Host John Farrell talks to Berkeley city councilor Kate Harrison and affordable housing developer Sean Armstrong about why cities should help residents to switch from gas to electric for their energy needs by exercising city authority over gas hookups. They also discuss:
- California’s complicated legacy of incentivizing gas use and how the rest of the country compares
- How detrimental burning gas can be to the health and safety of residents
- Why cities and towns are uniquely suited to get gas out of buildings
- How switching from gas to electric can cut energy costs, slow climate change, and lead to more affordable housing development
About 27% of our GHGs are coming from the use of natural gas in buildings. Usually when we think about this, we think about cars and factories, but to find out that it’s actually our homes that are producing this amount of GHG was stunning.
|Hibba Meraay:||Hey everyone. It’s Hibba, ILSR’s communications manager, and the host for today’s episode is John Farell, energy director. Hey, John.|
|Hibba Meraay:||What do you have for us today, John?|
|John Farrell:||I have an interview with a city council member who authored the ordinance in Berkeley, California, or the new rule, we should say, banning the connection of new homes to the gas network. And also on the call, an affordable housing developer who has been building all electric affordable housing and saving money doing it. So, really cool conversation about how policy is intersecting with best practices around health and the cost of energy, and an idea that I think is already spreading even since we’ve recorded the episode.|
|Hibba Meraay:||That’s awesome. Yeah. So one of my questions for you in listening to this conversation was, you know, California is usually ahead of the curve on clean energy and green infrastructure, and I’m just wondering how does the rest of the nation compare to what’s going on in Berkeley with this gas ban?|
|John Farrell:||Yeah, it’s this really interesting dichotomy we talk about in the episode about how the Enron debacle 20 years ago, where Enron basically gamed California’s electricity market, led to the state putting a lot of pressure on cities to encourage the development of homes that used gas, basically diversification strategy to avoid further market manipulation. And while California has really surged ahead on clean electricity, it means that they are more reliant on gas in some ways than a lot of other states around the country for home heating, water heating, and for operating stoves and that kind of thing. And so one of the things that we get into in the conversation is this issue of how does California catch up now that we are seeing clean electricity be available for lots of these home services? And in particular that California has these unique risks that other places don’t have, like earthquakes. And when earthquakes happen and they rupture the gas network, it’s a big safety risk and a big environmental risk.|
|Hibba Meraay:||Yeah, that’s super interesting. I think another interesting part of the conversation is they really emphasized the health implications of having gas in your home, which I wasn’t aware of, but especially for low income folks. The housing developer talked about how gas can be really detrimental to health, especially causing asthma and children and just really dangerous in terms of if something leaks, the gasket catch on fire. So I think that was another interesting part. It’s both cleaner and safer to have electric instead of gas in homes.|
|John Farrell:||It was really surprising to me too because I expected this being, you know, it’s Berkeley, California, it’s sort of a hotbed of liberalism, you know they’re going to be taking action around climate change, and they’re in California. California has been really pushing around climate solutions as well. And yet the thing that everybody’s talking about, like the primary reason they wanted to do this was around health and safety. And there’s not just the health issue that you mentioned, which I think he said at one point, the indoor air quality in a home after using your gas stove to make a complete dinner is like 10 times worse than the federal standards for outdoor air. So it’s really, really bad to be using gas appliances in your home without proper ventilation.
But the thing that the council member, Kate Harrison mentioned too was that, the stuff, you know, when we burn gas to make electricity for example, it’s in a big power plant that’s generally very well maintained. There’s probably a union workforce. So we burn it very cleanly. That’s probably the cleanest way we burn gas. But all these little gas appliances, gas stoves, gas furnaces, whatever, are often not quite tuned up as well as they could be, and that exacerbates the problem. So it’s not just one of the technology that we use, but the fact of the matter we have all these different appliances and it’s kind of up to the customer to maintain them appropriately and presents a much bigger threat as a result.
|Hibba Meraay:||Yeah. I was really struck by also Shawn saying that just the health savings enough in California would be enough to justify switching from gas to electric. So at one point he says follow the money, where all of the health issues that end up happening because of gas in homes. You could switch to electric, save money and make people be healthier.|
|John Farrell:||Yeah, I mean, and it was great that it’s a win-win too because as he described in doing affordable housing development, building all electric homes, avoiding the permanent costs of gas, like the hookup costs and all this kind of thing, actually makes it cheaper for him to build affordable housing for low income residents in California. And I think that’s something that we need to think about across the country as well. If we can build more affordable housing by doing all electricity, as well as avoid these health and climate impacts, it seems like a win-win. And Berkeley is not just the first place to do it. I mean this is the thing that’s crazy. I asked the council member there, “Are lots of other cities following you?” And I expected to hear about places in California. And there are some, in fact they’re already in the news, but she’s talking about cities in Massachusetts, places where it’s a cold climate where you use a lot more gas for heating, that are interested in this as well.
