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Home My WebLink About2025-05-02 Climate Action and Sustainability Committee Agenda PacketCLIMATE ACTION AND SUSTAINABILITY COMMITTEE Regular Meeting Friday, May 02, 2025 Community Meeting Room & Hybrid 1:30 PM Sustainability & Climate Action Committee meetings will be held as “hybrid” meetings with the option to attend by teleconference/video conference or in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda. The meeting will be broadcast on Cable TV Channel 26, live on YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center https://midpenmedia.org. VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/85380918387) Meeting ID: 853 8091 8387 Phone: 1(669)900-6833 PUBLIC COMMENTS General Public Comment for items not on the agenda will be accepted in person for up to three minutes or an amount of time determined by the Chair. General public comment will be heard for 30 minutes. Additional public comments, if any, will be heard at the end of the agenda. Public comments for agendized items will be accepted both in person and via Zoom for up to three minutes or an amount of time determined by the Chair. Requests to speak will be taken until 5 minutes after the staff’s presentation or as determined by the Chair. Written public comments can be submitted in advance to city.council@paloalto.gov and will be provided to the Council and available for inspection on the City’s website. Please clearly indicate which agenda item you are referencing in your subject line. PowerPoints, videos, or other media to be presented during public comment are accepted only by email to city.clerk@paloalto.gov at least 24 hours prior to the meeting. Once received, the Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted. Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that: (1) sticks, posts, poles or similar/other types of handle objects are strictly prohibited; (2) the items do not create a facility, fire, or safety hazard; and (3) persons with such items remain seated when displaying them and must not raise the items above shoulder level, obstruct the view or passage of other attendees, or otherwise disturb the business of the meeting. 1 May 02, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. CALL TO ORDER PUBLIC COMMENT Members of the public may speak in-person ONLY to any item NOT on the agenda. 1-3 minutes depending on number of speakers. Public Comment is limited to 30 minutes. Additional public comments, if any, will be heard at the end of the agenda. STANDING VERBAL REPORTS A.Staff Comments B.Committee Member Comments and Announcements ACTION ITEMS 1.Priorities for 2026-2027 Sustainability and Climate Action Plan (S/CAP) Climate Action Work Planning; CEQA Status – Not a Project 2.Review and Discussion of 2026-2028 Reach Code Policy Development Approach; CEQA Status - Not a Project 3.Single-Family Electrification Program Update; CEQA Status – Not a Project FUTURE MEETINGS AND AGENDAS Members of the public may not speak to the item(s) ADJOURNMENT 2 May 02, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. PUBLIC COMMENT INSTRUCTIONS Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone. 1.Written public comments may be submitted by email to city.council@paloalto.gov. 2.For in person public comments please complete a speaker request card located on the table at the entrance to the Council Chambers and deliver it to the Clerk prior to discussion of the item. 3.Spoken public comments for agendized items using a computer or smart phone will be accepted through the teleconference meeting. To address the Council, click on the link below to access a Zoom-based meeting. Please read the following instructions carefully. ◦You may download the Zoom client or connect to the meeting in- browser. If using your browser, make sure you are using a current, up-to-date browser: Chrome 30 , Firefox 27 , Microsoft Edge 12 , Safari 7 . Certain functionality may be disabled in older browsers including Internet Explorer. Or download the Zoom application onto your smart phone from the Apple App Store or Google Play Store and enter in the Meeting ID below. ◦You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. ◦When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. ◦When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments. 4.Spoken public comments for agendized items using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Council. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. CLICK HERE TO JOIN Meeting ID: 853 8091 8387 Phone: 1(669)900-6833 Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at (650) 329-2550 (voice) or by emailing ada@paloalto.gov. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service. California Government Code §84308, commonly referred to as the "Levine Act," prohibits an elected official of a local government agency from participating in a proceeding involving a license, permit, or other entitlement for use if the official received a campaign contribution exceeding $500 from a party or participant, including their agents, to the proceeding within the last 12 months. A “license, permit, or other entitlement for use” includes most land use and planning approvals and the approval of contracts that are not subject to lowest responsible bid procedures and have a value over $50,000. A “party” is a person who files an application for, or is the subject of, a proceeding involving a license, permit, or other entitlement for use. A “participant” is a person who actively supports or opposes a particular decision in a proceeding 3 May 02, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. involving a license, permit, or other entitlement for use, and has a financial interest in the decision. The Levine Act incorporates the definition of “financial interest” in the Political Reform Act, which encompasses interests in business entities, real property, sources of income, sources of gifts, and personal finances that may be affected by the Council’s actions. If you qualify as a “party” or “participant” to a proceeding, and you have made a campaign contribution to a Council Member exceeding $500 made within the last 12 months, you must disclose the campaign contribution before making your comments. 