illustrates that the measures save more than they cost and are therefore “cost effective.” These studies and the associated costeffectiveness data are the basis for staff’s cost effectiveness findings and are sufficient to illustrate compliance with the requirements set forth under California Administrative Regulations Section 10-106.

Based on these studies, staff finds the proposed local amendments to the 2022 California Energy Code to be cost-effective and consume less energy than otherwise permitted by Title 24, Part 6. In short, using the California Energy Commission’s TDV metric, the proposed amendments save more than they cost to implement. The following additional detail is included for transparency and to facilitate the California Energy Commission’s review of the City’s cost effectiveness findings:

1. Requiring new single-family residential buildings to achieve an EDR1 margin over the standard building by 9 or more points. As illustrated in the study data, an all-electric singlefamily home with additional efficiency measures would save energy relative to the base code and would achieve an EDR1 margin of 10 and a benefit to cost ratio of greater than 1 on a TDV basis. The study data also shows that a mixed-fuel building with additional efficiency measures, additional rooftop solar, and a battery storage system would save energy relative to the base code and would achieve and EDR1 margin of 13.7 and a benefit to cost ratio of 1.2 on a TDV basis.

2. Requiring low rise multi-family buildings to achieve a Source Energy savings 10% or more. As illustrated in the study data, an all-electric low rise multi-family building built to minimum code standards would achieve a Source Energy margin of 10% and a benefit to cost ratio of 9.8 on a TDV basis. The study data also shows that a mixed-fuel building with additional efficiency measures, additional rooftop solar, and a battery storage system would save energy relative to the base code, would achieve a Source Energy margin of 17% and would achieve a benefit to cost ratio of 1.5 on a TDV basis.

3. Requiring high-rise multi-family buildings to achieve a Source Energy savings of 4% or more. As illustrated in the study data, an all-electric high rise multi-family building built to minimum code standards would achieve a Source Energy margin of 7% and a benefit to cost ratio of 2.4 on a TDV basis. The study data also shows that a mixed-fuel building with additional efficiency measures, and additional rooftop solar would save energy relative to the base code, would achieve a Source Energy margin of 4%, and would achieve a benefit to cost score of 3.5 on a TDV basis.

4. Requiring non-residential buildings to achieve a Source Energy budget savings of 7%. The Non-Residential New Construction Reach Code Cost-effectiveness Study provides analysis for several non-residential building prototypes. One of the prototypes is a retail building, which prescriptively requires electric heat pump space conditioning and along with other similar small-to-medium non-residential buildings that prescriptively require electric space conditioning, would be exempt from the reach code. As illustrated in the study data for the remaining non-residential building prototypes, all-electric new nonresidential buildings built with additional efficiencies meet or exceed the 7% compliance

17.32 7
margin. Mixed-fuel non-residential buildings with various additional energy efficiency measures and rooftop solar, would meet or exceed the 7% compliance margin, save energy relative to the base code, and are cost effective on a TDV basis.

COMMUNITY OUTREACH:

In addition to extensive outreach conducted between 2019 and 2022 during the development of the 2020 ordinance prohibiting natural gas in new buildings and the CAP 2030, on October 11, 2023, staff conducted a virtual outreach meeting for builders, designers, developers, and contractors who do business in the City of Santa Cruz. Approximately 14 individuals participated in the meeting. Staff also conducted outreach with the Mayor’s Community Climate Action Task Force on October 12, 2023 where 10 individuals participated. Staff presented the draft ordinance and discussed questions and comments from participants. Feedback included questions related to how gas cooking appliances and electric vehicle chargers factored into the ordinance, whether the ordinance applies to ADUs, the scale of single family and multi-family development expected, available rebates, how percentages were determined, whether both heating and cooling were modeled, and heat pumps with central water heating. Staff also prepared newspaper and online noticing of tonight’s Planning Commission meeting to give the community an opportunity to provide feedback.

NEXT STEPS:

This item will be scheduled for a first and second hearing with the City Council in November. Two readings are required, and if approved by the City Council, the ordinance would become effective March 1, 2024, after the final approval by the City Council and the California Energy Commission.

HEALTH IN ALL POLICIES (HiAP)
HiAP is a collaborative approach to improving the health of all people by incorporating health considerations into decision-making across sectors and policy areas. HiAP is based on 3 pillars:
equity, public health, and sustainability. The goal of HiAP is to ensure that all decision-makers are informed about the health, equity, and sustainability impacts of various policy options during the policy development process. The municipal code amendments support the pillar of equity and public health by ensuring all buildings are safe and healthy while remaining cost effective. The amendments support sustainability by reducing GHG emissions and fossil fuel dependence citywide consistent with the CAP 2030. Therefore, the proposed code amendments are considered consistent with the three pillars of HiAP.

ENVIRONMENTAL REVIEW
The municipal code amendments are consistent with the Negative Declaration approved for the City of Santa Cruz 2030 Climate Action Plan adopted by City Council on September 13, 2022.

Therefore, no further environmental review under the California Environmental Quality Act (CEQA) is required. The ordinance is also exempt under exempt from CEQA under the general rule, 15061(b)(3), because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Further, this ordinance is exempt per CEQA Guidelines Section 15308, Class 8, Actions by Regulatory Agencies for Protection of Natural Resources, since the proposed ordinance would institute regulatory requirements intended to protect the environment and natural resources.

17.33 8
Submitted by:

Tiffany Wise-West
Sustainability and Climate Action Manager
Clara Stanger
Senior Planner
Approved by:

Matthew VanHua
Principal Planner
Attachments:
• Proposed Ordinance, Strikeout/Underline
• Proposed Ordinance, Clean
• 2022 Cost-Effectiveness Study: Single Family New Construction Study and associated cost-effectiveness data
• 2022 Cost-Effectiveness Study: Multifamily New Construction Study and associated costeffectiveness data • 2022 Code: Non-residential New Construction Reach Code Cost-effectiveness Study and associated cost-effectiveness data

17.34 Prepared by:

Frontier Energy, Inc
Misti Bruceri & Associates, LLC
Prepared for:

Kelly Cunningham, Codes and Standards Program, Pacific Gas and Electric Last modified: 2023/06/20
Revision: 1.1
2022 Cost-Effectiveness Study:

Single Family New
Construction

17.35 Cost-Effectiveness Analysis: Single Family New Construction Legal Notice
This report was prepared by Pacific Gas and Electric Company and funded by the California utility customers under the auspices of the California Public Utilities Commission.

Copyright 2023, 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 demonstrating compliance
with the California Residential Building Energy
Efficiency Standards
CFI – California Flexible Installation
CFM – Cubic Feet per Minute
CO2 – Carbon Dioxide
CPAU – City of Palo Alto Utilities
CPUC – California Public Utilities Commission
CZ – California Climate Zone
DHW – Domestic Hot Water
DOE – Department of Energy
DWHR – Drain Water Heat Recovery
EDR – Energy Design Rating
EER – Energy Efficiency Ratio
EF – Energy Factor

17.36 Cost-Effectiveness Analysis: Single Family New Construction GHG – Greenhouse Gas
HERS Rater – Home Energy Rating System Rater
HPA – High Performance Attic
HPWH – Heat Pump Water Heater
HSPF – Heating Seasonal Performance Factor
HVAC – Heating, Ventilation, and Air Conditioning
IECC – International Energy Conservation Code
IOU – Investor Owned Utility
kBtu – kilo-British thermal unit
kWh – Kilowatt Hour
LBNL – Lawrence Berkeley National Laboratory
LCC – Lifecycle Cost
LLAHU – Low Leakage Air Handler Unit
VLLDCS – Verified Low Leakage Ducts in Conditioned Space MF – Multifamily
NEEA – Northwest Energy Efficiency Alliance
NEM – Net Energy Metering
NPV – Net Present Value
NREL – National Renewable Energy Laboratory
PG&E – Pacific Gas and Electric Company
POU – Publicly-Owned-Utilities
PV – Photovoltaic
SCE – Southern California Edison
SDG&E – San Diego Gas and Electric
SEER – Seasonal Energy Efficiency Ratio
SF – Single Family
SMUD – Sacramento Municipal Utility District
SoCalGas – Southern California Gas Company
TDV – Time Dependent Valuation
Therm – Unit for quantity of heat that equals 100,000 British thermal units Title 24 – Title 24, Part 6
TOU – Time-Of-Use
UEF – Uniform Energy Factor
ZNE – Zero-net Energy

17.37 Cost-Effectiveness Analysis: Single Family New Construction Summary of Revisions
Date Description Reference (page or section)
9/12/2022 Original Release N/A
6/20/2023 Minor revision to content, no change to results 1, 42

17.38 Cost-Effectiveness Analysis: Single Family New Construction

TABLE OF CONTENTS
Executive Summary.......................................................................................................................................................... 1 1 Introduction................................................................................................................................................................ 3 2 Methodology and Assumptions............................................................................................................................... 4

2.1 Analysis for Reach Codes..................................................................................................................................................... 4

2.1.1 Modeling ....................................................................................................................................................................... 4

2.1.2 Cost-Effectiveness ........................................................................................................................................................ 4

2.1.3 Utility Rates................................................................................................................................................................... 6

2.2 Greenhouse Gas Emissions ................................................................................................................................................. 6

2.3 Energy Design Rating........................................................................................................................................................... 7 3 Prototypes, Measure Packages, and Costs............................................................................................................ 8

3.3 Measure Definitions and Costs ........................................................................................................................................... 10

3.3.1 Efficiency, Solar PV, and Batteries ............................................................................................................................. 10

3.3.2 All-Electric................................................................................................................................................................... 16

3.4 Measure Packages ............................................................................................................................................................. 22 4 Results......................................................................................................................................................................24

4.1 2022 Metrics and Compliance............................................................................................................................................. 24

4.2 All-Electric Code Minimum Results ..................................................................................................................................... 26

4.3 All-Electric Plus Efficiency, PV, and Battery Results........................................................................................................... 29

4.4 Mixed Fuel Results ............................................................................................................................................................. 31

4.5 CARE Rate Comparison..................................................................................................................................................... 34

4.6 Utility Infrastructure Cost Sensitivity.................................................................................................................................... 36

4.7 Greenhouse Gas Reductions.............................................................................................................................................. 38 5 Summary ..................................................................................................................................................................41 6 References ...............................................................................................................................................................44 7 Appendices ..............................................................................................................................................................46

7.1 Map of California Climate Zones......................................................................................................................................... 46

7.2 Utility Rate Schedules......................................................................................................................................................... 47

7.2.1 Pacific Gas & Electric.................................................................................................................................................. 47

7.2.2 Southern California Edison ......................................................................................................................................... 53

7.2.3 Southern California Gas.............................................................................................................................................. 57

7.2.4 San Diego Gas & Electric............................................................................................................................................ 60

7.2.5 City of Palo Alto Utilities.............................................................................................................................................. 65

7.2.6 Sacramento Municipal Utilities District (Electric Only)................................................................................................. 68

7.2.7 Fuel Escalation Assumptions...................................................................................................................................... 69

7.3 Summary of Measures by Package .................................................................................................................................... 70

LIST OF TABLES
Table 1. Utility Tariffs Used Based on Climate Zone ............................................................................................................................ 6 Table 2: Prototype Characteristics........................................................................................................................................................ 8

17.39 Cost-Effectiveness Analysis: Single Family New Construction Table 3: Base case Characteristics of the Prototypes .......................................................................................................................... 9 Table 4: Base Package PV Capacities (kW-DC) ................................................................................................................................ 10 Table 5: Incremental Cost Assumptions ............................................................................................................................................. 13 Table 6. Single Family IOU Natural Gas Main Distribution Line Extension Costs............................................................................... 17 Table 7. Residential IOU Gas Line Extension Appliance Allowances ................................................................................................. 17 Table 8. Single Family IOU Natural Gas Service Line Extension Costs ............................................................................................. 17 Table 9. Single Family IOU Other Natural Gas Infrastructure Costs................................................................................................... 17 Table 10. Single Family IOU Total Natural Gas Infrastructure Costs1 ................................................................................................ 18 Table 11. Single Family CPAU Total Natural Gas Infrastructure Costs .............................................................................................. 18 Table 12. ADU Utility Infrastructure Costs .......................................................................................................................................... 19 Table 13: Lifetime of Water Heating & Space Conditioning Equipment Measures ............................................................................. 19 Table 14. Single Family All-Electric Appliance Incremental Costs...................................................................................................... 21 Table 15. ADU All-Electric Appliance Incremental Costs.................................................................................................................... 22 Table 16. Single Family Cost-Effectiveness: All-Electric Code Minimum............................................................................................ 27 Table 17. ADU Cost-Effectiveness: All-Electric Code Minimum.......................................................................................................... 28 Table 18. Single Family Cost-Effectiveness: All-Electric Energy Efficiency + Additional PV + Battery ............................................... 29 Table 19. ADU Cost-Effectiveness: All-Electric Energy Efficiency + Additional PV + Battery ............................................................. 30 Table 20. Single Family Cost-Effectiveness: Mixed Fuel Efficiency + PV + Battery............................................................................ 31 Table 21. ADU Cost-Effectiveness: Mixed Fuel Efficiency + PV + Battery ......................................................................................... 32 Table 22. Single Family Cost-Effectiveness: Mixed Fuel Packages ................................................................................................... 33 Table 23. ADU Cost-Effectiveness: Mixed Fuel Packages ................................................................................................................. 34 Table 24. On-Bill Cost-Effectiveness with CARE Tariffs: All-Electric Code Minimum ......................................................................... 35 Table 25. On-Bill Cost-Effectiveness with CARE Tariffs: Mixed Fuel Efficiency+ PV+ Battery Package ............................................ 36 Table 26. Single Family Cost-Effectiveness Comparison with Range of Natural Gas Utility Infrastructure Costs: All-Electric Code Minimum ............................................................................................................................................................................................. 37 Table 27. Single Family Cost-Effectiveness On-Bill Impact of CPUC Proposed Design on Gas Line Extension Allowances: AllElectric Code Minimum....................................................................................................................................................................... 38 Table 28: Single Family Greenhouse Gas Reductions (metric tons) .................................................................................................. 39 Table 29 ADU Greenhouse Gas Savings (metric tons) ...................................................................................................................... 40 Table 30. Summary of All-Electric Efficiency EDR2 Margins and Cost-Effectiveness ........................................................................ 42 Table 31. Summary of Mixed Fuel Efficiency EDR2 Margins and Cost-Effectiveness........................................................................ 43 Table 32: PG&E Baseline Territory by Climate Zone.......................................................................................................................... 48 Table 33: PG&E Monthly Gas Rate ($/therm)..................................................................................................................................... 48 Table 34: PG&E Monthly CARE (GL-1) Gas Rate ($/therm)............................................................................................................... 48 Table 35: SCE Baseline Territory by Climate Zone ............................................................................................................................ 54 Table 36: SoCalGas Baseline Territory by Climate Zone ................................................................................................................... 58 Table 37: SoCalGas Monthly Gas Rate ($/therm) .............................................................................................................................. 58 Table 38: SDG&E Baseline Territory by Climate Zone ....................................................................................................................... 60

17.40 Cost-Effectiveness Analysis: Single Family New Construction Table 39: SDG&E Monthly Gas Rate ($/therm).................................................................................................................................. 60 Table 40: CPAU Monthly Gas Rate ($/therm)..................................................................................................................................... 66 Table 41: Real Utility Rate Escalation Rate Assumptions................................................................................................................... 69 Table 42: Single Family Efficiency Package Measures ...................................................................................................................... 70 Table 43: Single Family Mixed Fuel Efficiency + PV + Battery Package Measures............................................................................ 71 Table 44: ADU Efficiency Package Measures .................................................................................................................................... 71 Table 45: Single Family All-Electric Code Compliant Efficiency Measures......................................................................................... 72 Table 46: ADU All-Electric Code Compliant Efficiency Measures....................................................................................................... 72

LIST OF FIGURES
Figure 1: Single Family All-Electric Home Compliance Impacts ......................................................................................................... 24 Figure 2: ADU All-Electric Home Compliance Impacts ....................................................................................................................... 25 Figure 3: Single Family Four Gas Appliance Home Compliance Impacts........................................................................................... 25 Figure 4. Map of California climate zones........................................................................................................................................... 46

17.41 17.42
Cost-Effectiveness Analysis: Single Family New Construction Executive Summary
1 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Executive Summary
The California Codes and Standards (C&S) Reach Codes program provides technical support to local governments considering adopting a local ordinance (reach code) intended to support meeting local and/or statewide energy efficiency and greenhouse gas reduction goals. The program facilitates adoption and implementation of the code when requested by local jurisdictions by providing resources such as cost-effectiveness studies, model language, sample findings, and other supporting documentation.

This report documents cost-effectiveness analysis results for traditional new detached single family and detached accessory dwelling unit (ADUs) building types. It evaluates mixed fuel and all-electric package options in all sixteen California climate zones (CZs). Packages include combinations of efficiency measures, on-site renewable energy, and battery energy storage.

The following summarizes key results from the study:
• All-electric packages have lower GHG emissions than mixed-fuel packages in all cases, due to the clean power sources currently available from California’s power providers. • The Reach Codes Team found all-electric new construction to be feasible and cost effective based on TDV in all cases. In many cases all-electric code minimum construction results in an increase in utility costs and is not cost-effective On-Bill. Some exceptions include the SMUD and CPAU territories where lower electricity rates relative to natural gas rates result in lower overall utility bills. • The 2022 Title 24 Code’s new source energy metric combined with the heat pump baseline encourage allelectric construction, providing an incentive that allows for some amount of prescriptively required building efficiency to be traded off. This compliance benefit for all-electric homes highlights a unique opportunity for jurisdictions to incorporate efficiency into all-electric reach codes. Efficiency and electrification have symbiotic benefits and are both critical for decarbonization of buildings. As demand on the electric grid is increased through electrification, efficiency can reduce the negative impacts of additional electricity demand on the grid, reducing the need for increased generation and storage capacity, as well as the need to upgrade upstream transmission and distribution equipment. The Reach Codes Team recommends that jurisdictions adopting an all-electric reach code for single family buildings also include an efficiency requirement with EDR2 margins consistent with the all-electric code minimum package.
• The code compliance margins for the ADU all-electric code minimum package are lower than for the single family prototype and code compliance can be more challenging for smaller dwelling units. As a result, the Reach Codes Team does not recommend an additional efficiency requirement for all-electric ADU ordinances. • Electrification combined with increased PV capacity results in utility cost savings and was found to be On-Bill cost effective in all cases. These results were based on today’s net energy metering rules and do not account for future changes to utility agreements, which are expected to decrease the value of PV to the consumer. • For jurisdictions interested in a reach code that allows for mixed fuel buildings, the mixed fuel efficiency, PV, and battery package was found to be cost effective based on TDV in all cases. Cost effectiveness was marginal because of the high cost of the battery system. EDR2 margins ranged from 7 to 30 for the costeffective packages. • Applying the CARE rates 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 report presents measures or measure packages that local jurisdictions may consider adopting to achieve energy savings and emissions reductions beyond what will be accomplished by enforcing minimum state requirements, the 2022 Building Energy Efficiency Standards (Title 24, Part 6), effective January 1, 2023.

Local jurisdictions may also adopt ordinances that amend different Parts of the California Building Standards Code or may elect to amend other state or municipal codes. The decision regarding which code to amend will determine the specific requirements that must be followed for an ordinance to be legally enforceable. Reach codes that amend Part 6 of the CA Building Code and require energy performance beyond state code minimums must demonstrate the

17.43 Cost-Effectiveness Analysis: Single Family New Construction Executive Summary
2 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 proposed changes are cost-effective and obtain approval from the Energy Commission. Although a cost-effectiveness study is only required to amend Part 6 of the CA Building Code, this study provides valuable context for jurisdictions pursuing other ordinance paths to understand the economic impacts of any policy decision. This study documents the estimated costs, benefits, energy impacts and greenhouse gas emission reductions that may result from implementing an ordinance based on the results to help residents, local leadership, and other stakeholders make informed policy decisions.

Model ordinance language and other resources are posted on the C&S Reach Codes Program website at LocalEnergyCodes.com. Local jurisdictions that are considering adopting an ordinance may contact the program for further technical support at [email protected].

17.44 Cost-Effectiveness Analysis: Single Family New Construction Introduction
3 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 1 Introduction
This report documents cost-effective combinations of measures that exceed the minimum state requirements, the 2022 Building Energy Efficiency Standards, effective January 1, 2023, for newly constructed single family buildings. This report was developed in coordination with the California Statewide Investor-Owned Utilities (CA IOUs) Codes and Standards Program, key consultants, and engaged cities—collectively known as the Reach Codes Team.

The analysis considers traditional detached single family and detached accessory dwelling unit (ADUs) building types and evaluates mixed fuel and all-electric package options in all sixteen California climate zones (CZs). 1 Packages include combinations of efficiency measures, on-site renewable energy, and battery energy storage.

The California Building Energy Efficiency Standards Title 24, Part 6 (Title 24) (California Energy Commission, 2021a) is maintained and updated every three years by two state agencies: the California Energy Commission (Energy Commission) and the Building Standards Commission (BSC). In addition to enforcing the code, local jurisdictions have the authority to adopt local energy efficiency ordinances—or reach codes—that exceed the minimum standards defined by Title 24 (as established by Public Resources Code Section 25402.1(h)2 and Section 10-106 of the Building Energy Efficiency Standards). Local jurisdictions must demonstrate that the requirements of the proposed ordinance are costeffective and do not result in buildings consuming more energy than is permitted by Title 24. In addition, the jurisdiction must obtain approval from the Energy Commission and file the ordinance with the BSC for the ordinance to be legally enforceable.

The Department of Energy (DOE) sets minimum efficiency standards for equipment and appliances that are federally regulated under the National Appliance Energy Conservation Act, including heating, cooling, and water heating equipment (E-CFR, 2020). Since state and local governments are prohibited from adopting higher minimum efficiencies than the federal standards require, the focus of this study is to identify and evaluate cost-effective packages that do not include high efficiency heating, cooling, and water heating equipment. High efficiency appliances are often the easiest and most affordable measures to increase energy performance. While federal preemption limits reach code mandatory requirements for covered appliances, in practice, builders may install any package of compliant measures to achieve the performance requirements.

1 See Appendix 7.1 Map of California Climate Zones for a graphical depiction of climate zone locations.

17.45 Cost-Effectiveness Analysis: Single Family New Construction Methodology and Assumptions
4 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 2 Methodology and Assumptions

2.1 Analysis for Reach Codes
This section describes the approach to calculating cost-effectiveness including benefits, costs, metrics, and utility rate selection.

2.1.1 Modeling
The Reach Codes Team performed energy simulations using software approved for 2022 Title 24 Code compliance analysis, CBECC-Res 2022.1.0.

The general approach applied in this analysis is to evaluate performance and determine cost effectiveness of various energy efficiency upgrade measures, individually and as packages, in single family buildings. Using the 2022 baseline as the starting point, prospective measures and packages were identified and modeled in each of the prototypes to determine the projected energy (therm and kWh) and compliance impacts. A large set of parametric runs were conducted to evaluate various options and develop packages of measures that met or exceeded minimum code performance. The analysis utilized a Python based parametric tool to automate and manage the generation of CBECCRes input files. This allowed for quick evaluation of various efficiency measures across multiple climate zones and prototypes and improved quality control. The batch process functionality of CBECC-Res was utilized to simulate large groups of input files at once.

2.1.2 Cost-Effectiveness

2.1.2.1 Benefits
This analysis used two different metrics to assess cost effectiveness of the proposed upgrades. Both methodologies require estimating and quantifying the incremental costs and energy savings associated with each energy efficiency measure. The main difference between the methodologies is the manner in which they value energy and thus the cost savings of reduced or avoided energy use:

Utility Bill Impacts (On-Bill): Customer-based lifecycle cost (LCC) approach that values energy based upon estimated site energy usage and customer utility bill savings using today’s electricity and natural gas utility tariffs. Total savings are estimated over a 30-year duration and include discounting of future costs and energy cost inflation.

Time Dependent Valuation (TDV): Energy Commission LCC methodology, which is intended to capture the total value or cost of energy use over 30 years. This method accounts for long-term projected costs, such as the cost of providing energy during peak periods of demand and other societal costs, such as projected costs for carbon emissions, as well as grid transmission and distribution impacts. This metric values energy use differently depending on the fuel source (natural gas, electricity, and propane), time of day, and season. For example, electricity used (or saved) during peak periods has a much higher value than electricity used (or saved) during off-peak periods due to the less inefficient energy generation sources providing peak electricity (Horii, Cutter, Kapur, Arent, & Conotyannis, 2014).

This is the methodology used by the Energy Commission in evaluating cost effectiveness for efficiency measures in Title 24, Part 6.

2.1.2.2 Costs
The Reach Codes Team assessed the incremental costs of the measures and packages over a 30-year lifecycle.

Incremental costs represent the equipment, installation, replacements, 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 for measures with lifetimes less than the evaluation period.

In calculating On-Bill cost effectiveness, incremental first costs were assumed to be financed into a mortgage or loan with a 30-year loan term and four percent interest rate. Financing was not applied to future replacement or maintenance costs. In calculating TDV cost effectiveness, incremental first costs were not assumed to be financed into a mortgage or loan.

17.46 Cost-Effectiveness Analysis: Single Family New Construction Methodology and Assumptions
5 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

2.1.2.3 Metrics
Cost-effectiveness is presented using net present value (NPV) and benefit-to-cost (B/C) ratio metrics.

NPV Savings: The lifetime NPV savings is reported as a cost-effectiveness metric, Equation 1 demonstrates how this is calculated. If the net savings of a measure or package is positive, it is considered cost-effective. Negative savings represent net costs.

B/C Ratio: Ratio of the present value (PV) of all benefits to the present value of all costs over 30 years (PV benefits divided by PV costs). The criteria benchmark for cost effectiveness is a B/C ratio greater than one. A value of one indicates the NPV of the savings over the life of the measure is equivalent to the NPV of the lifetime incremental cost of that measure. A value greater than one represents a positive return on investment. The B/C ratio is calculated according to Equation 2.

Equation 1
𝑁𝑁𝑁𝑁𝑁𝑁 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 = 𝑜𝑜𝑜𝑜 𝑙𝑙 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙 𝑏𝑏 − 𝑜𝑜𝑜𝑜 𝑙𝑙 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙 𝑐𝑐 Equation 2
𝐵𝐵 − − 𝐶𝐶 𝑅𝑅 = 𝑜𝑜𝑜𝑜 𝑙𝑙 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙 𝑏𝑏
𝑜𝑜𝑜𝑜 𝑙𝑙 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙 𝑐𝑐
Improving the efficiency of a project often requires an initial incremental investment. In most cases the benefit is represented by annual On-Bill utility or TDV savings, and the cost is represented by incremental first cost and replacement costs. However, some packages result in initial construction cost savings (negative incremental cost), and either energy cost savings (positive benefits), or increased energy costs (negative benefits). In cases where both construction costs and energy-related savings are negative, the construction cost savings are treated as the ‘benefit’ while the increased energy costs are the ‘cost.’ In cases where a measure or package is cost-effective immediately (i.e., upfront construction cost savings and lifetime energy cost savings), B/C ratio cost effectiveness is represented by “>1”.

The lifetime costs or benefits are calculated according to Equation 3.

Equation 3
𝑜𝑜𝑜𝑜 𝑙𝑙 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙 𝑐𝑐 𝑜𝑜𝑜𝑜 𝑏𝑏 = �(𝐴𝐴 𝐴𝐴 𝑐𝑐 𝑜𝑜𝑜𝑜 𝑏𝑏 )𝑡𝑡
(1 + )𝑡𝑡
𝑛𝑛
𝑡𝑡=0
Where:
• n = analysis term in years
• r = discount rate
The following summarizes the assumptions applied in this analysis to both methodologies. • Analysis term of 30 years
• Real discount rate of three percent
TDV is a normalized monetary format and there is a unique procedure for calculating the present value benefit of TDV energy savings. The present value of the energy cost savings in dollars is calculated by multiplying the TDV savings (reported by the CBECC-Res simulation software) by a NPV factor developed by the Energy Commission (see (Energy + Environmental Economics, 2020)). The 30-year residential NPV factor is $0.173/kTDV kBtu for the 2022 code cycle.

Equation 4
𝑇𝑇𝑇𝑇 𝑜𝑜𝑜𝑜 𝑙𝑙 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙 𝑏𝑏 = 𝑇𝑇𝑇𝑇 𝑒𝑒 ∗ 𝑁𝑁𝑁𝑁𝑁𝑁

17.47 Cost-Effectiveness Analysis: Single Family New Construction Methodology and Assumptions
6 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

2.1.3 Utility Rates
In coordination with the CA IOU rate team (comprised of representatives from Pacific Gas and Electric (PG&E), Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E)) and two Publicly-Owned-Utilities (POUs) (Sacramento Municipal Utility District (SMUD) and City of Palo Alto Utilities (CPAU)), the Reach Codes Team determined appropriate utility rates for each climate zone in order to calculate utility costs and determine On-Bill cost effectiveness for the proposed measures and packages. The utility tariffs, summarized in Table 1, were determined based on the most prevalent active rate in each territory. Utility rates were applied to each climate zone based on the predominant IOU serving the population of each zone, with a few climate zones evaluated multiple times under different utility scenarios. Climate Zones 10 and 14 were evaluated with both SCE/SoCalGas and SDG&E tariffs since each utility has customers within these climate zones. Climate Zone 5 is evaluated under both PG&E and SoCalGas natural gas rates. Two POU or municipal utility rates were also evaluated: SMUD in Climate Zone 12 and CPAU in Climate Zone 4.

First-year utility costs were calculated using hourly electricity and natural gas output from CBECC-Res and applying the utility tariffs summarized in Table 1. Annual costs were also estimated for customers eligible for the CARE tariff discounts on both electricity and natural gas bills. Appendix 7.2 Utility Rate Schedules includes details of each utility tariff. For cases with PV generation, the approved NEM2 tariffs were applied along with minimum daily use billing and mandatory non-bypassable charges. Future changes to the NEM tariffs are likely and the California Public Utilities Commission (CPUC) has issued a proposed decision with suggested changes that is expected to be finalized in 2022. 2 The ADU was assumed to have separate electric and gas meters from the main house.

Table 1. Utility Tariffs Used Based on Climate Zone
Climate Zones Electric / Gas Utility Electricity Natural Gas IOUs
1-5,11-13,16 PG&E / PG&E E-TOU Option C G1
5 PG&E / SoCalGas E-TOU Option C GR
6, 8-10, 14, 15 SCE / SoCalGas TOU-D Option 4-9 GR
7, 10, 14 SDG&E / SDG&E TOU-DR-1 GR
POUs
4 CPAU / CPAU E-1 G-2
12 SMUD / PG&E R-TOD (RT02) G1
Utility rates are assumed to escalate over time according to the assumptions from the CPUC 2021 En Banc hearings on utility costs through 2030 (California Public Utilities Commission, 2021a). Escalation rates through the remainder of the 30-year evaluation period are based on the escalation rate assumptions within the 2022 TDV factors. See Appendix 7.2.7 Fuel Escalation Assumptions for details.

