REPORT TO COUNCIL
SUBJECT
Title
Adopt a Resolution Suspending Enforcement of Sunnyvale Municipal Code Sections 16.42.030 through 16.42.080 Related to All-Electric Requirements for New and Substantially Reconstructed Buildings, and Direct Staff to Investigate Alternatives to Achieve Building Electrification
Report
BACKGROUND
In 2014, the City of Sunnyvale Climate Action Plan was adopted to provide strategies to reduce greenhouse gas (GHG) emissions. The plan was comprehensively updated and renamed the Climate Action Playbook (Playbook) in 2019 with updated goals to reduce greenhouse emissions by 56% by 2030 and 80% by 2050. The goals of the Playbook are to: (a) exceed the State of California’s target of reducing GHG emissions by 40 percent below 1990 levels by the year 2030 (per SB 32); and (b) make progress towards the State’s target of 80 percent below 1990 levels by the year 2050 (per Governor’s Executive Order S-3-05).
To support the 2019 Playbook goals of reducing GHG emissions by minimizing the use of natural gas, the Council adopted an ordinance, sometimes referred to as the Reach Codes, on December 1, 2020, to require all-electric construction for new and substantially reconstructed buildings. The provisions were revised and readopted in 2022 in Sunnyvale Municipal Code Chapter 16.42 when the City completed its periodic adoption and local amendments of the International Codes. In addition to all-electric requirements, the 2022 ordinance prohibits gas-related utility meters on properties subject to the all-electric provisions. While there are limited exceptions to the all-electric requirement for non-residential projects, there are no exceptions for new or substantially reconstructed residential projects.
A recent federal court decision has invalidated this type of all-electric requirement. In July 2019, the City of Berkeley adopted an ordinance that prohibited natural gas infrastructure in newly constructed buildings, with a limited exception if it was not physically feasible to construct without gas, and an all-electric system was not available. In November 2019, the California Restaurant Association (CRA) filed a lawsuit in the United States District Court for the Northern District of California, arguing that the Federal Energy Policy and Conservation Act (“EPCA”), a federal statute that regulates the energy efficiency of several consumer products including water heaters, furnaces, stoves, and HVAC systems, preempted the ordinance. The District Court upheld Berkeley’s ordinance because it did not directly regulate, mandate, or impact appliances. The CRA appealed the decision to the US Court of Appeals for the Ninth Circuit. In early 2024, the Court of Appeals reversed the lower court’s decision and invalidated the Berkeley ordinance, holding that EPCA preempts state and local regulations, including building codes, concerning the energy use of natural gas appliances covered by the EPCA, and that the EPCA preemption applies to regulations addressing the appliances themselves and building codes that concern the use of natural gas (California Rest. Ass'n v. City of Berkeley, 89 F.4th 1094, 1098-1103 (9th Cir. 2024)). The City of Berkeley did not appeal the decision and subsequently rescinded its gas ban ordinance.
EXISTING POLICY
GENERAL PLAN
COMMUNITY VISION
VISION STATEMENT
It is the aspiration of the people of Sunnyvale to build upon the attributes which the City currently enjoys, so that Sunnyvale of the future will become.
• A regional leader in environmental sustainability - Advocating to reduce dependence on non-renewable resources by providing greater transportation options, reducing waste, protecting our natural resources, and promoting alternative energy usage and research. We take environmental preservation and protection seriously and consider how each action will affect Sunnyvale for future generations.
GOAL: III. Environmental Sustainability - To promote environmental sustainability and remediation in the planning and development of the City, in the design and operation of public and private buildings, in the transportation system, in the use of potable water and in the recycling of waste.
LAND USE AND TRANSPORTATION
GOAL LT-2: ENVIRONMENTALLY SUSTAINABLE LAND USE AND TRANSPORTATION PLANNING AND DEVELOPMENT - Support the sustainable vision by incorporating sustainable features into land use and transportation decisions and practices.
Green Development
Policy LT-2.1 Enhance the public’s health and welfare by promoting the City’s environmental and economic health through sustainable practices for the design, construction, maintenance, operation, and deconstruction of buildings, including measures in the Climate Action Plan.
• LT-2.1a - Maintain and regularly review and update green building standards for new construction and additions to buildings, including additional incentives where feasible.
• LT-2.1b - Encourage green features such as living roofs, passive solar design, natural ventilation, and building orientation, and apply flexibility when conducting development review .
• LT-2.1c - Establish incentives that encourage green building practices, including conservation, beyond mandated requirements.
Greenhouse Gas Reduction
Policy LT-2.2 - Reduce greenhouse gas emissions that affect climate and the environment though land use and transportation planning and development.
• LT-2.2a - Actively maintain and implement the Climate Action Plan, which outlines impacts, policies, and reduction measures related to public and private land use and transportation.
AIR QUALITY
GOAL EM-11 IMPROVED AIR QUALITY - Improve Sunnyvale’s air quality and reduce the exposure of its citizens to air pollutants.
Policy EM-11.13 - Reduce automobile emissions through transportation improvements and electrification.
• EM-11.3a - Encourage a shift to electric vehicles citywide.
• EM-11.3b - Expand requirements to install electric vehicle charging stations citywide, including adjusting minimum requirements for new construction through the City’s adopted Reach Codes.
• EM-11.3c - Increase electric vehicle infrastructure requirements for existing buildings.
