Green Building Law Blog : Green Building Lawyer & Attorney : Shari Shapiro: Calliope Communications, LLC

Today, Senator Kent Conrad (D-N.D.) introduced a "comprehensive energy bill" entitled the "Fulfilling U.S. Energy Leadership Act" or "FUEL."  The bill is available for download here. 

According to his press release:

Senator Kent Conrad today introduced comprehensive energy legislation intended to lessen America's dependence on foreign oil, reduce gas prices, and strengthen the national economy.  [The FUEL Act] is a blueprint for a national energy policy that would support domestic oil and gas production, including an environmentally responsible expansion of offshore activity, while also investing in the development of renewable fuels. The bill also promotes more alternative fuels and clean sources of electricity, including clean coal, and nuclear energy.

Regardless of the other positive things the FUEL Act may contain to achieve all of these ends, the bill has almost no provisions that address building energy efficiency, and mostly they simply extend the incentives already in place until 2016.  The only provisions for building energy efficiency in the FUEL Act are Section 601 and 611-614:

Section 601--Authorizing $4.9 billion for the Rural Utilities Service to provide interest-free loans to rural electric cooperatives to provide low interest loans to qualified consumers to implement energy efficiency measures.

Section 611--Increasing to $3.00 and extending through 2016 179(d), the commercial energy efficient property tax credit;

Sections 612-614--Extending through 2016 the existing tax credits for energy-efficient homes and appliances;

According to a McKinsey report, energy efficiency is one of the most cost-effective ways to minimize the dependence of the United States on foreign oil and reduce greenhouse gas emissions. Increasing building energy efficiency in the United States by 23% by 2020 would :

• Reduce end-use energy consumption by 9.1 quadrillion BTUs, roughly 23% of projected energy demand;
• Eliminate more than $1.2 trillion in waste—well beyond the $520 billion upfront investment (not including program costs) that would be required;
• Result in the abatement of 1.1 gigatons of greenhouse-gas emissions annually—the equivalent of taking the entire US fleet of passenger vehicles and light trucks off the roads.

Despite these facts, it appears that energy efficiency is still the red-headed step-child of energy policy.  It is true, appliance standards, building codes, loan guarantees for energy efficient buildings and other solid energy efficiency proposals are not as sexy as electric vehicles or as viscerally connected to what people pay at the pump.  On the other hand, a cost-effective and achievable 23% reduction in fossil fuel usage should be at the forefront of national energy policy.  

I hope there is a larger strategy at play.  To the extent that Conrad's bill may get bogged down in politics about fossil fuels, subsidies, domestic drilling and so forth, it may be an advantage that many of the energy efficiency policy proposals contained in ESICA, the energy efficiency bill introduced last month by Senators Shaheen and Portman (described in further detail here) were not rolled into the FUEL Act.  If the FUEL Act does become the leading energy policy, I recommend incorporating the programs in ESICA to make the FUEL Act a more complete energy package.   

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     Contributions to this post were made by Eli Wolfe, 2011 Cozen O'Connor Summer Associate.

     On May 12, 2011 the Energy Savings & Industrial Competitiveness Act (ESICA) of 2011 was introduced by Sens. Jeanne Shaheen (D. N.H.) and Rob Portman (R. OH). The Act creates a national strategy to increase use of energy efficiency technologies through a national model energy code, enhanced appliance standards, DOE loan guarantees for energy efficiency projects and a variety of other initiatives.  A summary of the bill is available here, and the bill itself is downloadable here.

    As I predicted here, ESICA resurrects the concept of a national model energy code which was first intorduced as part of Waxman-Markey (cap-and-trade).  Pursuant to ESICA, the DOE would essentially establish and regularly update national model building energy codes for residential and commercial buildings from baselines of the 2009 International Energy Conservation Code (IECC) and ASHRAE Standard 90.1-2010. The DOE would establish goals of zero-net-energy for new residential and commercial buildings by 2030. Energy savings targets would be set at the maximum level of energy efficiency that is technologically feasible and life-cycle cost effective, taking into account economic considerations.

   Within one year of any revisions to the IECC or ASHRAE Standard 90.1, the DOE would be directed to determine whether the revisions improve energy efficiency and meet the targets. If so, then the revisions would be established as the national model building energy code. If not, the DOE would recommend changes to improve the codes to meet the target, and IECC or ASHRAE would have 180 days to incorporate changes to meet the targets. If the revision still did not meet the target, then the DOE would establish a modified national model building code that does, based on the latest edition of the IECC or ASHRAE Standard 90.1.

     Within 2 years of the establishment of a national model building energy code, states would be required to certify whether they have updated their codes. Within 3 years of certification, the state would certify whether or not they either:

1. Achieved compliance: 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; or
2. Made significant progress: the state has developed and is implementing a plan for achieving compliance within 8-years of enactment, and is meeting compliance targets under the plan.

   If a state does not meet the requirements, it must submit a report to the DOE explaining the status of the state’s efforts to reach compliance and a plan to do so. In states out of conformance, localities would be allowed to meet the certification requirements themselves. Conformance to this section may be required by the DOE as a prerequisite for grants or other support for code adoption/compliance activities. The DOE would provide technical assistance and incentive funding to states on building energy codes, and additional funding would be provided by the DOE to states or local governments in conformance to improve compliance. Up to $750,000 per state could be used to train state and local building code officials.
 

   The ESICA concept builds on the American Reinvestment and Recovery Act model which tied funding to updating building codes, and the 2005 energy bill requirements that DOE evaluate model energy codes, and that states demonstrate that the provisions of its commercial building code regarding energy efficiency meet or exceed the DOE approved standard.

   The question I am pondering is whether a national model code tied to net-zero construction has a hope of seeing the light of day, or are the barriers too great?

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