2.2 Greenhouse Gas Emissions
The analysis reports the greenhouse gas (GHG) emission estimates based on assumptions within CBECC-Res. There are 8,760 hourly multipliers accounting for time dependent energy use and carbon based on source emissions, including renewable portfolio standard projections. There are two strings of multipliers—one for Northern California 2 https://www.cpuc.ca.gov/nemrevisit

17.48 Cost-Effectiveness Analysis: Single Family New Construction Methodology and Assumptions
7 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 climate zones, and another for Southern California climate zones. 3 GHG emissions are reported as average annual metric tons of CO2 equivalent over the 30-year building lifetime.

2.3 Energy Design Rating
The 2019 Title 24 Code introduced California’s Energy Design Rating (EDR) as the primary metric to demonstrate compliance with the energy code for single family buildings. This EDR was based on the hourly TDV energy use from a building that is compliant with the 2006 International Energy Conservation Code (IECC) as the Reference Building. The Reference Building has an EDR score of 100 while a zero-net energy (ZNE) home has an EDR score of zero. While the Reference Building is used to set the scale for the rating, the Proposed Design is still compared to the Standard Design based on the Title 24 prescriptive baseline assumptions to determine compliance.

In the 2022 Title 24 Code a second new EDR metric was introduced based on hourly source energy. The two EDR metrics are described below:
• EDR1 is calculated based on source energy.
• EDR2 is calculated based on TDV energy.

Furthermore, EDR2 is composed of two components for compliance purposes. The Efficiency EDR2 which represents the energy efficiency features of a home. The PV/Flexibility EDR2 includes the effects of PV and battery storage systems. Total EDR2 combines both the Efficiency and PV/Flexibility impacts. While the Efficiency EDR2 does not include the full impact of a battery system, it can include a self-utilization credit for batteries if certain conditions are met.

For a new, single family building to comply with the 2022 Title 24 Code, three criteria are required:

1. The Proposed EDR1 must be equal to or less than the EDR1 of the Standard Design, and

2. The Proposed Efficiency EDR2 must be equal to or less than the Efficiency EDR2 of the Standard Design, and

3. The Proposed Total EDR2 must be equal to or less than the Total EDR2 of the Standard Design.

This concept, consistent with California’s “loading order” which prioritizes energy efficiency ahead of renewable generation, requires projects meet a minimum Efficiency EDR2 before PV is credited but allows for PV to be traded off with additional efficiency when meeting the Total EDR2. A project may improve on building efficiency beyond the minimum required and subsequently reduce the PV generation capacity necessary to achieve the required Total EDR2.

However, it may not increase the size of the PV system and trade this off with a reduction of efficiency measures.

Results from this analysis are presented as EDR Margin, a reduction in the EDR score relative to the Standard Design.

EDR Margin is a better metric to use than absolute EDR in the context of a reach code because absolute values vary based on the home design and characteristics such as size and orientation. Referencing the margin results in similar requirements across a variety of designs. This approach aligns with how compliance is reported for the 2019 and 2022 Title 24 Code. The EDR Margin is calculated according to Equation 5.

Equation 5
𝐸𝐸 𝑀𝑀 = 𝑆𝑆 𝑆𝑆𝑆𝑆𝑆𝑆𝑆𝑆 𝑆𝑆 𝐸𝐸 − 𝑃𝑃 𝐸𝐸
3 CBECC-Res multipliers are the same for CZs 1-5 and 11-13 (Northern California), while there is another set of multipliers for CZs 6-10 and 14-16 (Southern California).

17.49 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
8 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 3 Prototypes, Measure Packages, and Costs
This section describes the prototypes and the scope of analysis drawing from previous 2019 Reach Code research where necessary.

3.1 Prior Reach Code Research
In 2019, the Reach Codes Team analyzed the cost-effectiveness of residential single family new construction projects for mixed-fuel and all-electric packages (Statewide Reach Codes Team, 2019). Using this analysis, several cities and counties in California adopted local energy code amendments encouraging or requiring that low-rise residential new construction be all-electric. As there were few changes to the single family requirements, this analysis for the 2022 code cycle leveraged the work completed for the 2019 reports. Initial efficiency packages were based on the final packages from the 2019 research and were revised to reflect measure specifications and costs based on new data.

3.2 Prototype Characteristics
The Energy Commission defines building prototypes which it uses to evaluate the cost-effectiveness of proposed changes to Title 24 requirements. For the 2022 code cycle the Energy Commission used two single family prototypes, both of which were used in this analysis. Additional details on the prototypes can be found in the Alternative Calculation Method (ACM) Approval Manual (California Energy Commission, 2018).

Additionally, a detached new construction ADU prototype was developed to reflect recent trends in California construction related to the high cost of housing (TRC, 2021). ADUs are additional dwelling units typically built on the property of an existing single-family parcel. ADUs are defined as new construction in the energy code when they are ground-up developments, do not convert an existing space to livable space, and are not attached to the primary dwelling. The evaluated prototype is not representative of an attached ADU constructed as an addition to an existing home.

The Reach Codes Team leveraged prior research to define the detached ADU baseline and measure packages. The house size and number of bedrooms were based on data from a survey conducted by UC Berkeley’s Center for Community Innovation (UC Berkeley Center for Community Innovation, 2021). The survey found that the average square footage for new ADUs statewide is 615 square feet and that the majority (61 percent) of new ADUs have one bedroom.

Table 2 describes the basic characteristics of each prototype. The prototypes have equal geometry on all walls, windows and roof to be orientation neutral.

Table 2: Prototype Characteristics
Characteristic Single Family
One-Story
Single Family
Two-Story ADU
Conditioned Floor Area 2,100 ft2 2,700 ft2 625 ft2
Num. of Stories 1 2 1
Num. of Bedrooms 3 3 1
Window-to-Floor Area Ratio 20% 20% 20%
The Energy Commission’s protocol for the two single family prototypes is to weight the simulated energy impacts by a factor that represents the distribution of single-story and two-story homes being built statewide. This study assumed 50 percent single-story and 50 percent two-story. Simulation results in this study are characterized according to this ratio, which is approximately equivalent to a 2,400-square foot (ft2) house. 4 ADU results are presented separately. 42,400 ft2 = (50% x 2,100 ft2) + (50% x 2,700 ft2)

17.50 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
9 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 The methodology used in the analyses for each of the prototypical building types begins with a design that precisely meets the minimum 2022 prescriptive requirements (zero compliance margin). Table 150.1-A in the 2022 Standards (California Energy Commission, 2021a) lists the prescriptive measures that determine the baseline design in each climate zone. Other features are consistent with the Standard Design in the ACM Reference Manual (California Energy Commission, 2022), and are designed to meet, but not exceed, the minimum requirements. Each prototype building has the following features:
• Slab-on-grade foundation.
• Vented attic.
• High performance attic in climate zones where prescriptively required (CZ 4, 8-16) with insulation installed at the ceiling and below the roof deck per Option B. (Refer to Table 150.1-A in the 2022 Standards.) • Ductwork located in the attic.

Table 3 describes additional characteristics as they were applied to the base case energy model in this analysis. In a shift from the 2019 Standards, the 2022 Standards define a prescriptive fuel source for space heating and water heating establishing a heat pump baseline. In each climate zone one heat pump is prescriptively required. In most climate zones the prescriptive base case includes a heat pump water heater and a natural gas furnace for space heating. In Climate Zones 3, 4, 13, and 14 this is reversed, where the base case has a heat pump space heater and natural gas tankless water heater.

Table 3: Base case Characteristics of the Prototypes
Characteristic Single Family ADU
Space
Heating/Cooling1,2
CZs 1-2,5-12,15-16: Natural gas furnace, split
AC 80 AFUE, 14 SEER, 11.7 EER
CZs 3-4,13-14: Split heat pump – 8.2 HSPF,
14 SEER, 11.7 EER
Same as single family
Water Heater1,2
CZs 1-2,5-12,15-16: Heat pump water heater
(HPWH) UEF = 2.0 located in the garage
CZs 3-4,13-14: Natural gas tankless –
UEF = 0.81
Same equipment type as SF
except HPWH is located inside
the conditioned space with the
supply air ducted from outside3
Hot Water
Distribution
Code minimum, all hot water lines insulated
CZs 1,16: Basic compact distribution credit Same as single family Drain Water Heat
Recovery Efficiency CZ 16: 65%, equal flow to shower & water heater Same as single family Cooking Natural Gas Same as single family
Clothes Drying Natural Gas Same as single family
PV System
Sized to offset 100% of electricity use for space
cooling, ventilation, lighting, appliance, & other
miscellaneous electric loads. Size differs by
climate zone ranging from 2.64 kW to 5.33 kW,
see Table 4.

PV is not required when the PV
system size required based on the
prescriptive calculations is less
than 1.8 kW, as is the case in
Climate Zones 1-9, 12, 14, and

16. In the other climate zones the
PV size ranges from 1.74 kW to

2.56 kW, see Table 4.
4 1 Equipment efficiencies are equal to minimum federal appliance efficiency standards. 2 AFUE = annual fuel utilization efficiency. SEER = seasonal energy efficiency ratio. EER = energy efficiency ratio.

HSPF = heating seasonal performance factor. UEF = uniform energy factor. 3 This version of CBECC-Res used in this analysis did not have the capability to directly model ducted HPWHs even though this configuration is called out as the Standard Design in the 2022 ACM (California Energy Commission, 2022). This was modeled by indicating that the tank is located within the conditioned space with the compressor unit located outside. 4 Exception 2 to Section 150.1(c)14 states that “no PV system is required when the minimum PV system size specified by section 150.1(c)14 is less than 1.8 kWdc.” In this analysis this exception is applied based on the sizes calculated per Equation150.1-C of Section 150.1(c)14. The performance software sizes the PV system based on the estimated energy use, which differs slightly from the prescriptive sizing. As a result, the baseline PV capacity from the performance software for Climate Zone 10 is less than 1.8 kWdc.

17.51 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
10 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 4 summarizes the PV capacities for the base case packages.

Table 4: Base Package PV Capacities (kW-DC)
Climate
Zone
Base Package
Single
Family ADU
CZ01 3.54 0
CZ02 2.99 0
CZ03 2.81 0
CZ04 2.90 0
CZ05 2.62 0
CZ06 2.64 0
CZ07 2.84 0
CZ08 3.13 0
CZ09 2.97 0
CZ10 3.19 1.74
CZ11 3.91 2.07
CZ12 3.12 0
CZ13 4.08 2.11
CZ14 3.16 0
CZ15 5.33 2.56
CZ16 2.90 0

3.3 Measure Definitions and Costs
Measures evaluated in this study fall into two categories: those associated with general efficiency, onsite generation, and demand flexibility and those associated with building electrification. The Reach Codes Team selected measures based on cost-effectiveness as well as decades of experience with residential architects, builders, and engineers along with general knowledge of the relative consumer acceptance of many measures.

The following sections describe the details and incremental cost assumptions for each of the measures. Incremental costs represent the equipment, installation, replacement, and maintenance costs of the proposed measures relative to the base case. 5
Replacement costs are applied for roofs, mechanical equipment, PV inverters and battery systems over the 30-year evaluation period. Maintenance costs are estimated for PV systems, but not any other measures.

Costs were estimated to reflect costs to the building owner. All costs are provided as present value in 2023 (2023 PV$).

The Reach Codes Team obtained measure costs from distributors, contractors, literature review, and online sources such as Home Depot and RS Means. Contractor markups are incorporated. These are the Reach Codes Team best estimate of average costs statewide. However, it's recognized that local costs may differ, and that inflation and supply chain issues may also impact costs.

3.3.1 Efficiency, Solar PV, and Batteries
Following are descriptions of each of the efficiency, PV, and battery measures evaluated under this analysis and applied in at least one of the packages presented in this report. Table 5 summarizes the incremental cost assumptions for each of these measures.
5 All first costs are assumed to be financed in a mortgage and interest costs due to financing are included in the incremental costs. See Section 2.1.2 for details.

17.52 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
11 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Reduced Infiltration (ACH50): Reduce infiltration in single family homes from the default infiltration assumption of five (5) air changes per hour at 50 Pascals (ACH50) 6 by 40 percent to 3 ACH50. HERS rater field verification and diagnostic testing of building air leakage according to the procedures outlined in the 2022 Reference Appendices RA3.8 (California Energy Commission, 2021b).

Lower U-Factor Fenestration: Reduce window U-factor to 0.24. The prescriptive U-factor is 0.30 in all climates.

Higher SHGC Fenestration: Increase solar heat gain coefficient (SHGC) to 0.50 in climate zones where heating loads dominate. The baseline solar heat gain coefficient (SHGC) applied in the Standard Design is 0.35 in Climate Zones 1, 3, 5, and 16.

Cool Roof: Install a roofing product that’s rated by the Cool Roof Rating Council to have an aged solar reflectance (ASR) equal to or greater than 0.25. Steep-sloped roofs were assumed in all cases. The 2022 Title 24 specifies a prescriptive ASR of 0.20 for Climate Zones 10 through 15.

Increased Ceiling Insulation: Increase ceiling level insulation in a vented attic to R-49 or R-60 insulation.

Slab Insulation: Install R-10 perimeter slab insulation at a depth of 16-inches. This measure doesn’t apply to Climate Zone 16 where slab insulation is required prescriptively.

Low Pressure Drop Ducts: Upgrade the duct distribution system to reduce external static pressure and meet a maximum fan efficacy of 0.35 Watts per cfm. This may involve upsizing ductwork, reducing the total effective length of ducts, and/or selecting low pressure drop components such as filters. Fan watt draw must be verified by a HERS rater according to the procedures outlined in the 2022 Reference Appendices RA3.3 (California Energy Commission, 2021b).

Buried Radial Duct Design: Bury all ductwork in ceiling insulation by laying the ducts across the ceiling joists or inbetween ceiling joists directly on the ceiling drywall. Duct design is based on a radial design where individual ducts are run to each supply register. This allows for smaller diameter ducts, reducing duct losses and more easily meeting fully or deeply buried conditions. 7 Duct burial and duct system design must be verified by a HERS rater according to the procedures outlined in the 2022 Reference Appendices RA3.1.4.1.5 and RA3.1.4.1.6 (California Energy Commission, 2021b). This applies to the single family prototypes only.

R-8 Duct Insulation: Increase duct insulation to R-8 in the climate zones where R-6 insulation is prescriptive.

Ductless Mini-Split Heat Pump: In the ADU prototype replace the ducted split system with a ductless mini-split heat pump with three indoor heads. The system is evaluated as meeting the criteria for the variable capacity heat pump (VCHP) credit, introduced in the 2019 code cycle, which must be verified by a HERS rater according to the procedures outlined in the 2022 Reference Appendices RA3.4.4.3 (California Energy Commission, 2021b). This credit requires verification of refrigerant charge, that all equipment is entirely within conditioned space, that airflow is directly supplied to all habitable space and that wall mounted thermostats serve any zones greater than 150 square feet.

Compact Hot Water Distribution: Design the hot water distribution system to meet minimum requirements for the basic compact hot water distribution credit according to the procedures outlined in the 2022 Reference Appendices RA4.4.6 (California Energy Commission, 2021b). In many single family homes this may require moving the water heater from an exterior to an interior garage wall. CBECC-Res software assumes a 30% reduction in distribution losses for the basic credit.

Solar PV: Installation of on-site PV is required in the 2022 residential code unless an exception is met. The PV sizing methodology in each package was developed to offset annual building electricity use and avoid oversizing which would 6 Whole house leakage tested at a pressure difference of 50 Pascals between indoors and outdoors. 7 The duct systems in the Central Valley Research Homes Project Final Project Report are illustrative of this approach (Proctor, Wilcox, & Chitwood, 2018).

17.53 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
12 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 violate net energy metering (NEM) rules. 8 In all cases, PV is evaluated in CBECC-Res according to the California Flexible Installation (CFI) assumptions.

The Reach Codes Team used two options within the CBECC-Res software for sizing the PV system, described below.

The first option, “Standard Design PV”, was applied in the base case simulations and packages where the PV system size was not changed from the minimum system size required. For the PV packages, the second option was used with a scaling of 100 percent. The Reach Codes Team evaluated an all-electric single family and ADU home with a PV system sized to offset 100 and 90 percent of the total calculated electricity use. Sizing to 100 percent proved to be more cost-effective based on customer utility bills in most cases. As a result, the PV packages were sized to offset 100 percent of electricity use.
• Standard Design PV – the same PV capacity as is required for the Standard Design case9 • Specify PV System Scaling – a PV system sized to offset a specified percentage of the estimated electricity use of the Proposed Design case
One exception to the PV requirement is when the minimum PV system size required is less than 1.8 kWh. This exception applies to the ADU models in Climate Zones 1-9, 12, 14, and 16. For these cases no PV system is required by code and no PV system was modeled in the base case simulations.

Battery Energy Storage: A battery system was evaluated in CBECC-Res with control type set to “Advanced Demand Response Control” and with default efficiencies of 95% for both charging and discharging. The “Advanced Demand Response Control” option assumes the battery system will charge or discharge depending on the needs of the grid. To qualify for the Advanced Demand Response Control the battery system must meet the requirements outlined in the 2022 Reference Appendices JA13.3.3.2 (California Energy Commission, 2021b). 8 NEM rules apply to the IOU territories only.
9 The Standard Design PV system is sized to offset the electricity use of the building loads which are typically electric in a mixed fuel home, which includes all loads except space heating, water heating, clothes drying, and cooking.

17.54 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
13 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 5: Incremental Cost Assumptions
Measure
Performance
Level
Incremental Cost
(2023 PV$)1
Source & Notes
Single
Family ADU
Non-Preempted Measures
Reduced
Infiltration

3.0 vs 5.0
ACH50 $591 $362 $0.115/ft2 based on NREL’s BEopt cost database plus $250 HERS rater verification.

Window U-factor 0.24 vs 0.30 $2,280 $285 $4.23/ft2 window area based on analysis conducted for the 2019 and 2022 Title 24 cycles (Statewide CASE Team, 2018).

Window SHGC 0.50 vs 0.35 $0 $0 Based on feedback from Statewide CASE Team that higher SHGC does not necessarily have any incremental cost (Statewide CASE Team, 2017).

Cool Roof

0.25 vs 0.20
aged solar
reflectance
$219 $53
$0.07per ft2 of roof area first incremental cost for asphalt shingle product based on the 2022 Nonresidential High Performance Envelope CASE Report (Statewide CASE Team, 2020a).

Total costs assume present value of replacement at year 20 and residual cost for remaining product life at end of 30-year analysis period. Higher reflectance values for lower cost are achievable for tile roof products
Attic Insulation
R-49 vs R-30 $872 n/a
Based on costs from the 2022 Residential Additions & Alterations CASE Report (Statewide CASE Team, 2020b).

R-60 vs R-30 $1,420 n/a
R-60 vs R-38 $1,096 n/a
Slab Edge
Insulation R-10 vs R-0 $651 $449 $4 per linear foot of slab perimeter based on internet research. Assumes 16in depth.

Low Pressure
Drop Ducts

0.35 vs 0.45
W/cfm $99 $49
Costs assume one-hour labor for single family and half-hour for the ADU. Labor rate of $88 per hour is from 2022 RS Means for sheet metal workers and includes a weighted average City Cost Index for labor for California.

Buried Ducts Buried, radial
design $281 n/a
No cost for laying ducts on attic floor versus suspending, in some cases there will be cost savings. Neutral cost for radiant design versus trunk and branch design. A $250 HERS Rater verification fee is included.

Duct Insulation R-8 vs R-6 $201 n/a Based on costs from the 2022 Residential Additions & Alterations CASE Report (Statewide CASE Team, 2020b).

17.55 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
14 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Measure
Performance
Level
Incremental Cost
(2023 PV$)1
Source & Notes
Single
Family ADU
Ductless MiniSplit Heat Pump
Ductless system
meeting the
VCHP credit vs.
ducted split heat
pump
n/a $1,571
Costs were developed based on data from E3’s 2019 report Residential Building Electrification in California (Energy & Environmental Economics, 2019) and the 2022 AllElectric Multifamily CASE Report (Statewide CASE Team, 2020c). Equipment costs are from the CASE Report for the 10-story multifamily prototype assuming similar sized equipment between the multifamily dwelling unit and the ADU. Thermostat, wiring, electrical, and ducting costs are from the E3 study. A $250 HERS Rater verification fee is also included.

Where this measure is applied to the mixed fuel home with a gas furnace, this cost is in addition to the cost difference for a heat pump versus a gas furnace/split AC reported in Section 3.3.2.

Compact Hot
Water
Distribution
Basic credit –
homes with gas
tankless
$196 $0
For single family homes with a gas tankless water heater (mixed fuel homes in Climate Zones 3,4,13,14) assumes adding 20-feet venting at $14.69 per linear foot to locate water heater on interior garage wall, less 20-feet savings for PEX and pipe insulation at $5.98 per linear foot. Costs from online retailers. For single family homes with a HPWH there is an incremental cost savings from less pipe being required. For the ADU it is assumed the credit can be met without any changes to design and there is no cost impact.

Basic credit –
homes with
HPWH
$-134 $0
PV + Battery
PV System
First Cost $3.21/W $3.21/W
First costs from LBNL’s Tracking the Sun 2021 costs (Barbose, Darghouth, O'Shaughnessy, & Forrester, 2021) and represent median costs in California in 2020 of $3.90/WDC for residential systems. The first cost was reduced by the solar energy Investment Tax Credit of 30%.2 Costs are presented as the average of 2023, 2024, and 2025.

Inverter replacement cost of $0.14/WDC present value includes replacements at year 11 at $0.15/WDC (nominal) and at year 21 at $0.12/WDC (nominal) per the 2019 PV CASE Report (California Energy Commission, 2017).

System maintenance costs of $0.31/WDC present value assume $0.02/WDC (nominal) annually per the 2019 PV CASE Report (California Energy Commission, 2017).

Inverter
replacement $0.14/W $0.14/W
Maintenance $0.31/W $0.31/W

17.56 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
15 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Measure
Performance
Level
Incremental Cost
(2023 PV$)1
Source & Notes
Single
Family ADU
Battery
First cost $617/kWh $617/kWh
Costs are based on research conducted for the 2021 Batteries in Single Family Homes reach code report (Statewide Reach Codes Team, 2021a). $1,000/kWh first cost in 2020 based on Self-Generation Incentive Program (SGIP) residential participant cost data. To estimate the first cost in future years this was reduced by 7% annually based on SDG&E’s Behind-theMeter Battery Market Study (E-Source companies, 2020). The first cost is reduced by the solar energy Investment Tax Credit of 30%.2 Costs are presented as the average of 2023, 2024, and 2025. No SGIP incentives are included.

Replacement cost at year 10 and 20 was calculated based on the 2023 cost reduced by 7% annually over the next 10 years for a future value cost of $389 (present value of $290 in year 10 and $216 in year 20).

Replacement
cost $505/kWh $505/kWh
1 All first costs are assumed to be financed in a mortgage and interest costs due to financing are included in the incremental costs. See Section 2.1.2 for details.

Interest costs were not included for calculating TDV cost-effectiveness. 2As part of the Inflation Reduction Act in August 2022 the Section 25D Investment Tax Credit was extended and raised to 30% through 2032 with a step-down beginning in 2033. https://www.seia.org/sites/default/files/2022-08/Inflation%20Reduction%20Act%20Summary%20PDF%20FINAL.pdf

17.57 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
16 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

3.3.2 All-Electric
This analysis compared a code compliant mixed fuel prototype, which uses natural gas for three appliances (cooking, clothes drying and either space heating or water heating), with a code compliant all-electric prototype. In these cases, the relative costs between natural gas and electric appliances, differences between in-house electricity and natural gas infrastructure and the associated infrastructure costs for providing natural gas to the building were included.

To estimate costs the Reach Codes Team leveraged costs from the 2019 reach code cost-effectiveness studies for residential new construction (Statewide Reach Codes Team, 2019) and detached accessory dwelling units (Statewide Reach Codes Team, 2021b), 2022 RS Means, PG&E data, published utility schedules and rules, and online research.

Incremental costs for natural gas infrastructure to a single family building are presented in Table 6 through Table 11.

These costs are applied as cost savings for an all-electric home when compared to a mixed fuel home. This is the component with the highest degree of variability for all-electric homes. These costs are project dependent and may be significantly impacted by such factors as utility territory, site characteristics, distance to the nearest natural gas main and main location, joint trenching, whether work is conducted by the utility or a private contractor, and number of dwelling units per development. All gas utilities participating in this study were solicited for cost information. The CA IOU costs for single family homes presented are based primarily on cost data provided by PG&E.

Table 6 presents assumed gas main distribution line extension costs within gas CA IOU territory. Total distribution line extension costs are based on cost data provided by PG&E for new greenfield development. Total costs are reduced to account for deductions per the Utility Gas Main Extensions rules. 10 These rules categorize distribution line extensions as “refundable” costs, which are offset or subsidized by all other ratepayers. Refundable costs are first subsidized by appliance allowances, which are defined in Table 7. If there are additional costs in excess of the allowances, the developer has the option to either be refunded for the remaining amount over ten years or receive a 50 percent discount at time of application. The latter discount option is assumed in this analysis and is more commonly used by developers (California Public Utilities Commission, 2022). Two scenarios are presented in Table 6 since the appliance allowances differ by type of appliance. One is for the base case home with a prescriptive heat pump space heater which assumes a gas water heater, gas cooking, and gas clothes dryer (Climate Zones 3, 4, 13, and 14). The second is for the base case home with a prescriptive heat pump water heater which assumes a gas furnace, gas cooking, and gas clothes dryer. and a natural gas furnace for space heating (Climate Zones 1, 2, 5 through 12, 15, and 16).

The costs less the deductions were applied under the On-Bill cost-effectiveness methodology. The total costs before the deductions were applied under the TDV cost-effectiveness methodology to better reflect the full cost of gas main extensions since the deductions are subsidized by ratepayers and recovered via revenue from customers. This follows the analysis approach in the 2019 reach code study (Statewide Reach Codes Team, 2019) and was based on input received from the Energy Commission and agreement from the Reach Codes technical advisory team that the approach is appropriate. TDV cost savings impacts extend beyond the customer and account for societal impacts of energy use. Accounting for the full cost of the infrastructure upgrades was determined to be justified when evaluating under the TDV methodology.

The CPUC issued a Proposed Decision in August 2022 that recommends eliminating the subsidies effective July 1, 2023. At the time of publishing this report there had been no ruling on this decision and therefore this analysis assumes the existing rules will remain in place through the 2022 code cycle. A sensitivity analysis of how the results would change if the Proposed Decision were adopted is included in the results of this report. 10 PG&E Rule 15: https://www.pge.com/tariffs/assets/pdf/tariffbook/GAS_RULES_15.pdf.

SoCalGas Rule 20: https://www.socalgas.com/regulatory/tariffs/tm2/pdf/20.pdf.

SDG&E Rule 15: https://tariff.sdge.com/tm2/pdf/GAS_GAS-RULES_GRULE15.pdf.

17.58 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
17 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 6. Single Family IOU Natural Gas Main Distribution Line Extension Costs Total
Less Gas Extension Rule
Deductions1
PG&E SoCalGas SDG&E
Gas Water Heater Base $1,020 $0 $13 $0
Gas Space Heater Base $0 $0 $0
1After Utility Gas Main Extension Rule deductions.

Table 7. Residential IOU Gas Line Extension Appliance Allowances Appliance PG&E SoCalGas SDG&E
Water Heating $1,391 $682 $1,138
Space Heating $987 $818 $987
Oven/Range $84 $152 $201
Dryer Stub $24 $160 $289
Total - Gas Water Heater Base $1,499 $994 $1,628
Total – Gas Space Heater Base $1,095 $1,130 $1,477
Table 8 presents costs for the extension of service lines from a main distribution line to the home within gas CA IOU territory. These costs are based on data provided by PG&E excluding trenching. Costs are presented separately for a new subdivision in an undeveloped area as well as an infill development. The service extension is typically more costly in an infill scenario due to the disruption of existing roads, sidewalks, and other structures. For this analysis an average of the new subdivision and infill development costs was used, representing 80 percent of the new subdivision and 20 percent infill.

Table 8. Single Family IOU Natural Gas Service Line Extension Costs New
Subdivision
Infill
Development
Average
(80% New, 20% Infill)
$1,300 $6,750 $2,390
Table 9 presents other relative costs within gas CA IOU territory including gas meter installation and IOU plan review.

These costs are based on data provided by PG&E.

Table 9. Single Family IOU Other Natural Gas Infrastructure Costs Meter $300
Plan Review $850
Table 10 presents total costs including distribution and service line extensions, meter installation and plan review for the three gas CA IOUs for the two base case scenarios. Costs are based on the average service line extension costs from Table 8. For the single family analysis, based on the Reach Codes Team's conversations with the industry it is assumed that no upgrades to the electrical panel are required and that a 200 Amp panel is typically installed for both mixed fuel and all-electric homes.

17.59 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
18 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 10. Single Family IOU Total Natural Gas Infrastructure Costs1 Total Less Gas Extension Rule
Deductions2
PG&E SoCalGas SDG&E
Total - Gas Water Heater Base $4,560 $3,540 $3,553 $3,540 Total - Gas Space Heater Base $3,540 $3,540 $3,540
1Based on average service line extension costs from Table 8. 1After Utility Gas Main Extension Rule deductions.

CPAU provides gas service to its customers and therefore separate costs were evaluated based on CPAU gas service connection fees. 11 Table 11 presents the breakdown of gas infrastructure costs used in this analysis for CPAU. There is no main distribution line component since Palo Alto has little greenfield space remaining and most of the development is infill.

Table 11. Single Family CPAU Total Natural Gas Infrastructure Costs Item Cost
Service Extension $5,892
Meter $1,012
Plan Review Costs $924
Total $7,828
Table 12 presents incremental costs for natural gas infrastructure for the detached ADU. These costs are directly from the 2019 detached ADU reach code report (Statewide Reach Codes Team, 2021b) and were obtained from interviews and RS Means. For the ADU scenario it’s assumed that natural gas already exists on the lot and is being extended to the location of the ADU typically at the back of the lot. There are incremental cost savings for an all-electric ADU from not extending the natural gas service; however, there is also a small incremental cost for upgrading the electric service to accommodate the additional electrical load. The Reach Codes Team found that a new detached ADU would require that the building owner upgrade the service connection to the lot in both the mixed-fuel ADU design and the all-electric design. The most common size for this upgrade is to upsize the existing panel to 225A, which would not represent an incremental cost from the mixed-fuel project to the all-electric project. Feeder wiring to the ADU and the ADU subpanel will need to be slightly upgraded for the all-electric design. 11 CPAU Schedule G-5 effective 09-01-2019: https://www.cityofpaloalto.org/files/assets/public/utilities/utilitiesengineering/general-specifications/gas-service-connection-fees.pdf

17.60 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
19 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 12. ADU Utility Infrastructure Costs
Mixed Fuel Measure Mixed Fuel
Cost All-Electric Measure All-Electric Cost
All-Electric
Incremental Cost
Site natural gas service
extension $1,998 No site natural gas service $0 ($1,998) Site electrical service
connection upgrade 225A $3,500
Site electrical service
connection upgrade 225A $3,500 $0
100A feeder to ADU with
breaker $933
125A feeder to ADU with
breaker $1,206 $273
100A ADU subpanel $733 125A ADU subpanel $946 $213
Totals $7,164 $5,652 ($1,512)
Equipment lifetimes applied in this analysis for the water heating and space conditioning measures are summarized in Table 13. The lifetime for the heat pump, furnace, and air conditioner are based on the Database for Energy Efficient Resources (DEER) (California Public Utilities Commission, 2021b). In DEER, heat pump and air conditioner measures are assigned an effective useful lifetime (EUL) of 15 years and a furnace an EUL of 20 years. The heating and cooling system components are typically replaced at the same time when one reaches the end of its life and the other is near it. Therefore, it is assumed that both the furnace and air conditioner are replaced at the same time at year 17.5, halfway between 15 and 20 years. For HVAC system costing, air-conditioning is included in all cases in both the base case and proposed models. Present value replacement costs are included in the total lifetime incremental costs.

