The City of Fayetteville Takes A Step Closer to Having the First PACE Program in Arkansas

At the Arkansas Advanced Energy Association’s “Hour of Power” event this past August, City of Fayetteville Mayor Lioneld Jordan was blunt: he intended to do everything within his power to position the City of Fayetteville to be the first to make Property Assessed Clean Energy, or “PACE,” financing available to its citizens.

Mayor Jordan and the City of Fayetteville took an important step towards that goal last week, filing a proposed ordinance that would create an Energy Improvement District to manage innovative financing programs for advanced energy improvements on residential, commercial, and industrial real properties. These programs include PACE financing options.

Act 1074 of 2013, now codified at Ark. Code Ann. Section 8-15-101 et seq., authorized governmental entities to establish energy improvement districts for the purpose of managing PACE programs. (By way of definition, a PACE program is “a property assessed clean energy program under which a real property owner can finance an energy efficiency improvement, a renewable energy project, and a water conservation improvement on the real property”.)

The PACE Act directs governmental entities to create PACE districts by adoption of an ordinance. Like traditional improvement districts, once created, PACE districts are operated and controlled by a Board of Directors.

This is what the Fayetteville PACE Ordinance accomplishes: it creates Energy Improvement District No. 1, and creates a seven-member Board of Directors to operate and manage the District.

Passing the PACE Ordinance does not finish the job. The District’s Board of Directors will need to be populated, and it will need to figure out how to govern itself. A means for determining when energy efficiency improvements will result in “positive cash flow” needs to be worked out. Most importantly, the financing program needs to be put in place. This means identifying underwriters, issuing bonds, figuring out how PACE financing will be occur for residential properties, and, most likely, getting a third-party administrator in place. But none of these things happen until the PACE Ordinance is in place.

The proposed PACE Ordinance is on the agenda for the October 15, 2013, meeting of the Fayetteville City Council. The Arkansas sustainasphere, and this sustainablawger, will be watching.

The Fayetteville PACE Ordinance and some related materials can be found here. 

Arkansas's Proposed Rule Adopting the 2009 IECC: Last Call for Written Comments

Arkansas has adopted the 2009 International Energy Conservation Code (IECC), effective January 1, 2014. The Arkansas Economic Development Commission Energy Office is soliciting public comment on the Rule that will formally update the residential energy standard in Arkansas from IECC 2003 to IECC 2009. The deadline to submit written comments to the AEDC is close of business tomorrow, October 4, 2013.

Written comments should be addressed to J.D. Lowery, Deputy Director of the Arkansas Energy Office and submitted in any one of three ways: 

• POSTAL MAIL: Arkansas Economic Development Commission
  Attention: J.D. Lowery
  900 West Capitol, Suite 400
  Little Rock, Arkansas  72201 
• FAX: (501) 682-7499
• EMAIL:jlowery@ArkansasEDC.com  

 

The 2009 IECC residential energy standards would require that all new homes constructed in the State of Arkansas receive a HERS rating (including blower door and duct testing) and provide a home energy disclosure label for consumers in a manner similar to mpg ratings for vehicles or Energy Star ratings for appliances. Adoption of the rule is a necessary step toward listing Arkansas among the 40 other states that have previously upgraded their energy building codes to at least the 2009 standard.

The 2009 IECC is substantially different from the 2003 IECC, and these differences are specifically intended to improve energy efficiency. According to a 2009 study by the U.S. Department of Energy, “Impacts of the 2009 IECC for Residential Buildings at State Level,” “important new requirements” in the 2009 IECC include:

· A requirement that duct systems be tested and sealed, and air leakage minimized;

· Half of the lighting “lamps” in a building must be energy efficient;

· “Trade-off credits” are no longer available for high efficiency HVAC equipment. For example, under the 2006 IECC, use of a high efficiency furnace could be traded for a reduction in wall insulation. Such trade-offs are eliminated under the 2009 IECC;

· Vertical fenestration U-factor requirements and maximum allowable solar heat gain coefficients are reduced;

· Insulation requirements are improved and increased;

· Better air-sealing language;

· Controls for driveway/sidewalk snow melting systems; and,

· Pool covers are required for heated pools.

