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San Luis Obispo Poised to Pursue Clean Energy Choice Policy

Pierre Delforge's picture
Senior Scientist, Building Decarbonization Natural Resources Defense Council

Pierre Delforge, a senior scientist, joined NRDC in 2010 after a 20-year career in the computer industry. At NRDC, he works on policies to transition buildings to clean energy. Previously...

  • Member since 2019
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  • Jun 16, 2020

The city of San Luis Obispo, California, plans next week to consider approval of a policy designed to encourage clean, efficient all-electric new buildings in a vote initially delayed by a pandemic-related threat from a gas utility front group. The proposed Clean Energy Choice for New Buildings program recognizes that pollution-free homes and businesses will be key in the drive to cut air pollution and greenhouse gases for their residents.

Historic San Luis Obispo

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The City Council has scheduled a June 16 online hearing ahead of holding a required second vote in July to finalize the policy, which consists of incentives and amendments to the local building code to incentivize all-electric new construction. Buildings that use highly-efficient electric heating and water heating technologies emit zero pollution on-site. And when powered by renewable electricity, they provide a solution for 100-percent clean energy buildings.

The policy was first approved by the City Council last fall and next week’s vote was scheduled for early April, but it was postponed to protect public health after an opponent of the measure threatened to amass protesters without observing social distancing.

Aligning Building Policy with Local Benefits

San Luis Obispo aims to be carbon-neutral by 2035, and given that buildings are the second-largest source of planet-warming emissions for both the city and California at large, buildings powered by an increasingly clean electric grid are an important tool for meeting the City’s climate action goals. The proposed policy is similar to those already implemented in 30 cities and counties across California over the past year, from Carlsbad in San Diego Country, to Santa Monica, San Jose, San Francisco, and many Bay Area cities.

This isn't just about mitigating the climate crisis: all-electric buildings generally cost less and are faster to build because they don't involve the expenses and delays associated with connecting to a gas pipeline in the street, installing a meter and gas plumbing in the building, and including gas combustion safety measures. Transitioning to clean electricity for heat, hot water, and other everyday needs also helps consumers benefit from the low and declining costs of solar and wind energy, whereas gas rates are projected to increase sharply over the coming years to pay for the massive safety upgrades that are necessary to maintain an aging gas distribution network.

Clean Energy Choice

The San Luis Obispo program does not prevent construction with gas. Those who want to outfit buildings with “natural” (fossil) gas can still do so, provided they meet higher energy performance requirements and pre-wire so that the structure can more easily be retrofitted for electricity in the future. The policy applies only to new construction, not existing buildings—plumbing and appliances in commercial kitchens are also exempt, along with emergency generators. While new homes represent less than 1 percent of California’s total housing stock each year, every new gas-connected home locks in higher emissions and costs for decades, or will require a more expensive retrofit. Building clean from the start is better for the climate and for the future residents’ wallets.

In San Luis Obispo, more than 1,300 new homes are expected to be all-electric in the next several years, which is a great start. Using electricity instead of gas will translate into cleaner air for residents and their neighbors: A growing body of research has revealed the risks of using gas-fueled appliances such as cooktops and ovens that contribute to both indoor and outdoor air pollution.

A recent study from UCLA's Fielding School of Public Health, for example, found that indoor air quality in homes that use gas stoves often exceeds federal and state nitrogen dioxides and sometimes even carbon monoxide pollution standards for outdoor air quality. Replacing gas with electric appliances in California homes would prevent about 350 premature deaths each year and produce $3.5 billion in annual health benefits from cleaner air. Given the increasing awareness about the potential health and climate effects of continuing to burn gas, it's not surprising that Californians chose renewable energy over fossil fuels for buildings by a margin of 48 points in a recent survey.

Delay Due to Public Health Threat

San Luis Obispo Mayor Heidi Harmon has accused SoCalGas and other fossil fuel interests of using bullying tactics and misinformation to thwart the proposed city policy to encourage construction of all-electric buildings that would not use gas appliances. She said the chairman of Californians for Balanced Energy Solutions, a front group created and funded by SoCalGas, threatened to bus hundreds of angry people “with no social distancing” to the April meeting if the council proceeded with its scheduled second vote on the policy. The agenda item was removed in the interest of the health of residents and gas workers.

“Fossil fuel executives have cultivated a toxic culture in which they fight progress by any means necessary—at the cost of public health, public dollars, their own workers and the precious time we have left to transition to clean energy and cut climate pollution before it’s too late,” the mayor wrote in an op-ed.  

Planning for a Just Transition

Workers in the gas industry have understandable concerns about the future of their livelihoods as California transitions to a clean energy economy. But this will be a gradual process that the State, utilities, and local governments can work on together to plan for a just transition.

