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7.A. - Page 54 of 285 2019 Energy Efficiency Ordinance Cost-effectiveness Study 1 Introduction The California Building Energy Efficiency Standards Title 24, Part 6 (Title 24) (Energy Commission, 2018b) is maintained and updated every three years by two state agencies, the California Energy Commission (Energy Commission) and the Building Standards Commission (BSC). In addition to enforcing the code, local jurisdictions have the authority to adopt local energy efficiency ordinances, or reach codes, that exceed the minimum standards defined by Title 24 (as established by Public Resources Code Section 25402.1(h)2 and Section 10-106 of the Building Energy Efficiency Standards). Local jurisdictions must demonstrate that the requirements of the proposed ordinance are cost-effective and do not result in buildings consuming more energy than is permitted by Title 24. In addition, the jurisdiction must obtain approval from the Energy Commission and file the ordinance with the BSC for the ordinance to be legally enforceable. This report documents cost-effective combinations of measures that exceed the minimum state requirements, the 2019 Building Energy Efficiency Standards, effective January 1, 2020, for new single family and low-rise (one - to three-story) multifamily residential construction. The analysis includes evaluation of both mixed fuel and all - electric homes, documenting that the performance requirements can be met by either type of building design. Compliance package options and cost-effectiveness analysis in all sixteen California climate zones (CZs) are presented (see Appendix A — California Climate Zone Map for a graphical depiction of Climate Zone locations). All proposed package options include a combination of efficiency measures and on-site renewable energy. 2 Methodology and Assumptions This analysis uses two different metrics to assess cost-effectiveness. Both methodologies require estimating and quantifying the incremental costs and energy savings associated with energy efficiency measures. The main difference between the methodologies is the manner in which they value energy and thus the cost savings of reduced or avoided energy use. • Utility Bill Impacts (On -Bill): Customer -based Lifecycle Cost (LCC) approach that values energy based upon estimated site energy usage and customer on -bill savings using electricity and natural gas utility rate schedules over a 30 -year duration accounting for discount rate and energy cost inflation. • Time Dependent Valuation (TDV): Energy Commission LCC methodology, which is intended to capture the "societal value or cost" of energy use including long-term projected costs such as the cost of providing energy during peak periods of demand and other societal costs such as projected costs for carbon emissions, as well as grid transmission and distribution impacts. This metric values energy use differently depending on the fuel source (gas, electricity, and propane), time of day, and season. Electricity used (or saved) during peak periods has a much higher value than electricity used (or saved) during off-peak periods (Horii et al., 2014). This is the methodology used by the Energy Commission in evaluating cost-effectiveness for efficiency measures in Title 24, Part 6. 2.1 Building Prototypes The Energy Commission defines building prototypes which it uses to evaluate the cost-effectiveness of proposed changes to Title 24 requirements. At the time that this report was written, there are two single family prototypes and one low-rise multifamily prototype. All three are used in this analysis in development of the above -code packages. Table 1 describes the basic characteristics of each prototype. Additional details on the prototypes can be found in the Alternative Calculation Method (ACM) Approval Manual (Energy Commission, 2018a). The prototypes have equal geometry on all walls, windows and roof to be orientation neutral. © 2019-08-01 306