Notes from WGA Energy Efficient Buildings Workshop
all slide shows available Thursday on WGA website
Q: (Howard Geller) - Will you make an executive order to enact your commitment of 20% improvement in EE by 2020?
A: Not planning executive order. What we are going: 1) Measure our progress; 2) Improve EE in state government; 3) Activity of the Public Utilities Commission working with Governor's Energy Office for EE and DSM. 4) If we achieve our goal early, we will increase our targets.
Q: What are you doing to improve education to provide human resources we need to build efficient buildings?
A: Addressing this as part of higher education strategy; working with National Governor's Association. Also mentioned $7M Clean Energy Fund.
Q: What can other states do to get legislators on board?
A: 1) Education of legislators is essential; 2) Get Rural Electric Co-ops (RECs) on board. 3) Make sure there are benefits for rural areas. In Colorado, we signed law allowing RECs to take out debt to fund transmission, and allowed some accelerated cost recovery.
Commitments to WGA EE goal: UT (Huntsman)- Increase EE 20% statewide by 2015; CO- EE 20% by 2020; Others considering, esp. NM (Richardson)
EE is a key component of most state Climate Action Plans e.g. AZ, CA, NM, OR, WA
AZ calculates net economic benefits of Climate Action Plan (not just EE) at $5.6 Billion from 2007-2020.
Western Climate initiative UT,CA,OR,WA,NM, BC, Manitoba
Utility DSM in AZ,CO,NV,NM,UT + WY on the rise from $29M in 2002 to $130M in 2007 (1.5% of utility revenues).. but dwarfed by CA.
Some states updating building energy codes, and Appliance efficiency standards.
Leading in construction of EnergyStar Homes: 71% of new construction in AZ. 100K (1/2 of national total) in AZ+NV+TX. >15% of new homes were EnergyStar in CA+UT.
Old Energy Star spec:
New Spec
5000 active builder partners; 20% penetration, 750,000 EnergyStar labeled homes, expects 1,000,000 by end of 2007
Aside: Hydrogen Fuel cells will not be a significant player in transport (I agree) PHEV the way to go. But PHEV leads to $.40/kWh electricity (some disagree - PHEVs may lower per kWh cost of electricity ) 40 cents a kWh in a PHEV is equiv to $.80/gal gas, but it's a lot to run an A/C unit on.
Builders will not be able to hide envelope defects, and the envelopes of most homes are FAILING.
(lots of graphic pics.) Basic IR camera costs $4000, everything you need for $8000. This will be a great tool for home inspectors to differentiate themselves.
READ: Scary Man article (Richard Mize)
Home Builders can blow away the competition by adopting EnergyStar.
BARRIERS to adoption of Energy Star
What's Needed:
What's Next:
Recommends: PG&E Video: "Living in an EnergyStar Home"
The Effectiveness of Voluntary "above code" programs, speaking both to industry and to consumer. Proven effective at building
Voluntary Programs:
Colorado Example:
No state code (home rule state.) Low historic priority on EE; Built Green introduced 'level playing field'; set stage for future improvements. Built Green program: 15% better EE, air quality, durability, etc. Builders benefit by market distinction. Helps both in marketplace and in approval process. 3rd party review of docs, energy analysis from plans, random 3rd party inspections, meet education req., and promote Built Green.
New program: Built Green High Performance.
Why is Built Green Colorado working? Industry program, flexibility, easy to comply. Market is driver.
There is a big disconnect with consumer awareness.
Make sure existing home stock is included.
Innovation will always be ahead of regulation, support it.
Accessible entry point. Build awareness (mortgage and RE industry.) Don't re-invent the wheel.
Wants Environmental Service Corps, akin to Peace Corps 1960s & Civilian Canservation Corps 1930s, to upgrade existing home stock.
Q: Do you follow up with homebuyers after? A: No, but builders do. I don't have data on utility bills in reality. There may be some information on SMUD website (probably referring to Barbara Farhar's study.)