4 May 02, 2025 Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas. 7 1 1 5 Climate Action and Sustainability Committee Staff Report Report Type: ACTION ITEMS Lead Department: City Clerk Meeting Date: May 2, 2025 Report #:2504-4534 TITLE Priorities for 2026-2027 Sustainability and Climate Action Plan (S/CAP) Climate Action Work Planning; CEQA Status – Not a Project This will be a late packet report published on April 24, 2025. Item 1 Item 1 Staff Report Item 1: Staff Report Pg. 1 Packet Pg. 5 of 25 7 1 1 4 Climate Action and Sustainability Committee Staff Report Report Type: ACTION ITEMS Lead Department: City Clerk Meeting Date: May 2, 2025 Report #:2504-4533 TITLE Review and Discussion of 2026-2028 Reach Code Policy Development Approach; CEQA Status - Not a Project This will be a late packet report published on April 24, 2025. Item 2 Item 2 Staff Report Item 2: Staff Report Pg. 1 Packet Pg. 6 of 25 7 1 1 6 Climate Action and Sustainability Committee Staff Report Report Type: ACTION ITEMS Lead Department: City Clerk Meeting Date: May 2, 2025 Report #:2504-4535 TITLE Single-Family Electrification Program Update; CEQA Status – Not a Project This will be a late packet report published on April 24, 2025. Item 3 Item 3 Staff Report Item 3: Staff Report Pg. 1 Packet Pg. 7 of 25 Climate Action and Sustainability Committee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Public Works Meeting Date: May 2, 2025 Report #:2503-4452 TITLE Priorities for 2026-2027 Sustainability and Climate Action Plan (S/CAP) Climate Action Work Planning; CEQA Status - Not a Project RECOMMENDATION This is a discussion item and no Committee action is requested. Staff is seeking feedback on Committee priorities for 2026-2027 Climate Action work planning. EXECUTIVE SUMMARY The City has made significant strides in its S/CAP efforts since adoption of the plan in 2023. It has executed a significant portion of the 2023-2025 S/CAP Climate Action Work Plan and is on track to complete most of the remaining items by the end of 2025. This puts the City in a position to take continued steps in the 2026-2027 time frame. This staff report summarizes progress to-date on S/CAP Climate Action work items and outlines potential areas of focus for 2026-2027. Staff is expecting that some key areas of focus for 2026-2027 will include: •Communications and outreach: raising awareness of the need for climate action •Financially scalable program models for EV charging and building electrification •Establishing priorities and exploring funding needs/availability for implementation of S/CAP Mobility goals •Designing effective electrification assistance for Palo Alto residents to comply with current Air District Zero Oxides of Nitrogen (NOx) regulations •Piloting program designs for multi-family and non-residential building electrification •Establishing and beginning implementation of a public and workplace charging strategy •Establishing and beginning implementation of a gas transition strategy Staff is seeking Committee feedback on these key areas of focus and the other potential program ideas noted in this report to inform staff development of a proposed 2026-2027 S/CAP Item 1 Item 1 Late Packet Report Item 1: Staff Report Pg. 1 Packet Pg. 8 of 25 Work Plan (Climate Section). As the Committee discusses the next years workplan, it will be important to consider the legislative and regulatory environment including but not limited to federal regulations, imposition of tariffs, utility affordability and the availability of near term and sustained funding availability. BACKGROUND In June 2023, the City Council adopted the S/CAP, which included Goals and Key Actions, along with a 2023-2025 S/CAP Work Plan for both the sustainability and the climate action areas. Council has also included Climate Action, Adaptation, and Sustainability in its priorities for 2023, 2024, and 2025. Most parts of the 2023-2025 S/CAP Work Plan Climate Action sections are either completed or on track to be completed (Attachment A). Detailed status updates on the 2023-2025 S/CAP Work Plan items and 2024 Council Priorities are included in the November 12, 2024 S/CAP Status Update.1 As the City reaches the end of its 2023-2025 work planning period, staff is beginning development of a 2026-2027 S/CAP Work Plan. Over the course of the year staff expects to develop the work plan by 1) brainstorming and soliciting ideas, 2) prioritizing those ideas, 3) lay out a draft proposal taking into account potential resource constraints, and 4) refining this proposal with the Committee, Council, and relevant stakeholders, including other City Commissions as needed. ANALYSIS This staff report focuses on brainstorming and soliciting ideas for the Climate Action section of the 2026-2027 S/CAP Work Plan. No formal proposals are presented in this report, only high- level potential areas of focus. Staff’s goal with this discussion is to use these high-level, preliminary descriptions to solicit feedback on the priorities of the Committee and stakeholders. Contents: 1. Transportation 2. Buildings (including Resiliency) 3. Carbon Neutrality Priorities for Climate Action in 2026-2027 could include: •Ensuring continued improvement in transportation emissions reduction, such as advancing vehicle miles traveled (VMT)-reducing transportation programs and projects and ensuring EV charging for residents of multi-family residential complexes and commuters and visitors where economically viable. 