Site Prioritization: Identifying Three Proposed Gas Decommissioning Pilot Locations

Introduction

This blog post provides an overview of the final step in identifying pilot sites for the Northern California portion of the California Energy Commission’s (CEC) Tactical Gas Decommissioning Project. Here, we detail our process to prioritize three pilot locations out of the 11 sites that emerged as potential candidates from the Site Selection Framework described in a previous blog post (here). The project team will subsequently develop Deployment Plans for these three locations. Funding to implement the pilots is not currently available under this CEC grant.

You can read more details about this project in our recently published Interim Report (here).

Data to Support Site Prioritization

To support site prioritization, the project team gathered data on the 11 sites that emerged as potential candidate locations from the Site Selection Framework. The following characteristics were explored for each site:

• Location: general geographic location of the site
• DAC: location in a disadvantaged community (DAC) based on CalEnviroScreen
• Building Types: types of buildings in the site including Single-Family homes (SF), Multi-Family homes (MF), and non-residential buildings (Non-Res)
• Non-residential buildings: specific types of non-residential buildings (e.g., restaurant)
• Number of gas meters: the total number of gas customers within the site, based on PG&E’s Gas Asset Analysis Tool
• Length of gas mains: total feet of gas distribution mains that would be decommissioned in a targeted electrification and gas decommissioning project, based on PG&E’s Gas Asset Analysis Tool
• Customers per mile of gas main: number of gas customers (e., meters) within the site divided by miles of gas main
• Gas main avoided costs: estimated cost of gas main and service replacement that would be avoided through a gas decommissioning project
• Electric distribution upgrade: evaluation of whether electric distribution upgrades would be needed based on hosting capacity data

Table 1 below provides information on these characteristics for each of the 11 candidate sites, identified as sites A through K. Figure 1 provides a map, showing the location of the 11 candidate sites and the three proposed pilots.

Table 1: Key characteristics of the 11 candidate sites

Figure 1: Map of 11 candidate sites, with three proposed pilot sites in yellow

Under the scope of the CEC research grant, the project team will identify three proposed pilot locations. To support prioritization among the 11 candidate sites, the project team initially considered four categories of criteria​:

1. Benefit/cost criteria: electric distribution system costs and gas system avoided costs
2. Building diversity criteria: diversity of building types (e.g., single-family homes, multi-family homes, and non-residential buildings)
3. Equity criteria: location in a disadvantaged community (DAC)
4. Community criteria: community priorities, presence of community champion(s)​

Based on preliminary findings, the project team ultimately chose to limit the final criteria for site prioritization to criteria 2-4. This rationale is unique to the research and pilot aspects of this project and is explained in further detail below.

Benefit/Cost Criteria

To support site prioritization, the project team initially considered specific benefit and cost criteria that could be evaluated at this stage in our research. The preliminary cost criteria considered for prioritization were:

1. Incremental electric distribution system costs
2. Avoided gas main and service replacement costs

The project team ultimately chose not to leverage these criteria in selecting the final three pilot locations.

While electric distribution costs are important and will need to be evaluated, public data from PG&E’s Integration Capacity Analysis (ICA) were not adequate to evaluate all 11 candidate sites for distribution system upgrade needs. In addition, these data do not provide a full picture of electric distribution costs as they do not indicate whether electric service upgrades may be needed for specific customers. The project team plans to investigate electric distribution costs in more detail as part of the development of deployment plans.

Regarding gas system avoided costs, the project team determined that prioritizing avoided gas system costs may conflict with our goal to include disadvantaged communities in our study. Urban disadvantaged communities will have a relatively high density of customers (customers per mile of gas main). Avoided pipeline replacement savings will scale by the length of gas main associated with the project site. At the same time, a higher-density site would have a greater number of customers who will need electric equipment and other electric upgrades, increasing project costs. Thus, while two gas decommissioning projects with the same length of gas mains may have the same gas pipeline savings, the costs of implementing a gas decommissioning project would be higher in the denser site (i.e., with more customers to electrify). The project team notes that DACs can also be rural, but those types of communities were not present in the geographic footprint for this study (the East Bay region of the San Francisco Bay Area).

