Thursday, September 6, 2018 by Jack Craver

Austin Energy shifts money away from apartment weatherization program

Every year, Austin Energy pays contractors to make apartment buildings more energy-efficient. They put in place new duct sealant, solar screens and attic insulation, which helps tenants reduce their energy consumption and lower their utility bills.

This year, however, the city-owned utility has spent dramatically less than in past years. It has also proposed cutting the budget for the program targeting multifamily properties. Funding for one of the arms of the program, which targets low-income tenants, is being reduced from $1 million a year to $675,000 a year. The other, which covers 80 percent of the cost of improvements at other multifamily properties, is being reduced from $850,000 to $525,000.

Tim Arndt, the head of development for 360 Energy Savers, one of the top contractors in the program, says that the budget reduction is part of an ongoing effort by Austin Energy to eliminate the program entirely.

Arndt said that the utility has put in place rules that restrict which properties are eligible for participation, such as those on the Austin Code Department’s Repeat Offenders Program due to code violations.

“What it seems to me like they’re doing is they’re killing the program with a thousand cuts,” said Arndt.

Another AE contractor, who declined to be named, voiced the same suspicion: “Every time we turn around, they’re making changes behind our backs. To me, it looks like they’re trying to shut down the program. I wish they would be classy enough to just do it.”

Debbie Kimberly, AE vice president of customer energy solutions and corporate communications, said budget reduction is simply a result of the program’s success.

Throughout the program’s history, said Kimberly, the utility has weatherized over 200,000 units, or 70 percent of all multifamily units in the AE service area. Half of the city’s apartments have been serviced in the past 10 years, she said.

Unfortunately, there are always going to be property owners who aren’t interested in participating, said Kimberly.

“I can’t force a property owner to take advantage of our program,” she said.

The utility encounters challenges even in convincing low-income homeowners to accept free upgrades that will reduce their energy bills. Selling the program to multifamily property owners is even tougher. It’s not them, but their tenants, who save money from the resulting energy efficiencies.

In theory, property owners should be interested in making improvements that will make their units more attractive to prospective tenants.

However, added Kimberly, “When you’re looking at a 3 percent vacancy rate in Austin, they’re not going to have a lot of incentive to take advantage of that program.”

In an attempt to boost participation, the utility plans to outsource management of the program to a contractor that hopefully has relationships with major multifamily property owners – including national and regional companies – and is able to get them on board.

Kimberly defended the exclusion of properties on the repeat offender list, saying that the utility was following clear direction from City Council to not offer incentives to properties where “unsafe, hazardous conditions exist.”

Arndt says the people getting hurt by excluding such properties are their predominantly low-income tenants. Furthermore, he said, properties on the repeat offender list are not necessarily there due to dangerous conditions, but because of the number of complaints the Code Department has received on an issue.

Paul Cauduro, the top lobbyist for the Austin Apartment Association, said that it is very easy to get on the repeat offender list and very hard to get off of it. He also said that tenants rights groups have encouraged tenants to complain to the Code Department instead of dealing with property management.

“(W)e understand the reluctance to ‘reward’ bad property owners by giving them energy upgrade rebates, however there are many new property owners taking over these distressed properties and they are making the capital improvements needed for the betterment of the residents and it would be a perfect time to partner with the city but they are prevented from doing so,” he said in an email.

Shoshana Krieger, project director for Building and Strengthening Tenant Action (BASTA), a group that has helped organize tenant associations at 16 properties, said that they tell tenants to complain to the city only after a lack of response from property management.

Kaiba White, who oversees environmental policy at progressive group Public Citizen and is a member of the city Resource Management Commission, is pushing for Council to restore the budget for the multifamily program. She offered a recommendation to that effect at a recent meeting of the commission that earned support from five of the seven commissioners present.

White noted that the decrease in the multifamily program budget has corresponded with a budget increase for a program that rewards businesses that reduce their consumption at peak times. White is not against the increase in the latter program, but does not want to see it come at the expense of residential programs.

White suggested that the multifamily program could boost participation by broadening its focus, such as offering more energy-efficient air conditioners, “something that landlords are loath to do.”

Kimberly said replacing AC units is simply too expensive to consider on a large scale.

Last year, Council approved a new 10-year generation plan that called on the utility to spend 2.6 percent of its gross revenues each year on demand-management programs. It specified that 20 percent of that should target “low-income” and “hard-to-reach” customers.

Kimberly says the utility is going above and beyond those targets and is committed to investing heavily in the programs that work.

Photo by dunktanktechnician made available through a Creative Commons license.

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Key Players & Topics In This Article

Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.

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