Q: Colorado Energy use trends? A: two-fold. Acceptance if int'l codes, after some confusion there was improvement in EE, even w/o state code, credits EnergyStar, Built Green, Environments for Living voluntary codes.
Q: Confusion about labels? A: Yes, this is a stumbling block both for buyers and builders? Many builders respond by doing all; codes are well-aligned. Some say they should merge, but Kim thinks competition is good between "Green" brands.
Q: Position on home builders on regulating home sizes? Example: Boulder county; Aspen. A: Homes are a product sold in the marketplace; there will always be a demand. We object to gov'ts telling us we can't build larger. Might be OK to require some additional extras. Boulder cnty citizens are objecting to Boulder proposal.
Q: Eric Zucker. We're building LEED developnent. Our incremental cost is $5000/unit. 1.6% of sales cost. 40% more eff. Not one size fits all. LEED works well for us.
Climate and energy efficiency program manager; WGA clean & diversified energy committee.
Facility Conservation Improvement Program (FCIP) authorized 2000
KS: State Contract with Energy Service Company (ESCOs)- has streamlined getting projects on the ground.
KS FCIP: financing program for EE improvements. Big difference is Pre-negotiated standard contract with ESCOs (10 partner ESCOs, all with same fees, indep 3rd party verification)
3 easy steps: Prelim Audit; investment grade audit (make sure returns are there); energy performance contract (standardized- saves time and effort).
Not needing full RFP speeds up process 8-9 months. All fees pre-negotiated.
Have found that ease of the process is drawing interest.
DOE looking at KS FCIP as "best practice project." Self-funding... fees from 0.8-2.9% of total project costs (sliding scale.)
TX - 1999 elec. deregulation. Limited regulation to T&D, and required T&D to meet 10% of projected load growth through EE.
2001 Emissions reduction plan passed.
Adopted building energy code.
80th legilative session... long list of bills proposed that had energy efficiency legislation... most failed, only a few passed. 2 distractions: concern over 18 proposed new coal plants (including TXU)
These passed: SB12: further emission reduction. SB 484 Electric Oversight. SB831 expanded performance contracting.
Energy Efficiency disclosure for commercial buildings. HB 3693 omnibus EE bill: raise EE goals; innovation. Education code for school districts 5% reduction of energy use per year extended to schools. Was under funded. EnergyStar equip and appliances bought where available. Gov't entities that pay utility bills have to make those bills publicly available.
Tax Code: tax holiday for certain EnergyStar products each Memorial days. comptroller must report on economic impacts of Energy Efficiency.
Utilities given inventive to exceed EE goals (15% 2008, 20% of demand growth 2009+) PUC study on other target ordered. So far only applies to IOUs; muni and RECs have been given notice that they are next.
Main 3/4 elec source is Hydro (we're different.) On regional Bonneville Power Admin.
1) state funded buildings must be LEED (incl affordable housing)
2) Appliance standards on 12 products on covered by fed standards.
3) one of nation's strongerst EE building code; further standards this year.
4) Adopted Cal auto emission standards before any other state
5) Renewable Portfolio Standard (RPS) passed as citizen initiative w/ 70% approx of vote. Same stds for IOUs and publicy owned utes.
6) GHG legislation. 1990 by 2020; 75% 1990 by 2035; ...
7) WCI Western Regional Climate Action Initiative.
8) Diversified trans fuels. 2% biofuels standard by 2008.
9) Financial incentives for Alternative Energy.... (taxpayer funded)... covers most forms of Alt-E
10) Local govts also involved - Seattle US Mayors Climate Protection Agreement. King County: Ron Simms Executive order on GHG emission from new sources.
"The time to deny, deflect, delay is over, now is the time to act."
Re-upped Energy Committee (had not met in 5 years.) Playing catch up.
Governor wasn't responding to req for energy strategy.
We did right: Kept strategy vague... called it a strategy.
No success yet on energy savings issues in KY. Wants to put the electric meter inside the house. Behavior is the hardest thing to change.