CLIMATE ACTION PLAYBOOK
Strategy 2: Decarbonizing Buildings
• Play 2.1 - Reduce energy consumption in existing buildings 2030 Target: 5% of existing homes and businesses receive deep energy retrofit 2050 Target: 30% of existing homes and businesses receive deep energy retrofit
• Play 2.2 - Support electrification of existing buildings 2030 Target: 20% of homes and businesses completely electrified 2050 Target: 50% of homes and businesses completely electrified
• Play 2.3 - Achieve all-electric new construction 2030 Target: 100% all-electric new buildings 2050 Target: 100% all-electric new buildings
An update to the Climate Action Playbook is tentatively scheduled for City Council consideration on June 26, 2024.
GREEN BUILDING REGULATIONS
Title 19 Zoning of the Sunnyvale Municipal Code states:
§ 19.39.010 Purpose. <https://ecode360.com/42730867> (a portion of this section)
The purpose of this chapter is to implement sustainable development with development and construction practices designed to use natural resources in a manner that does not eliminate, degrade or diminish their usefulness for future generations, to enhance the public health and welfare by promoting the environmental and economic health of the city through the design, construction, maintenance, operation and deconstruction of buildings and other site development, and to incorporate green building practices into all development projects.
Minimum standards (either the the LEED or GreenPoint Rate systems) are established for new development and certain types of alterations to existing buildings. In addition, the program offers voluntary incentives for higher levels of “green” development. All of the incentives require the provision of an all-electric building (except for single-family which includes all electric as an option).
ENVIRONMENTAL REVIEW
When the city adopted the codes containing the all-electric requirement, that action was determined to be exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA Guidelines. Because it could be seen with certainty that there is no possibility that the specified local amendments would have a significant effect on the environment. The decision to suspend enforcement of these requirements is exempt because it is necessary to comply with a legal standard established by the Ninth Circuit, and therefore is not a discretionary action subject to CEQA. (CEQA Guidelines, Sections 15268, 15357).
DISCUSSION
The provisions of Sunnyvale’s all-electric ordinance are substantially similar to the ordinance at issue in the City of Berkeley case. SMC sections 16.42.030 through 16.42.080 directly regulate the use of gas appliances covered by the EPCA in homes, kitchens, and businesses by expressly prohibiting several covered gas appliances in newly constructed and renovated single-family residences, duplexes, multi-family residences, hotels, motels, and other non-residential buildings. Therefore, under the Ninth Circuit Court of Appeals decision in the Berkeley case, these Code sections as currently drafted are preempted by the EPCA.
The attached resolution suspending enforcement of the all-electric requirements, including Sunnyvale’s ban on gas appliances and the removal of the utility-related meter will comply with the Ninth Circuit’s decision. The EV charger and infrastructure requirements and the requirement for photovoltaic systems will remain in force.
While enforcement is suspended, staff will continue to look for ways to further its goal of reducing greenhouse gases. Work will include communicating with other cities and regional groups, such as Silicon Valley Clean Energy, on approaches to reduce greenhouse gas emissions in new construction, monitoring any new state code requirements as part of the 2025 Triennial California Building Code update next year, and reviewing alternative programs developed by other agencies to reduce dependence on gas appliances in buildings. For example, some cities (San Jose, Santa Cruz, and San Luis Obispo) have adopted an energy performance approach. The energy performance approach leverages a carbon-based performance metric to regulate energy performance. Another option is an air quality code regulating the building or appliance emissions rather than the type of fuel used. Los Altos Hills and New York City have implemented air quality-based policies. Silicon Valley Clean Energy is working with member cities and other community choice aggregators to develop model codes addressing each avenue for compliance.
FISCAL IMPACT
None.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
ALTERNATIVES
1. Adopt a Resolution to Suspend Enforcement of Sunnyvale Municipal Code Sections 16.42.030 through 16.42.080 Related to All-Electric Requirements for New and Substantially Reconstructed Buildings and direct staff to investigate alternatives to achieve building electrification.
2. Retain Sunnyvale Municipal Code Sections 16.42.030 through 16.42.080 Related to All-Electric Requirements for New and Substantially Reconstructed Buildings.
3. Provide Other Council Direction.
STAFF RECOMMENDATION
Recommendation
Alternative 1: Adopt a Resolution to Suspend Enforcement of Sunnyvale Municipal Code Sections 16.42.030 through 16.42.080 Related to All-Electric Requirements for New and Substantially Reconstructed Buildings and direct staff to investigate alternatives to achieve building electrification.
JUSTIFICATION FOR RECOMMENDATION
Suspending the all-electric requirement of the reach codes minimizes the risk of legal challenge. Staff will return to Council with alternative approaches to eliminating or significantly reducing use of natural gas which will help the City achieve the goals in the Climate Action Playbook.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $250 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
A check or “Y” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use contract
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract
___ Labor or personal employment
X General policy and legislative actions
Staff
Prepared by: Suzanne Park, Chief Building Official
Reviewed by: Shaunn Mendrin, Acting Director, Community Development Department
Reviewed by: Ramana Chinnakotla, Environmental Services Director
Reviewed by: Connie Verceles, Deputy City Manager
Approved by: Kent Steffens, City Manager
ATTACHMENTS
1. Resolution Suspending Enforcement of the All-Electric Requirements in SMC Sections 16.42.030 through 16.42.080