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

2. 2 Agenda Introductions and Overview Public Housing Rebates and Grants Other Opportunities Next Steps

3. 3 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

4. 4 Energy Bill Overview Formally known as the Energy Policy Act of 2005 Signed on August 8 th 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

5. 5 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

6. 6 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

7. 7 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

8. 8 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

9. 9 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

10. 10 Amendments to US 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

11. 11 Amendments to US 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.

12. 12 Amendments to US Housing Act of 1937 “Integrated utility management” supports asset management Reduce lifecycle costs Opportunity to educate PHAs on comprehensive utility planning?

13. 13 Amendments to US 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

14. 14 Amendments to US 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

15. 15 Amendments to US 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?

16. 16 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

17. 17 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

18. 18 ENERGY STAR – Current Activities Management Plan goals call for promotion of ENERGY STAR –Equipment use –Incorporation in HOPE VI

19. 19 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

20. 20 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

21. 21 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

22. 22 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

23. 23 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

24. 24 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

25. 25 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?

26. 26 Building Codes Model Energy Code 1992 Edition – “1992 MEC” International Energy Conservation Code –IECC 2003 Edition –IECC 2004 Supplement (to 2003)

27. 27 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

28. 28 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

29. 29 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%

30. 30 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

31. 31 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

32. 32 How Do IECC 2003 and 2004 Compare? IECC 2003 – three methods –Prescriptive –Performance –Hybrid (performance w/prescriptive) IECC 2004 - two methods –Prescriptive (simplified) –Hybrid (performance w/prescriptive)

33. 33 States that have adopted IECC

34. 34 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

35. 35 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)

36. 36 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

37. 37 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

38. 38 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?

39. 39 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?

40. 40 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

41. 41 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

42. 42 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

43. 43 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

44. 44 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:

45. 45 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

46. 46 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

47. 47 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

48. 48 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)

49. 49 Timeline under development

50. 50 Introductions and Overview Public Housing Rebates and Grants Other Opportunities Next Steps

51. 51 Rebates and Grants Section 124, Energy Efficient Appliance Rebate Programs (p.57) –Calls for states to develop energy efficient appliance rebate programs

52. 52 Rebates and Grants Can PIH work with states to encourage rebates to PHAs, not just to “typical” residential consumers?

53. 53 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:

54. 54 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;

55. 55 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.

56. 56 Rebates and Grants - Community Pilots Would PHAs, IHAs be eligible? If so, should PIH provide guidance, tools to help housing authorities access funds?

57. 57 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

58. 58 Rebates and Grants – Renewable Systems Are PHAs eligible as consumers purchasing residential systems? –Should PIH pursue this with DOE?

59. 59 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

60. 60 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?

61. 61 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

62. 62 Metering

63. 63 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

64. 64 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

65. 65 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?

66. 66 What is a public building?

67. 67 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.

68. 68 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:

69. 69 Are there drawbacks to the classification of “public buildings”? –What other regulations will need to be followed?

70. 70 State and Federal Consumption Goals

71. 71 Section 123, State Energy Programs (p.56) –Calls for 25% improvement in energy efficiency by 2012 –Can PHAs contribute? State, Federal Consumption Goals

72. 72 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? State, Federal Consumption Goals

73. 73 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? State, Federal Consumption Goals

74. 74 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? State, Federal Consumption Goals

75. 75 Consumer Education

76. 76 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

77. 77 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

78. 78 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

79. 79 Tribal Energy

80. 80 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

81. 81 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?

82. 82 Introductions and Overview Public Housing Rebates and Grants Other Opportunities Next Steps

83. 83 Next Steps Incorporation into PIH Regulations –None of this is official until enacted by regulation List next steps and action items with dates: