On May 12, 2022 the New York State Assembly had a legislative hearing for Assembly Bill A8431, the “all-electric building act”. The recording for the hearing offers a glimpse into New York’s irrational net-zero transition legislation. This post describes the legislation and the testimony presented by Climate Action Council Co-Chair Doreen Harris and her response to questions about costs of this control strategy.
Everyone wants to do right by the environment to the extent that they can afford to and not be unduly burdened by the effects of environmental policies. I have written extensively on implementation of New York’s response to that risk because I believe the ambitions for a zero-emissions economy embodied in the Climate Act outstrip available renewable technology such that it will adversely affect reliability, impact affordability, risk safety, affect lifestyles, and will have worse impacts on the environment than the purported effects of climate change in New York. New York’s Greenhouse Gas (GHG) emissions are less than one half one percent of global emissions and since 1990 global GHG emissions have increased by more than one half a percent per year. Moreover, the reductions cannot measurably affect global warming when implemented. The opinions expressed in this post do not reflect the position of any of my previous employers or any other company I have been associated with, these comments are mine alone.
Climate Act Background
The Climate Act establishes a “Net Zero” target (85% reduction and 15% offset of emissions) by 2050. The Climate Action Council is responsible for preparing the Scoping Plan that will “achieve the State’s bold clean energy and climate agenda”. They were assisted by Advisory Panels who developed and presented strategies to the meet the goals to the Council. Those strategies were used to develop the integration analysis prepared by the New York State Energy Research and Development Authority (NYSERDA) and its consultants that quantified the impact of the strategies. That analysis was used to develop the Draft Scoping Plan that was released for public comment on December 30, 2021. Comments on the draft can be submitted until June 10, 2022. In order to implement these strategies additional legislation is needed.
I recently described two bills. According to the Advanced Code Act: “Buildings are the single largest user of energy in the State of New York, accounting for almost 60% of all energy consumed by end-use in the State.” Revisions to building codes will be “directly impacting a building’s energy load and carbon footprint”. The Gas Ban notes that the Climate Act “requires greenhouse gas emission reductions from all sectors, which will entail, among other things, converting buildings throughout the state from heating and cooking with combustible fuels to heating and cooking with non-emitting sources such as energy-efficient air, ground, and water sourced electric heat pumps which also provide cooling, and electric and induction stoves”.
All-Electric Building Act
This legislation establishes the All-Electric Building Act. As has been the case with other legislation the bill assumes that there are no technology limitations and that all new buildings can be built without fossil fuel infrastructure.
The proposed legislation revises the state energy conservation construction code to “prohibit infrastructure, building systems, or equipment used for the combustion of fossil fuels in new construction statewide no later than December 31, 2023 if the building is less than seven stories and July 1, 2027 if the building is seven stories or more”. It allows the building code council to exempt systems for emergency back-up power, or buildings specifically designated for occupancy by a “commercial food establishment, laboratory, laundromat, hospital, or crematorium, but in doing so shall seek to minimize emissions and maximize health, safety, and fire-protection.” However, it limits the areas where the combustion of fossil fuels is allowed and the building must be designed as all-electric ready.
The legislation includes a provision for affordability. It requires state agencies to identify policies to ensure affordable housing and affordable electricity (meaning that electricity costs no more than 6% of a residential customer’s income) for all-electric buildings by February 1st, 2023. Note that I have been unable to determine the current affordability status of New York.
The May 12, 2022 legislative hearing for this bill started with testimony from Doreen Harris. She is the head of the New York State Energy Research & Development Authority (NYSERDA) and co-chair of the Climate Action Council. Her presentation starts on the video at 4:45. She explained that buildings are the largest source of greenhouse gas emissions according to the most recent inventory performed using the Climate Act’s unique emission estimation methodology. In order to eliminate those emissions, the Draft Scoping Plan found that fully electrify buildings are necessary. Unfortunately, her testimony was long on generalizations and short on specifics relative to what the Draft Scoping Plan requires to meet the net-zero goals.
She noted that in this year’s State of the State the Governor announced a commitment to support two million climate friendly homes. This includes a plan to achieve one million efficient and electrified homes and up to one million electrification ready homes by 2030. To achieve this, they plan to increase energy efficiency and deploy clean home heating and cooling technologies.
Rather than explaining what the Draft Scoping Plan projects is necessary she talked about NYSERDA programs. For example, she said there is “laser focus” on the combination of heat pumps and energy efficiency because “when installed at scale they are the number one solution for emissions reductions in the sector. Harris bragged (at 7:40) that the New York Stretch 2020 Energy Code will save homeowners $275 per year. However, that code change “improves the State Energy Code’s efficacy by roughly 10%”.