Figure 2 below describes the primary financial cost and benefit of gas decommissioning for two illustrative pilot sites, one with two customers and one with four customers, but both with the same length of gas mains to be decommissioned. While both sites have the same total financial benefit (avoided gas main replacement), the less dense site would have only half of the costs (customer electrification costs).

Figure 2: Illustrative costs and benefits for gas system decommissioning in two sites

The project team is not specifically recommending that future endeavors to deploy gas decommissioning omit gas system avoided costs in project prioritization. It should be noted that no formal methodology for evaluating the cost-effectiveness of gas system decommissioning and targeted electrification projects currently exists, although the project team is in the process of developing a proposed cost-effectiveness framework.

Cost-effectiveness metrics may be at odds with the goal of prioritizing equity and investment in disadvantaged communities. Policymakers and regulators generally consider other factors in addition to cost-effectiveness and may determine that equity considerations support prioritization of urban DAC communities, even if high customer density leads to relatively worse cost-effectiveness compared to suburban or rural communities. Regulators may need to develop a cost-effectiveness framework for gas decommissioning and will need to consider how to balance cost-effectiveness findings against equity considerations.

The project team is working to develop a proposed cost-effectiveness framework that will be published in future project materials. Additional benefits and costs will be explored as the relevant data becomes available. These additional benefit and cost components may include:

• Behind-the-meter (BTM) electrification costs (device costs, labor).
• Electric panel and service costs
• Incremental electric system costs (non-distribution)
• Costs associated with gas system decommissioning
• Gas commodity savings
• Other gas revenue requirement savings associated with avoiding capital investments (net salvage accruals, taxes, O&M costs)
• GHG impacts
• Air quality impacts
• Customer comfort impacts associated with the electrification project (g., gaining space cooling service)

Selecting the Final 3 Proposed Pilot Locations

For site prioritization, the project team has focused on criteria 2-4: building diversity criteria, equity criteria, and community criteria.

Building Diversity Criteria: To support prioritization, the project team first grouped sites into three categories that reflect diverse building stock, location, and building density. The project team then proposed to advance one site from each of the three groups.

• Group 1 (Sites A-D) are located in urban DAC neighborhoods in West Oakland and East Oakland.
• Group 2 (Sites D-G) are mixed-use sites, including non-residential buildings that may be difficult to electrify. Note that site D appears in two groups due to overlapping criteria.
• Group 3 (Sites I-K) are suburban single-family neighborhoods in San Leandro and Hayward. Note that site I is also in a DAC.

Equity Criteria: In choosing among the candidate sites in each group, the project team prioritized sites located in DACs. This was also a goal of this CEC project (identifying at least one project in a disadvantaged community).

Community Criteria: The project team solicited feedback from city staff involved in building electrification and other sustainability efforts, conducted compensated interviews with two Community-Based Organizations (CBOs) based in the East Bay but not in these specific communities, and had preliminary conversations with a large customer located in one of the candidate sites.

Final proposed sites: Based on all three criteria, the project team selected the following final three pilot locations for the development of deployment plans. Figure 1 indicates the approximate locations of these sites.

• Site C: East Oakland: Urban Single Family; DAC
• Site F: Oakland – Allendale: Mixed building types (single-family, multi-family, and non-residential)
• Site I: San Leandro: Suburban Single Family; DAC

Next Steps

Over the next two months, the project team is working to prepare three documents for the Energy Commission. All three of these will be incorporated into the final report for this project. The documents are:

1. Outreach Strategies Report. This document will describe our community engagement activities throughout the project and summarize our findings.
2. Site Selection Report / Benefit-Cost Analysis Report. This document will present the project team’s proposed benefit-cost analysis framework for gas decommissioning projects. The benefit-cost analysis will also be analyzed for the 11 candidate sites.
3. Site Deployment Plans. This document will present a plan for implementing targeted electrification and gas decommissioning projects at the three proposed pilot sites.