Indoor electric meter is small. TED "The energy detective" Empower my homeowners to do what they want to do already. Some of the lowest rates, but not the lowest bills. Newer indoor meters are even smaller.
My antique lamps use more energy for the same bulbs. TED changed my behavior leaving lights on. Saved $.05 a hour by unplugging standby devices.
"My bill stole the show.. and I was shocked" (indoor meter bill.)
People want to be empowered with the kind of information that lets them do what they want to do... and come visit the "other" western state.
Efficiency is important. Per capita energy consumption in CA is flat, but growing in the rest of the US. Divergence in late 1970s, when CA energy commission was intorducing efficiency standards for buildings and appliances.
There is a place for mandates, as well as tech assistance, and incentives.
Existing building mandates: requiring point of sale audit, and/or commissioning (looking at how the bldg is actually operating... ) could even require retrofits. Half of CA's EE has been due to mandates, half due to incentives. There is a place for both.
Broaden the scope- combine EE with other initiatives (Climate change, Renewable Energy, Water/Energy, Demand Response, Smart Growth.) Ex: if you want incentive for PV, you have to exceed EE standard by 50%. Incentives to builder for better EE standard.
Ending thoughts:
1) Legislation and programs must support what you're trying to accomplish. Stds and incentives take time to generate significant savings. Affects clients and customers to understand offers and mandates and to incorporate these in their behaviors.
2) Program stability is important, change interferes with adoption by clients and customers; give timeline; let them know when things will happen, and let them know that the program will stay around.
3) Outreach... Partnerships impoertant with other states, other agencies, local governments, affected communities and clients. Ongoing training, assistance. Remember that the community is in flux: may be same community, but individuals change.
Q: Seattle Power & Light. Regarding TED ($125) with ($150 to verify savings) you lose cost effectiveness.
A: HB123 did this: Allow utilities on a voluntary basis to put indoor meter on a voluntary basis in 300 homes, and compare with homes without the meters. Utility in LG&E had 2000 people voluntarily sign up. Using more efficient, cheaper technology. Will find out how much change, and if the changed behavior persist. The bill was a pilot project.
LG&E's program is a 3 year program. The shocking thing was the broad base of excitement among consumers. An electric meter on the outside of the house is like going to pump gas at a meter that wouldn't tell you how much you were pumping.
Q: TX: How much spent on education, etc., once EE bills before the state. Did you see more advertising coming from builders.
A: We found that most builders did. "The Stampede was pretty darned impressive." in 2002 we were the poster child of singlepane windows made to the quality of horse trailers.
Q: So regulation spurred the market?
A: (TX) Yes.
Drivers of EE homes:
Phase II of Mayor's climate agreement; interest in greening local buildings; LEED -ND; Sustainable Development; green bldg programs; interest in carbon; down markets-EE helps.
Why are builders going above code: 1) limit callbacks. 2) product differentiation 3) recognition and awards 4) faster plan check, incentives 5) get ahead of/ready for new regulations.
Incentives: reduced fees, faster review, priority field inspections, enhanced PR
NM Model: 1) establish local government incentives- piggyback 2) Leverage DOE Building Americas funds 3) educate utilities 4) Gov office support 5) sustainable building tax credit. 6) promote ZEHs; $.13 per kWh solar tariff. 7) focus on a few large builders 8) combine consumer marketing
-Lennar has been mentioned several times.
Align with existing programs.2030 challenge; mayors climate initiative, WA state green communities, Living Building Challenge.
Drive demand by leveraging media outreach; public events; advert and outreach materials; holding public events.
Building Supply: Tech assistance, project coaching, technical briefs, training & educational events; encourage curriculum development (HERS, etc); design competition; Builder forums-networking-builders train each other!
Try to help make sense of all the info and groups pushing EE messages.
Got EnergyStar, LEED, Greenbuilt listed on MLS.
Package all incentives into one package for developers.
