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HomeMy WebLinkAboutStaff Report 2602-5989CITY OF PALO ALTO Climate Action and Sustainability Committee Friday, March 06, 2026   Agenda Item     1.Review and Discussion of 2026-2027 Climate Action Program Goals and Work Plan Timelines; CEQA Status - Not a Project Late Packet Report Added, Staff Presentation Climate Action and Sustainability Committee Staff Report Report Type: ACTION ITEMS Lead Department: City Clerk Meeting Date: March 6, 2026 Report #:2602-5989 TITLE Review and Discussion of 2026-2027 Climate Action Program Goals and Work Plan Timelines; CEQA Status - Not a Project This item will be a late packet publication released on 2/26/26. 9 3 5 8 Climate Action and Sustainability Committee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Public Works Meeting Date: March 6, 2026 Report #:2602-5955 TITLE Review and Discussion of 2026-2027 Climate Action Program Goals and Work Plan Timelines; CEQA Status - Not a Project RECOMMENDATION This is a discussion item; no action or recommendation is requested. EXECUTIVE SUMMARY At its January 9, 2026 meeting the Climate Action and Sustainability Committee (CASC) recommended that the City Council adopt a 2026-2027 S/CAP Work Plan. This item is on the March 2, 2026 City Council agenda. During the January 9, 2026 meeting, the CASC expressed an interest in seeing timelines and goals for the programs. This report lists the program goals (which staff has been developing in parallel with the budget process) and timelines for the 2026-2027 Climate Action S/CAP Work Plan items and any remaining 2023-2025 Climate Action Work Plan items being completed. BACKGROUND In efforts to align with the City’s goal of reducing carbon emissions 80% below 1990 levels by 2030 (“80 x 30”), the City adopted a Sustainability and Climate Action Plan (“S/CAP”)1 to guide actions toward achieving carbon neutrality. The S/CAP provides a comprehensive framework for reducing greenhouse gas (GHG) emissions across municipal operations, transportation, waste, and other environmental sectors. In 2023, the City adopted the 2023–2025 S/CAP Work Plan, 2 which outlines specific actions designed to advance progress toward the City’s long-term carbon reduction targets. The 1 https://www.paloalto.gov/City-Hall/Sustainability/SCAP 2 2023-2025 S/CAP Workplan, 2023; https://www.paloalto.gov/files/assets/public/v/1/sustainability/reports/2023-2025-scap-work-plan_final.pdf 9 3 5 8 workplan identifies eight primary focus areas, four of which are climate-focused and directly support the “80 x 30” goal. At its January 9, 20265 meeting the CASC heard a progress update on the 2023-2025 S/CAP Work Plan and recommended adoption of a proposed 2026-2027 S/CAP Work Plan. ANALYSIS 6 for water heaters take effect January 1, 2027 as currently scheduled. It further assumes continued provision through the end of 2027 of a comprehensive suite of services for all community members, including incentives, financing, technical assistance, and a direct installation program option. However, staff anticipates piloting other creative financing programs (e.g. on-bill financing, electrification as a service), with the intent of gradually transitioning away from community-wide incentives for the heat pump water heater component of this program as the regulation continues into its second and third years. FISCAL/RESOURCE IMPACT 5 Climate Action and Sustainability Committee, January 9, 2026; Agenda Item 1; SR #2507-5027, https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18309 6 https://www.baaqmd.gov/rules-and-compliance/rule-development/building-appliances 9 3 5 8 STAKEHOLDER ENGAGEMENT 3 ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Attachment A February 2026 Status Update on 2026-2027 S/CAP Work Plan Timelines and Program Goals #Work Item Timeline (Tentative) 2026-2027 Goals (annual rate by 2027 year end)1 2025 Results (for comparison) HPWH 326 200 installs, 40 rebate projects in progress HP HVAC 245 224 rebate application (of which, 117 done) Stoves 50 >20 CA1 Continue Advanced Home Electrification Pilot Program Extend full-service water heater program to other home appliances in Q1 2026 to complete comprehensive suite of services, continue through the end of 2027 Gas Disconnect 48 40 rebate applications (of which, 20 are done) CA2 Develop a Residential Electrification as a Service or Similar Financing Pilot for Council Approval Aiming for Q3 2026 or earlier program launch, but likely Q4 2026 or Q1 2027. Pace is partially dependent on organizational capacity based on staffing or alternative service delivery options and on feasible pace of billing system implementation. 