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.

Fayetteville, Arkansas, LEED-Certification, and Energy Efficient Municipal Buildings

According to the USGBC, “LEED initiatives including legislation, executive orders, resolutions, ordinances, policies, and incentives” are found in 384 cities and towns and 58 counties across 45 states. 

One of those initiatives – and, at least according to the USGBC’s online database, the only municipal initiative in Arkansas – is City of Fayetteville Resolution 176-07.

Entitled, “A Resolution Establishing An Energy Efficient Building Policy for the City of Fayetteville,” Resolution 176-07 passed on October 2, 2007.  It provides, in its entirety:

Section 1:  That the City Council of the City of Fayetteville, Arkansas hereby requires all new, city-owned buildings in excess of 5,000 square feet to achieve a minimum certification of LEED-Silver as issued by the US Green Building Council provided a favorable cost-benefit analysis is provided by a private architect or engineer and require all exempt building designs to include a LEED checklist with an emphasis on energy and water efficiency.

Resolution 176-07 does not carry the force of law.  It is best considered a statement of public policy.  Unfortunately, as a statement of public policy, particularly one with a national profile, Resolution 176-07 is undermined by a significant ambiguity: what, exactly, is a “favorable cost-benefit analysis”?  Indeed, what if even though the cost of building to the LEED-Silver status is not disproportionately more expensive than building to a conventional standard, the architect or engineer in question concludes that the cost-benefit analysis is unfavorable because the proposed project will not result greater energy efficiency?

The incorporation of LEED standards into land use law has generated significant and spirited debate, and one of the frequent debate points is that the empirical data does not indicate that LEED-certified buildings are, in fact, better performing buildings.  Henry Gifford asserted this very point – that the USGBC promoted LEED as resulting in more energy efficient buildings even though a study commissioned by the USGBC indicated that this was not the case – in his now dismissed lawsuit, Gifford v. USGBC.  Similarly, the authors of the 2009 National Institution of Building Science Report on Building Rating and Certification in the U.S. Building Community observed, “[t]here is very limited data that correlates verifiable improvements in building performance with building rating/certification system requirements.  Many people view the few data sets that do exist as controversial in terms of methodologies and conclusions drawn from them.”  The study concludes that “[t]here are growing concerns that the implied guarantee of building energy performance emanating from the building rating/certification/labeling systems may confuse or mislead policy makers and the public.”

Thus, Resolution 176-07 runs the risk of failing to achieve the very cause it advances.  One way to improve Resolution 176-07 would be to add a provision requiring the collection and analysis of data from new municipal buildings built to the LEED-Silver certification standard.  This, it would seem, encourages not only the energy-efficiency conscious green building practices embodied in the Resolution, but also results in the creation of green jobs.   

LEEDigation Update: Gifford v. USGBC Dismissed

In October 2010, energy efficiency consultant Henry Gifford filed a salacious and potentially ground-breaking lawsuit challenging the U.S. Green Building Council’s LEED certification system. Gifford made a number of interesting (and, as it turns out, legally insignificant) claims against the USGBC, but the essence of Gifford’s complaint was this: he contended that the USGBC promoted LEED as resulting in more energy efficient buildings; that, as a result, consumers favored LEED-accredited professionals over non-LEED accredited professionals; that the USGBC’s claims connecting LEED certification with increased energy efficiency were, in fact, untrue; and, as a result, energy efficiency consultants like Gifford who refused to “drink the Kool Aid” were being damaged and driven out of business.

Well, gadfly Gifford has been vanquished. In a nine-page opinion issued on August 15, 2011, the federal district court for the southern district of New York dismissed Gifford’s complaint in its entirety.

Given the aura of anticipation that surrounded this case and the occasional venom that pierced through the cold hard paper record (yes, the USGBC really did refer to Gifford as a “gadfly” in one of its filings), not to mention the fact that Gifford is one of those people who seems to have the uncanny ability to provoke strong feelings, even from those who do not know him, I suspect many will find the opinion both surprisingly bland and generally unintelligible.

