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Bend committee weighs electrification fee after consultant finds higher upfront costs for efficient electric homes
Summary
City staff and a hired consultant presented a rapid cost analysis showing efficient all-electric single-family equipment could cost roughly $12,000–$14,000 more up front than a comparable gas baseline; council signaled preference for a lower fee to raise revenue for incentives, and staff will return with further analysis and stakeholder interviews.
A Bend sustainability committee met to review federal policy changes and a consultant’s preliminary cost analysis of home electrification, and to weigh options for a proposed electrification fee the city could use to offset climate costs or fund incentives.
At the meeting staff explained the city had recently presented the consultant’s findings to council and that council expects further analysis at a Dec. 10 work session. A staff member said the city hired consultant Danielle Walker of Bridal Groups to run an expedited analysis using Regional Technical Forum and Regional Building Stock Assessment data — the same industry datasets used by utilities and Energy Trust. The staff member said the city would start stakeholder interviews with builders to “gut check” the rapid results before finalizing recommendations.
The presentation compared three equipment scenarios for a prototypical single-family house: a gas-equipment baseline (about $11,000 in equipment cost), a low-end electric baseline (under $5,000), and a fully efficient electric package (heat-pump water heater, heat-pump clothes dryer and efficient space heating) that the consultant estimated at roughly $25,000. Staff summarized that difference as a $12,000–$14,000 upfront premium for an all-efficient electric house compared with gas in the city’s scenarios.
Staff emphasized the analysis excluded some items (notably gas-service line-extension costs) and noted Cascade Natural Gas had recently presented a mid‑$6,000 estimate for mainline plus service-line extension to a single house in its rate discussions. Committee members also flagged other potential costs or offsets — panel upgrades, ducting, and whole-home design choices — and urged the city to run prototypical, end-to-end project examples and to collect builder cost quotes.
The consultant and staff ran energy-cost scenarios using today’s utility rates and a 2030 cleaner-grid case. With current Pacific Power rates, staff said switching to electric would increase annual energy costs in the city’s inefficient and efficient scenarios; the efficient-case increase was described as about $150 per year while the inefficient scenario showed much larger increases. In some Central Electric Co‑op scenarios and under future grid decarbonization assumptions (e.g., an 80% cleaner electricity mix by 2030), efficient electrification produced net greenhouse-gas and bill reductions.
The policy choice the council asked staff to clarify was whether the fee should be sized primarily to drive behavior change (i.e., set high enough to discourage gas appliance installation) or to raise revenue to pay incentives that help people electrify. Staff reported council members generally leaned toward a lower fee focused on generating a resource pool for incentives rather than a punitive surcharge designed to eliminate gas installs.
Legal staff briefed the committee on the important difference under Oregon law between a tax and a fee, and staff said the city is designing the proposal as a fee intended to offset climate-related costs and to fund mitigation programs rather than as a tax. Council and staff favored distinguishing efficient electric equipment from inefficient electric installs in the fee design and discussed a tiered approach that adjusts by home size rather than requiring house‑specific energy models.
Several committee members and industry representatives urged the city to validate the consultant’s rapid analysis by meeting with local builders and engineers and by running representative prototypical examples. Staff said they plan additional outreach and to present refined scenarios and a memo describing fee elements and public-engagement options to council on Dec. 10. Staff also said a joint committee is expected to launch in January to work through design details in the public process.
What’s next: staff will perform additional stakeholder interviews with builders, refine cost assumptions and prototypical examples, and return with updated analysis and fee-design options at the Dec. 10 council work session and through the newly formed joint committee early next year.
