Monday, October 7, 2013

The City of Fayetteville Takes A Step Closer to Having the First PACE Program in Arkansas

At the Arkansas Advanced Energy Association’s “Hour of Power” event this past August, City of Fayetteville Mayor Lioneld Jordan was blunt: he intended to do everything within his power to position the City of Fayetteville to be the first to make Property Assessed Clean Energy, or “PACE,” financing available to its citizens.

Mayor Jordan and the City of Fayetteville took an important step towards that goal last week, filing a proposed ordinance that would create an Energy Improvement District to manage innovative financing programs for advanced energy improvements on residential, commercial, and industrial real properties. These programs include PACE financing options.

Act 1074 of 2013, now codified at Ark. Code Ann. Section 8-15-101 et seq., authorized governmental entities to establish energy improvement districts for the purpose of managing PACE programs. (By way of definition, a PACE program is “a property assessed clean energy program under which a real property owner can finance an energy efficiency improvement, a renewable energy project, and a water conservation improvement on the real property”.)

The PACE Act directs governmental entities to create PACE districts by adoption of an ordinance. Like traditional improvement districts, once created, PACE districts are operated and controlled by a Board of Directors.

This is what the Fayetteville PACE Ordinance accomplishes: it creates Energy Improvement District No. 1, and creates a seven-member Board of Directors to operate and manage the District.

Passing the PACE Ordinance does not finish the job. The District’s Board of Directors will need to be populated, and it will need to figure out how to govern itself. A means for determining when energy efficiency improvements will result in “positive cash flow” needs to be worked out. Most importantly, the financing program needs to be put in place. This means identifying underwriters, issuing bonds, figuring out how PACE financing will be occur for residential properties, and, most likely, getting a third-party administrator in place. But none of these things happen until the PACE Ordinance is in place.

The proposed PACE Ordinance is on the agenda for the October 15, 2013, meeting of the Fayetteville City Council. The Arkansas sustainasphere, and this sustainablawger, will be watching.

The Fayetteville PACE Ordinance and some related materials can be found here

Thursday, October 3, 2013

Arkansas's Proposed Rule Adopting the 2009 IECC: Last Call for Written Comments

Arkansas has adopted the 2009 International Energy Conservation Code (IECC), effective January 1, 2014. The Arkansas Economic Development Commission Energy Office is soliciting public comment on the Rule that will formally update the residential energy standard in Arkansas from IECC 2003 to IECC 2009. The deadline to submit written comments to the AEDC is close of business tomorrow, October 4, 2013.

Written comments should be addressed to J.D. Lowery, Deputy Director of the Arkansas Energy Office and submitted in any one of three ways: 

  • POSTAL MAIL: Arkansas Economic Development Commission
    Attention: J.D. Lowery
    900 West Capitol, Suite 400
    Little Rock, Arkansas  72201 
  • FAX: (501) 682-7499

The 2009 IECC residential energy standards would require that all new homes constructed in the State of Arkansas receive a HERS rating (including blower door and duct testing) and provide a home energy disclosure label for consumers in a manner similar to mpg ratings for vehicles or Energy Star ratings for appliances. Adoption of the rule is a necessary step toward listing Arkansas among the 40 other states that have previously upgraded their energy building codes to at least the 2009 standard.

The 2009 IECC is substantially different from the 2003 IECC, and these differences are specifically intended to improve energy efficiency. According to a 2009 study by the U.S. Department of Energy, “Impacts of the 2009 IECC for Residential Buildings at State Level,” “important new requirements” in the 2009 IECC include:

· A requirement that duct systems be tested and sealed, and air leakage minimized;

· Half of the lighting “lamps” in a building must be energy efficient;

· “Trade-off credits” are no longer available for high efficiency HVAC equipment. For example, under the 2006 IECC, use of a high efficiency furnace could be traded for a reduction in wall insulation. Such trade-offs are eliminated under the 2009 IECC;

· Vertical fenestration U-factor requirements and maximum allowable solar heat gain coefficients are reduced;

· Insulation requirements are improved and increased;

· Better air-sealing language;

· Controls for driveway/sidewalk snow melting systems; and,

· Pool covers are required for heated pools.

Obviously, more efficient sidewalk snow melting systems, basement insulation, and heated pools are not going to drive improved residential energy efficiency in Arkansas. The improvements in duct and HVAC efficiency, building envelope tightness and air sealing, and window and insulation requirements are the meat of the coconut for those in the Arkansas sustainasphere.

In 2009, the U.S. Department of Energy analyzed the impact of the 2009 IECC in Arkansas. The DOE study found an average savings of $242.00 per house, per year for homes meeting the requirements of the 2009 IECC.