So here, in a nutshell, is why Gifford’s complaint failed:

As I’ve discussed in previous posts, a basic concept of any lawsuit is the idea of “standing.” This means, quite literally, that the person or entity bringing the suit is the right person or entity to bring the suit. Generally, a plaintiff must identify two basic things: first, that he or she has suffered an injury that is discrete, real, and compensable by the payment of money; and, second, that there is a legally relevant connection between that injury and something that the defendant allegedly did.

Gifford brought his claims under the federal Lanham Act, which generally prohibits the false representation of goods or services in interstate commerce. The Gifford court recognized two ways of showing standing for a Lanham Act claim: either the plaintiff and the defendant are competitors, or the plaintiffs must allege a “reasonable commercial interest” that is likely to be damaged by the defendant’s alleged false statements.

Gifford failed to clear the basic hurdle of standing. Gifford and the USGBC are not competitors. The court found that the USGBC, through the LEED certification system, provides third-party verification that structures have been designed and built in a way that should make them more energy efficient. Gifford, in contrast, held himself out as an energy efficient building expert. Since the USGBC expressly disclaimed any energy efficiency expertise, and the since Gifford did not content he was in the certification business, the federal court found that they were not competitors.

Likewise, “Because there is no requirement that a builder hire LEED-accredited professionals at any level, let alone every level, to attain LEED certification it is not plausible that each customer who opts for LEED certification is a customer lost to Plaintiffs.” In other words, the fact that a building owner might aspire to LEED-certification does not mean that Gifford cannot work on the project.

I do not know Henry Gifford, or any of the other plaintiffs in the Gifford v. USGBC suit, and I have no desire to pass judgment on him or them. Gifford may have valid, meritorious complaints about the LEED system. Just as LEED seems to be creating jobs in some areas, it may well be the cause of the demise of others. And it seems likely that some consumers will indeed feel that through LEED the USGBC has promised exactly that which Gifford says LEED does not and cannot deliver: a building that is more energy efficient than one that is not LEED-certified. Indeed, the most recent appropriations bill for the U.S. Department of Defense charged the DOD with studying this very point.

The simple fact is that Gifford alleged that the USGBC was a major player in the sustainasphere, and that he believed that was having an adverse affect on him and people like him. But what Gifford could not allege is that the USGBC was actually doing something – anything – wrong. And a fancy way of saying that is, “case dismissed for lack of standing.”

ASTM E2797-11: A New Standard for Assessing Energy Performance in Commercial Buildings?

One of the dominant trends in the law of sustainability is that the regulations that govern green building construction and performance – think of them as “green building codes” – are not written by legislators or municipalities but by private, non-governmental organizations. The most visible example of this phenomenon is the U.S. Green Building Council’s LEED green building certification system.

Another key player in private green regulation is ASTM International. ASTM started life in 1898 as the American Society for Testing and Materials. It is an international standards organization that develops and publishes voluntary consensus technical standards for a wide range of materials, products, systems, and services. And in February of this year, ASTM published its “Building Energy Performance Assessment (BEPA) Standard,” known in shorthand as ASTM E2797-11 or as simply the ASTM BEPA standard.

A technical dissertation on BEPA’s provisions is beyond the scope of this post (and would likely put you to sleep). But here is the meat of the coconut:

• The BEPA standard is intended to “define a commercially useful practice for collecting, compiling, and analyzing building energy performance information associated with a building involved in a commercial real estate transaction”;
• The BEPA standard has five basic components – (1) a site visit; (2) collection of records, information, and data; (3) review and analysis of the collected materials; (4) interviews; and (5) preparation of a report; and,
• BEPA is designed to be used in connection with other design and ratings standards, such as LEED, ASHRAE, and Energy Star.

It will take some time for the practical effect of BEPA to become clear. Another “outside the scope” use of the BEPA standard is that it complements the Sustainable Buildings Design and Sustainable Energy-Efficient Buildings Programs already on the books in Arkansas. The guidelines associated with the programs recommend energy data measurement and collection, and BEPA could provide a uniform standard by which to do so.