Table 13: Lifetime of Water Heating & Space Conditioning Equipment Measures Measure Lifetime
Gas Furnace 17.5
Air Conditioner 17.5
Heat Pump 15
Gas Tankless Water Heater 20
Heat Pump Water Heater 15
Appliance incremental costs are shown in Table 14 and Table 15. Replacement costs are applied to HVAC and DHW equipment over the 30-year evaluation period. Costs were estimated to reflect costs to the building owner. All costs are provided as present value in 2023 (2023 PV$). Costs due to variations in furnace, air conditioner, and heat pump capacity by climate zone were not accounted for.

The Reach Codes Team determined that the typical first installed cost for electric appliances is similar to that for natural gas appliances. Cost differences include equipment cost and installation, costs for natural gas piping from the meter to the appliance, and costs for electrical wiring to service the appliances.

Space Heater: Typical HVAC incremental costs were based on material costs from the AC Wholesalers website and labor costs from 2022 RS Means. In most cases the Reach Codes Team found that the material costs were slightly higher for the heat pump, but the labor costs were slightly higher for the gas furnace/AC installation. Costs were calculated for capacities ranging from a 2-ton to a 5-ton and the incremental costs used in this study were based on a weighted average of the expected nominal capacities from CBECC-Res autosizing results for the 2,100 square foot prototype. Incremental replacement costs for the heat pump are based on a 17.5-year lifetime for the gas furnace and air conditioner and a 15-year lifetime for the heat pump. Residual value of the gas furnace/AC at the end of the 30-year analysis period was accounted for to represent the remaining life of the equipment.

17.61 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
20 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Water Heater: Various cost sources were reviewed and the Reach Codes Team determined that installed first costs for a garage installed tankless gas water heater and HPWH are very similar and no incremental cost was applied for the equipment and installation (see below for details on costs for gas piping and electrical wiring). This accounts for slightly higher equipment costs for the HPWH but lower installation labor due to the elimination of the combustion gas venting.

Incremental replacement costs account for a 15-year HPWH lifetime and a 20-year lifetime for the gas tankless water heater. Residual value of the gas tankless at the end of the 30-year analysis period was accounted for to represent the remaining life of the equipment. For the ADU analysis the water heater is evaluated within the conditioned space with the supply air ducted from the outside. An HVAC contractor provided a cost estimate for supply air ducting through the wall in an ADU where the water heater is in an interior room adjacent to an exterior wall. The estimated total cost for this was $652.

A high efficiency HPWH that meets the Northwest Energy Efficiency Alliance (NEEA) 12 Tier 3 rating was also evaluated. HPWHs certified to meet NEEA Tier 3 or Tier 4 are the dominant product on the market today. According to NEEA all major HPWH manufacturers are represented in NEEA’s qualified product list 13 and there are only 11 listed products certified as Tier 1 or Tier 2. 14 While the Reach Codes Team evaluated a HPWH that just meets the federal minimum efficiency standards of close to 2.0 UEF to satisfy federal preemption requirements, the Reach Codes Team is not aware of any 2.0 UEF products that are available. The Reach Codes Team was unable to find any of the Tier 1 or Tier2 HPWHs for sale online and was unable to find any products for sale online that were not NEEA Tier 3 or Tier 4 certified. As a result, no incremental cost is assumed for a NEEA Tier 3 product versus a federal minimum efficiency product.

Clothes Dryer and Range: After review of various sources, the Reach Codes Team concluded that the cost difference between gas and electric resistance equipment for clothes dryers and stoves is negligible and that the lifetimes of the two technologies are also similar.

Electric Service Upgrade: The 2022 Title 24 Code requires electric readiness for gas appliances; as a result, the incremental costs to provide electrical service for electric appliances are minimal. The incremental costs accounted for in this study are calculated as the cost to install 220V service for the electric appliances less the cost for the electric ready requirements and for installing 110V service for the comparable gas appliance. Incremental costs are applied for the space heater, water heater, and cooking range. Based on builder surveys, it’s assumed that in a typical mixed fuel home both electric and gas service are provided to the dryer location and therefore no incremental costs for the dryer were applied. Costs assume 50A service for the range and 30A service for the space heater and water heater. Costs are assumed to be the same for the single family and ADU analyses.

In-House Natural Gas Infrastructure (from meter to appliances): Installation cost to run a natural gas line from the meter to the appliance location was estimated at $580 per appliance. These costs were based on material costs from Home Depot and labor costs from 2022 RS Means. The material costs were about 1/3 higher in RS Means than Home Depot, so the Reach Codes Team used the lower costs from Home Depot. The Reach Codes Team conducted a pipe sizing analysis for the two single family and one ADU prototype homes to estimate the length and diameter of gas piping required assuming the home included a gas furnace, gas tankless water heater, gas range, and gas dryer. Total estimated costs were very similar for each of the three prototypes and an average cost per appliance of $580 was determined. Costs are assumed to be the same for the single family and ADU analyses. 12 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.
13 https://neea.org/success-stories/heat-pump-water-heaters 14 https://neea.org/img/documents/residential-unitary-HPWH-qualified-products-list.pdf

17.62 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
21 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 14. Single Family All-Electric Appliance Incremental Costs Measure
Incremental Cost (2023 PV$)
First Cost Replacement
Cost
Total Lifetime
Financed
Heat Pump vs Gas Furnace/Split AC
Equipment & Installation ($151) $703 $533
Electric Service Upgrade $43 $0 $49
In-House Gas Piping ($580) $0 ($651)
Total ($688) $703 ($69)
Heat Pump Water Heater vs Gas Tankless
Equipment & Installation $0 $652 $652
Electric Service Upgrade $43 $0 $49
In-House Gas Piping ($580) $0 ($651)
Total ($537) $652 $49
NEEA Tier 3 HPWH vs Federal Minimum HPWH
Equipment $0 $0 $0
Total $0 $0 $0
Electric Resistance vs Gas Cooking
Equipment & Installation $0 $0 $0
Electric Service Upgrade $100 $0 $113
In-House Gas Piping ($580) $0 ($651)
Total ($480) $0 ($539)
Electric Resistance vs Gas Clothes Drying
Equipment & Installation $0 $0 $0
Electric Service Upgrade $0 $0 $0
In-House Gas Piping ($580) $0 ($651)
Total ($580) $0 ($651)

17.63 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
22 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 15. ADU All-Electric Appliance Incremental Costs
Measure
Incremental Cost (2023 PV$)
First Cost Replacement
Cost
Total Lifetime
Financed
Heat Pump vs Gas Furnace/Split AC
Equipment & Installation ($151) $703 $533
Electric Service Upgrade $43 $0 $49
In-House Gas Piping ($580) $0 ($651)
Total ($688) $703 ($69)
Heat Pump Water Heater vs Gas Tankless
Equipment & Installation $652 $652 $1,384
Electric Service Upgrade $43 $0 $49
In-House Gas Piping ($580) $0 ($651)
Total $115 $652 $781
NEEA Tier 3 HPWH vs Federal Minimum HPWH
Equipment $0 $0 $0
Total $0 $0 $0
Electric Resistance vs Gas Cooking
Equipment & Installation $0 $0 $0
Electric Service Upgrade $100 $0 $113
In-House Gas Piping ($580) $0 ($651)
Total ($480) $0 ($539)
Electric Resistance vs Gas Clothes Drying
Equipment & Installation $0 $0 $0
Electric Service Upgrade $0 $0 $0
In-House Gas Piping ($580) $0 ($651)
Total ($580) $0 ($651)

3.4 Measure Packages
The Reach Codes Team evaluated three packages for mixed fuel homes and five packages for all-electric homes for each prototype and climate zone, as described below.

1. All-Electric Code Minimum: This package meets all the prescriptive requirements of the 2022 Title 24 Code. In some instances, the prescriptive minimum package did not comply with code and efficiency measures were added to meet minimum compliance requirements. The added efficiency measures can be found in Table 45 and Table 46.

2. Efficiency Only: This package uses only efficiency measures that don’t trigger federal preemption issues including envelope and water heating or duct distribution efficiency measures.

3. Efficiency + NEEA (Preempted): This package was evaluated for the all-electric homes only and shows an alternative design that applies water heating equipment that is more efficient than federal standards meeting the NEEA Tier 3 rating. The Reach Codes Team considers this more reflective of how builders meet above code requirements in practice.

4. Efficiency + PV: Using the Efficiency Package as a starting point, PV capacity was added to offset most of the estimated electricity use.

17.64 Cost-Effectiveness Analysis: Single Family New Construction Prototypes, Measure Packages, and Costs
23 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

5. Efficiency + PV + Battery: Using the Efficiency & PV Package as a starting point, a battery system was added.

For mixed-fuel homes the package of efficiency measures differed from the Efficiency Package in some climate zones to arrive at a cost effective solution.

17.65 Cost-Effectiveness Analysis: Single Family New Construction Results
24 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 4 Results

4.1 2022 Metrics and Compliance
The Reach Codes Team evaluated the compliance impacts of a prescriptive all-electric home as well as a traditional mixed fuel home with four gas appliances (space heating, water heating, cooking, clothes drying). Compliance is relative to the 2022 prescriptive base case home with three gas appliances. The impacts for the single family home and the ADU are presented in Figure 1 and Figure 2, respectively. The all-electric single family home prototype is code compliant with both EDR1 (source energy) and efficiency EDR2 (TDV energy) in all climate zones except Climate Zones 15 and 16. In addition to this climate zone, the all-electric ADU is also not compliant in Climate Zones 4 through 10 and 13 through 15. The four gas appliance single family home is presented in Figure 3. This case is not code compliant in any climate zone.

This analysis illustrates a couple of interesting points. One is that the new 2022 compliance metrics are important drivers encouraging electrification. The compliance penalties assessed the four gas appliance home scenarios are significant and will require deep efficiency measures to overcome. Another is that the 2022 Title 24 Code’s new source energy metric combined with the heat pump baseline encourage all-electric construction, providing a compliance benefit, at least in larger homes, that allows for some amount of prescriptively required building efficiency to be traded off and still comply when using the performance method.

Figure 1: Single Family All-Electric Home Compliance Impacts -5
0 5
10 15
20 25
CZ01 CZ02 CZ03 CZ04 CZ05 CZ06 CZ07 CZ08 CZ09 CZ10 CZ11 CZ12 CZ13 CZ14 CZ15 CZ16 EDR Margin
All-Electric Prescrip�ve
Source (EDR1) TDV (EDR2 Efficiency)

17.66 Cost-Effectiveness Analysis: Single Family New Construction Results
25 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Figure 2: ADU All-Electric Home Compliance Impacts
Figure 3: Single Family Four Gas Appliance Home Compliance Impacts -6
-4
-2
0 2
4 6
8 10
12 CZ01 CZ02 CZ03 CZ04 CZ05 CZ06 CZ07 CZ08 CZ09 CZ10 CZ11 CZ12 CZ13 CZ14 CZ15 CZ16 EDR Margin
All-Electric Prescrip�ve
Source (EDR1) TDV (EDR2 Efficiency)
-18
-16
-14
-12
-10
-8
-6
-4
-2
0 2
CZ01 CZ02 CZ03 CZ04 CZ05 CZ06 CZ07 CZ08 CZ09 CZ10 CZ11 CZ12 CZ13 CZ14 CZ15 CZ16 EDR Margin
Mixed Fuel Prescrip�ve, 4 Gas Appliances
Source (EDR1) TDV (EDR2 Efficiency)

17.67 Cost-Effectiveness Analysis: Single Family New Construction 26 Results
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4.2 All-Electric Code Minimum Results
Table 16 shows results for the single family all-electric code minimum case compared to the 2022 baseline. This package reflects the prescriptive minimum requirements except in Climate Zones 15 and 16, where efficiency measures were added to meet minimum code compliance. Utility cost savings are negative, indicating an increase in utility costs for the all-electric building, in all cases except in CPAU and SMUD territories. In all cases the incremental cost is negative, which reflects a cost savings for the all-electric building due to eliminating the gas infrastructure costs. The package is cost effective based on TDV in all cases; however, it’s only cost-effective On-Bill in Climate Zones 4 in CPAU territory, 6, 8, 9, 12 in SMUD territory, and 15.

Table 17 shows the all-electric code minimum case results for the ADU. This package reflects the prescriptive minimum requirements except in Climate Zones 4 through 10 and 13 through 16, where efficiency measures were added to meet minimum code compliance. The conclusions related to cost-effectiveness are similar for the ADU as for the single family analysis.

A summary of measures included in each package is provided in Appendix 7.3 Summary of Measures by Package. The efficiency measures added to the allelectric package to meet minimum code requirements are described in Table 45 and Table 46.

17.68 Cost-Effectiveness Analysis: Single Family New Construction 27 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 16. Single Family Cost-Effectiveness: All-Electric Code Minimum Climate
Zone
Electric
/Gas Utility
Efficiency
EDR2
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual GHG
Reductions
(metric tons)
Utility Cost Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 8.3 -4,628 400 1.5 ($721) ($10,848) ($5,288) ($5,234) 0.5 ($5,614) >1 $5,566 CZ02 PGE 5.7 -3,170 247 0.8 ($581) ($10,060) ($5,288) ($5,234) 0.5 ($4,826) >1 $5,390 CZ03 PGE 4.7 -2,413 171 0.7 ($510) ($9,954) ($5,136) ($5,116) 0.5 ($4,838) 63.5 $4,414 CZ04 PGE 3.7 -2,233 163 0.7 ($455) ($8,756) ($5,136) ($5,116) 0.6 ($3,641) >1 $4,929 CZ04 CPAU 3.7 -2,233 163 0.7 $21 $3,274 ($9,424) ($9,931) >1 $13,205 >1 $9,217 CZ05 PGE 1.1 -2,123 133 0.4 ($452) ($8,930) ($5,288) ($5,234) 0.6 ($3,696) 2.5 $2,776 CZ05 PGE/SCG 1.1 -2,123 133 0.4 ($455) ($9,027) ($5,288) ($5,234) 0.6 ($3,793) 2.5 $2,776 CZ06 SCE/SCG 2.5 -1,481 84 0.3 ($269) ($5,120) ($5,288) ($5,234) 1.0 $115 3.2 $3,142 CZ07 SDGE 2.3 -1,328 69 0.2 ($456) ($10,904) ($5,288) ($5,234) 0.5 ($5,670) 3.1 $3,081 CZ08 SCE/SCG 0.6 -1,331 67 0.2 ($249) ($4,864) ($5,288) ($5,234) 1.1 $371 2.8 $2,951 CZ09 SCE 1.2 -1,513 85 0.3 ($269) ($5,109) ($5,288) ($5,234) 1.0 $126 3.3 $3,179 CZ10 SCE/SCG 1.1 -1,777 107 0.3 ($307) ($5,720) ($5,288) ($5,234) 0.9 ($486) 3.5 $3,285 CZ10 SDGE 1.1 -1,777 107 0.3 ($657) ($15,474) ($5,288) ($5,234) 0.3 ($10,239) 3.5 $3,285 CZ11 PGE 3.5 -2,934 227 0.7 ($444) ($7,106) ($5,288) ($5,234) 0.7 ($1,872) >1 $5,135 CZ12 PGE 4.0 -2,751 213 0.7 ($437) ($7,213) ($5,288) ($5,234) 0.7 ($1,979) >1 $5,002 CZ12 SMUD/PGE 4.0 -2,751 213 0.7 $58 $4,526 ($5,288) ($5,234) >1 $9,761 >1 $5,002 CZ13 PGE 2.1 -2,099 154 0.6 ($383) ($7,136) ($5,136) ($5,116) 0.7 ($2,021) >1 $4,904 CZ14 SCE/SCG 1.6 -2,301 159 0.6 ($411) ($7,590) ($5,136) ($5,116) 0.7 ($2,475) >1 $4,493 CZ14 SDGE 1.6 -2,301 159 0.6 ($914) ($21,350) ($5,149) ($5,130) 0.2 ($16,219) >1 $4,506 CZ15 SCE/SCG 1.6 -944 53 0.2 ($165) ($3,084) ($5,407) ($5,369) 1.7 $2,285 10.3 $4,247 CZ16 PG&E 6.0 -4,314 404 1.5 ($545) ($6,642) ($3,257) ($2,954) 0.4 ($3,687) >1 $3,139

17.69 Cost-Effectiveness Analysis: Single Family New Construction 28 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 17. ADU Cost-Effectiveness: All-Electric Code Minimum Climate
Zone
Electric
/Gas Utility
Efficiency
EDR2
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual GHG
Reductions
(metric tons)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 0.0 -1,832 114 0.4 ($346) ($6,791) ($3,260) ($2,957) 0.4 ($3,834) 1.2 $489 CZ02 PGE 0.4 -1,380 75 0.2 ($353) ($7,539) ($3,260) ($2,957) 0.4 ($4,582) 1.2 $403 CZ03 PGE 0.0 -1,665 123 0.5 ($384) ($7,667) ($2,457) ($2,106) 0.3 ($5,560) 2.0 $888 CZ04 PGE 0.2 -1,591 118 0.5 ($351) ($6,970) ($3,260) ($2,957) 0.4 ($4,013) 15.9 $2,395 CZ04 CPAU 0.2 -1,591 118 0.5 $42 $3,285 ($3,260) ($2,957) >1 $6,242 15.9 $2,395 CZ05 PGE 0.4 -1,031 49 0.1 ($268) ($5,966) ($3,260) ($2,957) 0.5 ($3,009) 1.2 $460 CZ05 PGE/SCG 0.4 -1,031 49 0.1 ($226) ($4,656) ($3,260) ($2,957) 0.6 ($1,699) 1.2 $460 CZ06 SCE/SCG 0.2 -909 38 0.1 ($215) ($4,435) ($3,260) ($2,957) 0.7 ($1,478) 1.4 $666 CZ07 SDGE 0.4 -879 37 0.1 ($384) ($9,528) ($3,260) ($2,957) 0.3 ($6,571) 1.4 $771 CZ08 SCE/SCG 0.6 -864 36 0.1 ($212) ($4,397) ($3,216) ($2,908) 0.7 ($1,489) 1.5 $876 CZ09 SCE 0.6 -901 38 0.1 ($190) ($3,861) ($3,216) ($2,908) 0.8 ($953) 1.6 $896 CZ10 SCE/SCG 0.4 -962 43 0.1 ($184) ($3,663) ($3,216) ($2,908) 0.8 ($755) 1.7 $1,055 CZ10 SDGE 0.4 -962 43 0.1 ($404) ($9,951) ($3,216) ($2,908) 0.3 ($7,043) 1.7 $1,055 CZ11 PGE 0.2 -1,322 71 0.2 ($297) ($6,281) ($3,260) ($2,957) 0.5 ($3,324) 1.5 $843 CZ12 PGE 0.3 -1,283 69 0.2 ($298) ($6,354) ($3,260) ($2,957) 0.5 ($3,397) 1.4 $716 CZ12 SMUD/PGE 0.3 -1,283 69 0.2 ($75) ($1,053) ($3,260) ($2,957) 2.8 $1,904 1.4 $716 CZ13 PGE 0.1 -1,594 112 0.4 ($296) ($5,748) ($3,260) ($2,957) 0.5 ($2,791) 11.3 $2,330 CZ14 SCE/SCG 0.4 -1,658 115 0.4 ($282) ($5,107) ($3,216) ($2,908) 0.6 ($2,199) 12.6 $2,313 CZ14 SDGE 0.4 -1,658 115 0.4 ($455) ($10,294) ($3,216) ($2,908) 0.3 ($7,386) 12.6 $2,313 CZ15 SCE/SCG 1.3 -783 36 0.1 ($146) ($2,872) ($3,216) ($2,908) 1.0 $35 2.3 $1,408 CZ16 PG&E 0.1 -1,807 122 0.4 ($348) ($6,698) ($2,640) ($2,261) 0.3 ($4,437) 1.0 $22

17.70 Cost-Effectiveness Analysis: Single Family New Construction 29 Results
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4.3 All-Electric Plus Efficiency, PV, and Battery Results Table 18 and Table 19 compare cost-effectiveness results for the all-electric packages for the single family and ADU prototypes, respectively. In all cases the packages are cost effective based on TDV. On-Bill cost effectiveness generally improves with the addition of efficiency measures, improves significantly with an upsized PV system, and then declines again once batteries are added.

Table 18. Single Family Cost-Effectiveness: All-Electric Energy Efficiency + Additional PV + Battery Climate
Zone
Electric
/Gas Utility
All Electric Efficiency All Electric Efficiency + NEEA All Electric Efficiency + PV All Electric Efficiency + PV + Battery
On-Bill TDV On-Bill TDV On-Bill TDV On-Bill TDV
B/C
Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 0.7 ($1,256) >1 $8,122 4.0 $2,407 >1 $10,497 2.8 $22,471 1.9 $9,517 1.5 $11,220 1.4 $9,062 CZ02 PGE 0.6 ($1,957) >1 $7,579 1.1 $236 >1 $8,957 3.5 $16,261 2.9 $10,678 1.3 $4,955 1.9 $13,716 CZ03 PGE 0.5 ($3,826) >1 $4,674 0.6 ($1,851) >1 $6,023 3.5 $10,584 2.9 $7,145 0.96 ($685) 1.6 $9,058 CZ04 PGE 0.5 ($3,085) >1 $5,328 0.7 ($1,599) >1 $6,220 3.7 $9,560 3.7 $8,348 0.9 ($1,607) 1.8 $10,519 CZ04 CPAU >1 $12,524 >1 $9,616 >1 $13,328 >1 $10,508 >1 $13,692 >1 $12,636 1.4 $3,815 2.6 $14,807 CZ05 PGE 0.6 ($2,601) 12.6 $3,140 1.1 $363 >1 $5,239 4.9 $11,566 3.3 $6,058 1.0 $583 1.6 $7,976 CZ05 PGE/SCG 0.6 ($2,698) 12.6 $3,140 1.1 $266 >1 $5,239 4.8 $11,469 3.3 $6,058 1.0 $486 1.6 $7,976 CZ06 SCE/SCG 0.9 ($500) 21.3 $2,785 1.2 $554 >1 $3,582 5.3 $6,705 4.9 $5,331 0.96 ($530) 1.6 $7,663 CZ07 SDGE 0.4 ($5,221) 6.1 $2,929 0.5 ($3,795) >1 $3,706 13.2 $11,129 7.2 $4,840 0.97 ($355) 1.5 $6,158 CZ08 SCE/SCG 1.0 $129 8.8 $3,006 1.4 $1,028 >1 $3,618 10.2 $6,404 10.7 $5,797 0.99 ($82) 1.8 $8,401 CZ09 SCE 0.996 ($14) 102.1 $3,357 1.3 $959 >1 $4,073 8.5 $7,052 8.7 $6,238 1.1 $626 1.9 $10,710 CZ10 SCE/SCG 0.9 ($403) >1 $3,475 1.2 $668 >1 $4,260 5.5 $7,389 5.5 $6,432 1.1 $1,597 1.7 $7,804 CZ10 SDGE 0.3 ($9,171) >1 $3,475 0.3 ($7,637) >1 $4,260 8.4 $12,063 5.5 $6,432 1.0 $514 1.7 $7,804 CZ11 PGE 1.1 $356 >1 $6,751 2.9 $1,988 >1 $7,863 3.9 $15,570 3.1 $9,509 1.3 $4,736 1.8 $12,035 CZ12 PGE 0.8 ($923) >1 $5,727 1.4 $840 >1 $6,925 3.8 $14,386 2.9 $8,684 1.2 $3,221 1.8 $11,629 CZ12 SMUD/PGE >1 $8,792 >1 $5,727 >1 $9,445 >1 $6,925 3.2 $11,636 2.9 $8,684 1.1 $1,351 1.8 $11,629 CZ13 PGE 1.0 ($134) >1 $6,391 1.7 $1,204 >1 $7,315 4.5 $12,333 3.9 $8,944 1.1 $1,808 1.9 $12,609 CZ14 SCE/SCG 0.96 ($226) >1 $6,168 2.6 $1,429 >1 $7,337 3.5 $11,205 3.8 $10,769 1.4 $6,530 1.9 $13,315 CZ14 SDGE 0.2 ($12,027) >1 $6,181 0.2 ($8,562) >1 $7,350 4.2 $14,424 3.8 $10,782 1.2 $2,882 1.9 $13,328 CZ15 SCE/SCG 3.2 $2,088 >1 $4,185 10.7 $2,739 >1 $4,639 >1 $5,871 >1 $5,572 1.2 $2,471 1.7 $7,367 CZ16 PG&E 0.3 ($2,843) >1 $3,675 0.5 ($1,291) >1 $4,277 3.1 $22,017 1.9 $8,576 1.5 $10,722 1.6 $11,922

17.71 Cost-Effectiveness Analysis: Single Family New Construction 30 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 19. ADU Cost-Effectiveness: All-Electric Energy Efficiency + Additional PV + Battery Climate
Zone
Electric
/Gas Utility
All Electric Efficiency Only All Electric Efficiency + NEEA All Electric Efficiency + PV All Electric Efficiency + PV + Battery On-Bill TDV On-Bill TDV On-Bill TDV On-Bill TDV
B/C
Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 0.3 ($2,010) >1 $1,155 2.5 $610 >1 $3,162 2.2 $16,861 1.2 $2,976 1.2 $5,286 1.0 $168 CZ02 PGE 0.2 ($4,208) 3.3 $481 0.3 ($2,696) >1 $1,403 2.5 $15,218 1.5 $4,707 1.2 $3,791 1.3 $6,522 CZ03 PGE 0.1 ($6,115) 14.1 $325 0.1 ($4,828) >1 $1,206 2.3 $12,653 1.5 $4,249 1.1 $1,285 1.2 $4,720 CZ04 PGE 0.0 ($5,883) 20.7 $992 0.0 ($4,940) 34.2 $1,672 2.3 $13,081 1.7 $6,179 1.1 $1,797 1.4 $6,977 CZ04 CPAU >1 $3,951 20.7 $992 >1 $4,509 34.2 $1,672 1.7 $6,738 1.7 $6,179 0.8 ($4,973) 1.4 $6,977 CZ05 PGE 0.3 ($4,141) 0.6 ($698) 0.3 ($2,912) 1.3 $222 2.9 $15,238 1.5 $3,921 1.2 $3,903 1.2 $3,473 CZ05 PGE/SCG 0.3 ($2,831) 0.6 ($698) 0.5 ($1,602) 1.3 $222 3.1 $16,548 1.5 $3,921 1.3 $5,212 1.2 $3,473 CZ06 SCE/SCG 0.4 ($2,272) 0.996 ($5) 0.5 ($1,672) 1.7 $444 2.6 $11,941 1.8 $5,275 1.1 $2,134 1.3 $5,984 CZ07 SDGE 0.2 ($6,766) 1.0 $4 0.2 ($5,978) 1.7 $435 3.8 $22,595 1.6 $4,364 1.6 $11,005 1.2 $3,943 CZ08 SCE/SCG 0.4 ($2,380) 0.98 ($23) 0.4 ($1,832) 1.4 $334 2.5 $12,446 1.9 $6,579 1.2 $2,991 1.4 $7,829 CZ09 SCE 0.4 ($1,858) 1.1 $53 0.5 ($1,255) 1.5 $367 2.6 $12,699 1.9 $6,334 1.2 $3,232 1.5 $9,406 CZ10 SCE/SCG 0.5 ($1,556) 1.4 $280 0.6 ($800) 4.9 $828 2.7 $3,430 2.1 $2,156 0.6 ($5,734) 1.2 $2,118 CZ10 SDGE 0.2 ($7,442) 1.4 $280 0.2 ($6,395) 4.9 $828 3.1 $4,264 2.1 $2,156 0.5 ($7,385) 1.2 $2,118 CZ11 PGE 0.3 ($2,749) >1 $1,115 0.4 ($1,634) >1 $1,901 2.1 $3,811 1.8 $2,577 0.5 ($7,415) 1.3 $4,046 CZ12 PGE 0.2 ($3,692) 3.1 $430 0.3 ($2,597) >1 $1,320 2.6 $16,095 1.6 $5,047 1.2 $4,800 1.3 $6,745 CZ12 SMUD/PGE 3.1 $645 3.1 $430 >1 $1,076 >1 $1,320 1.4 $4,399 1.6 $5,047 0.7 ($6,294) 1.3 $6,745 CZ13 PGE 0.0 ($3,425) 17.9 $1,657 0.0 ($2,455) 25.7 $2,419 1.7 $2,505 1.9 $3,158 0.4 ($8,653) 1.4 $5,829 CZ14 SCE/SCG 0.0 ($3,402) 4.0 $1,280 0.0 ($2,270) 6.0 $2,097 2.4 $13,741 2.0 $8,807 1.2 $5,041 1.5 $10,045 CZ14 SDGE 0.0 ($7,519) 4.0 $1,280 0.0 ($5,884) 6.0 $2,097 3.8 $28,555 2.0 $8,807 1.8 $16,912 1.5 $10,045 CZ15 SCE/SCG 1.0 ($47) >1 $1,212 1.3 $204 >1 $1,264 3.5 $3,155 2.9 $2,387 0.6 ($5,030) 1.3 $3,480 CZ16 PG&E 0.3 ($3,414) 9.9 $748 0.3 ($2,658) >1 $1,580 2.8 $19,246 1.7 $6,200 1.4 $7,856 1.4 $7,321

17.72 Cost-Effectiveness Analysis: Single Family New Construction 31 Results
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4.4 Mixed Fuel Results
Table 20 and Table 21 show results for the Mixed Fuel Efficiency + PV + Battery package compared to the 2022 baseline for Single Family and ADU, respectively. This package is cost-effective based on TDV everywhere for the single family prototype. It’s TDV cost-effective in most cases for the ADU with the exception of Climate Zones 1 and 10. The package is cost-effective On-Bill for the single family home only in Climate Zone 1. For the ADU the package is costeffective On-Bill in Climate Zones 1, 2, 5, 7, 9, 12 in PG&E territory, 14, and 16. For the climate zones where there is no PV requirement in the base package, the addition of a new PV system substantially reduced utility costs and the high cost-effectiveness of the PV measure helped to offset the high cost of the battery system.

