Energy Efficiency and Conservation at HUD Implementing HUD’s Energy Action Plan

1. Energy Efficiency and Conservation at HUDImplementing HUD’s Energy Action Plan Energy Training Workshop Departmental Headquarters - May 10, 2005

2. Energy Action Plan Created to Support President’s National Energy Policy “Conservation and energy efficiency are crucial components of a national energy plan. Greater energy efficiency helps the United States reduce the likelihood of energy shortages, emissions and the volatility of energy prices.” May 2001

3. Growing Gap Between Domestic Production and Consumption

4. Premise • Improvements in the energy efficiency of homes and apartments in the United States have the potential to significantly reduce U.S. dependence on foreign oil, increase housing affordability, and contribute to the nation’s energy security

6. Energy Use in Buildings • Buildings use more than one third of all energy in the U.S., and two-thirds of all electricity consumption • Homes and apartments use more than one half of the energy used in all buildings in the U.S.

7. Residential Sector Uses 20% of Total U.S. Energy • Americans spend $138 billion in homes • Residential energy use expected to grow by 20% by 2020 • Average family spends $1,338/year on energy • Electricity accounts for 61% of energy use • Significant reductions 1987-87, but little since: average home uses 101 million Btus • Homes getting bigger, more appliances

8. Some Efficiency Gains • New home refrigerators use one third less energy than in 1972 • New commercial lighting systems use less than half of the energy they did in the 1980s • Federal buildings now use about 20 percent less energy per square foot since 1985 • Industrial energy use per unit of output declined by 25% from 1980 to 1999 • Amount of energy required to generate 1 kilowatt hour of electricity has declined by 10 percent since 1980 • While energy consumption has increased, emissions have declined

9. Utilities and Housing Affordability • Energy costs often second-largest shelter expense • Second only to mortgage payments, rent • Can be a factor in mortgage defaults • Multifamily building abandonment • Low-moderate income families at risk • High oil, natural gas prices

10. Energy Burden Highest on Low-Income Households

11. HUD Spends An Estimated $4 Billion Each Year on Utilities • More than 10% of entire budget • Estimated $1.1 billion directly through public housing operating subsidies • Remainder though utility allowances (Housing Choice Vouchers) or Section 8 multifamily contracts • Also impacts new construction through HOME, CDBG, HOPE VI, and elderly housing • Approximately 5 million units nation-wide

12. Secretary Alphonso Jackson Creates Energy Task Force “With the announcement of the President’s National Energy Policy we now have the necessary framework for promoting increased energy efficiency in housing. HUD is committed to giving this issue the priority it deserves to make sure we make significant progress in conserving energy in housing.” June 20, 2001 Testimony to House Financial Services Committee

13. Broad-Based Energy Task Force • Policy Development and Research • Community Planning and Development • Housing • Public and Indian Housing • Healthy Homes and Lead Hazard Control • Field Policy and Management • Departmental Operations and Coordination

14. 21-Point Action Plan Posted on HUD Web Site www.hud.gov/offices/cpd

15. 21 Actions in Six Key Areas • Interagency partnerships with DOE and EPA • Leverage resources of sister agencies • Information, training and technical assistance • Rewards and incentives for energy efficiency • Energy standards and program requirements • Management and monitoring or HUD’s energy programs • Policy analysis and technology research

16. The Plan: Department-Wide • Work with EPA to distribute Energy Star information to HUD customers (Action 1) • Formalize partnerships with DOE and EPA (Action 2) • Coordinate department-wide workshops and information (Action 4) • Assist non-profits and faith-based organizations (Action 7)

17. The Plan: Department-Wide • Assign agency-wide responsibility for coordinating HUD’s energy programs (Action 14) • Include energy efficiency performance measures in Annual Performance Plan and Management Plan (Action 15) • Award priority rating points in competitive grant programs (Action 11)

18. The Plan: Public and Indian Housing • Streamline Energy Performance Contracting - guaranteed/shared savings (Action 8) • Purchase Energy Star products where cost effective (Action 12) • Establish HOPE VI as a leader in cost-effective energy-efficient construction - Energy Star (Action 13) • Improve tracking and monitoring of energy use in public housing (Action 17)

19. Public Housing ExampleDanbury Housing Authority • Energy Performance Contract • Combined Heat and Power • Electricity reduced from 1.25 million to 200,000 kWh • Energy cost reduced by $40,000 annually • No initial costs to the Housing Authority or HUD

20. HOPE VI ExampleChurchill Homes - Holyoke MA • 50 new wood-framed, 3-story buildings • Achieved Energy Star • Advanced framing • High efficiency boilers/DHW combinations • Controlled ventilation • 30 percent more energy efficient than standard construction

21. Feature Energy Efficient Mortgages (EEMs) for up to $8K higher loan amount (Action 9) Simplify regulatory requirements for EEMs (Action 10) Improve tracking and evaluate performance of EEMs (Action 17) The Plan:FHA – Single Family Homeownership

22. The Plan:FHA-Multifamily Housing • Initiate HUD-DOE multifamily weatherization partnerships (Action 2) • Support energy efficiency training for assisted multifamily managers and staff (Action 5)

