1 PIH 2005 Energy Bill Workshop FirstPic and D&R International L’Enfant Plaza Hotel September 23, 2005.

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PIH 2005 Energy Bill Workshop

FirstPic and D&R International

L’Enfant Plaza Hotel

September 23, 2005

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Agenda

• Introductions and Overview

• Public Housing

• Rebates and Grants

• Other Opportunities

• Next Steps

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Workshop Objectives

• Overview of PIH-related provisions of Energy Bill

• Discussion of implications for daily PIH operations

• Discussion of opportunities for PIH• Outline strategy for implementing provisions• End with clear idea of next steps

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Energy Bill Overview

• Formally known as the Energy Policy Act of 2005• Signed on August 8th 2005• Effective as of signing, though some provisions

effective January 1, 2006• First comprehensive energy legislation since 1992• Calls for energy conservation and efficiency in

public housing

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Implications for PIH

• Strengthens existing efforts to promote energy efficiency, management goals

• Reinforces audit requirement, EPCs• Supports asset management objectives –

improves value of individual buildings• Potentially reduces costs to HUD• Improves quality of life for residents

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Opportunities

• Raise energy efficiency standards

• Access other funds for PHA retrofits– Link to State Energy Programs?

• Further promote ENERGY STAR

• Demonstrate PIH leadership in energy

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Hurricane (Katrina) Recovery

• Provisions of Energy Bill could improve rebuilding efforts– Energy efficient appliances and products– Efficient construction standards– PIH can support rebuilding efforts with

guidance and information, such as planned upcoming newsletter

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Timeframes to Consider

• Many provisions effective as of signing– Must be enacted by regulation to be official

for PIH

• August 2006 – Report to Congress

• September 30, 2006 – Deadline for raising energy efficiency standards

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• Introductions and Overview• Public Housing

– Amendments to US Housing Act of 1937– ENERGY STAR– IECC 2003 and 2004– Amendments to Cranston-Gonzalez– Energy Strategy Development

• Rebates and Grants• Other Opportunities• Next Steps

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Amendments toUS Housing Act of 1937

• Section 151, Public Housing Capital Fund (p.155)

• Install fixtures and fittings• Increase energy efficiency, water

conservation • Integrated utility management• Third party contract provision

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• Define “other means as the Secretary determines are appropriate” (p. 156, line 12)

– Should other measures be required or strongly encouraged, beyond code?

– This provision could support increased efficiency standards.

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• “Integrated utility management” supports asset management

• Reduce lifecycle costs

• Opportunity to educate PHAs on comprehensive utility planning?

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Amendments toUS Housing Act of 1937 - EPC

• Extends Energy Performance Contract payback to 20 years – Likely to be increased pressure from

ESCOs opportunity to guide PHAs on EPCs in general

– Opportunity to implement more energy-saving measures

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• Cannot justify anything that will not last 20 years

• Should be used to justify measures that need the longer payback – e.g. PV, Solar DHW, CHP, complete HVAC

replacement, windows

• An EPC that is as short as possible will maximize savings– Private businesses usually consider only measures

that pay back within 3-5 years

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• Clarify guidance for 20-year payback– What qualifies?

– Guarantees for 20-year equipment?

– Issue waivers for existing contracts?

• How will this impact HUD’s budget?– Subsidies frozen at higher level for longer period

• How will PIH implement? Steps required to update 965? How to educate PHAs?

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ENERGY STAR

• Section 152, Energy-Efficient Appliances (p.158)

• A PHA shall purchase energy-efficient appliances that are ENERGY STAR or FEMP-designated products, unless the purchase is not cost-effective to the agency

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ENERGY STAR – Current Activities

• HUD Notice PIH 2005-05 (HA) encourages PHAs to consider ENERGY STAR for all products and construction

• Ongoing promotion through PHECC

• Bulk purchasing

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ENERGY STAR – Current Activities

• Management Plan goals call for promotion of ENERGY STAR

– Equipment use

– Incorporation in HOPE VI

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ENERGY STAR – Defining “Cost-Effective”

Simple Payback:

Savings/Year X Lifetime = Lifetime Savings

• If the savings exceed investment in fewer years than the product lifetime, the investment is cost-effective

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• ENERGY STAR is usually cost-effective when savings are considered as a whole – Savings to PHA + HUD + Tenant