Table 20. Single Family Cost-Effectiveness: Mixed Fuel Efficiency + PV + Battery Climate
Zone
Electric
/Gas Utility
Efficiency
EDR2
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual GHG
Reductions
(metric tons)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 30.0 1,577 118 1.1 $710 $18,829 $9,845 $17,192 1.1 $1,636 1.4 $5,664 CZ02 PGE 13.5 1,264 35 0.7 $419 $10,499 $8,951 $15,899 0.7 ($5,400) 1.4 $6,396 CZ03 PGE 11.2 1,073 7 0.6 $295 $7,072 $7,718 $14,333 0.5 ($7,261) 1.2 $2,956 CZ04 PGE 8.4 912 6 0.5 $244 $5,862 $8,056 $14,763 0.4 ($8,902) 1.2 $3,219 CZ04 CPAU 8.4 912 6 0.5 $159 $3,839 $8,056 $14,763 0.3 ($10,925) 1.2 $3,219 CZ05 PGE 16.8 1,186 43 0.8 $416 $10,571 $8,517 $15,361 0.7 ($4,790) 1.3 $4,171 CZ05 PGE/SCG 16.8 1,186 43 0.8 $394 $9,850 $8,517 $15,361 0.6 ($5,512) 1.3 $4,171 CZ06 SCE/SCG 9.2 894 6 0.5 $370 $8,721 $8,097 $14,780 0.6 ($6,059) 1.2 $3,134 CZ07 SDGE 8.3 841 4 0.5 $358 $9,129 $8,029 $14,709 0.6 ($5,579) 1.1 $1,612 CZ08 SCE/SCG 9.5 783 2 0.5 $381 $8,924 $7,494 $14,074 0.6 ($5,150) 1.3 $3,991 CZ09 SCE 8.6 839 3 0.5 $390 $9,148 $7,509 $14,094 0.6 ($4,946) 1.5 $5,914 CZ10 SCE/SCG 8.3 854 2 0.5 $416 $9,733 $7,139 $13,724 0.7 ($3,990) 1.2 $2,863 CZ10 SDGE 8.3 854 2 0.5 $314 $7,983 $7,139 $13,724 0.6 ($5,741) 1.2 $2,863 CZ11 PGE 11.0 1,034 27 0.7 $398 $9,903 $8,478 $15,286 0.6 ($5,383) 1.4 $5,505 CZ12 PGE 11.0 1,107 23 0.6 $364 $9,006 $8,733 $15,626 0.6 ($6,620) 1.4 $5,074 CZ12 SMUD/PGE 11.0 1,107 23 0.6 $252 $6,354 $8,733 $15,626 0.4 ($9,272) 1.4 $5,074 CZ13 PGE 9.6 1,168 5 0.6 $407 $9,736 $8,713 $15,536 0.6 ($5,801) 1.4 $5,562 CZ14 SCE/SCG 11.2 1,737 6 0.7 $663 $15,570 $9,664 $16,695 0.9 ($1,125) 1.4 $5,435 CZ14 SDGE 11.2 1,737 6 0.7 $403 $10,291 $9,664 $16,695 0.6 ($6,404) 1.4 $5,435 CZ15 SCE/SCG 8.5 532 2 0.5 $486 $11,372 $7,170 $13,536 0.8 ($2,164) 1.3 $3,451 CZ16 PG&E 22.6 1,235 115 1.2 $571 $15,439 $10,780 $18,007 0.9 ($2,568) 1.5 $8,024

17.73 Cost-Effectiveness Analysis: Single Family New Construction 32 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

Table 21. ADU Cost-Effectiveness: Mixed Fuel Efficiency + PV + Battery Climate
Zone
Electric
/Gas Utility
Efficiency
EDR2
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Average
Annual GHG
Reductions
(metric tons)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 24.3 3,642 79 0.8 $1,211 $29,946 $15,209 $25,617 1.2 $4,329 0.9 ($1,365) CZ02 PGE 14.5 3,451 40 0.6 $1,028 $25,019 $12,944 $22,587 1.1 $2,431 1.2 $4,938 CZ03 PGE 12.1 2,750 2 0.4 $715 $16,948 $11,077 $19,325 0.9 ($2,377) 1.1 $1,349 CZ04 PGE 12.2 2,860 2 0.4 $759 $17,992 $11,523 $19,837 0.9 ($1,845) 1.1 $2,417 CZ04 CPAU 12.2 2,860 2 0.4 $316 $7,490 $11,523 $19,837 0.4 ($12,347) 1.1 $2,417 CZ05 PGE 7.8 3,293 14 0.5 $959 $22,944 $11,409 $20,621 1.1 $2,324 1.1 $1,409 CZ05 PGE/SCG 7.8 3,293 14 0.5 $952 $22,711 $11,409 $20,621 1.1 $2,090 1.1 $1,409 CZ06 SCE/SCG 9.8 3,292 3 0.5 $815 $19,093 $11,028 $20,110 0.9 ($1,017) 1.2 $3,650 CZ07 SDGE 9.1 3,306 1 0.5 $1,172 $29,683 $11,381 $20,583 1.4 $9,100 1.1 $1,603 CZ08 SCE/SCG 10.1 3,527 1 0.5 $887 $20,746 $11,594 $20,867 0.99 ($121) 1.3 $4,990 CZ09 SCE 8.9 3,512 3 0.5 $883 $20,676 $11,361 $20,556 1.0 $120 1.4 $6,682 CZ10 SCE/SCG 9.0 729 7 0.4 $244 $5,806 $7,005 $14,720 0.4 ($8,914) 0.96 ($473) CZ10 SDGE 9.0 729 7 0.4 $206 $5,312 $7,005 $14,720 0.4 ($9,408) 0.96 ($473) CZ11 PGE 13.1 870 36 0.5 $277 $7,182 $8,022 $15,995 0.4 ($8,813) 1.1 $2,192 CZ12 PGE 12.6 3,589 33 0.6 $1,063 $25,738 $12,806 $22,393 1.1 $3,345 1.2 $4,771 CZ12 SMUD/PGE 12.6 3,589 33 0.6 $591 $14,577 $12,806 $22,393 0.7 ($7,816) 1.2 $4,771 CZ13 PGE 12.8 359 1 0.4 $77 $1,846 $7,009 $13,789 0.1 ($11,943) 1.2 $2,069 CZ14 SCE/SCG 14.2 3,624 2 0.5 $909 $21,262 $12,054 $20,466 1.0 $795 1.2 $4,545 CZ14 SDGE 14.2 3,624 2 0.5 $1,292 $32,729 $12,054 $20,466 1.6 $12,263 1.2 $4,545 CZ15 SCE/SCG 11.2 546 0 0.4 $252 $5,891 $6,588 $14,077 0.4 ($8,186) 1.1 $964 CZ16 PG&E 16.2 3,652 87 0.8 $1,178 $29,323 $13,234 $23,007 1.3 $6,316 1.2 $4,937

17.74 Cost-Effectiveness Analysis: Single Family New Construction 33 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 22 and Table 23 compare cost-effectiveness results across all the mixed fuel packages for the single family and ADU prototypes, respectively. The single family Efficiency Only package and Efficiency + PV package are cost effective based on On-Bill and TDV under most scenarios. The trends are similar for the ADU except the Efficiency Only package is not cost effective in many climate zones.

Table 22. Single Family Cost-Effectiveness: Mixed Fuel Packages Climate
Zone
Electric
/Gas Utility
Mixed Fuel Efficiency Only Mixed Fuel Efficiency + PV Mixed Fuel Efficiency + PV + Battery On-Bill TDV On-Bill TDV On-Bill TDV
B/C
Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 2.8 $3,619 2.7 $3,160 2.4 $8,979 1.6 $3,526 1.1 $1,636 1.4 $5,664 CZ02 PGE 2.0 $1,940 2.5 $2,664 2.2 $5,608 1.8 $3,565 0.7 ($5,400) 1.4 $6,396 CZ03 PGE 1.1 $226 0.97 ($56) 1.6 $2,688 1.2 $602 0.5 ($7,261) 1.2 $2,956 CZ04 PGE 0.8 ($379) 1.1 $107 1.4 $1,493 1.2 $862 0.4 ($8,902) 1.2 $3,219 CZ04 CPAU 0.5 ($1,159) 1.1 $107 0.8 ($910) 1.2 $862 0.3 ($10,925) 1.2 $3,219 CZ05 PGE 1.4 $516 1.3 $300 2.1 $4,449 1.4 $1,359 0.7 ($4,790) 1.3 $4,171 CZ05 PGE/SCG 1.2 $303 1.3 $300 2.1 $4,235 1.4 $1,359 0.6 ($5,512) 1.3 $4,171 CZ06 SCE/SCG 0.6 ($696) 0.9 ($180) 1.5 $1,950 1.2 $757 0.6 ($6,059) 1.2 $3,134 CZ07 SDGE 1.3 $395 0.97 ($36) 2.9 $5,981 1.3 $697 0.6 ($5,579) 1.1 $1,612 CZ08 SCE/SCG 0.8 ($238) 1.1 $103 1.7 $2,013 1.4 $1,099 0.6 ($5,150) 1.3 $3,991 CZ09 SCE 0.9 ($148) 1.2 $250 1.8 $2,266 1.5 $1,229 0.6 ($4,946) 1.5 $5,914 CZ10 SCE/SCG 1.0 $5 1.2 $263 1.7 $2,323 1.4 $1,140 0.7 ($3,990) 1.2 $2,863 CZ10 SDGE 1.6 $960 1.2 $263 2.6 $5,010 1.4 $1,140 0.6 ($5,741) 1.2 $2,863 CZ11 PGE 2.0 $2,242 2.1 $2,187 2.2 $5,142 1.8 $2,824 0.6 ($5,383) 1.4 $5,505 CZ12 PGE 1.4 $949 1.6 $1,207 1.9 $4,150 1.5 $2,039 0.6 ($6,620) 1.4 $5,074 CZ12 SMUD/PGE 1.1 $131 1.6 $1,207 1.2 $933 1.5 $2,039 0.4 ($9,272) 1.4 $5,074 CZ13 PGE 1.5 $1,236 1.5 $1,160 2.0 $4,442 1.5 $1,821 0.6 ($5,801) 1.4 $5,562 CZ14 SCE/SCG 1.3 $981 1.5 $1,290 1.9 $4,917 1.6 $2,877 0.9 ($1,125) 1.4 $5,435 CZ14 SDGE 2.3 $4,109 1.5 $1,290 1.9 $4,753 1.6 $2,877 0.6 ($6,404) 1.4 $5,435 CZ15 SCE/SCG 1.7 $1,534 1.7 $1,444 1.7 $1,653 1.7 $1,465 0.8 ($2,164) 1.3 $3,451 CZ16 PG&E 1.8 $3,124 2.2 $4,123 2.2 $8,324 1.9 $5,419 0.9 ($2,568) 1.5 $8,024

17.75 Cost-Effectiveness Analysis: Single Family New Construction 34 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 23. ADU Cost-Effectiveness: Mixed Fuel Packages
Climate
Zone
Electric
/Gas Utility
Mixed Fuel Efficiency Mixed Fuel Efficiency + PV Mixed Fuel Efficiency + PV + Battery On-Bill TDV On-Bill TDV On-Bill TDV
B/C
Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 1.6 $1,228 1.3 $616 2.1 $15,985 1.2 $2,051 1.2 $4,329 0.9 ($1,365) CZ02 PGE 0.7 ($634) 1.1 $148 2.3 $13,934 1.4 $3,499 1.1 $2,431 1.2 $4,938 CZ03 PGE 0.6 ($666) 0.7 ($475) 2.2 $9,045 1.3 $1,856 0.9 ($2,377) 1.1 $1,349 CZ04 PGE 0.5 ($941) 0.7 ($515) 2.1 $9,487 1.4 $2,679 0.9 ($1,845) 1.1 $2,417 CZ04 CPAU 0.3 ($1,507) 0.7 ($515) 0.99 ($115) 1.4 $2,679 0.4 ($12,347) 1.1 $2,417 CZ05 PGE 0.7 ($456) 0.2 ($1,141) 2.5 $13,761 1.3 $2,473 1.1 $2,324 1.1 $1,409 CZ05 PGE/SCG 0.5 ($689) 0.2 ($1,141) 2.5 $13,528 1.3 $2,473 1.1 $2,090 1.1 $1,409 CZ06 SCE/SCG 0.3 ($976) 0.6 ($638) 2.1 $9,282 1.5 $3,477 0.9 ($1,017) 1.2 $3,650 CZ07 SDGE 0.4 ($830) 0.5 ($717) 3.3 $20,716 1.3 $2,676 1.4 $9,100 1.1 $1,603 CZ08 SCE/SCG 0.3 ($1,069) 0.4 ($819) 2.1 $10,035 1.5 $4,415 0.99 ($121) 1.3 $4,990 CZ09 SCE 0.3 ($1,024) 0.5 ($780) 2.1 $10,242 1.5 $4,195 1.0 $120 1.4 $6,682 CZ10 SCE/SCG 0.4 ($1,004) 0.5 ($750) 1.4 $1,118 1.0 $71 0.4 ($8,914) 0.96 ($473) CZ10 SDGE 1.5 $721 0.5 ($750) 1.7 $2,230 1.0 $71 0.4 ($9,408) 0.96 ($473) CZ11 PGE 1.0 ($11) 1.2 $316 1.6 $2,473 1.3 $1,064 0.4 ($8,813) 1.1 $2,192 CZ12 PGE 0.6 ($761) 0.9 ($224) 2.4 $14,704 1.4 $3,458 1.1 $3,345 1.2 $4,771 CZ12 SMUD/PGE 1.0 ($70) 0.9 ($224) 1.3 $2,975 1.4 $3,458 0.7 ($7,816) 1.2 $4,771 CZ13 PGE 0.6 ($850) 1.1 $206 0.6 ($807) 1.1 $240 0.1 ($11,943) 1.2 $2,069 CZ14 SCE/SCG 1.0 $20 1.0 $107 2.2 $10,862 1.6 $4,977 1.0 $795 1.2 $4,545 CZ14 SDGE 1.5 $1,310 1.0 $107 3.7 $23,840 1.6 $4,977 1.6 $12,263 1.2 $4,545 CZ15 SCE/SCG 1.2 $411 1.1 $205 1.4 $916 1.2 $388 0.4 ($8,186) 1.1 $964 CZ16 PG&E 0.7 ($456) 1.0 $52 2.6 $17,779 1.4 $4,505 1.3 $6,316 1.2 $4,937

4.5 CARE Rate Comparison
Table 24 and Table 25 present a comparison of On-Bill cost-effectiveness results for CARE tariffs relative to standard tariffs. The all-electric code minimum package for the single family and ADU prototypes is shown in Table 24. Applying the CARE rates lowers both electric and gas utility bills for the consumer and the net impact is lower overall bills for an all-electric home and improved cost-effectiveness relative to the standard tariffs. The opposite trend occurs for the mixed fuel packages shown in Table 25 where the CARE rate lowers utility cost savings and the benefit-to-cost ratios decline.

17.76 Cost-Effectiveness Analysis: Single Family New Construction 35 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 24. On-Bill Cost-Effectiveness with CARE Tariffs: All-Electric Code Minimum Climate
Zone
Electric
/Gas Utility
Single Family ADU
Standard CARE Standard CARE
B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 0.5 ($5,614) 0.8 ($997) 0.4 ($3,834) 0.7 ($1,505) CZ02 PGE 0.5 ($4,826) 0.8 ($1,281) 0.4 ($4,582) 0.6 ($2,146) CZ03 PGE 0.5 ($4,838) 0.8 ($924) 0.3 ($5,560) 0.4 ($2,733) CZ04 PGE 0.6 ($3,641) 0.96 ($215) 0.4 ($4,013) 0.7 ($1,465) CZ04 CPAU >1 $13,205 >1 $9,931 >1 $6,242 >1 $2,957
CZ05 PGE 0.6 ($3,696) 0.9 ($647) 0.5 ($3,009) 0.7 ($1,158) CZ05 PGE/SCG 0.6 ($3,793) 1.1 $444 0.6 ($1,699) 1.1 $243 CZ06 SCE/SCG 1.0 $115 1.6 $1,984 0.7 ($1,478) 0.97 ($98) CZ07 SDGE 0.5 ($5,670) 0.8 ($1,636) 0.3 ($6,571) 0.5 ($3,441) CZ08 SCE/SCG 1.1 $371 1.7 $2,073 0.7 ($1,489) 0.95 ($139) CZ09 SCE 1.0 $126 1.6 $2,001 0.8 ($953) 1.1 $261
CZ10 SCE/SCG 0.9 ($486) 1.5 $1,703 0.8 ($755) 1.2 $433
CZ10 SDGE 0.3 ($10,239) 0.5 ($4,330) 0.3 ($7,043) 0.4 ($3,645) CZ11 PGE 0.7 ($1,872) 1.1 $568 0.5 ($3,324) 0.7 ($1,344) CZ12 PGE 0.7 ($1,979) 1.1 $457 0.5 ($3,397) 0.7 ($1,395) CZ12 SMUD/PGE >1 $9,761 >1 $12,640 2.8 $1,904 >1 $4,281 CZ13 PGE 0.7 ($2,021) 1.2 $783 0.5 ($2,791) 0.7 ($991)
CZ14 SCE/SCG 0.7 ($2,475) 1.1 $505 0.6 ($2,199) 0.9 ($222) CZ14 SDGE 0.2 ($16,219) 0.4 ($7,861) 0.3 ($7,386) 0.5 ($3,249) CZ15 SCE/SCG 1.7 $2,285 2.6 $3,330 1.0 $35 1.5 $927
CZ16 PG&E 0.4 ($3,687) 0.8 ($825) 0.3 ($4,437) 0.5 ($2,157)

17.77 Cost-Effectiveness Analysis: Single Family New Construction 36 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 25. On-Bill Cost-Effectiveness with CARE Tariffs: Mixed Fuel Efficiency+ PV+ Battery Package Climate
Zone
Electric
/Gas Utility
Single Family ADU
Standard CARE Standard CARE
B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 1.1 $1,636 0.7 ($4,574) 1.2 $4,329 0.7 ($6,549) CZ02 PGE 0.7 ($5,400) 0.4 ($8,958) 1.1 $2,431 0.7 ($6,728) CZ03 PGE 0.5 ($7,261) 0.3 ($9,524) 0.9 ($2,377) 0.6 ($8,471) CZ04 PGE 0.4 ($8,902) 0.3 ($10,706) 0.9 ($1,845) 0.6 ($8,329) CZ04 CPAU 0.3 ($10,925) 0.0 ($14,763) 0.4 ($12,347) 0.0 ($19,837) CZ05 PGE 0.7 ($4,790) 0.5 ($8,377) 1.1 $2,324 0.7 ($6,030) CZ05 PGE/SCG 0.6 ($5,512) 0.4 ($8,540) 1.1 $2,090 0.7 ($6,067) CZ06 SCE/SCG 0.6 ($6,059) 0.3 ($9,638) 0.9 ($1,017) 0.6 ($8,203) CZ07 SDGE 0.6 ($5,579) 0.5 ($7,676) 1.4 $9,100 0.96 ($836) CZ08 SCE/SCG 0.6 ($5,150) 0.4 ($8,775) 0.99 ($121) 0.6 ($7,852) CZ09 SCE 0.6 ($4,946) 0.4 ($8,642) 1.0 $120 0.6 ($7,580) CZ10 SCE/SCG 0.7 ($3,990) 0.4 ($7,862) 0.4 ($8,914) 0.2 ($11,587) CZ10 SDGE 0.6 ($5,741) 0.5 ($7,396) 0.4 ($9,408) 0.3 ($10,388) CZ11 PGE 0.6 ($5,383) 0.4 ($8,671) 0.4 ($8,813) 0.3 ($11,145) CZ12 PGE 0.6 ($6,620) 0.4 ($9,617) 1.1 $3,345 0.7 ($6,094) CZ12 SMUD/PGE 0.4 ($9,272) 0.1 ($14,636) 0.7 ($7,816) 0.1 ($20,989) CZ13 PGE 0.6 ($5,801) 0.4 ($9,016) 0.1 ($11,943) 0.1 ($12,502) CZ14 SCE/SCG 0.9 ($1,125) 0.6 ($6,889) 1.0 $795 0.7 ($7,099) CZ14 SDGE 0.6 ($6,404) 0.5 ($8,940) 1.6 $12,263 1.1 $1,271 CZ15 SCE/SCG 0.8 ($2,164) 0.5 ($6,384) 0.4 ($8,186) 0.2 ($10,846) CZ16 PG&E 0.9 ($2,568) 0.6 ($7,747) 1.3 $6,316 0.8 ($4,356)

4.6 Utility Infrastructure Cost Sensitivity
Table 26 compares cost effectiveness results for the three natural gas service line extension cost scenarios presented in Table 8. The average cost scenario reflects the costs applied in the results presented in the prior sections (Table 16). The gas infrastructure cost savings are lower for the new subdivision case and higher for the infill development case. For the latter, the all-electric home is On-Bill cost-effective in all climate zones except Climate Zones 1, 2, 10 in SDG&E territory, and 14 in SDG&E territory. Table 27 presents the impact on On-Bill cost-effectiveness if the subsidies currently allowed under the utility gas main extension rules were removed per a recent CPUC Proposed Decision (see discussion in Section 3.3.2). If the subsidies were removed On-Bill cost-effectiveness improves but only enough to change the outcome in one case, Climate Zones 10 in SoCalGas territory.

17.78 Cost-Effectiveness Analysis: Single Family New Construction 37 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 26. Single Family Cost-Effectiveness Comparison with Range of Natural Gas Utility Infrastructure Costs:

All-Electric Code Minimum
Climate
Zone
Electric
/Gas Utility
Average New Subdivision Infill Development
On-Bill TDV On-Bill TDV On-Bill TDV
B/C
Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 0.5 ($5,614) >1 $5,566 0.4 ($6,838) >1 $4,476 0.9 ($718) >1 $9,926 CZ02 PGE 0.5 ($4,826) >1 $5,390 0.4 ($6,050) >1 $4,300 1.0 $70 >1 $9,750 CZ03 PGE 0.5 ($4,838) 63.5 $4,414 0.4 ($6,062) 48.1 $3,324 1.0 $57 125.3 $8,774 CZ04 PGE 0.6 ($3,641) >1 $4,929 0.4 ($4,865) >1 $3,839 1.1 $1,255 >1 $9,289 CZ04 CPAU >1 $13,205 >1 $9,217 >1 $13,205 >1 $9,217 >1 $13,205 >1 $9,217 CZ05 PGE 0.6 ($3,696) 2.5 $2,776 0.4 ($4,920) 1.9 $1,686 1.1 $1,200 4.9 $7,136 CZ05 PGE/SCG 0.6 ($3,793) 2.5 $2,776 0.4 ($5,017) 1.9 $1,686 1.1 $1,103 4.9 $7,136 CZ06 SCE/SCG 1.0 $115 3.2 $3,142 0.8 ($1,109) 2.4 $2,052 2.0 $5,011 6.2 $7,502 CZ07 SDGE 0.5 ($5,670) 3.1 $3,081 0.4 ($6,894) 2.3 $1,991 0.9 ($774) 6.0 $7,441 CZ08 SCE/SCG 1.1 $371 2.8 $2,951 0.8 ($853) 2.1 $1,861 2.1 $5,266 5.5 $7,311 CZ09 SCE 1.0 $126 3.3 $3,179 0.8 ($1,098) 2.5 $2,089 2.0 $5,022 6.4 $7,539 CZ10 SCE/SCG 0.9 ($486) 3.5 $3,285 0.7 ($1,710) 2.7 $2,195 1.8 $4,410 6.9 $7,645 CZ10 SDGE 0.3 ($10,239) 3.5 $3,285 0.3 ($11,463) 2.7 $2,195 0.7 ($5,344) 6.9 $7,645 CZ11 PGE 0.7 ($1,872) >1 $5,135 0.6 ($3,096) >1 $4,045 1.4 $3,024 >1 $9,495 CZ12 PGE 0.7 ($1,979) >1 $5,002 0.6 ($3,203) >1 $3,912 1.4 $2,917 >1 $9,362 CZ12 SMUD/PGE >1 $9,761 >1 $5,002 >1 $8,537 >1 $3,912 >1 $14,656 >1 $9,362 CZ13 PGE 0.7 ($2,021) >1 $4,904 0.5 ($3,245) >1 $3,814 1.4 $2,875 >1 $9,264 CZ14 SCE/SCG 0.7 ($2,475) >1 $4,493 0.5 ($3,699) >1 $3,403 1.3 $2,421 >1 $8,853 CZ14 SDGE 0.2 ($16,219) >1 $4,506 0.2 ($17,443) >1 $3,416 0.5 ($11,323) >1 $8,866 CZ15 SCE/SCG 1.7 $2,285 10.3 $4,247 1.3 $1,061 7.9 $3,157 3.3 $7,181 19.8 $8,607 CZ16 PG&E 0.4 ($3,687) >1 $3,139 0.3 ($4,911) >1 $2,049 1.2 $1,208 >1 $7,499

17.79 Cost-Effectiveness Analysis: Single Family New Construction 38 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 27. Single Family Cost-Effectiveness On-Bill Impact of CPUC Proposed Decision on Gas Line Extension Allowances:

All-Electric Code Minimum
Climate
Zone
Electric
/Gas Utility
No Allowances
With Allowance No Allowances
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 0.5 ($5,614) 0.6 ($4,469)
CZ02 PGE 0.5 ($4,826) 0.6 ($3,681)
CZ03 PGE 0.5 ($4,838) 0.6 ($3,693)
CZ04 PGE 0.6 ($3,641) 0.7 ($2,495)
CZ04 CPAU >1 $13,205 >1 $13,205
CZ05 PGE 0.6 ($3,696) 0.7 ($2,551)
CZ05 PGE/SCG 0.6 ($3,793) 0.7 ($2,647)
CZ06 SCE/SCG 1.0 $115 1.2 $1,260
CZ07 SDGE 0.5 ($5,670) 0.6 ($4,524)
CZ08 SCE/SCG 1.1 $371 1.3 $1,516
CZ09 SCE 1.0 $126 1.2 $1,271
CZ10 SCE/SCG 0.9 ($486) 1.1 $660
CZ10 SDGE 0.3 ($10,239) 0.4 ($9,094)
CZ11 PGE 0.7 ($1,872) 0.9 ($726)
CZ12 PGE 0.7 ($1,979) 0.9 ($834)
CZ12 SMUD/PGE >1 $9,761 >1 $10,906
CZ13 PGE 0.7 ($2,021) 0.9 ($875)
CZ14 SCE/SCG 0.7 ($2,475) 0.8 ($1,329)
CZ14 SDGE 0.2 ($16,219) 0.3 ($15,088)
CZ15 SCE/SCG 1.7 $2,285 2.1 $3,430
CZ16 PG&E 0.4 ($3,687) 0.6 ($2,542)

4.7 Greenhouse Gas Reductions
Table 28 and Table 29 present greenhouse gas reductions for the single family and ADU prototypes, respectively. Savings represent average annual savings over the 30-year lifetime of the analysis. Greenhouse gas reductions are greatest for the all-electric Efficiency + PV + Battery package in all cases. For the single family homes, the all-electric code minimum case reduces greenhouse gas emissions as much or greater than the mixed fuel Efficiency + PV + Battery package in Climate Zones 1 through 4, 11, 12, 13, and 16. The trend differs for the ADU where the mixed fuel Efficiency + PV + Battery package results in more greenhouse gas savings than the all-electric code minimum in all climate zones except Climate Zones 3, 4, and 13.

17.80 Cost-Effectiveness Analysis: Single Family New Construction 39 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 28: Single Family Greenhouse Gas Reductions (metric tons) Climate
Zone
Single Family All-Electric Single Family Mixed Fuel
Code
Minimum
Efficiency
Only
Efficiency
+ NEEA
Efficiency
+ PV
Efficiency
+ PV +
Battery
Efficiency
Only
Efficiency
+ PV
Efficiency
+ PV +
Battery
CZ01 1.5 1.6 1.7 1.8 2.2 0.4 0.5 1.1
CZ02 0.8 0.9 1.0 1.1 1.5 0.3 0.3 0.7
CZ03 0.7 0.8 0.8 0.9 1.3 0.1 0.1 0.6
CZ04 0.7 0.7 0.8 0.8 1.3 0.1 0.1 0.5
CZ05 0.4 0.4 0.5 0.6 1.1 0.1 0.1 0.8
CZ06 0.3 0.3 0.3 0.4 0.9 0.1 0.1 0.5
CZ07 0.2 0.2 0.3 0.3 0.8 0.0 0.1 0.5
CZ08 0.2 0.2 0.3 0.3 0.8 0.0 0.1 0.5
CZ09 0.3 0.3 0.3 0.4 0.9 0.0 0.1 0.5
CZ10 0.3 0.3 0.4 0.4 0.9 0.1 0.1 0.5
CZ11 0.7 0.9 0.9 1.0 1.4 0.2 0.2 0.7
CZ12 0.7 0.8 0.8 0.9 1.3 0.2 0.2 0.6
CZ13 0.6 0.7 0.7 0.8 1.3 0.1 0.1 0.6
CZ14 0.6 0.7 0.8 0.9 1.4 0.2 0.2 0.7
CZ15 0.2 0.2 0.2 0.3 0.7 0.1 0.1 0.5
CZ16 1.5 1.6 1.6 1.8 2.3 0.7 0.8 1.2

17.81 Cost-Effectiveness Analysis: Single Family New Construction 40 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 29 ADU Greenhouse Gas Savings (metric tons)
Climate
Zone
ADU All-Electric ADU Mixed Fuel
Code
Minimum
Efficiency
Only
Efficiency
+ NEEA
Efficiency
+ PV
Efficiency
+ PV +
Battery
Efficiency
Only
Efficiency
+ PV
Efficiency
+ PV +
Battery
CZ01 0.4 0.5 0.5 0.6 0.9 0.4 0.5 0.8
CZ02 0.2 0.3 0.3 0.4 0.8 0.2 0.3 0.6
CZ03 0.5 0.5 0.6 0.7 1.0 0.1 0.1 0.4
CZ04 0.5 0.5 0.5 0.7 1.0 0.0 0.1 0.4
CZ05 0.1 0.2 0.2 0.3 0.7 0.0 0.2 0.5
CZ06 0.1 0.1 0.1 0.3 0.6 0.0 0.2 0.5
CZ07 0.1 0.1 0.1 0.3 0.6 0.0 0.2 0.5
CZ08 0.1 0.1 0.1 0.3 0.7 0.0 0.2 0.5
CZ09 0.1 0.1 0.1 0.3 0.7 0.0 0.2 0.5
CZ10 0.1 0.1 0.2 0.2 0.6 0.0 0.1 0.4
CZ11 0.2 0.3 0.3 0.3 0.7 0.2 0.2 0.5
CZ12 0.2 0.2 0.3 0.4 0.7 0.1 0.3 0.6
CZ13 0.4 0.5 0.5 0.6 0.9 0.1 0.1 0.4
CZ14 0.4 0.5 0.5 0.7 1.1 0.1 0.2 0.5
CZ15 0.1 0.1 0.2 0.2 0.6 0.0 0.0 0.4
CZ16 0.4 0.5 0.5 0.7 1.0 0.4 0.5 0.8

17.82 Cost-Effectiveness Analysis: Single Family New Construction 41 Summary
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 5 Summary
The Reach Codes Team identified packages of energy efficiency measures as well as packages combining energy efficiency with solar PV generation and battery storage, simulated them in building modeling software, and gathered costs to determine the cost-effectiveness of multiple scenarios. The Reach Codes Team coordinated with multiple utilities, cities, and building community experts to develop a set of assumptions considered reasonable in the current market. Changing assumptions, such as the period of analysis, measure selection, cost assumptions, energy escalation rates, or utility tariffs are likely to change results.

