FINAL BILL REPORT

SHB 2198

                                   C 2 L 90

BYHouse Committee on Energy & Utilities (originally sponsored by Representatives Nelson, Hankins, Cooper, Miller, May, Jacobsen, Brooks, Todd and H. Myers) 

Pertaining to energy efficiency and conservation.

House Committe on Energy & Utilities

Rereferred House Committee on Revenue

Senate Committee on Energy & Utilities and Ways & Means

SYNOPSIS AS ENACTED

BACKGROUND:

The Legislature adopted guidelines for a revised energy code in 1985 and directed the state building code council to adopt an energy code.  The guidelines set standards for insulation of ceilings, walls, and floors over unheated spaces, and guidelines for windows and window areas. The guidelines set different standards for electrically heated housing and housing heated with other fuel sources. They also provide different standards for two climate zones. The climate zones are differentiated by heating degree days. The state building code council is directed to allow flexibility in building design through trade-offs between various elements of a building's structure, so long as the overall whole house energy performance is equivalent to the performance provided for in the guidelines.

The energy code adopted by the state building code council preempts local energy codes and must be enforced by all municipal and county governments.  However, exceptions to preemption are provided if, prior to January 15, 1988, a local government adopted an energy code requiring energy efficiency greater than the state code, that code is not preempted. A local government may determine that the state-energy code is not cost-effective in that jurisdiction and adopt a less stringent energy code.  A local government may also enforce a more stringent energy code if the builder or owner of new residential construction is reimbursed by a federal agency for the additional costs to the consumer of the more stringent code.  The state preemption of local energy codes expired January 1, 1990.

The Northwest Power Planning Council, pursuant to its federal charter, has adopted Model Conservation Standards (MCS). The MCS are designed to provide a cost- effective means for improving energy efficiency. In the electric utility service areas in which the Bonneville Power Administration (BPA) sells power, BPA is required to assure that the MCS are being enforced.  If the MCS are not being enforced, or the utility is not moving toward implementation of the MCS, BPA is required to impose a rate surcharge on the power it sells to that utility.  BPA has funds that it will make available to utilities to assist in paying some of the costs of building to the MCS.

BPA has issued an Environmental Impact Statement (EIS) governing indoor air quality in homes that are built to the Model Conservation Standards.  BPA has issued a record of decision on its EIS adopting four different methods of achieving the indoor air quality standards necessary for its new homes programs.  BPA will only make funds available to builders who build to the MCS if the builder complies with the record of decision.

The Utilities and Transportation Commission is directed to encourage electric and gas companies to develop measures and to invest in resources that increase energy efficiency or that use renewable resources.  One measure which the commission must authorize is an additional 2 percent on the rate of return for investments in energy efficiency, cogeneration, or renewable resources.  The incentives are available only for investments made prior to January 1, 1990.

Gas and electric utilities, both public and private, are required to pay a tax on their income.  A deduction from income is allowed for investments in cogeneration or energy produced from renewable resources.  The deduction is available only for investments made prior to January 1, 1990.

The state building code council has authority to amend the uniform building codes adopted by the Legislature.  The amendments must be adopted by rule no later than December 1 and may not take effect until after the end of the next regular legislative session.

The 1985 Legislature directed the State Energy Office to contract with the University of Washington for a study of the cost- effectiveness of the 1985 energy code.  The study was originally due in 1988.  In 1988, the Legislature extended the report date to 1989 and required a review of the University of Washington study by a peer review panel.

SUMMARY:

Each city, town, and county shall enforce the state energy code no later than July 1, 1991.  If prior to March 1, 1990, a city, town, or county has adopted a local energy code for residential buildings that exceeds the energy efficiency requirements of the state energy code, the city, town, or county may continue to enforce its local energy code, but may not further amend its energy code.  The state energy code for residential buildings is the minimum and maximum energy code.  The state energy code for non-residential buildings is the minimum energy code.

The state energy code must be adopted by the state building code council not later than January 1, 1991.  The state energy code shall recognize two climate zones.  The guidelines for the energy efficiency of construction components in residential buildings are modified. Different guidelines for electric resistance and other space- heating systems are provided.  Guidelines for below grade walls and slab on grade floors are specifically included.  A guideline is established for exterior doors in electric resistance heated homes.  The state building code council shall also adopt a code for log homes and provide for pilot projects using innovative technology.

