The Energy Productivity Innovation Challenge Can Do Better By Codes

By Cosimina Panetti

If you were going to install a renewable energy system on your house, you would first make sure your house was as energy efficient as possible. At minimum, you would want your house to meet current model energy codes and you would probably go above and beyond the code. If you were the federal government providing incentives for energy efficiency and renewable energy systems to states, wouldn’t you expect that states adopt a minimum energy efficiency code? And yet the federal government barely gets involved with matters involving state energy codes, which are the only means states have to assure some minimum level of energy efficiency in all new construction.

The Energy Policy Act (EPAct) of 1992 required the Department of Energy (DOE) to determine if the most current model energy codes and standards would improve energy efficiency for residential and commercial buildings. Codes are revised every three years, and EPAct mandated that DOE make a new determination within 12 months for every revision of these codes. Given a positive DOE determination, each state then has two years to certify that it had revised its own energy code to meet or exceed the requirements of the latest iteration of the national model. Under EPAct, a state can decline to adopt a residential energy code by submitting a statement to the Secretary of the DOE detailing its reasons for doing so (Full Text of National Energy Conservation Policy Amended, 2009). We know that many states do not update their codes based on determinations. In fact many states don’t adopt codes at the state level at all. These strict home rule states leave it to local municipalities to adopt building codes.

In 2009, Congress passed the American Recovery and Reinvestment Act (ARRA). As a condition of receipt of $3.1 billion in State Energy Program grants, the Secretary of Energy received assurance letters from every governor in the country that current model energy codes would be adopted and plans for achieving a 90% compliance rate would be made (One Hundred Eleventh Congress of the United States of America, 2009). In the five years since ARRA, 16 states have still not complied with the residential adoption portion of the agreement and 11 states don’t comply with the requirement for commercial building codes (Building Codes Assistance Project, 2013). Similar to EPAct, there is no penalty for non-compliance under ARRA. Furthermore, the ARRA funding that was tied to energy code adoption and compliance was not required to be spenton energy code adoption and compliance. The assurance letters were largely symbolic, but at least we got energy codes on the table.

Current Legislation
On July 30, 2013, Senators Jeanne Shaheen (D-N.H.) and Rob Portman (R-Ohio) introduced a revised version of the Energy Savings and Industrial Competitiveness Act (S. 1392). The original bill was introduced on May 16, 2011. This comprehensive bill takes several approaches to improve energy efficiency including supporting building energy codes in states. S. 1392 has already been endorsed by a coalition of more than 200 businesses, trade associations and advocacy groups.The non-partisan bill made it out of the Senate Committee on Energy and Natural Resources on May 8, 2013 by a vote of 19-3.

So what is new and different in this bill for energy codes?

Under Section 101, Greater Energy Efficiency in Building Codes, the bill amends EPAct to direct the DOE to: support the updating of model building energy codes; the adoption of building energy codes by U.S. states, Indian tribes, and local governments; and full compliance with these codes.

Indian tribes and local governments is new. Previously, EPAct required only states to comply.

Full compliance is new. EPAct didn’t require compliance and ARRA stipulated only 90% compliance to the energy code. S. 1392 directs DOE to support the updating of model building energy codes by the independent codes and standards developers, i.e. the ICC and ASHRAE. DOE is also required to set aggregate energy savings targets for the model codes for residential and commercial buildings.

Setting targets is new. The targets are to be set at the maximum level of energy efficiency that is technologically feasible and life-cycle cost effective, and are to be higher than preceding targets. Within 15 months of any revisions to the IECC or ASHRAE Standard 90.1, DOE is to determine whether or not the revisions improve energy efficiency and meet the established targets. 15 months is changed from EPAct’s previous 12 month requirement for DOE’s determination.

The state certification process remains the same as EPAct: a state (or Indian tribe) has two years to certify. Within 90 days after a state or Indian tribe has submitted its certification, DOE is directed to determine whether the code provisions have met the specified criteria and if so, to validate the certification. Within three years of certification of a state code, each state is to certify whether or not the code has achieved compliance or made progress. “Compliance is defined as, “at least 90% of building space covered by the code substantially meets code requirements, or excess energy use for non-compliant buildings is not greater than 5% of energy use of all covered buildings. And significant progress means that “the state has developed and is implementing a plan for achieving compliance within eight years of enactment, and is meeting compliance targets under the plan” (Library of Congress, 2013). (Back to 90% compliance rate from the ARRA? hmmmm)

There are some other stipulations in the bill regarding demonstrating compliance and reporting, but there are no penalties for noncompliance. DOE is to provide technical and financial assistance to states and Indian tribes to meet energy code requirements. Funding is to be made available to improve and implement energy codes. Additionally, each state can use up to $750,000 to train officials to implement and enforce established codes (Alliance to Save Energy, 2013).

On June 11, 2013, Sen. Mark Warner (D-VA), introduced a new bill, S.1218, now called the Energy Productivity Innovation Challenge (EPIC), to the Senate Energy and Natural Resources committee. This bill did not make it out of committee but was later added as an amendment to S. 1392. S.1218 seeks to establish a voluntary electric and thermal energy productivity challenge grant program which, among other things, would expand:

“policies and programs that will advance energy efficiency retrofits for commercial buildings, schools, hospitals, and residential buildings through expanded energy service performance contracts, zero net-energy buildings, or improved building energy efficiency codes” (Govtrack, 2013).

EPIC seeks $100 million to create a competition in which states would compete for energy efficiency funding. The opposition to S. 1392 comes primarily from conservative groups like the American Heritage Foundation and Americans for Prosperity who are primary opposed to the use of government funding for the challenge. Among other things, these groups contend that it should be left to homeowners and businesses to decide if they want to adopt energy efficiency measures based on incentives and constraints (Loris, 2013). However, nothing in EPIC compels participation. States compete if they want to. Note that by the time S. 1392 stalled on the floor in December there were 120 new amendments with multiple opponents (Arizona State University, 2013).

I believe that EPIC is brilliant in its approach: allowing states a choice to participate in the contest or not. The entire country benefits when even a handful of states implement progressive energy policies. It pulls the country forward. However I hope that to compete under the EPIC would require adoption of the most current published model energy code as a minimum state requirement. Phase 1 should include assistance to help in the demonstration of established practices that move the state towards 100% compliance with the energy code. EPIC needs to assure that practices are fully established at the local level before issuing Phase 2 grants. This is one way we may have a shot at true market transformation of the built environment inherent in energy codes.

Effective energy efficiency policies provide benefits to consumers and businesses alike, making federal energy policy a vital component of enhancing the future of U.S. energy productivity. According to the Alliance to Save Energy, “federal energy efficiency policies have proven time and time again to save taxpayers money, create jobs, increase U.S. competitiveness, stimulate technological innovation, and moderate demand for energy and the need for imports” (Alliance to Save Energy, 2013). Improved energy efficiency can enhance national security, reduce air pollution, protect natural resources, and strengthen the economy. Here’s hoping EPIC lives up to its potential.