Obviously, more efficient sidewalk snow melting systems, basement insulation, and heated pools are not going to drive improved residential energy efficiency in Arkansas. The improvements in duct and HVAC efficiency, building envelope tightness and air sealing, and window and insulation requirements are the meat of the coconut for those in the Arkansas sustainasphere.

In 2009, the U.S. Department of Energy analyzed the impact of the 2009 IECC in Arkansas. The DOE study found an average savings of $242.00 per house, per year for homes meeting the requirements of the 2009 IECC.

Annual savings of $242.00 might not, at first blush, blow your skirt up. But consider: if the average life of a home is 30 years, not adopting the 2009 IECC will result in homeowners paying an additional $7,260.00 in energy costs over the life of the home.

 

The adoption of the 2009 IECC should also stimulate job creation and growth. The new requirements for air duct testing and sealing, and for general building envelope tightness will translate directly into a need for quality third-party testing, inspection, and compliance professionals. In simple terms, this means more home energy raters, auditors, inspectors, specialists, and consultants. These are skilled positions. Once created, they should become permanent parts of the sustainable economy.

More than pure economics, adopting the 2009 IECC is an integral step on the path to sustainability. Green building technology is rapidly evolving, and the only surefire way to ensure that Arkansans are provided with affordable, reliable, and sustainable energy is to adopt and enforce updated building standards based on current technology.

Here is a link to the AEDC’s proposed Rule adopting the 2009 IECC.

Reflections on the AAEA Second Annual Meeting and Policy Conference

The Second Annual Meeting and Policy Conference of the Arkansas Advanced Energy Association (AAEA), held yesterday in North Little Rock prompted me to reflect on what it means to practice sustainability law in Arkansas. 

What it means, more often than not, is uniting apparently disparate interests in a way that furthers the client's sustainability agenda and achieves the client's goals (of which, presumably, one is furthering the sustainability agenda). Consider the simple act of uniting sustainable business practices – such as efficiency in the use of paper and energy, with the notoriously inefficient practice of law. For a client that wants to use, or must use, (or both) vendors, contractors, and professoonals who meet certain sustainability standards or criteria, this simple act takes on considerable importance.

Against this backdrop, I highlight two strands of thought from the AAEA conference. The first is from the keynote speaker, former Colorado governor Bill Ritter. Governor Ritter observed that it was unlikely that comprehensive advanced energy legislation would be forthcoming from the federal government anytime soon. Instead, advancements in the law of sustainability would be found locally, and, ultimately, public policy would provide the leverage to move forward. These are not state secrets revealed. But to a lawyer who practices sustainability law, Governor Ritter’s plain spoken observation is a gut check. One of my mentors in the law used to reflect that, “for a lawyer, public policy is the refuge of a weak mind.” And it’s mighty difficult to provide advice and counsel about laws that do not exist and public policies that aren’t law.

The second thread comes from Matt Dromi, a co-founder of the Fayetteville, Arkansas-based company modthink. Presenting on “Harnessing the Power of Social Media for Advanced Energy Business Growth,” Dromi emphasized that successful social media campaigns were authentic and embraced humanity. This means less, “come to my event” or “here’s a coupon for some pants,” and more, “this is my real story” and “this is how we are alike.” In two words: similarities connect.

These two disparate ideas tie together in the practice of sustainability law. More often than not, lawyers are focused on differences, and clients, particularly before attorneys fees exceed budget, dig their heels into ground wrought from principle. For example, in reviewing a contract, the lawyer's first line of inquiry is usually something like, “What’s wrong with this deal?” or, “How is this different from what I expected?” as opposed to “What is good about this deal?” or “What provisions do I definitely want to keep?” The client's companion position might be something like, "I never waive the security deposit" or "I always litigate on my turf," instead identifying with areas of common interest, such as a mutual commitment to maintain the LEED certification of a building, and to share costs to do so.

This is the sustainability law that I practice – a practice driven by client goals and guided by embracing similarities. The fact that we are dealing with sustainability subject matter means that, by definition, there are similarities and that those similarities relate directly to client goals. Identify the common ground and point out to your adversary (and, perhaps with some finess, your client) that the two of you are already standing on it and identify exactly what that means: that from the start, some principles are aligned and some goals achieved. 