Annual savings of $242.00 might not, at first blush, blow your skirt up. But consider: if the average life of a home is 30 years, not adopting the 2009 IECC will result in homeowners paying an additional $7,260.00 in energy costs over the life of the home.

The adoption of the 2009 IECC should also stimulate job creation and growth. The new requirements for air duct testing and sealing, and for general building envelope tightness will translate directly into a need for quality third-party testing, inspection, and compliance professionals. In simple terms, this means more home energy raters, auditors, inspectors, specialists, and consultants. These are skilled positions. Once created, they should become permanent parts of the sustainable economy.

More than pure economics, adopting the 2009 IECC is an integral step on the path to sustainability. Green building technology is rapidly evolving, and the only surefire way to ensure that Arkansans are provided with affordable, reliable, and sustainable energy is to adopt and enforce updated building standards based on current technology.

Here is a link to the AEDC’s proposed Rule adopting the 2009 IECC.

Wednesday, October 2, 2013

Reflections on the AAEA Second Annual Meeting and Policy Conference

The Second Annual Meeting and Policy Conference of the Arkansas Advanced Energy Association (AAEA)held yesterday in North Little Rock prompted me to reflect on what it means to practice sustainability law in Arkansas. 

What it means, more often than not, is uniting apparently disparate interests in a way that furthers the client's sustainability agenda and achieves the client's goals (of which, presumably, one is furthering the sustainability agenda). Consider the simple act of uniting sustainable business practices – such as efficiency in the use of paper and energy, with the notoriously inefficient practice of law. For a client that wants to use, or must use, (or both) vendors, contractors, and professoonals who meet certain sustainability standards or criteria, this simple act takes on considerable importance.

Against this backdrop, I highlight two strands of thought from the AAEA conference. The first is from the keynote speaker, former Colorado governor Bill Ritter. Governor Ritter observed that it was unlikely that comprehensive advanced energy legislation would be forthcoming from the federal government anytime soon. Instead, advancements in the law of sustainability would be found locally, and, ultimately, public policy would provide the leverage to move forward. These are not state secrets revealed. But to a lawyer who practices sustainability law, Governor Ritter’s plain spoken observation is a gut check. One of my mentors in the law used to reflect that, “for a lawyer, public policy is the refuge of a weak mind.” And it’s mighty difficult to provide advice and counsel about laws that do not exist and public policies that aren’t law.

The second thread comes from Matt Dromi, a co-founder of the Fayetteville, Arkansas-based company modthink. Presenting on “Harnessing the Power of Social Media for Advanced Energy Business Growth,” Dromi emphasized that successful social media campaigns were authentic and embraced humanity. This means less, “come to my event” or “here’s a coupon for some pants,” and more, “this is my real story” and “this is how we are alike.” In two words: similarities connect.

These two disparate ideas tie together in the practice of sustainability law. More often than not, lawyers are focused on differences, and clients, particularly before attorneys fees exceed budget, dig their heels into ground wrought from principle. For example, in reviewing a contract, the lawyer's first line of inquiry is usually something like, “What’s wrong with this deal?” or, “How is this different from what I expected?” as opposed to “What is good about this deal?” or “What provisions do I definitely want to keep?” The client's companion position might be something like, "I never waive the security deposit" or "I always litigate on my turf," instead identifying with areas of common interest, such as a mutual commitment to maintain the LEED certification of a building, and to share costs to do so.

This is the sustainability law that I practice – a practice driven by client goals and guided by embracing similarities. The fact that we are dealing with sustainability subject matter means that, by definition, there are similarities and that those similarities relate directly to client goals. Identify the common ground and point out to your adversary (and, perhaps with some finess, your client) that the two of you are already standing on it and identify exactly what that means: that from the start, some principles are aligned and some goals achieved. 

The law of sustainability is different from other areas of law because, properly practiced, it is driven by similarities between and among parties as opposed to differences. Yes, parties negotiating a green lease may be adversarial, but they are also united by the common principals inherent in a green lease, such as the desire to preserve and promote a green building. Yes, an employer/employee relationship is often marked by an imbalance of power, but as the employer adopts sustainable business practices the two are united by a common interest in the employee’s welfare. The similarities align with goals, and if the parties start with a focus on the similarities, they are more likely to achieve the goals. A settlement of a contested piece of litigation is often described as a deal that no one likes. The resolution of a sustainability claim can be just the opposite – a deal that serves the goals and common interests of all involved.

And to me, that is what the practice of sustainability law is about.