So I think we’re going to see this spread a lot. I think the health issue is really going to be a hook for people. And I’m just really excited to share this episode with folks, not just because of it’s an interesting way that it talks about this health and safety issue people might not consider, but the fact that it’s really being driven by local action. That it’s the city council and city councils across the country that can take this action about whether or not homes should be able to connect up to the gas network. So, very exciting exercise of local power and local authority and how it impacts a really big part of our lives.
|Hibba Meraay:||Great. You heard it here first folks, so listen in and see what your local city council can do.|
|John Farrell:||What can your community do if families are creating a supper smog when they cook dinner, causing indoor air pollution to rise to levels that would be illegal out of doors? City council member Kate Harrison authored the local ordinance that bans new homes from connecting to the natural gas network in Berkeley, California. The bill passed in July, 2019. And Shawn Armstrong is a zero net energy designer and a managing principal at Redwood Energy, which helps affordable housing developers lower housing costs by going all electric. They joined me in September to talk about the health, safety and financial benefits of requiring new homes to avoid gas and instead use electricity for cooking, heating and water heating. Welcome, Sean.|
|Sean Armstrong:||Thank you|
|John Farrell:||And I also have Kate Harrison, a city council member and originator of this new ordinance in Berkeley that is spreading already across California and to other places. Kate, thank you so much for joining me.|
|Kate Harrison:||You’re welcome|
|John Farrell:||So I just want to start with a little bit of context for folks who may not have heard of this, but in July, Berkeley was one of the first cities in the country to pass an ordinance at the city level that is banning gas hookups for new home construction. And I would just like to start by saying why does a city need to do this? Why is this an important time to say that we’re going to draw a line about hooking people up to the gas network?|
|Kate Harrison:||About 27% of our GHGs are coming from the use of natural gas in buildings. Usually when we think about this, we think about cars and factories, but to find out that it’s actually our homes that are producing this amount of GHG was stunning. We also know from emerging research that there are health implications from natural gas use in the home, particularly for lower income people who may not have good ventilation, etc. The use of these devices does create more asthma in children in particular. And finally, we live on a seismic hotspot. We have a gas pipeline that runs right under our high school into our homes and we are likely to have an earthquake in the next few years. All these things taken together had led to us to consider banning natural gas in new buildings. I also should say that we have about 5,000 new units on tap to be built in the city of Berkeley. So this is a good time while we’re building a lot of housing to think about the future and how to not replicate the problems of the past and how to move forward with a carbon-free environment.|
|John Farrell:||So Sean, I feel like you could address this next question really well, which is if we don’t let people use gas in homes for space heating, for water heating, for cooking, what’s the alternative? Tell me a little bit about how you have been working in making sure that you can build a facility that people can live in comfortably that doesn’t use gas.|
|Sean Armstrong:||Well, if the state stops making people install gas into homes, and keep in mind that the state has been aggressively trying to gas buy homes since the electricity crisis of 2001, which was a manufactured crisis and it was the Enron scandal. So ever since, the code has essentially obligated people, and the consequences are pretty big. You have a doubling of asthma in children in the house. It’s a consequence of having just the gas stove, which is a dirty burning, uncontrolled, often un-vented gas burn. We inspect gas stoves as part of our business of making sure that affordable housing is safe to enter. Gas stoves are a danger if they don’t work. And we often find literally deadly leaks of carbon monoxide from the ovens and then frequently dirty burns from the burners and then gas leaks behind the stove at the connection, all three of which can be so bad that you have to evacuate because it can kill people.
