Strategies to retrofit existing buildings & fund electrification

Cities have additional tools and strategies that can help support electrification of existing buildings. For instance, Beneficial Electrification (BE) entails replacing fossil-fueled devices with their ultra-efficient electric counterparts. Carbon Free Palo Alto’s BE Smart program, is a proactive approach to implementing beneficial electrification that uses marketing, tariffed on-bill financing, and operational elements to jump start and accelerate adoption of the new electric devices that will be integrated into the future smart grid.

Most cities have a utility user tax (UUT) that taxes the consumption of utility services. The UUT for natural gas could potentially be increased to incentivize conversions to electric heating and appliances, and also create a funding source for low-income retrofits.

Before California’s AB32 initiated a Cap and Trade program, Palo Alto recognized the value of considering the future cost of carbon emissions that could be imposed on it by market or carbon tax or fee programs for utilities and city infrastructure. The City adopted a $20/ton assumed cost of carbon in decision making that ensured they would not dramatically under-invest in lower cost opportunities to reduce emissions when chances came up. This led to more cost-effective decision making in efficiency programs, and can be used in municipal construction design, fleet selection, and building code development. Current estimates of an appropriate market price for carbon reductions range from $50 to $100/ton or higher. 

The Campaign plans to:

  • Explore opportunities to implement a BE Smart program.
  • Explore opportunities to increase the UUT.
  • Explore the appropriate future cost of carbon to integrate into decision-making around building costs and retrofits.