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US cities see blueprint for building electrification in Berkeley gas ban

A city ordinance that aims to phase out new natural gas hookups in Berkeley, Calif., offers a blueprint for other cities pursuing building electrification as part of their efforts to combat climate change. But experts cautioned that the Berkeley gas ban cannot simply be carbon-copied in other jurisdictions.

Municipal lawmakers from Massachusetts to Seattle have reached out to Berkeley City Councilwoman Kate Harrison, who spearheaded her community's ban on gas hookups for new buildings, and sector observers said the legislation could pop up in cities with aggressive climate goals or aging gas infrastructure in need of replacement. Already, dozens of towns and cities in California alone are considering measures that would incentivize home electrification or ban gas in new structures.

Two nights after passing the Berkeley ordinance, Harrison and her staff traveled to neighboring Albany, Calif., to discuss the ordinance with the local Democratic club. Harrison said many of the 11 cites in the local community choice energy provider, East Bay Community Energy, have expressed interest in adopting a Berkeley-style ordinance.

While gas restrictions have attracted industry opposition, more than 50 cities across California are considering measures that would encourage or require all-electric buildings, according to Pierre Delforge, a senior scientist for building decarbonization at the Natural Resources Defense Council who tracks California policy.

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Carlsbad, Calif., passed a similar ordinance earlier this year requiring electric or solar water heating systems in all new buildings, Delforge said, and the city council of Santa Rosa, Calif., directed its staff to research an all-electric ordinance for new homes. Even if the Santa Rosa council does not ultimately take a prescriptive path, "the fact that Berkeley went first and is making the news is also probably going to influence their thinking," Delforge said.

Looking beyond the Golden State's borders, regions across the U.S. with aging natural gas infrastructure systems that will require costly replacement programs may be prime locations for electrification-oriented policies, according to Mike Henchen, a manager in the Rocky Mountain Institute's electricity practice. The Boston, Chicago and Philadelphia areas are among the major hubs that have such infrastructure.

"I think that is going to lead to a lot of recognition that ... even if the commodity of gas is cheap, this infrastructure investment is going to create an affordability challenge for a lot of people ... and there's going to be a growing interest in looking for alternatives," Henchen said.

Quinton Zondervan, a first-term member of Massachusetts' Cambridge City Council who campaigned on an environmental and affordable housing platform, intends to introduce legislation modeled after the Berkeley bill this fall as part of a series of building decarbonization measures.

"Other communities [in Massachusetts] are also taking an interest, so I think there's going to be quite a groundswell," Zondervan said.

Local officials in Lexington, Mass., and Brookline, Mass., confirmed their interest in these types of actions. Out West, Seattle Councilmember Mike O'Brien has been in touch with Harrison's office, although his office does not have any plans for legislation that would ban natural gas.

Harrison and other advocates of building electrification see the ban on new gas as a pathway to weaning existing housing stock off gas through retrofits.

"My big hope is that this new building effort will bring down the cost of the technology enough to make it possible for existing buildings to do the same thing," Harrison said.

Some parts of the country may find fewer reasons to pass ordinances and rules to move away from gas. The Southeast, for instance, may be less likely to adopt gas bans because the market for heat pumps is already relatively large and expanding, Henchen said.

Challenging utilities' business models

The strategy being piloted in California represents both a fresh challenge and a new opportunity for investor-owned utilities seeking opportunities to lock in revenue growth during rate cases.

The Berkeley ordinance has drawn support from Pacific Gas and Electric Co., or PG&E, which provides electric and natural gas delivery services in the San Francisco Bay Area. The utility has said it appreciates statutory clarity that helps it better plan its investments as California pursues aggressive long-term climate goals.

"PG&E supports local government policies that promote all-electric new construction when cost effective," the company said in an email.

But the prospect that other cities will adopt similar legislation presents a greater threat to utilities that solely provide natural gas delivery and do not have a power distribution business that would benefit from building electrification. Leading the opposition to these ordinances is industry-backed group Californians for Balanced Energy Solutions, whose nearly three dozen board members include a representative from Southern California Gas Co.

Californians for Balanced Energy Solutions, which did not respond to a request for an interview, said in an open letter to the state's governor that policymakers should more "objectively evaluate decarbonization options, rather than predetermining outcomes that could force California residents and businesses to electrify all energy uses — putting all our eggs in one basket." The letter said gas-limiting measures could potentially slow progress toward state environmental goals, disrupt essential services, curb innovation, and negatively impact the state's energy reliability and economy.

Pro-ordinance PG&E has said it also backs "a multi-faceted approach" to combating climate change that includes electrification and decarbonizing the gas system with renewable natural gas and hydrogen.

How transferable is Berkeley model?

The Berkeley ordinance blocks builders from outfitting new structures in the community with gas infrastructure. It will be implemented in phases because it is designed to take effect in tandem with planned updates to California Energy Commission, or CEC, building code compliance software. For instance, the ordinance will take effect for all low-rise residential structures Jan. 1, 2020, when CEC plans to release new modeling tools for all-electric buildings. The ordinance will start to apply to larger residential buildings as the CEC releases software updates for building systems in these kinds of structures, which is expected to start in 2020.

Harrison's legislation also requires all new buildings to be electric-ready, smoothing the way for their pivot from gas even if the ordinance does not immediately apply to them. The law will not apply to thousands of units in Berkeley's building pipeline that have already secured building permits, but Harrison said the ordinance has elevated the conversation around building electrification. She is hopeful that some builders with permits in hand will go all-electric voluntarily and said some developers have already told her they intend to do so.

To complement the ordinance, Berkeley city staff are developing new codes that would have developers demonstrate that natural gas systems in new buildings would be a certain percentage more efficient than electric systems, a measure that incentivizes building electrification while the ordinance is being implemented in phases.

All these elements are tailored to Berkeley's infrastructure and the state rules under which the jurisdiction operates. Differences in state statutes will present a challenge for environmental groups trying to use interstate forums, such as Bloomberg Philanthropies' American Cities Climate Challenge to present the Berkeley approach as a potential solution for building decarbonization, Delforge said. Still, organizations such as the Natural Resources Defense Council and the Rocky Mountain Institute are facilitating information-sharing among states, aiming to keep lawmakers up to date on the latest technologies and policy pathways.

In Brookline, Mass., Jesse Gray, a Harvard genetics professor and elected member of the town's 240-seat Town Meeting, is confident that his own planned legislation will not run afoul of building codes is concerned that it could face legal challenges because it could be seen as frustrating the purpose of the state utility law, specifically assuring that homeowners have access to gas supply.

Gray is in contact with Harrison's office and said he intends to argue that state law only extends to the meter. He said he would structure the legislation similarly to the Berkeley ordinance, which prohibits builders from applying to include gas infrastructure in new buildings, but he acknowledged that he is in untested waters in Brookline.

"It's a totally different state, different laws that have to be considered, and it's an uphill battle legally for a town or city in Massachusetts to ban natural gas in new buildings," Gray said.