Title
Commercial Building Electrification Reach Code Recommendation
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Discuss the proposed Commercial Electrification-Preferred Reach Code and move to forward the recommendations to City Council for approval of an ordinance adopting the recommendations.
Report
Issue:
Whether to discuss the proposed Commercial Electrification-Preferred Reach Code and move to forward the recommendations to City Council for approval of an ordinance adopting the recommendations.
Staff Contact:
Pamela Braff, PhD, Director of Climate Programs, Office of Community Vitality, 360.753.8249
Presenter(s):
Pamela Braff, PhD, Director of Climate Programs
Erik Jensen, Olympia Building Official
Tristan Grant, New Buildings Institute
Background and Analysis:
Building Electrification
Building electrification means using electricity, rather than fossil fuels such as natural gas, for space heating, water heating, and cooking in homes and buildings. As electricity is increasingly produced by non-emitting, renewable sources, such as wind and solar, replacing fossil fuel use in buildings with efficient, all-electric buildings will substantially reduce greenhouse gas emissions from buildings.
Washington already has one of the cleanest, electric grids in the country, and the state is currently on a pathway towards a fully decarbonized electric grid by 2045.
The Thurston Climate Mitigation Plan identifies building electrification and phasing out natural gas as key strategies for local action to reduce greenhouse gas emissions (See TCMP Strategy B6. Convert to cleaner fuel sources).
Building electrification is also identified as a key strategy in Olympia’s 2021 Community Greenhouse Gas Emissions Reduction Strategy Analysis. To achieve Olympia’s 2030 and 2040 emissions reduction targets, 100% of Olympia’s buildings must be electrified between 2024 and 2039. Achieving this target would require all new construction to be all-electric beginning in 2024, and 6.25% of Olympia’s existing building stock to be electrified annually between 2024 and 2039.
Washington State Building Code
Energy use in new buildings in Washington is governed by the state energy code. The energy code is divided into two sections:
• The residential energy code (WSEC-R), which regulates single-family homes, townhomes, and low-rise multifamily buildings (three floors and shorter); and
• The commercial energy code (WSEC-C), which regulates commercial buildings and large multifamily buildings (four floors and taller).
Approximately every three years, the Washington State Building Code Council (SBCC) updates the state’s energy code to align with national standards, clarify language, incorporate the latest technologies into new buildings, and continue moving forward on state targets for efficiency and fossil fuel-free new construction. The most recent version of the energy code, the 2021 Washington State Energy Code (WSEC), became effective on March 15, 2024.
In Washington, local governments have the authority to adopt a local Commercial Energy Code that exceeds the minimum requirements established by the State. This is often referred to as a “reach” code.
Commercial Building Electrification Reach Code Concepts
In May 2022, the Land Use and Environment Committee directed staff to draft a local commercial electrification reach code, including all-electric and electric-ready provisions for commercial buildings in Olympia.
In coordination with energy code experts from the New Buildings Institute (NBI), City staff developed concepts for code changes that would assist in bridging the gap between the 2021 WSEC-C and full building electrification. The proposed code concepts were meant to build on the gains expected in the forthcoming WSEC, by fully electrifying new commercial buildings in Olympia (with flexibility for specific load types) and accelerating the electrification retrofits of existing buildings undergoing additions and alterations.
In March 2023, staff solicited feedback from design and construction professionals on the potential impacts of the proposed code concepts. Feedback was generally neutral, with most stakeholders indicating that they had no major concerns regarding the electrification of new construction. Some stakeholders shared concerns about potential cost increases, particularly for difficult-to-electrify systems and restaurants.
Based on this feedback, staff modified the proposed code concepts to include targeted exceptions for many of these areas of concern. A summary of this stakeholder feedback and the initial code concepts is provided in the attachments.
Commercial Electrification Reach Code Proposal - Version 1
In April 2023, City staff briefed the Land Use and Environment Committee on the proposed code concepts and stakeholder feedback. The Committee was supportive of the proposed code concepts and directed staff to staff to draft an ordinance to implement the proposed code concepts and bring the ordinance to City Council for consideration.
With support from NBI, City staff drafted code language to implement the proposed code concepts. See Commercial Electrification Reach Code Proposal (Version 1), provided in the attachments.
To solicit community feedback on the proposed code language, staff launched a survey on Engage Olympia in May 2023. The survey was advertised on social media, shared through the City’s Planning and Climate newsletters, and shared directly with local community groups and professional organizations. The survey received a total of 13 responses. More than half of the responses were supportive of the proposed reach code. Responses were reviewed and categorized as supportive, not supportive, or other.
• Supportive: Eight respondents indicated general support for the code changes as proposed. Three of these respondents shared specific feedback or questions about the proposed code language.
• Not Supportive: Three respondents indicated a lack of support for the code changes as proposed. None of these respondents provided feedback or questions about the proposed code language.
• Other: Two respondents were classified as other. One respondent highlighted a concern about preemptions by the federal Energy Policy and Conservation Act. The other respondent indicated that they would like to see more robust electrification standards for new and existing buildings.
A copy of the survey and respondent feedback is provided in the attachments. However, many of the specific comments on the draft code proposal are no longer relevant, due to recent changes in the Washington State Building Code, as described below.
