Please note that the transcript provided below is AI-generated and intended for reference. It may contain missing words, misspellings, or other small errors. To request a correction or clarification, please contact info@theclimatecenter.org.
Barry Vesser, The Climate Center (00:08:43):
So if you are here for reducing inequity and improving health through Clean Energy Appliance, you are in the right place. These are the sponsors who have made this event possible, including the Bay Area Air District. So we are grateful to them. I’m going to go ahead and get us started. I think people will continue to filter in. Evidently there was a misunderstanding about the timing of when the panel starts. So to start out, I would like to introduce the honorable Vicki Veenker. Thank you Vicki, so much for being here who is the vice mayor of the city of Palo Alto and she’s also the vice chair of the Bay Area Air District Board. She serves as Palo Alto’s Commissioner on the Northern California Power Agency Board and she serves on the Public Safety Policy Committee for the League of California Cities and on the league’s Peninsula Division Executive Board in Palo Alto, Vice Mayor ER chairs, the Climate and Sustainability Committee.
(00:10:02):
And the Policy and Services Committee. As you can see, she is a very busy lady. So we’re very grateful to have her attendance today. And I have to say that we’re very grateful for the Bay Area Air District who has for a long time been doing cutting edge work in California, pushing forward standards, pushing forward air quality standards, and pushing forward climate standards. And that’s always been important. It’s more important now than ever that we have a hostile administration in Washington. So we thank the Air District for the hard work that they have been doing and Vicky’s going to come up and do a bit of a welcome for us all to get the panel started. Thank you so much.
Vicki Veenker, Bay Area Air Quality Management District (00:10:53):
Well thank you Barry for that kind introduction. Good afternoon. It’s such a pleasure to introduce a panel on a subject in which I deeply believe when my colleagues and I voted in March of 2023 to adopt the amendments to the air district’s rules to mandate clean energy appliances. We did so with optimism, but also an understanding of the challenges. Challenges regarding costs, costs that may be steeper upfront due to the cost of equipment and sometimes tricky installations, challenges in being equitable and accessible. Low and moderate income homeowners may struggle with accessing the financial and technical resources needed. Challenges regarding equipment availability. Does the appliance fit your space? Does that appliance fit your panel? Do you have a low voltage one? That’ll work. However, as I stated back when we were considering the rules, getting an update from staff just in December, I believe it was, I mentioned that while it is incumbent upon us at the Air District to work on the how given the current environment, the why is more important than ever.
(00:12:15):
So why did we adopt these rules? I would say to safeguard our clean air and to protect the public health from the threats to the air we breathe to realize the co-benefit of reduction of greenhouse gas emissions and importantly to inspire others to take similar actions. And already the South Coast Air District and CARB two major air quality agencies have followed our lead and taken similar actions. And our optimism was rewarded because rules like ours and those being developed by others send a strong market signal that is helping to bring more versatile and affordable appliances to market that will accelerate the transition to clean and healthy buildings and communities. And we’re taking advantage of that in my city of Palo Alto. And I see one of our residents here, given the city’s innovation, culture and resources, we feel a responsibility to go first to learn lessons that might help others.
(00:13:21):
So we’re proud that in Palo Alto we have our first of its kind full service heat pump water heater and emergency water heater replacement programs. And they helped replace 567 gas water heaters with electric heat pump water heaters, which represents about 20% of the annual turnover in water heaters in Palo Alto. And importantly, both of those programs have low income components and we were able to provide heat pump water heaters for free to eligible low income households. And in the last two months, our new whole home electrification rebate and technical assistance program has resulted in 19 heat pump water heaters, 17 heat pump HVACs, and five gas meter removal projects in progress. And 25 people you can clap for that. And 25 people engaging our technical assistance program for personalized home electrification consultations. And I’m happy to talk about any of that with this group later.
(00:14:26):
So in closing, during the 2023 meeting when we adopted the amended rules, I was particularly touched by a middle school student who came to give public comment because he was not there for himself. He was there to talk about his younger brother who had asthma and he called himself a concerned sibling. Well, my daughter’s had asthma and I am a concerned parent. So I was proud to vote to amend our rules for my daughters, for that student’s brother, for all the kids families and 7.5 million people in the Bay Area that are served by the Air District. On that note, I very much look forward to hearing more from our panelists and thank you all for being here today.
Viet Tran, Bay Area Air Quality Management District (00:15:28):
Thanks Barry. So hi everybody. I am Viet Tran, Deputy Executive Officer of public affairs at the Air District and wanted to thank again Vice Chair Viner, the vice chair of our board, knowing for adopting the Appliance rule amendments, but for making it up here in record time after a Marathon City Council meeting last night that ended around midnight. And so on top of all of her responsibilities and all the roles she holds, she also made it up here and is functioning. So thank you Vice Chair Winker. So I have the honor of being the moderator for this panel and introducing our esteemed panelists and we are honored. The Air District is honored to be a platinum sponsor of this year’s climate policy summit and continued partnership with the Climate Center. So with that, I’ll introduce our first panelist who will present, and it’s Mr. Greg Nud, deputy Executive Officer of Science and Policy at the Air District.
