Better Buildings Bill Update

Thirty-two U.S. Senators stayed up all night on March 10, speaking non-stop to stir Congressional colleagues into action on climate change. Overnight talking points emphasized state-by-state economic damage such as crop losses from California droughts, coastal destruction from extreme storm surges in New Jersey, and shrinking lobster harvests in Connecticut’s warming Long Island Sound. Senator Jeanne Shaheen (D-NH) added concerns about diverse impacts of warming New England winters, ranging from falling maple sugar production to dwindling moose populations, and called for bipartisan efforts to find solutions. But no Republicans participated in the all-nighter, and political skeptics might reasonably ask: Is bipartisan legislation to reduce carbon pollution and improve energy efficiency possible in the current Congress?

Yet evidence is growing that common ground can be found. In fact, on March 5, the House of Representatives voted overwhelmingly (375-36) in support of the “Energy Efficiency Improvement Act,” a.k.a. the Better Buildings Act of 2014 (H.R. 2026). Introduced last May, the bill was crafted by Congressmen David McKinley (R-WV) and Peter Welch (D-VT) to improve energy efficiency in commercial office buildings, with particular application to tenant spaces. Key provisions of the voluntary, market-based approach include:

  • GSA requirement to develop and publish model leasing provisions encouraging energy efficiency in privately owned buildings with federal tenants;
  • Federal agency requirement to implement strategies for improving energy efficiency of data centers operated by the federal government;
  • Establishment of a benchmarking and disclosure process for energy consumption in buildings leased by the federal government; and
  • Revising regulations to facilitate manufacture of large-scale water heaters.

Perhaps most notably for federal leaseholders, the bill would require the EPA to develop a “Tenant Star” program within its Energy Star program, which is widely respected for improving energy performance in whole buildings. The new Tenant Star program would recognize tenants that achieve high levels of energy efficiency in separate spaces. Jeffrey DeBoer, CEO of Real Estate Roundtable, is among those praising the Tenant Star program, saying in a press release that it will “encourage cooperation between commercial tenants and landlords to design and construct high performance leased spaces, and make smart operational decisions to lower energy use by investing in measures that will pay for themselves through energy savings.” The bill’s co-sponsor, Peter Welch, also commended the March 5 House vote in a press release. “Saving energy creates jobs, saves money and improves the environment,” said Welch. “I have long believed that energy efficiency is an area of common ground in this divided Congress.”

Companion legislation is pending in the Senate. Democratic Senator Shaheen first joined Rob Portman (R-OH) in 2011 to promote energy efficiency in homes and commercial buildings, streamline government programs for energy efficiency and reduce energy waste in federal buildings through a bill widely known as Shaheen-Portman. Their original version of the Energy Savings and Industrial Competitiveness Act (ESICA) garnered broad support until it was derailed by unrelated amendments many supporters found objectionable. The co-sponsors reintroduced the ESICA, or S. 2074, earlier this month, with added bipartisan provisions including Tenant Star and improvements in data center energy efficiency to attract additional backers. The American Council for an Energy-Efficient Economy estimates that the new version would create more than 190,000 jobs, save consumers and building owners $16.2 billion per year and cut carbon dioxide emissions as much as taking 22 million cars off the road by 2030. Supporters are again lining up, ranging from the U.S. Chamber of Commerce to the U.S. Green Building Council.

The Natural Resources Defense Council’s analysis of the new version of Shaheen-Portman complains briefly that it would repeal requirements in earlier legislation that new federal buildings achieve zero-carbon footprint by 2030. However, the report emphasizes that the legislation would also significantly improve federal building energy efficiency, offsetting the estimated costs of ESICA ($357.5 million from 2014-2018) by reducing appropriations ($362.5 million for the same period). Passage of the House bill suggests that momentum is building for ESICA. If it can proceed through the Senate without poison pill amendments, Shaheen-Portman would prove that both parties can share ground when it comes to common sense energy conservation legislation.

Want Capitol Markets articles delivered straight to your inbox?