[Senate Hearing 111-7]
[From the U.S. Government Publishing Office]


                                                          S. Hrg. 111-7
 
                     ENERGY EFFICIENCY IN BUILDINGS 

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                                   TO

  PROVIDE RECOMMENDATIONS FOR REDUCING ENERGY CONSUMPTION IN BUILDINGS

                               __________

                           FEBRUARY 26, 2009


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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

BYRON L. DORGAN, North Dakota        LISA MURKOWSKI, Alaska
RON WYDEN, Oregon                    RICHARD BURR, North Carolina
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          SAM BROWNBACK, Kansas
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
ROBERT MENENDEZ, New Jersey          JOHN McCAIN, Arizona
BLANCHE L. LINCOLN, Arkansas         ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
EVAN BAYH, Indiana                   JEFF SESSIONS, Alabama
DEBBIE STABENOW, Michigan            BOB CORKER, Tennessee
MARK UDALL, Colorado
JEANNE SHAHEEN, New Hampshire

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel










































                            C O N T E N T S

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                               STATEMENTS

                                                                   Page

Amann, Jennifer, Director, Buildings Program, American Council 
  for an Energy-Efficient Economy................................    24
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Giudice, Philip, Commissioner, Massachusetts Department of Energy 
  Resources, Boston, MA..........................................    15
Hubbell, Ward, President, Green Building Initiative, Portland, OR    34
Majumdar, Arun, Ph.D., Director, Environmental Energy 
  Technologies Division, Lawrence Berkeley National Laboratory, 
  Berkeley, CA...................................................     3
Mazria, Edward, Founder and Executive Director, Architecture 
  2030, Santa Fe, NM.............................................    13
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     2
Zimmerman, Charles, Vice President, International Design and 
  Construction, Wal-Mart Stores, Inc., Bentonville, AR...........    37

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    51

                              Appendix II

Additional material submitted for the record.....................    77


                     ENERGY EFFICIENCY IN BUILDINGS

                              ----------                              


                      THURSDAY, FEBRUARY 26, 2009

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:38 p.m. in room 
SD-366, Dirksen Russell Senate Office Building, Hon. Jeff 
Bingaman, chairman, presiding.

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW 
                             MEXICO

