Tag: Energy Efficiency

House Democrats Aim for 100 Percent “Clean Energy Economy” by Mid-Century; Proposal Includes Ramped-Up Building Codes

Posted on by Trey Jackson

Pallone podium Clean Future Act x375

Democratic leaders on the House Energy and Commerce (E&C) Committee released a far-reaching bill on January 28, signaling their plans for climate legislation based on the outcome of next November’s elections.  The bill includes rigorous efficiency targets for building energy codes and a framework to drive the U.S. electric grid toward net-zero carbon emissions. [E&C press release]

  • “The CLEAN Future Act,” sponsored by E&C Chairman Frank Pallone (D-NJ) — above in photo — and Subcommittee Chairmen Paul Tonko (D-NY) and Bobby Rush (D-IL), would implement a climate policy framework announced last month.  [See Roundtable Weekly, January 10]  The 622-page “discussion draft”  sets an overall target for a “100 percent clean energy economy” by 2050. 

  • The draft proposes a number of de-carbonization and renewable energy mandates and incentives affecting the real estate, power generation, transportation, and manufacturing sectors of the U.S. economy.  [CLEAN Future Act section-by-section analysis]
  • Commercial and residential buildings would be subject to increasingly stringent “model” energy codes for new construction and major retrofit projects.  States and localities typically adopt these model codes into law, but they have authority to alter them.
  • The CLEAN Future Act would require codes to reach a target for buildings to save 50 percent more energy by 2030 (relative to a 2016 baseline).  The bill’s 50-percent-improvement target would not consider the expenses incurred by owners and developers to install more costly – but efficient – HVAC, windows, lighting, and other equipment in their assets.  In contrast, a competing bipartisan proposal pending in the House and Senate — known as the Energy Savings and Industrial Competitiveness (ESIC) Act — would evaluate cost effectiveness and small business impacts as iterations of energy codes are developed.  

  •  The Roundtable has long-supported the ESIC Act, sponsored by Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH), and Representatives Peter Welch (D-VT) and David McKinley (R-WV).   [Roundtable Weekly, Sept. 27, 2019].

  • While the CLEAN Future Act’s building-related provisions emphasize increasingly stringent energy codes, it does not impose energy consumption, carbon reduction, or “labeling” mandates on building owners that have gained traction at the state and local levels.  [E.g., Roundtable Weekly, April 19, 2019].  Nor does the bill propose a “tax on carbon” as a means to cut greenhouse gas emissions.
  • Other notable elements of the CLEAN Future Act include: 
  • Creation of a market to buy and sell “clean energy certificates,” to drive more renewable energy to the U.S. electric grid and render the electricity sector “net-zero” carbon emissions by 2050;
     
  • New federal loan and other incentive programs to help finance microgrids and “distributed energy” projects, which would trigger Davis-Bacon prevailing wage requirements;  
     
  • Mandate connection of renewable energy facilities to the electric grid, and eliminate any monopolies in the U.S. where public utilities control all levels of production, transmission, and sale of power in wholesale electricity markets; and
     
  • Projects supported with federal funds must “buy clean” construction materials and products that generate lower greenhouse gas emissions during their manufacture. 

In addition to the CLEAN Future Act, the House’s Select Committee on the Climate Crisis is expected to release its own principles for legislation by the end of March. [Roundtable Weekly, Nov. 22, 2019]. 

Prospects to advance the CLEAN Future Act through Congress this year are virtually zero, as the bill does not presently align with Republican priorities in the Senate.  Nonetheless, as Democrats are soliciting input on their climate framework, The Real Estate Roundtable’s Sustainability Policy Advisory Committee (SPAC) has convened a “task force” process to review the omnibus package and provide comments to the bill’s House majority sponsors.

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House Hearing Focuses on Reducing Carbon Emissions from Buildings

Posted on by Trey Jackson

House Select Committee on the Climate Crisis Chair Kathy Castor (D-FL)

An Oct. 17 hearing before the House Select Committee on the Climate Crisis, “Solving the Climate Crisis: Cleaner, Stronger Buildings,” focused on reducing carbon pollution and improving resilience in residential and commercial buildings across the nation as a method of countering the effects of climate change.  (Hearing video and witness statements)