• Increases quality of living and tenant comfort

• Reduces energy consumption and air pollution

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Cost-effectiveness for PIH is not straightforward

• PHAs use Operating Funds to purchase ENERGY STAR appliances and Utility Allowances to pay for energy expenses

• Rolling Base• Tenant Paid utilities

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• Variables make a simple energy savings calculator impractical

• A contractor will run savings calculations

– ENERGY STAR vs. code

• www.energystar.gov includes savings calculators

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• Energy savings of some ENERGY STAR qualified products (boilers, furnaces, heat pumps, ac, and windows) depend on:– climate– insulation levels– infiltration– thermostat set points– efficiency of the heating/cooling/distribution– fuel prices

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DOE Weatherization Program• "Cost-effective" weatherization measures

are those that yield a savings-to-investment ratio (SIR) greater than or equal to 1 – SIR > 1 means energy cost savings over the lifetime of

the measure, discounted to present value, equal to or exceed the cost of materials, installation, and on-site supervisory personnel

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• Instruct PHAs to look at savings as a whole? – Remind about incentives, funding options

• Add Energy Bill language to the Notice in Purpose section?“…Purchase of ENERGY STAR-labeled products....support the goals

of the President’s National Energy Policy and the Energy Policy Act of 2005 by reducing the burden of public housing…”

• Update 965?

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Building Codes

• Model Energy Code 1992 Edition – “1992 MEC”

• International Energy Conservation Code

– IECC 2003 Edition

– IECC 2004 Supplement (to 2003)

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Building Codes• Energy codes cover the following:

– Building Envelope• Insulation

• Windows

• Air Leakage

– Heating, Ventilation and Air Conditioning (HVAC)– Hot Water– Electrical Power and Lighting

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Codes - 1992 MEC

• HUD currently requires 1992 MEC• Decent energy efficiency standards• Hard to use

– Codes are becoming increasingly less complex

• An ENERGY STAR home based on 1992 MEC + 30 percent

• Energy Bill requires both 2003 and 2004 IECC

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How Do MEC 1992 and IECC 2003 Compare?

• Basis for comparing MEC and IECC – Before: ENERGY STAR = 1992 MEC + 30%– New: ENERGY STAR = 2003 IECC + 15 - 20%

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How Do IECC 2003 and 2004 Compare?

• IECC 2003 and IECC 2004 roughly equivalent with respect to efficiency but have different ways of calculating energy efficiency

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• IECC 2003 – more climate zones– less flexibility on window requirements

• IECC 2004 – fewer climate zones, more understandably linked

• Keep metropolitan areas together• Better job of integrating cooling considerations• sometimes actually make IECC 2004 buildings slightly less

efficient

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IECC 2003 – three methods– Prescriptive– Performance– Hybrid

(performance w/prescriptive)

IECC 2004 - two methods– Prescriptive

(simplified)– Hybrid

(performance w/prescriptive)

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States that have adopted IECC

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Amendments to Cranston-Gonzalez National Affordable Housing Act

• Section 153, Energy Efficiency Standards (p.158)• Secretary to establish energy standards for

construction of public and assisted housing and single family and multifamily residential housing (other than manufactured homes) subject to mortgages insured under the National Housing Act; – HOPE VI housing shall meet or exceed IECC 2003

• Deadline: September 30, 2006

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• Secretary shall consult with advisory task force – Including builders, PHAs, etc.

• “Standards shall meet or exceed” CABO Model Energy Code 1992 (single family), ASHRAE Standard 90.1-1989 (multifamily high rise), and 2003 IECC (Hope VI)

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• NOTE: Section 128, State Building Energy Efficiency Codes Incentives (p. 66)

• Encourages adoption of IECC or ASHRAE• Not a direct connection to PIH, but because PHAs

are governed by local code, as states adopt IECC PHAs will be required to adopt IECC– This will support any PIH effort to raise energy

efficiency standards

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• Opportunity to update PIH code requirements– IECC 2004 or ENERGY STAR for single-family,

small multifamily• Cost implications for HUD budget?

– ASHRAE 90.1 2004 for high-rise multifamily– Increase costs slightly ($1000 - $1500/house),

increase annual savings ($100 - $450/yr) • Particularly important with rising energy prices

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• Tools to help PHAs implement new code?

– Provide code training with EPC training?

– Energy workshop for PIH?

– Update Rehab Advisor?

