Whitepaper: Utility Programs and Building Energy Codes

Over the last few years, utility energy efficiency programs and building energy codes activity have exploded in the Midwest .  Since 2007, four new states have adopted new energy efficiency portfolio standards (ACEEE 2011)  - a total of seven states have mandated rate-payer energy efficiency programs - while seven states have adopted the 2009 International Energy Conservation Code (IECC) for residential dwellings, ASHRAE 90.1-2007 for commercial buildings or both. Increasing energy efficiency program targets passed in the region have escalating savings requirements and are increasing annual spending that will require utilities to pursue non-traditional means of generating energy efficiency savings such as implementing deeper whole-home programs or training building operators to claim the savings from better building performance.

With respect to energy codes, adoption of updated building energy codes represents only a first step. To achieve the full benefits of new building energy codes, buildings must actually comply with the code, and to ensure compliance there must be effective enforcement. Effective enforcement comes from comprehensive, quality training of stakeholders; simple and complete plan review and inspection procedures; and proper evaluation of compliance. All of the above steps require funding, which states and municipalities chronically lack. Moreover, the monetary shortfall has recently become even more severe for municipalities as the two main sources of funds for building departments - building fees and state aid - have declined. Since many states in the Midwest have recently adopted new, and more stringent, energy codes, the decline in funds coupled with the need to implement their new codes have left many states and jurisdictions severely limited in their ability to ensure compliance.  

There may be an opportunity, however, to bring together the needs of both utility efficiency programs and state code compliance by seeking regulatory approval for utility programs that both increase code compliance and allow utilities to claim code-based savings toward the efficiency requirements. The outcome of such programs can assist states in improving code compliance while also helping utilities achieve energy efficiency portfolio goals and ultimately reduce energy consumption.