The law of sustainability is different from other areas of law because, properly practiced, it is driven by similarities between and among parties as opposed to differences. Yes, parties negotiating a green lease may be adversarial, but they are also united by the common principals inherent in a green lease, such as the desire to preserve and promote a green building. Yes, an employer/employee relationship is often marked by an imbalance of power, but as the employer adopts sustainable business practices the two are united by a common interest in the employee’s welfare. The similarities align with goals, and if the parties start with a focus on the similarities, they are more likely to achieve the goals. A settlement of a contested piece of litigation is often described as a deal that no one likes. The resolution of a sustainability claim can be just the opposite – a deal that serves the goals and common interests of all involved.

And to me, that is what the practice of sustainability law is about.

 

A Blow to the Arkansas Sustainasphere: Nordex USA to Cease Arkansas Production

The Arkansas Advanced Energy Association (“AAEA”), reported this morning that Nordex USA will soon be ceasing production at its’ manufacturing facility in Jonesboro, Arkansas:

AAEA learned this morning that Nordex USA will cease nacelle production at its Jonesboro, Arkansas facility after it completes the orders in its current pipeline. The decision was driven by the wind industry's global overcapacity and the continued uncertainty and instability of the US market. The decision will not impact the current year's business performance, as exceptional expenses were already accounted for in 2012 as previously reported. The training academy, the central parts storage and the repair facility in Jonesboro will remain in operation to support Service and Operations in the Americas. Around 40 employees will be affected with layoffs beginning in October 2013. Ralf Sigrist, President & CEO of Nordex USA, Inc. commented, "This is a sad day for all of us at Nordex USA. We will lose valued colleagues, who have done their very best for us, but the decision was inevitable considering the underutilization of our plant." In the future, nacelles for the North and Latin American markets will be supplied from Nordex' factory in Rostock, Germany, using the global supply chain and logistics support based there.

Special thanks to the AAEA folks for sharing this developing news.

The National Blueways Program and the White River

In January of this year, the White River became the second river designated a “National Blueway” under the National Blueways Program. Nearly six months later, that designation has become the source of controversy and contention, with opponents raising concerns that the designation will lead to increased regulatory activity and threaten private property rights.

So what is the National Blueways Program and what does it mean for a river to be designated a National Blueway?

According to the U.S. Secretary of the Interior, the Program advances a public policy of healthy and accessible rivers that are important to local communities and that contribute significantly to local, regional, and national economies.

The National Blueways Program was established by Order 3321 of the Secretary of the Interior. Order 3321 allows for the designation of entire rivers, including the watershed (a “source to sea” approach) as a National Blueway. All designated National Blueways will comprise the National Blueways System.

The Purpose of the National Blueways Program, as set forth in the Secretary’s establishing Order, is to establish a program

…to recognize river systems conserved through diverse stakeholder partnerships that use a comprehensive watershed approach to resource stewardship. River systems designated as a National blueway shall collectively constitute a National Blueways System. The National blueways System will provide a new national emphasis on the unique value and significance of a “headwaters to mouth” approach to river management and create a mechanism to encourage stakeholders to integrate their land and water stewardship efforts by adopting a watershed approach.

The Program is overseen by a “National Blueways Committee” charged with providing “leadership, direction, and coordination to the National Blueways System” including directing the bureaus of the Department of the Interior “to collaborate in supporting the National Blueways System”.

The establishing Order further states that, “National Blueways will be nationally and regionally significant rivers and their watersheds that are highly valued recreational, social, economic, cultural, and ecological assets for the communities that depend on them. National Blueways encourage a landscape-scale approach to river conservation that involves a river from its headwaters to its mouth and across its watershed, rather than individual segments of the channel and riparian area alone. Establishment of a National Blueways System will help promote best practices, share information and resources, and encourage active and collaborative stewardship of rivers across the country.”

Nothing in the establishing Order authorizes the public use of private property or otherwise affects the use of private property, and the Order explicitly states that it will not result in new federal regulations: “Nothing in this Order is intended to be the basis for the exercise of any new regulatory authority . . . .”

The establishment of the National Blueways Program would appear to recognize the importance of protecting river systems as a whole, rather than in segments. Indeed, the primary distinction between National Blueways designation and existing federal designations is that existing designations generally only cover a segment of a river and a narrow band of riparian corridor.