Another reasonable expectation is that BEPA assessments will become part of the due diligence associated with commercial real estate transactions. There is a precedent for this, as the ASTM “Environment Site Assessment (Phase I) Standard” has become a standard point of due diligence.

We can also anticipate that the BEPA standard will be incorporated into state and local law regarding building “labeling” – i.e., regulations that require building owners to measure and disclose certain energy efficiency data about a building. Such requirements are vogue in places like New York City and Austin, Texas. While Arkansans do not take many cues from the Big Apple (at least, not that we admit to), there is a known close relationship between Little Rock Mayor Stodola and his counterpart in Austin.

A final consideration is the Gifford v. USGBC lawsuit, which, among other things, challenges the effectiveness of the LEED rating system in measuring a building’s energy efficiency. Despite the claims in Gifford, it seems that there is little debate that LEED is a system related to designing buildings, and not for measuring their performance. Indeed, part of the USGBC’s response to the Gifford suit is that “LEED is premised on identifying strategies intended to improve building design,” and that, with the exception of the “existing buildings program, the LEED certification process does not assess the actual environmental performance of any of the structures for which certification is sought or granted.”

Nonetheless, the LEED system has become the rock upon which the green castle is built as an increasing number of states and municipalities – Arkansas and the cities of Fayetteville and Little Rock included – have sought to green their building practices and to legislate sustainability and energy efficiency. While there is evidence that LEED-certified buildings are more energy efficient than their non-certified counterpart, the LEED system is not a building code and certification is not a substitute for a systematic analysis of a building’s performance. This means that in many cases, the LEED system is being but to a task for which it was never intended. The BEPA standard fills this gap.

In short, local governments, developers, energy raters, lawyers, investors, bankers, and deal-doers of all types who deal with green commercial real estate and who want to get ahead of the curve should add a new acronym to their vocabulary. Absent some “battle of the standards,” BEPA is here.

(Department of Citation: The material quoted from the USGBC’s response to the Gifford suit comes from the “U.S. Green Building Council’s Memorandum of Law in Support of Motion to Dismiss First Amended Complaint,” United States District Court for the Southern District of New York civil action no. 1:10-cv-07747, Docket No. 20 at p. 5.)

Arkansas Legislative Update: SB 516 and the “Property Assessed Clean Energy Act”

If the current trend holds, the primary contribution of the 88th General Assembly of the Arkansas Legislature to the sustainasphere will be summed up in two words: improvement district.  We already have HB 1118, which would establish the “Arkansas Central Business Improvement and Development Investment Tax Credit Act,” and the newly amended HB 1027, which would establish the “Property Assessed Energy-Efficient Home Improvement District Act.”

Last week saw an important addition to this slate of sustainalaws: SB 516, which would establish the “Property Assessed Clean Energy Act” (which folds up into the convenient acronym PACE).  PACE is the product of years of behind the scenes work by the dedicated denizens of the Arkansas sustainasphere.

SB 516 is a piece of enabling legislation: if passed, it would enable counties to create “property assessed energy improvement districts.”  These districts, in turn, are tasked with establishing “a property assessed clean energy program” to provide financing for energy efficiency improvements and clean renewable energy projects.  The loans would run with the improved property, and would be secured by a lien against the property.  The districts would be bond-financed, and the bonds would be tax-free and fully transferable on the open market.

Unlike HB 1027, which is limited to residential projects, SB 516 grants energy improvement districts the discretion to provide PACE financing to the full range of projects, whether residential, commercial, industrial, or mixed use.

Another advantage of SB 516 is that it provides for districts comprised of several counties.  Given the number of small, rural, sparsely populated counties in Arkansas, this is significant.  These are the very places most in need of sustainable innovation and development, and, if PACE becomes law, these counties will be able to band together and issue bonds that are fiscally sound and financially attractive to investors.