We actually had a former staff person of mine almost died almost about a month ago now. He was down in the Bay Area and there was an oven that was badly leaking carbon monoxide. He said that his whole body, he had like four sensors on, and they went off like Christmas trees, all of his lights. And he had to go to the hospital. He had to be put on oxygen, and he was dying. It’s just testing affordable housing itself that reveals that this is a very dangerous technology. And it’s been forced. So giving people the option of not having it is a way of preventing asthma. It’s worth talking about.
|John Farrell:||And one of the things that you do as part of your work is to actually construct buildings, construct multifamily properties that don’t use gas. Tell me a little bit about how that works. How much does it cost? What are the options that people have if they’re not cooking with gas or using gas for other functions in a home?|
|Sean Armstrong:||I mean, I try to frame it in the virtuous, we should take care of our kids, I have kids kind of way, but truly my background is in construction cost estimating. I worked for one of the big 10 affordable housing developers in the country for years, six years, lowering construction costs, so it was there in a a-political environment where I just had to reduce construction costs by 30% usually each fall on multiple projects that I found that if I took out the gas infrastructure costs and the gas plumbing costs, I could shave like $3,000 per apartment off, which had the consequence of maybe funding an extra apartment itself or two. It could be very large numbers in the hundreds of thousands of dollars, and it would take $100,000 or more to develop an apartment. It was really obvious to all of my clients when I became a consultant in 2011 that it was just a cheaper way to build. It was faster. It reduced a lot of the design and the permitting and the surprises.
A lot of unpleasant surprises when you’re putting in gas infrastructure or on existing equipment or you can’t vent next to windows with it. So you end up having to redesign the whole building around getting rid of gas. And so I’ve been fighting for code for years that was trying to make sure that we had enough electricity, when we obviously did, which we have now huge surpluses in the grid every day of 20% more than we’re actually using of electricity. So in this situation, we’re really taking care of electricity supply and the crooks who got us into that situation. Now we have the capacity to stop burning gas in homes and it’s just self-evidently expensive and dangerous.
We have fires in our affordable housing developments that was consulted on back when we were still helping out people with gas, which we no longer do. But I’ve seen apartment buildings go up. In The New York times today, there’s a huge apartment complex that blew up because people had install gas in an unsafe way and it’s like 20 households are now homeless. It’s really dangerous in apartment buildings. You know, something that goes wrong affects everybody in the community that’s living there. So it’s really expensive. It’s dangerous. But the first thing to say is that my clients mostly just acknowledge it’s expensive. So we just support that. It works across all political stripes.
|Kate Harrison:||You know, in addition to the upfront beginning costs that Shawn addressed, we have the ongoing costs to tenants. Our tenants don’t really get a choice of what goes in their buildings. We know that gas prices have gone up on average at, well actually there’s a request now from the So Cal Gas and Electric to increase their gas prices by 40% in the next billing cycle, compared to electric prices, which has gone up on average 1% to 2% a year. People are now required for homes that have, buildings with three or fewer stories to add solar under state law. Those people will be paying virtually nothing for this electric technology. So the ongoing cost to tenants is really important. Right now we have a situation where a landlord decides “Something’s cheaper upfront, I’m going to do that”, but they strand these costs on the tenants. The other way that costs get left to the future generations is through stranded costs for more of us moving away from the grid. As we all get solar, those gas costs are being paid by fewer and fewer people, and I’m not willing to make that be the tenants that live in Berkeley. So our multi-family housing really needs to adapt to this, as both an equity issue and a safety and GHG control issue.
The other thing I wanted to say is I believe that our work here will help prime the pump for an entire industry. One of the biggest impediments to doing this have been lack of knowledge among developers and people in the construction trades. If you try to get a heat pump in your house, it can be a little challenging to find someone who can do it. Us pushing this will allow the development of an industry just like pushing solar lead to the development of an industry with reducing costs, so we’re going to see an improvement in the cost picture, but even as of now, it is cheaper to go with electricity instead of natural gas.
