by Dylan Voorhees, NRCM Clean Energy Project Director
Thank you for this opportunity to testify in support of LD 2179. This bill should be one of the Legislature’s top priorities this year as it seeks to reduce energy costs in Maine, and protect home buyers and the environment at the same time. Maine is one of the last states that has not taken the step of establishing a statewide minimum energy standard in codes, and we’re seeing the results: most new homes in Maine aren’t built to even this basic standard. Homebuilders aren’t to blame—they have lacked uniform standards or training. This bill is an opportunity to solve a significant problem in a careful and sensible way.
The energy situation in Maine
On Tuesday oil prices reached their all-time high, $101 barrel. So far this winter, taxpayers have spent $36 million dollars on heating oil assistance in Maine—we’ve asked the federal government for $20 million more. No one disputes the need to help those in need.
Unfortunately, over the next several years the price of heating oil will only go up, and there is very little Maine can do about that. We can reduce costs, which are what really matter. Maine can prevent from indefinitely hemorrhaging money by increasing efficiency—making our homes safe, warm and comfortable with less oil.
In Maine we use more energy for heating our homes than all energy uses in the industrial sector combined. Maine builds thousands of new homes each year – in some years nearly 10,000 new units – and these homes may last for generations.
To put this energy situation in context, consider the City of Auburn. They have responded to 36 “no heat” calls so far this winter, representing 80 families who were in trouble. Each call takes about 3 hours to respond to. In Auburn when a “no heat” complaint is received, a team consisting of a Code Enforcement Officer, Health/Sanitation Officer, City Electrical inspector and the Fire Prevention Officer goes to the building to check the situation. (During many of checks they find issues of dangerous practices for heating: invented propane heaters, old electric space heaters, etc.) With the price of energy the owners could not afford the cost of fuel to heat the buildings. Many of the issues were landlord-tenant issues where the tenant did not pay rent and the owner could not afford the fuel without the rent money. Sometimes the rent was not paid because there was no heat. These situations are troubling but not unique, many lesser examples exist across the state, with landlords, tenants and homeowners struggling against buildings not built with any energy efficiency in mind.
We presume that new buildings are immune to these problems. Unfortunately that is simply not true. 84% of new homes in Maine do not meet the Model Energy Building Code, which exists in state as voluntary for towns and would be established statewide under this bill. Homeowners and state and local taxpayers are paying the price right now. Of course today’s new buildings are also tomorrows older buildings. Now is the time to take action to make sure that every new home in Maine isn’t going to contribute further to this problem.
Why do we need minimum energy standards?
Our homes are our biggest investment. The expense of heating a home is a major part of the cost of home ownership. Appropriate standards will lower this expense and deliver the affordable value that homebuyers deserve. Energy standards assure every new homebuyer that the building meets a minimum level of energy efficiency that is carefully established as cost-effective.
They provide developers, architects and builders with a clear, uniform standard. Because meeting these codes is not onerous, this standard improves the business climate. (The benefit for builders is actually greater when there is good enforcement because builders know that their competitor is being held to the same standard.)
Standards can also be the simplest and most cost-effective way to provide an important public benefit uniformly throughout an industry. Standards are an important tool to protect consumers in cases where they are unlikely to have the needed information to evaluate a product’s quality—such as in food and product safety standards or energy standards for appliances. It’s practically impossible for a homebuyer to tell how efficient a home is—they can’t see inside the walls or detect the r-value of the windows. Even if they could, this information isn’t easily translated into energy savings. The common presumption that a new home will be energy efficient is a problem here—because the facts tell us that presumption is wrong, and that we are missing significant opportunities to reduce energy consumption, and costs, across Maine.
Each new home is an opportunity to improve our building stock. New construction is the best, most economic time to build in energy efficiency, and energy building codes are widely recognized as one of the most cost-effective energy efficiency measures available. We can’t go into the past and change standards, but we can go more confidently into the future with new buildings.
For consumers who want more efficient homes, standards provide a baseline against which to measure. If you want to pay for a house that is 30% or 50% “better”, minimum standards are the “better than” comparison.
What are the costs and savings for meeting the energy codes?
The fact that 84% of new homes don’t meet the energy codes clearly indicates that there is a problem. It is not as daunting as it may seem. There are some specific reasons why those buildings didn’t meet the code, and the remedies are straightforward and economic. Improving insulation in attics and cellars is not hard to do if that is the standard and everyone—from builders to energy code inspectors—is properly trained.
The recent new home survey by the Public Utilities Commission also found some good news. New homes are generally very well built, use relatively efficient furnaces. The are just missing a few important things.
