PIH 2005 Energy Bill Workshop FirstPic and D&R International L’Enfant Plaza Hotel September 23, 2005
Introductions and Overview Public Housing Rebates and Grants Other Opportunities Next Steps Agenda
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
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
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
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
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
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
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
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
Amendments toUS Housing Act of 1937 • 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.
Amendments toUS Housing Act of 1937 • “Integrated utility management” supports asset management • Reduce lifecycle costs • Opportunity to educate PHAs on comprehensive utility planning?
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
Amendments toUS Housing Act of 1937 - EPC • 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
Amendments toUS Housing Act of 1937 - EPC • 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?
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
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
ENERGY STAR – Current Activities • Management Plan goals call for promotion of ENERGY STAR • Equipment use • Incorporation in HOPE VI
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
ENERGY STAR – Defining “Cost-Effective” • 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
ENERGY STAR – Defining “Cost-Effective” 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
ENERGY STAR – Defining “Cost-Effective” • Variables make a simple energy savings calculator impractical • A contractor will run savings calculations • ENERGY STAR vs. code • www.energystar.gov includes savings calculators
ENERGY STAR – Defining “Cost-Effective” • 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
ENERGY STAR – Defining “Cost-Effective” 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
ENERGY STAR – Defining “Cost-Effective” • 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?
Building Codes • Model Energy Code 1992 Edition – “1992 MEC” • International Energy Conservation Code • IECC 2003 Edition • IECC 2004 Supplement (to 2003)
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
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
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%
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
How Do IECC 2003 and 2004 Compare? • 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
IECC 2003 – three methods Prescriptive Performance Hybrid (performance w/prescriptive) IECC 2004 - two methods Prescriptive (simplified) Hybrid (performance w/prescriptive) How Do IECC 2003 and 2004 Compare?
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
Amendments to Cranston-Gonzalez National Affordable Housing Act • 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)
Amendments to Cranston-Gonzalez National Affordable Housing Act • 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
Amendments to Cranston-Gonzalez National Affordable Housing Act • 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
Amendments to Cranston-Gonzalez National Affordable Housing Act • Tools to help PHAs implement new code? • Provide code training with EPC training? • Energy workshop for PIH? • Update Rehab Advisor?
Amendments to Cranston-Gonzalez National Affordable Housing Act • 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?
Energy Strategy Development • 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 – 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
Energy Strategy Development – Current Activities • 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
Energy Strategy Development – Current Activities • 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
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:
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
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
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
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)
Introductions and Overview • Public Housing • Rebates and Grants • Other Opportunities • Next Steps