Offer rebates for electrification

Background

For those who are renting, the landlord is responsible for choosing and owns the heating equipment. If, as is common, the tenant is responsible for paying utility bills, the landlord has no incentive for providing efficient up-to-date equipment. More efficient equipment typically costs more upfront, with savings recouped over time from lower utility costs. The landlord has an incentive to buy the cheapest possible heating equipment, even though this will cause higher costs for the tenant. This often results in tenants paying a high proportion of their earnings to utilities than those that own their residence.

For homeowners, particularly those on a fixed income, it may not be possible for them to pay the higher upfront cost of more efficient heating equipment. This is particularly likely when there is little to no warning that they will need to make a replacement; for example, on the first cold day in winter when the furnace won't turn on.

Seattle needs to identify a progressive revenue source for incentives to help bridge the cost between a gas furnace and an electric heat pump so that when a gas system needs to be replaced it will be with a heat pump.

Unfortunately, the state constitution (Article 8, Section 10) has a limitation on what a publicly owned utility can do to help people make the switch from gas to electricity using rate payer dollars. This means that Seattle City Light cannot offer incentives for people to switch to electric as part of their conservation programs, although Puget Sound Energy can offer incentives on new high efficiency gas furnaces. Recently PSE was paying incentives to get new buildings to choose gas over electricity for heating.

In 2019 the State enacted a new law, HB 1512, which clarifies the law so that public utilities may develop plans around electrification of transport that include subsidies, if the utilities can establish that the new smart load will provide a net benefit to their system. We need a similar law for electrification of buildings. In 2021 and 2022, this came up in bills before the Legislature that were sponsored by Senator Ramel and had the support of the governor, but did not pass due to opposition from gas companies.

Current Policies

Seattle approved a $200,000 pilot program as part of the 2021 budget to help low-income people electrify their homes. It will be managed as part of the Weatherization program in the Dept. of Housing. The current plan is that when the JumpStart funding is available after next year, about $20 million per year will go to this program. The governor has proposed a large increase in funding for low-income weatherization programs. We need to support this and push for it to include electrification of heating as well.