(00:16:28):
Greg oversees rural development, climate policy programs, regional and community scale air quality planning, ambient air quality monitoring, and the public health office. Before moving to the Air District, Greg worked as an environmental engineer at the US EPA Region nine for five years where he worked on air quality plans. Greg began his career on the Texas Commission on Environmental Quality, starting as a permanent engineer specializing in combustion sources. He worked at TCEQ for 16 years in a variety of engineering management and information technology positions. Greg earned bachelor’s and master’s degrees in mechanical engineering from the University of Texas at Austin where he specialized in energy studies. Please welcome Greg Nudd.
Greg Nudd, Bay Area Air Quality Management District (00:17:15):
Thanks for the introduction. I apologize for not reading the run of show and that’s why I stood up before it was my turn. But I do appreciate you and especially Vice Chair Tran for setting the stage here. So I’m going to talk about our zero NOx appliance rules and I’ll give you some kind of an overview of those and how they work and let you know where we stand on that. So I’m going to start off with a thumbnail overview of how you do air quality planning. So you look at all the big sources of pollution and you ask yourself, is there a way to reduce emissions from that source category, right? And it can be cars, it can be refineries, it can be power plants. And if there is, then you do some rulemaking. You incorporate that. Now, one of the things that we have had on the books since I was in middle school, and that was a long time ago, is regulations on nitrogen oxides from water heaters and furnaces.
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And so as part of our regular review of those regulations, we noted that thanks to the push from the climate community and the push to electrify everything, there are zero knocks equipment available to meet those needs. And so you start off with an overview of about why those equipment are important from an air quality and health standpoint, including their impacts on equity. And then I’m going to talk about how our regulation works and then what we’re seeing is some ongoing challenges and next steps. So let’s talk about nitrogen oxides or NOx. So if you’re not in this business, you may not be familiar with this term. Essentially what happens is when you burn fossil fuels, it burns so hot that it literally burns the air, right? It oxidizes the nitrogen that’s in the air, and that’s not just from fossil fuels, actually get that from burning hydrogen too.
(00:19:24):
So whenever you’re burning anything, whenever you have combustion, you’re going to have some level of NOx if there’s any oxygen in the area to be able to combine with the nitrogen. So NOx itself has a number of health detrimental properties. What we see is high NOx levels tend to be clustered in areas where there’s lots of combustion. So if you draw a map of the Bay Area and all the high NOx areas, it’s going to track very closely with traffic, right? So you’ve got those sources. Another source though is this kind of ubiquitous combustion that happens in homes and other buildings. So the other thing we worry about with NOx is in the atmosphere it combines with other pollutants to form particulate matter and ozone particulate matter is a particular problem, so to speak, in that it is probably the most health, the highest health risk is associated with particulate matter than any other pollutant, right? Our major cancer risk driver in the Bay Area is diesel particulate matter. If you’re exposed to diesel particulate matter at a level that say like a 10 in a million cancer risk, you’re at like a hundred and a million risk of early death just from the particulate matter itself. So this is a very dangerous pollutant and one that really drives a lot of our concern with respect to public health. And because it’s clustered around those combustion sources, equity.
(00:21:02):
So why are building appliances important? I mean the individual water heater and furnace in your house or your apartment doesn’t really amount to much, but when you look across the whole Bay Area, it amounts to a lot. The nitrogen oxides from these appliances exceed fuel, refining, exceed all the passenger vehicles in the Bay Area. And if you want to know where the NOx comes from in your house, it is from your water heater and your space heater. Now, I would caution you though to think about this carefully with respect to your stove because your stove may not admit as much NOx as these other appliances, but it’s right literally in your face, right? So your water heater, your furnace vent to the outside, your stove is in your face. So first thing I did at my house was get rid of the gas stove. But looking at this really from a regional perspective, from a air quality perspective and from a climate perspective, stoves don’t matter.
(00:22:05):
So this is the way the rule is structured right now and the way it works, it’s a point of sale rule. So if you need to replace your appliance, you can only buy one that complies with our rules. So at this point, the only appliances that comply with our rules are electric appliances, but it’s possible, certainly technically feasible. In fact, we’ve referenced a patent in our staff report, it’s technically feasible to build these that burn natural gas as well, but nobody’s done that yet. And I’d be surprised if they do because the manufacturers are really moving more towards the heat pumps on this. So the way the rules are now is by January 1st, 2027, you would not be able to buy a residential water heater that doesn’t meet this rule. And by 2029, the natural gas fired furnaces, and then when you get like 2031, you start to get into the larger devices, which at the time we made these rules, we thought were really going to be more challenging to electrify.