I submitted comments on the Draft Scoping Plan residential heating projections that showed that a primary driver of home heating electrification is the building shell cost. The Draft Scoping Plan states:
Two bundles of building shell improvements have been included: a basic shell upgrade and a deep shell upgrade. Basic and deep shell upgrades include a variety of measures focused on reducing energy use and increasing occupant comfort; these measures include, for example, varying levels of roof and wall insulation improvements, window treatments such as double or triple paned windows and infiltration improvements. Space heating demands are reduced by 27-44% with the basic shell package and 57-90% with the deep shell package, depending on building type.
Clearly the Stretch 2020 Energy Code is no where close to the basic or deep shell upgrades envisioned in the Draft Scoping Plan.
Most people at the hearing were worried about costs. Chair Harris lost the opportunity to explain what the Draft Scoping Plan projects as costs for the air source heat pumps, ground source heat pumps, and different building shells. She said that heat pumps paired with high performing building envelopes will work everywhere in New York. She did not explain how much that might cost. The following table lists data from the Council’s Plan. My interpretation of the Scoping Plan is that a ground source heat pump paired with a basic shell upgrade ($40,941) or an air source heat pump paired with a deep shell upgrade ($60,954) should work everywhere. The reference table gives the price of an efficient gas furnace as $3,085. That is quite a price premium for zero-emissions.
Given its importance all the assumptions used to generate the numbers should be available but there is insufficient documentation for that. The Draft Scoping Plan claims only 26% of residences need deep shell upgrades. I estimate that more than half actually will need to have deep shell upgrades using a more refined climatology. I estimate that the entire building sector component cost is $230 billion relative to the reference case in the Draft Scoping Plan. I calculated that just the residential retrofit heat electrification costs range between $259 billion and $370 billion using one methodology and between $295 billion and $370 billion based primarily on the number of residences that need deep building shell upgrades.
Chair Harris also made the claim that all-electric homes will be “more resilient and safer than buildings previously built and supported by fossil fuels as they lose heat during power outages”. I can only guess that the rationale for this argument is that the building shell improvements will be so good that the buildings will not lose as much heat when the power goes out. Eventually, however, even the best insulated and sealed home will become too cold to be livable. That is why people who are truly concerned about safety during power outages incorporate an independent backup system. For heating many use wood stoves. In my case I have used a backup electric generating system: first portable and more recently a whole house generator. A backup system that can be operated indefinitely is the truly “more resilient and safer” alternative.
The responses to questions were interesting. Assemblyman Cusik at 13:00 asked for the timeline for the State’s plan for implementing fully electric. Rather than explaining what is in the Draft Scoping Plan Chair Harris gave the pitch for Hochul’s two million climate friendly homes by 2030 proposal. Recall that this includes a plan to achieve one million efficient and electrified homes and up to one million electrification ready homes by 2030. In my opinion the sign of an “efficient and electrified” home is that it will have a heat pump installed. The following table shows that the Governor’s plan is 32% less than what the Draft Scoping Plan Integration Analysis projects is necessary.
She went on to say the plan is 200,000 decarbonized homes per year by 2030 as opposed to 20,000 now. Assuming that the sign of a decarbonized home is an installed heat pump the following table indicates that this estimate is much less than what is needed. It is not clear what the metric for today’s electrification metric is but 20,000 is not consistent with the Reference Case.
Affordability questions were asked numerous times. Cusik asked specifically whether there is a cost analysis in the plan at 14:34. The response was not direct: “Yes, certainly. Affordability is and will continue to be significant priority and a central focus of our implementation of the Climate Act.” Harris went on to say that NYSERDA programs are looking at upfront costs. Those programs found that all-electric homes are on the range of 2 to 4% higher than a building that would be constructed with gas infrastructure at this point”. She claimed costs will come down in the future but did not mention that the Draft Scoping Plan does not incorporate such a cost reduction.
In response to questions by Assemblyman Zebrowski about existing homes Harris noted that “as existing buildings turnover in ownership or replacement of installed equipment that’s when we would be addressing existing building stock”. This confirms my expectation that when a homeowner sells a home with gas-fired appliances after 2030 that the home will have to be upgraded to all-electric. Obviously that cost will be borne by the seller.
In response to Assemblyman Palmesano’s question about affordability Chair Harris claimed that the NYSERDA Building of Excellence found that a single family home built today for $350,000 added $17,000 upfront cost for heat pump and building shell (Video at 33:20).
