Energy Efficiency
Important Challenges Must Be Overcome to Realize Significant Opportunities for Energy Efficiency Improvements in Gulf Coast Reconstruction Gao ID: GAO-07-654 June 26, 2007Following several hurricanes in 2005, the need to rebuild and repair destroyed and damaged homes and buildings in the Gulf Coast region may create opportunities for making energy efficiency improvements and realizing energy cost savings. While numerous federal agencies are involved in the recovery process, the Department of Housing and Urban Development (HUD) and the Department of Energy (DOE) interact with the states on a regular basis regarding matters of energy efficiency. This report, initiated under the authority of the Comptroller General of the United States, examines (1) the extent of opportunities for incorporating energy efficiency improvements in the Gulf Coast reconstruction, (2) potential challenges to realizing the energy cost savings during the reconstruction, and (3) the role of HUD and DOE in promoting energy efficiency in the rebuilding of the Gulf Coast. GAO limited the scope of its work to Louisiana and Mississippi since these states experienced the majority of the hurricane damage. GAO assessed opportunities for incorporating energy efficiency measures by conducting site visits and interviewing federal, state government officials; home builders; and energy efficiency experts. GAO also worked with a DOE national laboratory to develop energy cost savings estimates. GAO is making no recommendations.
Reconstruction in the Gulf Coast creates a significant opportunity for incorporating energy efficiency improvements that could produce long-term energy costs savings in residential and commercial buildings. The sheer magnitude of the reconstruction effort and Louisiana's and Mississippi's recent adoption of more energy-efficient building codes makes this an opportune time for incorporating energy efficiency improvements in the rebuilding efforts. In partnership with a DOE national laboratory, GAO analyzed energy cost savings opportunities and estimated that adopting these newer building codes could reduce residential energy costs in these two states by at least $20 to $28 million per year, depending on the extent of the rebuilding efforts in these states. Furthermore, the analysis also showed that annual energy expenditures for commercial buildings--hospitals, schools, offices, and retail buildings--built to newer energy standards could be about 7 to 34 percent lower than buildings built to older standards. There also are opportunities for consumers to make additional energy efficiency improvements to both building types by replacing old, damaged equipment. There are three substantial challenges to realizing the energy cost savings opportunities presented by the Gulf Coast reconstruction: (1) the shortage of a skilled construction workforce, and specifically, the shortage of workers trained to meet the newer building codes; (2) the lack of trained building code inspectors to ensure compliance with newer building codes in Louisiana and Mississippi; and (3) the difficult financial issues facing consumers, such as the sufficiency of insurance and other compensation payments, that may make decisions about energy efficiency a low priority. States have efforts under way to address many of these challenges and it will take time and sustained commitment for them to be successful. The rebuilding of the Gulf Coast is largely a state and local matter, but HUD and DOE have played a supportive role in promoting energy efficient rebuilding. HUD and DOE have provided financial and educational resources that can encourage energy efficient rebuilding, and both agencies have broader national programs that may support energy efficiency improvements in the rebuilding of the Gulf Coast. HUD has made $16.7 billion in funding available for general rebuilding purposes, such as restoring damaged housing, and allows states to determine how to spend these funds, including using them for energy efficient improvements. HUD also has several national initiatives that may directly improve the energy efficiency of the public housing stock in Gulf Coast states. DOE has sponsored education and training on energy efficiency issues to state and local officials, private industry, and consumers in Louisiana and Mississippi. As part of its nationwide effort to assist all states with energy efficiency initiatives, DOE provides grants to states to design and carry out their own energy efficiency programs. DOE's energy expertise as well as HUD and DOE resources may prove valuable to the states and consumers as they make decisions about energy efficient rebuilding in the Gulf Coast.
GAO-07-654, Energy Efficiency: Important Challenges Must Be Overcome to Realize Significant Opportunities for Energy Efficiency Improvements in Gulf Coast Reconstruction
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Report to Congressional Addressees:
United States Government Accountability Office:
GAO:
June 2007:
Energy Efficiency:
Important Challenges Must Be Overcome to Realize Significant
Opportunities for Energy Efficiency Improvements in Gulf Coast
Reconstruction:
GAO-07-654:
GAO Highlights:
Highlights of GAO-07-654, a report to congressional addressees
Why GAO Did This Study:
Following several hurricanes in 2005, the need to rebuild and repair
destroyed and damaged homes and buildings in the Gulf Coast region may
create opportunities for making energy efficiency improvements and
realizing energy cost savings. While numerous federal agencies are
involved in the recovery process, the Department of Housing and Urban
Development (HUD) and the Department of Energy (DOE) interact with the
states on a regular basis regarding matters of energy efficiency. This
report, initiated under the authority of the Comptroller General of the
United States, examines (1) the extent of opportunities for
incorporating energy efficiency improvements in the Gulf Coast
reconstruction, (2) potential challenges to realizing the energy cost
savings during the reconstruction, and (3) the role of HUD and DOE in
promoting energy efficiency in the rebuilding of the Gulf Coast.
GAO limited the scope of its work to Louisiana and Mississippi since
these states experienced the majority of the hurricane damage. GAO
assessed opportunities for incorporating energy efficiency measures by
conducting site visits and interviewing federal, state government
officials; home builders; and energy efficiency experts. GAO also
worked with a DOE national laboratory to develop energy cost savings
estimates. GAO is making no recommendations.
What GAO Found:
Reconstruction in the Gulf Coast creates a significant opportunity for
incorporating energy efficiency improvements that could produce long-
term energy costs savings in residential and commercial buildings. The
sheer magnitude of the reconstruction effort and Louisiana‘s and
Mississippi‘s recent adoption of more energy-efficient building codes
makes this an opportune time for incorporating energy efficiency
improvements in the rebuilding efforts. In partnership with a DOE
national laboratory, GAO analyzed energy cost savings opportunities and
estimated that adopting these newer building codes could reduce
residential energy costs in these two states by at least $20 to $28
million per year, depending on the extent of the rebuilding efforts in
these states. Furthermore, the analysis also showed that annual energy
expenditures for commercial buildings”hospitals, schools, offices, and
retail buildings”built to newer energy standards could be about 7 to 34
percent lower than buildings built to older standards. There also are
opportunities for consumers to make additional energy efficiency
improvements to both building types by replacing old, damaged
equipment.
There are three substantial challenges to realizing the energy cost
savings opportunities presented by the Gulf Coast reconstruction: (1)
the shortage of a skilled construction workforce, and specifically, the
shortage of workers trained to meet the newer building codes; (2) the
lack of trained building code inspectors to ensure compliance with
newer building codes in Louisiana and Mississippi; and (3) the
difficult financial issues facing consumers, such as the sufficiency of
insurance and other compensation payments, that may make decisions
about energy efficiency a low priority. States have efforts under way
to address many of these challenges and it will take time and sustained
commitment for them to be successful.
The rebuilding of the Gulf Coast is largely a state and local matter,
but HUD and DOE have played a supportive role in promoting energy
efficient rebuilding. HUD and DOE have provided financial and
educational resources that can encourage energy efficient rebuilding,
and both agencies have broader national programs that may support
energy efficiency improvements in the rebuilding of the Gulf Coast. HUD
has made $16.7 billion in funding available for general rebuilding
purposes, such as restoring damaged housing, and allows states to
determine how to spend these funds, including using them for energy
efficient improvements. HUD also has several national initiatives that
may directly improve the energy efficiency of the public housing stock
in Gulf Coast states. DOE has sponsored education and training on
energy efficiency issues to state and local officials, private
industry, and consumers in Louisiana and Mississippi. As part of its
nationwide effort to assist all states with energy efficiency
initiatives, DOE provides grants to states to design and carry out
their own energy efficiency programs. DOE‘s energy expertise as well as
HUD and DOE resources may prove valuable to the states and consumers as
they make decisions about energy efficient rebuilding in the Gulf
Coast.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-654].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Mark Gaffigan at (202)
512-3841 or gaffiganm@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Significant Opportunities Exist for Incorporating Energy Efficiency
Measures into Gulf Coast Reconstruction Efforts, Which Could Reduce
Energy Expenditures:
Home Builder, State, and Consumer Challenges Are Substantial and May
Limit Energy Cost Savings Opportunities from Being Realized:
HUD and DOE Are Providing Funding and Educational Resources to
Encourage Gulf Coast States to Incorporate Energy Efficiency in
Rebuilding:
Concluding Observations:
Agency Comments:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Energy Cost Savings Estimates for Residential Buildings:
Appendix III: Energy Cost Savings Estimates for Commercial Buildings:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Annual Energy Cost Savings for Heating and Cooling Homes Built
in Accordance with Various Energy Efficiency Codes and Standards with
Slab-on-Grade and Elevated Foundations:
Table 2: Estimated Construction Cost Increases and Cost Recovery
Periods for Building Homes in Accordance with Various Energy Efficiency
Codes and Standards:
Table 3: Annual Energy Cost Savings for Selected Home Energy Efficiency
Improvements:
Table 4: Annual Energy Cost Savings for Home Lighting and Appliance
Upgrades:
Table 5: Annual Incremental Energy Cost Savings per Building for
Various Commercial Buildings Constructed in Accordance with a Newer
ASHRAE Standard:
Table 6: Estimated Energy Cost Savings from Commercial Buildings in
Accordance with Selected "Above Code" Levels:
Table 7: Annual Lighting Cost Savings for Commercial Buildings in
Louisiana and Mississippi:
Abbreviations:
ASHRAE: American Society of Heating, Refrigerating and Air-Conditioning
Engineers:
CDBG: Community Development Block Grant:
CFL: Compact Fluorescent Lighting:
DOE: Department of Energy:
EPACT: Energy Policy Act:
FEMA: Federal Emergency Management Agency:
GREAT: Gulf Rebuild, Education, Advancement, and Training Campaign:
HUD: Department of Housing and Urban Development:
ICC: International Codes Council:
IECC: International Energy Conservation Code:
IRC: International Residential Code:
LEED: Leadership in Energy and Environmental Design:
PATH: Partnership for Advanced Technologies in Housing:
PD&R: Office of Policy Development and Research:
PNNL: Pacific Northwest National Laboratory:
SEP: State Energy Program:
United States Government Accountability Office:
Washington, DC 20548:
June 26, 2007:
Congressional Addressees:
Each year in the United States, consumers spend more than $160 billion
to light, cool, heat and operate homes, and about $110 billion is spent
annually in energy costs for commercial buildings, making improving the
energy efficiency of homes and buildings an important aspect of any
effort to reduce energy consumption and lower energy costs. Improving
building efficiency to reduce energy consumption is normally a very
incremental process. However, after the destruction caused by the 2005
Gulf Coast hurricanes[Footnote 1] the need to rebuild and repair
hundreds of thousands of destroyed and damaged buildings in the Gulf
Coast region creates unique opportunities to address energy efficiency
issues on a large scale.[Footnote 2]
The Gulf Coast hurricanes battered the Gulf Coast region causing over
$150 billion in estimated damage.[Footnote 3] Louisiana and Mississippi
were the states hit the hardest by the hurricanes, sustaining extensive
destruction and damage to residential and commercial buildings. For
example, the hurricanes are estimated to have destroyed or caused
severe or major damage to nearly 270,000 single-family homes in
Louisiana and Mississippi. In all, the Gulf Coast hurricanes caused
more than 1,500 deaths; left hundreds of thousands of people displaced
without shelter or employment and had a disproportionate impact on
certain populations, especially the poor, elderly, and minorities. In
response to the Gulf Coast devastation the federal government has
committed a historically high level of resources--over $110 billion--
through an array of grants, loan subsidies, and tax relief and
incentives. A substantial portion of this assistance was directed
toward providing emergency assistance and meeting short-term needs
arising from the hurricanes. A relatively small portion of federal
assistance is available for longer-term rebuilding activities, such as
the restoration of the regions housing and infrastructure.
