The purpose of this analysis is to provide better understanding of the implications of Section 201 of the American Clean Energy and Security Act of 2009, also known as the Waxman-Markey Climate Bill. This analysis examines specific provisions of the bill and investigates ways for the Department of Energy and private code-development organizations to implement these policies using existing tools and methods available to them. The topics covered here include: ways to meet new energy efficiency targets, methods for defining cost-effectiveness, procedures to assure state compliance and issues that may arise if private organizations do not meet the requirements of the bill. For each of these topics, this analysis focuses on the relevant language in the bill, determines what questions stakeholders are interested in and answers these by taking both technical and policy factors into consideration.

On Tuesday, President Obama signed the $787 Billion American Recovery and Reinvestment Act into law. The act is estimated to save three and a half million jobs over the next two years.

We’ve kept an eye on it through its development, and I want to give an update as to what made it out the other side and into law. My comments on building related portions are below. A more inclusive evaluation of the stimulus’s green measures by the Alliance to Save Energy can be found here and here.

• DOE’s Weatherization Assistance Program: $5 Billion
  • The House version of the bill allocated $6.2 Billion and the Senate version set aside $2.9 Billion. The final version ended somewhere in the middle. With the amount of money allowed per home increased to $5,000, the program aims to retrofit roughly 1 million homes in the next two years. As we’ve said before, this has the potential to be a really great thing for the economy, energy independence, and national carbon footprint. That said, scaling the program up from $227.2 Million to $5 Billion (22 times larger) will require a monumental effort in management, training, and data analysis. I will post more about our thoughts on this in a separate post.

• Retrofitting Federal Buildings – $3.6 Billion for Department of Defense (DOD) energy efficiency projects and modernization of facilities, $4.5 billion to GSA for measures to convert GSA facilities to High-Performance Green Builings, $400 million to establish the Office of Federal High Performance Green Buildings, $75 million for Defense-wide funding of research, development, text and evaluation projects, including pilot projects, demonstrations, and energy efficiency manufacturing enhancements
  • This is a bit different from what was proposed in the senate and house bills. The House version gave $6 Billion to GSA for improving GSA buildings and $1.7 to DOD for energy efficiency projects and building improvements. The Senate version had the same two measures, but funded at $2.5 Billion and $3.2 Billion, respectively. The senate version also contained $200 million for research ($75 million in the final law), $250 Million for improving the Department of Health and Human Services facilities and $323 million for energy-related construction at the Department of Veterans Affairs medical facilities (both cut from the final).

The final version of this should drastically improve the state of federal buildings, making them more energy efficient and safer, saving tax-payers billions in spending on federal energy bills. The creation of the Office of Federal High Performance Green Buildings will be another great step towards the legislation of “high performance” buildings. Kelly Shultz, our Building Technologies intern, is currently writing a paper on the history of high performance legislation, as well as recommendations for future coordination and implementation. I’ll post this paper in the coming weeks, which will elaborate on the importance of this office.

• Retrofitting HUD Buildings: $2.25 billion for energy retrofit investment grants and loans for Section 8 Project-Based program; $1 billion from the Public Housing Capitol Fund funding to fund improvements in energy efficiency; $2.25 billion for the HOME Investment Partnerships Program to help build and rehabilitate low-income housing; $510 million for Native American housing block grants, to include improvements in energy efficiency
  • This didn’t change much from the senate and house versions of the bill. This section is interesting, because it puts a lot of money into retrofitting buildings at the Department of Housing and Urban Development. Currently there isn’t any sort of coordinated retrofit program at HUD, making this an equal large managerial challenge as the weatherization program increases. However, there is a 1 percent set aside for program management, research, etc., which will aide in running the program. We think this program should be coordinated with the weatherization program, federal building retrofits, and all other retrofit efforts to take best advantage of both the money invested and the opportunity to improve our energy use and climate impact.

• Decoupling and Higher Energy Codes: $3.1 billion for the Department of Energy’s (DOE’s) State Energy Program (SEP), which provides grants and funding to state energy offices for energy efficiency and renewable energy programs conditioned on state Governors’ assurances regarding regulatory policies, building code requirements and the prioritization of existing state programs.
  • I’ve mentioned this section before, and I’m curious how far it pushes the bar on decoupling. Basically, Section 410 of the bill stipulates that a first round of grants will be given based on current allocations, and sets conditions on the states for them to obtain the second round of energy conservation block grants. The conditions are that the governor has to notify DOE that s/he has “obtained necessary assurances” that: (a) the state’s regulatory body will “seek to implement” a policy to make sure utility financial incentives are “aligned” with energy efficiency — which is a weak way of pushing states towards decoupling (but not mandating it); and (b) the state will adopt the latest IECC code for residential energy efficiency and the ANSI 90.1-2007 code for commercial building energy efficiency. At the end of the day, the Act doesn’t require either decoupling or code improvements, but it incentivizes them, with a rather weak incentive for decoupling (but an incentive, nonetheless), and a relatively strong incentive for adopting higher energy codes.

• Green Schools: $9.75 billion for public safety and other government services, which may include assistance for elementary and secondary education and public institutions of higher education, and for modernization, renovation or repair of public school facilities and public institutions of higher education facilities, including modernization, renovation, and repairs that are consistent with a recognized green building rating system
  • The original House version of the Act had $14 Billion for school modernization. Which has been trimmed and watered down, offering less money and less emphasis on energy efficiency measures.