225 financing participants (40% of eligible participants) 22 on-bill financing participants (20% of eligible HPWH participants) CA3 Enhanced data tracking for home electrification Q4 2026. Database of contact information, building characteristics, information or estimation of appliance fuel source, and program participation already in progress, continue to move forward as staff time is available. This may involve implementation of multiple data systems or systems that evolve as new platforms become available. N/A N/A CA4 Launch Enhanced Multifamily EV Charging Infrastructure Program Launch Q4 2026 or earlier. Pace is partially dependent on organizational capacity based on staffing or alternative service delivery options. 32 projects in new enhanced program (on- site shared or individual charging, mobility hubs, or on-street charging) 9 projects in existing program 1 NOTE: The 2026-2027 goals refer to the rate of adoption staff will aim for by the end of 2027, growing programs throughout 2026 and 2027 to reach the goal. For example, 326 HPWH per year translates into about 27 per month, so if the community was showing that rate of adoption in Q4 2027, this would represent achievement of the goal. It does not necessarily represent the number of annual installations staff expects in 2026 and 2027. 1 0 5 8 5 #Work Item Timeline (Tentative) 2026-2027 Goals (annual rate by 2027 year end)2 2025 Results (for comparison) CA5 Develop a Charging-as-a- Service (CaaS) or Similar Financing Pilot for Council Approval Q4 2026 or earlier. Pace is partially dependent on organizational capacity based on staffing or alternative service delivery options and on feasible pace of billing system implementation. 25% or more of projects participating in financing program N/A CA6 Continue Affordable Multifamily Building Electrification Incentive Program Ongoing. Staff has been working with providers to prepare applications for State LIWP program and is releasing City grant rules in Q1 2026. Complete 2025 pipeline by end of 2027, which would result in 30% of central systems and 17% of in-unit systems in affordable housing developments being electrified Pipeline of projects preparing to participate in affordable housing grant program: 12 buildings, 762 housing units served, 11 central water heating systems, 315 units to have in-unit equipment electrified CA7 Multi-Family Technical Assistance Timeline TBD, staff is reviewing results of two recent CPA and NCPA RFPs before determining whether a separate RFP is needed N/A N/A CA8 Advanced Commercial Heat Pump HVAC Program Q4 2026 or earlier. Features will roll out in stages, starting with revised rebate structures, then technical assistance, contractor lists, and with financing likely the last feature 18 projects 11 projects in permitting, construction, or completed CA9 Develop a Commercial Electrification as a Service pilot or Similar Financing Pilot for Council Approval Q3 2027 or earlier. Pace is partially dependent on feasible pace of billing system implementation. 15% or more of projects participating in financing program N/A 2 NOTE: The 2026-2027 goals refer to the rate of adoption staff will aim for by the end of 2027, growing programs throughout 2026 and 2027 to reach the goal. For example, 326 HPWH per year translates into about 27 per month, so if the community was showing that rate of adoption in Q4 2027, this would represent achievement of the goal. It does not necessarily represent the number of annual installations staff expects in 2026 and 2027. 1 0 5 8 5 #Work Item Timeline (Tentative) 2026-2027 Goals (annual rate by 2027 year end)2 2025 Results (for comparison) CA1 0 Workplace EV Charging Pilot Q4 2027 or earlier. Depends on demonstration of viable business models in the multi-family context (see CA4, CA5) To be determined after business models developed for CA4, CA5 N/A 1 0 5 8 5 #Work Item Timeline (Tentative) 2026-2027 Goals (annual rate by 2027 year end)3 2025 Results (for comparison) CA1 1 Launch Pilot program for electrification of centralized water heaters and boilers Q1 2027 or earlier. 