Table 30 (all-electric) and Table 31 (mixed fuel) summarize results for each prototype and depicts the efficiency EDR2 compliance margins achieved for each climate zone and package. Because local reach codes must both exceed the Energy Commission performance budget (i.e., have a positive compliance margin) and be cost-effective, the Reach Codes Team highlighted cells meeting these two requirements to help clarify the upper boundary for potential reach code policies. All results presented in this study have a positive compliance margin. • Cells highlighted in green depict a positive compliance margin and cost-effective results using both On-Bill and TDV approaches.
• Cells highlighted in yellow depict a positive compliance and cost-effective results using either the On-Bill or TDV approach.
• Cells not highlighted depict a package that was not cost effective using either the On-Bill or TDV approach.

Following are key takeaways and recommendations from the analysis. • All-electric packages have lower GHG emissions than mixed-fuel packages in all cases, due to the clean power sources currently available from California’s power providers. • The Reach Codes Team found all-electric new construction to be feasible and cost effective based on TDV in all cases. In many cases all-electric code minimum construction results in an increase in utility costs and is not cost-effective On-Bill. Some exceptions include the SMUD and CPAU territories where lower electricity rates relative to gas rates result in lower overall utility bills. • The 2022 Title 24 Code’s new source energy metric combined with the heat pump baseline encourage allelectric construction, providing an incentive that allows for some amount of prescriptively required building efficiency to be traded off. This compliance benefit for all-electric homes highlights a unique opportunity for jurisdictions to incorporate efficiency into all-electric reach codes. Efficiency and electrification have symbiotic benefits and are both critical for decarbonization of buildings. As demand on the electric grid is increased through electrification, efficiency can reduce the negative impacts of additional electricity demand on the grid, reducing the need for increased generation and storage capacity, as well as the need to upgrade upstream transmission and distribution equipment. The Reach Codes Team recommends that jurisdictions adopting an all-electric reach code for single family buildings also include an efficiency requirement with EDR2 margins consistent with the all-electric code minimum package results in Table 30. • The code compliance margins for the ADU all-electric code minimum package are lower than for the single family prototype and code compliance can be more challenging for smaller dwelling units. As a result, the Reach Codes Team does not recommend an additional efficiency requirement for all-electric ADU ordinances. • Electrification combined with increased PV capacity results in utility cost savings and was found to be On-Bill cost effective in all cases. These results were based on today’s net energy metering rules and do not account for future changes to utility agreements, which are expected to decrease the value of PV to the consumer. • For jurisdictions interested in a reach code that allows for mixed fuel buildings the mixed fuel efficiency, PV, and battery package was found to be cost effective based on TDV in all cases. Cost effectiveness was marginal because of the high cost of the battery system. EDR2 margins ranged from 7 to 30 for the costeffective packages as is shown in Table 31. • Applying the CARE rates 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.

17.83 Cost-Effectiveness Analysis: Single Family New Construction 42 Summary
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Local jurisdictions may also adopt ordinances that amend different Parts of the California Building Standards Code or may elect to amend other state or municipal codes. The decision regarding which code to amend will determine the specific requirements that must be followed for an ordinance to be legally enforceable. Reach codes that amend Part 6 of the CA Building Code and require energy performance beyond state code minimums must demonstrate the proposed changes are cost-effective and obtain approval from the Energy Commission.

Table 30. Summary of All-Electric Efficiency EDR2 Margins and Cost-Effectiveness Climate
Zone
Electric
/Gas Utility
Single Family ADU
Code Min EE EE+PV EE+PV/B Code Min EE EE+PV EE+PV/B
CZ01 PGE 8.3 18.8 18.8 29.6 0.0 15.1 15.1 24.6
CZ02 PGE 5.7 13.5 13.5 19.1 0.4 9.5 9.5 14.6
CZ03 PGE 4.7 10.5 10.5 15.8 0.0 5.7 5.7 10.5
CZ04 PGE 3.7 8.6 8.6 13.5 0.2 6.3 6.3 10.8
CZ04 CPAU 3.7 8.6 8.6 13.5 0.2 6.3 6.3 10.8
CZ05 PGE 1.1 6.1 6.1 14.3 0.4 2.4 2.4 7.9
CZ05 PGE/SCG 1.1 6.1 6.1 14.3 0.4 2.4 2.4 7.9
CZ06 SCE/SCG 2.5 7.8 7.8 11.6 0.2 6.2 6.2 9.8
CZ07 SDGE 2.3 7.0 7.0 9.9 0.4 6.3 6.3 9.1
CZ08 SCE/SCG 0.6 4.0 4.0 10.4 0.6 3.6 3.6 10.0
CZ09 SCE 1.2 4.6 4.6 9.9 0.6 3.7 3.7 8.8
CZ10 SCE/SCG 1.1 4.6 4.6 10.1 0.4 3.8 3.8 9.1
CZ10 SDGE 1.1 4.6 4.6 10.1 0.4 3.8 3.8 9.1
CZ11 PGE 3.5 8.4 8.4 14.1 0.2 7.7 7.7 13.2
CZ12 PGE 4.0 8.5 8.5 14.7 0.3 6.8 6.8 12.6
CZ12 SMUD/PGE 4.0 8.5 8.5 14.7 0.3 6.8 6.8 12.6
CZ13 PGE 2.1 6.8 6.8 12.0 0.1 6.8 6.8 11.9
CZ14 SCE/SCG 1.6 7.9 7.9 13.2 0.4 7.3 7.3 12.4
CZ14 SDGE 1.6 7.9 7.9 13.2 0.4 7.3 7.3 12.4
CZ15 SCE/SCG 1.6 4.2 4.2 8.6 1.3 6.5 6.5 11.1
CZ16 PG&E 6.0 9.7 9.7 18.1 0.1 8.8 8.8 16.4

17.84 Cost-Effectiveness Analysis: Single Family New Construction 43 Summary
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 31. Summary of Mixed Fuel Efficiency EDR2 Margins and Cost-Effectiveness Climate
Zone
Electric
/Gas Utility
Single Family ADU
EE EE+PV EE+PV/B EE EE+PV EE+PV/B
CZ01 PGE 12.0 12.0 30.0 14.9 14.9 24.3
CZ02 PGE 8.8 8.8 13.5 9.4 9.4 14.5
CZ03 PGE 5.7 5.7 11.2 6.3 6.3 12.1
CZ04 PGE 4.8 4.8 8.4 6.7 6.7 12.2
CZ04 CPAU 4.8 4.8 8.4 6.7 6.7 12.2
CZ05 PGE 4.8 4.8 16.8 2.3 2.3 7.8
CZ05 PGE/SCG 4.8 4.8 16.8 2.3 2.3 7.8
CZ06 SCE/SCG 6.1 6.1 9.2 6.1 6.1 9.8
CZ07 SDGE 5.5 5.5 8.3 6.3 6.3 9.1
CZ08 SCE/SCG 3.5 3.5 9.5 3.6 3.6 10.1
CZ09 SCE 3.6 3.6 8.6 3.7 3.7 8.9
CZ10 SCE/SCG 3.7 3.7 8.3 3.8 3.8 9.0
CZ10 SDGE 3.7 3.7 8.3 3.8 3.8 9.0
CZ11 PGE 5.7 5.7 11.0 7.5 7.5 13.1
CZ12 PGE 5.3 5.3 11.0 6.8 6.8 12.6
CZ12 SMUD/PGE 5.3 5.3 11.0 6.8 6.8 12.6
CZ13 PGE 4.7 4.7 9.6 7.2 7.2 12.8
CZ14 SCE/SCG 6.2 6.2 11.2 8.5 8.5 14.2
CZ14 SDGE 6.2 6.2 11.2 8.5 8.5 14.2
CZ15 SCE/SCG 4.3 4.3 8.5 6.6 6.6 11.2
CZ16 PG&E 14.9 14.9 22.6 8.7 8.7 16.2

17.85 Cost-Effectiveness Analysis: Single Family New Construction 44 References
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 6 References
Barbose, G., Darghouth, N., O'Shaughnessy, E., & Forrester, S. (2021, October). Tracking the Sun. Pricing and Design Trends for Distributed Photovoltaic Systems in the United States 2021 Edition. Retrieved from https://emp.lbl.gov/tracking-the-sun
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. (2018). 2019 Alternative Calculation Method Approval Manual for the 2019 Building Energy Efficiency Standards. Retrieved from https://www.energy.ca.gov/publications/2018/2019-alternativecalculation-method-approval-manual-2019-building-energy California Energy Commission. (2021a). Express Terms for the Proposed Revisions to 2022 Title 24, Part 1 and Part 6.

Retrieved from https://efiling.energy.ca.gov/Lists/DocketLog.aspx?docketnumber=21-BSTD-01 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. (2022, Feb). 2022 Single-Family Residential Alternative Calculation Method Reference Manual. Retrieved from https://www.energy.ca.gov/publications/2022/2022-single-family-residentialalternative-calculation-method-reference-manual 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-affairsdivision/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 California Public Utilities Commission. (2022). Proposed Decision of Commissioner Rechtschaffen: PHASE III DECISION

ELIMINATING GAS LINE EXTENSION ALLOWANCES, TEN-YEAR REFUNDABLE PAYMENT OPTION, AND FIFTY PERCENT DISCOUNT PAYMENT OPTION UNDER GAS LINE EXTENSION RULES.

E-CFR. (2020). https://www.ecfr.gov/cgibin/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/cgibin/retrieveECFR?gp=&SID=8de751f141aaa1c1c9833b36156faf67&mc=true&n=pt10.3.431&r=PART&ty=HTM L#se10.3.431_197
Energy & Environmental Economics. (2019). Residential Building Electrification in California. Retrieved from https://www.ethree.com/wpcontent/uploads/2019/04/E3_Residential_Building_Electrification_in_California_April_2019.pdf Energy + Environmental Economics. (2020). Time Dependent Valuation of Energy for Developing Building Efficiency Standards: 2022 Time Dependent Valuation (TDV) and Source Energy Metric Data Sources and Inputs.

E-Source companies. (2020). Behind-the-Meter Battery Market Study. Prepared for San Diego Gas & Electric.

Retrieved from https://www.etcc-ca.com/reports/behind-meter-battery-market-study?dl=1582149166 Horii, B., Cutter, E., Kapur, N., Arent, J., & Conotyannis, D. (2014). Time Dependent Valuation of Energy for Developing Building Energy Efficiency Standards.

Proctor, J., Wilcox, B., & Chitwood, R. (2018). Central Valley Research Homes Project. California Energy Commission.

Retrieved from
https://www.researchgate.net/publication/342135376_Central_Valley_Research_Homes_Project_-- _Final_CEC_Report

17.86 Cost-Effectiveness Analysis: Single Family New Construction 45 References
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Statewide CASE Team. (2017). Residential High Performance Windows & Doors Codes and Standards Enhancement (CASE) Initiative 2019 California Energy Code. Retrieved from http://title24stakeholders.com/wpcontent/uploads/2017/09/2019-T24-CASE-Report_Res-Windows-and-Doors_Final_September-2017.pdf Statewide CASE Team. (2018). Energy Savings Potential and Cost-Effectiveness Analysis of High Efficiency Windows in California. Prepared by Frontier Energy. Retrieved from https://www.etcc-ca.com/reports/energy-savingspotential-and-cost-effectiveness-analysis-high-efficiency-windows-california Statewide CASE Team. (2020a). Nonresidential High Performance Envelope Codes and Standards Enhancement (CASE) Initiative 2022 California Energy Code. Prepared by Energy Solutions. Retrieved from https://title24stakeholders.com/wp-content/uploads/2020/10/2020-T24-NR-HP-Envelope-Final-CASEReport.pdf Statewide CASE Team. (2020b). Residential Energy Savings and Process Improvements for Additions and Alterations Codes and Standards Enhancement (CASE) Initiative 2022 California Energy Code. Prepared by Frontier Energy. Retrieved from https://title24stakeholders.com/wp-content/uploads/2020/08/SF-Additions-andAlterations_Final_-CASE-Report_Statewide-CASE-Team.pdf Statewide CASE Team. (2020c). Multifamily All-Electric Codes and Standards Enhancement (CASE) Initiative 2022 California Energy Code. Prepared by TRC.

Statewide Reach Codes Team. (2019, August). 2019 Cost-effectiveness Study: Low-Rise Residential New Construction.

Prepared for Pacific Gas and Electric Company. Prepared by Frontier Energy. Retrieved from https://localenergycodes.com/download/800/file_path/fieldList/2019%20Res%20NC%20Reach%20Codes Statewide Reach Codes Team. (2021a). Cost-Effectiveness Analysis: Batteries in Single Family Homes. Prepared by Frontier Energy. Retrieved from
https://localenergycodes.com/download/930/file_path/fieldList/Single%20Family%20Battery%20Costeff%20Report.pdf Statewide Reach Codes Team. (2021b). 2020 Reach Code Cost-Effectiveness Analysis: Detached Accessory Dwelling Units. Prepared by TRC. Retrieved from
https://localenergycodes.com/download/760/file_path/fieldList/2019%20New%20Detached%20ADUs%20Co st-effectiveness%20Report.pdf
TRC, P. E. (2021). 2020 Reach Code Cost-Effectiveness Analysis: Detached Accessory Dwelling Units.

UC Berkeley Center for Community Innovation. (2021). Implementing the Backyard Revolution: Perspectives of California’s ADU Owners.

17.87 Cost-Effectiveness Analysis: Single Family New Construction 46 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 7 Appendices

7.1 Map of California Climate Zones
Climate zone geographical boundaries are depicted in Figure 4. The map in Figure 4 along with a zip-code search directory is available at: https://ww2.energy.ca.gov/maps/renewable/building_climate_zones.html Figure 4. Map of California climate zones.

17.88 Cost-Effectiveness Analysis: Single Family New Construction 47 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

7.2 Utility Rate Schedules
The Reach Codes Team used the CA IOU and POU rate tariffs detailed below to determine the On-Bill savings for each package. The California Climate Credit was applied for both electricity and natural gas service for the IOUs using the 2022 credits shows below. 15 The credits were applied to reduce the total calculated annual bill, including any fixed fees or minimum bill amounts.

7.2.1 Pacific Gas & Electric
The following pages provide details on the PG&E electricity and natural gas tariffs applied in this study. Table 32 describes the baseline territories that were assumed for each climate zone. A net surplus compensation rate of $0.0362 / kWh was applied to any net annual electricity generation based on a one-year average of the rates between April 2021 and March 2022.
15 https://www.cpuc.ca.gov/industries-and-topics/natural-gas/greenhouse-gas-cap-and-trade-program/californiaclimate-credit

17.89 Cost-Effectiveness Analysis: Single Family New Construction 48 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 32: PG&E Baseline Territory by Climate Zone
Baseline
Territory
CZ01 V
CZ02 X
CZ03 T
CZ04 X
CZ05 T
CZ11 R
CZ12 S
CZ13 R
CZ16 Y
The PG&E monthly gas rate in $/therm was applied on a monthly basis for the 12-month period ending August 2021 according to the rates shown in Table 33. The corresponding CARE rates are shown in Table 34.

Table 33: PG&E Monthly Gas Rate ($/therm)
Month Procurement
Charge
Transportation Charge Total Charge
Baseline Excess Baseline Excess
Jan 2022 $0.76338 $1.33589 $1.79545 $2.09927 $2.55883
Feb 2022 $0.73412 $1.33589 $1.79545 $2.07001 $2.52957
Mar 2022 $0.61773 $1.33589 $1.79545 $1.95362 $2.41318
Apr 2021 $0.22304 $1.19868 $1.68034 $1.42172 $1.90338
May 2021 $0.21063 $1.19868 $1.68034 $1.40931 $1.89097
June 2021 $0.21778 $1.20019 $1.68243 $1.41797 $1.90021
July 2021 $0.19109 $1.20019 $1.68243 $1.39128 $1.87352
Aug 2021 $0.22551 $1.20019 $1.68243 $1.4257 $1.90794
Sept 2021 $0.44379 $1.20019 $1.68243 $1.64398 $2.12622
Oct 2021 $0.68120 $1.20019 $1.68243 $1.88139 $2.36363
Nov 2021 $0.81218 $1.20019 $1.68243 $2.01237 $2.49461
Dec 2021 $0.82555 $1.20019 $1.68243 $2.02574 $2.50798
Table 34: PG&E Monthly CARE (GL-1) Gas Rate ($/therm)
Month CARE Discount Total CARE Charge
Baseline Excess Baseline Excess
Jan 2022 ($0.41947) ($0.51139) $1.67790 $2.04554
Feb 2022 ($0.41362) ($0.50553) $1.65449 $2.02214
Mar 2022 ($0.39034) ($0.48226) $1.56138 $1.92902
Apr 2021 ($0.28372) ($0.38006) $1.13490 $1.52022
May 2021 ($0.28124) ($0.37757) $1.12497 $1.51030
June 2021 ($0.28297) ($0.37942) $1.13190 $1.51769
July 2021 ($0.27764) ($0.37408) $1.11054 $1.49634
Aug 2021 ($0.28452) ($0.38097) $1.13808 $1.52387
Sept 2021 ($0.32818) ($0.42462) $1.31270 $1.69850
Oct 2021 ($0.37566) ($0.47211) $1.50263 $1.88842
Nov 2021 ($0.40185) ($0.49830) $1.60742 $1.99321
Dec 2021 ($0.40453) ($0.50098) $1.61811 $2.00390

17.90 Cost-Effectiveness Analysis: Single Family New Construction 49 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 17.91 2023-06-20 Cost-Effectiveness Analysis: Single Family New Construction 50 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 17.92 2023-06-20 Cost-Effectiveness Analysis: Single Family New Construction 51 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 17.93 2023-06-20 Cost-Effectiveness Analysis: Single Family New Construction 52 Appendices
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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

7.2.2 Southern California Edison
The following pages provide details on are the SCE electricity tariffs applied in this study. Table 35 describes the baseline territories that were assumed for each climate zone. A net surplus compensation rate of $0.03339 / kWh was

17.95 Cost-Effectiveness Analysis: Single Family New Construction 54 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 applied to any net annual electricity generation based on a one-year average of the rates between April 2021 and March 2022.

Table 35: SCE Baseline Territory by Climate Zone
Baseline
Territory
CZ06 6
CZ08 8
CZ09 9
CZ10 10
CZ14 14
CZ15 15

17.96 Cost-Effectiveness Analysis: Single Family New Construction 55 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 17.97 2023-06-20 Cost-Effectiveness Analysis: Single Family New Construction 56 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 17.98 2023-06-20 Cost-Effectiveness Analysis: Single Family New Construction 57 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

7.2.3 Southern California Gas
Following are the SoCalGas natural gas tariffs applied in this study. Table 36 describes the baseline territories that were assumed for each climate zone.

17.99 Cost-Effectiveness Analysis: Single Family New Construction 58 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 36: SoCalGas Baseline Territory by Climate Zone
Baseline
Territory
CZ05 2
`CZ06 1
CZ08 1
CZ09 1
CZ10 1
CZ14 2
CZ15 1
The SoCalGas monthly gas rate in $/therm was applied on a monthly basis for the 12-month period ending August 2021 according to the rates shown in Table 37. Historical natural gas rate data was only available for SoCalGas’ procurement charges. 16 To estimate total costs by month, the baseline and excess transmission charges were assumed to be relatively consistence and applied for the entire year based on January 2021 and April 2021 costs.

CARE rates reflect the 20 percent discount per the GR tariff.

Table 37: SoCalGas Monthly Gas Rate ($/therm)
Month Procurement
Charge
Transportation Charge Total Charge
Baseline Excess Baseline Excess
Jan 2022 $0.83569 $0.82487 $1.23877 $1.66056 $2.07446
Feb 2022 $0.60655 $0.82487 $1.23877 $1.43142 $1.84532
Mar 2022 $0.55921 $0.82487 $1.23877 $1.38408 $1.79798
Apr 2021 $0.31373 $0.80599 $1.20562 $1.11972 $1.51935
May 2021 $0.35684 $0.80599 $1.20562 $1.16283 $1.56246
June 2021 $0.39460 $0.80599 $1.20562 $1.20059 $1.60022
July 2021 $0.42622 $0.80599 $1.20562 $1.23221 $1.63184
Aug 2021 $0.44599 $0.80599 $1.20562 $1.25198 $1.65161
Sept 2021 $0.44425 $0.82487 $1.23877 $1.26912 $1.68302
Oct 2021 $0.57580 $0.82487 $1.23877 $1.40067 $1.81457
Nov 2021 $0.63799 $0.82487 $1.23877 $1.46286 $1.87676
Dec 2021 $0.65129 $0.82487 $1.23877 $1.47616 $1.89006
16 The SoCalGas procurement and transmission charges were obtained from the following site:
https://www.socalgas.com/for-your-business/energy-market-services/gas-prices

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7.2.4 San Diego Gas & Electric
Following are the SDG&E electricity and natural gas tariffs applied in this study. Table 38 describes the baseline territories that were assumed for each climate zone. A net surplus compensation rate of $0.04174 / kWh was applied to any net annual electricity generation based on a one-year average of the rates between April 2021 and March 2022.

Table 38: SDG&E Baseline Territory by Climate Zone
Baseline
Territory
CZ07 Coastal
CZ10 Inland
CZ14 Mountain
The SDG&E monthly gas rate in $/therm was applied on a monthly basis for the 12-month period ending August 2021 according to the rates shown in Table 39. CARE rates reflect the 20 percent discount per the G-CARE tariff.

Table 39: SDG&E Monthly Gas Rate ($/therm)
Month Procurement
Charge
Transportation Charge Total Charge
Baseline Excess Baseline Excess
Jan 2022 $0.83668 $1.43201 $1.70577 $2.26869 $2.54245
Feb 2022 $0.60727 $1.43201 $1.70577 $2.03928 $2.31304
Mar 2022 $0.55988 $1.43201 $1.70577 $1.99189 $2.26565
Apr 2021 $0.31401 $1.44464 $1.70732 $1.75865 $2.02133
May 2021 $0.35719 $1.44464 $1.70732 $1.80183 $2.06451
June 2021 $0.39498 $1.44464 $1.70732 $1.83962 $2.10230
July 2021 $0.42663 $1.44464 $1.70732 $1.87127 $2.13395
Aug 2021 $0.44642 $1.44464 $1.70732 $1.89106 $2.15374
Sept 2021 $0.44468 $1.44464 $1.70732 $1.88932 $2.15200
Oct 2021 $0.57637 $1.38238 $1.63573 $1.95875 $2.21210
Nov 2021 $0.63862 $1.38238 $1.63573 $2.02100 $2.27435
Dec 2021 $0.65194 $1.38238 $1.63573 $2.03432 $2.28767

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localenergycodes.com California Energy Codes & Standards17.105 | A statewide utility program 2023-06-20 Cost-Effectiveness Analysis: Single Family New Construction 64 Appendices
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7.2.5 City of Palo Alto Utilities
Following are the CPAU electricity and natural gas tariffs applied in this study. The CPAU monthly gas rate in $/therm was applied on a monthly basis for the 12-month period ending August 2021 according to the rates shown

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Cost-Effectiveness Analysis: Single Family New Construction 66 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 in Table 40. The distribution charge was $0.4835/therm for Tier 1 and $1.0426/therm for Tier 2. The monthly service charge applied was $10.94 per month per the G-1 tariff in effect at the time of the analysis.

Table 40: CPAU Monthly Gas Rate ($/therm)
Effective
Date
Commodity
Rate
Cap and Trade
Compliance
Charge
Transportation
Charge
Carbon
Offset
Charge
G1 Tier 1
Volumetric
Totals
G1 Tier 2
Volumetric
Totals
Jan 2022 $0.77140 $0.04860 $0.15000 $0.04000 $1.53900 $1.83144 Feb 2022 $0.53600 $0.04860 $0.15000 $0.04000 $1.30360 $1.81874 Mar 2022 $0.53700 $0.04860 $0.15000 $0.04000 $1.30460 $1.8565 Apr 2022 $0.59750 $0.07680 $0.14404 $0.04000 $1.38734 $1.8363 May 2021 $0.39010 $0.04860 $0.12200 $0.04000 $1.10450 $1.8889 June 2021 $0.39820 $0.04860 $0.12214 $0.04000 $1.11274 $1.89714 July 2021 $0.48000 $0.04860 $0.12274 $0.04000 $1.22034 $2.04394 Aug 2021 $0.54920 $0.04860 $0.12274 $0.04000 $1.28954 $2.11314 Sept 2021 $0.52170 $0.04860 $0.12274 $0.04000 $1.26204 $1.78012 Oct 2021 $0.71750 $0.04860 $0.12274 $0.04000 $1.45784 $1.83222 Nov 2021 $0.75050 $0.04860 $0.12274 $0.04000 $1.49084 $1.83472 Dec 2021 $0.63210 $0.04860 $0.12274 $0.04000 $1.37244 $1.80442

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7.2.6 Sacramento Municipal Utilities District (Electric Only) Following are the SMUD electricity tariffs applied in this study.

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

7.2.7 Fuel Escalation Assumptions
The average annual escalation rates in Table 41 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 41: Real Utility Rate Escalation Rate Assumptions Statewide Natural
Gas Residential
Average Rate
(%/year, real)
Electric Residential Average Rate
(%/year, real)

PG&E SCE SDG&E
2023 4.6% 1.8% 1.6% 2.8%
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%

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

7.3 Summary of Measures by Package
Table 42 provides the details of the measures in each of the efficiency package by climate zone and case. Table 43 presents the measures for all the single family efficiency + PV + battery packages. Table 44 presents the measures for all the ADU efficiency packages.

Table 42: Single Family Efficiency Package Measures
Climate
Zone
3 ACH50
R-10
Slab Attic

0.25 Roof
Solar
Reflectance

0.24 U-Factor /

0.50 SHGC
Windows

0.35 W/cfm Buried Ducts
Basic
Compact Hot
Water Credit
1 X R-60 vs R-38 X
2 X R-60 vs R-38 X X X
3 R-60 vs R-30 X X X
4 X R-60 vs R-38 X X X
5 R-49 vs R-30 X X X
6 R-60 vs R-30 X X X
7 R-49 vs R-30 X X
8 R-60 vs R-38 X X X
9 R-60 vs R-38 X X X
10 R-60 vs R-38 X X X X
11 X R-60 vs R-38 X X X X
12 X R-60 vs R-38 X X X X
13 X R-60 vs R-38 X X X X
14 X X R-60 vs R-38 X X X X
15 X R-60 vs R-38 X X X X
16 R-60 vs R-38 X X X

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Cost-Effectiveness Analysis: Single Family New Construction 71 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 43: Single Family Mixed Fuel Efficiency + PV + Battery Package Measures Climate
Zone
3 ACH50
R-10
Slab Attic

0.25 Roof
Solar
Reflectance

0.24 UFactor /

0.50 SHGC
Windows

0.30 UFactor /

0.50 SHGC
Windows

0.35 W/cfm
Buried
Ducts
Basic
Compact
Hot Water
Credit
1 X X X
2 X R- 49 vs R-38 X X X
3 R-38 vs R-30 X X X
4 X R-49 vs R-38 X X X
5 R-49 vs R-30 X X X
6 R- 49 vs R-30 X X X
7 R-49 vs R-30 X X
8 R- 49 vs R-38 X X X
9 R- 49 vs R-38 X X X
10 X X X X
11 X R-49 vs R-38 X X X X
12 X R- 49 vs R-38 X X X X
13 X R- 49 vs R-38 X X X X
14 X X R- 49 vs R-38 X X X X
15 X R- 49 vs R-38 X X X X
16 R- 49 vs R-38 X X X
Table 44: ADU Efficiency Package Measures
Climate
Zone
3 ACH50
R-10
Slab

0.25 Roof
Solar
Reflectance

0.24 U-Factor /

0.50 SHGC
Windows
Ductless
VCHP
Basic
Compact Hot
Water Credit
1 X X
2 X X X
3 X X
4 X X X
5 X X
6 X X
7 X X
8 X X
9 X X
10 X X X
11 X X X X
12 X X X X
13 X X X X
14 X X X X X
15 X X X X
16 X X

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Cost-Effectiveness Analysis: Single Family New Construction 72 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 The efficiency measures added to the All-Electric prescriptive package in Climate Zones that were not compliant are shown in Table 45 and
Table 46.

Table 45: Single Family All-Electric Code Compliant Efficiency Measures Climate
Zone

0.24 U-Factor / 0.50
SHGC Windows
Basic Compact Hot
Water Credit
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 X
16 X
Table 46: ADU All-Electric Code Compliant Efficiency Measures Climate
Zone
3 ACH50 R-49 vs R-38
Attic
Insulation

0.30 U-Factor /

0.50 SHGC
Windows

0.24 U-Factor /

0.50 SHGC
Windows
Improved HVAC
Fan Efficiency:

0.35 W/cfm
Basic Compact
Hot Water Credit
1 2
3 4 X
5 X X
6 X
7 X
8 X X
9 X X
10 X X
11 12
13 X
14 X X
15 X X
16 X X X X

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Cost-Effectiveness Analysis: Single Family New Construction 73 Appendices
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 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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17.115

Prepared by:

Frontier Energy, Inc
Misti Bruceri & Associates, LLC
Prepared for:

Kelly Cunningham, Codes and Standards Program, Pacific Gas and Electric Last modified: 2023/06/20
Revision: 1.1
2022 Cost-Effectiveness Study:

Multifamily New Construction

17.116
Cost-Effectiveness Analysis: Multifamily New Construction Legal Notice
This report was prepared by Pacific Gas and Electric Company and funded by the California utility customers under the auspices of the California Public Utilities Commission.

Copyright 2022, Pacific Gas and Electric Company. All rights reserved, except that this document may be used, copied, and distributed without modification.

Neither PG&E nor any of its employees makes any warranty, express or implied; or assumes any legal liability or responsibility for the accuracy, completeness or usefulness of any data, information, method, product, policy or process disclosed in this document; or represents that its use will not infringe any privately-owned rights including, but not limited to, patents, trademarks or copyrights.

