Form revised May 5, 2009

 

FISCAL NOTE FOR NON-CAPITAL PROJECTS

 

Department:

Contact Person/Phone:

DOF Analyst/Phone:

Department of Planning and Development

Jayson Antonoff 386-9791

Calvin Chow  684-4652

 

Legislation Title:

An ordinance relating to energy conservation; requiring owners of nonresidential and multi-family buildings to measure and disclose energy efficiency performance, and adding a new chapter 22.920 to Title 22 of the Seattle Municipal Code.

 

·         Summary of the Legislation:

This Bill would require owners of non-residential buildings of 10,000 square feet or larger and of residential buildings of five units or more to submit reports of their building’s energy performance using the US Environmental Protection Agency’s Energy Star Portfolio Manager Tool. 

 

The reporting requirements would be phased in over a two year period, with larger buildings subject to these requirements by January 1, 2011 and remaining buildings by January 1, 2012.   Upon authorization by the building owner, utilities providing energy service in Seattle will be responsible for providing customer billing data in a format compatible with the Portfolio Manager database maintained nationally by the U.S. Environmental Protection Agency.  Upon request, building owners will be required to disclose the energy performance of their building to current or prospective tenants, lenders, and buyers.  The Department of Planning and Development will be responsible for developing and maintaining a database of all reporting buildings in the city, and for enforcement of the legislation.

 

The Portfolio Manager Tool requires input of key energy use and building characteristics and allows a building owner to establish an energy performance benchmark (for use in evaluating energy performance over time) and (in most cases) an energy performance rating (to compare building energy performance with other similar buildings nationwide).  Ratings are not currently available for some space types, in particular for multifamily buildings, though EPA is working to develop this capacity.  ENERGY STAR Portfolio Manager is considered the industry standard for measuring non-residential energy performance. 

 

·         Background:

In February 2008 Mayor Nickels announced the Green Building Capital Initiative – a focused initiative to increase the efficiency of Seattle’s residential and commercial buildings.  The three goals of this initiative, announced as part of the Mayor’s 2008 State of the City Address are to: 

-          Improve the energy efficiency of residential and commercial buildings

o   Increase energy efficiency in existing buildings by 20%

o   Increase energy efficiency in new buildings and major retrofits consistent with the requirements of the 2030 Challenge[1]

-          Create job opportunities in the green economy

-          Save Seattle residents and businesses money on energy costs

 

In July 2008 the Mayor convened a Green Building Task Force to provide guidance and feedback on policy mechanisms that the City could employ to achieve the goals of the Green Building Capital Initiative. Mayor Nickels selected and invited 50 stakeholders with a range of perspectives on environmental and policy issues to sit on the Task Force, including real estate professionals, building owners and operators, green building experts, architects, engineers, low-income housing providers and advocates, historic preservation advocates, energy suppliers, financial institutions and other interested parties.

 

The Office of Sustainability and Environment, the Department of Planning & Development and Seattle City Light spent the better part of a year researching and identifying policy options available to the City to meet these targets.  This list of options, approved by the Mayor and senior staff in early 2008, was then turned over to teams of consultants, who completed a technical analysis for each policy option.  This information was brought to the Task Force for consideration and feedback.

 

The Task Force Committees met regularly between July 2008 and January 2009, and provided feedback to staff on these policy options, including thoughts on feasibility, likelihood of success and compatibility/ synchronization with other state, regional, national and international efforts.  Significantly, in order to ensure that all voices were heard, the Task Force was not asked to develop a consensus recommendation, but rather to provide input during the meetings to inform the staff recommendations. 

 

Policies considered by the Existing Buildings Committee fell broadly into five categories:  Measurement & Disclosure, Financing, Incentives, Repayment Mechanisms, and Upgrades. 

This legislation was developed to fulfill the recommendations of the Green Building Task Force, which determined that disclosing the energy performance of new and existing buildings would provide a significant market incentive for increasing their energy efficiency.

