A communication transmitted from Yi-An Huang, City Manager, relative to a Fossil Fuel Free Demonstration pilot

C I T Y O F C A M B R I D G E Community Development Department 344 Broadway Cambridge, MA 02139 Voice: [phone removed] Fax: [phone removed] TTY: [phone removed] www.cambridgema.gov IRAM FAROOQ Assistant City Manager for Community Development SANDRA CLARKE Deputy Director Chief of Administration KHALIL MOGASSABI Deputy Director Chief Planner To: Yi-An Huang, City Manager From: Iram Farooq, Assistant City Manager for Community Development Date: June 21, 2023 Re: Fossil Fuel Free Demonstration This memorandum relates to Policy Order #116 “Fossil Fuel Free Demonstration Pilot” from June 12, 2023 and provides a description of the requirements and proposed process for the City to participate in the Demonstration. Copies of the enabling state regulation and proposed model ordinance are attached. The Cambridge City Council has since 2019 been discussing a requirement that newly constructed buildings be fossil-fuel free in order to advance the decarbonization of buildings. Adopting this standard is a key action in the Net Zero Action Plan 2021 Update. Cambridge and more than 10 other Massachusetts communities have submitted home rule petitions to the state legislature requesting such permission. In 2022, the Legislature authorized 10 communities that had submitted home rule petitions, including Cambridge, to implement fossil-fuel free requirements for new construction and major renovation as Part of an Act Driving Clean Energy and Offshore Wind. In May 2023, the Massachusetts Department of Energy Resources (DOER) published final regulations (225 CMR 24.00) including a model ordinance, attached here. Cambridge is eligible to participate in the Fossil Fuel Free Demonstration by virtue of having submitted a home rule petition requesting this authority in April 2022 and meeting the housing eligibility requirements stipulated in the ordinance. To participate in the Demonstration an application and final proposed ordinance language must be submitted to DOER for review and approval no later than September 1, 2023. The Council can either vote to ordain final ordinance language (with an effective date after DOER’s approval) at the August 7 meeting or, alternatively, vote on the proposed ordinance language to be submitted to DOER for approval, accompanied by a plan and timeline for acquiring local approval of the ordinance before July 2024. However, once submitted to and approved by DOER, the ordinance requirements cannot be changed. What is the Fossil Fuel Free Demonstration The Fossil Fuel Free Demonstration will allow the City to require that all new residential and non-residential building construction, regardless of size, as well as major

2 renovations of such buildings (as defined in the state building code) be constructed without the use of fossil fuels with the exception of “research laboratories for scientific or medical research, hospitals and medical offices regulated by the department of public health as a health care facility.” Laboratories and health care facilities were excluded from the demonstration, based on the state’s assessment of the feasibility of building or renovating such facilities without using fossil fuels. The model rule also proposes to allow the use of gas or propane for multifamily water heating until 2027. The Inspectional Services Department would be responsible for enforcement of this ordinance along with compliance with the Specialized Stretch Code, the new energy code that Cambridge has opted into, effective on July 1 of this year. Application Requirements On May 10, 2023 DOER issued final regulations establishing the process for the 10 communities to participate in the Fossil Fuel Free Demonstration. The regulations include a model rule, which communities may adopt as a local ordinance, with or without changes. In order to participate, the City is required to submit an application, including the proposed ordinance language and program design by September 1, 2023 (two months earlier than previously proposed). Any changes proposed to the model rule will require DOER approval. Failure to submit an application by the September deadline will result in elimination from the program. The following elements must be included with the application: 1. Copy of Home Rule petition and proof of Local Approval (completed; vote taken by Council on December 13, 2021). 2. Copy of proposed ordinance including an explanation of any differences from the Model Ordinance published by DOER including exemptions and/or waiver processes, if any. 3. An implementation plan including timeline for acquiring Local Approval of the proposed ordinance, if not already approved 4. Demonstrated commitment to collaborating with DOER on data collection, reporting and outreach/training. 5. Description of process for storing building permitting data. 6. Description of how ordinance will affect the use of fossil fuels for commercials and industrial process loads, including but not limited to restaurants, dry cleaners and manufacturing uses. 7. Description of exemptions and/or waiver processes proposed, if any. 8. Demonstration of compliance with housing production criteria.

3 Development of Ordinance Language City staff are working with consultants who have expertise in building decarbonization to examine the types of buildings and end-uses that are built or renovated in Cambridge to identify any technical or other impediments that could render a requirement for all- electric equipment infeasible or impractical. As required by DOER, this review includes a specific focus on process loads (energy use not regulated under the building code) including energy used by restaurants, dry cleaners, and manufacturing facilities. Based on this analysis, staff will suggest any such exemptions or propose a waiver process for the Council’s review. Public Engagement Process To increase awareness and provide information about the proposed ordinance, CDD will seek to reach a broad group of people including homeowners, small retailers and business owners, seniors, the faith community, low-income individuals and linguistic minorities by making plain language information translated into multiple languages available through our website, an online survey and social media as well as through distribution of flyers at public places such as libraries, churches, senior centers etc. Also, in collaboration with the Inspectional Services Department (ISD), CDD will host two informational webinars about the Fossil Fuel-Free Demonstration during the second week of July to ensure awareness of the proposed ordinance and to collect feedback from residents, business and property owners, contractors, and the public in general. These webinars will also include presentations by MassSave on the Specialized Code compliance, as previously requested by the Council. Information about the webinars will be widely distributed. Ordinance Approval Process Following completion of the technical review and public engagement processes, CDD intends to present proposed ordinance language for review and discussion by the Ordinance Committee in July and the final proposed ordinance language and application package for approval at the Summer meeting on August 7. Immediately following approval by the Council, the application and ordinance language would be submitted by staff to DOER for review, potential feedback and approval. Summary Fossil Fuel Free Demonstration Under the regulation a building cannot use coal, oil, natural gas, synthetic equivalents, or other fossil fuels in its operation. This is generally understood to include heating, hot water systems, lighting, cooking, and clothes drying, and potentially commercial process

4 loads (e.g., restaurants, dry cleaners). A municipality may propose limited exemptions to these requirements for approval by DOER. The Model Ordinance DOER has developed a model regulation that eligible cities and towns can choose to adopt or modify (with justification). The model ordinance is based on the Specialized Code (which Cambridge adopted in January, effective July 1 of this year.) The model ordinance eliminates options that allow for fossil fuel use in new construction and eliminates the installation of new fossil fuel-powered equipment in major renovations with the exception of laboratories and medical facilities. The model rule also proposes that communities allow the use of gas or propane for multifamily water heating until 2027.