Acronym List
2023 PV$ – Present value costs in 2023
ACH50 – Air Changes per Hour at 50 pascals pressure differential ACM – Alternative Calculation Method
ADU – Accessory Dwelling Unit
AFUE – Annual Fuel Utilization Efficiency
B/C – Lifecycle Benefit-to-Cost Ratio
BEopt – Building Energy Optimization Tool
BSC – Building Standards Commission
CA IOUs – California Investor-Owned Utilities
CASE – Codes and Standards Enhancement
CBECC-Res – Computer program developed by the California Energy Commission for use in demonstrating compliance with the California Residential Building Energy Efficiency Standards CFI – California Flexible Installation
CFM – Cubic Feet per Minute
CO2 – Carbon Dioxide
CPAU – City of Palo Alto Utilities
CPUC – California Public Utilities Commission
CZ – California Climate Zone
DHW – Domestic Hot Water
DOE – Department of Energy
DWHR – Drain Water Heat Recovery
EDR – Energy Design Rating
EER – Energy Efficiency Ratio
EF – Energy Factor
GHG – Greenhouse Gas

17.117
Cost-Effectiveness Analysis: Multifamily New Construction HERS Rater – Home Energy Rating System Rater
HPA – High Performance Attic
HPWH – Heat Pump Water Heater
HSPF – Heating Seasonal Performance Factor
HVAC – Heating, Ventilation, and Air Conditioning
IECC – International Energy Conservation Code
IOU – Investor Owned Utility
kBtu – kilo-British thermal unit
kWh – Kilowatt Hour
LBNL – Lawrence Berkeley National Laboratory
LCC – Lifecycle Cost
LLAHU – Low Leakage Air Handler Unit
VLLDCS – Verified Low Leakage Ducts in Conditioned Space MF – Multifamily
NEEA – Northwest Energy Efficiency Alliance
NEM – Net Energy Metering
NPV – Net Present Value
NREL – National Renewable Energy Laboratory
PG&E – Pacific Gas and Electric Company
POU – Publicly-Owned-Utilities
PV – Photovoltaic
SCE – Southern California Edison
SDG&E – San Diego Gas and Electric
SEER – Seasonal Energy Efficiency Ratio
SF – Single Family
SMUD – Sacramento Municipal Utility District
SoCalGas – Southern California Gas Company
TDV – Time Dependent Valuation
Therm – Unit for quantity of heat that equals 100,000 British thermal units Title 24 – Title 24, Part 6
TOU – Time-Of-Use
UEF – Uniform Energy Factor
ZNE – Zero-net Energy

17.118
Cost-Effectiveness Analysis: Multifamily New Construction Summary of Revisions
Date Description Reference (page or section)
2/28/2022 Original Release N/A
6/20/2023 Minor revisions to content; no change to results 2, 3, 32, 33

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Cost-Effectiveness Analysis: Multifamily New Construction

TABLE OF CONTENTS
Executive Summary.......................................................................................................................................................... 1 1 Introduction................................................................................................................................................................ 4 2 Methodology and Assumptions............................................................................................................................... 5

2.1 Analysis for Reach Codes..................................................................................................................................................... 5

2.1.1 Modeling ....................................................................................................................................................................... 5

2.1.2 Cost-Effectiveness ........................................................................................................................................................ 5

2.1.3 Utility Rates................................................................................................................................................................... 6

2.2 2022 T24 Compliance Metrics .............................................................................................................................................. 8

2.3 Greenhouse Gas Emissions ................................................................................................................................................. 8 3 Prototypes, Measure Packages, and Costs............................................................................................................ 9

3.2 Measure Definitions and Costs ........................................................................................................................................... 11

3.2.1 Efficiency, Solar PV, and Batteries ............................................................................................................................. 11

3.2.2 All-Electric................................................................................................................................................................... 15

3.3 Measure Packages ............................................................................................................................................................. 18 4 Results......................................................................................................................................................................20

4.1 All-Electric Prescriptive Code.............................................................................................................................................. 20

4.2 All-Electric Plus PV ............................................................................................................................................................. 23

4.3 Mixed Fuel Efficiency .......................................................................................................................................................... 25

4.4 Mixed Fuel Plus PV (Plus Battery for the 3-Story Prototype).............................................................................................. 26

4.5 CARE Rate Comparison..................................................................................................................................................... 29

4.6 Greenhouse Gas Reductions.............................................................................................................................................. 30 5 Summary ..................................................................................................................................................................32 6 References ...............................................................................................................................................................34 7 Appendices ..............................................................................................................................................................36

7.1 Map of California Climate Zones......................................................................................................................................... 36

7.2 Utility Rate Schedules......................................................................................................................................................... 37

7.2.1 Pacific Gas & Electric.................................................................................................................................................. 38

7.2.2 Southern California Edison ......................................................................................................................................... 43

7.2.3 Southern California Gas.............................................................................................................................................. 46

7.2.4 San Diego Gas & Electric............................................................................................................................................ 48

7.2.5 City of Palo Alto Utilities.............................................................................................................................................. 53

7.2.6 Sacramento Municipal Utilities District (Electric Only)................................................................................................. 55

7.2.7 Fuel Escalation Assumptions...................................................................................................................................... 57

7.3 Cost Details......................................................................................................................................................................... 58

7.4 PG&E Gas Infrastructure Cost Memo................................................................................................................................. 59

7.5 Central Heat Pump Water Heater Comparison................................................................................................................... 62

7.6 Summary of Measures by Package .................................................................................................................................... 63

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Cost-Effectiveness Analysis: Multifamily New Construction

LIST OF TABLES
Table ES-1. Summary of Efficiency TDV Compliance Margins and Cost-Effectiveness....................................................................... 3 Table 1. Utility Tariffs Used Based on Climate Zone ............................................................................................................................ 8 Table 2. Prototype Characteristics........................................................................................................................................................ 9 Table 3. Base Case Characteristics of the Prototypes........................................................................................................................ 10 Table 4. Base Package PV Capacities (kW-DC) ................................................................................................................................ 10 Table 5. Incremental Cost Assumptions ............................................................................................................................................. 13 Table 6. Heat Pump Water Heater Incremental System Costs (Present Value (2023$)).................................................................... 16 Table 7. Heat Pump Space Heater Costs per Dwelling Unit (Present Value (2023$)......................................................................... 16 Table 8. Lifetime of Water Heating & Space Conditioning Equipment Measures ............................................................................... 17 Table 9. IOU Natural Gas Infrastructure Cost Savings for All-Electric Building................................................................................... 18 Table 10. Multifamily IOU Total Natural Gas Infrastructure Costs ...................................................................................................... 18 Table 11. Multifamily CPAU Total Natural Gas Infrastructure Costs................................................................................................... 18 Table 12. 3-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric Prescriptive Code......................................................... 21 Table 13. 5-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric Prescriptive Code......................................................... 22 Table 14. 3-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric 100% PV...................................................................... 23 Table 15. 5-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric 100% PV...................................................................... 24 Table 16. 3-Story Cost-Effectiveness Results per Dwelling Unit: Mixed Fuel Efficiency..................................................................... 25 Table 17. 5-Story Cost-Effectiveness Results per Dwelling Unit: Mixed Fuel Efficiency..................................................................... 26 Table 18. 3-Story Cost-Effectiveness Results per Dwelling Unit: Mixed Fuel Efficiency + PV + Battery............................................. 27 Table 19. 5-Story Cost-Effectiveness Results per Dwelling Unit: Mixed Fuel Efficiency + PV............................................................ 28 Table 20. On-Bill IOU Cost-Effectiveness Comparison with CARE Tariffs, Results per Dwelling Unit: All-Electric Prescriptive Code 29 Table 21. On-Bill IOU Cost-Effectiveness Comparison with CARE Tariffs, Results per Dwelling Unit: Mixed Fuel Packages ........... 29 Table 22. Summary of Efficiency TDV Compliance Margins and Cost-Effectiveness......................................................................... 33 Table 23. PG&E Baseline Territory by Climate Zone.......................................................................................................................... 38 Table 24. PG&E Monthly Gas Rate ($/therm)..................................................................................................................................... 38 Table 25. PG&E Monthly CARE (GL-1) Gas Rate ($/therm)............................................................................................................... 39 Table 26: SCE Baseline Territory by Climate Zone ............................................................................................................................ 43 Table 27. SoCalGas Baseline Territory by Climate Zone ................................................................................................................... 46 Table 28. SoCalGas Monthly Gas Rate ($/therm) .............................................................................................................................. 46 Table 29. SDG&E Baseline Territory by Climate Zone ....................................................................................................................... 48

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Cost-Effectiveness Analysis: Multifamily New Construction Table 30. SDG&E Monthly Gas Rate ($/therm).................................................................................................................................. 48 Table 31. CPAU Monthly Gas Rate ($/therm)..................................................................................................................................... 53 Table 32: Real Utility Rate Escalation Rate Assumptions................................................................................................................... 57 Table 33. Heat Pump Water Heater First Costs per Building (Present Value (2023$))....................................................................... 58 Table 34. Heat Pump Space Heater First Costs per Dwelling Unit (Present Value (2023$)............................................................... 58 Table 35. 5-Story Cost-Effectiveness: All-Electric Prescriptive Code with R-134a Heat Pump Water Heater .................................... 62 Table 36. Mixed Fuel Efficiency Package Measures .......................................................................................................................... 63 Table 37. Upgrade Package PV Capacities (kW-DC)......................................................................................................................... 64

LIST OF FIGURES
Figure 1. 3-Story greenhouse gas reductions (metric tons) per dwelling unit ..................................................................................... 31 Figure 2. 5-Story greenhouse gas savings (metric tons) per dwelling unit.......................................................................................... 31 Figure 3. Map of California climate zones........................................................................................................................................... 36

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17.123
Cost-Effectiveness Analysis: Multifamily New Construction Executive Summary
1 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Executive Summary
The California Codes and Standards (C&S) Reach Codes program provides technical support to local governments considering adopting a local ordinance (reach code) intended to support meeting local and/or statewide energy efficiency and greenhouse gas (GHG) reduction goals. The program facilitates adoption and implementation of the code when requested by local jurisdictions by providing resources such as cost-effectiveness studies, model language, sample findings, and other supporting documentation.

This report documents cost-effective combinations of measures that exceed the minimum state requirements, the 2022 Building Energy Efficiency Standards (Title 24, Part 6 or Energy Code), effective January 1, 2023, for newly constructed multifamily buildings. The analysis considers low-rise and mid-rise multifamily building types and evaluates mixed fuel and all-electric package options in all sixteen California climate zones (CZs) Packages include a code compliant electrification package and a mixed fuel efficiency package, as well as the addition of above-code on-site solar photovoltaic (PV) capacity and battery energy storage. The 2022 Energy Code established electric heat pumps as the prescriptive baseline for space heating in most climate zones. As a result, this analysis primarily focuses on the electrification of central water heating. Space heating electrification was also evaluated where the prescriptive heat pump baseline didn’t apply: In Climate Zone 16 for multifamily buildings three habitable stories or fewer, and Climate Zones 1 and 16 for multifamily buildings greater than three habitable stories.

This analysis used two different metrics to assess the cost-effectiveness of the proposed upgrades. Both methodologies require estimating and quantifying the incremental costs and energy savings associated with each energy efficiency measure over a 30-year analysis period. On-Bill cost-effectiveness is a customer-based lifecycle cost (LCC) approach that values energy based upon estimated site energy usage and customer utility bill savings using today’s electricity and natural gas utility tariffs. Time Dependent Valuation (TDV) is the California Energy Commission’s LCC methodology, which is intended to capture the long-term projected cost of energy including costs for providing energy during peak periods of demand, carbon emissions, grid transmission and distribution impacts. This is the methodology used by the Energy Commission in evaluating cost-effectiveness for efficiency measures in Title 24, Part

6. Two multifamily prototypes were evaluated in this study. A 3-story loaded corridor and a 5-story mixed use prototype, which combined are estimated to represent 91 percent of new multifamily construction in California.

The following summarizes key results from the study:
• The Reach Codes Team found all-electric new construction to be feasible and cost-effective based on the California Energy Commission’s Time Dependent Valuation (TDV) metric in all cases. In many cases allelectric prescriptive code construction results in an increase in utility costs and is not cost-effective On-Bill.

Some exceptions include the SMUD and CPAU territories where lower electricity rates relative to gas rates result in lower overall utility bills.
• All-electric packages have lower GHG emissions than mixed fuel packages in all cases, due to the clean power sources currently available from California’s power providers. • The 2022 Energy Code’s new source energy metric combined with the heat pump space heating baseline in most climate zones encourages all-electric construction. While the code does not include an electric baseline for water heating, the penalty for central electric water heating observed in the performance approach in past code cycles has been removed and a credit is provided for well-designed central heat pump water heaters in most cases.
• Electrification combined with increased PV capacity results in utility cost savings and was found to be On-Bill cost-effective in all cases.
• The results in this study are based on today’s net energy metering (NEM 2.0) rules and do not account for recently approved changes to the NEM tariff (referred to as the net billing tariff). The net billing tariff decreases the value of PV to the consumer as compared to NEM 2.0. As a result, the cost-effectiveness of the packages that include above-code PV capacity is expected to be less under the net billing tariff. Conversely, the net

17.124
Cost-Effectiveness Analysis: Multifamily New Construction Executive Summary
2 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 billing tariff is expected to increase On-Bill cost-effectiveness of the all-electric prescriptive code scenario. An all-electric home has better on-site utilization of generated electricity from PV than a mixed fuel home with a similar sized PV system, and as a result exports less electricity to the grid. Since the net-billing tariff values exports less than under NEM 2.0, the relative impact on annual utility costs to the mixed fuel baseline is greater.
• This analysis does justify a modest reach based on either efficiency TDV or source energy for all-electric buildings. However, this may be challenging for some projects given the recent changes to which the industry must adapt, including the efficiency updates and multifamily restructuring in the 2022 Title 24, Part 6 code.

While project compliance margins using a CO2 refrigerant heat pump water heating system are high, the Reach Code Team found lower compliance margins using other heat pump water heater system designs.

Focusing on supporting projects to electrify water heating is expected to support the market shift towards more central heat pump water heaters.
• For jurisdictions interested in a reach code that allows for mixed fuel buildings, a mixed fuel efficiency and PV package (and battery for the 3-story prototype) was found to be cost-effective based on TDV in all cases and cost-effective On-Bill in most climate zones. This path, referred to as “Electric-Preferred”, allows for mixed fuel buildings but requires a higher building performance than for all-electric buildings. The efficiency measures evaluated in this study did not provide significant compliance benefit. As a result, the Reach Codes Team recommends establishing a compliance margin target based on source energy or total TDV. This would allow for PV and battery above minimum code requirements to be used to meet the target. • Jurisdictions interested in increasing affordable multifamily housing should know that applying the CARE rates has the overall impact of increasing utility cost savings for an all-electric building in most climate zones compared to a code compliant mixed fuel building, improving On-Bill cost-effectiveness.

Table ES-1 summarizes results for each prototype and depicts the efficiency TDV compliance margins achieved for each climate zone and package. All results presented in the table have a positive compliance margin (greater than zero percent). Cells highlighted in green depict cases with a positive compliance margin and cost-effective results using both On-Bill and TDV approaches. Cells highlighted in yellow depict cases with a positive compliance margin and costeffective results using either the On-Bill or TDV approach. Cells not highlighted depict cases with a positive compliance margin but that were not cost-effective using either the On-Bill or TDV approach.

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Cost-Effectiveness Analysis: Multifamily New Construction Executive Summary
3 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table ES-1. Summary of Efficiency TDV Compliance Margins and Cost-Effectiveness Climate
Zone
Electric
/Gas Utility
3-Story 5-Story
All-Electric
Prescriptive
Code
AllElectric
+ PV
Mixed
Fuel
Efficiency
Mixed
Fuel
Efficiency
+ PV +
Battery
All-Electric
Prescriptive
Code
AllElectric
+ PV
Mixed
Fuel
Efficiency
Mixed
Fuel
Efficiency
+ PV
CZ01 PGE 26% 26% 1% 1% 14% 14% 0% 0%
CZ02 PGE 20% 20% 1% 1% 9% 9% 1% 1%
CZ03 PGE 21% 21% 1% 1% 11% 11% 0% 0%
CZ04 PGE 18% 18% 1% 1% 9% 9% 1% 1%
CZ04 CPAU 18% 18% 1% 1% 9% 9% 1% 1%
CZ05 PGE 23% 23% 1% 1% 12% 12% 0% 0%
CZ05 PGE/SCG 23% 23% 1% 1% 12% 12% 0% 0%
CZ06 SCE/SCG 18% 18% 1% 1% 9% 9% 0% 0%
CZ07 SDGE 20% 20% 0% 0% 11% 11% 0% 0%
CZ08 SCE/SCG 13% 13% 1% 1% 8% 8% 1% 1%
CZ09 SCE 13% 13% 1% 1% 7% 7% 1% 1%
CZ10 SCE/SCG 14% 14% 3% 3% 7% 7% 2% 2%
CZ10 SDGE 14% 14% 3% 3% 7% 7% 2% 2%
CZ11 PGE 14% 14% 3% 3% 8% 8% 2% 2%
CZ12 PGE 17% 17% 2% 2% 9% 9% 2% 2%
CZ12 SMUD/PGE 17% 17% 2% 2% 9% 9% 2% 2%
CZ13 PGE 13% 13% 4% 4% 7% 7% 2% 2%
CZ14 SCE/SCG 13% 13% 3% 3% 6% 6% 2% 2%
CZ14 SDGE 13% 13% 3% 3% 6% 6% 2% 2%
CZ15 SCE/SCG 5% 5% 5% 5% 3% 3% 3% 3%
CZ16 PG&E 24% 24% 5% 5% 9% 9% 2% 2%
Local jurisdictions may also adopt ordinances that amend different Parts of the California Building Standards Code or may elect to amend other state or municipal codes. The decision regarding which code to amend will determine the specific requirements that must be followed for an ordinance to be legally enforceable. Reach codes that amend Part 6 of the CA Building Code and require energy performance (including PV and storage) beyond state code minimums must demonstrate that the proposed changes are cost-effective and obtain approval from the Energy Commission prior to filing with the BSC.

Model ordinance language and other resources are posted on the C&S Reach Codes Program website at LocalEnergyCodes.com. Local jurisdictions that are considering adopting an ordinance may contact the program for further technical support at [email protected].

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Cost-Effectiveness Analysis: Multifamily New Construction Introduction
4 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 1 Introduction
This report documents cost-effective combinations of measures that exceed the minimum state requirements, the 2022 Building Energy Efficiency Standards, effective January 1, 2023, for newly constructed multifamily buildings. This report was developed in coordination with the California Statewide Investor-Owned Utilities (CA IOUs) Codes and Standards Program, key consultants, and engaged cities—collectively known as the Reach Codes Team. The CA IOU Codes and Standards Program is comprised of IOUs representatives from Pacific Gas and Electric (PG&E), Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E) and two Publicly-Owned-Utilities (POUs) – Sacramento Municipal Utility District (SMUD) and City of Palo Alto Utilities (CPAU), The analysis considers low-rise and mid-rise multifamily building types and evaluates mixed fuel and all-electric package options in all sixteen California climate zones (CZs) 1 Packages include combinations of efficiency measures, on-site renewable energy, and battery energy storage.

The California Building Energy Efficiency Standards Title 24, Part 6 (Energy Code) (California Energy Commission, 2022a) is maintained and updated every three years by two state agencies: the California Energy Commission (Energy Commission) and the Building Standards Commission (BSC). In addition to enforcing the code, local jurisdictions have the authority to adopt local energy efficiency ordinances—or reach codes—that exceed the minimum standards defined by Title 24 (as established by Public Resources Code Section 25402.1(h)2 and Section 10-106 of the Building Energy Efficiency Standards (California Energy Commission, 2022a)). Local jurisdictions must demonstrate that the requirements of the proposed ordinance are cost-effective and do not result in buildings consuming more energy than is permitted by Title 24. In addition, the jurisdiction must obtain approval from the Energy Commission and file the ordinance with the BSC for the ordinance to be legally enforceable.

The Department of Energy (DOE) sets minimum efficiency standards for equipment and appliances that are federally regulated under the National Appliance Energy Conservation Act, including heating, cooling, and water heating equipment (E-CFR, 2020). Since state and local governments are prohibited from adopting higher minimum efficiencies than the federal standards require, the focus of this study is to identify and evaluate cost-effective packages that do not include high efficiency heating, cooling, and water heating equipment. High efficiency appliances are often the easiest and most affordable measures to increase energy performance. While federal preemption limits reach code mandatory requirements for covered appliances, in practice, builders may install any package of compliant measures to achieve the performance requirements.

1 See Appendix 7.1 Map of California Climate Zones for a graphical depiction of climate zone locations.

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Cost-Effectiveness Analysis: Multifamily New Construction Methodology and Assumptions
5 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 2 Methodology and Assumptions

2.1 Analysis for Reach Codes
This section describes the approach to calculating cost-effectiveness including benefits, costs, metrics, and utility rate selection.

2.1.1 Modeling
The Reach Codes Team performed energy simulations using software approved for 2022 Title 24 Code compliance analysis, CBECC 2022.2.0.

Using the 2022 baseline as the starting point, prospective energy efficiency measures were identified and modeled to determine the projected site energy (therm and kWh) and compliance impacts. Annual utility costs were calculated using hourly data output from CBECC, and electricity and natural gas tariffs for each of the investor-owned utilities (IOUs).

This analysis focused on residential apartments only (a prior study and report analyzed the cost-effectiveness of above code packages for nonresidential buildings (Statewide Reach Codes Team, 2022b). The Statewide Reach Codes Team selected measures for evaluation based on the single family 2022 reach code analysis (Statewide Reach Codes Team, 2022a) and the multifamily 2019 reach code analysis [ (Statewide Reach Codes Team, 2020), (Statewide Reach Codes Team, 2021)] as well as experience with and outreach to architects, builders, and engineers.

2.1.2 Cost-Effectiveness

2.1.2.1 Benefits
This analysis used two different metrics to assess the cost-effectiveness of the proposed upgrades. Both methodologies require estimating and quantifying the incremental costs and energy savings associated with each energy efficiency measure. The main difference between the methodologies is the manner in which they value energy and thus the cost savings of reduced or avoided energy use:

Utility Bill Impacts (On-Bill): This customer-based lifecycle cost (LCC) approach values energy based upon estimated site energy usage and customer utility bill savings using the latest electricity and natural gas utility tariffs available at the time of writing this report. Total savings are estimated over a 30-year duration and include discounting of future utility costs and energy cost inflation.

Time Dependent Valuation (TDV): This reflects the Energy Commission’s current LCC methodology, which is intended to capture the total value or cost of energy use over 30 years. This method accounts for long-term projected costs, such as the cost of providing energy during peak periods of demand, costs for carbon emissions, and grid transmission and distribution impacts. This metric values energy use differently depending on the fuel source (natural gas, electricity, and propane), time of day, and season. Electricity used (or saved) during peak periods has a much higher value than electricity used (or saved) during off-peak periods due to the less inefficient energy generation sources providing peak electricity (Horii, Cutter, Kapur, Arent, & Conotyannis, 2014). This is the methodology used by the Energy Commission in evaluating cost-effectiveness for efficiency measures in the 2022 Energy Code.

2.1.2.2 Costs
The Reach Codes Team assessed the incremental costs of the measures and packages over a 30-year lifecycle.

Incremental costs represent the equipment, installation, replacements, and maintenance costs of the proposed measure relative to the 2022 Energy Code minimum requirements or standard industry practices. Present value of replacement cost is included for measures with lifetimes less than the evaluation period.

2.1.2.3 Metrics
Cost-effectiveness is presented using net present value (NPV) and benefit-to-cost (B/C) ratio metrics.

NPV: The lifetime NPV is reported as a cost-effectiveness metric, Equation 1 demonstrates how this is calculated. If the NPV of a measure or package is positive, it is considered cost-effective. A negative values represent net costs.

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6 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 B/C Ratio: This is the ratio of the present value (PV) of all benefits to the present value of all costs over 30 years (PV benefits divided by PV costs). The criteria benchmark for cost-effectiveness is a B/C ratio greater than one. A value of one indicates the NPV of the savings over the life of the measure is equivalent to the NPV of the lifetime incremental cost of that measure. A value greater than one represents a positive return on investment. The B/C ratio is calculated according to Equation 2.

Equation 1
𝑁𝑁𝑁𝑁𝑁𝑁 = 𝑜𝑜𝑜𝑜 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑏𝑏 𝑏𝑏 − 𝑜𝑜𝑜𝑜 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑐𝑐 𝑐𝑐 Equation 2
𝐵𝐵 − − 𝐶𝐶 𝑅𝑅𝑅𝑅 = 𝑜𝑜𝑜𝑜 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑏𝑏 𝑏𝑏
𝑜𝑜𝑜𝑜 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑐𝑐 𝑐𝑐
Improving the efficiency of a project often requires an initial incremental investment. In most cases the benefit is represented by annual On-Bill utility or TDV savings, and the cost is represented by incremental first cost and replacement costs. Some packages result in initial construction cost savings (negative incremental cost), and either energy cost savings (positive benefits), or increased energy costs (negative benefits). In cases where both construction costs and energy-related savings are negative, the construction cost savings are treated as the ‘benefit’ while the increased energy costs are the ‘cost.’ In cases where a measure or package is cost-effective immediately (i.e., upfront construction cost savings and lifetime energy cost savings), B/C ratio cost-effectiveness is represented by “>1”.

The lifetime costs or benefits are calculated according to Equation 3.

Equation 3
𝑜𝑜𝑜𝑜 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙𝑙 𝑐𝑐 𝑐𝑐 𝑜𝑜𝑜𝑜 𝑏𝑏 𝑏𝑏 = �(𝐴𝐴 𝐴𝐴 𝑐𝑐 𝑐𝑐 𝑜𝑜𝑜𝑜 𝑏𝑏 𝑏𝑏 )𝑡𝑡 (1 + )𝑡𝑡
𝑛𝑛
𝑡𝑡=0
Where:
• n = analysis term in years
• r = discount rate
The following summarizes the assumptions applied in this analysis to both methodologies. • Analysis term of 30 years
• Real discount rate of three percent
TDV is a normalized monetary format and there is a unique procedure for calculating the present value benefit of TDV energy savings. The present value of the energy cost savings in dollars is calculated by multiplying the TDV savings (reported by the CBECC simulation software) by a NPV factor developed by the Energy Commission (see E3’s 2022 TDV report for details (Energy + Environmental Economics, 2020)). The 30-year residential NPV factor is $0.173/kTDV for the 2022 Energy Code.

Equation 4
𝑇𝑇𝑇𝑇 𝑜𝑜𝑜𝑜 𝑙𝑙𝑙𝑙 𝑙𝑙𝑙𝑙𝑙𝑙 𝑏𝑏 𝑏𝑏 = 𝑇𝑇𝑇𝑇 𝑒𝑒𝑒𝑒 𝑠𝑠 ∗ 𝑁𝑁𝑁𝑁𝑁𝑁

2.1.3 Utility Rates
In coordination with the CA IOU rate team (comprised of representatives from PG&E, SCE, SDG&E, SMUD, and CPAU), the Reach Codes Team determined appropriate utility rates for each climate zone in order to calculate utility costs and determine On-Bill cost-effectiveness for the proposed measures and packages. The utility tariffs, summarized in Table 1, were determined based on the most prevalent active rate in each territory. Utility rates were applied to each climate zone based on the predominant IOU serving the population of each zone, with a few climate zones evaluated multiple times under different utility scenarios. Climate Zones 10 and 14 were evaluated with both

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7 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 SCE for electricity and Southern California Gas Company (SoCalGas) for gas and SDG&E tariffs for both electricity and gas since each utility has customers within these climate zones. Climate Zone 5 is evaluated under both PG&E and SoCalGas natural gas rates. Two POU or municipal utility rates were also evaluated: SMUD in Climate Zone 12 and CPAU in Climate Zone 4.

For the IOUs in-unit gas was evaluated under the G1 rate and central gas for water heating was evaluated under the relevant master metered gas tariff, GM. Electricity use for central water heating was evaluated using the residential TOU rates. The water heating utility bill was calculated separately from the in-unit electricity bill. Photovoltaic (PV) and battery energy storage benefits were applied according to virtual net energy metering (VNEM) rules.2 PV was first assigned to the central water heating meter to offset 100 percent of the electricity use. The remaining PV and all of the battery impacts were then split evenly across the apartment meters. The same approach was applied for CPAU and SMUD using the rates described in Table 1.

The multifamily prototypes used in this analysis include common area spaces that serve the residents (lobby, leasing office, corridors, etc.). Most of the energy use for these spaces could not be separated from that for the dwelling units within the CBECC model. As a result, average per dwelling unit hourly energy use was calculated to include both the dwelling unit and common space energy use.

First-year utility costs were calculated using hourly electricity and natural gas output from CBECC and applying the utility tariffs summarized in Table 1. Annual costs were also estimated for customers eligible for the CARE tariff discounts on both electricity and natural gas bills. The CARE tariff was only applied to the in-unit apartment meters.

Appendix 7.2 Utility Rate Schedules includes details of each utility tariff.

For cases with PV generation, the approved NEM 2.0 tariffs were applied along with minimum daily use billing and mandatory non-bypassable charges. In December the California Public Utilities Commission (CPUC) issued a decision adopting a net billing tariff (NBT) as a successor to NEM 2.0 that will go into effect April of 20233 Given the recent timing of this decision there was not time to incorporate these changes into this analysis. The Reach Codes Team conducted a limited sensitivity analysis on the impacts of NBT relative to NEM 2.0 on utility bills. It was found that utility costs will increase for all homes with PV systems; however, the increase was less for an all-electric building compared to a mixed fuel building with a similarly sized PV system. As a result of better onsite utilization of PV generation and thus fewer exports to the grid, the Reach Codes Team expects the cost-effectiveness for the electrification scenarios for the all-electric home evaluated in this report to improve under NBT. Conversely, cost-effectiveness of increasing PV capacity is expected to be reduced under NBT.
2 PG&E: https://www.pge.com/tariffs/assets/pdf/tariffbook/ELEC_SCHEDS_NEM2V.pdf SDG&E: https://tariff.sdge.com/tm2/pdf/tariffs/ELEC_ELEC-SCHEDS_NEM-V-ST.pdf SCE:
https://edisonintl.sharepoint.com/teams/Public/TM2/Shared%20Documents/Forms/AllItems.aspx?ga=1&id=%2Fteams %2FPublic%2FTM2%2FShared%20Documents%2FPublic%2FRegulatory%2FTariff%2DSCE%20Tariff%20Books%2F Electric%2FSchedules%2FOther%20Rates%2FELECTRIC%5FSCHEDULES%5FNEM%2DV%2DST%2Epdf&parent= %2Fteams%2FPublic%2FTM2%2FShared%20Documents%2FPublic%2FRegulatory%2FTariff%2DSCE%20Tariff%20 Books%2FElectric%2FSchedules%2FOther%20Rates
3 https://www.cpuc.ca.gov/nemrevisit

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8 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 1. Utility Tariffs Used Based on Climate Zone
Climate Zones Electric / Gas Utility Electricity Natural Gas IOUs
1-5,11-13,16 PG&E / PG&E E-TOU Option C G1 (in-unit) & GM (central water heating)1
5 PG&E / SoCalGas E-TOU Option C GM
6, 8-10, 14, 15 SCE / SoCalGas TOU-D Option 4-9 GM
7, 10, 14 SDG&E / SDG&E TOU-DR-1 GM
POUs
4 CPAU / CPAU E-1 (in-unit) & E-2 (central
water heating) G-2
12 SMUD / PG&E R-TOD, RT02 (in-unit) &
RSMM (central water heating) GM
1G1 rate applied to gas use within the apartment units, which only occurs in Climate Zones 1 and 16, see Section 3 for details. GM rate applied to gas use for central water heating.

Utility rates are assumed to escalate over time according to the assumptions from the CPUC 2021 En Banc hearings on utility costs through 2030 (California Public Utilities Commission, 2021a). Escalation rates through the remainder of the 30-year evaluation period are based on the escalation rate assumptions within the 2022 TDV factors. See Appendix 7.2.7 Fuel Escalation Assumptions for details.

2.2 2022 T24 Compliance Metrics
2022 Title 24, Part 6 Section 170.1 defines the energy budget of the building based on source energy and TDV energy for space-conditioning, indoor lighting, mechanical ventilation, PV and battery storage systems, service water heating and covered process loads. In 2022, the Energy Commission introduced the new compliance metric of source energy, which differs by fuel source (as does TDV) and is a reasonable proxy for greenhouse gas emissions. Additionally, for multifamily buildings four habitable stories and higher prescriptive requirements for PV and battery systems were also introduced. This led to the need to differentiate an efficiency compliance metric, which ensured that the building met minimum efficiency standards, and a total energy compliance metric which incorporated the PV and battery standards.

