Milpitas is the latest Silicon Valley city to ban natural gas in all new buildings, disregarding attempts from a local energy company to score an exemption.
The Milpitas City Council approved two policies Tuesday to combat climate change and reduce greenhouse gas emissions. Councilmembers unanimously approved a policy requiring more electric vehicle charging stations around the city, but were split 3-2 on a plan to impose an all-electric mandate on new construction for homes and commercial spaces. Mayor Carmen Montano and Vice Mayor Evelyn Chua voted against dropping a requirement for future renovations of existing buildings to retrofit from natural gas to electric.
Only renovation projects that replace or add to more than 50% of the building fall under the proposed policy, city officials said. But Councilmember Anthony Phan said he worries about the affect it might have on housing costs—especially for multi-family homes.
“The extra cost is going to come from somewhere,” Phan said. “It’s going to be passed on to the tenants.”
Some elected officials also had concerns about potential impacts the natural gas ban will have on the regional power grid and cost of construction. PG&E officials said the new requirement won’t affect the grid. According to the city’s analysis, building an all-electric home costs roughly $6,000 less than constructing a mixed-fuel home, with most of the savings stemming from not having to install gas infrastructure.
The climate-focused policies passed as San Jose-based Bloom Energy tried to angle for an exemption. Bloom Energy launched a similar campaign to protect the use of its technology in 2020 when San Jose was considering a similar policy. Under the leadership of a previous vice president, Carl Guardino, an ally to former San Jose Mayor Sam Liccardo, the company successfully wrote an exemption benefitting its technology.
According to a letter sent to Milpitas last December, company representatives asked the city to continue allowing gas pipelines around new buildings—effectively enabling the use of the company’s fuel cell microgrids. The policy would create “a de-facto monopoly for backup diesel generators,” the company said.
Don Campbell, a vice president of Bloom Energy, told San José Spotlight the company’s technology could address both immediate needs and future climate goals.
“Our microgrids help our customers with critical energy resilience and we are active in advancing renewable fuel solutions,” he said before the meeting. “We support well-crafted building electrification initiatives that avoid unintended consequences like increased diesel generator use and lower reliability for California communities.”
In a response to Bloom Energy’s letter, Milpitas Building Official Bill Tott said the company’s proposal runs counter to the state’s direction to reduce gas infrastructure usage. Tott also said Bloom Energy’s fuel cells are impractical and expensive, and the city could use solar energy-supplied batteries as an alternative to diesel generators.
The company’s fuel cells, which require gas lines to operate, run nonstop. According to the Natural Resources Defense Council, they produce approximately quadruple the amount of greenhouse gas emissions as those produced by the renewable electricity from PG&E and the occasional use of a diesel backup generator during power outages.
“The amendment requested by Bloom Energy would have had much more dire consequences than the (change) that was made,” Linda Hutchins-Knowles, a volunteer with Mothers Out Front Silicon Valley and a senior manager at Acterra, told San José Spotlight. Mothers Out Front and Acterra, both environmental justice groups, opposed an exemption for the company.
More than a dozen residents and environmental advocates urged the council to approve the policies without any exemptions.
“Milpitas is a forward-looking city,” resident Lilian Koenig said. “All these individuals are calling in (and) asking you to look at climate change. Milpitas should look at how to save your environment for the future generations.”