    The Chairman. Why don't we go ahead and get started. 
Today's hearing will focus on policies and programs to improve 
energy efficiency in buildings. It's important to focus on the 
buildings sector because it represents such a large share of 
primary energy use and of greenhouse gases, Greenhouse gas 
emissions in our economy. Technologies that improve building 
efficiency are often referred to as the low-hanging fruit in 
meeting our energy challenges because they are relatively 
inexpensive compared to other climate change mitigation 
strategies.
    However, we have found that this low-hanging fruit can 
sometimes be hard to pick. The building sector is complex, it's 
fragmented. In many cases the benefits of energy efficiency 
have not been well understood by those in the best position to 
improve building efficiency.
    In the last two energy bills we enacted significant energy 
efficiency requirements for Federal buildings, most notably 
adopting the 2030 Challenge for New Federal Buildings and 
authorizing a net-zero energy resource and development program 
for private sector commercial buildings. As we move forward in 
developing an energy bill for 2009, I hope we can support the 
inclusion of some bold policies that will help us to transform 
the building sector.
    The witnesses we have here have been asked to provide 
comments on various programs and policy options to improve 
efficiency of buildings, including resource for zero energy 
buildings, integrated whole building design, advanced building 
codes, residential and commercial energy retrofits, disclosure 
of building energy use, and market-driven changes, and the role 
of green building rating programs.
    Let me call on Senator Murkowski for any comments she has 
at this point, and then we'll call the witnesses.
    [The prepared statement of Senator Mark Udall follows:]
   Prepared Statement of Hon. Mark Udall, U.S. Senator From Colorado
    Thank you, Mr. Chairman, for holding today's hearing.
    Addressing our energy needs in a responsible and sustainable way is 
necessary for our national security, our economy and our environment. 
Increasing our use of renewable energy, as well as promoting new, 
cleaner uses of our domestic resources, such as coal, are certainly 
paths that we must pursue. But we also should further promote energy 
efficiency--after all, the most affordable kilowatt of energy is the 
one that is not used.
    Homes and other buildings are prime targets for improving 
efficiency--they account for 70 percent of our electricity use. 
Furthermore, they use 50 percent of all natural gas in the U.S. and are 
responsible for 40 percent of all greenhouse gas emissions. After 
mortgage payments, energy costs constitute the single largest monthly 
expense for homeowners.
    Not surprisingly, changes that improve energy efficiency are highly 
cost-effective investments that dramatically reduce high energy 
expenses for businesses and families. Energy efficiency improvements 
can provide a combination of direct consumer benefits that will persist 
for many years. By freeing up consumer spending now devoted to utility 
bills, and by cutting peak demand, we will reduce energy costs and 
defer the need for new power plants.
    Sun Microsystems' new data center at its Broomfield campus in 
Colorado is a good example. This facility will reduce Sun's electrical 
consumption by 1 million kilowatts per month, enough to power 1,000 
homes in Colorado. Also, it collapses 496,000 square feet of data 
center space into 126,000 square feet--doing more with less.
    There are many examples of companies, schools and others realizing 
the bottom line benefits of instituting energy-efficient technology in 
buildings.
    Today's hearing will help us explore what else the federal 
government can do to promote energy efficiency in buildings. I look 
forward to hearing from the witnesses today and would like to thank 
them for being here.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman. I appreciate 
you convening the hearing today.
    We recognize we've had several conversations about this, 
but we're going to be busy as we move forward as a committee to 
craft yet another comprehensive energy bill. Today's topic, how 
to best reduce energy consumption in buildings through energy 
efficiency, will be an important component of this ongoing 
debate and hopefully the legislation that we will draft.
    Your words were pulled from my notes here. You're talking 
about the low-hanging fruit when we talk about energy 
efficiency, and I think we hear that quite often, the low-
hanging fruit or the fifth fuel out there. I think most people 
will recognize that efficiency is the cheapest, quickest, 
cleanest resource that we have. It's generally characterized as 
a way to ensure adequate and reliable energy supplies and to 
simply use what we already have more effectively. It sounds 
like something that everybody should be doing.
    We have, of course, over the years through EPAct 2005 and 
the energy bill in 2007 instituted steps to enhance the 
efficiency, but many of the programs that were authorized by 
Congress have not been previously funded in annual 
appropriations bills. We now know that the agencies are 
receiving unprecedented funding as a result of the stimulus and 
it is my hope that that money will be used efficiently to 
promote our energy efficiency goals.
    It is important to frame the debate to ask the question, 
what are the goals here? What have we done to meet our energy 
efficiency goals? Where do we want to go with energy efficiency 
and how can we best pursue the new options?
    As we will probably learn from today's testimony, the goal 
of these actions is defined differently by those appearing 
before us and others who discuss this issue. It may be cutting 
operating costs and passing those costs on to consumers. It may 
be conformity to uniform standards, such as imposition of 
Federal building codes. Or it may be reducing gases and fossil 
fuel consumption.
    I think that one goal that we all share is increasing 
energy security. We say it all the time in this committee, but 
there really is no silver bullet for solving our Nation's 
energy challenges. There's certainly no silver bullet for 
deciding how energy efficiency is most effective. Despite our 
best intentions, a government-mandated standard doesn't 
necessarily translate into maximum efficiency in real life. But 
I do believe that there is a role certainly for both the public 
and private sectors as we grapple with this issue.
    I look forward to the comments from the witnesses this 
afternoon and again thank you for the hearing.
    The Chairman. OK. Why don't we start right in. Let me just 
introduce all of the witnesses and then we'll just have each of 
you take about 6 minutes and tell us the main points you think 
we need to understand from your testimony, and then we'll 
include your full testimony in our committee hearing record.
    Professor Arun Majumdar--is that the correct pronunciation?
    Mr. Majumdar. Right.
    The Chairman [continuing]. Is the Director of the 
Environmental Energy Technologies Division in Lawrence Berkeley 
National Laboratory. I was fortunate to visit his laboratory 
this last fall and he briefed us at that time and I was very 
impressed with what I heard.
    Mr. Ed Mazria, who is the founder and Executive Director of 
Architecture 2030 in Santa Fe, New Mexico. We're very proud of 
the work he has done nationally.
    Mr. Philip--tell me the pronunciation again?
    Mr. Giudice. ``Jue-DEE-see.''
    The Chairman. ``Jue-DEE-see.'' Philip Giudice, who is 
Commissioner of the Massachusetts Department of Energy 
Resources.
    Ms. Jennifer ``AH-mann''?
    Ms. Amann. ``AE-mann.''
    The Chairman. ``AE-mann,'' who is the Director of the 
Buildings Program at ACEEE in Washington.
    Mr. Ward Hubbell, who is President of the Green Building 
Initiative in Portland, Oregon. Thank you for being here.
    Mr. Charles Zimmerman, who is the Vice President for 
International Design and Construction with Wal-Mart Stores, out 
of Bentonville, Arkansas. Thank you very much for being here.
    Professor, why don't you go right ahead.