 

Energy disclosure was subsequently enacted at the State level through SB 5854.  The current Seattle legislation expands upon the disclosure requirements of the State legislation in three ways: 

1)      Expands the reporting and disclosure requirement to include multi-family buildings, in addition to non-residential buildings;

2)      Requires that all non-residential buildings of 10,000 SF or more and residential buildings with five or more units complete energy performance benchmarking at regular intervals.  The state legislation requires disclosure of this information only upon request and as triggered by a real estate transaction or sale; and

3)      Requires regular reporting of this benchmarking data to the Department of Planning and Development.

 

X         This legislation has financial implications.  

 

Appropriations:  None included in this legislation

 

Notes: 

The City anticipates receiving funding from the U.S. Department of Energy through the Energy Efficiency and Conservation Block Grant program, and has allocated $450,000 of that grant for implementing this program.  Necessary appropriations will be requested as part of the grant acceptance legislation.  Please see attached “Disclosure Program Budget” for additional details on program components and anticipated costs.   

 

This funding is currently anticipated to be sufficient to cover DPD’s cost for the initial development and implementation of this program over a two-year period projected to begin in Q4 2009, with the actual start contingent upon the receipt date of the grant funding.  Funding to cover additional resource needs, if any, that are identified as the scope of work is refined would be considered in the development of DPD’s 2010 Proposed Budget.

 

Ongoing costs after this period, as well as the potential costs for the future review role of the Hearing Examiner’s Office, will be considered as part of the 2011-2012 Budgets.

 

Appropriations to cover costs associated with Seattle City Light’s reporting responsibilities (as required by state law and this legislation) will be discussed as part of the 2010 Budget process. 

 

Anticipated Revenue/Reimbursement: Resulting From This Legislation:

 

Fund Name and Number

Department

Revenue Source

2009

Revenue

2010

Revenue

City Light Fund (41000)

Seattle City Light

Fees

$0

unknown

Planning and Development Fund (15700)

Department of Planning and Development

Citations

$0

unknown

TOTAL

 

 

 

 

 

Notes

This legislation authorizes Seattle City Light to impose a charge to recover costs for providing utility data in a format compatible with Energy Star Portfolio Manager. 

 

This legislation establishes financial penalties for noncompliance:

 

Failure to Report

-          The Department of Planning and Development may issue a $150 citation for failure to report.

-          If a report is not filed within 15 days of citation, the Department may issue a notice of violation with a penalty of $150/day for the first 10 days of noncompliance, then $500 per day for each day in violation past the 10th day until compliance is achieved

 

Failure to Disclose

-          The Department of Planning and Development may issue a $150 citation for failure to disclose energy benchmarking data to a requesting tenant, buyer or lender for the first violation and $500 for any subsequent violation. 

 

 

Total Regular Positions Created, Modified, Or Abrogated Through This Legislation, Including FTE ImpactNone included in this legislation

 

Notes:  While this legislation does not create any new positions, implementation will require reallocation of 1.5 FTE in the Department of Planning and Development in fiscal year 2010 and 2011.  These positions will be funded by the Energy Efficiency and Conservation Block Grant and the associated funding will be appropriated in the grant acceptance legislation.  Ongoing staffing needs after 2010 will be considered as part of the 2011-2012 Budget. 

 

City Light estimates staff will be needed to prepare and maintain data in a format consistent with the existing state requirements and those proposed in this ordinance.  Funding to cover these positions will be discussed in the 2010 budget process.

 

·         Do positions sunset in the future No, however continuation of the positions at DPD will be dependent on additional funding at the expiration of the Energy Efficiency and Conservation Block Grant funding.

 

Notes:

 

·         What is the financial cost of not implementing the legislation?  

 

This legislation will result in increased energy conservation for non-residential and large multi-family buildings in Seattle.  This conservation will help allow City Light to cost-effectively meet its energy resources needs and maintain greenhouse gas neutrality through avoided electrical load growth. 

 

·         Does this legislation affect any departments besides the originating department

 

Yes.  This legislation requires that Seattle City Light provide utility data for input into the EPA’s ENERGY STAR Portfolio Manager tool upon request of building owners.  This requirement is consistent with a requirement in recently passed state legislation:

 

On and after January 1, 2010, qualifying utilities shall maintain records of the energy consumption data of all nonresidential and qualifying public agency buildings to which they provide service. This data must be maintained for at least the most recent twelve months in a format compatible for uploading to the United States environmental protection agency's energy star portfolio manager.

