Title
Approval of a Resolution Authorizing a Municipal Services Agreement with South Puget Sound Habitat for Humanity for Energize Thurston 2025 Subsidized Pathway Program Administration
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve a resolution authorizing a Municipal Services Agreement with South Puget Sound Habitat for Humanity for Energize Thurston 2025 subsidized pathway program administration.
Report
Issue:
Whether to approve a resolution authorizing a Municipal Services Agreement between the City of Olympia and South Puget Sound Habitat for Humanity for Energize Thurston 2025 Subsidized Pathway Program Administration.
Staff Contact:
Dominic Jones, Building Decarbonization Program Manager, City Manager’s Office, 360.753.8347
Presenter(s):
None - Consent Calendar Item
Background and Analysis:
Energize Thurston
Energize Thurston is a regional heat pump group purchase program that makes it faster, easier, and more affordable for Thurston County residents to purchase and install energy-efficient heat pumps and heat pump water heaters (HPWH). Energize Thurston will reduce upfront costs through a group purchase discount provided by competitively selected installers and the application of all available rebates as a time-of-sale discount. The campaign will offer two participant pathways:
• Low- and Moderate-Income (LMI) Pathway: will provide fully subsidized equipment installations for low-income households (<80% area median income; AMI) and partially subsidized installations for moderate-income households (≥80% but <120% AMI).
• Self-Funded Pathway: will provide a group purchase discount, free educational workshops, guidance on relevant incentives and financing, streamlined installation, and customer support available to all households in Thurston County.
Energize Thurston builds on the foundation of existing local and regional campaigns, including:
• The City of Olympia’s “Energize Olympia” campaign, which was developed and implemented in partnership with South Puget Sound Habitat for Humanity (SPSHFH). Energize Olympia provided discounted and subsidized ductless heat pumps to Olympia residents in 2023-2024, leading to 163 heat pump installations, including 96 fully subsidized installations for income-qualified households.
• “The Switch Is On” web platform, which provides education about electric home appliances and location-based tools to find incentives and vetted contractors.
Energize Thurston will expand the scope of Energize Olympia to serve residents throughout Thurston County and offer more equipment types, including ducted and ductless heat pumps and heat pump water heaters. Thurston County and the cities of Olympia, Lacey, Tumwater, and Tenino (“partner jurisdictions”) are entering into an Interlocal Agreement for regionally coordinated implementation of the campaign, and Thurston County is leading a competitive Request for Proposals (RFP) process to select the Energize Thurston 2025 Installers.
LMI Pathway Administration
South Puget Sound Habitat for Humanity was a key partner in the design and implementation of Energize Olympia and has leveraged their own grant funds to augment the program. The Energize Thurston partner jurisdictions intend to continue this established partnership with SPSHFH to administer the LMI Pathway for Energize Thurston 2025.
Serving as the LMI Pathway Administrator for the 2025 Energize Thurston Campaign, SPSHFH will:
• Support ongoing campaign coordination and installer oversight.
• Support educational workshops and program outreach.
• Conduct income verification for LMI pathway participants.
• Provide customer support for all LMI pathway participants.
• Schedule and facilitate installations for eligible LMI pathway participants.
• Review installer bids, invoices, and completion of work for subsidized installations.
LMI Pathway Funding
Each of the five partner jurisdictions has been awarded funds through the Washington State Home Electrification and Appliance Rebate (HEAR) Program to subsidize installations of eligible equipment for low- and moderate-income (LMI) households. The City of Olympia was awarded $481,483 in HEAR funding to administer rebates for heat pumps and other high-efficiency electric equipment for low- and moderate-income households. The Olympia Climate Program intends to allocate an additional $100,000 towards subsidized equipment installations for LMI households as well. In total, this is anticipated to fund approximately 25-40 subsidized heat pump heating/cooling retrofits for income-qualified households.
Climate Analysis:
The Thurston Climate Mitigation Plan (TCMP) identifies reducing energy use in existing residential buildings and converting to cleaner fuel sources as key strategies for local action to reduce greenhouse gas emissions (See TCMP Strategies B1 and B6).
Energize Thurston will enable a long-term reduction in greenhouse gas emissions, by supporting the installation of energy-efficient heat pump space heating and heat pump water heating in Olympia households.
Equity Analysis:
The Energize Thurston Program directly benefits low- and moderate-income households up to 120% AMI through fully- or partially subsidized installations of heat pump and HPWH equipment retrofits. Households at or below 80% AMI are eligible to receive full cost coverage installations of qualified heat pump and HPWH equipment, and households between 80% - 120% AMI are eligible for 80% cost coverage up to a maximum owner contribution of $2,500.
Providing energy efficiency retrofits to low- and moderate-income households directly supports energy equity by removing the barrier of high up-front costs for equipment and installation, as well as reducing long-term energy use and lowering energy bills. In addition to reducing energy burdens, heat pump and weatherization retrofits offer resilience co-benefits including access to cooling, as well as improved comfort and indoor air quality.
Neighborhood/Community Interests (if known):
TCMC staff conducted a community survey for homeowners in Thurston County between September-October 2024, to help shape the Energize Thurston Campaign. Out of 165 total respondents:
• 68.5% of respondents shared a ‘very favorable’ or ‘somewhat favorable’ view of electric powered home appliances.
• Over 75% of survey respondents, when asked which barriers would affect their decision to switch to electric appliances, indicated upfront costs were either a ‘Significant barrier’ or ‘Somewhat of a barrier’.
These results indicate a high level of interest and community support regarding electric home appliances, as well as significant demand for energy efficiency incentive programs that reduce the barrier of high upfront costs to complete retrofits.
Additionally, demand for fully subsidized installations in the 2024 Energize Olympia program exceeded program funding, and 43 participants were put on a waitlist to receive a heat pump dependent on additional program funding. The high number of low- and moderate-income households on the Energize Olympia 2024 waitlist directly indicates strong community interest in additional funding for fully subsidized heat pump installations and future energy efficiency incentive programs.
Financial Impact:
Incentives and subsidized installations for City of Olympia residents will be funded through existing general fund allocations ($100,000) as well as state and federal grant programs.
The City of Olympia has accepted an award of $481,483.00 from the HEAR Program to fund subsidized installations through Energize Thurston; 88% of the HEAR grant funding ($423,705.04) is allocated towards the provision of subsidized equipment installations for LMI households. The remaining 12% of the total HEAR award ($57,777.96) is allocated towards SPSHFH operations and staff time for subsidized pathway program administration.
Options:
1. Approve a resolution authorizing a Municipal Services Agreement between the City of Olympia and South Puget Sound Habitat for Humanity for Energize Thurston 2025 Subsidized Pathway Program Administration.
2. Approve a resolution authorizing a Municipal Services Agreement between the City of Olympia and South Puget Sound Habitat for Humanity for Energize Thurston 2025 Subsidized Pathway Program Administration with amendments.
3. Do not approve a resolution authorizing a Municipal Services Agreement between the City of Olympia and South Puget Sound Habitat for Humanity for Energize Thurston 2025 Subsidized Pathway Program Administration.
Attachments:
Resolution
Agreement