In Louisiana and Mississippi, housing and infrastructure restoration is
taking place in the context of broader regional planning and
coordination activities. The Louisiana Recovery Authority is the
planning and coordinating body created by the governor to assist in
implementing the state's vision for the recovery of Louisiana. Working
in collaboration with local, state, and federal agencies, the authority
serves to address short-term recovery needs and guide the long-term
planning process. In Mississippi, the Governor's Commission on
Recovery, Rebuilding, and Renewal was formed to develop a strategy for
rebuilding the affected areas of Mississippi. In early January 2006,
the commission released a report with numerous recommendations intended
to guide Mississippi's post-hurricane rebuilding. Current Gulf Coast
rebuilding activities, including the bulk of the federal rebuilding
assistance, are directed primarily toward restoring the region's stock
of livable housing and essential infrastructure.
States and their subdivisions, such as counties and cities, adopt codes
and standards that establish minimum requirements for energy-efficient
design and the construction of residential and commercial buildings.
Building codes and standards regulate components that affect the amount
of energy that a building will use, such as the building
envelope,[Footnote 4] electrical power, and lighting. These codes and
standards vary from one state to another and sometimes within a state.
States and local jurisdictions may choose to adopt model codes
developed and published by nonprofit organizations, such as the
International Code Council (ICC) and the American Society of Heating,
Refrigerating and Air-Conditioning Engineers (ASHRAE).
Louisiana and Mississippi adopted statewide residential building codes
created by the ICC to guide the reconstruction of housing after the
hurricanes. Louisiana adopted the 2006 version of the ICC's code as its
mandatory statewide residential building code, while Mississippi
adopted the 2003 version of this code as its voluntary statewide
residential building code--except for five coastal counties where it is
mandatory.[Footnote 5] In addition, both of these states were already
using ASHRAE's commercial energy standards prior to the Gulf Coast
hurricanes. Louisiana used ASHRAE's 2001 standard and Mississippi
employed ASHRAE's 1975 standard.[Footnote 6]
While numerous federal agencies, including the Department of Housing
and Urban Development (HUD) and Department of Energy (DOE), are
involved in providing emergency assistance as part of the recovery
process, HUD and DOE have also been working with states regarding
matters of energy efficiency. HUD works to increase homeownership,
support community development, and increase access to affordable
housing. DOE is the nation's lead agency on energy use and energy
efficiency issues. DOE provides education and training through a
diverse set of national, state, and local programs that promote energy
efficiency, such as its Building America, Building Energy Codes, and
High Performance Building Programs. DOE sponsors research in
partnership with industry and academia to advance building science and
improve technologies and practices that make both residential and
commercial buildings more energy efficient.
In light of the widespread congressional and public interest in
rebuilding the Gulf Coast, we have prepared this report under the
authority of the Comptroller General of the United States as part of an
effort to assist the Congress in reviewing opportunities and challenges
related to incorporating improved energy efficiency practices into the
reconstruction of residential and commercial buildings in the affected
Gulf Coast states. This report (1) analyzes the extent of opportunities
for incorporating energy efficiency improvements and realizing energy
cost savings in the Gulf Coast reconstruction, (2) discusses potential
challenges to realizing energy cost savings during the reconstruction,
and (3) describes the roles of HUD and DOE in promoting energy
efficiency in the rebuilding of the Gulf Coast. We limited the scope of
our work to Louisiana and Mississippi because these states experienced
the majority of the damage from the Gulf Coast hurricanes and their
building stock is generally similar to the residential and commercial
buildings found in the other Gulf Coast states, according to the data
we that analyzed.
We assessed the opportunities for incorporating improved energy
efficiency measures in the reconstruction efforts in Louisiana and
Mississippi by soliciting the views of federal and state government
officials, home builders, and energy efficiency practitioners and by
conducting site visits to these states. In addition, we worked with
DOE's Pacific Northwest National Laboratory (PNNL) to develop energy
cost savings estimates for residential and commercial buildings in the
Gulf Coast. PNNL used energy simulation programs to develop these
estimates under several scenarios. PNNL calculated energy consumption
and energy expenditures for these building types assuming they were
constructed to meet newer building codes and standards and compared
these data with a baseline that approximately reflected the energy
consumption and expenditures of buildings prior to the hurricanes. To
aggregate potential residential energy cost savings to the Gulf Coast
region, we made estimates of annual savings that could occur as the
result of reconstruction efforts. A more in-depth description of the
methodology that DOE's PNNL used to develop energy cost savings for
residential and commercial buildings can be obtained from their January
2007 and December 2006 reports.[Footnote 7] These reports can be found
at Hyperlink, http://www.energycodes.gov/impacts.stm.
To understand the potential challenges that may limit energy cost
savings from being realized, we relied on site visits to Louisiana and
Mississippi, interviews with state and local government officials, and
attendance at local building conferences and housing summits.
Furthermore, we interviewed energy efficiency practitioners, building
industry representatives, and non-profit organizations as well as HUD
and DOE officials to solicit their views on the challenges of
incorporating energy efficiency measures in the rebuilding and
repairing of destroyed and damaged buildings.
To describe the roles of HUD and DOE in promoting energy efficiency in
the rebuilding of the Gulf Coast, we interviewed agency officials and
obtained and reviewed documentation describing the actions that these
agencies have taken to assist Louisiana and Mississippi. We also
conducted site visits to these states to obtain firsthand knowledge
from state government officials, non-profit organizations, home
builders, and energy efficiency practitioners about their views on
HUD's and DOE's efforts to promote or work with various stakeholders to
consider energy efficiency in the rebuilding process. A more detailed
discussion of our methodology is provided in appendix I. We conducted
our work from March 2006 through May 2007 in accordance with generally
accepted government auditing standards, which included an assessment of
data reliability.
Results in Brief:
The anticipated reconstruction in the Gulf Coast creates a significant
opportunity for incorporating energy efficiency improvements that could
produce long-term energy cost savings. First, the sheer magnitude of
the reconstruction effort creates a tremendous opportunity for
incorporating energy efficiency improvements during the rebuilding and
repairing of residential and commercial buildings. Second, state and
local governments in Louisiana and Mississippi are still engaged in
short and long term planning efforts to recover from the hurricanes.
Since these planning efforts are evolving, now is an opportune time to
consider fully incorporating energy efficiency improvements in the
reconstruction. Third, Louisiana's and Mississippi's recent adoption of
newer and more energy efficient building codes and standards creates a
unique opportunity for energy efficient rebuilding. In partnership with
DOE's PNNL, we analyzed energy cost savings opportunities and estimated
that these newer building codes could reduce energy expenditures for
residential buildings in Louisiana and Mississippi by at least $20 to
$28 million per year, depending on the scale of rebuilding in these
states. For example, the annual energy expenditures for heating and
cooling a typical home in Louisiana and Mississippi built to newer
codes could be reduced by $167 to $233, a range of savings of 24 to 28
percent, depending on the type of foundation upon which the home is
built and the specific code to which it is built. Furthermore, our
results showed that annual energy expenditures for commercial
buildings--hospitals, schools, offices, and retail--built to newer
commercial energy standards could be about 7 to 34 percent lower than
buildings built to older standards, depending on the building type.
Fourth, our analysis showed that even greater energy cost savings could
be obtained for both residential and commercial buildings if consumers
and builders voluntarily embrace energy efficiency measures that exceed
minimum building code and standard requirements. Finally, in addition
to rebuilding homes and commercial buildings, there are opportunities
for consumers to make energy efficiency improvements as they replace
damaged equipment with more energy efficient air conditioners,
appliances, lighting, and windows.
There are three primary challenges to realizing energy cost savings
opportunities presented by the Gulf Coast reconstruction. First, home
builders, state officials, and energy efficiency practitioners told us
that there is a shortage of construction workers and more specifically
a shortage of skilled labor trained to meet the newer building codes
and standards--including wind, flood, and energy provisions. These
shortages are of particular concern given the number of homes and
buildings that may need to be rebuilt or repaired in accordance with
newer building codes and standards. Second, states will confront
substantial challenges to ensuring compliance with new building codes
and standards because of a lack of trained building code inspectors.
State compliance and enforcement programs are essential for ensuring
that buildings are constructed to the mandatory building codes and
standards. Despite states' efforts to improve their compliance and
enforcement programs, state and local officials as well as building
industry representatives repeatedly told us that they do not have
enough trained staff and will have to create building inspection
offices, hire additional code officials, and train them in the
application of the new codes. Third, consumers considering rebuilding
and repairing their homes are faced with making other decisions that
may make energy efficiency a low priority. Because of the catastrophic
losses caused by the hurricanes, many residents must determine whether
they have the financial resources to rebuild or repair their homes at
all and whether existing employment opportunities make returning to
their homes feasible. Once consumers address these issues, they will
have to decide whether it is in their best financial interest to pay
the additional costs to make their homes more energy efficient through
purchases, such as energy efficient appliances, or to use their money
for other purposes. For consumers, especially poor and low-income
consumers, this decision will be further compounded by their loss of
income, assets, and other financial needs that must be met. Indeed, for
some, these short-term financial needs may be so pressing that they
preclude long-term thinking about the future financial savings that
might be gained by making energy efficiency improvements.