23. Provide technical assistance and information to HOME and CDBG grantees Promote Combined Heat and Power (CHP) The Plan:Community Planning and Development

24. HOME ExampleFolsom Dore Apts – San Francisco • $1.9 million in HOME-funds • Currently under construction • High-efficiency HVAC system • Energy Star Appliances • High-performing windows

25. The Plan:Policy Development and Research • Conduct energy-related policy analysis and research • Research, test and demonstrate innovative technologies (as needed)

26. PATH DemonstrationCo-Housing - Washington DC • HVAC equipment and ducts in conditioned spaces • Low-flow plumbing fixtures • Geothermal heat pumps • High efficiency water heaters

27. The Plan:Office of Healthy Homes and Lead Hazard Control • Develop integrated approaches to energy and environmental retrofits

28. Energy Star Partnership with EPA and DOE • Memorandum of Understanding between HUD, EPA, DOE • September 2002 • Expands purchasing of Energy Star in all HUD-assisted, financed, insured buildings

29. FY 2005 SuperNOFA – General Section • Applicants constructing, rehabilitating, or maintaining housing…are encouraged to promote energy efficiency in their design and operations • They are urged…to purchase and use Energy Star-labeled products • Applicants are encouraged to undertake program activities that include…outreach to low-moderate income renters and buyers. • Communities and developers…encouraged to promote designation of homes as ES-compliant

30. Policy Priority in FY 2005 SuperNOFA • FHA Multifamily • Section 202/811 – 1 point for Energy Star • Assisted Living Conversion – 2 points • FHA Single Family • Housing Counseling - 1 point for Energy Star • CPD • Rural Housing and Economic Development – 1 point • HOPWA – 1 point • Youthbuild – 1 point • Continuum of Care – checklist

31. Policy Priority in FY 2005 SuperNOFA (2) • Healthy Homes • Healthy Homes Demonstration – 1 point • PIH • ROSS – encourages use of Energy Star • PD&R • University Partnerships – up to 1 point • Historically Black Colleges • Hispanic Serving Institutions • Alaskan/Native Hawaiian

32. Energy Efficient Rehab Advisor www.rehabadvisor.net

35. FHA - Energy Efficient Mortgages • New mortgagee letter issued this week • Borrower can finance into an already approved FHA loan • 5% of property value – maximum $8,000 • EEM vs. EEH • EEH is new home built to 2000 Model Energy Code – stretch ratios • EEM – adds additional dollars to loan amount • Requires pre- and post-construction inspection • Savings must exceed cost

36. Public Housing • Energy performance contracting • Developing standardized operating procedures • Allow smaller PHAs to do their “own” performance contracting • Consolidate, streamline review of proposals • Energy Star • Benchmarking energy use • Information and technical support • Public Housing Clearinghouse

37. Multifamily Weatherization Partnerships • NYSERDA (New York) • Assisted Multifamily Program (AMP) - successful initiative in HUD-assisted multifamily buildings • Collaboration on Combined Heat Power • California Energy Commission • Two multifamily projects identified in Stockton, two in Sacramento • Missouri Energy Office • DOE provided grant to Department of Energy and Natural Resources for St. Louis pilot

38. Multifamily: Emphasize Low-Hanging Fruit • Training of multifamily building managers and maintenance staff • Low-cost O&M techniques, improved energy management • Lighting retrofits • Domestic Hot Water servicing • Proper boiler and pipe insulation

39. CDBG and HOME • New web-based training module (HOME) • Energy Star adopted as guideline for substantial rehab, new construction • New England – 39 entitlement communities • Some localities included energy in Consolidated Plan

40. Upcoming Activities • Training workshops scheduled during FY 2005 • Energy efficiency training for multifamily property managers, maintenance staff • E-Newsletter for staff, grant recipients • Informational materials – briefing papers and research reports • Many workshops and outreach events through Field Offices

41. Opportunities for Collaboration • Weatherization partnerships • Rebates and incentives • State, local, utility programs • Outreach and education • Participate in/co-sponsor workshops • Multifamily energy training • Adopt Energy Star label for new construction, rehab • CDBG and HOME • Marketing and promotion of Energy Efficient Mortgages • State HFAs, Housing Counseling Agencies

42. Regional Energy Coordinators • Located in each Regional Office • Responsible for coordinating field office activities • Identify training and information needs • Liaison with DOE, EPA and state energy offices • Identify local opportunities for joint actions • Will work with you - contact information on HUD web site

43. Phase II Plan • Initiating development of Phase II plan for FY 2006-2007 • Focus on quantifying results – documenting energy savings • Limit reporting requirements

44. For Further Informationwww.hud.gov/energy • General - Michael Freedberg • 202-708-0614 Ext. 4366 • Comm. Planning and Development - Robert Groberg • 202-708-0614 Ext. 4642 • Public Housing – John Miller • 202-708-0614 Ext. 4237 • FHA Single Family – Susan Cooper • 202-708-2121 Ext. 7204 • FHA Multifamily – Reba Cook • 202-708-0614 Ext. 2471 • Regional Energy Coordinators • Jim Chaplin – 813-228-2026 Ext 2118 • www.hud.gov/energy