|John Farrell:||Yeah. I’m really glad you brought up the state solar mandate because it’s this interesting interface here between state policy where energy policy is often set in local policy and what are the two can really be brought into harmony. You have the state policy requiring solar on new homes, and now you’re talking about getting gas out of homes, but of course, as you’ve pointed out, the solar on these homes can actually help lower the cost of using electricity to supply the energy for these different home uses.|
|Kate Harrison:||Yes, that’s correct.|
|Sean Armstrong:||I want to speak to that because it’s been interesting to see that my clients, who are affordable housing developers, who are in budget constraints, design constraints, go down a long list of constraints. They are really, there’s one of the strongest advocates for adding solar to apartment complexes. They’re demonstrating that it’s the least cost way to get their electricity. And when you make an all electric buildings, you cheapen the first cost, if you add solar, it is the lowest cost way to get electricity. When I did my first solar powered tenant serving apartment complex in 2005, solar was $5 a watt just to buy the panels. They’re 15 cents a watt right now. It’s just more than an order of magnitude, less expensive, in the period of 14 years that had been in the industry. And with that ridiculously radical drop in cost of solar, we’re 15 cents a watt, all the rest of it is the expensive part. It’s the racking, it’s the labor, it’s not the solar anymore, it’s just mobilizing people and materials to get there. It’s, solar’s cheap cheap.
So in that context, my clients were big developers have been able to put in their own solar, and they make money. They make significant amounts of money off of lowering the costs compared to their grid electricity. It’s a just a financial strategy, it pays for more apartments.
|John Farrell:||That is amazing. I think it’s so important for people to understand. I love that you led with this conversation about it being a health issue, and it really is, and one that I think people have been largely unaware of because we think of, most people think of gas as being clean. It’s certainly being marketed as being clean. But then to understand that it’s not only a health and safety issue, which of course is primary, but it also is a cost issue where people can actually save money. I think that is just one of those remarkable things.
I also just really appreciate what you said too Kate. This notion about, you know, cost is one piece of the cost isn’t just in the money. It’s in this like sense of expertise and even understanding, that a lot of people who build homes, you know won’t, are contractors that do HVAC might be reluctant to talk to you about electric things because they’re just not familiar with doing them, and that you’ve got a chance now to build that experience by requiring them to do that work and it’s going to make it cheaper and more accessible to everybody as a result.
|Sean Armstrong:||Berkeley is leading on making this a policy, but let’s give credit to the Southeastern States who have been electrifying homes since 1993 as a growing trend, and now about six out of 10 homes in the South are built all electric. We in California have about nine in ten homes have gas in them. Nationwide, three and four homes, not nine and 10, have gas in them and most loads are like 50-50 if they actually get into someone’s house, they’re not all gas loads like we have in California. You have electric heat pumps through space heating, or you might have an electric stove in a home that has a gas water heater. The rest of the country is much more ambivalent about putting gas into buildings.
California has had it as a policy, specifically in response to an energy crisis, quote unquote, which was the crisis of governance. And now we are trying to catch up by adopting policies or other people just said, “Oh it’s way cheaper to get a building permit if I go all electric, people are going to buy this home because they’re going to make it wonderful, and that’s how they build in this house”. It’s not for political reasons of any type, and it’s unfortunately not for climate change, it’s just because it’s a better way of building. And so it’s the majority way of doing it. Berkeley needs to catch up, but it’s like we’re pushing against headwinds in California.
|John Farrell:||We’re going to take a short break, when come back, we’ll talk about why cities are uniquely suited to get gas out of buildings, how this policy can work in warm or cold climates, and how cities can help residents of existing buildings improve health and cut energy costs as well.
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Is that what makes this Kate such an attractive issue for local action? I mean we’ll often talk about energy policy, people talking about climate. We hear about a Green New Deal, a federal policy, or we see states enacting renewable energy standards. Is that what makes this thing around gas such an attractive local issue? Is that there’s this way that the cities have the power to do something about it?
|Kate Harrison:||Yeah, because we control building codes, and health and safety, police powers are under us. So essentially the issue issues about building have been left to us with some guidance from the state. The guidance from the state however has been quite slow and incremental. We’ve had barriers from the state in terms of producing the, providing all electric buildings in the form of absence of software that allowed us to evaluate buildings and say “This is an effective building”. Literally until recently, the states software only allowed you to enter inputs for gas buildings. And if you wanted to go with an electric appliance or an electric building, you would have sort of demerits applied to your project saying, “Wow, that’s not an efficient gas heater”. No, it’s an efficient electric heater, but we don’t give you points for that. So we’ve had these, these barriers at the state level.
Us doing this work has prompted the state to start looking at removing those barriers. And in fact they are now modeling the allowance of these buildings for three stories are lower for all residential, and they’re working on models right now for a hot water heating for all building types. So us changing our building codes in a sense forced them to do more work on their end. We can’t say to a developer, “We think it’s great to get rid of natural gas, now go get your toilet- Title 24 approval from the state”. If the state doesn’t work with us to make that feasible. And are doing this has sped them up in terms of making that feasible. So we’ve had a big impact on a statewide basis, more than just what the local effort might look like.