Because the rebuilding of the Gulf Coast is largely a state and local
matter, HUD and DOE have played a supportive role in promoting energy
efficient rebuilding. More specifically, HUD and DOE have provided
financial and educational resources that can encourage the
incorporation of energy efficiency in the reconstruction of the Gulf
Coast. In addition, both agencies have broader national programs that
may assist Louisiana and Mississippi in incorporating energy efficiency
improvements during their rebuilding efforts. HUD has made $16.7
billion in funding available for general rebuilding purposes, such as
damaged housing and infrastructure, and allows states to determine how
to spend these funds, including using them for energy efficient
improvements. In addition, HUD had several national initiatives that
were either planned or under way prior to the hurricanes, and that may
directly improve the energy efficiency of the public housing stock in
Gulf Coast states. For example, HUD developed an energy strategy for
public and assisted housing that includes actions to, among other
things, provide incentives for energy efficiency in housing financed
through HUD's competitive grant programs and to promote the use of
energy efficient appliances and equipment through a HUD partnership
with DOE. In its capacity as the nation's lead agency on energy use and
energy efficiency issues, DOE's primary role in the Gulf Coast
reconstruction has been to provide education and training to state and
local officials, private industry, and consumers. In direct response to
the Gulf Coast hurricanes, DOE partnered with several entities,
including state energy offices, to conduct training workshops for home
builders, contractors, and consumers on rebuilding with energy
efficiency and storm resistance practices. The department also
developed a Disaster Recovery and Building Reconstruction Web site to
provide information to state and local officials, builders and
contractors, and consumers to promote cost-effective and energy-
efficient reconstruction. As part of its ongoing nationwide effort to
encourage state energy efficiency initiatives, DOE provides grants to
state energy offices to design and carry out their own energy
efficiency programs. For example, DOE recently awarded $6 million to
fund 22 federal-state partnerships, 4 of which involve Gulf Coast
states, with the aim of creating initiatives to increase energy and
cost savings in residential and commercial buildings.
Significant Opportunities Exist for Incorporating Energy Efficiency
Measures into Gulf Coast Reconstruction Efforts, Which Could Reduce
Energy Expenditures:
The anticipated rebuilding and repairing of residential and commercial
structures in the Gulf Coast creates an important opportunity for
incorporating energy efficiency improvements that could produce long-
term energy cost savings. We estimated that newer building codes and
standards could significantly reduce energy expenditures for
residential and commercial buildings in Louisiana and Mississippi,
depending on the rebuilding efforts in these states.
The Scope and Status of the Reconstruction Efforts Create Significant
Opportunities to Reduce Energy Expenditures through New Building Codes
and Standards:
The sheer magnitude of the reconstruction effort creates a tremendous
opportunity for incorporating energy efficiency improvements into
rebuilt homes and buildings. Many Gulf Coast neighborhoods and
communities need to be rebuilt--some from the ground up--especially
since an estimated 122,261 homes in Louisiana and Mississippi were
destroyed or severely damaged. This rebuilding creates an opportunity
for these states to make wide-scale improvements to their building
stock, especially the older vintage housing in the areas.[Footnote 8]
In addition, state and local governments in Louisiana and Mississippi
are still engaged in short-and long-term planning efforts to recover
from the hurricanes. Since these planning efforts are evolving, now is
an opportune time to consider fully incorporating energy efficiency
improvements in the reconstruction efforts. Furthermore, Louisiana's
and Mississippi's recent adoption of newer and more energy efficient
building codes creates a unique opportunity for rebuilding all of the
destroyed and severely damaged homes in a manner that could result in
significant energy cost savings for these two states.
In partnership with DOE's PNNL, we analyzed a range of energy
efficiency levels to determine the potential energy cost savings that
could be achieved if single-family homes and commercial buildings in
Louisiana and Mississippi were constructed in accordance with various
residential building codes and commercial energy standards. For
residential buildings, we examined four energy efficiency levels
associated with building in accordance with various codes--a "baseline"
level,[Footnote 9] a "code" level, and two "above-code" levels. The
baseline level we used represents the estimated energy efficiency
associated with construction practices in areas of the Gulf Coast that
do not have building codes or where the codes may not be enforced. The
code level represents the energy efficiency associated with building in
accordance with the energy provisions of the ICC's 2006 residential
code.[Footnote 10] The third level represents the energy efficiency
associated with building to meet the Energy Star New Homes Guidelines,
which requires a 15 percent improvement over the ICC's code for all
energy used in a house. The fourth level represents the energy
efficiency necessary to qualify for the $2000 home builders' federal
tax credit for energy efficient new homes, which requires a 50 percent
reduction in space heating and air conditioning energy use compared
with the ICC's code.[Footnote 11]
We estimated that homes built to meet the ICC's 2006 residential code
could reduce energy costs between 24 to 28 percent, resulting in an
aggregate annual savings ranging from $20 to $28 million, depending on
the type of foundation used, the energy efficiency measures to which
the homes are built, and the number of homes being rebuilt.[Footnote
12] More specifically, our analysis showed that, depending on the
parameters of individual homes, an estimated annual per house energy
cost savings ranging from $167 to $233 could be achieved if new homes
were built in accordance with the ICC's 2006 residential code, rather
than current construction practices in the Gulf Coast region where
there are no building codes or where codes are not enforced.
Furthermore, greater home energy cost savings could be obtained if
consumers rebuild their homes to meet Energy Star New Home Guidelines
or if home builders take advantage of the energy efficient home tax
credit provisions of the Energy Policy Act of 2005 (EPACT) by building
homes that use 50 percent less energy for heating and cooling than
those built to meet the ICC's code. For example, annual per house
energy cost savings of $310 to $364 over baseline levels could be
achieved by meeting Energy Star Home specifications, while $371 to $447
in savings can be realized by building to meet the tax credit criteria
in EPACT. The potential for Louisiana and Mississippi to achieve
significant energy cost savings if the estimated 122,261 homes that
were destroyed or severely damaged are rebuilt in accordance with
various energy efficiency measures is shown in more detail in appendix
II, table 1.[Footnote 13]
In general, the improved energy efficiency features that are part of
the ICC's 2006 residential code, Energy Star New Home Guidelines, and
the EPACT tax credit include more efficient windows and heating and
cooling equipment, improved building envelope and duct sealing, and
increased insulation. While building homes in accordance with the newer
building codes and above code measures will improve a home's energy
efficiency, it will also increase home construction costs because more
expensive and efficient energy features are required. However, these
additional costs can generally be recovered within several years.
Details on the cost recovery period for several key energy efficiency
features can be found in appendix II, table 2.
For commercial buildings--offices, hospitals, schools, and retail--we
used the current commercial energy standards for Louisiana and
Mississippi as baselines: the ASHRAE 2001 standard for Louisiana and
the ASHRAE 1975 standard for Mississippi. We then estimated the
potential energy cost savings associated with rebuilding commercial
structures in Louisiana in accordance with the ASHRAE 2004
standard[Footnote 14] and in Mississippi in accordance with ASHRAE's
2001 standard. We also estimated the potential savings that could be
achieved by constructing buildings to meet "above code" levels, such as
the requirements of the Leadership in Energy and Environmental Design
(LEED) green building program and the EPACT commercial tax credit
level, requiring 50 percent less energy use than the ASHRAE 2001
standard.[Footnote 15]
The results of our commercial building analysis showed that an
estimated annual energy cost savings for commercial buildings between 7
and 34 percent could be achieved in Mississippi if commercial
structures were rebuilt in accordance with the ASHRAE 2001 standard and
a savings of between 7 and 13 percent could be achieved in Louisiana if
commercial structures were rebuilt in accordance with the ASHRAE 2004
standard. More detailed information on these potential savings is
presented in appendix III, table 5. The primary reason for this
significant savings is that the newer energy standards call for the use
of less lighting power, which directly saves energy and indirectly
reduces cooling needs because less heat is given off from lighting
fixtures. Overall, adopting newer and more efficient commercial energy
standards in the Gulf Coast would reduce energy operating costs as well
as construction costs because the newer standards can be met with
fewer, more efficient lighting fixtures resulting in immediate cost
recovery.
Our analysis also shows that greater energy cost savings could be
obtained for commercial buildings if they were constructed in
accordance with even higher energy efficiency measures. These
efficiency measures include the LEED rating system,[Footnote 16] which
awards points for buildings that use less energy than required by the
ASHRAE 2004 standard and the federal tax credit level for commercial
buildings.[Footnote 17] The energy cost savings associated with these
two "above code" energy efficiency approaches could range from $17,263
to $286,285 per building, depending on the building type and size.
Additional information about these potential savings are presented in
appendix III, table 6.
Making Energy Efficient Improvements to Residential and Commercial
Buildings by Replacing Damaged Equipment and Appliances Could Further
Decrease Future Energy Expenditures:
Some residential and commercial buildings damaged by the Gulf Coast
hurricanes will not need to be replaced completely, but they will
require repairs. Consumers who decide to repair homes or commercial
structures can reduce their energy expenditures by replacing older and
less efficient energy consuming equipment that may have been destroyed
or damaged with more energy efficient products. We identified several
common energy efficiency improvements that can be made to both
residential and commercial buildings. For some items, such as cooling
systems, minimum federal standards set by DOE require the manufacture
of more efficient units than would have been used prior to the Gulf
Coast hurricanes. Therefore, energy cost savings from these kinds of
equipment could be achieved by simply replacing older equipment with a
standard newer model. Some of the more common energy efficiency
improvements include more efficient air conditioning systems, better
insulating windows,[Footnote 18] and improved duct sealing.[Footnote
19] Although these systems are generally more costly than older, less
efficient units, with the exception of window replacements, the
additional costs can usually be recovered in a few years. Additional
information on the estimated energy cost savings that these
improvements could bring to both Louisiana and Mississippi is presented
in appendix II, table 3.
Residential consumers can also reduce their energy costs by replacing
damaged incandescent lighting and appliances with compact fluorescent
lighting (CFL) and Energy Star appliances. On a per house basis,
switching to CFLs can save consumers an estimated $48 a year in
electricity costs for lighting.[Footnote 20] Installing Energy Star
appliances can produce modest annual dollar savings compared with
appliances that simply meet the current minimum federal manufacturing
standards. However, according to PNNL, if these appliances are used to
replace older appliances that may be much less efficient, the costs
savings can be considerable. According to Energy Star data, an Energy
Star refrigerator is at least 15 percent more efficient than federal
minimum manufacturing standards, meaning that it would save an
estimated $9 a year over a new conventional refrigerator. Savings from
replacing an older refrigerator could be much higher, for example $65 a
year over a pre-1993 refrigerator. The additional costs and the energy
cost savings that may be achieved if these lighting and appliance
upgrades are made in the estimated 143,862 homes that received major
damage is outlined in appendix II, table 4.