1 Staff report 2407-3266, https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=6222&meeti ngTemplateType=2&compiledMeetingDocumentId=12233 Item 1 Item 1 Late Packet Report Item 1: Staff Report Pg. 2 Packet Pg. 9 of 25 •Advancing building electrification and resiliency through advanced pilots and exploring scalable financial structures (including financing) for programs based on the S/CAP Funding and Financing Study. •Studying Carbon Neutrality for promising approaches to offsetting carbon emissions or removing carbon from the atmosphere. 1. Transportation In the Mobility area, the 2023-2025 S/CAP Work Plan primarily focused on developing plans to reduce VMT, such as bike and pedestrian infrastructure and safety, housing development, and last mile solutions like micromobility and on-demand transit. Some of this plan development was delayed due to staff capacity issues that were resolved in a previous budget cycle. In 2026- 2027, staff expects to focus more attention on plan and program implementation, such as Safe Streets for All Safety Action Plan implementation, Bicycle and Pedestrian Transportation Plan implementation, and VMT-reducing policy updates, including a transportation demand management (TDM) Ordinance, which will require exploring funding needs and funding sources specific to transportation projects and programs to assist businesses in helping manage their transportation demand. Maintaining staffing capacity is also needed if implementation is to proceed successfully. Community EV adoption is proceeding rapidly but could stall if adequate charging is not provided for multi-family housing residents (who currently only represent 15% of total community EV ownership due to limited charging), either on-site or public. Public and workplace EV charging, if economically viable, could help facilitate commuter and visitor EV adoption. Both multi-family and workplace charging can be addressed in conjunction with building electrification as described below. The EV Charger Needs Assessment currently being finalized will help the City determine appropriate strategies. 2. Buildings The City to-date has used a three-phase approach to building electrification and EV charging programs: starting with small pilots and studies, then moving into larger scale early adopter advanced pilots, with the goal of identifying a program design and financial structure that can be scaled community-wide. This is complicated by the diversity of building and EV charging strategies needed for different parts of the community. Single-family homeowners, multi-family complex homeowners, commercial building and business owners, and major employers all have different ownership structures and financial perspectives. Different approaches are needed for each. Attachment B shows different groups within the community, which phase of the three- phase approach the City is in for each group and which existing programs serve them, and potential programs that could be established for them. A critical step in 2026 and 2027 will be the development of scalable funding approaches. The City made some progress in this area in the Advanced Heat Pump Water Heater Pilot Program, Item 1 Item 1 Late Packet Report Item 1: Staff Report Pg. 3 Packet Pg. 10 of 25 which was piloted with a financial structure that might attract outside capital in the future if successful, but it became clear that it would require additional funding sources to scale community-wide. The S/CAP Funding Study, currently being finalized, will give the City the insights needed to design new financial structures to pilot and identify potential revenue sources. In particular, use of net new electric sales revenue from building and vehicle electrification to provide support to electrification programs could be a critical part of a successful approach, and identifying any legal or business risks and clarifying the business tradeoffs of this approach is an important step in 2025. Other concepts to explore could be financing or “electrification as a service,” modeled on existing “efficiency as a service” offerings where an efficiency improvement is paid for out of resulting utility bill savings. Policy decisions to balance further investment in S/CAP goals while maintaining affordability of utility rates will be a key consideration as the City works to develop scalable financial spproaches. Electrification programs that can be made available to most or all of the community will be helpful in ensuring the successful implementation of the regional Bay Area Air District zero NOx mandates. On January 1, 2027, small NOx-emitting combustion water heaters may no longer be sold within the Air District’s jurisdiction. That is followed by a prohibition on the sale of NOx- emitting combustion space heaters on January 1, 2029 and large NOx-emitting combustion