Massachusetts adopted the 2009 International Energy Conservation Code effective in January 2010. But the state also offers towns an upgrade option on the code, known as the “ Stretch Code,” based on the national EPA Energy Star building specification. The state is offering an incentive for the code upgrade: towns that adopt the Stretch Code, and also commit to a menu of other energy-saving policies, become eligible for designation as “Green Communities” and get to share in a state pool of grant money targeting energy-saving upgrades to town equipment and community facilities. And as one town after another considers whether to step up to the Stretch Code, the state is, in effect, holding an extended town-by-town debate on codes, the environment, and energy policy. In most towns, builders and developers have represented the anti-Stretch side of the argument, considering the proposed code and the hoped-for grants with a hostile, or at least skeptical, eye. Such was the case in Ayer, Mass., earlier this month, reported the Ayer News (“ Builders: New code a stretch,” by Mary E. Arata). Half the 20 attendees at a town meeting considering the code were builders or developers, the News reported, and most voiced opposition to the idea. Newly joined Green Communities will probably get a $100,000 to $200,000 grant in their first year in the program, consultant Marianne Graham told the town meeting. But in later years the grants will be competitive. Commented Ayer builder Mark Canney, “What's the guarantee? So all of a sudden a $150,000 grant is $15,000 down the road with an expense to the town to meet these requirements and then everybody's stuck with the bill." And brother David Canney argued, "One and one still has to make two. Everyone has everything figured out except how does the builder retrieve over a three-year period the added costs of $18,000 a year. We're selling houses at 15- to 20-percent less than we used to. Who's figuring out that chart?" Skeptics notwithstanding, the Stretch Code has momentum in Massachusetts: As of April 18, 2011, 70 towns have voted to implement the tougher code, according to a map on the website (“ Stretch Code Adoptionby Community”). The list includes Boston and most of its nearby suburbs, Gloucester and Wenham on the North Shore, and Mashpee on Cape Cod. Other Cape Cod towns appear to be on the fence. A school auditorium meeting in Falmouth, Mass., sparked the same range of opinions on the code as this month’s Ayer meeting, with construction industry voices registering strong reservations, reported the Falmouth Enterprise (“ Opinions Split Over Value of Proposed Stretch Code,” by Brent Runyon). Robert M. McPhee, president of the Cape Cod Home Builders and Remodelers Association, said homeowners who want energy upgrades can build an Energy Star home without the town adopting a new code for everyone. And New Bedford architect Greg Jones said, “It’s a little frustrating that this all comes during one of the worst building climates that we have ever seen. It’s going to be very difficult to swallow all this at once.” All at once or in small bites, however, the requirements in the Stretch Code are coming eventually. For towns that don’t adopt the Stretch Code now, most of its new, tougher provisions will go into force when Massachusetts moves to the 2012 IECC, sometime in 2013 — and when that happens, complying with the code will not make towns eligible for any state grants. Meanwhile, however, there’s criticism of the whole idea of using the Energy Star spec as a mandatory code. Energy Star was devised as a voluntary, above-code specification, intended to set energy-conscious builders apart from their mainstream competition. If Energy Star becomes code, that goal falls by the wayside. Asked about the Massachusetts case, Energy Star national director Sam Rashkin provided Coastal Connection with this statement:

“EPA discourages local governments from using ENERGY STAR for Homes as part of their building code. Although it may appear counter-intuitive, we have had this long-standing policy for several reasons: ENERGY STAR is a hard-earned prominent national brand that consumers depend upon for making choices for superior energy performance above minimum code or standards. Programs where ENERGY STAR equals code can lead to consumer confusion and dilute the core brand message. ENERGY STAR is a very fluid voluntary program that needs to move at the speed of business. Public review processes, policy decisions, and amendments are all substantially expedited to ensure timely consumers guidance on energy efficient products, homes, services, and buildings. Often this pace conflicts with the needs of codes and regulations agencies who need more time to promulgate changes.

Most local governments can achieve the same desired outcome with making ENERGY STAR as code by using other voluntary revenue neutral initiatives that promote the market-based advantages of ENERGY STAR qualified homes in their communities (e.g., more economically viable neighborhoods; increased property tax revenue from higher value properties; increased disposable income that can be spent locally; and homes with less risk of default or insurance issues). These initiatives include: • Discounted mortgage interest rates subsidized by the utility and/or lenders which are market-based since energy efficient homes reduce peak demand for utilities and risk for lenders (homes with lower ownership costs that are positioned for higher value as energy costs escalate). The key is for the discount to be compelling (e.g., 1/2% reduction). This was done in Alaska and resulted in complete market transformation to ENERGY STAR Qualified Homes. • Discounted/Delayed housing permit fees are market-based since energy efficient homes have higher value and will therefore deliver up to 100 years or more of increased real estate tax revenue. They also increase disposable income that can be spent in the community supporting the local economy. • Priority Code Processes including expedited plan approvals and priority field inspections provide an important incentive because time is money for builders.

• Discounted utility hook-up fees which are market-based since energy efficient homes reduce utility peak demand (e.g., typically 1 kW/ENERGY STAR Qualified Home). • Discounted utility rates which provide a percent reduction off each utility bill for the life or the home or a preset time (e.g., Virginia Power program in mid 1990's and current Duke Power program providing lifetime 5% discount on utility costs for ENERGY STAR Qualified Homes). Again, this is market-based because the homes deliver peak load reduction to the utility.

This all said, we accept the fact that some local jurisdictions still do choose to make ENERGY STAR for Homes as code and try to work with them to avoid consumer confusion. For example, we recently helped Long Island townships who were not able to move as fast as EPA to the new Version 3 specifications with alternate solutions for a code that does not require ENERGY STAR certification. States are different. EPA cannot allow the consumer confusion where ENERGY STAR equates to minimum code in a broad region. EPA develops a customized specification for ENERGY STAR qualified homes where states like Massachusetts develop rigorous energy codes that meet or exceed ENERGY STAR. This includes current work providing customized ENERGY STAR Version 3 specifications in Washington, Oregon, California, Hawaii, and Florida. Note that we do have the Massachusetts Stretch Code on our list of states that need customized specifications with plans to provide a customized ENERGY STAR solution later this year.” Stay tuned to Coastal Connection for more updates on coastal building codes and the Energy Star spec.