Our analysis demonstrated that lighting upgrades are the primary area
where energy cost savings can be achieved from renovating damaged
commercial buildings in the Gulf Coast region. For example, if
commercial buildings--offices, schools, hospitals, and retail--in
Mississippi were renovated to meet the ASHRAE 2004 standard, rather
than the state's current standard ( the ASHRAE 1975 standard), the
cumulative savings per building would be $18,689 to $150,538 per year
depending on the building type. In contrast, renovating these same
building types in Louisiana so that they go beyond the state's current
ASHRAE 2001 standard to meet the ASHRAE 2004 standard would result in
$5,704 to $30,537 in annual savings per building. According to PNNL
officials, all other building renovations pale in comparison to the
impact that lighting changes would have in terms of producing energy
cost savings for commercial buildings. Additional information about the
potential energy cost savings associated with lighting in commercial
buildings is presented in appendix III, table 7.
Home Builder, State, and Consumer Challenges Are Substantial and May
Limit Energy Cost Savings Opportunities from Being Realized:
Three substantial challenges may limit the energy cost savings
opportunities presented by the Gulf Coast reconstruction from being
realized. First, a general shortage of a skilled construction workforce
and, specifically, the shortage of construction workers trained to meet
newer building codes may limit energy cost savings. Second, states will
face serious challenges ensuring compliance with newer building codes,
thereby potentially limiting energy cost savings opportunities from
being realized. Third, consumers who consider rebuilding and repairing
their homes are faced with making other decisions that may make energy
efficiency a low priority.
Availability of a Skilled Construction Workforce Trained to Meet Newer
Building Codes and Standards May Limit Energy Cost Savings:
The shortage of a skilled construction workforce capable of sustaining
the rebuilding and repairing of destroyed and damaged homes in
Louisiana and Mississippi may limit the energy cost savings that can be
achieved by rebuilding to the newly adopted building codes. The
construction workforce shortage is twofold--that is, there is a general
shortage of construction workers and, more specifically, a shortage of
skilled construction workers trained in the application of the newer
building codes.
A 2004 Department of Labor report cited an industry study that said in
the year prior to the Gulf Coast hurricanes, nearly 75 percent of
contractors nationwide reported experiencing skilled construction labor
shortages.[Footnote 21] Louisiana and Mississippi builders told us that
the labor shortage worsened when the hurricanes displaced some of their
construction workforce to other states and caused an overwhelming
demand for rebuilding and repairing destroyed and damaged residential
and commercial buildings. Consequently, the demand for construction in
the Gulf Coast region far exceeds the capacity of the local
construction workforce. For example, a study conducted by the RAND
Corporation reported that to sustain the rebuilding efforts in New
Orleans, the city would have to expand its number of construction
firms, labor force, and building supply networks.[Footnote 22]
In addition, there is currently a lack of skilled construction workers
trained to meet the states' new building codes and standards. According
to many different stakeholders with whom we spoke, building code
training is an important part of ensuring that buildings are properly
constructed to meet the newer building codes, including the energy
provisions. Training the construction workforce will require time and
involve a learning curve, which may delay or even limit the energy cost
savings achieved during the Gulf Coast reconstruction. According to
state officials and home builders that we spoke to, prior to the Gulf
Coast hurricanes the general construction workforce in Louisiana and
Mississippi did not have to comply with any particular statewide
building codes, and some parishes and counties had no residential
building codes to guide home construction. As a result, there was not
an overwhelming need for the general construction workforce to be
familiar with the building codes developed by the ICC. However, the
construction workforce in Louisiana and the five coastal counties in
Mississippi will now need training on the application of the newer
building codes that include wind, flood, and energy provisions. This is
especially true for Louisiana, since it adopted mandatory statewide
building codes. Home builders, energy efficiency practitioners, state
officials, and non-profit organizations with whom we spoke acknowledged
that fully implementing newer building codes will take time and will
involve a learning curve before construction workers understand and are
able to comply with the requirements. State officials and home builders
told us that it will be difficult for local home builders--consisting
of small volume builders---to make the transition from not building
according to a building code to now constructing buildings to meet the
requirements of the most recent residential codes. In addition,
according to the National Association of Home Builders, the ICC's
energy code has caused problems for home builders because they have
trouble finding the lowest cost solution that also complies with the
code. All of these challenges may delay or even limit the energy cost
savings.
In an effort to address the skilled construction workforce shortage,
the Business Roundtable--an association of chief executive officers of
leading U.S. companies with $4.5 trillion in annual revenues and more
than 10 million employees--in partnership with federal, state, and
local government agencies, construction trade groups, businesses, and
non-profit organizations, created the Gulf Coast Workforce Development
Initiative as an effort to recruit and train up to 20,000 skilled
construction laborers for the Gulf Coast region by the end of 2009.
Recruitment efforts for this initiative are under way through the Gulf
Rebuild, Education, Advancement, and Training (GREAT) Campaign. Under
this campaign, participants enroll in a 4-week course to gain entry-
level skills in preparation for jobs in the construction industry. In
addition to the GREAT Campaign, there are other efforts under way to
build a skilled construction workforce in the Gulf Coast states,
including courses and related workshops at local colleges and
universities and construction and building summits/expos being offered
throughout the Gulf Coast states.
States Will Be Challenged to Ensure That New Construction Meets the
Recently Adopted Building Codes and Standards:
Having an adequate number of trained code officials to inspect
buildings is vital to ensuring that rebuilding the hundreds of
thousands of destroyed and damaged structures is done in accordance
with the newly adopted building codes so that energy cost saving
opportunities are actualized. However, building industry
representatives and state officials told us that Louisiana and
Mississippi lack code offices, lack an adequate number of code
officials,[Footnote 23] and may find it difficult to secure the
resources to hire a sufficient number of adequately trained staff.
Despite these challenges, however, efforts to enforce the new codes and
standards in Louisiana and Mississippi are currently under way.
Louisiana and Mississippi may not have adequate resources to open
additional code offices and may not currently have adequate numbers of
trained staff. For example, only a few Louisiana parishes and
Mississippi counties have code compliance and enforcement programs, and
implementing the new building codes will require more building code
offices to be established. According to one Louisiana code official,
because 57 of the state's 64 parishes did not have to comply with any
mandatory statewide building codes before the Gulf Coast hurricanes,
there was no need for building code offices in those particular
parishes. In Mississippi, only those five coastal counties affected by
the hurricanes are required to meet the new statewide building codes.
According to Mississippi officials, despite the fact that three of the
five counties had building codes and offices in place prior to the
hurricanes, these counties will still need to hire and train additional
code officials because of the overwhelming amount of rebuilding that
remains and the new building codes. In addition, there was a consensus
among the groups we interviewed that building code offices are
currently overburdened, because there are too few officials and too
many inspections.
Furthermore, Louisiana and Mississippi will face serious challenges in
securing the adequate staff and resources to support code enforcement.
Both states reported that the local governments in the most severely
affected parishes and counties have limited financial resources to
provide staff to implement the newer building codes. State officials,
home builders, and non-profit organizations pointed out that code
officials are taking other jobs in the private sector, which means code
offices will have to fill those vacated positions as well as hire and
train additional code officials. According to 1 state official in
Louisiana, there were only 35 code inspectors statewide, only 7 of whom
were certified to enforce the ICC building code recently adopted by the
state that includes energy provisions.
Furthermore, local governments will face challenges in training code
officials and code users[Footnote 24] in the application of the new
building codes. Building codes are inherently complex and technical,
thereby potentially affecting compliance and enforcement, especially
for larger commercial buildings. One study on compliance and
enforcement methods reported that enforcing energy codes may require a
higher level of expertise, and found that some local governments hire
multiple code officials with specialized areas of expertise.[Footnote
25] Another study suggests that the complexities of energy codes make
them impossible to enforce without a labor-intensive review of energy
plans and documentation supported by extensive investments in hardware,
software, training, and other resources. Energy efficiency
practitioners suggest that education and training are critical during
implementation, and that adopting jurisdictions must prepare code
officials to enforce the energy code and prepare the building industry
to comply with the code. According to one study, the inability to
ensure compliance with energy codes will risk failing to capture the
energy efficiency and cost savings they are designed to
achieve.[Footnote 26]
Despite the challenges, efforts to implement the new codes and
standards in Louisiana and Mississippi are currently under way. For
example, according to Louisiana Code Council officials, to some extent
parishes have been enforcing the new building code since February 2006.
The 11 most affected parishes have collaborated with surrounding
governmental bodies to expand their existing offices or hired third-
party service providers. One official estimated that the number of code
officials in the state has increased from about 35 to 100, mainly
because the Louisiana Code Council is giving existing code officials,
who are not certified to enforce the new code, up to 3 years to acquire
their certification as they continue to conduct building inspections.
Moreover, as of December 2006, the state had allocated $8 million for
those parishes that did not previously have building code offices.
Furthermore, Louisiana has a $14 million program, funded by Federal
Emergency Management Agency (FEMA) funds,[Footnote 27] to provide
assistance to local governments as they implement the new statewide
building codes. The Mississippi Development Authority is using HUD
funding to administer a $5 million grant program to coastal county
governments to hire additional building code officials and inspectors
to ensure compliance with the new building codes. The program also
intends to help to fund salaries, fringe benefits, travel, and training
for building code enforcement officials for 1 year.
Finally, Louisiana and Mississippi state energy office officials are
providing education and training to code users to encourage the
incorporation of energy efficiency and sustainable practices into the
rebuilding of the state. According to Louisiana officials, they will
continue to provide training on energy codes and compliance methods,
sponsor energy efficiency projects, and work with experts and
universities to host forums to provide hands-on, project-specific, one-
on-one assistance to those rebuilding and repairing destroyed and
damaged structures. Officials from the Mississippi state energy office
said that they are conducting similar efforts in their state.