The Arkansas Social Media Statute (Act 1480): More Questions than Answers?

THE ARKANSAS SOCIAL MEDIA STATUTE (ACT 1480): QUESTIONS AND CHALLENGES


The use of social media, especially in commercial and advocacy settings, is a key part of the sustainasphere. Employers who use and regulate employee use of social media can anticipate a number of compliance challenges and questions in connection the new Arkansas Social Media Statute (Act 1480). For example:

• How can employers use social media in investigations? The stature allows employer to request access in connection with a “formal investigation or related proceeding,” but does not define the phrase, leaving ambiguous and open to interpretation which investigations and proceedings qualify.

• How can employers use information publically available on social media? Act 1480 allows employers to view information publically available on the internet. But the statute is silent on whether employers can use the information they view as the basis for an employment-related decision, or as the basis for instituting a “formal investigation or related proceeding.” A related open question is whether, without asking for a password or username, an employer can ask an employee to verify “ownership” of a social media account on which the employer views publically available information, or to verify the information publically viewed.

• Who can sue for a violation of the Arkansas Social Media Statute? The Arkansas Legislature presumably intended to give employees and prospective employees the right to sue for violations of the statute. However, Act 1480 does not explicitly give an employee, prospective employee, or other person injured or damaged by the alleged violation the right to sue – i.e., the new statute does not provide for a private right of action.

• Is there a right to a jury trial or punitive damages? Assuming that employees and prospective employees do have the right to sue, do they have a right to a jury trial? To injunctive or other equitable relief? To punitive damages?

• How about attorneys’ to the prevailing party? Similarly, would an employee or prospective employee who prevails in a lawsuit under the new statute have a right to recover their attorneys’ fees incurred in prosecuting the action? The answer to this question is likely no, since Arkansas law is clear that absent a rule or statute explicitly providing for the recovery of attorneys’ fees, the parties to a suit bear their own fees.

• Is a violation of the Arkansas Social Media Statute also a violation of the Arkansas Deceptive Trade Practices Act (“ADTPA”)? The ADTPA contains a “catch-all” provision generally prohibiting unconscionable, false, or deceptive practices in business, commerce, or trade. See Ark. Code Ann. § 4-88-107(a)(10). The Arkansas Supreme Court has defined “unconscionable” to include conduct that violates a statute. See Baptist Health v. Murphy, 365 Ark. 115, 226 S.W.3d 800 (2006). Thus, an employer’s conduct in violation of the new statute might form the basis for a suit against the employer for violating the ADTPA. (Significantly, the ADTPA explicitly provides that any person who is damaged or injured by a violation of the ADTPA “has a cause of action to recover . . . reasonable attorney’s fees.” Ark. Code Ann. § 4-88-113(f)).

• Are employees and prospective employees required to exhaust administrative or internal complaint processes and remedies as a pre-requisite to filing a suit?

• What is a “self-regulatory organization”? The statute provides that it is not intended to prevent an employer from complying with the rules or regulations of “self-regulatory organizations.” This provision appears intended to address concerns raised in other states about conflicts with compliance with the rules and regulations of agencies such as the federal Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). But the phrase “self-regulatory organization” is undefined. For example, would the American Bar Association, American Medical Association, or National Association of Realtors qualify as self-regulatory organizations for purposes of the statute?

These concerns will most likely be addressed and resolved through practice and litigation over time. What is clear is that, as indicated in the previous post, employers with a policy or practice of routinely asking employees to disclose or for access to their social media need to assess that policy or practice against the Arkansas Social Media Statute, probably with the assistance of counsel.

Delta Green Community Forum - This Friday, June 28, 2013

This Friday, June 28, 2013, citizens of the Arkansas sustainasphere will have a chance to gather and share notes at the inaugural Delta Green Community Forum in Forrest City, Arkansas.  The theme of the forum is "Visions of Green Jobs and Renewable Energy - Preparing Arkansas' Economy for the 21st Century."  The Delta Green Community Forum will be held at the East Arkansas Community College, 1700 Newcastle Road, Forrest City, Arkansas 72335.  Registration starts at 8:00 am, and the Forum starts at 8:30 am.

