| In 2008, the most recent data available, Oregon residents and commercial building owners spent $4 billion on energy costs. Residential energy made up more than half of that spending at $2.5 billion. While Oregon has many robust energy efficiency programs, Oregonians are still overpaying millions on energy. Buildings could be at least 20% more efficient, and Oregon still has many residences and apartment buildings with inadequate insulation or single paned windows. Commercial buildings consumed $1.6 billion worth of energy. Energy costs are one of the largest operational expenses for commercial buildings, but fortunately they are also a controllable expenditure. Energy use also has environmental costs. Building energy use is growing quickly and buildings are the fastest growing source of greenhouse gas emissions in the state. | |||
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| In sluggish economic times, it is important that we create new drivers for economic activity and job growth. Fortunately, energy efficiency projects are cost-effective job creators. According to the national IMPLAN model, for every $1 million invested in energy efficiency, up to 10-17 direct and indirect jobs are created. That is more than is created through traditional job creation industries like new road construction, and three times as many created by fossil fuels industries. Energy efficiency projects also utilize a broad range of skillsets, including electrical work, carpentry, engineering, and plumbing and pipefitting. Oregon’s construction sector has suffered above average unemployment rates and efficiency projects could provide good work for many individuals and small businesses. Energy efficiency is also important because dollars not spent on energy can be re-spent throughout the economy. For every dollar Energy Trust has invested in energy-efficiency programs from 2002-09, ratepayers have avoided paying four dollars in costs for utilities to generate, store, deliver and purchase an equivalent amount of energy. These energy programs have already saved ratepayers $600 million, which will increase to $1.5 billion over the life of those investments. Those dollars can be spent on other consumer goods, hiring, upgrading equipment, or other investments that benefit Oregon’s economy. Good jobs are also created through this type of work. Since 2002, Energy Trust programs have created a $76 million net increase in wages and $11 million in new business income since 2002. Oregon has a proven track record of creating economic opportunities through energy efficiency. It is a sector the state has expertise in and one we should focus on expanding. In difficult economic conditions, it is a wise course of action to build on a state’s strengths. | |||
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| While Oregon is a national leader in this arena, the energy efficiency marketplace, still does not operate optimally. Many of our programs rely on incentives, rather than free market forces to drive investments. One of the barriers is a lack of information. One major vacuum is that building energy performance information is not available on a consistent basis—and especially when consumers are making critical purchasing decisions. When homebuyers, renters, or lessees of commercial spaces are looking for a new home, office or retail space, there is little comparative information available on energy performance and costs for these buildings. Even though utility bills can eclipse property taxes as a cost of homeownership, this standardized information is not made available during transactions. This undervalues energy performance in the built environment and staunches economic activity in this sector. Not having access to energy information is particularly problematic in the rental market. Renters experience the classic problem of the “split incentive.” Landlords who are not responsible for paying utility bills have no incentive to increase the efficiency of their buildings, leaving renters with higher than necessary utility costs and creating a greater burden on our energy systems. Renters have no ability to make improvements on property, nor the security of knowing they would reap the long-term benefits of any improvements. Providing credible, easy to understand energy performance information and expected utility costs to renters would create market-based forces that would encourage landlords to make efficiency investments and allow renters to “vote with their feet” on the energy performance amenities they want. In many towns and cities throughout Oregon, such as Corvallis, renters make up more than 50% of the housing market, and a tool that provides comparative energy performance would be profoundly helpful to enhance their efficiency marketplace. One might ask, why not just use utility bill data? There are two main reasons. The first is that utilities must be concerned with the privacy of customer information, including utility bill history. Many utilities do not provide detailed information for liability reasons. Secondly, utility bill data alone is not a good indicator of building performance. The habits and behaviors of residents or tenants can vary significantly from user to user. For example, the energy use for a family of four and a bachelor in the same building will differ greatly. An energy performance score, on the other hand, uses a building’s physical attributes— the thickness and ubiquity of insulation, the sealing around air ducts, the age and efficiency of heating systems—and models performance based on normalized weather conditions. This provides a much better metric for a building’s expected energy performance than individual utility bills. In the commercial building sector, some larger commercial building operators track energy use, but it is not consistent throughout the marketplace. A standardized process that compares commercial buildings by type would provide consistent information. A standardized approached would also streamline and increase the speed for transactions, a major benefit for commercial property transactions. | |||
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Like a mile-per-gallon sticker on a car, a statewide energy performance rating system would enhance the energy efficiency marketplace in Oregon. Eight other states are working on similar programs. Most recently, Seattle’s City Council unanimously passed a city ordinance for commercial building disclosure. But Oregon could be the first to have a statewide program for both the residential and commercial sectors. HB 3535 will create the right kind of push for the energy efficiency marketplace. Energy performance information can also improve the efficacy of existing programs. For example, a pilot program in Bellingham, Washington, showed that 60% of households that had an “Energy Performance Score” provided with their home energy assessment made energy improvements on their home. If the energy performance program in Oregon increased energy efficiency investments by just 5%, that could save Oregonians $200 million in energy costs over ten years. HB 3535 is exactly the kind of policy Oregon needs right now to spur investments, create jobs, and continue to safeguard Oregon’s environment. |
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 by Jana Gastellum, Global Warming Program Director, Oregon Environmental Council Issue #465 / April 2011  |
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| RE-ENERGIZING OREGON’S ECONOMY by Jana Gastellum, Global Warming Program Director, Oregon Environmental Council |
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Jana Gastellum joined the Oregon Environmental Council in January, 2010 and currently leads the council’s work to implement climate solutions. She previously served on the United Nations Foundation/Energy Future Coalition joint climate and energy team where she focused on domestic and international opportunities for clean energy development and the nexus between energy security, climate change and poverty alleviation. She helped launch the 25x’25 renewable energy alliance and built capacity within the agricultural and forestry communities around the role these sectors can play in a low-carbon economy. Jana also managed a soils laboratory that analyzed the impacts of climate change on ecosystems at the University of Michigan. She received a B.S. and M.S. in Earth Systems from Stanford University. |
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