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Task force recommends voluntary energy upgrade program

Monday, September 15, 2008 by Mark Richardson

Almost every building in Austin would be subject to an energy efficiency audit in the next few years if the recommendations of the Energy Efficient Upgrades Task Force were put into effect by the City Council. The 27-member group completed its final report last week. The City Council is scheduled to hear the report at their Sept. 25 meeting.

 

If the task force’s recommendations are successful, it is estimated that property owners would spend some $124 million for efficiency upgrades, but would save $555 million on their utility bills. It would also lower the power demand to Austin Energy by 225 megawatts, and save 3.66 million tons of carbon dioxide emissions over a 10-year period.

 

The task force was created to help the city implement Austin’s Climate Protection Plan.

 

Rumors of what the task force may have been considering in a proposed energy efficiency upgrades ordinance made headlines in recent months—mostly during the runoff election between Laura Morrison and Cid Galindo—as many in the real estate community were concerned that mandatory upgrades would be required of single-family homeowners at the point of sale. However, the report’s recommendations are all voluntary, despite efforts by some members to eventually make upgrades mandatory if the voluntary measures fail.

 

Chair Phillip Schmandt said the panel considered but rejected “mandatory backstop” recommendations for single-family, multi-family and commercial properties, emphasizing the voluntary nature of their recommendations. Some members of the task force wanted to recommend that owners of single-family homes be forced to retrofit their property within one year after sale if the voluntary measures failed to reach the city goals in 2010. That proposal failed to win enough support to make it into the report.

 

The task force has made these specific recommendations:

 

  • Within the two years of the effective date of an EEU ordinance, all commercial and multifamily buildings shall conduct an energy audit, the results of which would be shared with Austin Energy, current tenants, prospective purchasers and residential tenants.

  • For single-family residences, an energy audit would be conducted prior to the sale of a home and disclosed to the purchaser of the home at closing. The city would establish protocols and program requirements for a voluntary energy efficiency program for each of the three major property sectors. Program participation targets will also be established for each property sector.

  • In addition, starting two years after adoption of an energy efficiency ordinance, and each year after that, the City Manager will report to the Council on progress towards achieving the participation targets.

The Task force recommended goals, or targets, for the three categories of structures:

  • Single Family – The number of owner occupied homes sold each year that would perform the specified upgrades would grow from 25 percent in the first year following the passage of the ordinance to 85 percent in the fourth year following passage of the ordinance.
  • Multi Family.—80 percent of the oldest multifamily units (built before 1970) would perform the specified upgrades within two years; 80 percent of the next oldest multifamily units (1970 – 1979) would perform the specified upgrades within four years; and 80 percent of the next oldest multi family units (1980 – 1999) would perform the specified upgrades within six years.
  • Commercial – Would be determined by the building’s EPA Energy Star Building ratings with a goal to achieve a score of 50 or higher for 80 percent of the square footage of commercial properties in Austin.

The report makes it clear that task force members were divided over whether to make the upgrades mandatory at some point, but that a majority of the members preferred for the program to remain voluntary.

 

Austin Energy staff estimates that if all of the eligible properties receive energy efficiency upgrades between 2009 and 2020, the average energy efficiency of the existing stock of homes in Austin would be improved by a range of between 12 to 15 percent.

 

For the city’s multifamily units, the improvements would range from  approximately 10 to 16 percent, while commercial properties would be improved by at least 20 percent, with the least energy efficient buildings improving to at least the national median level of energy efficiency.

 

The report estimates total cost to property owners to perform all of the energy efficiency upgrades within all three sectors would be approximately $124 million and the total savings from reduced energy bills during the next 10 years would be $555 million. On average, the upgrades would pay for themselves within 2.25 years through reduced energy bills.

 

Under the program, an owner of a single-family home would spend approximately $1,066 on retrofits and receive annual savings of approximately $242 at current rates from reduced energy bills. Over 10 years, the total savings from reduced energy bills would pay back the initial investment in upgrades and put $1,355 in the pocket of the homeowner.

 

The report also noted that over 10 years, the program would cost the city some $70 million in rebates to participants, but would benefit utility ratepayers by $158 million in avoided power plant capital costs and $15 million in carbon credits.

Members of the task force included local realtors, trade associations, real estate inspectors, the Austin Mortgage Bankers Association and other lenders and brokers, home performance contractors, affordable housing advocates, energy efficiency advocates, the Austin Board of Realtors, Austin Apartment Association, the Austin Tenant’s Council, the city Resource Management Commission, and the Electric Utility Commission. It was created and began meeting in January 2007.

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