(00:23:10):
So whenever we do a big rule like this, we look at the health and equity impacts. So we’ve got a computer model that we use that kind of models the atmosphere, models, the meteorology, models, the chemistry and lays out how these pollutants combine and then expose people. And then we lay that over a demographic map and then we can say who is harmed most by these pollutants. Now in the case of appliances, it’s the Asian-American population is the highest, followed by Hispanic Latino and then African-American, black and then white. So we see this pattern a lot with air pollution sources where if you look at who is really bearing most of the burden, it’s most often low income communities of color. Now it’s kind of unusual to see the Asian American community this high in this kind of analysis, and that’s driven by San Jose largely, which has a very large low income Asian community in the downtown. And so these emissions tend to be concentrated with population centers. And so that’s why you see this kind of disproportionate burden. So as we replace these appliances over time, these benefits will accrue primarily to communities of color.
(00:24:39):
So what benefits are we talking about right now? And there’s two columns on here. One is for zero NOx, which assumes that some technology becomes available before the compliance date, which enables combustion to meet that zero NOx requirement. And like I said, this is theoretically possible if you don’t have oxygen. And so this has been tested in larger scale devices, and so it can be done if it’s electric appliances, then you’re avoiding not just that secondary particulate matter that happens when the NOx combines in the atmosphere, but also the direct particulate matter from the combustion. So that’s what the second column is for. So we’re talking about premature mortality of up to 85 per year. We’re talking about 110 new kids every year in the Bay area getting cancer. I’m getting asthma that didn’t have it before.
(00:25:32):
So just recap here. If you quantify all this, we’re talking about $890 million a year of avoided health impacts. And that goes on forever, right? That’s something that’s important to remember. You can’t just look at, okay, we’re going to save 99,000,890 million this year and it’s going to cost us 600 million or whatever to replace all these appliances, right? This happens forever. Once those appliances are gone, they’re gone and these health improvements continue forever. So here are the problems that we’ve identified in the report that vice Chair Viner identified earlier. One of the things that’s really important is there can be like a $4,000 on average typical difference between a replacement cost between an electric and a gas water heater. So in order to have our low income families be held harmless through this, we need stable long-term, easily accessible incentives for those folks. We need affordable electricity rates so that we can guarantee savings relative to gas. We need cost supports for small and medium sized businesses who may have a hard making this transition. And we need to address landlord hesitancy to make upgrades and provide for tenant protections.
(00:26:53):
So we’re looking for the manufacturers and OEMs to help with that education. We’re looking to address challenging installations due to space constraints. We have identified a particular problem with small water heaters in apartments and we’re looking for similar pilots. Vice talked about a loaner project for water heaters. It’d be good to have some other solution for furnaces. And we’re working to align our rules with other agencies. So right now we’re looking at some options on how to adjust these rules to identify and address those high installation cost scenarios. And so this first one, it seems simple in concept to allow for project by project delays, but the practical implications of that are significant and would require a huge addition of staff to the air districts looking at particular installation types, perhaps giving longer time periods for these smaller water heaters that I referenced. Another thing we’re looking at is to set standards for manufacturers so that they are required to install a certain percentage of zero NOx units over time and provide a mitigation fee when they can’t hit those targets, which is attractive in one way because it generates funding for the low low-income families.
(00:28:28):
Thank you.
Viet Tran, Bay Area Air Quality Management District (00:28:32):
Thank you, Greg. Our next panelist is Anthony Eulo with Silicon Valley Clean Energy. Anthony works directly with Silicon Valley Clean Energy member jurisdictions and others on advancing decarbonization programs, projects and policies. He directly supports SVCE’S reach code initiative and works cooperatively with local building officials in modernizing the permitting process. Prior to joining SCE, Anthony worked for decades at the city of Morgan Hill on a variety of environmental programs, administrative issues and utility services. Please welcome Anthony.
Anthony Eulo, Silicon Valley Clean Energy (00:29:12):
Thank you. Alright, so Barry was really scared we saw the number of slides I have. So just let me tell you, some of ’em are going to be fly by for sure, and that’s not because I’m rushed, but they were always intended to be fly by. So we are a community choice aggregator. We are in Santa Clara County. We have all of the agencies in Santa Clara County except Palo Alto because they have a municipal utility, Santa Clara because they have a municipal utility and a small village you may have heard of before San Jose.
