Natural gas ban will make Seattle even more unaffordable

Seattle is already an expensive city to live in, even if you don’t own one of its multi-million valued homes. The median rent in the Emerald City is $2,334, with the average apartment size just under 700 square feet.

However, new building rules will make it even pricier, particularly for lower-income residents.

In February 2021 the Seattle City Council voted unanimously in favor of a new building code banning the use of natural gas in all new commercial and residential buildings over three stories high.

Natural gas is a popular energy source for heating in Seattle, composing one third of all daily energy use on a typical day, with even higher use when temperatures dip.

One of the reasons is that natural gas is significantly cheaper than electricity.

As Center Point Energy notes, “when all charges are considered, for a $0.06 per kilowatt hour (kWh) electricity rate to be competitive, natural gas would have to cost $1.77 per therm. Historically and currently, natural gas costs are well below that price. Even the highest commercial/industrial natural gas firm rate on record is only $1.38 per therm.”

Using that comparison, Seattle’s electrical rates don’t come even close to its natural gas rates. The average natural gas prices in the Seattle-Tacoma area in July was $1.261 per therm, while the average Seattle area households paid almost $.12 per kilowatt hour (kWh) for electricity during that same month. 

So how much is this new energy code rule going to cost Seattle residents?

A study by the Affordable Energy Coalition estimated it could range from $49 million over a 15-year period to as high as $356 million over the same time period. The cost estimates depending on a variety of variables, such as whether existing buildings are retrofitted. The annual increased energy cost per household is estimated to be $587.

This will hit lower-income families the most in two ways. First, it absorbs a higher percentage of their annual income than someone making $200,000. Second, lower-income families typically rent due to the high cost of home ownership. That means those living in new apartment buildings forced to use electricity will be individuals with less money to spend.

“Government mandates requiring households to purchase specific products generally burden the least economically well-off for the simple reason that these households have the least ability to absorb the costs,” the study noted.

Yet, it’s worth noting that the new energy code rule doesn’t merely ban natural gas. It also bans most electric resistance heating. Although cheap to install, electrical resistance heating is expensive to use. While it is utilized sparingly, almost 60 percent of Seattle metro residents use it. The new rule shifts new construction toward heat pumps, currently used by only 5-10 percent of Seattle metro residents. While highly efficient, heat pumps have high up-front costs to install, adding to the overall costs of new construction.

The cost of living in Seattle is already pricing people out. This new energy rule will help maintain that.