 

However, given its expanded scope for benchmarking to include all qualifying buildings and not just those involved in a real estate transaction, there are likely to be significantly more requests for City Light to provide this data.  Therefore, this legislation allows Seattle City Light to establish a charge to recover the costs of maintaining this data in this format.

 

·         What are the possible alternatives to the legislation that could achieve the same or similar objectives?  

 

The Green Building Task Force considered a range of policy options, including establishing mandates for energy efficiency retrofits. 

 

The Task Force determined opportunities for increasing energy efficiency in existing buildings must be driven by a better understanding of how these buildings are performing.  By increasing the amount of information available to building owners and occupants, measurement and disclosure of building energy performance will help identify opportunities for energy efficiency gains, encourage voluntary upgrades and participation in utility conservation programs, and create a mechanism for market differentiation.

 

·         Is the legislation subject to public hearing requirementsNo.

 

·         Other Issues

None.

 

Please list attachments to the fiscal note below:

 

Attachment A: Proposed Disclosure Program Budget - DPD

Attachment B: Energy Performance Disclosure Requirements in Other Jurisdictions

Attachment C: Green Building Task Force Membership

Attachment D: Green Building Task Force Staff Recommendations & Appendices

Attachment E: Green Building Capital Initiative Final Report

Attachment F: Portfolio Manager Quick Reference Guide

Attachment G: Washington State Second Substitute Senate Bill 5854:  Climate Pollution Reduction  -- Energy Efficiency

Attachment H: Block Diagram of Proposed Process Flow for Energy Disclosure Information

 

 

Program

Description

DPD Resources – Year 1

DPD Resources – Year 2

 

 

 

 

1.      Data Acquisition

§  Develop database of all city properties that will be subject to requirements

§  Link data records downloaded from Portfolio Manager to our buildings database

0.5 FTE, CGB ($60k) plus 0.5 FTE, IT ($60k)

0.25 FTE, CGB ($30k)

2.      Enforcement

§  Develop policies and processes for ensuring that building owners comply with program requirements

§  Ensure that hearing examiner and others impacted have capacity to handle challenges to the legal requirements

§  Develop case management software, linked to Hansen, to track any communications that could lead to legal action.

§  Follow-up with those who fail to comply with program requirements, through phone calls and written notices.

0.25  FTE,  CGB ($30k)

0.25  FTE,  CGB ($30k), 0.5 FTE, DPD Code Compliance ($60k)

3.      Outreach/Technical Assistance

§  Inform building owners of the disclosure requirements for both multi-family and commercial properties

§  Develop a 2-year training and technical assistance program for building owners and managers subject to the reporting requirement, offered in partnership with US EPA, BOMA, IFMA and other industry groups

§  Build and maintain a web resource clearinghouse for building owners and operators

§  DPD staff will manage work of contractor for:

-          Web development and maintenance

-          Workshop planning and delivery (bi-monthly workshops offered for 2 year period and then as needed)

-          Developing  and producing outreach materials

0.10 FTE, CGB ($12k) plus $60k for outside contract

0.10 FTE in CGB ($12k)

4.      Data Analysis

Analyze data to 1) inform future policy decisions, 2) target utility incentive programs, 3) spot check for accuracy of reporting

 

0.25 FTE, DPD CGB ($30k)

5.      Program Management

§  Project management

§  Ensure that overall program goals are achieved

0.15 FTE, CGB ($18k)

0.15 FTE in CGB ($18k)

Program Total

 

1.0 FTE, CGB ($120k); 0.5 FTE, IT ($60k); consulting ($60k)

1.0 FTE, CGB ($120k); 0.5 FTE, Code Compliance ($60k);

 

 

 

Status of Related Efforts in Other Jurisdictions

 

 

Disclosure and/or Upgrades

Financing Mechanism

Austin, TX

Existing:  Ordinance passed November 2008:  (a) Single family:  perform checklist audit prior to the sale of a home and provide the audit information to prospective buyers during the normal disclosure process.  Estimate will be 4000 per year (effective June 2009). 