water heaters on January 1, 2031. The City is coordinating regionally with both Air District staff and community choice aggregators (CCAs) on the support needed from energy providers. Areas of focus include the need for financing programs, incentives for income-qualified customers, and exemptions or incentives for complex, higher-cost projects. Another potential work item could be to explore finding ways to incorporate the price of carbon into gas commodity prices. This could be done through the purchase of biogas, or other methods that would require more legal analysis. Programs could involve an opt-in or opt-out feature. Lastly, as part of its implementation of the Reliability and Resiliency Strategic Plan (Strategies 4 and 5) the City is currently finishing studies of potential resiliency programs. If, based on these studies, Council directs staff to pursue resiliency programs, these could also be included in the 2026-2027 Work Plan. In addition to the CASC’s review of this topic, the RRSP is being reviewed by the Utilities Advisory Commission (UAC) throughout 2025, with the last review taking place at its February meeting with feedback focusing on greater clarity on City microgrid policies and how long-term resiliency is dealt with in the plan. 3. Carbon Neutrality There were no work items specific to carbon neutrality in the 2023-2025 S/CAP Work Plan, but the City still made some progress, working with Stanford students to identify some potential carbon removal options to achieve carbon neutrality. The City’s Carbon Offset Gas Program also advances carbon neutrality. But more work is needed in this area. Considering options like Item 1 Item 1 Late Packet Report Item 1: Staff Report Pg. 4 Packet Pg. 11 of 25 biogas for the gas utility could help the City progress, but a broader study of carbon removal approaches being commercialized and ways of funding carbon neutrality will be needed. FISCAL/RESOURCE IMPACT The fiscal impact of the Climate Action strategies above will depend on what is adopted and the strategies used. Additional funding appropriations will be necessary, with exact amounts to be identified once a draft workplan returns. The model developed for the S/CAP Funding Study primarily focused on building and vehicle electrification, but as funding needs for VMT reduction, resiliency, and carbon neutrality are developed further, they can be added to the funding model to develop resource impacts. STAKEHOLDER ENGAGEMENT The City will continue stakeholder engagement via the Climate Action and Sustainability Committee and the Working Group, but also engages in other outreach depending on the program or strategy in question. The City is working on broad outreach around the need for climate action. More specific outreach and engagement is in progress or in development for specific projects, such as the Bicycle and Pedestrian Transportation Plan or the 2026-2028 Energy Reach Code. But as the 2026-2027 S/CAP Work Plan is developed, additional outreach may be needed to the community at large. The City is also coordinating regionally with other municipalities, utilities, and CCAs on programs, regulations, and studies, particularly in developing unified approaches to assist with compliance with Air District regulations. ENVIRONMENTAL REVIEW Council’s discussion of potential work plan items for a 2026-2027 S/CAP Work Plan is not a project as defined by CEQA because it does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378(b)(4). ATTACHMENTS Attachment A: 2023-2025 S/CAP Work Plan Status Dashboard Attachment B: Building Electrification and EV Charger Program Overview APPROVED BY: Brad Eggleston, Director Public Works/City Engineer Item 1 Item 1 Late Packet Report Item 1: Staff Report Pg. 5 Packet Pg. 12 of 25 Attachment A 2023-2025 S/CAP Work Plan Status Dashboard = completed = on track for completion by end of 2025 = delayed = ongoing Work Item Status 1.A Grid Modernization Study 1.B Reliability and Resiliency Strategic Plan 1.C Reliability and Resiliency Strategic Plan Implementation 1.D Evaluate Utility Rates and Fees 2.1 A Promote EV Adoption 2.1 B Emissions Reduction Advisory Services 2.1 C Evaluate small electric vehicles program potential 2.1 D Heat Pump Water Heater Electrification Pilot Program 2.1 E Full-Scale Heat Pump Water Heater Electrification Program 2.1 F Electrification data collection program 2.1 G Pilot Programs for Modernized Neighborhoods 2.1 H Single-family Electrification Rebates 2.1 I Affordable Housing EV Charging and Electrification Pilot 2.1 J Multi-Family EV Charger Program 2.1 K Multi-family and Affordable Housing Electrification and EV Charger Access Strategy Development 2.2 A Rooftop Packaged HVAC Pilot 2.2 B Rooftop Packaged HVAC Advanced Pilot Design 2.2 C Major Employer Partnerships 2.2 D Commuter Transportation and EV Charging Strategy 2.2 E Regional and State Partnerships 2.3 A Transportation and Land Use Policies and Programs 2.3 B Housing Element Adoption 2.3 C Housing Element Implementation 2.3 D Micro-mobility evaluations 2.3 E On-demand transit pilot 2.3 F Update Bicycle Plan 2.3 G Vision Zero Program 2.3 H Evaluate expansion of employer transportation demand management (TDM) 2.3 I Proposals for Managing Downtown Parking Availability 2.3 J Implement Efficient Downtown Parking Management 2.3 K Traffic Signal Improvements & Transit Signal Priority 2.4 A Facility Electrification Assessment Plan 2.4 B Facility Electrification Assessment Implementation 2.4 C Electrify Equipment at City Facilities