The Afternoon News with Kitty O'Neal

The Afternoon News with Kitty O'Neal

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SAC Going All Electric: Mayor's Remarks and Sac Chamber's Response

Listen: Mayor Steinberg, air quality, and utility leaders held a press conference this week to advocate for the passage of Sacramento's Electrical Ordinance requiring all new construction in the city be all electric. The City Council votes June 1st.

Erica Bjork has a response from the Sacramento Chamber of Commerce perspective.

Mayor Darrell Steinberg
Sacramento Mayor Darrell Steinberg
Erika Bjork, Sacramento Chamber of Commerce
Erica Bjork, Sacramento Metro Chamber of Commerce
City of Sacramento

Summary of electrification ordinance

Sacramento has some of the worst air quality in the nation. Burning gas in our cars or in our homes not only contributes to dirtier air and ozone, but it exacerbates risk for respiratory disease. Burning gas also creates greenhouse gas emissions that are warming the planet. When new buildings use electricity rather than natural gas, these buildings are not just better for the environment and the health of those living in them, but they are also cheaper in almost every development type. Studies show that residents in these new electric buildings will also save hundreds of dollars in electricity costs. Constructing new buildings to be all-electric takes advantage of the clean power that SMUD produces, maximizing the benefit of SMUD’s commitment to zero-carbon electricity by 2030.

Shifting new buildings to electricity ensures they are clean, affordable, and resilient. This is why building electrification is a key principal for the 2040 General Plan, as committed by the City Council.  

By constructing new buildings to use only electric appliances, Sacramento can realize cost reductions and benefits in health and air quality improvements.

The New Building Electrification Ordinance takes a balanced, phased approach. With delayed effectiveness that varies based on development size and type, the City is ensuring that developers have time to adequately plan and prepare for implementation. The ordinance includes limited exemptions and an infeasibility process, to accommodate technical challenges and ensure that the ordinance is not a barrier to construction. 

Key points:

  • What is the ordinance? The ordinance requires that new buildings be all-electric, with no gas or propane infrastructure. The ordinance slowly ramps in by development type and size, from 2023 to 2026, starting with residential and commercial buildings of three stories or less.
  • What does the ordinance apply to?
    • Only to new buildings, with limited exemptions and a process to accommodate infeasibility.
    • The ordinance does not apply to existing buildings, remodels of existing buildings, tenant improvements, or expansions.
  • Who will this affect? Only those developing new buildings. The ordinance doesn’t apply to existing construction.
  • Why is the City doing this?
    • Electrifying new buildings is a key strategy to ensure new buildings are efficient, clean, and resilient. In August 2020, City Council prioritized the ordinance as a critical near-term action to reduce greenhouse gas emissions and achieve climate goals. The ordinance advances a key recommendation of the Mayors’ Commission on Climate Change.
    • When you use gas in your home, such as a gas stove for cooking food, the combustion creates air pollutants – not only does this pollution create dirtier air and contribute to ozone, but studies have shown that using a gas stove increases the likelihood of asthma in children by 42%.
    • Long-term, electric buildings are more resilient and can use the renewable power that SMUD generates. SMUD has committed to 100% clean power by 2030.
    • Electric buildings will save residents money over time. One study estimated that over a 30-year period, residents in new electric construction would pay less in energy bills by approximately $5,349 in single family housing and $2,337 in low-rise multi-family.[1] SMUD also has the lowest electricity rates in the state, meaning that going all-electric in Sacramento will yield the biggest ratepayer benefits.
  • What about costs to build new construction? Building without gas is cheaper in almost all circumstances, and SMUD incentives are available to further reduce costs.
    • Accounting for both the City’s EV standards and all-electric requirements for residential buildings, data suggests that construction savings ranges from over $6,000 (for a mid-rise, ~88-unit development) to over $60,000 (for a low-rise multi-family project with 8 dwelling units), based on cost-effectiveness studies for SMUD territory.[2]
    • Construction costs for all-electric high-rise multi-family vary depending on project design and how hot water heating is addressed, but are offset by SMUD incentive. While the cost increase for all-electric mid- to high-rise unit can range from a savings of $228 per unit to a cost increase of $557 per dwelling unit, SMUD electric incentives range from $1,750 - $5,000 unit, offsetting the cost.
    • Also, gas rates are forecasted to increase because gas infrastructure is costly to maintain and keep safe. Residential gas costs are forecasted to increase from just about $1.3 per residential therm today to an estimated $18 per therm in 2050[3]  (the average home in Sacramento uses about 300 therms per year; without a managed transition, annual average home gas costs in Sacramento would increase from approximately $400/year today to over $5,400/year in 2050).
  • Why is the City doing this now in the midst of COVID19? New development often takes years to plan. By passing the ordinance now, Council is sending a strong signal to inform financial decisions and infrastructure planning, so that developers are ready for implementation when the ordinance goes into effect in 2023.
  • How will this impact new business and housing construction?
    • The ordinance includes limited exemptions and infeasibility process, to ensure it does not place a barrier on business or housing development. This means that new restaurants can build with a gas stove, or a new manufacturing facility could include gas equipment for high-intensity process loads where technology may not be widely available. Hot water heating in regulated affordable housing is also exempt from the ordinance until 12/31/25.
    • Stakeholders will be invited to advise staff to develop infeasibility criteria, to ensure that the process is clear and transparent for applicants, and to identify technologies that may not be market ready, or project-specific conditions that may make all-electric infeasible. A range of representatives will be involved including those representing manufacturing, business, development, restaurants, equity and environmental justice perspectives, cultural perspectives, technical and engineering expertise, and labor.
    • The City will work closely with SMUD to ensure availability of educational materials and resources to assist developers with the transition to all-electric construction. 
  • What other cities have done this? 44 other cities in California have adopted electrification ordinances that are in effect already or go into effect before 2023, including San Francisco, San Jose, and Oakland.
  • What about existing buildings?
    • The ordinance does not regulate existing buildings, and there’s no proposed requirements to retrofit or replace of appliances in existing buildings.
    • On June 1st, staff are also recommending a framework to City Council for an 18-month planning process to evaluate options and develop a strategy to decarbonize existing buildings over the next twenty-five years. To develop this strategy, the City will conduct a technical analysis and lead extensive stakeholder engagement. The proposed framework does not include new retrofit mandates, but outlines a planning process to develop recommendations for City Council.

[1] Low-rise multi-family defined as 8 units. California Energy Codes & Standards. (August 1, 2019). 2019 Cost-effectiveness Study: Low-Rise Residential New Construction. Prepared for Pacific Gas and Electric Company. Prepared by Frontier Energy.

[2] Statewide Codes & Standards studies, multiple reports:

[3] Gridworks (2019). California’s gas system in transition.

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