South Carolina – A Model Of Successful Stakeholder Collaboration In Energy Code Adoption

by Paul Karrer

For over a year, the Building Codes Assistance Project (BCAP) has focused on South Carolina as a target state for the adoption of an updated building energy code. South Carolina regulates its building codes through a regulatory process, except for the South Carolina Energy Standard, which the state legislature must approve. The state’s previous energy code update legislation, House Bill 3550, enacted the 2006 International Energy Conservation Code (IECC) and became effective January 1, 2010.

BCAP classified South Carolina as a high-priority target for code adoption support for several reasons. First, South Carolina policy lags behind that of its neighboring states, Georgia and North Carolina, since both adopted more stringent energy codes than the 2009 IECC. Second, the population has grown 13.7 percent between 2000 and 2009. While the state’s population of almost 4.7 million is largely decentralized, there are a few major municipal hubs in Charleston, Columbia, and Greenville/Spartanburg. The growth of Charlotte, North Carolina has also created suburbs and exurbs well into the northern part of South Carolina. Third, South Carolina is a net energy importer, ranking 19th in total energy consumption per capita. Fourth, South Carolina represents one of the cheapest costs of upgrading to the 2009 IECC and one of the shortest pay back periods for residential homeowners at less than 10 months.

BCAP implemented a multi-tiered adoption support strategy in South Carolina. BCAP considered addressing the state Building Codes Council with the option of reviewing the 2012 IECC, but legislation was needed to modify its current adoption process and to amend existing law to change the state code’s reference from the 2006 IECC to the 2009 IECC. BCAP identified the Public Utilities Review Committee (PURC) as a viable organization to execute this strategy. PURC was charged with providing energy-related recommendations to the legislature prior to the 2012 general session, and BCAP reached out to a member of PURC to recommend updating the energy code as a proposal to the legislature. After finding this potential ally and interested party, BCAP contacted the South Carolina Energy Office (SCEO) to determine their position on adoption. With the support of the South Carolina Energy Office, BCAP effectively leveraged its contacts gathered through the Compliance Planning Assistance (CPA) program to begin discussions on supporting the adoption of the 2009 IECC.

BCAP identified key players involved in the process and facilitated discussions surrounding the issues and barriers to adoption of the 2009 IECC. The South Carolina Home Builders Association (HBA) highlighted two major barriers: cost and timing of adoption. Subsequently, PURC held its first hearing on February 18, 2011, and a stakeholder group began to organize to support the proposal. BCAP initially limited the South Carolina stakeholder group to regional and local organizations like Mathis Group and the Southeast Energy Efficiency Alliance (SEEA, but also briefed national partners such as the Responsible Energy Codes Alliance (RECA), North American Insulation Manufactures Association (NAIMA), and the American Council for an Energy Efficient Economy (ACEEE) on the effort’s status. BCAP used their resources to assist with the development of the stakeholder group’s materials.

The initial hearing provided a venue to enter the group’s support of the proposal into the public record. PURC listened to oral comments, and BCAP rallied support from SEEA who, along with BCAP, provided supporting written comments. BCAP’s presentation focused on the “big picture” policy elements of energy codes – savings, costs, and requirements under the federal American Recovery and Reinvestment Act of 2009 (ARRA). Mathis Group delivered a report on the 2012 IECC. The South Carolina HBA came out in strong opposition to the 2012 IECC, citing considerably higher incremental costs, a lack of demand, and supply issues for products to comply with the code. While PURC committee members asked questions indicating they were supportive of a code update, they recognized that a policy change needed buy-in from all parties, especially given the political climate of South Carolina which, like many Southern states, has been repealing or replacing regulations in recent years. Seeking to avoid painting the energy code as an extra regulation that might fall victim to anti-regulatory sentiments, BCAP concluded the best path forward would be the adoption of the 2009 IECC.

PURC created an informal working group to address the barriers that the South Carolina HBA presented. BCAP served as a member of this working group to provide state-specific incremental cost figures for code changes between the 2006 IECC and the 2009 IECC. PURC reconvened on April 15, 2011, to discuss its findings, but details of the group’s work did not satisfy all of the concerns of the South Carolina HBA. Questions remained over the size of the model house assumption, the products used, the location of the model house, product availability, and specific requirements of the code. BCAP began coordinating with the SCEO as well as SEEA, RECA, and Southface to better define the working group and provide clarification as the South Carolina HBA requested. In the summer of 2011, the working group convened twice to discuss costs, but no agreement was reached.

During this time, however, the list of code update supporters expanded to include local green builders, the South Carolina Heating and Air Conditioning Association, and low-income builders. By this point, the South Carolina HBA represented the only opposition to the code change. Mathis Group began pursuing the adoption of the 2012 IECC through the South Carolina Building Codes Commission, placing added pressure on the South Carolina HBA in its ongoing dialogue with BCAP and creating a sense of urgency within both the HBA and PURC.

At the instruction of PURC, a final working group meeting occurred on September 26, 2011 with South Carolina Energy Office representatives, PURC, the South Carolina HBA, BCAP, Southface, and the Mathis Group in attendance. PURC moderated the discussion, requiring agreement on the assigned incremental costs to each item within the 2009 IECC. Representatives from each organization signed their name on each page of the code, agreeing to the accuracy of each individual listed cost. The collective calculated a final figure $530 as the average added first cost of building to comply with 2009 IECC. PURC then prepared an executive summary and scheduled a presentation of the findings to the full committee in October. PURC unanimously voted to recommend adoption of the 2009 IECC and prepared legislation for the 2012 general session.

In January 2012, legislators introduced Senate Bill 1110 and House Bill 4639. On January 24, BCAP, SEEA, Southface, and Mathis Group provided supporting public comments at the legislative subcommittee hearing for these bills. BCAP also reached with state utilities – which had previously remained neutral on energy code updates – to ensure they were supportive of the process at the hearing by discussing the impacts of the proposed changes, the estimated costs incurred, the broad stakeholder group supporting the change. The bills passed through their respective committees, and the state House voted unanimously in favor of House Bill 4639 on February 23. The state Senate concurred on March 21, sending the measure to the desk of Gov. Nikki Haley, who signed the legislation on April 2, 2012. It will become effective January 1, 2013.

Among the lessons learned through the success of this process, it is crucial to identify the appropriate committee or government body to work though that can be supportive of the policy change. In this case, PURC held a diverse purview including utilities, low-income housing, environmental groups, and the state energy office, helping create an effective coalition. Like in other states, the key issue during the debate in South Carolina centered on the added first cost of constructing to comply with the new code version. BCAP has replicated this process of engaging HBAs, through a moderator, on seeking common cost assumptions and buy-in from opponents to demonstrate a willingness to cooperate and compromise. While every state is unique in both its process and circumstances, this success story from South Carolina highlights the importance of communication and leveraging a strong local and regional support group to involve stakeholder throughout this policy arena and achieve desired policy outcomes.