Bellingham climate action proposal could cost homeowners big

Bellingham climate action proposal could cost homeowners big
The city of Bellingham’s Climate Action Plan Task Force is recommending a 100 percent conversion from natural gas to electricity that could cost home sellers or buyers $30,000-$50,000. Photo: freepik.com

The state legislature this year passed a law requiring that Washington utility providers convert to 100 percent carbon-neutral energy by 2035. Now, the city of Bellingham could adopt potential recommendations from its Climate Action Plan Task Force (CAPTF) prohibiting the use of natural gas in all new building construction and mandating that existing homes that use natural gas be converted to electrical heating.

In a city already undergoing a housing crisis, the measures have raised alarm among local realtors, general contractors and building industry groups that warn homeowners could end up paying $30,000-$50,000. Major utility providers have also cautioned that the move could add further stress to an energy system already experiencing growing demand as plans are made for the shift away from coal.

The task force is the product of a 2018 resolution approved by the Bellingham City Council declaring its intent to make the city’s electrical supply 100 renewable by 2030 and the community heating and transportation 100 percent clean by 2035.

According to the CAPTF’s Oct. 16 meeting, the proposed recommendations to help achieve those goals include:

  • Requiring that all new construction use electric;
  • Requiring that existing buildings electrify water and space heating when the appliances need to be replaced; according to a presentation by the Buildings Work Group, the measure may also include a requirement that conversion occur within two years of a property sale; and
  • Requiring that all buildings generate some type of clean energy such as installing rooftop solar panels, or that the owners enroll in a renewable energy credit program.

However, numerous Puget Sound Energy members have urged caution due to the existing state utilities mandate, including a ban on coal-generated energy by 2025. At the task force’s July 17 meeting, Dan Aas with consulting firm E3 noted that the region will need the equivalent of three or four large power plants to meet demand by 2030. He added that not only is natural gas extremely reliable when compared to other energy sources, but also there is no replacement currently available that matches that level of reliability.

Even if there was, the proposed mandate to swap out natural gas with electricity could cost existing homeowners $30,000-$55,000, according to an analysis by the Building Industry Association of Whatcom County.

In an email, Building Industry Association of Washington (BIAW) Government Affairs Director Jan Himebaugh wrote that “we have great concerns about any state or local ordinances limiting or banning the use of any specific energy source, especially natural gas, as that is a product of consumer choice for fireplaces and stoves, let alone water heaters and other consumer-driven demands or requests.”

If the upgrade mandate applies within two years of a house sale, that could cause significant disruption to people’s ability to qualify for a lower-interest house loan, according to Whatcom County Association of Realtors executive of Government Affairs Director Perry Eskridge. While some task force members have suggested homebuyers can simply add the conversion costs to their mortgage, Eskridge said it’s not that simple.

“The level of misunderstanding about housing and financing is absolutely stunning,” he said. “You have to qualify for a mortgage. Lenders who have been watching this too know somebody’s going to have to spend this money within two years of purchasing a home. If they default on that (loan), then we (lenders) will end up with a piece of collateral that can’t be sold until it has these upgrades. We’re going to factor that into the lending decision that we make.”

For prospective homebuyers, that means proving that you can not only pay the mortgage but also the costs of conversion within the two-year timeframe, he added. “And that’s all before you close the purchase.”

Another outcome is that the mandate affects the house sale price, he said. “We’re not talking about a $10,000 roof (replacement). We’re talking about $60,000 that’s going to have to be negotiated.”

Associated General Contractors of Washington Northern District Manager Lance Calloway told Lens that one of his organization’s main objections is the task force has yet to complete a study of the economic impacts described in the task force’s directives. “What does this (measures) do to the appearance of our economy to outside people? We want to make sure that there are no ordinances done and resolutions done without a feasibility analysis. Within some of the measures, we’re just talking homes. If you’re talking about commercial buildings or big apartment complexes, you have the same situations but only magnified.”

Eskridge said: “Our commercial brokers are freaking out just as much.”

The task force will approve its final report on Nov. 20 and present it to the City Council in December.

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