Tracking progress; low cost survey techniques; invest in evaluation; avoid analysis paralysis...sometimes you just have to deliver. Employ social marketing follow-up.
Adaptively learn with your program. If it's not working, ditch it! (maybe just modify within parameters)
How compliance with codes brings builders a long way towards "beyond codes."
Inspect the expectations set by industry.
Help the builders help themselves. Focus on how builders were doing what they are doing.
MY SUMMARY: keeping builder's honest... check and double-check.
"Helping through enforcement."
Make it simple: it may not be the highest level of performance, but if you can enforce it, it will save a lot more energy.
Once they are complying with the code, getting them beyond the code is a minor step. If all these pieces go together, it will be easier to get them adopted. Big savings are available in jurisdictions that have never had energy codes.
We enforce codes b/c by having a standard of construction, we know that the house will be there 10-15 years down the road, and the same is true for energy code. It is a better community because it has better buildings?
How do you convince the jurisdictions that they want to get into this? 2003 code was not understandable. My philosophy for 2006 code was make it understandable... if I can't understand it (and I'm a simple architect... and I mean simple... then it's not a good code.) Education is essential. The avg building inspector, code inspector does not understand the benefits of these codes. Inspectors need to understand the benefits, only then will they enforce it properly.
We represent IOUs, including Xcel, that's the perspective I'll be taking.
Total energy use started diverging from GDP in nation as a whole in 1980.
People seek well-being: they're not going to build a house without HVAC or a smaller house than they want. I would not be a proponent of requiring smaller houses.
EE: We're trying to get more utility out of the same energy, not just use less energy.
Drivers for EE nationwide: Electricity has been low priced historically, and price increases have been much slower than other commodities... way down there wit apparel. Much of the EE that can be had is through building codes. Many of the things we have to do will have to happen without people having to do anything... it should happen without them having to "do" anything... it's not a big enough part of their budget for them to be motivated.
If we get this right, we can export these products. Let's develop this technology here, so we can sell it to the rest of the world.
We must align what we are trying to achieve with IOU's ability to make money... Change the role of the utility to be the service company to do the things that you are trying to do: Samrt Meters, Smart Grid. The utility probably won't do most of the EE work: they will provide the structure to let the EE entrepreneurs to do what they are going to do.
GHG: I do not believe that we can meet all our energy needs and mitigate GHG as well just with EE and Renewable energy. Wind is doing a good job, PV has lots of potential but too expensive. CSP very interesting. Must look at everything incl Nukes, Clean Coal... don't take anything off the table... 10 years from now it will be too late to solve our energy issues.
How to promote Plug In Hybrids: Tying the transportation sector to electric generation. 90% of transportation is oil=foreign source of energy.
US has huge opportunity to develop know-how and then export that to other countries.
Moved to marketing about 8 months ago. Trying to evolve into a green utility.
Utilities and Incentives: traditionally the utility has stopped at the meter, but what we're talking about now goes well beyond the meter.
Competitive advantage of being green... what Xcel is trying to do is to get EVERYONE to be building green... but will that take away the competitive advantage?
Building Green is the right thing to do, but it is probably contrary to the utility's self interest. We're now trying to DECREASE sales... need decoupling; change regulatory context so that level of sales no longer tied to utility earnings. If we have a financial disincentive to be more efficient it will be difficult to persuade the utility to help home builder.
I've been in regulation for a long time. Help us overcome "regulatory lag" help us make up for lost margins.
It's impossible to do DSM for all customer classes. Cannot spread evenly over all classes. Bigger opportunities in commercial and industrial, some residential. Change to TRC (total resource cost) test was gigantic. I invite you all to call us at Xcel... Building Green, avoiding new generation is of primary interest to us; it's the thing to do.
Nevada- we had some success 2001-2005 legislature moved EE to the top of the list for resource options.
I want to close the day with a success story. the point of talking about success is that your hard work does pay of and have rewards.