(00:29:48):
We are one of many CCAs in the Backman, excuse me, in the air district’s territory. Try to get that right. MCE, of course the mother of CCAs in California and we’re the green one in the bottom not to sell energy. We’re formed to address climate change. And when you look at our emission base, 80% of it comes from buildings and vehicles. So all of our programs are about addressing emissions in buildings and addressing the emissions in vehicles. And if you look at this pie chart, you can see a whole lot of those are associated with building natural gas, which tends to dovetail quite nicely with the air district’s programs. So that’s about us. Let’s talk about what we’re doing now. So due to the passage of these rules, and so part of me wants to say Thanks Greg. And then part of me wants to say thanks Greg
(00:30:50):
With all sincerity because what they have done is begun the process of a culture of movement of transitioning from gas appliances to electric appliances. And so the regulatory requirements create this really important signal to all the actors in the world in our area that things have to change. Then it’s for folks like us as a CCA that has resources to look at how we can do standup programs to assist in this transition and how we can work with community groups to address their constituencies as well. And then our thought is that over time, all of these sensible actions will lead to market transformation without the world ending and a bunch of disruption. So clear rules really set the stage so the contractors will train up when it’s clear the jobs are coming, homeowners will know what’s going on and they can pre-wire and prepare where we have a big initiative now to get people to, whenever you’re messing with your house pre-wire, when you have the electrician there, don’t wait for your water here to go out, run the line. Now entrepreneurs are going to look at opportunities that the new market presents and manufacturers are ramping up production.
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All of the Bay Area, CCAs, we’re just being one of them, have programs currently to address this transition. Different kinds of rebates. They’re all custom tuned to different things. And Barry, I forgot to ask, but are the slides going out to people after the show?
Speaker 7 (00:32:27):
Yeah.
Anthony Eulo, Silicon Valley Clean Energy (00:32:27):
Great. Alright, good.
(00:32:29):
Obviously you can’t see what these bars mean, but you can when you look at them at home on your screen. All right. And this is just a variety of what some of our different sister agencies are doing. We’re all doing a lot of the same things in with little differences. And so as you can see, financing, providing solid advice to people doing emergency water heater loans and focusing on our multifamily, we’re all doing all that stuff and these are just really core things that the CCAs need to do. And cities too, Vicki, I’m sorry. Here is the first elephant in the room is the big scaling challenge. So we think we’re doing a bang up job and we’ve in our history, been doing 300 woohoo heat pump water heater rebates a year.
(00:33:18):
We estimated the need is going to be 10,000 when the air district rules kick in. And so that’s a big gap. It’s a big gap in rebate dollars. It’s a big gap in awareness and it’s a big gap in permitting processes in member agencies when suddenly there’s that many more people at their counter getting a building permit because it’s not that there’s not water heaters being changed, now there’s 10,000 now they’re just not getting permitted. But when you put a rebate program up that says thou shall have a permit, if you want $3,000 in a rebate, guess what? You go and get a permit. And so we’re working with our permitting entities on that, but scaling up is really the challenge of before us. So what we’ve learned, we’ve taken baby steps, we’ve gotten so far and we know that the mountain is getting steeper and of course the administration across the country is not making it any easier in a variety of ways.
(00:34:21):
So here’s some tidbits of what we learned so far. It was alluded to earlier today, but avoiding service upgrades can save our customers about 750 million a year. So there is and was a common, which turned out to be myth that whenever you go to electrify your home, you’re going to need to upgrade your service. If you have an old 100 amp service, which most of our customers do, if you have a 60 amp service, you’re probably going to need to upgrade. But if you’re at 100, there is an ample body of evidence that says that you can get all the way there with that service by using a variety of techniques. And so a number of entities have focused on different cuts of that. We have put out a manual specifically for building officials. So when you go get a permit, they’re not telling you to upgrade your service that they know that the correct truth is there’s waste of doing this within the a hundred amps.
(00:35:18):
Another myth is that heating with electricity is going to be more expensive. So we’ve done a study that shows that having a heat pump water heater and going to the e elect rate that pg e offers should save you $20 a month. Not more expensive. Less expensive. Similarly to a heat pump space eater saving $20 a month, if you do both, you save about 30, 20 plus, 20 does not equal 30. I’m aware of that. It’s not bad math. What it is is it’s going to the e elect rate, which you have to have a heat pump to do or an ev. It’s what gets you most of that savings. But nonetheless, you save. And that’s a pretty awesome story to tell is that you can actually save money and be greener. PCE, our friends and colleagues next door, they electrified a small collection of homes full electrification, and they found that the six homes that emerged at the beginning of a study saved going fully electric.