Indeed, if used to their fullest potential, PACE districts will add a powerful arrow to the quiver that Arkansas counties have for attracting business investment, particularly when it comes to attracting international venture capitalists looking to invest in renewable energy and resource projects.

SB 516 is headed for the Senate Committee on Insurance & Commerce, where it is on the regular agenda for the March 1, 2011, meeting.

Stay tuned! 

The “Sustainable Energy-Efficient Home Program”

Lets take a look at one piece of proposed sustainable legislation before the 88th Session of the Arkansas Legislature: the “Sustainable Energy-Efficient Home Program” (HB 1027).

This ambitious legislation would change the face of residential development in Arkansas.  If passed, it would require the Arkansas Energy Office to develop comprehensive energy-efficiency guidelines for new residential construction and for major renovations of existing homes. 

The key parts of Program are:

First, new construction and major home renovations shall be certified to at least 10% reduction below the baseline energy consumption determined in accordance with the Performance Rating Method of Appendix G of the American Society of Heating, Refrigerating and Air-Conditioning Engineers, Standard 90.1-2007.  The requirement would apply to all projects that had not entered the “schematic design phase” as of the effective date of the Program; and,

Second, in addition to the 10% reduction in energy consumption, new construction projects would also be required to “be designed and constructed” to use at least 20% less indoor water “than the indoor water use baseline calculated for the home after satisfying the fixture performance requirement, if any, under the Arkansas Plumbing Code.”  Outdoor water use must be at least 50% “of the water that would have been consumed otherwise.” 

The Program also requires the Arkansas Energy Office to develop and issue policies and technical guidelines to establish procedures and methods for compliance with the Program.

Like I said, this is an ambitious piece of sustainalaw.  The recognition that energy efficiency and sustainability in housing can be managed on a statewide basis is a step forward.  New home construction in Arkansas has been at best flat for the last 18 to 24 months, but the economy is loosening up and I expect that in 2011 folks are going to start building homes again, which makes the timing right. 

Something else that is innovative about the Program: while it recognizes that homes can be made more energy-efficient and sustainable if they are built according to a set of recognized standards, the Program runs counter to the current trend of relying on the USGBC’s LEED criteria.  This is a good thing, as it is well established that the LEED criteria was never intended to be a building code.

But the proposed legislation also contains some significant shortcomings.  First and foremost, HB 1027 contains no funding mechanism.  How, exactly, is the Arkansas Energy Office going to administer the Program, develop standards, technical guidelines, and performance criteria, and police compliance with the Program without any additional funding?  We all know the answer.

Another problem: the Program imposes a one-year monitoring requirement.  If after a year the home has failed to perform as required, the designer, homeowner, contractor, contract manager at risk, and commissioning agent shall investigate and determine the cause for the performance shortcomings and recommend corrections or modifications necessary for the home to meet the Program’s performance standards. 

This is necessary, as simply requiring a home to be built to conserve energy is no guarantee that the conservation will actually occur.  But the Program lacks a real enforcement mechanism.  The legislation does not actually require modifications to be made.  Nor does it assign financial responsibility (or, alternatively, give financial rewards) for bring the home into compliance.  Thus, while the language of HB 1027 says “mandatory,” the spirit and the reality of the bill is “comply if you can afford to and feel like complying.” 

And then there is a more esoteric problem: increases in energy efficiency are just as likely to result in increases as in decreases in energy use.  (For an interesting article on this point, read “The Efficiency Dilemma” in the December 20 and 27, 2010, issue of the New Yorker.)

These shortcomings could be fatal.  Thus, I can’t help but think that the Program, if passed in its current form, is poised to be little more than a paper tiger – unfunded, without adequate compliance and enforcement mechanism, and perhaps a bit off target.  After all, is HB 1027 a Program, or merely an aspirational statement?  It’s an important distinction.

The Arkansas Legislature opens for business this coming Tuesday, January 11, 2011.  Stay tuned.