Energy Efficiency May Be a Low Priority When Consumers Consider
Rebuilding or Repairing Destroyed and Damaged Homes:
According to state officials, home builders, and non-profit
organizations in Louisiana and Mississippi, consumers who desire to
return to their homes face difficult financial questions regarding
compensation payments, the higher costs of construction and insurance,
and the availability of employment, which may make decisions about
energy efficiency a low priority. Some state officials and non-profit
organizations believe that compensation payments awarded to homeowners
may not be enough to cover their mortgage balances or rebuilding costs.
Qualified Louisiana and Mississippi homeowners may receive up to
$150,000 in financial assistance from their state's homeowner's
assistance program, which is funded by the federal government. However,
the most recent available data show that the average amount received by
residents in Louisiana and Mississippi is about $75,177 and $70,045,
respectively. Representatives from non-profit organizations with whom
we spoke told us that in some cases, homeowner mortgage balances and
rebuilding costs exceed the payment amounts, leaving a funding gap that
homeowners will have to fill. In addition, state officials whom we
spoke with told us that the housing program does not provide additional
funds to use for energy efficiency, thus homeowners will have to pay
any additional costs associated with making their homes more energy
efficient.
According to home builders, non-profit organizations, and energy
efficiency practitioners, homeowners may also have to consider the
additional construction costs associated with new elevation
requirements. That is, some consumers will have to consider the
additional costs to elevate their homes. Although FEMA provides $30,000
to cover the costs for building to higher elevations, it may cost more
than that to build in some neighborhoods, based on FEMA's advisory base
flood elevations and local parish and county community decisions to
implement higher elevation requirements, according to some home
builders. Representatives of a state home builders association told us
that it can cost as much as $40,000 to more than $100,000 depending
upon the house.
According to state officials, home builders, and non-profit
organizations, homeowners continue to deal with insurance claims and
face difficult decisions about future coverage in light of higher
insurance costs, if any coverage is available at all. By some news
reports, insurance premiums have doubled or tripled in some areas.
Increasing insurance costs may affect consumers purchasing decisions
regarding energy efficiency, thus limiting energy cost savings
opportunities presented by the Gulf Coast reconstruction from being
realized.
State officials and non-profit organizations told us that homeowners
also will have to decide whether existing employment opportunities make
returning to their homes feasible. Many residents lost their jobs when
infrastructure was destroyed and employees and customers were
displaced. The employment level statewide in Mississippi returned to
their pre-hurricane levels, while levels in the hardest hit area
remained down, as did the rate in Louisiana. In the absence of
employment opportunities, many residents will likely not return to
their homes. Without adequate employment opportunities, even those
residents who do return are likely to face financial hardships that
will make decisions about repairing or rebuilding their homes in an
energy efficient manner a low priority.
Even after addressing these issues, homeowners will have to decide
whether it is in their best financial interest to pay the additional
costs to make their homes more energy efficient through purchases, such
as energy efficient appliances, or to use their money for other
purposes. For consumers, especially poor and low-income consumers, this
decision may be compounded by their loss of income, assets, and other
financial needs that will have to be met. One study we reviewed suggest
that among the most important barriers generally affecting consumers
and their purchasing decisions are limited information, limited
awareness and interest in energy costs and reducing energy expenses;
and limited capital and rapid payback requirements. Consumers are less
likely to voluntarily adopt energy efficiency measures without
financial incentives and education on the costs and benefits.
HUD and DOE Are Providing Funding and Educational Resources to
Encourage Gulf Coast States to Incorporate Energy Efficiency in
Rebuilding:
Because the rebuilding of the Gulf Coast is largely a state and local
matter, HUD and DOE have played a supportive role in promoting energy
efficient rebuilding. More specifically, HUD and DOE have provided
financial and educational resources that can encourage the
incorporation of energy efficiency in the reconstruction of the Gulf
Coast. In addition both agencies have broader national programs that
may assist Louisiana and Mississippi in incorporating energy efficiency
improvements during their rebuilding.
HUD Is Making Funding Available to Gulf Coast States for Rebuilding and
Repairing Residential Buildings:
HUD officials told us that they provided the affected Gulf Coast states
with funding that can be used for, among other things, rebuilding in an
energy efficient manner. Congress has appropriated a total of $16.7
billion in Community Development Block Grants (CDBG) supplemental
funding that has been allocated for use in the five affected Gulf Coast
states for general rebuilding. These grants afford states a great deal
of discretion in designing, rebuilding, and repairing housing; in
neighborhood revitalization; and in economic development activities.
The federal coordinator for Gulf Coast rebuilding has said that the
CDBG program allows state leaders "who are closest to the issues" to
make decisions regarding how the money should be spent.[Footnote 28] In
Louisiana and Mississippi, these funds are mostly being used for
restoring housing infrastructure. To receive CDBG funding, Louisiana
and Mississippi as well as the other affected Gulf Coast states were
required to submit a Disaster Action Plan--an overall plan for short-
and long-term disaster recovery--to HUD for review and approval. States
were required to describe, among other things, how their Disaster
Action Plan would encourage construction methods that emphasize energy
efficiency and promote the enactment and enforcement of modern building
codes as part of their rebuilding process. HUD officials said they also
have been working with Louisiana and Mississippi homeowner assistance
programs to target CDBG funds to better assist states and consumers in
rebuilding homes that are more energy efficient, safer, and storm
resistant. In addition, HUD officials told us that they encourage
public housing authorities to use energy efficient construction
practices, appliances, and equipment. According to HUD, this was the
case when the department approved and funded a $22 million grant to the
Housing Authority of New Orleans and $7 million in grants to the Biloxi
Mississippi Housing Authority from its Capital Fund Reserve for
Emergencies and Natural Disasters to rebuild, repair, modernize, and
improve the energy efficiency of damaged public housing units.
HUD officials told us that they also have disseminated information on
energy efficiency to public housing authorities and participated in
educational and training activities to assist state and local offices,
consumers, and builders with considering energy efficient rebuilding.
For example, the department distributed a special disaster recovery
edition of its Public Housing Energy Conservation Clearinghouse e-
newsletter, outlining energy efficiency measures that public housing
authorities and residents can take to save energy and reduce utility
costs. In addition, HUD was involved in several reconstruction
activities that while focused on hurricane preparedness and
reconstruction, also provided information on energy efficiency. These
activities included the Mississippi Governors Reconstruction "Expo"
where HUD disseminated extensive materials on its Partnership for
Advanced Technologies in Housing (PATH) program, and the release of HUD
"Tech Sets" on storm-resistant roofing and wind resistant openings for
use by homeowners, builders, and community officials in the affected
Gulf Coast states.
HUD also has actions that were planned or under way prior to the Gulf
Coast hurricanes that are designed to improve the energy efficiency of
the nation's public housing stock and that could potentially benefit
the Gulf Coast states.[Footnote 29] These actions included the
following:
* HUD's Energy Task Force developing standard training program modules
to promote energy efficiency in both new and existing HUD-assisted and
financed housing. HUD also will develop materials on ways to improve
household energy efficiency for housing authorities to disseminate to
public housing residents.
* HUD, through its new Partnership for Home Energy Efficiency with DOE
and the Environmental Protection Agency, working to ensure that
information on Energy Star products and appliances, Energy Star
Qualified New Homes, and Home Performance with Energy Star for existing
homes is available for distribution to public housing authorities,
grant recipients, property managers, and new Federal Housing
Administration (FHA) homebuyers.[Footnote 30]
* HUD improving its tracking and monitoring of energy efficiency in
pubic housing with an automated system to provide public housing
authorities with data that serves as an indicator of the relative
efficiency of individual properties and their potential for energy
savings.
DOE Is Providing Energy Efficiency Training and Education to Consumers
and State and Local Officials:
In its capacity as the nation's lead agency on energy efficiency
issues, DOE's primary role in the Gulf Coast reconstruction has been to
support states by provide training and education to state and local
officials, private industry, and consumers. In direct response to the
Gulf Coast hurricanes, DOE partnered with several entities, including
state energy offices, to conduct training workshops on rebuilding with
energy efficiency and storm-resistance practices for home builders,
contractors, and consumers. For example, DOE, in partnership with HUD's
PATH program, Home Depot, and Entergy Corporation, sponsored free home
repair workshops in Louisiana and Mississippi that highlighted energy
efficiency.[Footnote 31] Attendees had the opportunity to receive hands-
on instructions on repairing storm damaged roofs, ceilings, walls, and
floors; installing windows, doors, and hurricane shutters; and
improving a home's energy efficiency and durability. DOE also responded
to a request from the Louisiana State Energy Office to provide Web-
based code training sessions to architects, engineers, and code
officials to train them on how to comply with the 2005 Louisiana ASHRAE
Commercial Energy Building Code as they renovate and replace commercial
buildings.
DOE also made educational resources available to all parties involved
in the rebuilding efforts by developing a Disaster Recovery and
Building Reconstruction Web site (www.eere.energy.gov/buildings) to (1)
provide various educational resources to state and local officials,
builders and contractors, and consumers and (2) promote cost-effective
and energy-efficient reconstruction. This Web site includes information
on energy efficiency and rebuilding training opportunities and a wide
range of guidelines, fact sheets, and case studies developed by DOE,
HUD, FEMA, the National Association of Home Builders, and other
organizations.
DOE has taken other actions to encourage parties involved in the
rebuilding process to consider energy efficiency. For example, it
awarded a $100,000 grant to Louisiana, Mississippi, and other affected
Gulf Coast states to incorporate energy efficiency and sustainable
design practices into their rebuilding strategy. DOE also partnered
with state energy offices to encourage the regional exchange of
information and best practices. As part of its partnership with states,
DOE hosted the Katrina Green Informal Working Group, a biweekly
conference call with various federal and state officials, industry
associations, builders, nonprofit organizations, and energy efficiency
and housing experts, aimed at networking and sharing information about
the rebuilding efforts in Gulf Coast states. DOE officials said that
the agency plans to continue its efforts to encourage Louisiana and
Mississippi and other affected states to rebuild more energy
efficiently.
Finally, DOE also has ongoing nationwide energy efficiency initiatives
to assist all states with their own energy efficiency initiatives
through several national programs and projects including the following:
* Federal-State Partnership Projects: DOE recently awarded $6 million
to fund 22 federal-state partnerships that will help implement training
programs and provide technical assistance and education that is
intended to ultimately result in the construction of more energy
efficient buildings. Louisiana and Mississippi were among the states
that were awarded partnership grants. Louisiana's project proposal,
entitled Gulf Region High Performance Homes Program, is intended to
spur market transformation in Louisiana and the Gulf Coast region
through educational outreach, demonstration, technical assistance, and
training on locally appropriate, hazard-resistant, energy-efficient,
and healthy-building science and technologies. The goal of
Mississippi's proposal, entitled Promoting Energy Codes and "Beyond
Code" Programs through EPACT Tax Incentives, is to integrate building
energy codes and "better than code" programs using the tax incentives
of EPACT as a coordinating framework, and to promote building energy
codes, DOE Building America approaches, and Energy Star Home procedures
as avenues for qualifying for the buildings-related tax incentives in
EPACT.