Changes to the Washington State Building Code
In April 2023, the Washington State Building Code Council (SBCC) adopted the 2021 WSEC, with an anticipated effective date of July 1, 2023. Although the SBCC did not completely eliminate on-site fossil fuel combustion from new construction in the 2021-WSEC, it did make the path toward full building electrification an easier option for code path compliance.
The first draft of Olympia’s Commercial Electrification Reach Code (Version 1) was designed to bridge the gap between the 2021 WSEC and full building electrification for new buildings, additions, and significant alterations.
However, following a recent ruling by the Ninth Circuit Court of Appeals, which overturned a City of Berkeley ordinance prohibiting fossil fuel piping in new buildings, the SBCC decided to modify the 2021 WSEC to address any legal uncertainty and ensure compliance with federal laws, including the Energy Policy and Conservation Act (EPCA). Given the potential changes in the state energy code, City staff paused work on further developing the local reach code until after the SBCC finalized the 2021 WSEC.
In November 2023, The WA State Building Code Council (SBCC) approved modifications to the commercial and residential energy codes, which removed previous heat pump requirements that did not comply with the Ninth Circuit’s ruling. The final version was revised to leverage an electric-preferred approach that incentivizes, but does not require, building electrification.
Commercial Electrification-Preferred Reach Code Proposal - Version 2
In April 2024, City staff resumed work on the electrification reach code. In coordination with NBI, staff revised the reach code to comply with the new standards for electrification of building codes established by the Ninth Circuit Court and to align with new requirements and terminology in the final version of the 2021 WSEC. Major changes between Version 1 and Version 2 of Olympia’s proposed electrification reach code include:
• Incentivizing building electrification, rather than requiring electric space and water heating.
• Requiring buildings that use fossil fuels for space or water heating also install electrical infrastructure to enable future retrofits to electric systems.
The goal of the revised Electrification-Preferred Reach Code (Version 2) is to maintain the intent of the original proposed reach code (Version 1) to the greatest extent feasible, while complying with new standards for electrification of building codes.
Climate Analysis:
Building electrification means using electricity, rather than fossil fuels such as natural gas, for space heating, water heating, and cooking in homes and buildings. As electricity is increasingly produced by non-emitting, renewable sources, such as wind and solar, replacing fossil fuel use in buildings with efficient, all-electric buildings will substantially reduce greenhouse gas emissions.
The proposed Commercial Electrification-Ready Reach code would support a long-term reduction in greenhouse gas emissions by further incentivizing the electrification of new commercial buildings, additions, and alterations; and by requiring that buildings using fossil fuels for space or water heating also install electrical infrastructure to enable electrification in the future. This action is consistent with the Thurston Climate Mitigation Plan, Strategy B6. Convert to cleaner fuel sources.
Equity Analysis:
Using natural gas, oil, and other fuels in our buildings creates pollution that harms people and the environment. In addition to reducing greenhouse gas emissions, building electrification can significantly improve indoor air quality by removing on-site fossil fuel combustion. Electric heat pumps also increase access to cooling, which can help protect vulnerable populations during extreme heat events.
Potential code changes could have increased costs, at least in the short term, for appliances for space and water heating. These costs may be passed through by builders, property owners, and managers, to tenants or buyers. However, in the long-term, life-cycle costs for electric heating equipment may be at or below that of gas equipment. Electrifying buildings at the time of construction and/or ensuring that they are electric-ready also avoids expensive retrofits that would likely be needed to electrify those buildings in the future.
The proposed code includes targeted exceptions to limit disproportionate impacts on specific uses (e.g., commercial kitchens) that may be especially challenging to electrify due to technological or market reasons.
Neighborhood/Community Interests (if known):
Since the Acceptance of the Thurston Climate Mitigation Plan in February 2021, community members have continued to urge the City to take immediate action to address climate change. Many community members have specifically requested that the City support state and local policies to advance building electrification.
During the development of the initial code concepts (Version 1), staff met with multiple professionals from building sectors that could be directly affected by code changes to promote building electrification/decarbonization: Design Professionals, Mechanical Engineers, Developers, and Restauranteurs. Most of the concerns identified by these stakeholders have been addressed through targeted exceptions to the proposed code language, as well as an emphasis on incentivizing, rather than requiring, electrification in Version 2 of the reach code proposal.
Version 1 of the proposed Electrification Reach Code was also made available for broader public review and comment on Engage Olympia. Community feedback was generally supportive, with more than half of the survey respondents supporting the proposed reach code.
Financial Impact:
The 2021 Washington State Energy Strategy recommends building electrification as the least-cost pathway to decarbonizing Washington’s building stock. While building electrification may result in moderate upfront costs for construction and installation, electrifying buildings at the time of construction can yield significant savings, as compared to future electrification retrofits.
Review and enforcement of the Commercial Electrification Reach code would be implemented through the City’s existing building code review process. Staff expect that no additional costs would be incurred by the City to implement the proposed reach code.
Options:
1. Forward the Commercial Electrification-Preferred Reach Code to City Council with a recommendation of approval.
2. Forward the Commercial Electrification-Preferred Reach Code to City Council with a recommendation of approval, with amendments.
3. Forward the Commercial Electrification-Preferred Reach Code to City Council with a recommendation of denial.
4. Defer recommendation to a future Committee meeting.
Attachments:
Olympia Reach Code Proposal_V2
Olympia Reach Code Proposal_V1
Code Concepts Stakeholder Feedback
Code Proposal Survey Responses
GHG Reduction Strategy Analysis