The Delta Green Community Forum will allow participants to gain a comprehensive insight into how renewable energy resources are generating a new field of green jobs in Arkansas, and how Arkansas ranks from a regional, national and international perspective in regards to legislative policies and current projects and products. The Forum will emphasize the importance of renewable energy sources and products to Arkansas’ Delta region. Participants will have the opportunity to network with many of the foremost authorities, experts and advocates in the field. “Tool-kits” will be given to participants that contain information on best practices and models that can be implemented in their own community.


The overall goal of the Forum is to provide Arkansas Delta farmers, community-based organizations, community leaders, and residents’ insight into the development and utilization of green strategies, products, practices, policies, and renewable energy sources that support the achievement of long-term economic goals of creating more green jobs and increasing workforce productivity without compromising environmental security for the region and for Arkansas.

PANEL TOPICS

Define Sustainable Energy and Green Jobs?

• This panel will connect different forms of sustainable and renewable energy with job creation. Panelists will also discuss how the terms Green, Sustainable, and Renewable were coined.

Sustainable Agriculture for Arkansas’ Future

• Will address the use of sustainable practices in agriculture to increase crop yields.

Path between Policy and Renewable Energy Adaptation

• The panel will discuss federal and state policy on renewable energy implementation, specially focusing on how polices have influenced financial opportunities for wind turbines and solar panel initiatives. Panelists will also discuss policies that encourage green initiatives and overcome challenges.

Model Community Projects - Solar Panel Application

• This panel will consist on various individuals who are currently implementing green projects (e.g. solar panels, wind turbines, high tunnels, aquaponics systems, and hydroelectric systems). The panel will also discuss Existing Building/New Construction and weatherization in relation to retrofitting, new procedures and change that will take effect, as well as general information on how facilities and organization can obtain resources to complete weatherization projects.

Renewable Technology Panel

• Panelists will discuss new technologies related to fuel production and how the demand for alternative fuels such as biodiesel can be facilitated by cities converting public transportation and state vehicles to cleaner and more efficient fuels.

Events like the Delta Green Community Forum are essential to a vital, growing sustainasphere because they provide a place for stakeholders (here, Delta farmers, non-profits, community leaders and residents) to learn about and define their green economy, bridging knowledge, expertise, and opportunity. These opportunities are also the place where the law of sustainability is born, because as citizens come to recognize themselves as stakeholders in the sustainasphere, they will also come to recognize the public policies necessary for the sustainsphere to grow and thrive economically and socially. This, of course, is also where the law of sustainability is born.

Arkansas Passes Law Restricting Employer Access to Employee Social Media (Act 1480)

On April 22, 2013, Arkansas passed Act 1480 and joined California, Illinois, Maryland, Michigan, New Mexico, and Utah as a state limiting or prohibiting employer access to the social media accounts of employees and prospective employees.


The new law prohibits employers from requiring, requesting, suggesting, or causing a current or prospective employee to:

(1) Disclose his or her username and password to the current or prospective employee’s social media account;

(2) Add any employee, supervisor, or administrator to the list or contacts associated with his or her social media account; or

(3) Change the privacy settings associated with his or her social media account.

Ark. Code Ann. § 11-2-124(b). Employers may not retaliate against an employee or prospective employee, or fail or refuse to hire a prospective employee for exercising these rights. Id. at § 11-2-124(c).

Act 1480 also contains potential safe-harbors for employers. It does not prohibit an employer from viewing information publically available on the internet, or prevent an employer from complying with “the requirements of federal, state, or local laws, rules, or regulations or the rules or regulations of self-regulatory organizations.” Id. at § 11-2-124(e)(1).

Employers can also request access to an employee’s social media account in connection with certain “formal” investigations and proceedings. Nothing in the proposed statute:

Affects an employer’s existing rights or obligations to request an employee to disclose his or her username and password for the purpose of accessing a social media account if the employee’s social media account activity is reasonably believed to be relevant to a formal investigation or related proceeding by the employer of allegations of an employee’s violation of federal, state, or local laws or regulations or of the employer’s written policies.

Ark. Code Ann. § 11-2-124(e)(2)(A).

Act 1480 also presents a number of challenges and compliance pitfalls for employers. Those will be discussed in the next post. However, under the Arkansas Social Media Statute, one thing is clear: employers can no longer ask current or prospective employees for blanket access to their social media accounts.