* State Energy Program (SEP): DOE's SEP provides grants to the states
to design and carry out their own renewable energy and energy
efficiency programs. Funding from SEP goes to state energy offices in
all states and U.S. territories. States use these grants to address
their energy priorities and to adopt emerging renewable energy and
energy efficiency technologies. SEP projects are managed by state
energy offices, not by DOE directly. In 2006, DOE provided over
$650,000 in SEP grants to Louisiana and about $400,000 to Mississippi.
* Weatherization Assistance Program: This program enables low-income
families to permanently reduce their energy bills by making their homes
more energy efficient. According to DOE, it is this country's longest
running and perhaps most successful energy efficiency program. During
the last 30 years, DOE's Weatherization Assistance Program has provided
weatherization services to more than 5.5 million low-income families.
DOE reported that, on average, weatherization reduces overall energy
bills by $358 per year at current prices. In 2006, about $2 million in
weatherization funds were provided to Louisiana and about $1.9 million
went to Mississippi.
Concluding Observations:
While the current level of reconstruction and the difficulties
surrounding the return of residents is unsettling for both individuals
and communities, the nature and status of rebuilding actually creates
significant opportunities for incorporating energy efficiency measures
into reconstruction and rebuilding efforts. Nonetheless, as great as
the potential opportunities are, the challenges that must be overcome
to capitalize on these opportunities and actually achieve energy cost
savings are equally significant. Since most of the reconstruction in
Louisiana and Mississippi is still in the planning phase, there is
still time to address the challenges of incorporating energy efficiency
in the rebuilding of the Gulf Coast. Meeting these challenges will
undoubtedly benefit consumers, the Gulf Coast region, and the nation.
While the rebuilding of the Gulf Coast is largely a state and local
matter, HUD and DOE have provided states and consumers with funding and
educational resources to assist in the largest reconstruction effort in
the nation's history. Going forward, there will be a growing
opportunity to incorporate energy efficiency measures during the
rebuilding process--as states and local governments decide on how and
to what extent to implement and enforce new building codes, and
consumers begin to make decisions about whether making energy efficient
choices is in their best financial interest. Given that improved energy
efficiency measures, such as updated building codes and energy
efficient building materials are new to the Gulf Coast region, states
and consumers can greatly benefit from DOE expertise in these areas.
DOE expertise as well as HUD and DOE resources may prove invaluable to
states and consumers as they make decisions about building code
training and enforcement, energy efficiency construction practices, and
purchasing energy efficient appliances and equipment.
Agency Comments:
We provided a draft of this report to DOE and HUD for their review and
comment. DOE provided technical and clarifying comments, which we
incorporated as appropriate. HUD had no comments on the report.
We are sending copies of this report to interested congressional
committees, the Secretary of Energy, the Secretary of Housing and Urban
Development, and other interested parties. We will also make copies
available to others on request. In addition, the report will be
available at no charge on GAO's Web site at http://www.gao.gov.
If you or your staffs have any questions regarding this report, please
contact me at (202) 512-3841 or gaffiganm@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made major contributions
to this report are listed in appendix IV.
Signed by:
Mark E. Gaffigan:
Acting Director, Natural Resources and Environment:
List of Congressional Addressees:
The Honorable Jeff Bingaman:
Chairman:
The Honorable Pete V. Domenici:
Ranking Member:
Committee on Energy and Natural Resources:
United States Senate:
The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Mary L. Landrieu:
Chairwoman:
Ad hoc Subcommittee on Disaster Recovery:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable John D. Dingell:
Chairman:
Committee on Energy and Commerce:
House of Representatives:
The Honorable Peter J. Visclosky:
Chairman:
Subcommittee on Energy and Water Development:
Committee on Appropriations:
House of Representatives:
The Honorable John W. Olver:
Chairman:
Subcommittee on Transportation, Housing and Urban Development, and
Related Agencies:
Committee on Appropriations:
House of Representatives:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
During our review, our objectives were to (1) analyze the extent of
opportunities for incorporating energy efficiency improvements and
realizing energy cost savings in the Gulf Coast reconstruction, (2)
discuss potential challenges to realizing energy cost savings during
the reconstruction, and (3) describe the role of Department of Housing
and Urban Development (HUD) and the Department of Energy (DOE) in
promoting energy efficiency in the rebuilding of the Gulf Coast.
To estimate potential energy cost savings from rebuilding and repairing
residential and commercial structures on the Gulf Coast, we worked with
DOE's Pacific Northwest National Laboratory (PNNL). PNNL modeled the
levels of energy efficiency that could be achieved if the buildings
were rebuilt or repaired to meet newer building codes and standards or
"above code" levels, and compared these measures with a baseline that
approximately reflected the energy efficiency of these buildings prior
to the Gulf Coast hurricanes. Separate analyses were conducted for
representative residential and commercial building types. We worked
with PNNL in developing the model assumptions, including the size and
characteristics of representative residential and commercial buildings,
the building codes and standards that were used, the future costs of
fuels, the heating and cooling climate of the area, the discount rate
used for consumers' valuation of future fuel cost savings from more
energy efficient equipment and materials. We found PNNL's models and
assumptions reasonable and sufficiently reliable for the purposes of
this report.
For a representative residential Gulf Coast home, PNNL modeled several
energy efficiency scenarios--two baseline measures,[Footnote 32] an
energy code level, and two "above code" levels. PNNL used an energy
simulation tool developed at the Florida Solar Energy Center and DOE's
Energy Information Administration forecasts of natural gas and
electricity prices. PNNL also modeled the efficiency gains that could
be achieved by bringing Gulf Coast commercial buildings into compliance
with current, more efficient, energy standards for four prototypical
buildings--offices, schools, hospitals and retail. PNNL estimated the
annual energy cost savings associated with three levels of energy
standards--baseline efficiency, the current code's higher-efficiency,
and "above code" building standards.
To aggregate potential residential energy cost savings from rebuilding
or repairing destroyed and damaged homes in the Gulf Coast region, we
used PNNL's estimates of annual energy cost savings for a
representative home built to different levels of energy efficiency and
federal estimates of the aggregate number of these homes to estimate
the scope for savings. We reviewed the methodology used to estimate the
damaged and destroyed homes, including the steps that were taken to
ensure the reliability of these data and were satisfied that the
estimates were satisfactory for our purposes.
To understand the potential challenges that may limit energy cost
savings from being realized, we relied on site visits to Louisiana and
Mississippi, interviews with state government officials, and attendance
at local building conferences and housing summits. Furthermore, we
interviewed energy efficiency practitioners, building industry
representatives, and non-profit organizations as well as HUD and DOE
officials to solicit their views on the challenges of incorporating
energy efficiency measures in the rebuilding and repairing of destroyed
and damaged buildings.
To describe the role of HUD and DOE in promoting energy efficiency in
the rebuilding of the Gulf Coast, we interviewed agency officials and
obtained and reviewed documentation describing the actions that these
agencies have taken to assist Louisiana and Mississippi. We also
conducted site visits to these states to obtain firsthand knowledge
from state government officials, non-profit organizations, home
builders, and energy efficiency practitioners about their views on
HUD's and DOE's efforts to promote or work with various stakeholders to
consider energy efficiency in the rebuilding process. We conducted our
work from March 2006 through May 2007 in accordance with generally
accepted government auditing standards, which included an assessment of
data reliability.
[End of section]
Appendix II: Energy Cost Savings Estimates for Residential Buildings:
Tables 1 through 4 contain energy cost savings estimates for homes
built in accordance with various energy efficiency standards and for
homes repaired with selected energy efficiency-related improvements.
Table 1: Annual Energy Cost Savings for Heating and Cooling Homes Built
in Accordance with Various Energy Efficiency Codes and Standards with
Slab-on-Grade and Elevated Foundations:
Energy efficiency alternative: International Residential Code (IRC)
2006;
Per house dollar savings over new housing baseline: Slab-on grade:
$167;
Per house dollar savings over new housing baseline: Elevated: $233;
Percentage savings over new housing baseline: Slab-on grade: 24%;
Percentage savings over new housing baseline: Elevated: 28%;
Aggregate savings over new housing baseline for 122,261 homes (dollars
in millions): Slab-on grade: $20;
Aggregate savings over new housing baseline for 122,261 homes (dollars
in millions): Elevated: $28.
Energy efficiency alternative: Energy Star;
Per house dollar savings over new housing baseline: Slab-on grade:
$310;
Per house dollar savings over new housing baseline: Elevated: $364;
Percentage savings over new housing baseline: Slab-on grade: 45%;
Percentage savings over new housing baseline: Elevated: 44%;
Aggregate savings over new housing baseline for 122,261 homes (dollars
in millions): Slab-on grade: $38;
Aggregate savings over new housing baseline for 122,261 homes (dollars
in millions): Elevated: $45.
Energy efficiency alternative: Tax credit;
Per house dollar savings over new housing baseline: Slab-on grade:
$371;
Per house dollar savings over new housing baseline: Elevated: $447;
Percentage savings over new housing baseline: Slab-on grade: 54%;
Percentage savings over new housing baseline: Elevated: 54%;
Aggregate savings over new housing baseline for 122,261 homes (dollars
in millions): Slab-on grade: $45;
Aggregate savings over new housing baseline for 122,261 homes (dollars
in millions): Elevated: $55.
Source: GAO analysis of Pacific Northwest National Laboratory data.
Notes:
New housing baseline: estimated current practice for new construction
in areas of the Gulf Coast region that does not have building codes.
There will be a variation of energy efficiency in both new and existing
buildings. Some buildings may be more energy efficient than the
baseline assumed here, some will be less.
IRC 2006: For this analysis, we analyzed the energy efficiency
requirements of the International Energy Conservation Code (IECC) 2006,
which is similar in stringency to the energy provisions of the IRC 2006
as well as the IECC 2003.
Energy Star Homes Guideline: Energy Star requires a 15 percent
improvement over the IECC for all energy used in a house.
Tax Credit: Qualification for the $2,000 tax credit requires a 50
percent reduction in space heating and air conditioning energy use
compared with the IECC 2003, including supplements.