(00:36:16):
They all had reduced bills. So our study based on modeling their study is based on empirical rural evidence. People saved while they gained cooling. By the way, these are people that didn’t have cooling before and went through the heat of the summer and undoubtedly ransom air conditioning at times and actually had lower utility bills as a result. As you can see, most of our rebates to date have been heat pump water heaters, and also heat pump hvac. You can see that nice bar at the bottom of pre-wiring that’s coming up strong. We’re really doing a big initiative on getting people to pre-wire and we have found that it’s time for us to take stock of where we are. Most of our program participants have been single family homes. Probably not a shock to anyone in the audience. About half of our service territory is multifamily homes, so how can we bridge that gap? And so we are engaged and talking to those folks to see what we can do to help them. Thanks so much.
(00:37:19):
You can’t read this, but I wanted it here and there’s two of them, but we had a focus group with the multifamily folks, the property owners as to what would motivate you, how can we assist? You did the same thing with the tenants to say, how can you as a tenant, how can you be supported in this transition? And here’s our key learnings. Property owners want to know more and how to maintain equipment. They also want to know what the bill impacts are. Not a shock. Tenants don’t know what electrification is as most people don’t. Not just tenants, homeowners too. They’re distrusting of free NOCO programs. Becky and I were talking about this on the way in how many scams there are out there frankly and not hurts our cause, and they’re very concerned about high bills and increased rents.
(00:38:14):
So we are working with CBOs, community benefit organizations, sorry for the acronym to ensure that we can work with them as trusted partners in serving these folks. An RFP is going out this spring to get a partner, CBO to assist us. And the good news is we have a direct install program for multifamily sites. The first two sites will be the contractors being selected this week. They are going to be installed in the fall. This is whole building electrification, not just space and water heating, but the whole unit and success will lead to us expanding the program if resources continue to be available. This is hard. Reaching these folks is not easy, but what choice do we have? Guys? We have to do this. We know in our hearts that we can do it and we know that starting off small and building up is the way for us to get there. Thanks so much.
Viet Tran, Bay Area Air Quality Management District (00:39:21):
Thank you Tony. We’re going to take a moment and switch presentations really quickly and as I do so, I wanted to share with everyone that I was remiss in not sharing with all of you the role that Tony holds at Silicon Valley Clean Energy. He’s the senior manager of public sector services. So with that, I’ll introduce our next panelist.
(00:40:08):
So our next and final panelist is Becky Minton, who is the California director for the Building Decarbonization Coalition. Becky oversees political strategy and execution and coalition building to advance climate policy and equitable building decarbonization in California. Prior to joining BDC, Becky worked for nearly 10 years on energy programs for CCAs, such as Tony said, the mother of CCAs, MCE, and East Bay Community Energy. Becky has also worked at both the California Energy Commission and the California Public Utilities Commission in addition to overseeing distributed energy resources programs at the Center for Sustainable Energy. Please welcome Becky Menton.
Beckie Menten, Building Decarbonization Coalition (00:40:54):
Thank you so much. My boss Panama likes to joke that it’s harder to find a place. I haven’t worked in California, so it’s nice to meet everybody. I’ll try to get through this quickly a little bit about our organization. The Building Decarbonization Coalition is exactly that. It’s a coalition. Our membership is made up of local governments, utilities including folks like SVCE, but we also represent about 80% of the manufacturers that build the electric appliances that we’re going to need for a part of our future. And our objective is to really find that middle ground approach that can bring those diverse voices and stakeholders together. And so that is what we’re all about. I as was mentioned, I’m in the California director there. I live in San Francisco, so I’m a resident who is affected by the rules and I’m just really excited to spend a little bit of time today actually drawing the lens back a little bit to more of the statewide level to think about what are some of the complimentary policies that really need to come along to provide support for the courageous move of the air district and really moving forward with what is such a landmark ruling.
(00:42:11):
So a little bit about I’m why here. What do we know? We know that buildings and transportation electrification is the most cost-effective pathway to achieving our climate targets. Both having a decarbonized utility grid, meaning high renewable energy saturation and helping buildings get off of fossil fuels. We know that these all electric buildings are cleaner. You heard a bit about some of the nitrous oxide emissions and particulate matter. Well, that stuff also happens in your homes as has been expressed in these presentations. I recently learned about kitchen smog. If y’all didn’t know, kitchen smog is a thing and it can happen when we combust fossil fuel appliances in our buildings. We also know that heat pumps are bi-directional. You are both heating and cooling your home with one appliance and in many cases, particularly in the Bay Area, that can provide access to lifesaving cooling.
(00:43:10):
Folks may not know, but we have something called climate change happening and it is causing increasing instances of extreme heat. And even in places like San Francisco, I get teased all the time from my colleagues who work in the Central Valley for griping about the heat, but we do not have air conditioning. Our homes were not built for that, and there are as many as 3.4 million households in California that lack access to air conditioning units. So this is an increasing issue. We also know that it can be cheaper to build and it can be cheaper to operate. When you’re building new construction that is like a no-brainer. You can save up to $10,000 in the cost of constructing your building a point, which I’m really trying to make in the LA region for folks who have the opportunity to start fresh. It is much harder to retrofit, but you can retrofit and these appliances are cheaper to operate.
