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On Tuesday, July 30, 2019, the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) held a second joint Workshop on Building Decarbonization. According to the CPUC and CEC, the objective of this workshop was to share an overview of the staff proposal for the SB 1477 pilot programs, Building Initiative for Low-Emission Development (BUILD) and Technology and Equipment for Clean Heating (TECH). However, the long-term game plan endorsed by legislative leaders and the Administration is to reduce greenhouse gases by eliminating the use of natural gas to heat residential and commercial structures. A new subdivision without natural gas will present a challenging situation for the swimming pool and spa business in California given Californian’s demand for hot tubs, spas, heated pools, and the various gas-operated elements of outdoor kitchens and entertainment spaces. 

The State of California has committed $50 million annually, from FY19/20 to FY22/23, to be put into this program from Cap-and-Trade revenue on gas corporations. Of that $50 million, the proposed budget will allocate 40% to BUILD for new residential construction and 60% to TECH for new clean heating technologies in existing residential buildings. 

The list of clean heating technologies which were mentioned included electric space and water heat pumps, solar hot water with electric backup, heat pump dryers, and induction cooktops. It was noted they would be willing to review other technologies to fit into the program. As for the metrics on which administrators are judging these projects, there are two key focuses — greenhouse gas emissions reductions and savings on utility bills. Presenters noted the goal is to improve energy and housing affordability and will not provide funding to projects that result in higher utility bills. The target is to require all-electric in new construction and incentivize high-efficiency electric in all retrofits. 

Recent studies have indicated 40% of greenhouse gases emanate from the way we heat California residential and commercial buildings with 85% of natural gas emissions coming from space and water heating; 4% of residential natural gas is consumed by swimming pools, spas, and hot tubs. 

In just the last few weeks, the Cities of Oakland, Berkley, and San Jose have endorsed the effort to eliminate the use of natural gas in California by 2040. The Mayor of San Jose has indicated he will incentivize residential builders to construct housing tracts with no natural gas lines or hookups. 

The California Pool & Spa Association (CPSA) filed written comments following the first joint hearing held in April of this year and is again filing comments this week outlining the adverse effects of this policy on what is a $5 billion industry in this state and the largest swimming pool, hot tub and spa market in the world. 

John Norwood, Chief Lobbyist for CPSA, noted a big backyard complete with a pool and outside entertainment area is still the California Dream, as demonstrated by the record number of swimming pools and spas having been permitted in the state over the last five years. California families want a safe place for their families to relax and entertain. Swimming pools and spas have no real option other than natural gas to provide water heating. “Solar works during the day in many, but not all communities,” said Norwood, “but solar is not sufficient in the evening or coastal areas of the state and electric heating is too expensive. In addition, Californian’s desire for outdoor kitchens or entertainment spaces complete with gas BBQs, cooktops, pizza ovens, fireplaces, fire pits, and space heating. Newly built communities without natural gas hookups will deprive citizens of these highly desired facilities. Moreover, for over 1.2 million residential and commercial swimming pools and spas in the state, there is really no other cost-effective option for heating the water when the pools and spas are used.”

We will keep you updated as more information is available. 

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