And I also just to say that in general, these sort of efforts start locally. We started locally in Berkeley with the writing off solar on your property tax. That was, that came out of Berkeley. We started, we had the first recycling in the United States, curbside recycling. So these things often start at a local level.
|Sean Armstrong:||I want to point out San Luis Obispo with their, just passed four to one vote, in favor of a similar electrification ordinance. The mayor points out “When there’s opposition from the silk, how gas staff people who are in the audience were booing”. She pointed out that it was the same as San Luis Obispo one of the first cities in the country that banned cigarette smoking in restaurants. And now you can go to Beijing and sit in a restaurant without a cigarette smoker in the entire building. But that kind of action, which did take place at the municipal level in California and elsewhere, is how new better policies get adopted higher up the food chain. That’s just how policies develop, period, and always has been, and should be acknowledged as the right way to approach it.
It’s very democratic at the local level, tons of participation from actual people. Like in Berkeley we had a unanimous vote, you had unanimous support from it. PG&E and was able to show up in person and say “We support this too”. I mean it was, this is the right way to do it. It’s a very participatory and effective and, like it’s the way to build policy at the federal level in the real world. Yeah, it’s awesome.
|John Farrell:||I was curious, you know, we are having some interesting conversations. I’m in Minneapolis and there was actually kind of a big dustup recently in our newspaper because folks from the city were saying essentially “Our climate problem is and how gas”, that the electric utility has been decarbonizing building wind and solar, retiring coal plants, and now the majority of the city’s emissions are associated with gas, and of course we’re also in a Northern climate, so we use a lot of gas for heating and homes and businesses. And so I’m just curious, do you know, is this, do you feel like this is a policy that could work in a northern city? And, are there, is the technology there? Are the cost benefits the same in Chicago or Boston or Minneapolis that they are in Berkeley?|
|Sean Armstrong:||Yeah, like I went to Iceland… Iceland is all electric, you know. It depends upon your pricing of electricity, but there’s tons of cities that have access to cheap electricity in the winter time. That makes sense now to build all electric for immediate reasons about even adding solar, which is the cheapest form of electricity. So yeah, a cold climate, just fine. In some places do cold climates electric resistance, other ones do cold climate with heat pumps.|
|John Farrell:||And Kate what were you going to say?|
|Kate Harrison:||And Brookline Massachusetts has contacted us and they are pursuing a similar ordinance. That’s the area right outside of Boston. You know, we are lucky here in California that we have an active group of Cal, of energy agencies that are community run, that provide electricity to us. They’re outside of the PGNE framework. And I think that gives us even even more ability to do this because we can work with our local agency on rebates, we can do things with their rates that allow us to incentivize people to do some of these technologies and introduce these. But I would say even absent that, having natural gas, drive and electricity plant is still a better deal then having it come as electricity, then having natural gas come into your home, because you avoid all those pipelines with all the possibilities of explosion, leakage, et cetera, across the entire supply chain.
So, you know, we know the factories are many more times, 84 times more efficient, than natural gas factories at sequestering pollution, than the pipelines and the lines into our homes. So even if we start with natural gas, because that’s what’s available to a state as the starting point for producing energy, they produce electricity, we’re much better off than if they use it just as natural gas.
|Sean Armstrong:||Scientifically, Kate is super right on. This important thing to understand that we have dirty burning appliances. They’ve gone around the country and they cleaned up gas power plants. So now it’s dirtier in your kitchen after you’ve cooked a meal, and you’ve made supper smog with your gas stove, the nitrogen dioxide and formaldehyde as well as all of the P-M 2.5 that’s coming off, that’s just from the food. But the nitrogen dioxide and a formaldehyde, these are the things that dramatically increased asthma in children, in homes with gas stoves, which has been shown in study after study, after study, after study all over the world. In Australia and in Europe and in the United States, in the Bay area, in Wisconsin where I’m from.
This is a real issue in winter time when people close up their homes. My grandma was from Minnesota, my, sorry, my married in grandma, my extra grandma, she is from Minnesota. She was raised to keep her windows open all winter long for clean air. This is how people are supposed to be able to stay healthy in the Midwest when we have so much particulate in our homes frequently from woodstove, like I was raised in woodstove.