In order to be compliant with the building code a building needs to comply with all three compliance metrics described below:
• Efficiency TDV. Efficiency TDV accounts for all regulated end-uses but does not include the impacts of PV and battery storage.
• Total TDV. Total TDV includes regulated end-uses and accounts for PV and battery storage contributions. • Source Energy. Source energy is based on fuel used for power generation and distribution.

2.3 Greenhouse Gas Emissions
The analysis reports the greenhouse gas (GHG) emission estimates based on assumptions within CBECC. There are 8,760 hourly multipliers accounting for time dependent energy use and carbon based on source emissions, including renewable portfolio standard projections. There are two series of multipliers—one for Northern California climate zones, and another for Southern California climate zones.4 GHG emissions are reported as average annual metric tons of CO2 equivalent over the 30-year building lifetime.
4 CBECC multipliers are the same for CZs 1-5 and 11-13 (Northern California), while there is another set of multipliers for CZs 6-10 and 14-16 (Southern California).

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Cost-Effectiveness Analysis: Multifamily New Construction Prototypes, Measure Packages, and Costs
9 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 3 Prototypes, Measure Packages, and Costs
This section describes the prototypes, measures, costs, and the scope of analysis drawing from previous reach code research where appropriate.

3.1 Prototype Characteristics
The Energy Commission defines building prototypes which it uses to evaluate the cost-effectiveness of proposed changes to Title 24 requirements. There are 4 multifamily prototypes used in code development: a 2-story garden style, a 3-story loaded corridor, a 5-story mixed use and a 10-story mixed use. Based on work completed for the 2022 Title 24 code development, the 3-story and the 5-story represent 33 percent and 58 percent, respectively, of new multifamily construction in California. As a result, these two prototypes are used in this analysis. Additional details on all four prototypes can be found in the Multifamily Prototypes Report (TRC, 2019).

Table 2 describes the basic characteristics of each prototype.

Table 2. Prototype Characteristics
Characteristic 3-Story Loaded
Corridor 5-Story Mixed Use
Conditioned Floor Area 39,372 ft2
113,100 ft2 total:
33,660 ft2 nonresidential
79,440 ft2 residential
Num. of Stories 3
6 Stories total:
1 story parking garage (below grade)
1 story of nonresidential space
4 stories of residential space
Num. of Bedrooms
(6) Studio
(12) 1-bed
(12) 2-bed
(6) 3-bed
(8) studios
(40) 1-bed units
(32) 2-bed units
(8) 3-bed units
Window-to-Wall Area Ratio 25% 25%
Wall Type Wood framed Wood frame over a first-floor concrete podium
Roof Type Flat roof Flat roof
Foundation Slab-on-grade Concrete podium with underground parking
The methodology used in the analyses for each of the prototypical building types begins with a design that precisely meets the minimum 2022 prescriptive requirements.5 Table 170.2-A and 170.2-B in the 2022 Standards (California Energy Commission, 2022a) list the prescriptive measures that determine the baseline design in each climate zone.

Other features are designed to meet, but not exceed, the minimum requirements and are consistent with the Standard Design in the ACM Reference Manual (California Energy Commission, 2022c). The analysis also assumed electric resistance cooking in the apartment units to reflect current market data. The 3-story building prototype includes a central laundry facility, and the 5-story assumes laundry in the units. Laundry equipment was assumed to be electric in all cases; electrification of laundry equipment was not addressed in this study. The nonresidential 2022 reach code analysis (Statewide Reach Codes Team, 2022b) did consider electrification of central laundry facilities within the small hotel prototype.

Table 3 describes characteristics as they were applied to the base case energy model in this analysis. In a shift from the 2019 Standards, the 2022 Standards define a prescriptive fuel source for space heating establishing an electric 5Due to planned software updates to how the prescriptive requirements are applied in the Standard Design and challenges for certain space types with sizing heating and cooling equipment the same in the Proposed Design as in the Standards, the results compliance margins for the base case models were not exactly zero percent..

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10 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 heat pump baseline in all climate zones except 16 for multifamily buildings three habitable stories and fewer and 1 and 16 for multifamily buildings four habitable stories and greater.

Table 3. Base Case Characteristics of the Prototypes
Characteristic 3-Story Loaded Corridor 5-story Mixed Use Space
Heating/Cooling1
Individual split systems with ducts in
conditioned space
CZ 1-15: Heat pump
CZ 16: Natural gas furnace with air
conditioner
Individual split systems with ducts in
conditioned space
CZ2-15: Heat pump
CZ1, 16: Dual-fuel heat pump with
natural gas backup
Ventilation Individual balanced fans, continuously
operating
Individual balanced fans, continuously
operating
Water Heater1
Natural gas central boiler with solar
thermal sized to meet the prescriptive
requirements by climate zone.

Natural gas central boiler with solar
thermal sized to meet the prescriptive
requirements by climate zone.

Hot Water
Distribution Central recirculation Central recirculation Cooking Electric Electric
Clothes Drying Electric (central) Electric (in-unit)
PV System
Sized according to the prescriptive
requirements in Equation 170.2-C of the
2022 Title 24 Standards. Size differs by
climate zone ranging from 1.60 kW to

2.90 kW per dwelling unit, see Table 4.

Sized according to the prescriptive
requirements in Equation 170.2-D of the
2022 Title 24 Standards. Size differs by
climate zone ranging from 2.26 kW to

3.34 kW per dwelling unit, see Table 4.

Battery System None None
1 Equipment efficiencies are equal to minimum federal appliance efficiency standards.

Table 4 summarizes the PV capacities for the base case packages.

Table 4. Base Package PV Capacities (kW-DC)
Climate
Zone
Base Package
3-Story 5-Story
CZ01 2.00 2.26
CZ02 1.79 2.68
CZ03 1.70 2.26
CZ04 1.75 2.68
CZ05 1.60 2.26
CZ06 1.77 2.68
CZ07 1.67 2.68
CZ08 1.91 2.68
CZ09 1.92 2.68
CZ10 1.98 2.68
CZ11 2.21 2.68
CZ12 1.96 2.68
CZ13 2.33 2.68
CZ14 1.94 2.68
CZ15 2.90 3.34
CZ16 1.76 2.26

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11 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

3.2 Measure Definitions and Costs
Measures evaluated in this study fall into two categories: those associated with general efficiency, onsite generation, and demand flexibility and those associated with building electrification. The Reach Codes Team selected measures based on cost-effectiveness as well as decades of experience with residential architects, builders, and engineers along with general knowledge of the relative consumer acceptance of many measures. This analysis focused on measures that impacted the residential dwelling units only.

The following sections describe the details and incremental cost assumptions for each of the measures. Incremental costs represent the equipment, installation, replacement, and maintenance costs of the proposed measures relative to the base case. Replacement costs are applied for roofs, mechanical equipment, PV inverters and battery systems over the 30-year evaluation period. Incremental maintenance costs are estimated for PV systems, but not any other measures. Costs were estimated to reflect costs to the building owner. All costs are provided as present value in 2023 (2023 PV$).

The Reach Codes Team obtained measure costs from distributors, contractors, literature review, and online sources such as Home Depot and RS Means. Contractor markups are incorporated. These are the Reach Codes Team best estimate of average costs statewide. Regional variation in costs is not accounted for, although it's recognized that local costs may differ. Cost increases due to recent high inflation rates and supply chain delays are not included.

3.2.1 Efficiency, Solar PV, and Batteries
The following are descriptions of each of the efficiency, PV, and battery measures evaluated under this analysis and applied in at least one of the packages presented in this report. Table 5 summarizes the incremental cost assumptions for each of these measures. These measures were evaluated for all climate zones but were ultimately adopted in a subset of climate zones based on cost-effectiveness outcomes.

Lower U-Factor Fenestration: Reduce window U-factor to 0.24. The prescriptive U-factor is 0.30 in all climate zones except Climate Zones 7 and 8 where it is 0.34. This measure is included in Climate Zone 16 only.

Cool Roof: Install a roofing product that’s rated by the Cool Roof Rating Council to have an aged solar reflectance (ASR) equal to or greater than 0.70. Low-sloped roofs were assumed in all cases. The 2022 Title 24 specifies a prescriptive ASR of 0.63 for Climate Zones 9 through 11 and 13 through 15. This measure is included in Climate Zones 9 through 15.

Low Pressure Drop Ducts: Upgrade the duct distribution system to reduce external static pressure and meet a maximum fan efficacy of 0.35 Watts per cfm. This may involve upsizing ductwork, reducing the total effective length of ducts, and/or selecting low pressure drop components such as filters. Fan watt draw must be verified by a HERS rater according to the procedures outlined in the 2022 Reference Appendices RA3.3 (California Energy Commission, 2022b). This measure is included in Climate Zones 1 and 10 through 16.

Verified Low Leakage Ducts in Conditioned Space: Seal the ducts to achieve a measured leakage no greater than 25 cfm leakage to outside. This may be verified using a guarded blower door test to isolate leakage to outside.

Alternatively, this can also be satisfied by demonstrating that total leakage is not greater than 25 cfm. Ducts are assumed to already be located in conditioned space in the baseline. This measure is included in all climate zones.

Solar PV: Installation of on-site PV is required in the 2022 residential code unless an exception is met. The PV sizing methodology in each package was developed to offset annual building electricity use and avoid oversizing which would violate net energy metering (NEM) rules.6 In all cases, PV is evaluated in CBECC according to the California Flexible Installation (CFI) assumptions. This measure is included in all climate zones.

Battery Energy Storage: A battery system was evaluated in CBECC-Res with control type set to “Time-of-Use” and with default efficiencies of 95% for both charging and discharging. This control option assumes the battery system will 6 NEM rules apply to the IOU territories only.

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12 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 charge or discharge based on a utility tariff time-of use signal. To qualify, the battery system must meet the requirements outlined in the 2022 Reference Appendices JA12.2.3.2 (California Energy Commission, 2022b). This measure is included in all climate zones but only for the 3-story prototype. A 100kWh battery was applied following the battery sizing requirements for multifamily buildings more than three habitable stories per Equation 170.2-E of the 2022 Energy Code.

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13 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 5. Incremental Cost Assumptions
Measure
Performance
Level
Incremental Cost per
Dwelling Unit
(2023 PV$)
3-Story 5-Story Source & Notes
Non-Preempted Measures
Window U-factor 0.24 vs 0.30 $536 $489 $4.23/ft2 of window area based on analysis conducted for the 2019 and 2022 Title 24 cycles (Statewide CASE Team, 2018).

Low-Sloped Cool
Roof Aged Solar
Reflectance

0.63 vs 0.10 $314 $222
$0.525/ft2 of roof area first incremental cost based on the 2022 Residential Additions and Alterations CASE Report (Statewide CASE Team, 2020b).Total costs assume present value of replacement at year 15.

0.70 vs 0.63 $24 $17
$0.04/ft2 of roof area first incremental cost based on the 2022 Nonresidential High Performance Envelope CASE Report (Statewide CASE Team, 2020a). Costs assume a blended average across roofing product types. Total costs assume present value of replacement at year 15.

Low Pressure
Drop Ducts

0.35 vs 0.45
W/cfm $44 $44
Costs assume half-hour labor per multifamily dwelling unit. Labor rate of $88 per hour is from 2022 RS Means for sheet metal workers and includes a weighted average City Cost Index for labor for California.

Verified Low
Leakage Ducts in
Conditioned
Space
≤25 cfm leakage
to outside $132 $132
Costs assume half-hour labor per multifamily dwelling unit and a $100 HERS Rater fee.

Labor rate of $88 per hour is from 2022 RS Means for sheet metal workers and includes a weighted average City Cost Index for labor for California. Ducts are already assumed to be located in conditioned space and the incremental costs reflect additional sealing and testing only.

PV + Battery
PV System
First Cost $1.47/W $1.47/W
First costs from LBNL’s Tracking the Sun 2022 costs (Barbose, Darghouth, O'Shaughnessy, & Forrester, 2022) and represent median costs in California in 2021 of $2.10/WDC for nonresidential greater than 100kWDC systems. The first cost was reduced by the solar energy Investment Tax Credit (ITC) of 30%.1 Costs are presented as the average of 2023, 2024, and 2025.

Inverter replacement cost of $0.14/WDC present value includes replacements at year 11 at $0.15/WDC (nominal) and at year 21 at $0.12/WDC (nominal) per the 2019 PV CASE Report (California Energy Commission, 2017).

System maintenance costs of $0.31/WDC present value assume $0.02/WDC (nominal) annually per the 2019 PV CASE Report (California Energy Commission, 2017).

Inverter
replacement $0.14/W $0.14/W
Maintenance $0.31/W $0.31/W

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14 localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Measure
Performance
Level
Incremental Cost per
Dwelling Unit
(2023 PV$)
3-Story 5-Story Source & Notes
Battery
First cost $700/kWh n/a
First cost of $1,000/kWh from LBNL’s Tracking the Sun 2022 costs (Barbose, Darghouth, O'Shaughnessy, & Forrester, 2022) for residential systems > 30kWh. The report derived costs from California’s Self-Generation Incentive Program (SGIP) residential participant cost data. First cost is reduced by the solar energy ITC of 30%.1 No SGIP incentives are included.

Costs are assumed to remain consistent at $1,000/kWh through 2025 and then reduced by 7% annually based on SDG&E’s Behind-the-Meter Battery Market Study (E-Source companies, 2020) over a 10 year period. Replacement is assumed at years 10 and 20. At year 10 the replacement cost is based on the average of expected 2033, 2034, and 2035 costs after applying the ITC for a future value cost of $435. Replacement cost at year 20 is based on a future value cost of $484 and does not include any ITC reduction.

Replacement
cost $564/kWh n/a
1As part of the Inflation Reduction Act in August 2022 the Section 25D Investment Tax Credit was extended and raised to 30% through 2032 with a step-down to 26% in 2033 and 22% in 2034. It’s assumed that the ITC is not renewed and is 0% starting in 2035. https://www.irs.gov/pub/taxpros/fs-2022-40.pdf.

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3.2.2 All-Electric
This analysis compared a code compliant mixed fuel prototype, which uses natural gas for water heating only in most climate zones, with a code compliant all-electric prototype. In these cases, the relative costs between natural gas and electric appliances and natural gas infrastructure and the associated infrastructure costs for not providing natural gas to the building were included.

To estimate costs the Reach Codes Team leveraged costs from the 2022 Multifamily All-Electric CASE Report (Statewide CASE Team, 2020c) and the 2019 reach code multifamily cost-effectiveness studies ( (Statewide Reach Codes Team, 2020), (Statewide Reach Codes Team, 2021)), and online equipment research. Present value replacement costs are included in the total lifetime incremental costs.

3.2.2.1 Water Heating
Federal regulations establish minimum efficiency requirements for heat pump water heaters with rated storage volume less than 120 gallons. While some heat pump water heaters falling into this regulated category can be used in a central water heater design, they are not required and therefore this measure does not trigger federal preemption and heat pump equipment of any efficiency level may be used for this analysis to justify the basis of a reach code.

For the central heat pump water heating system in the 3-story prototype the system design was based on the 2022 AllElectric Multifamily CASE Report (Statewide CASE Team, 2020c) and used CO2 refrigerant based heat pump water heaters (four Sanden GS3-45HPA-US units), 525 gallons of storage, and a 250 gallon electric resistance swing tank.

The 2022 CASE work based the 5-story system design on Colmac R-134a refrigerant heat pump water heaters. While this is an acceptable design, R-134a or R-410a refrigerant heat pump water heaters were found to be less costeffective for the prototypes evaluated in this analysis due to higher incremental costs and lower overall performance relative to CO2 refrigerant products. As such, the Reach Codes Team evaluated a CO2 refrigerant system for the 5- story prototype for this analysis. As part of the 2025 Energy Code update cycle, designs for both multifamily prototypes are being reexamined using CO2 refrigerant heat pump water heaters. While full design and cost information was not yet available for this analysis, preliminary design data was used to inform sizing of a Sanden system for this prototype.

The system used 10 heat pump water heaters (Sanden GS3-45HPA-US units), 800 gallons of storage, and a 200 gallon electric resistance swing tank.

Table 6 reports costs for the central heat pump water heating systems relative to a gas boiler system with solar thermal that meets the prescriptive requirements of 20% solar fraction in Climate Zones 1 through 9 and 35% solar fraction in Climate Zones 10 through 16. Costs include equipment and labor, gas piping within the building for the boiler system, and additional electrical service necessary for the heat pump system. Replacement costs are based on an effective useful life of 15 years for the water heaters and tanks, and 20 years for the solar thermal collectors. For the solar thermal systems, it’s also assumed that the glycol is replaced at years 9, 18 and 27. Additional details on cost assumptions are presented in Appendix 7.3 Cost Details.

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 6. Heat Pump Water Heater Incremental System Costs (Present Value (2023$)) Item
3-Story 5-Story
Source & Notes Central
Gas
Boiler
Central
Heat
Pump
Central
Gas
Boiler
Central
Heat
Pump
First Cost CZs 1-9 $173,772
$211,531
$279,163
$343,920
3-story costs directly from 2022
Multifamily All-Electric CASE
Report. 5-story costs estimated
based on component costs for
the 3-story from the CASE
report.

CZs 10-16 $182,810 $300,883
Replacement Cost CZs 1-9 $32,297
$44,263
$59,930
$110,659
CZs 10-16 $36,943 $69,361
Total Incremental
Cost
CZs 1-9
n/a
$49,725
n/a
$115,486
CZs 10-16 $36,041 $84,335
Incremental Cost
per Dwelling Unit
CZs 1-9 $1,381 $1,312
CZs 10-16 $1,001 $958

3.2.2.2 Space Heating
Table 7 presents the costs for heat pump space heater conversion from gas equipment. In most climate zones the baseline per the 2022 Energy Code is a heat pump space heater, so these costs are only applied in a couple of instances. For the 3-story prototype the baseline in Climate Zone 16 is a gas furnace and air conditioner. For the 5- story prototype the baseline in Climate Zones 1 and 16 is a dual fuel heat pump with a gas furnace as backup. Costs include equipment and labor, gas piping within the building for the boiler system, and additional electrical service necessary for the heat pump system. Most of the cost difference between the two systems is attributed to higher labor costs to install the gas system as a result of gas piping and venting. Additional details on cost assumptions are presented in Appendix 7.3 Cost Details.

Table 7. Heat Pump Space Heater Costs per Dwelling Unit (Present Value (2023$) Item
3-Story 5-Story
Furnace + Source & Notes
Split AC
Heat
Pump
Furnace +
Split HP
Heat
Pump
First Cost
$20,667 $16,776 $21,245 $16,597
Costs largely based on the 2022
Multifamily All-Electric CASE Report with
some updates to reflect online equipment
cost research and labor cost alignments.

Replacement Cost $8,059 $7,326 $9,052 $7,326 See lifetimes referenced in Table 8.

Residual value at the end of the 30-year
analysis period was accounted for to
represent the remaining life of any
Residual Value ($1,591) $0 $0 $0 equipment.

Total $27,135 $24,102 $30,296 $23,924
Incremental Cost ($3,032) ($6,373)
Equipment lifetimes applied in this analysis for the space conditioning measures are summarized in Table 8. The lifetime for the heat pump, furnace, and air conditioner are based on the Database for Energy Efficient Resources (DEER) (California Public Utilities Commission, 2021b). In DEER, heat pump and air conditioner measures are assigned an effective useful lifetime (EUL) of 15 years and a furnace an EUL of 20 years. The heating and cooling system components are typically replaced at the same time when one reaches the end of its life and the other is near

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 it. Therefore, it is assumed that both the furnace and air conditioner are replaced at the same time at year 17.5, halfway between 15 and 20 years. For HVAC system costing, air-conditioning is included in all cases in both the base case and proposed models.

Table 8. Lifetime of Water Heating & Space Conditioning Equipment Measures Measure Lifetime
Gas Furnace 17.5
Air Conditioner 17.5
Heat Pump 15
Dual Fuel Heat Pump 15

3.2.2.3 Natural Gas Infrastructure
Eliminating natural gas to a building saves costs associated with connecting a service line from the street main to the building, piping distribution within the building, and monthly meter customer charges from the utility. This section focuses on the first item, not connecting gas service to the building. The latter two are captured in the appliance costs and the utility bill analysis. Cost savings for removing natural gas infrastructure to a multifamily building in IOU territory are presented in Table 9 and Table 10. These costs are applied as cost savings for the all-electric case when compared to the mixed fuel baseline.

These costs are project dependent and may be significantly impacted by such factors as utility territory, site characteristics, distance to the nearest natural gas main and main location, joint trenching, whether work is conducted by the utility or a private contractor, and number of dwelling units per development. All gas utilities participating in this study were solicited for cost information.

Service Extension: Service extension costs to the building were taken from a PG&E memo dated December 5, 2019 to Energy Commission staff (see Appendix 7.4 PG&E Gas Infrastructure Cost Memo for a copy of the memo). The estimated cost of $6,750 excludes costs for trenching and assumes nonresidential new construction within a developed area. For the 5-story building the cost is apportioned between the residential and nonresidential spaces in the building based on associated conditioned floor areas where 84 percent is residential. All of the spaces in the 3-story building are residential based.

Today, total costs are reduced to account for deductions per the Utility Gas Main Extensions rules.7 These rules categorize distribution line extensions as “refundable” costs, which are offset or subsidized by all other ratepayers. The CPUC issued a Decision in September 2022 that eliminates the subsidies effective July 1, 2023 (California Public Utilities Commission, 2022). Since most of the development that will occur during the three-year 2022 code cycle (2023-2025) will not be subject to these deduction allowances they are not included in this analysis.

Meter: Cost per meter provided by PG&E of $3,600 for a commercial meter to serve the central water heating and $600 per multifamily dwelling unit. The $600 dwelling unit meter is only applied in Climate Zone 16 for the 3-story prototype and Climate Zones 1 and 16 for the 5-story prototypes where gas is used either for primary or backup space heating. Two scenarios are presented in the tables. One is the case with electric space heating, no in-unit gas and the only residential gas use is to serve the central water heating system. The other case represents the scenario where there is in-unit gas to service space heating.
7 PG&E Rule 15: https://www.pge.com/tariffs/assets/pdf/tariffbook/GAS_RULES_15.pdf.

SoCalGas Rule 20: https://www.socalgas.com/regulatory/tariffs/tm2/pdf/20.pdf.

SDG&E Rule 15: https://tariff.sdge.com/tm2/pdf/GAS_GAS-RULES_GRULE15.pdf.

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Natural Gas Plan Review: Total costs are based on TRC’s 2019 reach code analysis for Palo Alto (TRC, 2018 ). The cost for the 5-story prototype is apportioned between the residential and nonresidential spaces in the building in the same way as was done for the service extension costs.

Table 9. IOU Natural Gas Infrastructure Cost Savings for All-Electric Building Item 3-Story 5-Story
Service Extension $6,750 $5,695
Meter
No In-Unit Gas
(Gas DHW only) $3,600 $3,600
In-Unit Gas $25,200 $56,400
Plan Review $2,316 $1,954
Table 10. Multifamily IOU Total Natural Gas Infrastructure Costs Prototype Scenario Total
Building
Per Dwelling
Unit
3-Story
No In-Unit Gas $12,666 $352
In-Unit Gas $34,266 $952
5-Story
No In-Unit Gas $11,248 $128
In-Unit Gas $64,048 $728
CPAU provides gas service to its customers and therefore separate costs were evaluated based on CPAU gas service connection fees.8 Table 11 presents the breakdown of gas infrastructure costs used in this analysis for CPAU. The same approach to apportioning the total building costs to the residential spaces as described in the IOU section was applied here for the service extension and plan review costs for the 5-story prototype. Meter costs were based on $1,772 for an 800 cubic foot per hour commercial meter for the central water heating system.

Table 11. Multifamily CPAU Total Natural Gas Infrastructure Costs Item 3-Story 5-Story
Service Extension $5,892 $4,971
Meter $1,772 $1,772
Plan Review $2,557 $2,157

3.3 Measure Packages
The Reach Codes Team evaluated three packages for mixed fuel homes and five packages for all-electric homes for each prototype and climate zone, as described below.

1. All-Electric Prescriptive Code: This package meets all the prescriptive requirements of the 2022 Energy Code.

2. All-Electric Prescriptive Code + PV: Using the code minimum package as a starting point, PV capacity was added to offset 100 percent of the estimated annual electricity use.

3. Mixed Fuel Efficiency Only: This package uses only efficiency measures that do not trigger federal preemption including envelope and duct distribution efficiency measures. 8 CPAU Schedule G-5 effective 09-01-2019: https://www.cityofpaloalto.org/files/assets/public/utilities/utilitiesengineering/general-specifications/gas-service-connection-fees.pdf

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4. Mixed Fuel Efficiency + PV + Battery: Using the Efficiency Package as a starting point, PV capacity was added to offset 100 percent of the estimated annual electricity use. A battery system was also added. This package only applies to the 3-story prototype. The 5-story prototype includes a battery system in the baseline per the 2022 prescriptive requirements.

5. Mixed Fuel Efficiency + PV: Using the Efficiency Package as a starting point, PV capacity was added to offset 100 percent of the estimated annual electricity use. This package only applies to the 5-story prototype.

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 4 Results
Cost-effectiveness results are presented per prototype and measure packages described in Section 3.3. The TDV and On-Bill based cost-effectiveness results are presented in terms of B/C ratio and NPV. Energy savings, compliance margin, utility bill savings, and incremental costs are also shown.

In the following figures, green highlighting indicates that the case is cost-effective with a B/C ratio greater than or equal to 1 and a NPV greater than or equal to 0. Red highlighting indicates the case is not cost-effective.

Compliance margins are presented as percentages both for the efficiency TDV and the source energy metrics. A compliance margin that is equal to or greater than 0 indicates the case is code compliant.

4.1 All-Electric Prescriptive Code
Table 12 and Table 13 shows results for the multifamily all-electric prescriptive code case compared to the 2022 baseline. For both prototypes this scenario is cost-effective based on TDV in all climate zones. This scenario is only On-Bill cost-effective in a few climate zones. The 3-story all-electric case is cost-effective On-Bill in Climate Zones 1 through 3, 4 in CPAU territory, 12 in SMUD territory, and 16. The 5-story all-electric case is cost-effective On-Bill in Climate Zones 1, 4, 12 in SMUD territory, and 16.

In most cases there is a small net increase in utility cost in the first year.

There is an incremental cost for the central heat pump water heater ranging from $361 to $697 per dwelling unit.

The all-electric packages applied to the 3-story prototype in Climate Zone 16 and the 5-story prototype in Climate Zones 1 and 16 incorporate both gas to electric water heating and gas to electric space heating measures. In these cases, there are significant cost savings due to the avoided first costs of installing a gas furnace as compared to a heat pump. As a result, these cases are On-Bill cost-effective.

These results reflect a CO2 refrigerant based central heat pump water heating system. The 5-story prototype was also evaluated with a R-134a refrigerant based central heat pump water heater and these results are shown in Appendix

7.5 Central Heat Pump Water Heater Comparison.

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 12. 3-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric Prescriptive Code Climate
Zone
Electric
/Gas Utility
Efficiency
TDV
Comp
Margin
Source
Comp
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 26% 15% -904 135 ($19) $1,676 $97 $429 3.9 $1,247 >1 $4,158 CZ02 PGE 20% 11% -801 115 ($30) $1,061 $697 $1,029 1.0 $32 9.9 $2,998 CZ03 PGE 21% 10% -789 115 ($26) $1,148 $697 $1,029 1.1 $119 9.9 $2,990 CZ04 PGE 18% 9% -759 109 ($31) $922 $697 $1,029 0.9 ($108) 9.2 $2,767 CZ04 CPAU 18% 9% -759 109 $233 $8,191 $765 $1,097 7.5 $7,094 7.7 $2,700 CZ05 PGE 23% 9% -789 112 ($30) $1,009 $697 $1,029 0.98 ($21) 9.3 $2,782 CZ05 PGE/SCG 23% 9% -789 112 ($79) ($515) $697 $1,029 0.0 ($1,545) 9.3 $2,782 CZ06 SCE/SCG 18% 7% -709 100 ($61) ($226) $697 $1,029 0.0 ($1,255) 8.6 $2,551 CZ07 SDGE 20% 8% -704 102 ($69) ($427) $697 $1,029 0.0 ($1,456) 9.1 $2,712 CZ08 SCE/SCG 13% 6% -689 96 ($61) ($302) $697 $1,029 0.0 ($1,331) 8.2 $2,432 CZ09 SCE 13% 5% -698 96 ($64) ($351) $697 $1,029 0.0 ($1,380) 8.0 $2,363 CZ10 SCE/SCG 14% 7% -701 83 ($88) ($1,109) $446 $649 0.0 ($1,758) >1 $1,959 CZ10 SDGE 14% 7% -701 83 ($112) ($1,803) $446 $649 0.0 ($2,452) >1 $1,959 CZ11 PGE 14% 10% -740 91 ($64) ($177) $446 $649 0.0 ($826) >1 $2,212 CZ12 PGE 17% 11% -755 94 ($62) ($70) $446 $649 0.0 ($719) >1 $2,297 CZ12 SMUD/PGE 17% 11% -755 94 $68 $2,942 $446 $649 4.5 $2,293 >1 $2,297 CZ13 PGE 13% 9% -717 86 ($65) ($291) $446 $649 0.0 ($940) >1 $2,050 CZ14 SCE/SCG 13% 7% -748 83 ($102) ($1,413) $446 $649 0.0 ($2,063) >1 $1,759 CZ14 SDGE 13% 7% -748 83 ($128) ($2,191) $446 $649 0.0 ($2,841) >1 $1,759 CZ15 SCE/SCG 5% 2% -607 64 ($89) ($1,403) $446 $649 0.0 ($2,053) >1 $1,305 CZ16 PG&E 24% 29% -1,928 185 ($178) ($1,066) ($4,045) ($2,983) 2.8 $1,917 >1 $4,352

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 13. 5-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric Prescriptive Code Climate
Zone
Electric
/Gas Utility
Efficiency
TDV
Comp
Margin
Source
Comp
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 14% 9% -1,146 147 ($49) $1,209 ($4,639) ($5,788) >1 $6,998 >1 $9,816 CZ02 PGE 9% 6% -888 120 ($45) $809 $608 $1,185 0.7 ($375) 3.0 $2,270 CZ03 PGE 11% 7% -874 120 ($46) $778 $608 $1,185 0.7 ($407) 3.1 $2,421 CZ04 PGE 9% 6% -824 113 $18 $2,130 $608 $1,185 1.8 $945 3.1 $2,393 CZ04 CPAU 9% 6% -824 113 $230 $8,205 $635 $1,211 6.8 $6,994 3.0 $2,367 CZ05 PGE 12% 6% -871 117 ($47) $706 $608 $1,185 0.6 ($479) 2.8 $2,065 CZ05 PGE/SCG 12% 6% -871 117 ($99) ($919) $608 $1,185 0.0 ($2,103) 2.8 $2,065 CZ06 SCE/SCG 9% 5% -739 104 ($10) $986 $608 $1,185 0.8 ($199) 2.9 $2,183 CZ07 SDGE 11% 6% -735 106 ($74) ($500) $608 $1,185 0.0 ($1,685) 2.9 $2,215 CZ08 SCE/SCG 8% 4% -710 100 ($79) ($644) $608 $1,185 0.0 ($1,829) 3.0 $2,259 CZ09 SCE 7% 4% -725 100 ($53) ($51) $608 $1,185 0.0 ($1,236) 3.0 $2,274 CZ10 SCE/SCG 7% 4% -729 84 ($111) ($1,615) $361 $831 0.0 ($2,445) 2.7 $1,374 CZ10 SDGE 7% 4% -729 84 ($137) ($2,404) $361 $831 0.0 ($3,234) 2.7 $1,374 CZ11 PGE 8% 5% -790 92 ($86) ($663) $361 $831 0.0 ($1,494) 3.1 $1,656 CZ12 PGE 9% 6% -809 96 ($83) ($527) $361 $831 0.0 ($1,358) 3.0 $1,620 CZ12 SMUD/PGE 9% 6% -809 96 $62 $2,831 $361 $831 3.4 $2,000 3.0 $1,620 CZ13 PGE 7% 5% -754 88 ($83) ($686) $361 $831 0.0 ($1,517) 3.0 $1,570 CZ14 SCE/SCG 6% 3% -803 84 ($131) ($2,085) $361 $831 0.0 ($2,916) 2.2 $928 CZ14 SDGE 6% 3% -803 84 ($165) ($3,106) $361 $831 0.0 ($3,937) 2.2 $928 CZ15 SCE/SCG 3% 1% -602 65 ($105) ($1,775) $361 $831 0.0 ($2,606) 1.9 $695 CZ16 PG&E 9% 11% -1,388 142 ($127) ($675) ($4,886) ($6,142) 9.1 $5,467 >1 $6,704

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4.2 All-Electric Plus PV
Table 14 and Table 15 present cost-effectiveness results for the all-electric plus PV packages for the 3-story and 5-story prototypes, respectively. All cases are cost-effective both On-Bill and based on TDV.