  STATEMENT OF ARUN MAJUMDAR, PH.D., DIRECTOR, ENVIRONMENTAL 
   ENERGY TECHNOLOGIES DIVISION, LAWRENCE BERKELEY NATIONAL 
                    LABORATORY, BERKELEY, CA

    Mr. Majumdar. Chairman Bingaman, Ranking Member Murkowski--
It is an honor and privilege for me to be here testifying 
before you. I am Arun Majumdar, Director of the Environmental 
Energy Technologies Division at Lawrence Berkeley Labs, which 
has a long history in buildings research, and also Professor in 
the College of Engineering at the University of California-
Berkeley. I'm a member of the U.S. National Academy of 
Engineering and my field of expertise is the science and 
engineering of heating and cooling, which is a large fraction 
of energy consumption in buildings.
    The building sector consumes the largest fraction of 
building primary energy, roughly 40 percent, and is responsible 
for the largest fraction of carbon emissions. Buildings also 
offer one of the best opportunities, if not the best, to 
economically and rapidly reduce energy demand and limit 
greenhouse gas emissions.
    The Energy Independence and Security Act of 2007 contains 
authorized legislation for a zero net energy commercial 
buildings initiative, or CBI, which calls for massive reduction 
in energy consumption by 2030. I believe this is an important 
and bold step. With your kind permission, I'd like to show you 
some charts and graphics to illustrate the potential impact and 
the challenges of CBI.
    If we are successful in achieving the goals of CBI by 2030, 
if you look at the chart over here, that's the amount of energy 
that we will save, which is equivalent to about 4 quads. If 
this were to happen today, or in 2006, we would have eliminated 
the need for electricity from half the coal-fired power plants 
and could have potentially provided the balance from renewables 
and nuclear, a zero carbon footprint. That's the opportunity.
    Now let me show you where we are today and the challenge 
that lies ahead of us. The two graphs in the next chart show 
data on measured or actual performance of 121 LEED-rated 
buildings. The data shows that as we go from silver to gold to 
platinum rating the average energy consumption does go down, 
and this average is better than the national average. So LEED 
does work on average.
    But if you look at the scatter in the data, it tells a 
different story also. The reason is that this and all other 
codes and ratings are based today on design simulation, but 
design and actual performance do not always match.
    The chart on the right out here is even more relevant. What 
this data shows is that as we tighten the design toward the CBI 
goals this way of zero net energy buildings, the measured 
performance can be 100 to 200 percent higher than the intent. 
So this is a fundamental problem.
    So the key gaps today are the lack of measurement and 
policies requiring it, and the fragmentation of the market and 
the process. I have made several recommendations in my written 
statement. Let me highlight a few examples of how to address 
the gaps with a coordinated effort through technology and 
policy.
    Lack of measurement. We need an information technology 
infrastructure to measure and sub-meter the performance of all 
public buildings, display to information to the occupants, 
which could influence their behavior, and create a transparent 
national repository of building performance. Without this, it 
is unlikely we will diagnose common inefficiencies, identify 
best practices and the best opportunities to retrofit.
    This can go hand in hand with a policy that calls for 
standards based on measured performance, that provides some 
financial incentives and perhaps disincentives to align the 
goals of a fragmented industry.
    Non-fragmentation. A building is made up of materials, HVAC 
systems, lighting, windows, appliances, etcetera. These 
components and subsystems are supplied by different companies 
who don't interact with each other. Yet when these components 
are assembled in a building they do interact with each other, 
and sometimes they fight each other and waste energy. It's like 
driving a car with your brakes on.
    The standards based on measured performance would align the 
industry toward a common goal. But unless we use science and 
technology, science and engineering, to develop new 
technologies that design and operate buildings as an integrated 
system, we are unlikely to get to zero net energy buildings in 
an affordable and scalable way.
    To address the challenge at adequate scale I have made 
several recommendations, but here is one. To address it at 
scale and to address the fragmentation, I have recommended that 
we create multiple regional centers of excellence where 
researchers and practitioners from multiple national labs, 
industries, academia, and other critical building-related 
organizations and stakeholders can collaborate and jointly 
address integration between basic R and D and market 
transformation, and also across science and technology, policy, 
education, and training.
    That ends my oral testimony, Senators. Thank you very much 
for the opportunity to appear before you and testify.
    [The prepared statement of Mr. Majumdar follows:]
  Prepared Statement of Arun Majumdar, Ph.D., Director, Environmental 
 Energy Technologies Division, Lawrence Berkeley National Laboratory, 
                              Berkeley, CA
    Chairman Bingaman, Ranking Member Murkowski and distinguished 
members of this Committee, it is an honor and privilege for me to be 
here to testify before you to provide recommendations for reducing 