You want leaky homes just so you don’t suffocate yourself literally, but now we tighten up homes and we still have all these dirty gas burning appliances in our houses, particularly the gas stoves, but also wall furnaces. Just a whole bunch of different ways you can get gas combustion that backs those from water heaters too. It’s a problem over and over and over and people get hurt. I look at the Midwest, which is some of the best wind resources in the country. Then you look at the wind belt, which is all governed by Republican majority legislatures and governors, as being the places where you see the highest adoption of wind power in the country. 33%, 35% of their grids will be wind power. And I said, “These are places that have got really cheap energy they should electrify,” and they are. I mean, I’ll say it again, California is leading in policy, but in practice it’s elsewhere in the country that’s been leading for more than 20 years now because it just makes financial sense.
|John Farrell:||So I was curious, we talked about this a little bit before we started recording, so I’m interested to come back to it, but the ban here is justified in part to get a handle on rising gas use as the city is growing. So you’re, you know as Kate mentioned, these 5,000 new units of housing that are going to be built and making sure that they don’t kind of take on the same health and safety risk that existing homes have. Is there a way the city can help get to those folks though in existing homes and apartments and homes that are using gas appliances?|
|Kate Harrison:||Yeah, we’re working on several things. One, we are looking at using our transfer tax when a property turns over, allowing the new owner to use a portion of that for energy improvements. Right now we do that for seismic upgrades so that people can put in sure walls, etc., and this includes multistory as well. Buildings, they use half the transfer tax for seismic improvements and our office suggested that why don’t we do that for energy improvements as well. And so our staff is actively looking at that right now, what those improvements might be, what would qualify someone for one of these rebates. We’re also examining a possible gas, a higher tax on the utility user’s tax for gas than electric and using the money as rebates to tenants. We’ve examined looking at ways to purchase equipment through somewhat like our solar program where you pay for it over time through your bills rather than all at once.
So if a building owner wanted to invest in heat pumps for example, he could purchase them and with these savings in his bills, pay those off over time with our local community agency. So those are some of the things that we’ve been looking at doing. And also just in a more technical sense, but something I feel very passionately about. I’ve sponsored legislation requiring that all kitchens have oven hoods. That’s not something we require right now. And it is a dangerous health issue for us. So we’re looking at that. As well as legislation requiring that all buildings have automatic shutoff valves. So in the case of an earthquake, when the ground shakes, the gas goes off. Also something we’ve not required traditionally. So there are several things we’re doing to sort of tackle this issue of multifamily homes and also people of lower income.
|John Farrell:||Hey, I just wanted to note too that you’ve mentioned these local agencies. Something that we’ve covered before and I want to just name it for folks, that community choice programs or community choice aggregation is what allows cities like Berkeley to join with other cities in California and this policy is enacted in a few other states as well, to take charge of their local energy purchasing decisions for the community. And as you’ve mentioned, they can work with you on a lot of these issues around climate in a way that a large and distant utility might not be so willing to do, which is actually an issue we faced here in Minneapolis, as well as in other places across the country. So I think a really interesting intersection here of these different issues but not only city authority over the regulations about use of gas in homes, but the fact that because you have this community-based energy agency to work with, they can help you set policies that favor and smooth the path for people to make the transition.|
|Sean Armstrong:||I want to add to that. There is an opportunity there with utilities. These distant utilities like Pacific Gas and Electric, one of the nation’s largest utilities, both in electricity and gas sales, they have now gone all in on electrification and they stated at the Berkeley city council meeting, as well as the San Luis Obispo city council meeting that they don’t want stranded assets. They acknowledge that in California we’re setting policy to stop putting in more expensive infrastructure and we’re favoring less expensive infrastructure, which is naturally favoring all electric construction now. That’s been happening for about three or four years at the state level where they’re just really saying, “Hey, how much does that gas pipeline cost? What are the benefits?” Because stranded assets are the death knell of utility, they’re trying to staunch the flow of the blood. They’re trying to stop any more gas infrastructure from being developed, and favor all electric.