At (40:49 in video) Assemblyman Lawler asked for a specific cost estimate to electrify a home. Chair Harris had to respond but only prattled on that she could not provide a specific price. She said that each home will be different and the building shell improvement for each house can only be determined by doing an energy audit. This is all baloney because we all understand that it is not possible to predict exactly what our individual home is going to cost to be electrified. However, the Draft Scoping Plan claims that “The cost of inaction exceeds the cost of action by more than $90 billion” so there are costs estimates available in the Integration Analysis. It would have been interesting to see the reaction if the Chair Harris had been asked what the Integration Analysis device costs were and what the expected total costs for new housing units and retrofits would be.
Based on my evaluation of the Integration Analysis spreadsheets I can answer those questions. The 2030 Climate Friendly Homes Compared to Integration Analysis Homes with Heat Pumps table earlier in this post gives an example of the device costs available in the Draft Scoping Plan documentation. The Plan’s recommended electrification approach is electric heat pumps and building shell improvements (more insulation, infiltration improvements and better windows). Based on the information in the Plan, I estimate that for a single-family residence, an air source heat pump ($14,678) will need to be coupled with deep shell improvements ($45,136) totaling $60,954 or a ground source heat pump ($34,082) coupled with basic shell improvements ($6,409) totaling $40,491 will be needed to provide adequate comfort similar to those oft-referenced homes in the Nordic countries. These numbers are much higher than those quoted from the Buildings of Excellence program but the comments I submitted document that they are from the Draft Scoping Plan so it is incumbent on NYSERDA to explain the discrepancies.
A couple of assemblymen asked about grid upgrades and got another non-responsive reply. I recently submitted comments on the costs for residential electric service upgrades, electric distribution improvements when everyone is all-electric, and an estimate of the costs for de-commissioning gas service. The following table presents those numbers which are not based on the Draft Scoping Plan. Presumably, somewhere, someplace similar numbers have been developed but I have not been able to find them. The unit cost ranges for a single-family home is another $3,850 to $9,500.
In addition to the individual homeowner costs, I made a first-order approximation estimate of total costs for residential heating upgrades to all-electric. Using the Integration Analysis device costs described earlier I estimate the additional cost to electrify home heating and upgrade the building envelopes to the basic and deep shell standards will add $28 billion to new building housing costs between 2023 and 2050. Depending on the assumptions used for air-source vs. ground source heat pumps and basic building shell vs. deep building shell I project retrofit costs between $240 and $330 billion. Throw in $30 billion for electric service upgrades, distribution network modifications and residential natural gas disconnections the total residential heating upgrades to all-electric approach at least $300 billion. This does not include costs for other electric appliances, EV chargers, and all the other things necessary for an all-electric house.
In my opinion the fact that the Co-Chair of the Climate Action Council did not provide the Draft Scoping Plan projections was an oversight. On the other hand, it could be indicative of a deeper problem. The Climate Action Council draft scoping plan is required to provide “The costs of implementing proposed emissions reduction measures, and the emissions reductions that the council anticipates achieving through these measures” in § 75-0103 (14) (b) (ii). In order to fulfill that mandate, I believe there should be a summary chapter in the Draft Scoping Plan that describes all the control measures, provides references for the assumptions used, lists the expected costs for those measures and lists the expected emission reductions for the Reference Case, the Advisory Panel scenario and the three mitigation scenarios. I don’t believe that the Integration Analysis developers have provided these numbers to anyone. If this information was available then legislators would have ready access to the information that both parties requested but did not get at the hearing. Given the extreme reticence to provide specific numbers and the shenanigans I have uncovered related to the few numbers provided, I worry that this obfuscation is deliberate. I believe that the Legislature should be demanding this information be included in the Final Scoping Plan.
I want to make one other point. I have spent a lot of time evaluating the Climate Act Draft Scoping Plan and recently noticed something that is inconsistent with the NYSERDA story that everything is wonderful about heat pumps. According to the Integration Analysis modeling, sales of heat pump for the Reference Case grows to 4% of total sales by 2025 but stays the same until 2050 in the Reference Case Space Heating-Res table. If heat pumps are as good as NYSERDA claims then shouldn’t the rate of adoption be higher in the business-as- usual case? The fact that the NYSERDA claims no increased rate of heat pump sales either means that the modeling is wrong or that these heat pumps are not expected to be purchased by homeowners who make decisions based on economics.
Co-Chair Harris testimony was more about NYSERDA than providing useful testimony for the Assembly. There were many instances of statements that basically said trust us we have this under control but provided nothing to support those claims. She should have been able to tell the Hearing attendees the device costs in the Draft Scoping Plan and the explained just what is needed for the building shells. The lack of detailed cost measure information is a major flaw in the Draft Scoping Plan.