during Routine Replacement 2.4 D Electrify City Vehicle Fleet Item 1 Attachment A - 2023-2025 SCAP Work Plan Status Dashboard Item 1: Staff Report Pg. 6 Packet Pg. 13 of 25 Attachment A Work Item Status 2.4 E Build City Fleet and Employee Charging Infrastructure 2.4 F Publicly-owned charger strategic plan 2.5 A Electric Vehicle Strategic Plan Development 3.1 A Build awareness of the need for climate action 3.1 B Drive community actions to achieve S/CAP goals 3.1 C S/CAP Survey Program 3.1 D S/CAP Reporting 3.1 E Build confidence in the City’s electric infrastructure 4.A Multi-family and Commercial End Use Study 4.B Idea generation and additional research 4.C Additional Emissions Reduction Project Prioritization 5.A Resource Needs Assessment 5.B Funding Alternatives 5.C Affordability Study 5.D Gas Utility Financial and Operating Plan Item 1 Attachment A - 2023-2025 SCAP Work Plan Status Dashboard Item 1: Staff Report Pg. 7 Packet Pg. 14 of 25 7 7 9 1 Overview of Building Electrification and EV Charging Programs Topic Area Current Scale of Programs Existing Programs / Studies Planned Programs / Potential Ideas Single-family Electrification •HPWH full-service program •Rebates for all technologies •(Potential) Full-service program, all technologies •(Potential) Revised program design to pilot scalable financial structure •(Potential) Financing programs to complement Air District mandates Multi-family (EV Charging) •Up-front incentives for shared multi-family EV chargers •(Potential) Pilot program design for individual unit multi-family EV chargers with financial structure that can ideally scale community-wide Multi-family (Building Electrification) •Grant-funded small affordable housing pilots •Multi-Family Electrification Study •(Potential) Affordable Housing Grant Program •(Potential) Financing programs to complement mandates Public / Workplace Charging •Grant-funded City public chargers •EV Charger Needs Assessment •(Planned) Public / Workplace charger strategy development Small & Med Building Electrification •Commercial HVAC Pilot Program •(Potential) Advanced Commercial HVAC Pilot Program Major Facility Building Electrification •PAUSD, City, Stanford Health Care project partnerships •(Potential) Major Facility Electrification Grant Program City Facility / Fleet Electrification •Electrification Assessment which is part of the Facility Condition Assessment •(Potential) RFP for design services to electrify and upgrade existing City owned facilities Early Pilots & Studies Advanced Pilots Community-Wide Programs Early Pilots & Studies Advanced Pilots Community-Wide Programs Early Pilots & Studies Advanced Pilots Community-Wide Programs Early Pilots & Studies Advanced Pilots Community-Wide Programs Early Pilots & Studies Advanced Pilots Community-Wide Programs Early Pilots & Studies Advanced Pilots Community-Wide Programs Planning and Pilots Comprehensive Electrification Plan Planned, Funded Electrification Program Att a c h m e n t B Item 1 Attachment B - Building Electrification and EV Charger Program Overview Item 1: Staff Report Pg. 8 Packet Pg. 15 of 25 Climate Action and Sustainability Committee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Public Works Meeting Date: May 2, 2025 Report #:2503-4451 TITLE Review and Discussion of 2026-2028 Reach Code Policy Development Approach; CEQA Status - Not a Project RECOMMENDATION This is a discussion item and no recommendation is requested. Staff is requesting feedback on staff’s planned approach to 2026-2028 Reach Code policy development. EXECUTIVE SUMMARY Every three years, the California Building Standards Commission publishes updates to the building standards codes; these include the building code, the fire code, the electrical code, the plumbing code, the energy code, and the green building standards code, among others. Local agencies are allowed to propose local amendments, or reach codes, that are more stringent than State codes if appropriate based on local conditions. The City has historically adopted reach codes, most recently for the Energy Code and the Green Building Standards Code. Staff is seeking Committee feedback on its approach to the 2026-2028 Reach Code. The City already has more stringent Green Building Standards Code requirements than the State’s, and staff is not expecting to propose significant changes to the Green Building Standards local amendments during the 2026-2028 Code Cycle. With respect to the Energy Code, the statewide reach code cost-effectiveness studies need to be completed so that local proposed Energy Code amendments for multi-family and non-residential buildings can be created. It is staff’s understanding that these studies are delayed, and staff will be unable to propose amendments until spring of 2026, with an estimated effective date of July 1, 2026. However, the studies for single-family homes are complete and there are potential policy options for local amendments to the Energy Code for single-family homes. Studies are showing cost-effectiveness for local amendments that would affect the replacement of water heaters and air conditioners as a standalone project, replacement of energy-using equipment during remodels, and the emissions and efficiency of new construction. Item 2 Item 2 Late Packet Report Item 2: Staff Report Pg. 1 Packet Pg. 16 of 25 BACKGROUND During the triennial building code adoption cycle there are two codes for which the City adopts local amendments for environmental purposes: the Green Building Standards and the Energy Codes. The