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• Who should be recommended for the task force? – PIH to lead?– Reps from Energy Action Plan Committee?– Workshop attendees?

• Next steps to convene task force?

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• Section 154, Energy Strategy for HUD (p.160)• Secretary shall develop and implement an

integrated strategy to reduce expenses through cost-effective energy conservation and energy efficient design – HUD has initiated with Energy Action Plan– PIH has implemented several supporting activities

Energy Strategy Development

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Energy Strategy Development – Current Activities

• Development of energy reduction goals and incentives for PHAs– Benchmarking

• Three-year program to determine energy use in PIH buildings with respect to others

• Must decide how to improve

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• Promoting ENERGY STAR with EPA, DOE– Supporting bulk purchasing

– Program Notice 2005-25 (HA) encourages product purchase and construction standards

• Educating PHAs through PHECC newsletter and Website

• EPC guidance and education• Gathering data from utilities

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• 2005 Management Plan Goals require Field Office reporting for EPC, promotion of ENERGY STAR, energy-efficient HOPE VI construction, and energy audits

– Monitor 10% of national inventory of HOPE VI construction projects to ensure implementation of energy conservation measures as part of construction phase

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Energy Strategy Development – Indian Housing

• Section 506, Energy Efficiency In Federally Assisted Housing (p.569)– HUD Secretary shall promote energy

conservation in housing that is located on Indian land and assisted with Federal resources through:

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Energy Strategy Development – Indian Housing (cont.)

• Use of energy efficient technologies and innovations (including appliance procurement)– PIH disseminated special edition of PHECC newsletter

• Promotion of shared savings contracts (EPCs)• Use and implementation of such other similar

technologies and innovations

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Energy Strategy Development – Indian Housing

• Small amendment to the Native American Housing and Self-Determination Act of 1996 – “improvement to achieve greater energy

efficiency” added as a development activity

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Energy Strategy Development – Report to Congress

• Requires report to Congress on energy goals and actions– One year after enactment (August

2006) and every two years thereafter

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Energy Strategy Development

• What data will need to be collected for Report to Congress? Who will collect it? How?

• How will Indian housing information be collected?– Should this information be included in the

Congressional report?

• Who will write the report?• Milestones for development

– First step: convene task force (October)

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• Timeline under development

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• Public Housing



• Next Steps

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Rebates and Grants

• Section 124, Energy Efficient Appliance Rebate Programs (p.57)– Calls for states to develop energy efficient

appliance rebate programs

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Rebates and Grants

• Can PIH work with states to encourage rebates to PHAs, not just to “typical” residential consumers?

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Rebates and Grants

• Section 126, Low Income Community Energy Efficiency Pilot Program (p.63)– Authorizes DOE Secretary to make up to $20M

in grants for each year from 2006-2008 to non-profit community development organizations and Indian tribe economic development entities for:

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Rebates and Grants – Community Pilots (cont.)

• Investments that develop alternative, renewable, and distributed energy supplies;

• Energy efficiency projects and energy conservation programs;

• Studies and other activities that improve energy efficiency in low income rural and urban communities;

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Rebates and Grants - Community Pilots (cont.)

• Planning and development assistance for increasing the energy efficiency of buildings and facilities; and

• Technical and financial assistance to local government and private entities on developing new renewable and distributed sources of power or combined heat and power generation.

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Rebates and Grants - Community Pilots

• Would PHAs, IHAs be eligible?• If so, should PIH provide guidance, tools to

help housing authorities access funds?

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Rebates and Grants

• Section 206, Renewable Energy Rebate Program (p.179)– The DOE Secretary shall establish a program

providing rebates for consumers for expenditures made for the installation of a renewable energy system in connection with a dwelling unit or small business

• 25% of expenditure or $3000

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Rebates and Grants – Renewable Systems

• Are PHAs eligible as consumers purchasing residential systems?– Should PIH pursue this with DOE?

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Tax Credit Rebates

• Section 1332, Credit for Construction of New Energy Efficient Homes (p.1344)

• Tax credit for eligible contractors for each qualified new energy efficient home– Home’s annual HVAC consumption < 50%

annual heating and cooling consumption of a similar dwelling unit

– IECC 2003 compliant with at least 1/5 of savings from building envelope improvements

– $2000 credit

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Tax Credit Rebates

• Can PHAs take advantage of this? Some PHAs are for-profit, most are not

• Can Housing Choice Voucher (Section 8) landlords take advantage of this incentive?– If so, how to communicate rebate incentives to

owners of Housing Choice Voucher properties?