• Green Jobs: $500 million for research, labor exchange and job training projects to prepare workers for careers in energy efficiency and renewable energy industries, and up to $37.5 million provided for Job Corps Centers, which may include training for careers in energy efficiencyo
  • This is an interesting provision that I haven’t read into in enough depth. One of the largest obstacles in the implementation of the Act and its long term impacts on the shape of the economy/job force will be the training of a new “green” work force, and it is important that money be placed aside to the development of curriculum and training of workers. I will read more into this and post what I find.

Overall, I think that while some of the money in the House and Senate versions of the bill have been trimmed down or eliminated, there is still a very significant amount of money being placed into improving our nations building stock, with a keen eye on improving energy efficiency. This will create a large number of jobs, and will take advantage of buildings as the low hanging fruit in our national energy consumption reductions. The Act carries with it many massive managerial challenges for different government agencies, and it remains to be seen how these will be handled. That said, I remain hopeful that this Act will bring our nation’s economy and energy consumption back in a positive direction.

First of all, the amount of money being put into building retrofits is pretty astounding. Just under 35 billion is included in the house stimulus package that is strictly for retrofitting and renovating buildings. This isn’t all solely for energy-efficiency measures, but much of it is. This includes money to the DOE Weatherization Assistance Program, money for the US General Services Administration to improve energy efficiency of federal buildings, grants to improve the energy efficiency of HUD subsidized housing for the elderly, disabled, and for Section 8, and for improving schools and institutions of higher education.

All of this is really exciting, but it also creates an astounding puzzle: how to ramp up these programs to such enormous levels quickly and effectively. For example, the Weatherization Assistance Program was allocated $227.2 Million last year. There is a national framework and a network of state and local agencies already in place, and allowances per building have been doubled, but absorbing roughly 25 times the amount of money will be a dramatic challenge.  A national framework for training and certification, as well as some sort of national database to expedite the process of analyzing and retrofitting buildings to the full cost-effective level. FAS is currently putting together thoughts on this, and I’ll have more on this shortly.

Another important point to note is tucked into the section on State Energy Program grants. The bill allocates $3.4 Billion to state energy programs, but allows money beyond normal allocations to be distributed only to states that have “decoupled” utility profits from sales in their regulation. This allows for utilities to profit from energy efficiency, rather than strictly from producing more energy, and it has been shown to be an important tool in energy reductions. It appears as though this was Rep. Waxman’s doing, and a more in depth account can be found here.

In addition to being tied to decoupling, these state energy program grants are to be given to states where the residential building code is equivalent or better than the 2009 International Energy Conservation Code (and for commercial buildings, ASHRAE 90.1-2007). This is also encouraging. There are two halves to improving the national building stock through building codes: improving the codes themselves, and then getting municipalities to adopt them. Hopefully this carrot will help push states towards these improved codes.

Its unclear what of this will emerge in the final version of the stimulus, and I’ll be keeping an eye and adding more thoughts as things happen.

I’m back from my trip out to Denver for the ASCE AEI Conference, so I’ll be putting up a few posts to catch up on a few things. The first I’d like to update on is the “30 Percent Solution” – an attempt to increase the performance of the model energy code by 30 percent – that I referenced a few posts back.

The final hearings were held in Minneapolis last week, and unfortunately the overall package of energy improvements narrowly failed (receiving over 60% of votes in favor, but not enough to reach the required two thirds majority).

Still, energy efficiency will substantially improve in the nation’s 2009 model energy code governing new home construction, as several individual measures were passed. The 2009 IECC will have several significant new provisions to boost energy efficiency, including:

• Increased insulation in basements, floors and walls;
• Improved window efficiency;
• Reductions in wasted energy from leaky heating & cooling ducts;
• Reductions in tradeoffs that fail to capture energy savings from efficient heating & cooling equipment;
• High-efficiency lighting; and
• Improved air sealing within the building envelope.

While FAS is disappointed the measures were not fully passed, these incremental improvements are encouraging. It is also heartening that over 60 percent of attendees voted in its favor, a clear demonstration of its growing support. We hope (and fully expect) that these efforts will continue, and model energy codes will continue to improve.

More information can be found at the EECC’s website.

In a few days, the International Code Council’s (ICC) final action hearings of the 2009 code development process will take place in Minneapolis. The hearings are the final step in a 3 year long code development cycle aimed at re-evaluating and improving the ICC’s myriad of building codes.

I bring this up because it’s the final determination for what has been deemed as the “30 percent solution” by the Energy Efficient Codes Coalition (EECC) to be adopted into the International Energy Conservation Code (IECC), the nationally recognized model energy efficiency code.  The proposals included in this “30 percent solution” look to improve the energy efficiency of the entire code by 30 percent by using current, everyday products and practices that are affordable (paying dividends through positive cash flow for the homeowner).

This lengthy process began in 2007 with the submission of over 150 proposed amendments, which have been revised to incorporate comments and recommendations throughout the development process. The result is a set of 21 individual proposals – fourteen of which were approved by the Development Committee in Palm Springs, with modifications as appropriate, and seven other proposals which were initially not approved but have now been modified by the EECC in its public comments. One of these, EC-14 is a compilation of all the individual parts and would essentially revise the entire code, and another (EC-154) is a voluntary appendix, designed to provide jurisdictions interested in increasing their energy efficiency  beyond the basic IECC measures with a means to do so.

The product of this “Final Action Hearing” will become the 2009 IECC, which can then be ratified as a new building requirement by municipalities across the country.

FAS is very interested in the outcome of these hearings. Improving building codes is one of the many ways to spur future focus and development on building energy efficiency, and if these measures are passed, they will represent a significant jump in one fell swoop.  FAS will be keeping an eye of these hearings, and will update the blog with developments.