So you see in Sacramento where they have their municipal utility, which is also one of the nation’s largest utilities at its own scale, still big, they have a $13,000 incentive for electrifying existing homes, which they’ve told me pays off in about 14 years for them. And they have a 40 year bond to get that. So there’s the next, all the years after you’re 14 they’re making money compared to what would have happened if they hadn’t gone out and aggressively electrified existing gas loads. So doing it just on pure financial self-interest, assertively electrifying homes and taking away someone else’s opportunity to make money selling gas. And that’s PG&E. So PG&E is seeing this really big tension in Sacramento and I think that it’s already happening nationwide. Calling attention to it is what this podcast is also about. What this is for is to say, “Hey, it’s a national trend.”
The electrification’s been happening in single family homes since 1993. Utilities should start putting their eggs in the basket of electrification, since that’s already happening. They should acknowledge it and start being more strategic and not let people saddle us all with gas infrastructure costs, but we have to pay off one way or another societally, even if that means bankrupting utilities, that everyone, somehow it gets paid and it costs money and it hurts to make bad decisions now. So I see utilities, the smart ones have an opportunity to make an electric move going that way, and including So Cal Gas, which is installing solar fields now. They’re an all gas utility, but they’re installing solar electric fields, like out in Arizona and such.
|Kate Harrison:||I want to say also in defense of our investor owned utilities, that until recently the California public utilities commission also disadvantaged rebates for electrical appliances. They were limited to giving rebates for efficient gas appliances under something known as a three prong test, which is just way too boring to describe. But they basically have now come out with a new decision in July the week after our ordinance passed, abandoning the three prong test and saying that they will be allowing utilities to give rebates for electric devices. So you know, up until now I couldn’t buy an electric heat pump and get a rebate. I did it anyway, but more people will do it now because they can. So I think we see the synergy happening and I agree completely with Sean that the utilities are understanding this is the business they’re going to be in.|
|John Farrell:||It’s a fascinating history of seeing in other states too that it was conservation laws meant to keep utilities from encouraging people to use more energy that backed that kind of policy that has now kind of trapped us in using less efficient and more polluting energy resources. Sean, I think you were going to jump in and then I’d like to wrap up by asking about what advice you might have for other cities that are now wanting to follow in Berkeley’s wake.|
|Sean Armstrong:||Follow the money. Identify the gas infrastructure costs. Bring it in front of the builder community, as well as the real estate community and just the general community in California. We’ve identified through a number of studies that just the health benefits would pay for electrifying the whole state, because the air pollution, that’s the consequence of living in … 90% of California has essentially illegal air. It always has since the Clean Air Act was passed in 1970. We’re in a terrible situation with people’s air quality and lung quality. So, follow the money. It costs more to build. It costs more to operate, especially if you pair it with solar, but in about two-thirds of the states in the United States doing all electric package, especially with efficiency, would give you lower utility bills, as well as being lower cost to build. Just to make a pure financial argument and let’s get around partisanship around people’s health and what things cost. Let’s just talk, you know, follow the money.|
|John Farrell:||Kate, what advice would you give for other cities that might want to follow what Berkeley has done?|
|Kate Harrison:||I would say that the most important thing is to stop the bleeding as soon as possible and not expand the gas infrastructure we already have because eventually we’re going to have to replace it, and that’s going to cost everyone. It’s going to cost communities, businesses, renters, ratepayers, and it’ll cost much more down the line than if we do the right thing now. So think about the future and the fact that particularly in California, we’re being told that we have got to eliminate 40% of our greenhouse gases that come from buildings by 2030. And how are we going to do that if we don’t start with new buildings?|
|John Farrell:||Kate and Sean, thank you so much for talking with me about this issue. I am super excited to share this podcast with other folks. Just the depth of knowledge both of you bring to this and the context that you understand this issue is remarkable. So I can’t wait to get it live and share with folks what’s happening in Berkeley and how it’s already spreading.|
|Kate Harrison:||Thank you|
|John Farrell:||Thank you so much for tuning in to Building Local Power. This is John Farrell, ILSR co-director. I was speaking with city council member, Kate Harrison of Berkeley, California and zero net energy designer and managing principal of Redwood Energy, Sean Armstrong, about the health, safety and financial benefits of the city’s recently adopted ban on new gas hookups in Berkeley, California. Learn more about how cities drive local climate action and clean energy with the interactive community power map and community power toolkit, both available from the Institute for Local Self Reliance at ilsr.org. That is ilsr.org. There will also be links and a full transcript on the show page.
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