Energy Efficiency, Regulation  -  February 26, 2024 - By Cherylyn Kelley, IMT

Energy Codes Forecast 2024: Money, Politics, and a New Model Code

It’s gearing up to be another banner year for energy codes. Let’s chat about where we’ve been and where we may go next.

Big Money
Last year we were abuzz about DOE’s Resilient and Efficient Codes Implementation (RECI) opportunity, funded through the Bipartisan Infrastructure Act. This year’s belle of the ball is the Technical Assistance for Building Energy Codes funding opportunity: $1 billion in grant dollars through the Inflation Reduction Act for states and localities to adopt the latest model energy codes—the 2021 International Energy Conservation Code (IECC) for residential or ASHRAE 90.1-2019 for commercial buildings—or zero energy codes, as well as other innovative approaches to energy codes (like Building Performance Standards). Some of that money came down as formula funding for states and territories, but we are currently in the midst of the competitive funding component.

As a seasoned manager of DOE-funded projects, my favorite aspect of this DOE funding opportunity is that cost share is not mandatory. If you know, you know (it’s a pain)… My second favorite feature of the funding opportunity is the high, yet achievable standard that states and localities are being held to in order to be eligible for funding: you MUST achieve the energy savings equivalent of the model 2021 IECC/ASHRAE 90.1-2019 or better. Energy codes that have been amended don’t necessarily doom a state or locality to ineligibility for the competitive funding, but if there are edits to the energy-saving components of the code they have to wash out to save at least as much energy as 2021 IECC/90.1-2019. You can take a look at DOE’s State Portal to get an idea the adopted code vs the effective code level in a state: in the table, “Current Residential Code” is the code adopted on paper, while “Residential Code Efficiency Category” reflects the code efficiency level as a result of amendments. The same information is available for commercial buildings.

Concept papers for eligible entities for the funding opportunity were due February 9. Those who submitted concept papers should be getting feedback and the potential go-ahead to apply from DOE sometime in early spring, with an official application deadline of April 30. I’m rooting for all you would-be applicants, especially those of you who reached out to IMT to be a project partner (go team!). For those of you who didn’t get your concept papers in, DOE expects to announce additional calls for concept papers in fall 2024 and spring 2025, assuming funding remains available.

The Who’s Who of Energy Code Updates
You know what they say: money makes the world update their energy codes. In last year’s Look Ahead blog, I talked about IRA funding being the push some jurisdictions might need to adopt the 2021 IECC…and that seems to be the case. The list below provides a good overview of where states are at in terms of energy code adoption.

Fannie and Freddie: Will They or Won’t They?
Poorly insulated homes with outdated equipment are a huge problem across the country, especially for families already struggling to pay their energy bills. Right now, there’s a potential to make a big change for the better. The Federal Housing Finance Agency (FHFA) is considering whether to adopt an efficiency standard equal to the 2021 IECC/ASHRAE 90.1-2019 for new home mortgages. FHFA is currently the regulator and conservator for Fannie Mae and Freddie Mac, the institutions charged with providing stability and affordability to the mortgage market in the U.S. in order to increase access to quality affordable housing. Implementing a minimum efficiency standard for Fannie and Freddie’s mortgage requirements could have massive market impact, and bring down energy costs for generations of Americans.

You may recall from one of my past blogs that the Department of Housing and Urban Development (HUD) and the United States Department of Agriculture (USDA) have proposed to require the latest energy codes as a condition of financing and assisting newly constructed homes under their programs. Adopting the code would also allow FHFA to act in concert with other federal agencies, creating consistent energy requirements for nearly all federally backed mortgage financing. A minimum energy code requirement by FHFA, combined with that of the federal agencies, would apply to roughly 70% of new homes in the United States and could transform construction. For this reason, IMT signed on to a joint letter urging FHFA to make these changes.

2024 IECC: The Appeals are Unappealing
It has been a wild ride, and we’re not done yet with the 2024 IECC development process. The code drafting and public comment processes have been completed, the final hurdle to cross before the code can be published in the fall is the appeals process. Nine appeals have been submitted by six organizations spanning four primary issue types: scope and intent, consensus building approaches, procedural specific issues, and subject specific issues.

IMT and other efficiency advocates are deeply concerned about this cycle’s appeals process and its potential effects. In our assessment, the International Code Council (ICC) is allowing appeals to be heard that violate its own policies. The details are in this letter to Dominic Sims, Chief Executive Officer at the International Codes Council (ICC) penned by our allies at the American Council for an Energy-Efficient Economy. IMT is a co-signer to the letter. If these appeals are upheld, the 2024 IECC would be a weaker code overall, sacrificing important efficiency and decarbonization aspects developed through consensus to appeals submitted outside the collective process. The deadline to express intent to speak and submit written viewpoints has passed, but interested parties can listen in live without registering for the event. The link to view the hearings will be posted on the 2024 Appeals Process webpage. Hearings will take place February 21-23, 2024 and the schedule can be found on the ICC’s website.

Legislative Session: The Best Time of the Year?
I have been lovingly accused of being the only person in the world who enjoys legislative session. There’s something about it…The clap-backs during debate, the unusual bills (e.g. the 2019 designation of July 7th as Missouri Sliced Bread Day), the witnessing of history and change being made. There’s a certain je ne sais quoi about it. But, despite my love letter to American democracy, there is plenty of fodder for frustration as well. Last year we saw more than a few bills of questionable content and motivation. Here are just a few to jog your memory:

• North Carolina passed HB 488, which froze the state’s outdated energy code until 2031.
• Iowa tried to pass IA SF 479, which would have removed energy conservation requirements for new construction and allowed jurisdictions to adopt energy standards less stringent than state code. It has been revived this year as SF 479.
• Missouri tried to pass HB580 which would have prevented localities from adopting and enforcing certain provisions of the energy code that were stronger than the 2009 IECC. This is of particular interest because Missouri is a home rule state that has a long history of promoting local control. The bill would effectively eliminate that.

Thanks in part to the participation of many efficiency proponents, two of those three bills didn’t pass, but I’m never surprised by zombie bills like IA SF 479. Session is just starting to pick up steam. Here are a few bills I’m tracking this year:

• Nebraska HB 1219: adopts the 2021 IECC as the state’s energy code
• Utah HB 64: modifies energy components of the state’s code. Moving very fast.
• Oklahoma HB 3819: prevents the building code commission from adopting a code with a payback period of 7 years or more.

Here’s to another year of making the buildings we work, live, and play in more comfortable, healthy and affordable. Reach out to me if you have questions, or to let me know what energy code-related bills you’re keeping an eye on.

Energy Codes Forecast 2024: Money, Politics, and a New Model Code originally appeared on the IMT website.

Cherylyn Kelley is IMT’s Manager of Building Energy Codes and Policy. She supports policy development and implementation, and actively participates in code development and adoption processes that dictate the energy efficiency of new construction throughout the U.S.

Prior to joining IMT, Cherylyn was a Senior Energy Policy Analyst at the Missouri Department of Natural Resources Division of Energy where she led the development of stakeholder-driven projects such as the Partnering with Missouri Communities: Roadmap to Resilience and the Missouri State Energy Planning Process. In her 5 years at the Division of Energy, she directed the Division’s legislative activities, supported emergency response through Emergency Support Function 12 (Energy), and provided training in energy efficiency to real estate professionals.

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