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Codes, compromises and hidden costs

[1]When the N.C. Building Code Council passed rules in December to improve the energy efficiency of new homes, it gave an unprecedented concession prize to home builders complaining about the cost of the changes.

Home builders, in the compromise brokered by N.C. Gov. Bev Perdue, will get offsets in other parts of the building code to cover the costs of making homes 15 percent more energy efficient than what the current code requires.  Environmental groups and the state energy office had hoped to see the council adopt more stringent rules that would have required homes to be 30 percent more efficient than they are now.

But while a lot of attention has been given to Perdue’s compromise and home builders’ offsets (a proposed wish list from home builders included several that put fire safety at risk) not much attention has been given to $79 million in recovery dollars given to the state in exchange for making the building code greener.

The money was accepted in March 2009 by Perdue in exchange for her promise that she’d bring the state up to the 2009 International Energy Conservation Code, as seen in a letter she wrote to the U.S. Secretary of Energy Steven Chu. It’s gone to pay for the State Energy Program, which funds several initiatives to make the state more conservation-minded when it comes to energy.  A fifth of the money has already been paid out to state contractors, said Ward Lenz, the director of the State Energy Office.

In North Carolina, the 15 percent improvement on residential homes passed by the building council does meet the IECC requirements, but the state could fall short of those goals if the energy efficiency rules are weakened any further. Most of the code changes are simple tweaks, requiring energy efficient lights, more insulation and better sealing of ducts that could let heat, and energy escape. Changes are expected to go into effect in 2012.

But there’s a real possibility that the state Legislature could decide to take the matter up at the behest of the N.C. Home Builders Association, a process that can occur if 10 people write letters of objection to the code council’s new rules. If lawmakers were to weaken or scrap the code entirely, the state could end up being on the hook for the $79 million of recovery dollars.

“We’ve had discussions here, and I don’t want to go overboard and say there’s a risk,” Lenz said. “But obviously (Perdue’s) letter says what it says and that was a part of each state’s agreement to get the funds.”

Perdue’s office said the governor was confident the compromise would come through, and that the requirements for the recovery money will be met by the 15 percent rules passed in December. The state has until 2017 to make the changes, Mackey said.

“With the most recent changes to the building code, we’ve already met those requirements,” said Chris Mackey, a Perdue spokeswoman. “We’re certainly moving in the right direction.”

But not everyone is as confident as the governor’s office.

Chris Mathis, a consultant hired by the state two years ago to move the state to a greener building code, said he’s worried what will happen to his efforts to make new construction in the state more energy efficient.

 “We’ve got a real serious problem on our hands,” Mathis said, if the legislature wants to weaken the code. “It is absolutely essential that we adopt the improved energy code and we do it as soon as possible.”

Lisa Martin, the head lobbyist for the N.C. Home Builders Association, said the group does plan on submitting those 10 letters so that they can go to the legislature in case the promised offsets don’t materialize.

“It’s simply to keep our options open if we have to go to the legislature,” Martin said. She said home builders are okay with the building code changes, as long as the code council agrees to offsets to help lower the cost to residential builders.

And the homebuilders will likely get a warm reception in the General Assembly coming into session later this month. The group’s PAC gave significant donations to both Democratic and Republican candidates during the last election cycle when voters elected in the first Republican-led legislature of both houses since 1898.

There’s also been a difference of opinions as to how much the proposed changes will cost. Mathis suspects it will be between $500 and $1000 while Martin said the homebuilders believe the costs will be between $4,000 and $5,000 and that’s how much they’d like to see in offsets.

Other estimates in the media have wavered between $2400 and $3000.

The N.C. Building Code Council will begin considering the offsets, and how much they’ll allow, in coming months. If the code council isn’t able to choose offsets that are ensure safety and save home builders enough money, the General Assembly could end up being the final deciders.

Have questions about this report? Email reporter Sarah Ovaska at [email protected] [2] or call her at (919) 861-1463.

To see a list of proposed offsets, from which the code council will select, go here [3].

To see the 2009 letter Gov. Perdue wrote to Energy Secretary Chu about the recovery dollars and building code, go here [4].