Snapshot on Sustainability: California Takes Some Huge Legislative (And Executive) Strides

Photo by Luis Reynoso on Unsplash

It’s been a golden year for sustainability in the Golden State. First, LA’s City Council voted to slash greenhouse gas (GHG) emissions from the City by electrifying its buildings. Then, the Energy Commission voted to make solar panels mandatory on all new homes. And in the last few weeks, the politicos in Sacramento—never wanting to be outdone—hit us with a one-two punch: first came new laws that upped the ante on California’s renewable electricity and building efficiency goals; then came an executive order guiding the way to California’s carbon neutrality. Phew! That’s a lot to take in so here is the breakdown:

First up: the State’s energy goals! California passed SB 100 which doubles down on California’s previous mandate of 50% renewable electricity by 2030 (which, by the way, many of the state’s utilities have already met or are closing in on). Known as the 100 Percent Clean Energy Act of 2018, SB 100 sets new standards requiring the state to use 50% renewable electricity by 2026, 60% renewable electricity by 2030, and 100% carbon-free electricity by 2045.

Yes, you saw that correctly: SB 100 does differentiate between “renewable” and “carbon-free” electricity. While “renewable” generally refers to electricity from sources like solar and wind, “carbon-free” could include electricity from more traditional gas and coal power plants (provided they can install sufficient carbon-capture mechanisms). This flexibility may allow California to more easily reach its 100% carbon-free goal.

But why stop at a 100% clean electricity mandate? Why not go for—wait for it: Statewide. Carbon. Neutrality. The same day he signed SB 100, Governor Brown also signed Executive Order B-55-18, committing California to total, economy-wide carbon neutrality by 2045. Yes, this is only an executive order (which means it’s not law, and a subsequent governor or legislature can overturn it), but executive orders have often informed California’s carbon and energy policies. For example, executive orders setting carbon-reduction targets preceded both the passages of AB 32 (requiring the state to reach 1990 carbon levels by 2020) in 2006, and SB 32 (carbon levels 40% below 1990 levels by 2030) in 2016.

EO B-55-18 is meant to further the processes and goals set by AB 32 and SB 32 by bringing in all sectors of California’s economy. Two new laws directed towards the state’s building sector, AB 3232 and SB 1477, should help the state reach these goals. (Got all those bill numbers straight, right?!)

AB 3232 requires the Energy Commission to assess, by January 1, 2021, the potential for reducing GHG emissions from California’s residential and commercial buildings to 40% below 1990 levels by 2030. The assessment will include the cost-effectiveness of reducing GHG emissions from space and water heating technologies.

How exactly is an assessment supposed to help? Buildings are responsible for 25% of California’s GHG emissions and the use of fossil fuels to power space and water heaters alone account for 10% of the state’s emissions. Up until now, there has been no comprehensive strategy for how to reduce carbon emissions from the building sector—something that will be critical to California achieving its GHG reduction (and carbon neutrality) goals. AB 3232 seeks to change that by identifying key options and policies for increasing heating efficiency while reducing carbon emissions from the state’s commercial and residential buildings.

While AB 3232 will help form the game plan for how to tackle carbon emissions from the building sector, SB 1477 will help implement that game plan and bring new carbon-efficient technologies to life (and to the marketplace). SB 1477 creates two programs focused on growing the market for clean and efficient heating technologies: TECH and BUILD. $50 million from utility cap-and-trade revenue will be allocated annually to these two programs through 2023.

Through the TECH (Technology and Equipment for Clean Heating) Initiative, the Public Utilities Commission (PUC) will identify and target early-stage space and water heating technologies that will assist California in meeting its GHG reduction goals. The PUC, in coordination with the Energy Commission, will then develop guidelines and evaluation metrics, provide job training and employment opportunities, and implement outreach strategies for hard-to-reach consumers.

The BUILD (Building Initiative for Low-Emissions Development) program, patterned after the New Solar Homes Partnership (NSHP) program, incentivizes the use of low-emissions heating technologies like high-efficiency heat pumps and solar thermal systems. Backers of this law hope that BUILD will help decrease the cost of clean heating options (and dramatically increase their market share) the way the NSHP and the California Solar Initiative did for rooftop solar panels.

California has never been afraid to spearhead trends (hello, Korean tacos!), and it’s no different with its sustainability policies. With the close of this year’s legislative session, California enacted a number of new laws that have the potential to dramatically reshape this state’s (and other’s?) energy future.

About the Author

Jennifer TungJennifer Tung, Associate at Hunt Ortmann, focuses her practice on a broad array of construction-related matters, including breach of contract claims and construction defect litigation.

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