  • The Select Committee is chartered to study and make recommendations to reduce greenhouse gas emissions and develop solutions to combat climate change.  It lacks authority to introduce legislation, but is scheduled to publish a set of recommendations for bill-writers by March 31, 2020.
  • Committee Chair Kathy Castor (D-FL), above, stated at the hearing that “[a]n ambitious national plan for cleaner, stronger buildings requires national leadership. And Congress needs to offer smart incentives, to set a direction for the numerous federal, state, and local officials involved in the buildings sector.”
  • Committee Ranking Member Garret Graves (R-LA) emphasized that reauthorization of the flood insurance program and other Committee recommendations must “advance[ ] the goal of resiliency, [housing] affordability, and energy efficiency conservation. [W]e can achieve multiple goals.”
  • The Real Estate Roundtable has long been a leading advocate for energy efficiency in buildings, spearheading significant policy developments in this arena.  For example, the Sustainability Policy Advisory Committee (SPAC) was critical to the creation of EPA’s ENERGY STAR for buildings program in 1998, and its evolution to ENERGY STAR for Tenants in 2015.
  • Recently, SPAC’s assistance to EPA resulted in improved and updated models for federal ratings regarding building energy efficiency performance.  (Roundtable Weekly, July 19).  Current SPAC initiatives include efforts to refine the next version of ENERGY STAR for Tenants (to be unveiled in 2020 and cover retail as well as office leased spaces), and coordinate with the agency on key data it collects regarding the carbon footprint of the nation’s electricity grid.
  • On the legislative front, The Roundtable has long supported the Energy Savings and Industrial Competitiveness (ESIC) Act (S. 2137), co-sponsored by Sens. Rob Portman (R-OH) and Jeanne Shaheen (D-NH).  (Roundtable support letter for S. 2137) The Senate Energy Committee advanced the ESIC Act last month. (Roundtable Weekly, Sept. 27).
  • The ESIC Act “is exactly the kind of smart, forward-looking policy that will help building owners respond to our modern, evolving economy” Roundtable President and CEO Jeffrey DeBoer stated in a Senate news release upon the bill’s introduction this summer.  (Roundtable Weekly, July 19) (Video of DeBoer’s statement)
  • Also in the Senate, Delaware Democrat Chris Coons and Indiana Republican Mike Braun have formed a climate caucus aimed at creating bipartisan consensus on ways to reduce carbon dioxide emissions.  The purpose of the Senate Climate Solutions Caucus is outlined by the two Senators in an Oct. 23 opinion piece in The Hill. 

The Roundtable will provide comments to the House Select Committee on the Climate Crisis, summarizing our energy efficiency advocacy agenda.  The committee’s questions for stakeholders are posted at https://climatecrisis.house.gov/inforequest, with submissions due by November 22.

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Real Estate, Environmental Groups Recommend Accelerated Depreciation for Energy Efficient Building Equipment

Posted on by Trey Jackson

A broad coalition of real estate and environmental organizations urged congressional tax writers this week to establish an accelerated depreciation schedule for a new category of Energy Efficient Qualified Improvement Property installed in buildings – or “E-QUIP.”  (Coalition E-QUIP Letter, May 8)

  

A broad coalition of real estate and environmental organizations urged congressional tax writers this week to establish an accelerated depreciation schedule for a new category of Energy Efficient Qualified Improvement Property installed in buildings – or “E-QUIP.” (Coalition E-QUIP Letter, May 8)

  • The coalition, led by The Real Estate Roundtable, recommends “a uniform E-QUIP 10-year recovery period [to] promote productive business investment by spurring high performance upgrades in commercial and multifamily buildings. In turn, optimizing energy efficient building performance will help create well-paying jobs in the construction, design, and energy sectors; boost equipment manufacturing; enhance our country’s energy independence; and reduce the built environment’s carbon footprint.”    
  • Legislation supported by The Roundtable is currently pending to fix a technical error from the Tax Cut and Jobs Act regarding depreciation of interior building improvements, known as Qualified Improvement Property (“QIP”).  (Roundtable Weekly,  March 15 and QIP Policy Comment Letter, April 26)  However, even if Congress fixes the QIP mistake, it would not meaningfully encourage commercial and multifamily owners to invest in expensive high-performance building equipment.    
  • The new E-QUIP coalition thus proposes a beneficial 10-year cost recovery period for efficient HVAC, lights, roofs and other components that will save energy and reduce carbon emissions attributable to buildings, their tenants, and other occupants.  
  • Roundtable President and CEO Jeffrey DeBoer said, “The purpose of establishing a new E-QUIP category in the tax code is to stimulate productive, capital investment on a national level that modernizes our nation’s building infrastructure while helping to lower greenhouse gas emissions.  As Congress considers potential tax, infrastructure, and climate legislation, the E-QUIP proposal should have bipartisan appeal on a range of important policies prioritized by Republicans and Democrats.”
  • An elective 10-year, straight-line cost recovery period for E-QUIP expenditures for taxable income, as well as for earnings and profits purposes, is the core of the proposal.  Other elements recommended to Congressional tax writers for consideration in E-QUIP legislation are set forth in the real estate and environmental groups’ coalition letter.   

E-QUIP will be one of many policies affecting commercial real estate discussed during the June 11-12 Annual Roundtable Meeting in Washington DC.