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• Introductions and Overview• Public Housing• Rebates and Grants

• Other Opportunities– Metering– Air Conditioning Policy– What is a Public Building?– State and Federal Consumption Goals– Consumer Education– Tribal Energy Development– Definition of Assisted Housing

• Next Steps

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Metering

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• Section 1251, Net Metering and Additional Standards (p.1147)– Net metering for on-site generation

– Allows PHAs to minimize life-cycle cost of CHP and PV

– Educate PHAs on opportunity?

Metering

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• Section 1252, Smart Metering (p.1151)– By June 2007, each electric utility shall

provide its customers with a time-based rate schedule so that the consumer can better manage use and cost

– This should benefit PHAs, especially with asset-based management

Metering

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• Does the Energy Bill affect PIH's air conditioning policy?– If a PHA can demonstrate energy savings

from an ENERGY STAR air conditioner, could savings apply to the cost of AC?

– Address in rewrite of 24 CFR 965.

• Next steps?

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What is a public building?

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Benefits of a PHA inclusive definition:

• Section 125, Energy Efficient Public Buildings (p. 61)– Authorizes DOE Secretary to make $30M

in grants for each year from 2006-2010 to local government offices to improve energy efficiency in public buildings• 30% efficiency improvement above IECC!

– Higher than ENERGY STAR for new bldgs.

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• Section 204, Use of Photovoltaic Energy in Public Buildings (p.170)– Commercialization program for

procuring, installing PV systems in new and existing public buildings

– $50M for each year from 2006-2010

Benefits of a PHA inclusive definition:

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• Are there drawbacks to the classification of “public buildings”?

– What other regulations will need to be followed?

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State and Federal

Consumption Goals

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• Section 123, State Energy Programs (p.56)

– Calls for 25% improvement in energy efficiency by 2012

– Can PHAs contribute?

State, Federal Consumption Goals

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• Section 140, Energy Efficiency Pilot Program (p.153)– Authorizes DOE Secretary to provide financial

assistance ($5M/fiscal year, 2006-2010) to 3-7 states energy efficiency pilot programs

• PHAs could contribute to state efficiency goals with results of benchmarking analysis

• Does PIH want to promote this?


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• Section 203, Federal Purchase Requirement (p.167)– Ensures % of total electric energy

consumed by the Federal government is renewable

– Does HUD count PHA consumption as part of Federal consumption?


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• Section 913, National Building Performance Initiative (p. 825)– Establish interagency group to integrate

Federal, state, and voluntary private sector efforts to reduce costs of construction, operation of residential buildings

– PIH, Task Force participation?


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Consumer Education

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• Section 132, HVAC Maintenance Consumer Education Program (p.72)– Calls for DOE Secretary to educate

homeowners, small businesses re: energy savings from proper HVAC maintenance, by June 2007

– PIH role? Educate residents?

Consumer Education

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• Section 133, Public Energy Education Program (p.75)– Calls for the DOE Secretary to convene

an organizational conference for the purpose of establishing an ongoing, self-sustaining national public energy education program by June 2007• HUD may be asked to participate

Consumer Education

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• Section 134, Energy Efficiency Public Information Initiative (p.77)– Calls for the DOE Secretary to carry out

a comprehensive national program to inform consumers about reducing energy consumption

– PIH role?

Consumer Education

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Tribal Energy

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• Section 503, Indian Energy. Section 2602 of Title XXVI of 1992 Act, Indian Tribal Energy Resource Development (p.525)– Encourages resource extraction on Indian

land– Grants to tribes for energy education

Tribal Energy

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Assisted Housing

• Federally assisted housing is defined in 24CFR5.100– What are implications for PIH, others?– Congressional reporting requirements– Communicate incentives, requirements to

grantees, mortgagees, homeowners?

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• Public Housing



• Next Steps

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Next Steps

• Incorporation into PIH Regulations– None of this is official until enacted by

regulation

• List next steps and action items with dates:

1 PIH 2005 Energy Bill Workshop FirstPic and D&R International L’Enfant Plaza Hotel September 23, 2005.

Documents

energy slide

energy conservation

energy efficiency standards

public housing slide

energy bill overview

energy policy act

us housing act

energy star iecc