The minimum state energy code for non-residential construction is the June 1986, edition of the state energy code.

The building code council is directed to consult with the state energy office in developing the state energy code.

Beginning July 1, 1991, electric utilities are directed to make payments to builders of newly constructed residential buildings with electric resistance space heat.  Payments are required for buildings constructed between July 1, 1991, and July 1, 1995.  The payments must be at least $900 in single family houses and $390 per unit in a multifamily residence. Payments are not required for any single family residence with more than 2000 square feet of finished floor area. A utility in a jurisdiction that has a local energy code, which is not preempted by the state energy code must make payments beginning with the effective date of this act. Utilities may provide incentives in addition to the payments and may provide incentives for additional energy efficiency measures. The Utilities and Transportation Commission (UTC) shall allow regulated electric utilities to recover expenses incurred in making the payments.

If a federal agency, from which an electric utility purchases at least 1 percent of its firm energy load, fails to make available at least 50 percent of the funds necessary to make the payments, the amendments to the energy code and the requirement to make payments are null and void.  This provision expires June 30, 1995.

The energy code training account is established.  The state energy office will administer the account to provide training to local energy code enforcement officials.  The state energy office shall impose an assessment on each investor owned and publicly owned gas and electric utility in proportion to the number of housing starts served by that utility in 1989.  The assessment is $150 per energy code official within the service area of the utility.  Assessments may be made between January 1, 1991, and July 1, 1991.

An investor owned electric utility may obtain an additional 2 percent rate of return on builder payments and on expenditures for programs that improve energy efficiency if priority in those programs is given to low-income individuals and senior citizens.  The UTC may allow an additional rate of return on other investments to improve energy efficiency and may adopt other policies to protect a utility from short-term earnings reductions resulting from energy efficiency programs.  The commission may also allow utilities required to make payments for code enforcement to recover those expenses.

For purposes of calculating the utility tax, the public and investor owned utilities may deduct from gross income the amount spent on builder payments and the amount spent on programs to improve energy efficiency if those programs give priority to senior citizens and low-income individuals.  Utilities required to make payments for code enforcement may deduct 50 percent of the amount of those payments from the utility tax owed.

The building code council is directed to develop by January 1, 1991, interim requirements for the maintenance of indoor air quality in newly constructed residential buildings.  The interim requirements will be in effect from July 1, 1991, to July 1, 1993.  The interim requirements shall provide for the ventilation of the bathroom and kitchen and the supply of outside air to each bedroom and the main living area.  By January 1, 1993, the state building code council must adopt final requirements for the maintenance of indoor air quality in newly constructed residential buildings.  The final requirements will take effect July 1, 1993.  The final requirements must comply with the Bonneville Power Administration record of decision for the environmental impact statement on energy efficient new homes programs.

Both the interim and final ventilation standards shall take into account different heating sources.  The final ventilation standards shall permit multifamily housing to meet the standards by the installation of fans with a total capacity of 200 cubic feet per minute.

The builder of and the design professional for a residential structure who in good faith and without negligence or misconduct complies with the state energy code and the ventilation standards adopted by the building code council has a defense against a lawsuit claiming injury from indoor air pollution.

Beginning in 1996, the state building code council shall review the state energy code for residential buildings every three years.  If the council determines that the state energy code should be changed to require increased energy efficiency, it shall adopt rules modifying the energy code.  The rules must be adopted by December 1 and may not take effect until the end of the next regular legislative session.

The requirement for a study of the cost-effectiveness of the 1985 energy code is repealed.

The provisions amending the energy code, requiring payments, and providing energy efficiency incentives are declared to be an emergency and take effect March 1, 1990.  Provisions repealing sections of the energy code to be replaced by the state building code council's code take effect January 1, 1991.  The provision creating a defense for builders who comply with the ventilation standards takes effect July 1, 1991.

VOTES ON FINAL PASSAGE:

      House 87   5

      Senate    43     3 (Senate amended)

      House 91   3 (House concurred)

EFFECTIVE:March 1, 1990 (Sections 1 - 4, 6, 7, 9, and 10)

            January 1, 1991 (Sections 11 and 12)

            July 1, 1991 (Section 8)