(00:44:00):
I know that it seems really hard to hear that right now because the cost of electricity is really high and the cost of electricity is getting higher. That creates a perception that all electric is unaffordable. When in reality many of these appliances are 300 times more efficient than their counterparts, and as a result, they’re able to get, I guess I have to keep moving the screen around here as a result, even though that they are operated by electricity, they can be considerably more affordable to operate. That is even in the case for some customers when you add ac, we do see some price increases for customers when they add ac, and I don’t want to get in front of this, but the tech program, which is the largest building electrification incentive program in the country, it will be releasing a bill impact report soon. And they have seen that even in the cases of customers who did not previously have air conditioning, you can add air conditioning for a nominal cost.
(00:45:00):
So I cannot wait for the results of this study to come out so I can talk about it more and more. They also support economic opportunities. What we’re doing here is putting people to work, changing out appliances, retrofitting homes, improving buildings. The more that we can make sure that those jobs are high road, the better we can do with aligning with our equity principles. But it is a really good economic opportunity for the state. As I indicated though, however, we have to also make sure that we are not leaving frontline communities behind in this transition. And so I will take a moment to speak to some of the points on that in a minute here. I also want to just take a step back and commend the Bay Area Air District. I mean this is remarkable. They were the first air district in the nation to even think about applying their very clear mandate for regulating air quality to appliances.
(00:45:51):
We know that buildings are an increasingly higher proportion of our carbon emissions and of our air quality emissions. And so it really is time that we start taking a look at what we can do. I will also note that following the ninth district court ruling, in the case of the city of Berkeley, many of the tools that have been available to us as decision makers have been taken away or the legality of them has been questioned. The Air District has firm standing to regulate air quality emissions and it is so important that they have stepped up and done what they’ve done. And as was noted earlier, they are clearly setting a trend. The California Air Resources Board has already drafted their intent to follow in the footsteps with the zero emission appliance standard rule. The South Coast is poised to vote this upcoming June on a similar rule, they already passed one that affects large boilers.
(00:46:46):
The state of Maryland is looking at moving forward with this is very actively working on some of these air district regulations. And then the scom, which is not something that maybe a lot of folks know about, but represents a lot of it. Air quality regulators from across the country has also developed an MOU to look at what is a key policy standard for regulating air quality through appliances like this. So really just need to commend again the leadership of the Air District because it has started a very important movement at a time when we really need it.
(00:47:17):
So equity leads the way, and I just will own here I am a white woman who grew up in Boise, Idaho standing up here and talking about equity. So the first thing I want to reiterate here is that it really is important that you look to the communities who are affected the most to develop the solutions that are meaningful to their communities. And I’m going to spend a lot of time talking about that. What we do know is that equity requires having equitable and affordable access. And I’ll talk about the linkage a little bit between what that means when it comes to policy design in a second. We know that we need to prioritize health and safety. I mean, the reality of this is a lot of the communities that are impacted the most by these point source polluters, I really appreciate the statistics that were shared around how we’re seeing higher proportions of PM and NOx emissions around bipoc communities.
(00:48:09):
I mean, that’s not an accident. That is a result of years of historical marginalization redlining policies that have kept these communities in these locations and they have also many times, years of historical disinvestment in their communities as well. So when you go to retrofit and appliance in a building, you may find a number of health and safety concerns in those buildings as well. And so that’s a part of this conversation too. You really need to be focusing on the health and safety of these buildings. Strong tenant protections are critical. We have to make sure that as we’re looking to improve outcomes for these residents, that we’re not putting them in a situation where they’re going to see rent increases, where they’re going to potentially suffer displacement as these retrofits occur. I mean one of the things that may be a reality from some of these improvements is that they do require some structural work and that can get in the way of Ellis Act and other eviction loopholes.
(00:49:04):
So it’s important to think about that. And then community engagement, as I said before, I’ll say again, the best solutions are those that come directly from the community. To that point, I also want to highlight, and I’m really glad to hear that we’ll be sharing the presentation afterwards because I put a lot of hyperlinks into the presentation to link to the organizations that are doing this work to link to some of the documentation for some of the statistics that I’m saying up here. But I’m also running short on time, so I’m going to jump along to a little bit of the what is happening right now. First thing I want to talk about is the Equitable Building decarbonization program. This is a direct install program that we’ll be rolling out this summer. It’s a California Energy Commission program. And what I think is just one of the most important things to keep in mind when you’re thinking about a program design for serving equity-based communities is that incentive programs don’t always work well.