(b) Multifamily:  perform energy audits within two years of the effective date of the ordinance and disclose the results to current and prospective tenants and to Austin Energy.

(c) Commercial: Use Energy Star Portfolio Manager tool to serve the audit function within 2 years and report Energy Star rating to Austin Energy and prospective buyers.

Existing:  Agreement with local credit union to finance any upgrades identified by residential customers following audit.  Existing incentives and rebates for both commercial and residential customers. 

Berkeley, CA

Existing:  Checklist audit and upgrades required at time of sale for both commercial (since 1994) and residential (since 1981) properties.  400-500 residential properties go through this process annually. 

Under Development:  Considering moving toward a performance based audit and upgrade requirement. 

Existing:  Rolled out sustainable energy financing district pilot (BerkeleyFIRST) project in September 2008.  40 homes are part of the pilot (application process for an opt-in to the district), paying for installation of solar (and efficiency) through a 20 year assessment on their property tax bill.  Is considered a “super-lien” and is superior to private liens on property.

Burlington, VT

Existing:  Passed ordinance in 1997 to establish minimum rental housing efficiency standards for single and multifamily rental properties.

 

Cambridge, MA

Existing:  Comprehensive energy audits for Cambridge buildings — in most cases, for free.  Offered through a partnership between the City of Cambridge and NStar (Electric and Gas IOU)

Existing:  Cambridge Energy Alliance formed 2 years ago with intention of accessing a pool of private investors for energy efficiency projects – have not yet been able to attract this investment.

Chicago, IL

Existing:  Audits available to low income residential owners through weatherization program.  Checklist audits for 1500 homes completed to date. 

 

 

Existing:  City administers a commercial/industrial sector low-interest loan program targeting a different industry annually.

Under Development:  Announced new initiative to retrofit 400,000 homes throughout the city – 65,000 each year – to improve their energy efficiency by 30%.  The city has yet to identify a funding source for the program.

Denver, CO

Under Consideration:  Looking to expand existing weatherization program beyond low-income homeowners, hopefully utilizing federal stimulus dollars.

 

Gainesville, FL

Existing:  City has established an interactive database that allows homeowners served by the public utility to view their current and past energy use and compare to other homes. 

 

Milwaukee, WI

 

Under Development:  Pay-As-You-Save on-bill financing for commercial and residential owners.  Me2 will administer the program and repayment as a “savings charge” under authority of the City.

New York City, NY

Under Development:  Launching a requirement that commercial and multifamily residential buildings over 50,000 sq ft disclose energy use annually using Portfolio Manager, complete an audit every 10 years,  and complete cost-effective retrofits.

Under Development:  Establishing a revolving loan program for buildings affected by the new requirements. 

 

Disclosure and/or Upgrades

Financing Mechanism

Portland, OR

Under Development:  For Commercial and multifamily buildings:  disclosure of building performance in the areas of energy usage, water usage and stormwater management. Exploring residential requirements and financing mechanisms.  No policy direction at this time.

Under Development:  Launching energy efficiency loan program for single family residential homes with on-bill repayment of loan amount.  Pilot program will reach 500 homes. 

Sacramento, CA

Existing:  Residential requirements in place since 1970s, not well enforced.

Under Consideration:  Target revised ordinance in place by January 2009

Existing:  Sacramento Municipal Utility District launched a residential loan program in 1977 and since then has issued 135,000 loans (avg. size $8750).

San Francisco

Existing:  Requirement for residential energy efficiency at time of sale in place since 1982, applies only to residences granted permits prior to 1978.  Utilizes a checklist system to identify required upgrades.  Commercial lighting upgrade requirements passed in 2008.

Under Development:  Revisions to the prescriptive disclosure requirements.

Existing:  Homeowners pay for cost of measures up to a cap.

Under Development: RFP on the street to identify a fund manager for an interim loan pool (to proceed a LID take out mechanism modeled after the Berkeley pilot).     

Tacoma, WA

 

Existing:  Zero-interest loans available to single family and multifamily customers to finance insulation measures.