Investments in energy efficiency are just that, investments. They cost something up front and, if they are good investments, yield financial returns. Building to energy codes is a great investment. The cost of insulating cellar walls in a new Maine home might cost $2500, and would bring many of these new building into compliance. That cost becomes part of the mortgage and becomes a tiny increment in a monthly payment. The energy savings—calculated for real new homes surveyed across Maine—start that first winter and are greater than any mortgage increase. You can calculate a “payback period” (maybe it’s 3 or 4 years), but that really doesn’t matter to a homeowner who pays a mortgage bill and an energy bill.
A study in Michigan, conducted when their legislature updated statewide codes several years ago, found an average new home would save over $1000 in the first several years—that is after all costs have been accounted for. That was before energy prices had increased by 50%.
In addition, energy efficiency, including energy building codes, are extremely cost-effective at reducing global warming pollution. The Maine Climate Action Plan reveals that these are some the most cost-effective actions we can possibly take. Unlike some actions to reduce carbon, they actually save money per ton of carbon rather than cost something.
Why a uniform statewide energy code?
Despite our harsh winters and high heating bills, Maine is one of only ten states nationwide that lacks a statewide building energy code for new home construction. It is the only state in the northeast. You know as well anyone that our fierce independence in Maine has advantages and disadvantages. In this case, it is time for Maine to catch up. Higher than necessary heating costs should not be part of the “Maine brand.”
The alternative is the “patchwork quilt” of codes that the State Planning Office discovered in their research and outreach. There was little disagreement that this lack of uniformity causes unnecessary confusion and cost. (This includes for towns, where the code adoption or amendment processes might cost $3000.) Many builders, designers and developers said it: just tell us clearly what the standards are and make sure it is a level playing field. And it would be helpful if they didn’t have to work to different codes just because they crossed a town line.
Perhaps most importantly, every new home buyer in Maine deserves some basic consumer protection. People in smaller towns shouldn’t be left to fend for themselves as they struggle to buy a new home that won’t cost them extra to heat.
However we can’t solve this problem by simply telling every small town that they have to make it happen either. The state can and should play a role in ensuring protection for homebuyers without undue burdens for enforcement. This bill makes important progress towards that balance.
Why does the bill focus on training, certification and inspections?
If all you wanted to do was legislate that the energy code applies to all new homes statewide, you could achieve that with sections 1 & 8 of this bill alone—two paragraphs.
I believe that would be a largely symbolic gesture. (If you were going to do that, you should at least pass a much more aggressive standard than this one…) The legislature would obviously think twice about making something against the law without any mechanism for enforcing it.
Similarly, the significant benefits of energy standards for new homes—protecting consumers, reducing costs for Mainers, and reducing unnecessary energy consumption—depend on our ability to ensure each home meets those codes. That takes some effort and care, but it must be a core component of any bill.
Maine is not the only state to face the challenge of enforcing codes. Some states solving this problem by creating and staffing a state agency charged with enforcing codes. That is probably an effective method but probably not suited for Maine today.
In some parts of Maine, code enforcement officers could do this work, assuming they are trained in the energy codes. In many Maine towns there is no code inspector. In some towns those code inspectors are not ideally suited to enforce the codes. This bill proposes an important mechanism that would strike the right balance for Maine and our diverse communities. It allows cities to enforce the codes if they can, or allows builders elsewhere to contract independent, certified inspectors to work on a fee-for-service basis. (A process modeled closely on enforcement for plumbing codes.) Not only does this give municipalities flexibilities, it allows us to move towards a class of more professional energy experts to help Maine move towards increasingly efficient homes.
Everyone who inspects to the energy codes needs to be trained and certified in those codes. This is a shared responsibility between towns and the state, but is an opportunity for state government to provide a much needed coordinated training program. This bill calls for such a program, which would be open to code officers, builders and independent inspectors alike. Efficiency Maine, the Housing Authority and others can and will also increase training efforts for builders.
What benefits will the incentives provide?
Finally I would like to make a comment about the importance of building beyond these codes. They are called minimum standards for good reason. There are many, many opportunities to build highly cost effective homes well in excess of these standards. You’ll hear from some people who understand that better than me.
I do know that many, many states are building more new homes to Energy Star standards. You may be familiar with Energy Star labels on appliances. There is also a federal program to rate and reward new homes that perform about 20-30% better than the codes. In Vermont, over 25% of new homes meet this standard. In New Hampshire, 17%. In Maine, less than 3%. Not only are the people in those states spending much less on heating oil than us, those builders brought in (in New Hampshire), over $1.6 million in federal tax credits in 2006. Some matching efforts in Maine will help us do a better job in this area.
In conclusion, we recognize that you have a committee bill that is very complimentary to this one—it also requires uniform energy codes and a mechanism to enforce them, albeit on building codes as well. We are working cooperatively with SPO on these matters and strongly encourage you to work both bills together, allowing you to use the best language and best ideas from each. No matter which language you use, now is the time to move Maine forward and take strong action to reduce energy costs and protect homebuyers statewide.