Seattle City Light - documented savings of 117 average MW- 11% of total requirements with conservation resources developed over last 25 years. Equiv. to taking 25% of Seattle cars off the road. Large net savings to customers.$5M last year?(PPT problems)
Success stories: 3 LEED Silver buildings and one LEED certified. Seattle leads nation in completed LEED projects because utility and gov, etc all working together. LEED silver low income housing project.
Bottom line: Where sound business meets strong policy, the barriers vanish!
Q&A
Q: HAve you built fewer power plants due for conservation? A: SCL: Yes
Q: Could utilities move into energy management... seems like large opportunity. Smart Grid?
A: (Stoffel) Most utilities are looking to move into Smart Grid... so far systems are dumb. Historically, "If there's an outage, call us because we don't know" customer "what?".... We're interested, other utilities are. MSFT, HON, SI... there's a lot of competition in protecting those ideas. We just have to get the software and the chips into homes.
A: Utilities victims of their own success... good at turning lights on. Lots of assets in the ground... need lots of new investment... trying to convince folks to spend a lot of money when the record is good on reliability, so smart grid is had sell. Eastern Interconnect is the largest synchronous machine... keeping it all balanced is quite an engineering feat.
Q: Giant oppty? A: Yes, it's huge. (Roger) problem, is that utilities are geographical in nature. Stoffell: utilities are local; we're creatures of government... when we stray from local, it becomes an issue for customers.
Q: I'm from LV, NV... I hope Nukes not part of the solution... the waste has to go somewhere. Also, should we take sole ability to build transmission from utility, just as government builds roads. Maybe then utility can spend more on CSP, etc. Problem: not enough response from utility. Real diversity is going to come from new
A: (Roger EEI) Having someone else build transmission if that's the most efficient way to do it, yeah. But you're dealing with a VERY complex system... if you can ensure that those transmission lines work with the system, then letting someone else built it is okay. But don't try to ignore the additional costs of getting the renewables today...
Q: what if we shifted subsidies back... RE getting 1/5 the amount coal and nuclear gets. The true cost of energy in this country is not being given to the consumer.
A: (roger EEI) You have to put a value on what you consider valuable. You can argue all year about who gets subsidized and how much and never get to a conclusion.
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Performance Contracting 101: "It's a no-brainer"
Biggest objection: "Why would I borrow money?" (I personally find this ironic. Esp since public sector only paying 4%)
Energy Efficiency: America's greatest energy resource.
PC101: Common probs for public facility: Limited budget; maint problems or comfort complaints; limited expertise on technologies.
Projects pay for themselves... savings on utility bills pays for replacement equipment... this money is already in your budget.
How project funded? Usually tax-exempt lease purchase financing. Annual cost savings exceed annual payments. 10-30 year financing programs. Does not impact debt ceiling. Endorsed by most state legislators & governors; results/cost guaranteed by ESCO. Only one state does not allow (Iowa).
Some states have funding mechanism, but if your state does not have a program... not a reason not to go ahead.
Risk? Significantly lower risk than traditional construction/retrofit projects. Design/build. Single point of responsibility. Guaranteed results (project, equip, etc will function as designed, ESCO gaurantees.)
Measurement and Verification of Project Performance: IPMV- International Protocol for Measurement and Verification procedures. M&V plan may be reviewed by 3rd party engineer. Possible to measure ACTUAL performance.
Applications include renewables, LEED certification, biomass, central plants, solar wind geo exchange, new building construction.
Differentiator is partnership with energy services company (ESCO). ESCO puts all the pieces together.
[statistics on industry... see presentation]
Recs: Do it!; Extend contract periods; DSM form utilities; Energy office: support PC process
http://energyservicescoalition.org/
Getting the savings is the first part; second part is making sure that savings are protected (not pulled back into sate budget... esp after the end of the contracts).
Authorization for Energy Performance Contracting in statutes... term in TX extended to 20 years 6/16/07 (from 15 years.. average existing contract about 10 years).