Green Building Standards Code (CALGreen) includes provisions focused on storm water management, EV charging, water efficiency, construction material conservation and recycling, and indoor air quality. There are mandatory requirements (CALGreen Mandatory) that apply statewide to all project types. The State also publishes optional additional requirements that local agencies can adopt to apply only within their jurisdiction. These are the CALGreen Tier 1 requirements (typically applicable to remodels) and Tier 2 requirements (typically applicable to new construction). They provide flexible pathways to reducing environmental impacts in buildings further than would be achieved under the CALGreen Mandatory Code alone. The Energy Code governs the energy efficiency of buildings. It includes efficiency standards for installed equipment and insulation as well as standards that measure the energy use of the overall building design, including a metric (“source energy”) that takes into account the fossil fuels combusted due to modeled energy used by that design. The City currently has more stringent source energy requirements for new construction and substantial remodels than the State. Local amendments to the Green Building Standards or Energy Codes must be consistent with a federal law known as the Energy Policy and Conservation Act (EPCA). In general, EPCA preempts local regulations that ban a specific fuel, but allows local regulations on the overall energy consumption of a building. In 2024, the City repealed its all-electric reach code and adopted standards using Energy Code metrics focused on source energy. The City has implemented permit streamlining efforts that ease compliance with these codes, including streamlined online permits for heat pump water heaters and other mechanical, electrical, and plumbing requirements. The City also provides streamlined solar permitting. It is worth noting that there is a bill being considered by the California State Legislature, AB 306, that would suspend agencies’ ability to make local amendments to the residential Energy and Green Building Codes. Staff is proceeding with this effort in line with current law and will adjust course if this legislation passes. ANALYSIS The City is considering local amendments to the Green Building Standards and Energy Codes to propose for the 2026-2028 code cycle. In most years, local amendments to these codes for single-family, multi-family and non-residential building types are adopted at the same time, effective January 1 of the first year of the code cycle. The Energy Code amendments depend on the completion of cost-effectiveness studies. The City partners with a statewide working group and regional partners on cost-effectiveness studies. These are normally completed by June of Item 2 Item 2 Late Packet Report Item 2: Staff Report Pg. 2 Packet Pg. 17 of 25 the year prior to the code cycle – in this case June 2025 – to allow time for local agencies to develop local amendments that could be effective the following January. This year, however, the cost-effectiveness studies for multi-family and non-residential building types that would enable local amendments to the Energy Code are delayed and will not be completed until early 2026, likely Q1. The single-family cost-effectiveness studies are already nearly completed, however, and no cost-effectiveness studies are needed for Green Building Standards Code amendments. Staff proposes the following strategy: •Propose local amendments to the Green Building Code for all building types, including multi-family and non-residential, effective January 1, 2026. •Propose local amendments to the single-family Energy Code effective January 1, 2026 •Propose local amendments to the multi-family and non-residential Energy Code effective July 1, 2026, pending availability of cost-effectiveness studies analyzing potential local amendments. In addition, as described below, staff recommends that certain local amendments to the single- family Energy Code related to equipment replacement be effective later than January 1, 2026, to promote consistency and coordination with other jurisdictions in the Bay Area. Green Building Standards Code (CALGreen) Local Amendments The City has historically adopted the CALGreen optional Tier 1 and Tier 2 requirements, leading to healthier and less environmentally impactful buildings in Palo Alto. The applicability of these requirements is shown in Attachment A. In addition to adopting the Tier 1 and Tier 2 requirements (which are published by the State and are the same across all adopting agencies), the City adopted local amendments in the last code cycle. These are summarized below and listed in more detail in Attachment A: •Low-carbon concrete •Deconstruction and construction materials management and waste reduction •Natural environment protection (storm water, invasive species) •Indoor air quality •Recycled water use and cooling tower water use •Water and energy building efficiency ratings •Electric readiness •Enhanced EV charging infrastructure requirements Staff intends to propose adopting the Tier 1 and Tier 2 requirements again for the next code cycle and to continue the existing local amendments. For multi-family and non-residential buildings staff is recommending consideration of the following additional local amendments: Item 2 Item 2 Late Packet Report Item 2: Staff Report Pg. 3 Packet Pg. 18 of 25 •Use Leadership in Energy and Environmental Design (LEED) certification as an alternative pathway for