energy consumption in buildings.
    I am Arun Majumdar, Director of the Environmental Energy 
Technologies Division (EETD) at the US Department of Energy's Lawrence 
Berkeley National Laboratory, and Professor in the Departments of 
Mechanical Engineering and Materials Science and Engineering at the 
University of California, Berkeley. My field of expertise is the 
science and engineering of heating and cooling, which accounts for 
approximately 40-60 percent of the energy consumption in buildings. I 
am a member of the US National Academy of Engineering, and, over the 
years, I have served in an external advisory capacity for various 
federal agencies, including DOE Basic Energy Sciences. I am currently a 
member of the Advisory Committee of the National Science Foundation's 
Engineering Directorate.
    My Division in LBL was created in 1973 in response to the energy 
crisis then and focused a substantial part of its efforts over these 
past 35 years on reducing energy consumption in commercial and 
residential buildings. It has contributed to various aspects of energy 
efficiency, such as building codes and appliance standards, creation of 
the building design software tools, technologies for internet-based 
demand response between buildings and the grid, electronic ballasts for 
fluorescent lamps, low-emittance and electrochromic windows, materials 
and coatings for cool roofs, and to many demonstration projects such as 
the New York Times Building in Manhattan and the San Francisco Federal 
Building. Furthermore, the Division has had major influence on the 
global buildings sector by educating, training and collaborating with 
people in federal and state agencies, private industry, non-profit 
organizations, philanthropic foundations, as well as in international 
governments and organizations. I will draw upon this experience in my 
testimony of how to reduce energy consumption in buildings in the 
future.
    In August 2008, in response to the authorization of the Commercial 
Buildings Initiative (CBI) of the Energy Independence and Security Act 
(EISA) of 2007, DOE's Office of Energy Efficiency and Renewable Energy 
(EERE) launched a National Laboratory Collaborative on Buildings 
Technology (NLCBT), with the goal of coordinating the R&D activity of 
five national laboratories that have expertise in this field. I applaud 
EERE's efforts in bringing the national labs together. The NLCBT 
includes two members each from the EERE Buildings Technologies Program, 
as well as from Argonne National Lab, National Renewable Energy Lab, 
Lawrence Berkeley National Lab, Oak Ridge National Lab, and Pacific 
Northwest National Lab. Over the last six months, the NLCBT has worked 
closely to develop some common goals and approaches. I am one of the 
Berkeley Lab's representatives in NLCBT. While I have been influenced 
by the discussions, my testimony here reflects my views and those of 
Berkeley Labs and University of California, Berkeley.
    I also want to bring to your attention the work recently completed 
by National Science and Technology Council's Committee on Technology. 
Their Building Technology Research and Development Subcommittee, 
representing 21 Federal agencies, released a report\1\ on High-
Performance Green Buildings in October 2008. This document lays out a 
framework for R&D activities within the Federal government to achieve 
the aggressive net-zero energy goals set out within EPAct 2005 and EISA 
2007. DOE's laboratories were a critical contributor to the development 
of this agenda.
---------------------------------------------------------------------------
    \1\ ``Federal Research and Development Agenda for Net-Zero Energy, 
High-Performance Green Building,'' Report of the Subcommittee on 
Buildings Technology Research and Development, Committee on Technology, 
National Science and Technology Council, October 2008.
---------------------------------------------------------------------------
                      1. why buildings and why now
    We are living in a critical time. Energy security and climate 
change are two of the most important challenges of our lifetimes, and 
need urgent attention. The decisions we make and the paths we take now 
will determine the future health, security and well being of our Nation 
and the world. It is clear that there is no single solution to the 
problem. The challenge is so massive and urgent that it requires 
multiple simultaneous responses and solutions. I firmly believe that 
reducing energy consumption in buildings by a very substantial margin 
must be part of the solution. Otherwise, we are unlikely to adequately 
address the challenges of energy and climate change.
    Most economic and technical analyses suggest that buildings offer 
one of the best opportunities, if not the best, to economically and 
rapidly reduce energy demand and limit green house gas (GHG) emissions. 
The buildings sector consumes (see box) the largest fraction of US 
primary energy (roughly 40 out of 100 quads) and is responsible for 
about 40% of the CO2 emissions, which is more than either 
transportation or industry. The buildings sector also provides a 
significant fraction of the US GDP and employment, and hence it could 
play a critical role in stimulating the economy. The electricity 
transmission/distribution system largely exists for buildings, and 
buildings can provide some level of thermal and/or electrical storage 
to complement the grid, which will be even more important to address 
issues related to intermittency in renewable energy supply.
    The U.S. building sector (residential and commercial):