San Luis Obispo's policy does not cover the vast remainder of existing homes that will continue to use gas for many years. Existing gas pipelines and other infrastructure will still need maintenance for decades. But we must begin planning for this transition now to ensure fossil fuel workers keep the system safe while we use it, and can either retire in their jobs or have pathways to other well-paying careers.

This transition has the potential to create thousands of new clean energy jobs to modernize the electric grid and build more renewable energy to accommodate efficient electric buildings and vehicles, and to retrofit existing buildings. We need a constructive dialogue between all stakeholders to implement effective policies for an equitable and just transition.

It's time to move forward with the local democratic process in San Luis Obispo and get to the hard work of planning for a future that works for everyone. We can’t sacrifice our future to avoid change today. Let’s work together to make that change work for all.

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Matt Chester's picture
Matt Chester on Jun 17, 2020

which consists of incentives and amendments to the local building code to incentivize all-electric new construction

It will be interesting to see how this is received and the impacts of implementation in comparison with the cities that have outright banned gas lines going to new buildings. A natural experiment of sorts can come from tracking these two (obviously it's small scale and not scientifically conclusive because of many other factors, but still!)

Bob Meinetz's picture
Bob Meinetz on Jun 17, 2020

"all-electric buildings generally cost less and are faster to build...Transitioning to clean electricity for heat, hot water, and other everyday needs also helps consumers benefit from the low and declining costs of solar and wind energy,..."

Pierre, here you conflate all-electric buildings with clean electricity.

San Luis Obispo's electricity, in the next 5 years, will get significantly dirtier if Diablo Canyon (nuclear) Power Plant is allowed to retire in 2024-2025. After it is replaced by gas-fired electricity plants, buildings newly-powered by electricity in the city will be emitting even more carbon than they are now. That's because gas stoves and gas heaters are far more energy-efficient than burning gas to boil water, then using steam to turn turbines to generate electricity, then transmitting the electricity over the electric grid to homes and businesses, then converting the electricity back to thermal energy (again).

At one point PG&E claimed Diablo Canyon would be replaced by solar panels and wind turbines. But when asked how, they were only able to account for 2 terawatthours (TWh) of clean electricity from the 18 TWh of clean electricity generated by Diablo Canyon now (11%). A local group named Californians for Green Nuclear Power filed a protest that would have forced PG&E to commit to replacing it with 100% clean electricity, but it was denied by California's Public Utility Commission.

The economics are not complicated: by buying gas from itself, then adding it to the cost of generating electricity to be borne by ratepayers, PG&E can make more money selling gas-fired electricity than nuclear electricity. The more gas they burn, the more money they make, and the more electric homes in San Luis Obispo, the more gas they burn.

Joe Deely's picture
Joe Deely on Jun 18, 2020


Here's the regular update on PG&E info - puck keeps moving.

Below shows PG&E electricity sales for Q1 of this year. When you subtract CCA and Direct Access customers - PG&E only delivered 7,723 GWh to its own customers in Q1. This is down 13% from last year. CCAs keep eating into PG&E base. Within a few years, PG&E will only require 20,000 GWh of generation annually - maybe even less.

Note: For perspective Diablo generated 4,847 GWh in Q1 or 63% of what PG&E provided to its remaining customers.  Subtracting off Diablo generation leaves (7,723-4,847) leaves 2,876GWh of other generaton needed.

Next section shows renewables PG&E used last year(pg22) to satisfy the state's 30% requirement. Almost, all of this is thru long-term PPAs.

If PG&E's annual generation requirement drops to 20,000 GWh - as I say above -  then the below total will come close to satisfying the CA 2030 60% renewables target.

Finally, here are the facilities that PG&E currently owns. Note the 2.7GW of Hydro and about 1.4GW of NG.

Given all the above - how much NG generation do you think PG&E will need when Diablo shuts down?

Bob Meinetz's picture
Bob Meinetz on Jun 20, 2020

"Given all the above - how much NG generation do you think PG&E will need when Diablo shuts down?"

None, because I don't think Diablo Canyon will shut down. Since you asked.

Joe Deely's picture
Joe Deely on Jun 22, 2020

None, because I don't think Diablo Canyon will shut down. Since you asked.

Interesting... would love to hear more. 

If Diablo - and its annual 18 TWh of production stays - then PG&E would still retain 35-40 TWh of production capability between its Nuclear,Hydro and Renewable PPAs.  

If as I guesstimate, the amount needed for its own customers drops to 20 TWh over the next 5 years then the remaining 15-20 TWH would have to be sold on the open CAISO market.



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