[End of table]
Table 2: Estimated Construction Cost Increases and Cost Recovery
Periods for Building Homes in Accordance with Various Energy Efficiency
Codes and Standards:
Energy efficiency alternative: IRC 2006;
Per house dollar cost increase above new housing baseline: $618;
Cost recovery period: House with slab-on-grade foundation (years): 3.7;
House with an elevated foundation (years): 2.7;
Aggregate cost increase above new housing baseline for 122,261 homes
(dollars in millions): $76.
Energy efficiency alternative: Energy Star;
Per house dollar cost increase above new housing baseline: $2,198;
Cost recovery period: House with slab-on-grade foundation (years): 7.1;
House with an elevated foundation (years): 6.0;
Aggregate cost increase above new housing baseline for 122,261 homes
(dollars in millions): $269.
Energy efficiency alternative: Tax Credit;
Per house dollar cost increase above new housing baseline: $1,354;
Cost recovery period: House with slab-on-grade foundation (years): 3.6;
House with an elevated foundation (years): 3.0;
Aggregate cost increase above new housing baseline for 122,261 homes
(dollars in millions): $166.
Source: GAO analysis of Pacific Northwest National Laboratory data.
Note: For this analysis, we analyzed the energy efficiency requirements
of the IECC 2006, which is similar in stringency to the energy
provisions of the IRC 2006.
[End of table]
Table 3: Annual Energy Cost Savings for Selected Home Energy Efficiency
Improvements:
From: estimated existing home energy features (prehurricane): SEER-10
Cooling equipment;
To: more energy efficient home features: SEER-13 cooling equipment;
Incremental cost (per house): $335;
Annual per house energy cost savings: $127;
Cost recovery period (years): 2.6;
Aggregate energy cost savings for 143,862 homes (dollars in millions):
$18.
From: estimated existing home energy features (prehurricane): Manual
thermostat;
To: more energy efficient home features: Programmable thermostat;
Incremental cost (per house): $65;
Annual per house energy cost savings: Unknown;
Cost recovery period (years): Unknown;
Aggregate energy cost savings for 143,862 homes (dollars in millions):
Unknown.
From: estimated existing home energy features (prehurricane): Standard
duct sealing;
To: more energy efficient home features: Improved duct sealing;
Incremental cost (per house): $235;
Annual per house energy cost savings: $63;
Cost recovery period (years): 3.7;
Aggregate energy cost savings for 143,862 homes (dollars in millions):
$9.
From: estimated existing home energy features (prehurricane): Single
pane, aluminum window;
To: more energy efficient home features: Double pane vinyl low-E
window;
Incremental cost (per house): $3,506.00 ($10.56 sq. ft.);
Annual per house energy cost savings: $202;
Cost recovery period (years): 17.4;
Aggregate energy cost savings for 143,862 homes (dollars in millions):
$29.
Source: GAO analysis of Pacific Northwest National Laboratory data.
Note: Studies have been unable to verify any energy savings from
programmable thermostats. In addition, EPA recently decided to cease
crediting any thermostats as Energy Star. Inherently, these thermostats
save no energy but allow the consumers to set a temperature schedule
that could reduce energy.
[End of table]
Table 4: Annual Energy Cost Savings for Home Lighting and Appliance
Upgrades:
From: standard lighting and appliances: Incandescent lighting;
To: more energy efficient lighting and appliances: Compact fluorescent
lighting;
Incremental cost (per house): $99;
Annual per house energy cost savings: $48;
Cost recovery period (years): 2;
Aggregate energy cost savings for 143,862 homes (dollars in millions):
$7.
From: standard lighting and appliances: New conventional refrigerator;
To: more energy efficient lighting and appliances: Energy Star labeled;
Incremental cost (per house): $65;
Annual per house energy cost savings: $9;
Cost recovery period (years): 7;
Aggregate energy cost savings for 143,862 homes (dollars in millions):
$1.
From: standard lighting and appliances: New conventional clothes
washer;
To: more energy efficient lighting and appliances: Energy Star labeled;
Incremental cost (per house): $440;
Annual per house energy cost savings: $59;
Cost recovery period (years): 7.5;
Aggregate energy cost savings for 143,862 homes (dollars in millions):
$8.
From: standard lighting and appliances: New conventional dish washer;
To: more energy efficient lighting and appliances: Energy Star labeled;
Incremental cost (per house): $45;
Annual per house energy cost savings: $13;
Cost recovery period (years): 3.5;
Aggregate energy cost savings for 143,862 homes (dollars in millions):
$2.
Source: GAO analysis of Pacific Northwest National Laboratory data.
[End of table]
[End of section]
Appendix III: Energy Cost Savings Estimates for Commercial Buildings:
Tables 5 through 7 contain energy cost savings estimates for commercial
buildings--office, school, hospital, and retail buildings--constructed
in accordance with various commercial building energy standards, to
"above code" levels, and with more efficient lighting requirements.
Table 5: Annual Incremental Energy Cost Savings per Building for
Various Commercial Buildings Constructed in Accordance with a Newer
ASHRAE Standard:
Incremental savings from moving to a newer ASHRAE standard: 1975
standard (Mississippi's current standard) to 2001 standard;
Office: $13,311 ($0.18 sq. ft.) (12%);
School: $28,060 ($0.23 sq. ft.) (18%);
Hospital: $37,822 ($0.16 sq. ft.) (7%);
Retail: $145,404 ($0.61 sq. ft.) (34%).
Incremental savings from moving to a newer ASHRAE standard: 2001
standard (Louisiana's current standard) to 2004 standard;
Office: $7,608 ($0.10 sq. ft.) (8%);
School: $10,524 ($0.09 sq. ft.) (8%);
Hospital: $32,567 ($0.14 sq. ft.) (7%);
Retail: $37,649 ($0.16 sq. ft.) (13%).
Source: GAO analysis of Pacific Northwest National Laboratory data.
[End of table]
On a per building basis, we estimated the energy cost savings that
could be achieved in Mississippi and Louisiana by moving from their
current energy standards to the LEED 1-point and 10-point levels as
well as the federal tax credit level, as shown in tables 6 and
7.[Footnote 33]
Table 6: Estimated Energy Cost Savings from Commercial Buildings in
Accordance with Selected "Above Code" Levels:
Louisiana - Current standard (ASHRAE 2001 standard).
Location: LEED 1-point level;
Estimated annual energy cost savings, per building type, by amount
total and square feet: Office: $17,263; ($0.23);
Estimated annual energy cost savings, per building type, by amount
total and square feet: School: $22,093; ($0.18);
Estimated annual energy cost savings, per building type, by amount
total and square feet: Hospital: $77,259; ($0.32);
Estimated annual energy cost savings, per building type, by amount
total and square feet: Retail: $62,028; ($0.26).
Location: LEED 10-point level;
Estimated annual energy cost savings, per building type, by amount
total and square feet: Office: $45,785; ($0.61);
Estimated annual energy cost savings, per building type, by amount
total and square feet: School: $60,139; ($0.49);
Estimated annual energy cost savings, per building type, by amount
total and square feet: Hospital: $219,706; ($0.91);
Estimated annual energy cost savings, per building type, by amount
total and square feet: Retail: $140,757; ($0.59).
Location: Tax credit level;
Estimated annual energy cost savings, per building type, by amount
total and square feet: Office: $49,538; ($0.66);
Estimated annual energy cost savings, per building type, by amount
total and square feet: School: $63,821; ($0.52);
Estimated annual energy cost savings, per building type, by amount
total and square feet: Hospital: $239,021; ($0.99);
Estimated annual energy cost savings, per building type, by amount
total and square feet: Retail: $140,757; ($0.59).
Mississippi - Current standard (ASHRAE 1975 standard).
Location: LEED 1-point level;
Estimated annual energy cost savings, per building type, by amount
total and square feet: Office: $30,773; ($0.41);
Estimated annual energy cost savings, per building type, by amount
total and square feet: School: $50,320; ($0.41);
Estimated annual energy cost savings, per building type, by amount
total and square feet: Hospital: $115,889; ($0.48);
Estimated annual energy cost savings, per building type, by amount
total and square feet: Retail: $207,557; ($0.87).
Location: LEED 10-point level;
Estimated annual energy cost savings, per building type, by amount
total and square feet: Office: $59,295; ($0.79);
Estimated annual energy cost savings, per building type, by amount
total and square feet: School: $88,367; ($0.72);
Estimated annual energy cost savings, per building type, by amount
total and square feet: Hospital: $258,335; ($1.07);
Estimated annual energy cost savings, per building type, by amount
total and square feet: Retail: $286,285; ($1.20).
Location: Tax credit level;
Estimated annual energy cost savings, per building type, by amount
total and square feet: Office: $63,048; ($0.84);
Estimated annual energy cost savings, per building type, by amount
total and square feet: School: $92,049; ($0.75);
Estimated annual energy cost savings, per building type, by amount
total and square feet: Hospital: $277,650; ($1.15);
Estimated annual energy cost savings, per building type, by amount
total and square feet: Retail: $286,285; ($1.20).
Source: GAO analysis of Pacific Northwest National Laboratory data.
[End of table]
Table 7: Annual Lighting Cost Savings for Commercial Buildings in
Louisiana and Mississippi:
Louisiana.
Location/Building type: Office;
ASHRAE standard: 1975 standard to 2001 standard: $11,334; ($0.15 sq.
ft.);
ASHRAE standard: 2001 standard to 2004 standard: $5,704; ($0.08 sq.
ft.);
ASHRAE standard: Cumulative savings (1975 standard to 2004 standard):
$17,038; ($0.23 sq. ft.)
Location/Building type: School;
ASHRAE standard: 1975 standard to 2001 standard: $13,746; ($0.11 sq.
ft.);
ASHRAE standard: 2001 standard to 2004 standard: $8,223; ($0.07 sq.
ft.);
ASHRAE standard: Cumulative savings (1975 standard to 2004 standard):
$21,969; ($0.18 sq. ft.)
Location/Building type: Hospital;
ASHRAE standard: 1975 standard to 2001 standard: $26,075; ($0.11 sq.
ft.);
ASHRAE standard: 2001 standard to 2004 standard: $26,075; ($0.11 sq.
ft.);
ASHRAE standard: Cumulative savings (1975 standard to 2004 standard):
$52,150; ($0.22 sq. ft.)