Tier 1 and Tier 2 compliance (note – this could also be applicable to single-family home Tier 1 and Tier 2 compliance) •Consider lowering square footage threshold for applicability of embodied carbon requirements in new construction •Other administrative modifications to make existing local amendments clearer In addition, staff is reaching out to other jurisdictions, most of which are not as far along in their process for identifying local amendments, to find opportunities for collaboration and alignment between efforts. Single-Family Energy Code Local Amendments Potential Energy Code local amendments require cost-effectiveness studies before they can be adopted. They must be more stringent than the California Energy Code, generally using the metrics established by that code (such as source energy). The studies to establish which regulations are cost-effective are generally performed via a statewide working group that the City partners with. That working group and other regional partners have identified three potentially cost-effective regulations for local agencies to adopt: •Time of replacement requirements for water heaters and air conditioners that would require either energy efficiency measures or installation of heat pumps when these two types of equipment are replaced. •Time of remodel requirements that would require a combination of electric readiness, energy efficiency, or electrification when water or space heating equipment is replaced as part of a remodel. •Requiring new construction to meet higher source energy requirements than is required by the statewide energy code, which is the approach the City used when it adopted a replacement for its all-electric Reach Code in June 2024. Staff plans to propose local amendments effective January 1, 2026, requiring higher source energy standards for new construction and substantial remodels, as the City’s local amendments currently do. Staff also plans to propose some requirements related to remodels based on the cost-effectiveness studies. Time of replacement regulations require more consideration. These requirements could be put in place starting January 1, 2026, or they could be made effective in alignment with upcoming Bay Area Air District Zero NOx regulations, or implementation of these regulations could be done in coordination with other agencies. In general, staff recommends an approach for time of replacement mandates that focuses on regional coordination to avoid making it harder to do equipment replacements in Palo Alto, which could increase the percentage of equipment replacement projects done without permits. Item 2 Item 2 Late Packet Report Item 2: Staff Report Pg. 4 Packet Pg. 19 of 25 There are two potential cost-effective time of replacement mandates: 1) requiring efficiency measures or installation of a heat pump water heater when replacing a gas water heater, and 2) efficiency measures or installation of a heat pump when replacing an air conditioner. It would be simplest for homeowners and contractors to align adoption of a water heater time of replacement standard with the 2027 effective date of Air District regulations prohibiting sale of gas water heaters in the Bay Area. Air District regulations for furnace replacements do not take effect until 2029, however. Staff would only recommend considering a time of replacement standard for air conditioning before 2029 if it can be done in conjunction with other building divisions in the area, with joint outreach to contractors. Staff will reach out to other building divisions in the area to see what they are considering on this front. Staff will also investigate the possibility of using incentives and financing to improve the cost- effectiveness calculations for other equipment replacements, possibly enabling time of replacement standards to be adopted for other technologies. This would require finding scalable incentive and financing strategies that could cover all anticipated annual replacements. FISCAL/RESOURCE IMPACT Development and implementation of local amendments to the 2026-2028 State Energy and Green Building Standards Codes is being absorbed within existing budgets for Planning and Development Services and Utilities. Resource needs include about 0.5 FTE in staff time and $248,000 in professional services costs spread across FY 2025 and FY 2026. STAKEHOLDER ENGAGEMENT Staff is developing a final staff proposal for local Green Building Standards Code amendments and single-family local Energy Code amendments. The proposal is tentatively planned to be completed by the end of June 2025. After that, the City will do outreach over the summer to contractors, architects, advocates, and the general public. Staff is currently developing an outreach plan it will share with the Committee when finalized. Adoption of local amendments to the Green Building Codes for all buildings and to the Energy Code for single-family homes would likely take place in October 2025, with outreach to raise awareness of the new codes taking place at the end of 2025 prior to the January 1 effective date, continuing into early 2026 after the codes take effect. In early 2026, as staff develops its proposal for local amendments to the multi-family and non- residential Energy Codes, a similar outreach schedule would be developed based around a July 1, 2026 effective date for these code amendments. ENVIRONMENTAL REVIEW The Committee’s discussion of this approach to developing proposals for local amendments to the State’s Energy and Green Building Codes