(00:50:00):
An incentive is nice, but if you have to come up with the rest of the cost of the project, that’s not always an option for some people. Also for renters, a lot of times renter communities lack agency. They can’t even necessarily make decisions around what appliances are being used in their homes. Direct and sell programs are a really great way to get around that because it is a comprehensive investment. The EBD program at no cost to the person living in the building. The EBD program is also great because they incorporated really strong tenant protections into the program, not as strong as some advocates would’ve liked, but still some of the best that we’ve seen in a program to date. And so I think that’s also great. They also required partnership with the community-based organization on the team. I want to take a minute to talk about neighborhood scale decarbonization.
(00:50:43):
There is an effort underway to explore about whether or not we can redirect utility investment. Instead of having utility investment go towards aging pipelines that are in need of repair replacement natural gas pipelines, you can actually make the decision to redirect those dollars instead to investing in the customer buildings so that they can be fully electrified. And then you can take that piece of pipeline out of commission. This also gives us the opportunity to really prioritize where those investments occur and make sure that those frontline communities that have experienced this historical disinvestment are at the front of the line. There is an active proceeding at the CPUC right now to enact SB 1221, which was passed last year. Tariff on bill financing is an important model. Tariff on bill financing is a really interesting one because it allows the charge for upgrading your home or your appliance to transfer with the building.
(00:51:33):
So it’s really an attractive option for renter populations that you can make sure that the cost of the appliance stays with the appliance. So if a renter moves from building to building, they don’t have to take the cost with them, right? The cost stays with the person who’s getting the benefits of it. Obviously there are a lot of important consumer protections with that kind of model. This is also an active proceeding at the Public Utilities Commission in Silicon Valley Clean Energy. We’ll soon be launching a field test of a program. They really have a lot of leadership in this space. Income tiered flat utility rates has got to be the wonkiest thing I have up here. This link goes to A-C-P-U-C fact sheet. This is a policy that was passed at the CPUC last year. And what I will just say is that what it does is it allows for a more progressive utility rate structure.
(00:52:19):
So rather than having all customers pay the same amount, this allows for customers who are lower income to pay a little bit smaller portion of those fixed system costs. And that improves drastically the economics not only for having an expensive utility bill, but for electrifying. And so I think it’s going to be a really important thing when it rolls out in a few years. Streamline permitting and inspection. I mentioned this because a lot of the costs associated with installing equipment can be soft costs and streamline permitting and inspection is something that we’re working on this year. We’re co-sponsoring a bill actually with the Bay Area Air District and Spur that looks to really make it easier to get a permit and to get an inspection on an installed heat pump and that can reduce the cost of the installation. And then finally, as was mentioned by my colleagues, we absolutely need long term incentive in rebate programs when we have a start stop program in the market. That makes it really hard for workforce development, makes it really hard for the industry. It makes it really hard for agencies like this to know that their customers will have support when they pass these kinds of rules. And so that is something that we are also working hard on is like let’s make sure that there is funding over a long time horizon similar to what California did with the California Solar Initiative, radically transforming our solar market. So we think we’re ready for that kind of investment as well. Thank you very much.
Viet Tran, Bay Area Air Quality Management District (00:53:44):
Thank you, Becky. So we’ve got about 10 minutes for question and answer. And so you can ask a question of individual panelists or the whole group. I’ll start with a group question. How can advocates and CBOs support and further the clean energy appliances work of agencies, energy providers and organizations such as the Air District, Silicon Valley Clean Energy and the Building Decarbonization Coalition
Anthony Eulo, Silicon Valley Clean Energy (00:54:12):
Fighting over the mic? Not me.
Beckie Menten, Building Decarbonization Coalition (00:54:19):
No,
Anthony Eulo, Silicon Valley Clean Energy (00:54:20):
All. See, I’m going to have to move forward. I’m going to have to talk quiet. You can still hear me in the back. Right? Okay. No one likes feedback or at least King. So I mentioned it in the presentation that working with community-based organizations is key to our strategy for reaching the harder to reach folks because people at this day and age can’t trust who’s talking to them. So we literally go out to a complex and say, we will do this whole building electrification for free. And who’s going to believe that it’s true that we’re doing that for free, paying for all the costs? So we need community partners. So they’re key to have community partners just in terms of giving you street cred really, when you’re talking to people and doing these programs, certainly at the complex that’s going to come into play, but even on an individual basis, having partners help market the program. There’s plenty of poor people that own their own home, they’ve just owned it for a long time. But to the extent that we can have their houses of worship sharing the information with them, other people, other neighborhood groups, it’s all invaluable really. I hope that addressed the question.
Greg Nudd, Bay Area Air District (00:55:46):
The only thing that I would add is, and this was brought up by one of my colleagues here, it’s the tenant protections is going to be really important. And so having NGOs that are active in that space get tied into this issue, I think is going to be really important and helpful.