Table 14. 3-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric 100% PV Climate
Zone
Electric
/Gas Utility
Efficiency
TDV
Comp
Margin
Source
Comp
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 26% 24% 2,127 135 $782 $20,242 $3,638 $5,034 4.0 $15,208 3.2 $9,448 CZ02 PGE 20% 20% 1,835 115 $653 $16,910 $3,294 $4,406 3.8 $12,504 3.3 $8,632 CZ03 PGE 21% 20% 1,711 115 $614 $15,998 $3,076 $4,123 3.9 $11,875 3.4 $8,209 CZ04 PGE 18% 18% 1,558 109 $559 $14,587 $2,841 $3,818 3.8 $10,770 3.6 $8,230 CZ04 CPAU 18% 18% 1,558 109 $489 $14,138 $2,909 $3,886 3.6 $10,253 3.6 $8,162 CZ05 PGE 23% 20% 1,604 112 $579 $15,137 $2,826 $3,798 4.0 $11,338 3.6 $8,026 CZ05 PGE/SCG 23% 20% 1,604 112 $531 $13,613 $2,826 $3,798 3.6 $9,814 3.6 $8,026 CZ06 SCE/SCG 18% 17% 1,207 100 $378 $9,795 $2,364 $3,197 3.1 $6,598 3.8 $7,092 CZ07 SDGE 20% 21% 1,528 102 $723 $19,318 $2,777 $3,734 5.2 $15,584 3.5 $7,623 CZ08 SCE/SCG 13% 17% 1,393 96 $426 $10,842 $2,569 $3,464 3.1 $7,378 3.9 $7,908 CZ09 SCE 13% 15% 1,204 96 $379 $9,756 $2,335 $3,160 3.1 $6,596 3.9 $7,158 CZ10 SCE/SCG 14% 18% 1,381 83 $404 $10,130 $2,237 $2,978 3.4 $7,152 4.1 $7,031 CZ10 SDGE 14% 18% 1,381 83 $621 $16,493 $2,237 $2,978 5.5 $13,514 4.1 $7,031 CZ11 PGE 14% 19% 1,843 91 $625 $15,782 $2,940 $3,893 4.1 $11,889 3.4 $7,748 CZ12 PGE 17% 19% 1,704 94 $579 $14,777 $2,756 $3,654 4.0 $11,124 3.6 $7,607 CZ12 SMUD/PGE 17% 19% 1,704 94 $399 $10,615 $2,756 $3,654 2.9 $6,961 3.6 $7,607 CZ13 PGE 13% 17% 1,572 86 $544 $13,822 $2,567 $3,408 4.1 $10,415 3.6 $7,148 CZ14 SCE/SCG 13% 18% 1,572 83 $449 $11,152 $2,300 $3,060 3.6 $8,092 4.2 $7,668 CZ14 SDGE 13% 18% 1,572 83 $688 $18,158 $2,300 $3,060 5.9 $15,098 4.2 $7,668 CZ15 SCE/SCG 5% 11% 1,163 64 $330 $8,164 $1,966 $2,626 3.1 $5,539 3.9 $5,567 CZ16 PG&E 24% 38% 1,371 185 $700 $19,307 ($1,064) $894 21.6 $18,412 58.9 $11,596

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 15. 5-Story Cost-Effectiveness Results per Dwelling Unit: All-Electric 100% PV Climate
Zone
Electric
/Gas Utility
Efficiency
TDV
Comp
Margin
Source
Comp
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 14% 21% 1,437 147 $629 $16,919 ($1,574) ($1,803) >1 $18,721 >1 $18,222 CZ02 PGE 9% 14% 428 120 $262 $7,918 $1,930 $2,904 2.7 $5,015 4.0 $8,679 CZ03 PGE 11% 16% 682 120 $327 $9,417 $2,121 $3,152 3.0 $6,265 4.0 $9,285 CZ04 PGE 9% 13% 92 113 $207 $6,524 $1,476 $2,313 2.8 $4,211 4.1 $7,054 CZ04 CPAU 9% 13% 92 113 $337 $10,667 $1,502 $2,340 4.6 $8,327 4.0 $7,027 CZ05 PGE 12% 16% 451 117 $259 $7,806 $1,815 $2,754 2.8 $5,052 4.0 $8,096 CZ05 PGE/SCG 12% 16% 451 117 $207 $6,182 $1,815 $2,754 2.2 $3,427 4.0 $8,096 CZ06 SCE/SCG 9% 12% -163 104 $98 $3,449 $1,127 $1,859 1.9 $1,590 3.8 $5,035 CZ07 SDGE 11% 15% 74 106 $192 $6,131 $1,387 $2,198 2.8 $3,934 3.9 $6,204 CZ08 SCE/SCG 8% 14% 265 100 $154 $4,666 $1,516 $2,365 2.0 $2,301 4.0 $7,053 CZ09 SCE 7% 12% 60 100 $122 $3,930 $1,307 $2,093 1.9 $1,837 3.7 $5,636 CZ10 SCE/SCG 7% 13% 289 84 $131 $3,912 $1,266 $2,007 1.9 $1,905 3.9 $5,749 CZ10 SDGE 7% 13% 289 84 $238 $6,951 $1,266 $2,007 3.5 $4,945 3.9 $5,749 CZ11 PGE 8% 17% 1,091 92 $417 $10,990 $2,226 $3,256 3.4 $7,734 4.2 $10,472 CZ12 PGE 9% 16% 594 96 $263 $7,487 $1,712 $2,587 2.9 $4,901 4.3 $8,544 CZ12 SMUD/PGE 9% 16% 594 96 $260 $7,419 $1,712 $2,587 2.9 $4,889 4.3 $8,544 CZ13 PGE 7% 17% 1,036 88 $398 $10,479 $2,064 $3,045 3.4 $7,434 4.2 $9,715 CZ14 SCE/SCG 6% 11% 182 84 $102 $3,250 $1,170 $1,883 1.7 $1,368 4.0 $5,515 CZ14 SDGE 6% 11% 182 84 $194 $5,858 $1,170 $1,883 3.1 $3,975 4.0 $5,515 CZ15 SCE/SCG 3% 10% 387 65 $153 $4,119 $1,238 $1,971 2.1 $2,148 3.6 $4,998 CZ16 PG&E 9% 23% 1,007 142 $501 $13,864 ($2,682) ($3,275) >1 $17,139 >1 $16,140

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Cost-Effectiveness Analysis: Single Family New Construction 25 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

4.3 Mixed Fuel Efficiency
Table 16 and Table 17 show results for the Mixed Fuel Efficiency packages. The packages are cost-effective based on at least one of the two metrics in Climate Zones 1, 2, 4, and 8 through 16 for the 3-story prototype and in Climate Zones 2, 4, 6, and 8 through 15 for the 5-story prototype. In all cases the NPV values, whether negative or positive, are small. The compliance impacts are also small.

A summary of measures included in each package is provided in Appendix 7.6 Summary of Measures by Package.

Table 16. 3-Story Cost-Effectiveness Results per Dwelling Unit: Mixed Fuel Efficiency Climate
Zone
Electric
/Gas Utility
Efficiency
TDV
Comp
Margin
Source
Comp
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 1% 1% 41 0 $12 $273 $176 $176 1.6 $98 1.2 $38
CZ02 PGE 1% 0% 24 0 $7 $162 $132 $132 1.2 $30 1.5 $62
CZ03 PGE 1% 0% 17 0 $5 $111 $132 $132 0.8 ($21) 0.8 ($27) CZ04 PGE 1% 0% 21 0 $6 $141 $132 $132 1.1 $9 1.3 $46
CZ04 CPAU 1% 0% 21 0 $3 $74 $132 $132 0.6 ($58) 1.3 $46 CZ05 PGE 1% 0% 19 0 $5 $123 $132 $132 0.9 ($9) 0.8 ($32) CZ05 PGE/SCG 1% 0% 19 0 $5 $123 $132 $132 0.9 ($9) 0.8 ($32) CZ06 SCE/SCG 1% 0% 9 0 $2 $56 $132 $132 0.4 ($75) 0.7 ($44) CZ07 SDGE 0% 0% 7 0 $3 $72 $132 $132 0.5 ($60) 0.4 ($81) CZ08 SCE/SCG 1% 0% 20 0 $6 $140 $132 $132 1.1 $9 1.5 $59 CZ09 SCE 1% 0% 28 0 $8 $192 $146 $156 1.2 $36 1.6 $88
CZ10 SCE/SCG 3% 1% 65 0 $20 $447 $190 $199 2.2 $247 2.4 $277 CZ10 SDGE 3% 1% 65 0 $27 $683 $190 $199 3.4 $484 2.4 $277 CZ11 PGE 3% 1% 91 0 $30 $699 $190 $199 3.5 $499 3.5 $489 CZ12 PGE 2% 0% 98 0 $33 $766 $381 $514 1.5 $252 1.5 $273 CZ12 SMUD/PGE 2% 0% 98 0 $17 $396 $381 $514 0.8 ($118) 1.5 $273 CZ13 PGE 4% 1% 99 0 $33 $765 $190 $199 3.8 $566 3.9 $574 CZ14 SCE/SCG 3% 1% 88 0 $26 $585 $190 $199 2.9 $385 3.1 $427 CZ14 SDGE 3% 1% 88 0 $36 $886 $190 $199 4.4 $686 3.1 $427 CZ15 SCE/SCG 5% 2% 182 0 $54 $1,226 $190 $199 6.1 $1,026 5.8 $957 CZ16 PG&E 5% 4% 16 12 $34 $1,012 $712 $712 1.4 $300 1.3 $184

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 17. 5-Story Cost-Effectiveness Results per Dwelling Unit: Mixed Fuel Efficiency

4.4 Mixed Fuel Plus PV (Plus Battery for the 3-Story Prototype) Table 18 presents the Mixed Fuel Efficiency + PV + Battery package for the 3-story prototype. The battery system is a 100kWh battery. This scenario is costeffective for all climate zones and under both metrics except for On-Bill in Climate Zone 4 in CPAU territory. Table 19 presents the Mixed Fuel Efficiency + PV package for the 5-story prototype. This package is cost-effective under TDV in all climate zones and cost-effective On-Bill everywhere except in Climate Zones 6 and 7. In the cases where it is not cost-effective, it is very close to being so with small negative NPV. In Climate Zone 6 in the 5-story prototype there is no upgrade to the PV system capacity as the prescriptive PV system already offset all of the estimated electricity use.

Climate
Zone
Electric
/Gas Utility
Efficiency
TDV
Comp
Margin
Source
Comp
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 0% 0% 5 0 $2 $39 $176 $176 0.2 ($137) 0.2 ($136) CZ02 PGE 1% 0% 11 0 $2 $38 $132 $132 0.3 ($94) 1.9 $118 CZ03 PGE 0% 0% 7 0 $2 $46 $132 $132 0.3 ($86) 0.8 ($23) CZ04 PGE 1% 0% 12 0 $2 $40 $132 $132 0.3 ($92) 1.9 $114 CZ04 CPAU 1% 0% 12 0 $2 $39 $132 $132 0.3 ($93) 1.9 $114 CZ05 PGE 0% 0% 6 0 $1 $17 $132 $132 0.1 ($114) 0.4 ($73) CZ05 PGE/SCG 0% 0% 6 0 $1 $17 $132 $132 0.1 ($114) 0.4 ($73) CZ06 SCE/SCG 0% 0% 12 0 $2 $51 $132 $132 0.4 ($81) 1.4 $49 CZ07 SDGE 0% 0% 10 0 $0 $0 $132 $132 0.0 ($132) 0.9 ($7) CZ08 SCE/SCG 1% 0% 24 0 $8 $184 $132 $132 1.4 $53 2.2 $152 CZ09 SCE 1% 0% 28 0 $4 $96 $142 $149 0.6 ($52) 2.1 $163 CZ10 SCE/SCG 2% 1% 66 0 $21 $491 $186 $192 2.6 $298 3.2 $425 CZ10 SDGE 2% 1% 66 0 $30 $751 $186 $192 3.9 $558 3.2 $425 CZ11 PGE 2% 1% 83 0 $29 $665 $186 $192 3.5 $473 4.2 $621 CZ12 PGE 2% 0% 84 0 $29 $681 $321 $414 1.6 $267 2.3 $546 CZ12 SMUD/PGE 2% 0% 84 0 $16 $372 $321 $414 0.9 ($42) 2.3 $546 CZ13 PGE 2% 1% 95 0 $33 $765 $186 $192 4.0 $573 4.9 $742 CZ14 SCE/SCG 2% 1% 75 0 $11 $246 $186 $192 1.3 $54 3.9 $561 CZ14 SDGE 2% 1% 75 0 $34 $847 $186 $192 4.4 $654 3.9 $561 CZ15 SCE/SCG 3% 2% 172 0 $55 $1,257 $186 $192 6.5 $1,065 7.3 $1,212 CZ16 PG&E 2% 2% 40 4 $23 $616 $665 $665 0.9 ($49) 0.999 ($0)

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 18. 3-Story Cost-Effectiveness Results per Dwelling Unit: Mixed Fuel Efficiency + PV + Battery Climate
Zone
Electric
/Gas Utility
Efficiency
TDV
Comp
Margin
Source
Comp
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 1% 16% 2,068 0 $543 $12,588 $4,603 $6,917 1.8 $5,671 1.5 $3,724 CZ02 PGE 1% 16% 1,757 0 $462 $10,718 $3,881 $5,990 1.8 $4,728 1.6 $3,820 CZ03 PGE 1% 17% 1,624 0 $423 $9,797 $3,700 $5,754 1.7 $4,043 1.5 $3,157 CZ04 PGE 1% 17% 1,476 0 $383 $8,878 $3,518 $5,518 1.6 $3,360 1.6 $3,067 CZ04 CPAU 1% 17% 1,476 0 $171 $3,967 $3,518 $5,518 0.7 ($1,551) 1.6 $3,067 CZ05 PGE 1% 18% 1,520 0 $393 $9,107 $3,503 $5,498 1.7 $3,609 1.6 $3,526 CZ05 PGE/SCG 1% 18% 1,520 0 $393 $9,107 $3,503 $5,498 1.7 $3,609 1.6 $3,526 CZ06 SCE/SCG 1% 18% 1,112 0 $336 $7,677 $3,127 $5,009 1.5 $2,668 1.4 $1,917 CZ07 SDGE 0% 20% 1,431 0 $550 $13,713 $3,498 $5,493 2.5 $8,220 1.6 $3,159 CZ08 SCE/SCG 1% 18% 1,311 0 $413 $9,427 $3,328 $5,270 1.8 $4,156 1.4 $2,277 CZ09 SCE 1% 17% 1,129 0 $367 $8,375 $3,129 $5,017 1.7 $3,359 1.4 $1,937 CZ10 SCE/SCG 3% 19% 1,342 0 $420 $9,584 $3,321 $5,254 1.8 $4,331 1.5 $2,588 CZ10 SDGE 3% 19% 1,342 0 $533 $13,303 $3,321 $5,254 2.5 $8,049 1.5 $2,588 CZ11 PGE 3% 17% 1,833 0 $500 $11,587 $3,914 $6,025 1.9 $5,562 1.6 $3,852 CZ12 PGE 2% 17% 1,701 0 $442 $10,239 $3,926 $6,105 1.7 $4,133 1.6 $3,583 CZ12 SMUD/PGE 2% 17% 1,701 0 $285 $6,609 $3,926 $6,105 1.1 $503 1.6 $3,583 CZ13 PGE 4% 17% 1,568 0 $431 $9,983 $3,594 $5,609 1.8 $4,374 1.7 $3,944 CZ14 SCE/SCG 3% 19% 1,556 0 $477 $10,886 $3,388 $5,341 2.0 $5,545 1.6 $3,434 CZ14 SDGE 3% 19% 1,556 0 $607 $15,155 $3,388 $5,341 2.8 $9,815 1.6 $3,434 CZ15 SCE/SCG 5% 19% 1,241 0 $421 $9,616 $3,136 $5,013 1.9 $4,603 1.6 $3,076 CZ16 PG&E 5% 17% 1,286 12 $357 $8,508 $3,894 $5,833 1.5 $2,674 1.6 $3,219

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 19. 5-Story Cost-Effectiveness Results per Dwelling Unit: Mixed Fuel Efficiency + PV Climate
Zone
Electric
/Gas Utility
Efficiency
TDV
Comp
Margin
Source
Comp
Margin
Annual
Elec
Savings
(kWh)
Annual
Gas
Savings
(therms)
Utility Cost
Savings Incremental Cost On-Bill TDV
First
Year
Lifecycle
(2022$)
First
Year
Lifecycle
(2022$)
B/C
Ratio NPV B/C Ratio NPV
CZ01 PGE 0% 5% 1,446 0 $341 $7,917 $1,889 $2,403 3.3 $5,514 3.0 $4,757 CZ02 PGE 1% 2% 444 0 $55 $1,275 $567 $697 1.8 $578 4.4 $2,365 CZ03 PGE 0% 4% 693 0 $119 $2,766 $801 $1,002 2.8 $1,764 4.4 $3,423 CZ04 PGE 1% 1% 112 0 $14 $324 $226 $254 1.3 $69 3.5 $632 CZ04 CPAU 1% 1% 112 0 $13 $307 $226 $254 1.2 $53 3.5 $632 CZ05 PGE 0% 3% 464 0 $56 $1,310 $550 $676 1.9 $634 4.2 $2,165 CZ05 PGE/SCG 0% 3% 464 0 $56 $1,310 $550 $676 1.9 $634 4.2 $2,165 CZ06 SCE/SCG 0% 0% 12 0 $2 $51 $132 $132 0.4 ($81) 1.4 $49 CZ07 SDGE 0% 1% 95 0 $0 $0 $212 $237 0.0 ($237) 2.8 $423 CZ08 SCE/SCG 1% 3% 299 0 $42 $968 $388 $465 2.1 $504 4.3 $1,527 CZ09 SCE 1% 1% 99 0 $12 $284 $204 $230 1.2 $54 3.0 $465 CZ10 SCE/SCG 2% 3% 364 0 $57 $1,296 $450 $536 2.4 $759 4.2 $1,720 CZ10 SDGE 2% 3% 364 0 $103 $2,566 $450 $536 4.8 $2,030 4.2 $1,720 CZ11 PGE 2% 7% 1,178 0 $281 $6,521 $1,276 $1,610 4.1 $4,911 4.8 $6,162 CZ12 PGE 2% 4% 683 0 $120 $2,791 $898 $1,164 2.4 $1,627 4.2 $3,716 CZ12 SMUD/PGE 2% 4% 683 0 $102 $2,362 $898 $1,164 2.0 $1,198 4.2 $3,716 CZ13 PGE 2% 7% 1,137 0 $274 $6,347 $1,179 $1,484 4.3 $4,863 4.8 $5,599 CZ14 SCE/SCG 2% 2% 266 0 $33 $748 $342 $395 1.9 $353 4.7 $1,447 CZ14 SDGE 2% 2% 266 0 $62 $1,554 $342 $395 3.9 $1,158 4.7 $1,447 CZ15 SCE/SCG 3% 5% 567 0 $125 $2,851 $535 $646 4.4 $2,204 5.6 $2,994 CZ16 PG&E 2% 6% 1,051 4 $237 $5,569 $1,601 $1,883 3.0 $3,686 3.1 $4,011

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20

4.5 CARE Rate Comparison
Table 20 presents a comparison of On-Bill cost-effectiveness results for CARE tariffs relative to standard tariffs for the all-electric prescriptive code case. The CARE rates apply to the apartment meters only and don’t impact the central water heating utility costs. Applying the CARE rates lowers both electric and gas utility bills for the consumer and the net impact for an all-electric building in most climate zones is lower overall bills and improved cost-effectiveness relative to the standard tariffs. Although not presented here, the all-electric + PV packages are all still On-Bill costeffective using the CARE tariffs.

Table 20. On-Bill IOU Cost-Effectiveness Comparison with CARE Tariffs, Results per Dwelling Unit: All-Electric Prescriptive Code
Climate
Zone
Electric
/Gas Utility
3-Story 5-Story
Standard CARE Standard CARE
B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 3.9 $1,247 9.5 $3,637 >1 $6,998 >1 $10,045
CZ02 PGE 1.0 $32 3.1 $2,139 0.7 ($375) 2.5 $1,831
CZ03 PGE 1.1 $119 3.1 $2,187 0.7 ($407) 2.6 $1,901
CZ04 PGE 0.9 ($108) 2.8 $1,884 1.8 $945 2.9 $2,218
CZ05 PGE 0.98 ($21) 3.0 $2,041 0.6 ($479) 2.5 $1,773
CZ05 PGE/SCG 0.0 ($1,545) 1.5 $517 0.0 ($2,103) 1.1 $148 CZ06 SCE/SCG 0.0 ($1,255) 0.9 ($57) 0.8 ($199) 2.1 $1,349 CZ07 SDGE 0.0 ($1,456) 1.8 $856 0.0 ($1,685) 1.3 $343
CZ08 SCE/SCG 0.0 ($1,331) 0.8 ($165) 0.0 ($1,829) 1.2 $271 CZ09 SCE 0.0 ($1,380) 0.8 ($204) 0.0 ($1,236) 1.6 $750
CZ10 SCE/SCG 0.0 ($1,758) 0.1 ($574) 0.0 ($2,445) 0.5 ($447) CZ10 SDGE 0.0 ($2,452) 0.8 ($162) 0.0 ($3,234) 0.0 ($1,590) CZ11 PGE 0.0 ($826) 2.7 $1,119 0.0 ($1,494) 1.7 $616
CZ12 PGE 0.0 ($719) 2.9 $1,263 0.0 ($1,358) 2.0 $793
CZ13 PGE 0.0 ($940) 2.4 $936 0.0 ($1,517) 1.6 $491
CZ14 SCE/SCG 0.0 ($2,063) 0.0 ($803) 0.0 ($2,916) 0.3 ($613) CZ14 SDGE 0.0 ($2,841) 0.0 ($3,407) 0.0 ($3,937) 1.1 $61 CZ15 SCE/SCG 0.0 ($2,053) 0.0 ($1,036) 0.0 ($2,606) 0.0 ($1,452) CZ16 PG&E 2.8 $1,917 >1 $5,527 9.1 $5,467 >1 $8,557
Error! Not a valid bookmark self-reference. presents the comparison for the mixed fuel efficiency and PV packages.

Generally, the opposite trend occurs here for the mixed fuel packages where the CARE rate lowers utility cost savings and the benefit-to-cost ratios decline.

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localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Table 21. On-Bill IOU Cost-Effectiveness Comparison with CARE Tariffs, Results per Dwelling Unit: Mixed Fuel Packages
Climate
Zone
Electric
/Gas Utility
3-Story (Efficiency + PV + Battery) 5-Story (Efficiency + PV) Standard CARE Standard CARE
B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV B/C Ratio NPV CZ01 PGE 1.8 $5,671 1.2 $1,113 3.3 $5,514 2.2 $2,765
CZ02 PGE 1.8 $4,728 1.2 $907 1.8 $578 1.5 $337
CZ03 PGE 1.7 $4,043 1.1 $579 2.8 $1,764 2.0 $1,028
CZ04 PGE 1.6 $3,360 1.0 $259 1.3 $69 0.8 ($44)
CZ05 PGE 1.7 $3,609 1.1 $414 1.9 $634 1.7 $442
CZ05 PGE/SCG 1.7 $3,609 1.1 $414 1.9 $634 1.7 $442
CZ06 SCE/SCG 1.5 $2,668 0.9 ($515) 0.4 ($81) 0.3 ($92)
CZ07 SDGE 2.5 $8,220 1.7 $4,106 0.0 ($237) 0.0 ($237)
CZ08 SCE/SCG 1.8 $4,156 1.1 $446 2.1 $504 1.3 $137
CZ09 SCE 1.7 $3,359 0.99 ($26) 1.2 $54 0.9 ($28)
CZ10 SCE/SCG 1.8 $4,331 1.1 $577 2.4 $759 1.3 $180
CZ10 SDGE 2.5 $8,049 1.8 $4,180 4.8 $2,030 0.0 ($536)
CZ11 PGE 1.9 $5,562 1.2 $1,435 4.1 $4,911 2.7 $2,744
CZ12 PGE 1.7 $4,133 1.1 $517 2.4 $1,627 1.8 $905
CZ13 PGE 1.8 $4,374 1.2 $883 4.3 $4,863 2.9 $2,777
CZ14 SCE/SCG 2.0 $5,545 1.3 $1,395 1.9 $353 1.3 $136
CZ14 SDGE 2.8 $9,815 1.4 $2,292 3.9 $1,158 0.0 ($395)
CZ15 SCE/SCG 1.9 $4,603 1.2 $887 4.4 $2,204 1.9 $586
CZ16 PG&E 1.5 $2,674 0.97 ($162) 3.0 $3,686 2.0 $1,908

4.6 Greenhouse Gas Reductions
Figure 1 and Figure 2 compare greenhouse gas reductions across all the packages for the multifamily 3-story and 5- story prototypes, respectively. Savings represent average annual savings per dwelling unit over the 30-year lifetime of the analysis. Electrification of gas uses represents the greatest greenhouse gas reductions, followed by PV.

Greenhouse gas reductions are greatest for the all-electric + PV package.

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Cost-Effectiveness Analysis: Single Family New Construction 31 Results
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 Figure 1. 3-Story greenhouse gas reductions (metric tons) per dwelling unit Figure 2. 5-Story greenhouse gas savings (metric tons) per dwelling unit

0.0 0.1

0.2 0.3

0.4 0.5

0.6 0.7

0.8 0.9

1.0 CZ01 CZ02 CZ03 CZ04 CZ05 CZ06 CZ07 CZ08 CZ09 CZ10 CZ11 CZ12 CZ13 CZ14 CZ15 CZ16 Greenhouse Gas Reduc�ons (metric tons)
Mixed Fuel Efficiency
Mixed Fuel Efficiency + PV + Ba�ery
All-Electric Code Minimum
All-Electric + PV

0.0 0.1

0.2 0.3

0.4 0.5

0.6 0.7

0.8 0.9

1.0 CZ01 CZ02 CZ03 CZ04 CZ05 CZ06 CZ07 CZ08 CZ09 CZ10 CZ11 CZ12 CZ13 CZ14 CZ15 CZ16 Greenhouse Gas Reduc�ons (metric tons)
Mixed Fuel Efficiency
Mixed Fuel Efficiency + PV
All-Electric Code Minimum
All-Electric + PV

17.154
Cost-Effectiveness Analysis: Single Family New Construction 32 Summary
localenergycodes.com California Energy Codes & Standards | A statewide utility program 2023-06-20 5 Summary
The Reach Codes Team identified packages of electrification and energy efficiency measures as well as packages combining these measures with solar PV generation and battery storage, simulated them using building modeling software, and gathered costs to determine the cost-effectiveness of multiple scenarios. The Reach Codes Team coordinated with multiple utilities, cities, and building community experts to develop a set of assumptions considered reasonable in the current market. Changing assumptions, such as the period of analysis, measure selection, cost assumptions, energy escalation rates, or utility tariffs are likely to change results.

Table 22 summarizes results for each prototype and depicts the efficiency TDV compliance margins achieved for each climate zone and package. Because local reach codes must both exceed the Energy Commission performance budget (i.e., have a positive compliance margin) and be cost-effective, the Reach Codes Team highlighted cells meeting these two requirements to help clarify the upper boundary for potential reach code policies. All results presented in this study have a positive compliance margin.
• Cells highlighted in green depict cases with a positive compliance margin and cost-effective results using both On-Bill and TDV approaches.
• Cells highlighted in yellow depict cases with a positive compliance margin and cost-effective results using either the On-Bill or TDV approach.
• Cells not highlighted depict cases with a positive compliance margin but that were not cost-effective using either the On-Bill or TDV approach.

Following are key takeaways and recommendations from the analysis. • The Reach Codes Team found all-electric new construction to be feasible and cost-effective based on the California Energy Commission’s Time Dependent Valuation (TDV) metric in all cases. In many cases allelectric prescriptive code construction results in an increase in utility costs and is not cost-effective On-Bill.

Some exceptions include the SMUD and CPAU territories where lower electricity rates relative to gas rates result in lower overall utility bills.
• All-electric packages have lower GHG emissions than mixed fuel packages in all cases, due to the clean power sources currently available from California’s power providers. • The 2022 Energy Code’s new source energy metric combined with the heat pump space heating baseline in most climate zones encourages all-electric construction. While the code does not include an electric baseline for water heating, the penalty for central electric water heating observed in the performance approach in past code cycles has been removed and a credit is provided for well-designed central heat pump water heaters in most cases.
• Electrification combined with increased PV capacity results in utility cost savings and was found to be On-Bill cost-effective in all cases.
• The results in this study are based on today’s net energy metering (NEM 2.0) rules and do not account for recently approved changes to the NEM tariff (referred to as the net billing tariff). The net billing tariff decreases the value of PV to the consumer as compared to NEM 2.0. As a result, the cost-effectiveness of the packages that include above-code PV capacity is expected to be less under the net billing tariff. Conversely, the net billing tariff is expected to increase On-Bill cost-effectiveness of the all-electric prescriptive code scenario. An all-electric home has better on-site utilization of generated electricity from PV than a mixed fuel home with a similar sized PV system, and as a result exports less electricity to the grid. Since the net-billing tariff values exports less than under NEM 2.0, the relative impact on annual utility costs to the mixed fuel baseline is greater.
• This analysis does justify requiring a modest reach based on either efficiency TDV or source energy for allelectric buildings. However, this may be challenging for some projects given the recent changes to which the industry must adapt, including the efficiency updates and multifamily restructuring in the 2022 Title 24, Part 6 code. While project compliance margins using a CO2 refrigerant heat pump water heating system are high, the Reach Code Team found lower compliance margins using other heat pump water heater system designs.