13 boilers 13 boilers in affordable housing and non- residential pipeline – some may enter this program CA1 2 Establish One or More Partnerships with Large Commercial Facility Owners Q4 2026 or earlier.At least one additional partnership Partnerships with PAUSD and Stanford Health Care on EV charging CA1 3 Develop Funding and Financing Strategies for Consideration Complete modeling and present to CASC by Q4 2026 or earlier. Tentatively expecting first discussions of the topic in Q2 2026. N/A N/A CA1 4 Regulatory Measures Develop recommended policy options for CASC consideration in Q4 2026 or earlier in coordination with the analysis in CA13. Tentatively expecting first discussions of the topic in Q2 2026. N/A N/A CA1 5 Carbon Neutrality Develop recommended policy options for CASC consideration in Q4 2026 or earlier. Tentatively expecting first discussions of the topic in Q3 2026. N/A N/A CA1 6 Cost-Based Pricing of Non- Electric Decarbonization and Inefficient Electrification To be considered in coordination with CA13, integrating options into those policy options to be developed by Q4 2026. N/A N/A CA1 7 Permitting, Interconnection, and Other Barrier Reduction Ongoing. Development of first annual barrier reduction list by Q2 2026 N/A N/A 3 NOTE: The 2026-2027 goals refer to the rate of adoption staff will aim for by the end of 2027, growing programs throughout 2026 and 2027 to reach the goal. For example, 326 HPWH per year translates into about 27 per month, so if the community was showing that rate of adoption in Q4 2027, this would represent achievement of the goal. It does not necessarily represent the number of annual installations staff expects in 2026 and 2027. 1 0 5 8 5 #Work Item Timeline (Tentative) 2026-2027 Goals (annual rate by 2027 year end)3 2025 Results (for comparison) CA1 8 Public Charging Siting and Business Models Q4 2027 or earlier. Depends on demonstration of viable business models in the multi-family context (see CA4, CA5) To be determined after business models developed for CA4, CA5 N/A 1 0 5 8 5 #Work Item Timeline (Tentative) 2026-2027 Goals (annual rate by 2027 year end)4 2025 Results (for comparison) CA1 9 Grid Modernization Ongoing. Strategy for next projects under discussion with UAC, CASC, and City Council N/A N/A CA2 0 Gas Transition Management Completion of Gas Transition Study and discussion with UAC in Q1 2027 or earlier, followed by discussion with CASC N/A N/A CA2 1 Achieve Benchmarks for Bicycle and Pedestrian Capital Improvement Projects Various dates for four projects: South Palo Alto Bikeways pilot construction by Q2/Q32027 Churchill Bikeway construction by end of Q4 2026 Quarry Road Extension – plans, specifications by end of Q4 2027 South Palo Alto Connectivity – final report by end of Q4 2026 N/A N/A CA2 2 Implement Micromobility Feasibility Study recommendations Depends on City Council direction before end of Q2 2026 N/A N/A CA2 3 Traffic Signal Operations and Multimodal Improvements Ongoing – various projects in coordination with transit providers, as detailed in 2026-2027 S/CAP work plan N/A N/A CA2 4 Housing Element Implementation / Land Use Planning and Policy Ongoing – various goals, policies, and programs reflected in the City’s Housing Element N/A N/A CA2 5 Update City’s Traffic Calming Policy and Process Proceeding as staff time is available, no specified timeline N/A N/A 4 NOTE: The 2026-2027 goals refer to the rate of adoption staff will aim for by the end of 2027, growing programs throughout 2026 and 2027 to reach the goal. For example, 326 HPWH per year translates into about 27 per month, so if the community was showing that rate of adoption in Q4 2027, this would represent achievement of the goal. It does not necessarily represent the number of annual installations staff expects in 2026 and 2027. 1 0 5 8 5 #Work Item Timeline (Tentative) 2026-2027 Goals (annual rate by 2027 year end)4 2025 Results (for comparison) CA2 6 Develop and begin implementing a City Facility Electrification Plan RFP issued in early 2026, proceeding with design and bidding for projects through 2026 Five pilot sites with 16 pieces of gas equipment, 110 MT CO2e per year in emissions reductions N/A 1 0 5 8 5 #Work Item Timeline (Tentative) 2026-2027 Goals (annual rate by 2027 year end)5 2025 Results (for comparison) CA2 7 Electrify City vehicle fleet Ongoing – refer to vehicle replacement schedule N/A N/A CA2 8 Explore the electric capacity needs of the Palo Alto Airport for electric aviation Proceeding as staff time is available N/A N/A 5 NOTE: The 2026-2027 goals refer to the rate of adoption staff will aim for by the end of 2027, growing programs throughout 2026 and 2027 to reach the goal. For example, 326 HPWH per year translates into about 27 per month, so if the community was showing that rate of adoption in Q4 2027, this