Title of this report is Evaluation of the Cost Effectiveness of Residential Gas-to-Electric Fuel Switching Option for Appliances and Vehicles . This was an informational report to council for meeting date 2/10/2014. This report was one of the earliest  reports on the electrification concept. Right at the beginning in the Executive Summary, it states "The analysis concludes that it is not cost -effective to switch from natural gas appliances to electric appliances." Some key conclusions:

  • * The least cost option for water heaters is a standard efficiency gas water heater over the 13-year life of the appliance. High efficiency electric water heaters cost over twice as much over that period.
  • * For space heating, standard or high efficiency gas space heaters cost about the same over the 20-year life of the appliance, but a high efficiency air source electric heat pump costs almost twice as much over the appliance lifetime.
  • * An electric induction stove/oven is over twice as expensive as a gas stove/oven over the 20-year life of the appliance.
  • * An electric clothes dryer is over almost three times as expensive as a gas dryer over the 15-year life of the appliance.

Take the time and check out this report for your own conclusions.

Cost effectiveness was addressed in this informational report titled Staff Evaluation of the Cost-Effectiveness of Switching from Fossil Fuels to Electricity for Residential Home Appliances and Passenger Vehicles . This information report was presented to city council on August 17,2015. The executive summary in part states, "One way to reduce GHG emissions further is to replace natural gas appliances (water heaters, space heaters, clothes dryers, and stoves) with electric appliances" Further is cost effective for residents in single family homes to switch from natural gas to electric heat pump technologies for water heating. Space heating is close to being cost-effective." The report states that "Months net cost electrification to household water heating will save $4.00. However there is a big problem. No where in the report does it define and describe where and how these numbers came about. The key unanswered question, how were the calculations made. This is very important in order to judge the usefulness of the cost figures. My conclusion is that city staff does not know how heat pump technology works.

On January 25, 2016 city council held a study session with title Study Session Regarding Ongoing Preparation of a Sustainability/Climate Action Plan (S/CAP) to Update and Replace the City's 2007 Climate Protection Plan . This report or study session went into many more items besides electrification. A key item: "Electricity: Support a systematic shift from natural gas to all-electric systems powered by carbon neutral electricity, wherever technically and legally feasible and cost- effective. Given the consumer costs and stranded costs to the Utility, this may require various transition strategies over time."
Key Actions: Natural Gas [broken out from energy for clarity]

  • * Encourage all-electric in new construction Because new construction of advanced alternatives is generally more economic than retrofits, this strategy is one of the most cost-effective evaluated.
  • * Make PA GreenGas “opt out.” Shift PAGG from an opt-in program to an opt-out, which would bring Palo Alto to 40% GHG reductions—California’s 2030 target—now!).
  • * Reduce energy use through efficiency measures and equipment replacement Continue to support and, where feasible, consistent with legal and regulatory requirements, and cost-effective, accelerate aggressive energy efficiency and accelerated retrofit cycles through building codes and CPAU incentives. Develop programs that take advantage of natural equipment life cycles by encouraging CPAU customers, through focused marketing and/or predictive analytics, to upgrade at time of replacement to most efficient technology, determined on a total cost of ownership basis.
  • * Pursue and apply electrification feasibility analysis. Encourage “fuel switching” where cost effective from GHG-emitting natural gas to carbon neutral electricity. Initial analysis of the cost-effectiveness of fuel switching strategies identified residential water heating (replacing hot water heaters with heat pump water heaters (HPWH) and some EVs as “cost-effective” within current parameters. CPAU plans to begin a pilot program testing HPWH replacement strategies and customer response in early 2016.34 Other electrification opportunities, including residential space heating electrification, commercial water heating and space heating electrification, and commercial cooking electrification, are less cost effective at this time when assessed as individual measures, but may be more cost-effective when offered as bundled services.


City council held a study session on April 18, 2016 for the review of the report titled Review Annual Earth Day Report and Provide Direction to Staff Regarding Sustainability and Climate Action Plan (S/CAP), Including Feedback Regarding 80 Percent by 2030 Greenhouse Gas Reduction Target, Guiding Principles and Decision Criteria, Implementation Priorities, and Next Steps. This was a big report with lots of details and some 250 pages in length. This report added businesses besides residential homes in the electrification process. The report also includes details on building code changes that would require residents and businesses to change out their natural gas appliances for electrical appliances. For instance:
Develop energy reach code to exceed state minimum for energy efficiency in all new buildings, and all existing buildings doing work that requires a building permit.

  • * Develop energy reach code every 3 years in coordination with building code update; focus efficiency first
    with carbon as component of policy.
  • * Provide alternate building code pathways for all‐electric homes
  • * Evaluate feasibility of Heat Pump technology in buildings from an electrical as well as cost efficiency
  • * Partner with other jurisdictions and NRDC to align energy efficiency and carbon reduction goals in
    California Energy Commission (CEC) regulations and state policy.
  • * Increase education and outreach to promote the policy, and to improve ease of implementation and
    predictability for project applicants.

Explore new or expanded programs and policies for energy efficiency in existing buildings

  • * Assess opportunities for residential energy use disclosure requirements
  • * Explore potential incentives or requirements for energy audits to be completed every 5 years for existing
  • * Consider time‐of‐sale requirements for energy upgrades (e.g., Residential/Commercial Energy
    Conservation Ordinance)
  • * Continue to expand energy efficiency incentive and technical assistance programs through Palo Alto
    Utilities to exceed current goals


Palo Alto Yearly Electricity Sources


Figure 1 - Electricity Sources by Year (Source: Above report, Appendix A)

 Notice that last year , 2015, 50% of all electricity used by Palo Alto was so-called Brown Power. Brown Power is electricity generated from polluting sources, e.g., natural gas power plants or diesel powered generators. Palo Alto is not totally carbon-free. If residents and businesses convert to major electric appliances, brown power needs will go up, thus making Palo Alto less carbon free. Since Palo Alto has no power plants located in the city, Palo Alto is really shipping it's GHG to other cities. Other cities may say, that is not fair.

There is a very good source for energy information. Everything you would to know about California's power plants, electricity, natural gas, petroleum, renewables, etc. This is a good place to start for your researching. It is the California Energy Almanac, check it out.