is not a project as defined by CEQA because it does Item 2 Item 2 Late Packet Report Item 2: Staff Report Pg. 5 Packet Pg. 20 of 25 not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. CEQA Guidelines section 15378. ATTACHMENTS Attachment A: Green Building Code applicability and existing local amendments APPROVED BY: Brad Eggleston, Director Public Works/City Engineer Item 2 Item 2 Late Packet Report Item 2: Staff Report Pg. 6 Packet Pg. 21 of 25 7 7 8 9 Green Building Code Applicability Requirements and Existing Local Amendments Single Family CalGreen Code Applicability Scope of Work Current requirements ADU conversions, alterations, additions CalGreen Mandatory Alterations / Additions that Increase conditioned area and do not trigger Tier 1 requirements CalGreen Mandatory Additions / Alterations1 >1000 sf CalGreen Mandatory + Tier 1 New construction or substantial remodel CalGreen Mandatory + Tier 2 Multi-Family CalGreen Code Applicability Scope of Work Current requirements Alterations / Additions that Increase conditioned area and do not trigger Tier 1 requirements CalGreen Mandatory Additions / Alterations1 >1000 sf CalGreen Mandatory + Tier 1 New construction or substantial remodel CalGreen Mandatory + Tier 2 Non-Residential CalGreen Code Applicability Scope of Work Current requirements Tenant Improvements (Tis), Renovations, Alterations w/ $200,000 permit valuation and do not trigger Tier 1 or Tier 2 requirements CalGreen Mandatory TIs, Renovations, Alterations > 5,000 SF w/ replacement of two systems: HVAC system, building envelope, hot water system, lighting system CalGreen Mandatory + Tier 1 Additions > 1,000 SF CalGreen Mandatory + Tier 2 New construction CalGreen Mandatory + Tier 2 1 Alterations include raising the plate height, historic restoration, changes or rearrangements of the structural parts or elements, and changes or rearrangement of bearing walls and full height partitions. Normal maintenance, reroofing, painting or wall papering, floor finishes, replacement-in-kind of mechanical, plumbing and electrical systems, or replacing or adding new kitchen counter and similar furniture, plumbing fixture to the building are excluded for the purposes of establishing scope of Tier 1 projects (PAMC 16.14.080). Attachment A Item 2 Attachment A - Green Building Code applicability and existing local amendments Item 2: Staff Report Pg. 7 Packet Pg. 22 of 25 7 7 8 9 Existing Local Amendments to the Green Building Code Applies To: Single Family Multi Family Non Res Third-party Green Building Special Inspector required for all projects (PAMC 16.14.080)X X X Low-carbon concrete requirements for Tier 1 and Tier 2 projects (PAMC 16.14.080, PAMC 16.14.240)X X X Deconstruction and construction materials management (PAMC 16.14.150, PAMC 5.24)X X X Cement and concrete made with recycled products (PAMC 16.14.420)X Enhanced construction waste reduction of 80% X X X Local storm water pollution prevention for new construction and additions (PAMC 16.14.290)X Invasive species prohibited (PAMC 16.14.330)X Indoor Air Quality Management Plan (PAMC 16.14.390)X X Recycled water infrastructure for irrigation X X Cooling tower water use X X Swimming pool and spa covers – vapor retardant cover required (PAMC 16.14.100)X X Non-residential enhanced water budget (PAMC 16.14.340)X Energy STAR portfolio manager profile for energy and water use, energy and water performance reviews (PAMC 16.14.360, 370, 380)X Full electrification of outdoor grills, stoves, and barbeques (PAMC 16.14.090)X X X Electric readiness requirements (PAMC 16.14.190/410, PAMC 16.17)X X X Enhanced EV Charging requirements (PAMC 16.14.160, PAMC 16.14.400)X X X Item 2 Attachment A - Green Building Code applicability and existing local amendments Item 2: Staff Report Pg. 8 Packet Pg. 23 of 25 7 7 8 9 Summary of Enhanced EV Charging Requirements in the Green Building Code For clarity, the table below summarizes the EV charging requirements in the Green Building Code at a high level and are accurate for most projects. For precise requirements see PAMC 16.14.160 and 16.14.400. Single Family Multi-family Hotels/Motels Nonresidential New Construction of Any Size (including substantial remodel for residential) Install 1 EV Ready Space OR Install 1 Level 2 EV Charger Exception: Accessory Dwelling Unit (ADU) Resident Parking: For each residential unit, install one Level 2 EV Charger OR Install one Level 2 EV Ready Space for each residential unit AND Guest Parking: 25% EV Capable, EV Ready, EV Chargers AND 10% EV Chargers Installed 40% EV Ready AND 10% Level 2 EV Chargers Installed 10 to 20 parking spaces: 20% EV Capable or EV Ready Space AND 20% Level 2 EV Chargers Installed OR Over 20 parking spaces: 15% EV Capable or EV Ready Space AND 15% EV Chargers Installed Item 2 Attachment A - Green Building Code applicability and existing local amendments Item 2: Staff Report Pg. 9 Packet Pg. 24 of 25 Climate Action and Sustainability Committee Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Public Works Meeting Date: May 2, 2025 Report #:2503-4453 TITLE Single-Family Electrification Program Update; CEQA Status - Not a Project RECOMMENDATION This is an informational item and no Committee action is requested. Staff is providing a presentation on the status of the City’s single-family electrification programs and is prepared to answer any Committee questions. APPROVED BY: Brad Eggleston, Director Public Works/City Engineer Item 3 Item 3 Late Packet Report Item 3: Staff Report Pg. 1 Packet Pg. 25 of 25