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TO: Members, Senate Transportation and Housing Committee SUBJECT: AB 2112 (Saldaña) Residential Zero Net Energy Building Mandate -- OPPOSE I OPPOSE AB 2112 (Saldaña) as bill mandates that beginning in 2020 all new residential buildings generate at least 50% of their power from on-site sources. While I support cost-effective increases in energy efficiency and conservation goals, this bill is not an effective way to accomplish either, and it would have significant and devastating consequences on California’s already struggling housing sector, reduce or eliminate new affordable housing projects, and push patterns of development further into the rural edge of suburbs. California has long been a leader in the effort to reduce energy consumption. New commercial buildings are already 50% more efficient in California than the national average. And starting in June 2009 our state residential standards get tighter making new homes 50% more energy efficient than those built to national standards. In order to meet the mandate set forth in this bill, every new home in California – single-family and multi-family dwellings -- will have to generate most of their power on-site. On-site power generation is very expensive and has technological and physical application issues that may not allow it to produce the quantity of electricity needed in certain types of housing. In the multi-tenant residential setting there is very little a building owner can do to reduce tenant power usage. It is estimated that the “plug-load” of such a building can reach as high as 40%. This bill provides no incentives or tools to reduce the energy usage of people in the buildings. We are also very concerned about the impact this measure will have on housing affordability, especially during this time of a down market. Mandating that a home generate 50% of its own power will drastically increase the cost of a new home and will hit those that can least afford to purchase a home the hardest. The Sacramento Municipal Utility District estimates that a zero net energy mandate on a home will cost at least $20 per square foot. This mandate will increase the price of a new average sized home by $50,000, reducing affordable workforce housing and pricing many Californians out of the market altogether. This impact would be amplified on multi-residential housing and on affordable housing. There are major technological impediments to implementing the on-site power generation requirements mandated by this measure. According to a recent University of California study, even a highly evolved and advanced PV system simply will not be able to provide the required amount of power needed for a large commercial or multi-tenant building, no matter how efficient the building is. From the pragmatic viewpoint, this policy would be much harder to accomplish in certain building types, uses, and climate zones, yet this bill has a “one-size fits all” mandate.