would represent achievement of the goal. It does not necessarily represent the number of annual installations staff expects in 2026 and 2027. Agenda Item 1: 2026-2027 Climate Action Program Goals and Timelines Climate Action and Sustainability Committee March 6, 2026 www.paloalto.gov 2 2Acting Now for A Resilient Future paloalto.gov/ClimateAction Single-Family Residential Programs •CA1. Continue Advanced Home Electrification Pilot Program - Ongoing •CA2. Electrification as a Service or Financing Pilot – likely Q4 2026 or Q1 2027 •CA3. Enhanced data tracking for home electrification – Q4 2026 Single- Family Activity 2027 Goal*2025 Comparison Heat pump water heaters 326 200 installs, 40 rebates in progress Heat pump HVAC 245 224 rebates (of which 117 are complete) Stove electrification 50 >20 Gas disconnection 48 40 rebates (of which 20 are complete) Financing participants 225 (40%)22 (20% of full service HPWH participants Timelines Program Goals – Annual Rate to Achieve by End of 2027 *Annual rate to achieve by end of calendar year 2027 3 3Acting Now for A Resilient Future paloalto.gov/ClimateAction Multi-Family Residential Programs •CA4. Enhanced Multifamily EV Charging Program – Q4 2026 or earlier •CA5. Charging-as-a-Service (CaaS) or Similar Financing Pilot – Q4 2026 or earlier •CA6. Continue Affordable Multifamily Grant Program - Ongoing •CA7. Multi-Family Technical Assistance – Timeline TBD Multi- Family Activity 2027 Goal*2025 Comparison EV charging 32 projects 9 projects Charging as Service or similar 25%+ of projects participating N/A Affordable Housing Grant Program 2025 pipeline done by end of 2027 Pipeline: 12 buildings with 762 housing units Timelines Program Goals – Annual Rate to Achieve by End of 2027 *Annual rate to achieve by end of calendar year 2027 4 4Acting Now for A Resilient Future paloalto.gov/ClimateAction Non-Residential Programs CA8. Advanced Heat Pump HVAC Program – Q4 2026 or earlier CA9. Electrification as a Service or Similar Financing Pilot – Q3 2027 or earlier CA10. Workplace EV Charging Pilot – Q4 2027 or earlier CA11. Centralized Water Heaters and Boilers – Q1 2027 or earlier CA12. Partnerships with Large Commercial Facility Owners – Q4 2026 or earlier Non- Residential Activity 2027 Goal*2025 Comparison Heat pump HVAC 18 11 in progress or complete Workplace EV TBD N/A Boilers 13 13 Partnerships At least 1 private 3 partnerships (public/nonprofit) Timelines Program Goals – Annual Rate to Achieve by End of 2027 *Annual rate to achieve by end of calendar year 2027 5 5Acting Now for A Resilient Future paloalto.gov/ClimateAction Regulatory, Analysis, Financing, Strategy, Infrastructure •CA13. S/CAP Funding and Financing Strategies – Q4 2026, first discussion April •CA14. Potential Regulatory Measures – Q4 2026, first discussion April •CA15. Carbon Neutrality Strategies – Q4 2026, first discussion September •CA16. Pricing Strategies – As part of CA 13 •CA17. Permitting, Interconnection, and Other Barriers - Ongoing •CA18. Public Charging Siting and Business Models – Q4 2027 or earlier •CA19. Grid Modernization – Ongoing – discussion today •CA20. Gas Transition Management Strategies – Q1 2027 or earlier Timelines 6 6Acting Now for A Resilient Future paloalto.gov/ClimateAction Mobility and City Facilities •CA21. Bicycle and Pedestrian Capital Improvement Projects - Various •CA22. Implement Micromobility Feasibility Study – Q2 2026 •CA23. Traffic Signal Operations and Multimodal Improvements - Ongoing •CA24. Housing Element / Land Use Planning and Policy - Ongoing •CA25. Traffic Calming Policy and Process – As staff time is available Mobility •CA26. City Facility Electrification Plan – RFP issued early 2026 –Five pilot sites, 16 pieces of gas equipment, 110 MT CO2 -e per year •CA27. Electrify City Vehicle Fleet when Feasible - Ongoing •CA28. Airport Electric Capacity Needs for Electric Aviation – As staff time available City Facilities 7 7Acting Now for A Resilient Future paloalto.gov/ClimateAction Working Group Feedback •Discussion about how budget adoption works and integrates with these goals •Discussed how the single-family goals were developed –How the Air District regulations were incorporated –Whether a higher heat pump HVAC goal would be appropriate •Interest in dashboards that track progress toward these goals and the progress we are making on electrifying the entire building stock •Discussion of traffic signal management and how it affect emissions and idling •Interest in consideration of Building Performance Standards Thank You!