Beckie Menten, Building Decarbonization Coalition (00:56:08):
And I think the only thing I’ll add to relates back to the idea of having communities involved in helping to shape solutions. I mean, I think that our policy making arena is not really well equipped for incorporating EJ perspectives. And so it does take work to meet people where they’re at. And it does take work to just trust the credibility of those voices, but you’re going to have so much more success with your programs and with your outcomes if you’re really incorporating community perspectives and what they want. So I’ll add that too.
Viet Tran, Bay Area Air Quality Management District (00:56:47):
Thank you, Becky. Alright, we have a question. Just want to add a question.
Speaker 12 (00:56:53):
I hear about the engaging communities that’s the right path, but as a community based organization and also community leader, I always see that there’s a gap in funding to show your commitment to community engagement. So a lot of the times when there are community engagement projects or funding, it only allows the CPO or the leaders to engage the community once or two times talking about technology or talking about transitioning. That will take longer time, which also means it will cost more. But I don’t see that commitment from organizations or agencies putting that trust in CBOs by putting the money. So I always feel like
Beckie Menten, Building Decarbonization Coalition (00:57:41):
I want to, yeah, well it just would underscore how important that is. And also point out that it is really challenging when all of that funding is project based. When you’re working with a community-based organization, they’re typically shuffling lots of priorities and asking them to all of a sudden be able to dedicate all of their time and resources to your issue versus finding pathways to have long-term sustained funding for long-term meaningful community-based organization partnerships. I’ll just say that I think that that’s a best practice. The Public Utilities Commission did briefly have some funding that was available for long-term CBO partnerships that I thought was amazing, but I think it got raked back in some of the budget cuts from last year, which is another part of the problem. A lot of times these are some of the first funding sources to be cut. So nothing to add, just to reiterate. Yes,
Anthony Eulo, Silicon Valley Clean Energy (00:58:33):
So before the decades I worked for a city agency. I worked for a nonprofit organization and so I have some history and I understand the need to pay for FTEs to do work. If you want something done, people have to do it and it has to be their priority and their day job, not something they’re adding on to their day job. And so I’m going to say we’re trying at our level, we do as sly indicated, we are seeking out a community a CBO partner that we will pay for their time and their work to do it. I think it’s going to come short of what Becky mentioned, those key terms.
(00:59:17):
I don’t think we’re in a position to be able to commit to tell someone, we’re going to give you this grant for 10 years, hire someone, develop them, and they’re going to be a presence in the community. That’s maybe a really valid aspiration. And I’ll say, I don’t think we’re quite there yet. We also have a community A CBO grant program going out this fall to support CBOs in their activities as well. So not only do we have the partnership we’re trying to establish on a more contractual basis, but we also have a grant program for them to take advantage of our resources in reaching out to their community.
Greg Nudd, Bay Area Air District (00:59:55):
And the only thing that I would add is in order to have a long term from a public agency’s perspective, if you’re going to have a long-term commitment to a group of community-based organizations to do this work, you need to have identified a long-term funding stream to do that. And so that’s the problem that the three of us just keep ringing up. It’s like there are pots of money out there now, right? They’ll probably enough money to do the work in terms of on the ground, replace the appliances, but there’s not the money to go and talk to people and explain to them how this works and why it’s important and how to get it done in a way that alleviates their concerns about housing insecurity and other issues. So that long-term funding isn’t out there right now. And that’s one of the things that we’re working on.
Anthony Eulo, Silicon Valley Clean Energy (01:00:45):
I wanted, if I can add one thing, which is we are trying to reach out to folks that are not necessarily as environmentally oriented but health oriented because as Greg pointed out, it’s typically the low income populations and people of color that have the worst environmental outcomes and the highest health impacts. So we really are trying to reach out and share resources with the health community as well.
Viet Tran, Bay Area Air Quality Management District (01:01:13):
Thank you everybody. Another question.
Vicki Veenker, Bay Area Air Quality Management District (01:01:15):
Oh, my question is purely selfish as a forced air hydronic.
Greg Nudd, Bay Area Air Quality Management District (01:01:57):
And I can say in the Bay Area the hydronic systems are more popular than they are other places, but it’s a pretty small proportion and it is a particular challenge here, which is one of the reasons why we’re looking at maybe setting a longer timeframe for the technology to catch up.
(01:01:57):
Viet Tran, Bay Area Air Quality Management District (01:03:45):
Well thank you everybody. Again, on behalf of the Bay Area Air District, we thank you so much for taking the time to join this panel. Please stay in touch with us, all of our panelists, and once I give big hand, okay, Gary, shall we turn it back over to you?
Barry Vesser, The Climate Center (01:04:07):
Thank you all and thank you Viet for doing such a great job moderating.