Washington, DC

Existing:  Free energy audits available for residents living in single-family homes (2 year pilot through end of 2008).  Based on the inspection, homes receive a rating that allows homeowners to compare their home with similar homes. The two-year pilot program had an annual budget of $800,000 and currently the city pays about $410 per audit. As of January 2008, the DC HERS program had completed 870 audits. 

Existing:  The Energy Efficiency Partnership of Greater Washington, DC will provide energy efficiency retrofits to large commercial and public buildings through a partnership with private investor Hannon Armstrong ($500 million over 5 years)

Boulder County, CO

Existing:  City has established a partnership with a non-profit, the Center for Resource Conservation (CRC) and Xcel Energy to offer energy audits at 60% below the private market price. 

Existing:  Modeling Clean Energy Options Local Improvement District off Berkeley pilot.  All property owners who participate will be responsible for paying debts through a special assessment on their property. Voters approved ballot issue in November allowing the County to issue up to $40 million in special assessment bonds (for both commercial). 

Montgomery County Maryland

Existing:  Disclosure of energy use and energy costs at time of sale for residential properties.

Under Development:  Establish specific energy performance requirements and timelines for the benchmarking, commissioning and improvement of new and existing commercial and multi-family buildings in order to reduce energy consumption by 25% by 2020. This will be achieved by a combination of education and outreach efforts, incentives, market forces and, if necessary, mandates. 

Existing:  Green Building Property Tax Credit for commercial buildings (created 2008) applies to buildings achieving a silver (10%), gold (25%) or platinum (50%) LEED-EB (existing building) certification. 

Under Development:  "Home Energy Loan Program" (HELP) which will create long term financing opportunities collected through the property tax and bolstered by a high quality energy audit

State of California

Existing:  Performance-based disclosure of commercial property energy efficiency at time of sale.  Utilities must make data available to all building owners in a format compatible with ENERGY STAR Portfolio Manger

Under Consideration:  Performance-based disclosure of residential property energy efficiency at time of sale

Current Status:  Legislation will be re-introduced 2009

 

State of New Mexico

 

Existing:  Sustainable Building tax credits enacted in 2007—commercial buildings must achieve a Silver LEED-EB rating and residential properties must score at least 60 on the HERS index (national audit standard).

State of Washington

Existing:  Performance-based disclosure for commercial properties is incorporated into Efficiency First! Legislation using Energy Star Portfolio Manager upon request. 

Existing:  State’s Housing Finance Authority may sell bonds to finance residential energy efficiency loans. 

 

Disclosure and/or Upgrades

Financing Mechanism

State of Oregon

Under Consideration:  Governor will pursue performance-based disclosure of energy efficiency for residential owners. 

Under Consideration:  Legislation drafted to allow local jurisdictions and possibly the state to establish energy efficiency investment districts

State of Virginia

 

Existing:  Tax code gives authority to local jurisdictions to levy lower taxes on energy efficient buildings (both new and existing)

 

 

 

State of Wisconsin

Existing:  Program requires upgrades, and applies only to residential rentals built prior to 1978.

 

 

 

 

 

Voluntary Programs/Pilots

 

Ann Arbor, MI

Pilot project (100 homes) will be rated using the energy performance score model and the National Energy Audit Tool.  A database will be created to publicly disclose energy use rates.  It will cost about $350-400 to do the home energy audits.  If homeowners make the suggested upgrades they will be eligible (in the near future) for rebates from the local utilities. 

Denver, CO

Pilot project beginning late 2008, partnering with Denver Board of Realtors and University of Colorado to complete a performance/prescriptive hybrid audit coupled with incentives for upgrades. 

Portland, OR

Pilot project (200 homes) rated using the Energy Performance Score.  Results available January 2009.

 

 

 

 

 



[1] 2030 Challenge:  http://www.architecture2030.org/

Attachment C: Green Building Task Force Membership

Attachment D: Green Building Task Force Staff Recommendations & Appendices

Attachment E: Green Building Capital Initiative Final Report

Attachment F: Portfolio Manager Quick Reference Guide

Attachment G: Washington State Second Substitute Senate Bill 5854: Climate Pollution Reduction -- Energy Efficiency