Provisions: Design-build approach; professional services procurement method; energy and or water savings measures and related costs eleigible... may include operating costs or new revenues. Savings must exceed costs. Payment and performance bond required as is 3rd party review.
TX has low interest revolving loan facility avail to any TX public entity. 187 loans 5.5 year payback... cumulative energy savings over $20million. 2.1 million tons of CO2 reduced (7k tons NOx, 4788 tons SOx)
City of San Antonio: LED traffic and pedestrian signs 2 yr ROI. City of Ft Worth: (Lighting, EMS, HVAC, design/engineering 7 yr ROI)
Commissioning (continuous maintenance) often produces more savings than replacement. Maximum performance to achieve highest level of service for the lowest possible cost.
NAESCO: Nat'l trade organization; 85 companies and agencies. ESCOs financiers, contractors, suppliers. Very rigorous accreditation process.
NAESCO produced as much savings as all utility DSM programs combined.
Performance Contracting.: Turnkey; EE/RE, Guaranteed return necessary to finance; Full range of efficiency measures. Guaranteed savings; customer has no out of pocket cost; designed to meet jurisdictional standard.
Why Performance Contracting? Solve bldg problems; pay for "greening a bldg", meet CO2 mandates; enhance local economy. 3rd party financing (very important to public entities) Free up budge for primary activities; increase productivity (indoor air quality, building comfort)
Calculating cost of delay (EPA Tool): Cash flow opportunity calculator. How long should you wait for a better interest rate? (because of high returns of EE, it often does not pay to wait very long to get a better interest rate.) How big a project can you buy given interest rate/given cash flow/certain time period.
Conclusion: can be pot of gold/ outstanding energy savings/ solves building problems/ greening/ helps local economy/ use it!
Economic impact
TAC division of Schneider electric.
PC has had $1Billion in economic impact SO FAR.
Saving $200 in electricity... almost no impact on jobs at utility, but creates funding for $2M project: 83.5 man-years of jobs, plus possible manufacturing jobs.
Draw distinction between savings from reduction in service and savings to enhance technology. Savings from loss of service is a non-starter.
We need to get away from the the view that more energy means more service. PC frees up budget for other service needs. Interest rates are lower than construction cost increases.
Why doesn't everyone do PC? TANSTAAFL: PC isn't a free lunch, it's a lunch you get paid to eat.
Risk and Risk management. Cost Savings Development (understand cost modeling process, agree early on project intent. don't evaluate everything, only things likely to get into the project. Too much evaluation reduces potential size of the project.) M&V procedures (some savings are budget reductions- some aren't (will this project reduce payroll costs?)... 3rd party reviews are available) Contracts (Be clear on Standards of Service & comfort; knowledge and understanding is critical.) Involve budgeting people early. Know client's responsibilities as well as ESCO responsibilities. Know statutory requirements; don't reinvent the wheel.. look to other states.
Q: PC for affordable housing/multifamily? A: Yes, through HUD. Yes, there are ESCOs that do all kinds of projects... housing, agricultural, all the way up to largest fed facilities.
Q: How is ESCO contract guaranteed? A: contract contains targeted amt of energy savings... IMBP plan comparing old to new equipment. Real results are compared to chart in contract. Parties agree on these operating hours and energy energy savings, and performance is measured... if there is a discrepancy, then it is the responsibility of ESCO to fix it or pay the difference out of pocket.
Q: Types of projects in PC? What about renewables? Example old solar thermal but has now been covered over... would PC pay for PV? Q: Yes, that is a great oppty for PC. Renewables are always on the table. Renewables are fastest growing sector in performance contracting.
Q: City Longmont... $1.80/sq ft tax credit for ? apply to public entities can PC capture? A. Yes... various ways, but dollar amount (to the extent legal, but usually works) goes to public entity.
Q: Savings continue after payback period. Are you conservative? A: Yes, additional savings go back to client. Once funding is paid for savings go to the organization. Utility rates rise, and this is another source of possible savings.
1. Advancing legislation, building codes and incentives. 2. Utility DSM programs