Location/Building type: Retail;
ASHRAE standard: 1975 standard to 2001 standard: $107,118; ($0.45 sq.
ft.);
ASHRAE standard: 2001 standard to 2004 standard: $30,537; ($0.13 sq.
ft.);
ASHRAE standard: Cumulative savings (1975 standard to 2004 standard):
$137,655; ($0.58 sq. ft.)
Mississippi.
Location/Building type: Office;
ASHRAE standard: 1975 standard to 2001 standard: $12,459; ($0.17 sq.
ft.);
ASHRAE standard: 2001 standard to 2004 standard: $6,230; ($0.08 sq.
ft.);
ASHRAE standard: Cumulative savings (1975 standard to 2004 standard):
$18,689; ($0.25 sq. ft.)
Location/Building type: School;
ASHRAE standard: 1975 standard to 2001 standard: $14,973; ($0.12 sq.
ft.);
ASHRAE standard: 2001 standard to 2004 standard: $8,959; ($0.07 sq.
ft.);
ASHRAE standard: Cumulative savings (1975 standard to 2004 standard):
$23,932; ($0.19 sq. ft.)
Location/Building type: Hospital;
ASHRAE standard: 1975 standard to 2001 standard: $28,489; ($0.12 sq.
ft.);
ASHRAE standard: 2001 standard to 2004 standard: $28,489; ($0.12 sq.
ft.);
ASHRAE standard: Cumulative savings (1975 standard to 2004 standard):
$56,978; ($0.24 sq. ft.)
Location/Building type: Retail;
ASHRAE standard: 1975 standard to 2001 standard: $117,138; ($0.49 sq.
ft.);
ASHRAE standard: 2001 standard to 2004 standard: $33,400; ($0.14 sq.
ft.);
ASHRAE standard: Cumulative savings (1975 standard to 2004 standard):
$150,538; ($0.63 sq. ft.)
Source: GAO analysis of Pacific Northwest National Laboratory data.
Note: The lighting cost saving reflect the typical building sizes used
in our analysis, as well as the electricity prices used for Louisiana
and Mississippi, which were 8.81 cents per kilowatt hour (kWh) and 9.64
cents per kWh respectively.
[End of table]
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Mark E. Gaffigan, (202) 512-3841, gaffiganm@gao.gov:
Staff Acknowledgments:
In addition to the contact person named above, Dan Haas, Assistant
Director; Mark Braza; Jacqueline Cook; John Delicath; Yvette Gutierrez-
Thomas; Raun Lazier; Paul Pansini; Anne Stevens; and Barbara Timmerman
made key contributions to this report.
FOOTNOTES
[1] In this report, we refer to Hurricanes Katrina, Rita, and Wilma
collectively as the "Gulf Coast hurricanes."
[2] For purposes of this report, the term "building codes" refers to
state and local government requirements for design and construction of
residential and commercial buildings that are based on industry
standards including those related to energy efficiency.
[3] Cost estimates for damages due to these storms have varied and a
definitive cost estimate may never be known. See Gulf Coast Rebuilding:
Preliminary Observations on Progress to Date and Challenges for the
Future GAO-07-574T (Washington, D.C., April 12, 2007).
[4] The building envelope is the structural elements (walls, roof,
floor, and foundation) of a building that encloses conditioned space--
the building shell.
[5] Mississippi requires the counties of Jackson, Harrison, Hancock,
Stone and Pearl River to enforce, on an emergency basis, all the wind
and flood mitigation requirements of the code. According to state
officials, although the energy provisions are optional, some counties
are considering making the provisions mandatory.
[6] ASHRAE's 1975 standard and ASHRAE's 2001 standard refer to ASHRAE
standards 90-75 and 90.1-2001, respectively.
[7] R.G. Lucas, Analysis of Energy Savings Impacts of New Residential
Energy Codes for the Gulf Coast, PNNL-16265, (January 2007); and M.A.
Halverson, K. Gowri, E.E. Richman, Analysis of Energy Savings Impacts
of New Commercial Energy Codes for the Gulf Coast, PNNL-16282,
(December 2006).
[8] The Energy Information Administration estimates that 38 percent of
housing in the South Census Region was built prior to 1970; 58 percent
was built before 1980; and 81 percent was built before 1989.
[9] PNNL modeled two baselines. The first baseline is an approximation
of measures in typical existing housing in the rebuilding region. The
second baseline represents the estimated energy efficiency associated
with construction practices in areas of the Gulf Coast that do not have
building codes or where the codes may not be enforced.
[10] We use the term "ICC's residential code" in this report to refer
to the ICC's International Residential Code (IRC), which is a
comprehensive, stand-alone residential code that creates minimum
regulations for one-and two-family dwellings of three stories or fewer
and brings together all building, plumbing, mechanical, fuel gas,
energy, and electrical provisions for one-and two-family residences. In
terms of energy efficiency, the energy provisions of the IRC references
the International Energy Conservation Code (IECC), which requires
energy conservation through efficiency in areas, such as, envelope
design and mechanical systems. We technically analyzed the energy
efficiency requirements of the IECC 2006, which is similar in
stringency to the energy provisions of the 2003 and 2006 versions of
the IRC.
[11] This tax credit is provided by section 1332 of the Energy Policy
Act of 2005, Pub. L. No. 109-58 (Aug. 8, 2005).
[12] The amount of rebuilding can vary. The aggregated and individual
ranges of energy cost savings depend on the type of foundation used,
the energy efficiency measure to which the houses are built, and the
number of homes being rebuilt. Our aggregate range of energy cost
savings is based on the assumption that an estimated 122,261 severely
damaged/destroyed homes are rebuilt with either a slab-on-grade or
elevated foundation. See appendix II of this report for more
information.
[13] On the basis of our review of HUD's report entitled Promoting
Energy Efficiency at HUD in a Time of Change: Report to Congress
(Washington DC: August 8, 2006), it appears that the department could
similarly reduce its utility-related energy expenditures for its public
and assisted housing programs in the Gulf Coast region by implementing
energy efficiency practices similar to those that we identified for
single-family homes.
[14] Technically, the ASHRAE standards referred to in this report are
the ANSI/ASHRAE/IESNA Standard 90-75, ANSI/ASHRAE/IESNA Standard 90.1-
2001, and the ANSI/ASHRAE/IESNA Standard 90.1-2004.
[15] The LEED Green Building Rating System is the nationally accepted
benchmark for the design, construction, and operation of high
performance green buildings and is operated by the U.S. Green Building
Council. EPACT created certain requirement and incentives to help
improve energy efficiency, including residential and commercial
buildings.
[16] The U.S. Green Building Council has developed a national rating
system--LEED--for constructing high-performance, sustainable buildings.
The LEED system awards points for various building parameters,
including energy. For example, the LEED system awards 1 point for a
building that uses 10.5 percent less energy than required using the
ASHRAE 2004 standard and 10 points for a building that uses 42 percent
less energy than required using the ASHRAE 2004 standard.
[17] A tax deduction of up to $1.80 per square foot is available to
owners or designers of new or existing commercial buildings that save
at least 50 percent of the heating and cooling energy of a building
that meets ASHRAE standard 90.1-2001. Partial deductions of up to $0.60
per square foot can be taken for measures affecting any one of three
building systems: the building envelope, lighting, or heating and
cooling systems.
[18] The cost recovery period for the windows that we previously
mentioned may not appear attractive. However, if the existing building
has single-pane windows, these windows can have substantial
disadvantages that are not accounted for in an energy cost analysis.
For example, the inner surface temperature of a single-pane aluminum
window will become quite low during the coldest winter conditions. This
low temperature can result in an unpleasant drafty feeling for
occupants in the vicinity of the windows. Also, the cold surface can
lead to possible water condensation, which could eventually result in
water damage to the windows or walls over an extended period of time.
[19] Tax credits are available for many types of home improvements
including adding insulation, replacing windows, and purchasing certain
high efficiency heating and cooling equipment. The maximum amount of
homeowner credit for all improvements combined is $500 during the 2-
year period of the tax credit.
[20] On the basis of a house with 20 light fixtures, the Energy Star
Advance Lighting Package's minimum requirements would save $48 a year
in electricity costs for lighting.
[21] U.S. Department of Labor, Americas Construction Industry:
Identifying and Addressing Workforce Challenges (December 2004).
[22] Kevin McCarthy, D.J. Peterson, Narayan Sastry, and Michael
Pollard, The Repopulation of New Orleans After Hurricane Katrina, a
technical report prepared by the RAND Gulf States Policy Institute
(January 2006).
[23] The terms "code officials" or "inspectors", in this report, refer
to building officials, inspectors, plans examiners, and others in the
position of regulating building codes and standards.
[24] The term "code users," as used in this report, refers to builders
and contractors, architects, designers, and others in the position of
compliance with building codes and standards.
[25] Maine Public Utilities Commission, "Building Code Compliance and
Enforcement Methods Investigation" (presented to the Utilities and
Energy Commission, December 2004).
[26] D.L. Smith and J.J. McCullough, Alternative Code Implementation
Strategies for States, A report prepared for the U.S. Department of
Energy (May 2001).
[27] FEMA is tasked with responding to, planning for, recovering from,
and mitigating against disasters. Its Hazard Mitigation Grant Program
provides grants to states, to implement long-term hazard mitigation
measures after a major disaster declaration.
[28] Statement made by Donald Powell, the Federal Coordinator for Gulf
Coast Rebuilding; on January 25, 2006, when he announced the
distribution of CDBG funds to the five Gulf Coast states impacted by
hurricanes.
[29] Section 154 of EPACT requires HUD to develop and implement an
integrated strategy to reduce utility expenses through cost-effective
energy conservation and efficiency measures and energy-efficient design
and construction of public and assisted housing. HUD also is required
to monitor the energy use of public housing agencies and submit a
report update every 2 years on its progress in implementing the
strategy.
[30] Home Performance with Energy Star is a whole-house Energy Star
retrofit initiative aimed at existing homes.
[31] PATH is a voluntary partnership between leaders of the
homebuilding, product manufacturing, insurance, and financial
industries and representatives of federal agencies concerned with
housing. HUD's Office of Policy Development and Research (PD&R)
coordinates all PATH activities. PD&R manages PATH's budget, strategy,
and daily operations.
[32] PNNL modeled two baselines. The first baseline is an approximation
of measures in typical existing housing in the rebuilding region. The
second baseline represents the estimated energy efficiency associated
with construction practices in areas of the Gulf Coast that do not have
building codes or where the codes may not be enforced.
[33] We did not evaluate the total cost-effectiveness of these options
because the methods that designers might use to achieve these savings
are highly variable.
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