Calling B.S. on the Energy Conservation Code

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Power to the People is a column by Donald M. Kreis, New Hampshire’s Consumer Advocate. Kreis and his staff of four represent the interests of residential utility customers before the NH Public Utilities Commission and elsewhere.

By DONALD M. KREIS, Power to the People

My parents bought the home in which I was raised, when it was brand new, in 1961.  They are just now getting around to selling it.

In other words, a home is a long-term investment.  Move into a newly built home that is well-insulated and equipped with well-designed heating and cooling systems and you will save thousands of dollars.  Move into something that is built on the cheap and you might save a few bucks on the purchase price but your monthly fuels and utility bills will eat up those savings many times over.

The good news is that here in New Hampshire we have standards.  Newly built homes can only be as rinky dink as the state’s building codes – in particular, the energy conservation code – will allow.

The bad news is that the trade group that represents the state’s building contractors does not want to give the buyers of new homes the energy efficiency they need.

Earlier this month, the Executive Departments and Administration Committee of the House of Representatives unanimously recommended a bill that would leave the state’s energy conservation code frozen in the past.  Specifically, frozen in the 2018 version of the energy conservation code as drafted by the International Code Council (ICC) – the Washington-based nonprofit that creates these highly technical documents and updates them every three years.

Nobody is suggesting New Hampshire fast forward to the latest edition of the energy conservation code, which was just finalized last week.  The pending question is whether New Hampshire should adopt the 2021 version of the code.

From the standpoint of residential ratepayers – the people who save money on their monthly utility bill when their dwelling places aren’t leaking energy – the question is a no-brainer.

According to an analysis from the U.S. Department of Energy’s Pacific Northwest National Laboratory – an objective and credible source – a home built to the standards in the 2021 energy conservation code, as opposed to the standards in the 2018 edition, will experience reduced energy costs of 7.44 percent in the climate zone applicable to southern New Hampshire.

Maybe saving 7.44 percent on your annual energy bill doesn’t seem like a big deal to you.  But consider the example of my parents, who will end up having owned their home for 63 years.  Ask yourself how much money you’d save over all those decades if your new home were built to the standards in the 2021 energy conservation code.

Just before that House committee took its vote, the lawmakers heard from Matt Mayberry of the New Hampshire Home Builders Association.  He claimed that updating to the 2021 energy conservation code would raise the price of a typical new home by $31,000.

Is that baloney?  Well, not exactly, because there definitely is an increased cost associated with applying more stringent energy conservation standards.  But it’s definitely some form of lunchmeat – if only because the data comes from the National Association of Home Builders, a self-interested group that is waging an intense nationwide campaign against the 2021 energy conservation code.

“That’s a green energy tax placed right on the heads and the wallets of granite staters when housing is the second largest issue in the state of new Hampshire behind substance abuse disorder,” Mayberry testified.

I call B.S.

Specifically, this is not some scheme by proponents of renewable energy or decarbonization to fleece homeowners and line the pockets of insulation manufacturers.  It’s about saving people money on their energy bills – period.

The same objective source referenced above – the Pacific Northwest National Lab – released an analysis specific to New Hampshire in 2021.  According to that report, updating to the 2021 energy conservation code would yield net savings of $10,956 over the life of a new home.

To put this whole thing in a bit more perspective, consider that when the International Code Council (ICC) approved the 2024 edition of the energy conservation code last week, which would require even more energy efficient buildings than the 2021 code mandates, the American Council for an Energy Efficient Economy accused the ICC of watering down the document to accommodate gas utilities, apartment building developers, and manufacturers of heating and cooling equipment.

But here in New Hampshire, nobody is even dreaming of the 2024 energy conservation code.  The New Hampshire way has been to stick, always, with the second most recent edition of the code – until now, that is, when even the 2021 code is too evolved for our state’s home builders (or, at least, their trade association).

Fans of this column will recall that two years ago Mayberry and the group he represents were instrumental in saving NHSaves.  That’s the statewide ratepayer-funded energy efficiency program the Public Utilities Commission (PUC) was all set to ditch until the Legislature overruled the PUC at the urging of Mayberry, the state’s utilities, and our office (i.e., the Office of the Consumer Advocate), among others.

So what’s different now?  And where are the utilities – which pride themselves on being big proponents of energy efficiency – on this question of updating the energy conservation code?

New Hampshire’s home builders – or, at least, their trade association – are perfectly happy to champion energy efficiency (and make some money installing energy efficiency measures) when the costs are buried in people’s utility bills.  They grow less enthusiastic when they have to reflect those costs directly in the prices they charge buyers of new homes.

And as for the utilities, remember that under the NHSaves program their shareholders get incentive payments for deploying cost-effective energy efficiency measures that would not otherwise be attractive to homeowners.  Savings that are achieved via compliance with mandatory standards – like the energy conservation code – can’t be claimed by the utilities.

Ergo, the utilities have no incentive to take on the New Hampshire Home Builders Association on this question of updating the energy conservation code.  And, so far, they have not done so.

Mayberry is right about one thing:  New Hampshire must address its housing shortage if it is to remain an attractive place for young people to settle, as opposed to becoming one giant retirement community.  But asking young people to live in homes that will have needlessly high energy bills for decades is no way to solve this problem.

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