   employs 8 million people; contributes to 10% of the U.S. 
        GDP;
   consists of about 115 million households and 5 million 
        commercial buildings;
   energy consumption is split roughly 50:50 between commercial 
        and residential buildings
   consumes 72% of the electricity and 55% of natural gas, and 
        40% of the US primary energy (larger than either transportation 
        or industry);
   per year, consumes 40 quads of primary energy, 2.7trillion 
        KW-hr, and accounts for 40% of CO2 emissions or 
        about 2300 MMT CO2 equivalent.
   has a utility bill of about $400 billion per year while the 
        construction sector is about $1,000 billion per year;
   By 2030, EIA estimates 16% growth in energy consumption, 
        which will require additional 200 GW of electrical capacity.

    Looking ahead, the US will add about 1.5-2 billion square feet per 
year of new floor space\2\ in commercial buildings. The US has about 
115 million ``households'' today, that is likely to grow to 140 million 
by 2030 based on population growth estimates. If we maintain business-
as-usual, Energy Information Administration (EIA) estimates\3\ that by 
2030 we will experience a 16 percent growth in buildings energy 
consumption. This amounts to approximately 200 GW of additional 
electricity capacity by 2030, which at a cost of about $2-5/W capital 
expenditure,\4\ would require investments on the order of $500-1000B 
over the next 20 years, or approximately $25-50B/year.\5\ While some 
investments in the supply side are necessary to keep up with demand, we 
cannot operate with a business-as-usual approach for the demand side: 
We must take some bold steps for significant reductions in energy 
consumption. Investments to reduce energy demand have been proven to be 
more cost-effective than increasing supply, as has been the experience 
in California.
---------------------------------------------------------------------------
    \2\ In rough terms 2 billion square feet would be equal to 2000 
Forrestal buildings or over 19,000 typical Home Depots.
    \3\ Annual Energy Outlook 2009 Early Release, Energy Information 
Administration; http://www.eia.doe.gov/oiaf/aeo/pdf/
aeo2009_presentation.pdf
    \4\ Cost estimates based on today's fuel prices are about $2/W for 
pulverized coal, $0.8/W for combined cycle gas turbine, $1.8/W for 
wind, $3/W for integrated gasification combined cycle, $5/W nuclear
    \5\ For example, a recent industry study based on the EIA's 2030 
projections, estimates that 214GW of new generating capacity at an 
investment cost $697 billion will be required under a Reference 
Scenario. Transforming America's Power Industry: The Investment 
Challenge 2010-2030. Prepared by: The Brattle Group for The Edison 
Foundation. November 2008.
---------------------------------------------------------------------------
    While each building is unique, buildings often utilize similar 
materials and equipment, so that technologies developed for the 
buildings sector can be widely replicated, offering substantial 
leverage for these research efforts. Given the long lifetimes of 
residential and commercial buildings, often more than 50 years, 
technology development should include advances in materials, equipment, 
and strategies for retrofitting buildings for improved energy 
efficiency.
    The Federal Energy Independence and Security Act (EISA) of 2007 
contains authorized legislation for a Zero-Net Energy Commercial 
Buildings Initiative, which calls for 80-90% reduction\6\ in energy 
consumption for:
---------------------------------------------------------------------------
    \6\ Zero-net energy building reduces 80-90% energy consumption 
compared to benchmarks, and uses renewable energy to provide the 
remaining 10-20%.

   All newly constructed commercial buildings by 2030
   50% of the commercial building stock by 2040
   All commercial buildings by 2050

    From here on, I will focus my comments on commercial buildings 
only.
    Figure 1 shows that if by 2030, we achieve reductions in energy 
consumption of 80% in new construction and 50% in existing buildings, 
the site energy saved will be about 4 Quads (about 1200 billion kW-hr) 
per year.* If this were to happen in 2006, it would have essentially 
eliminated the need for electricity from approximately half the coal-
fired power plants. This would have saved 400 MMT-CO2 
emissions per year. The remaining load of 4 Quads could have been 
supplied by electricity produced by nuclear, hydroelectric and other 
renewable sources, and one could have reached a zero-carbon footprint 
for the commercial buildings sector. Yet, achieving these goals in a 
cost-effective, reliable, and scalable way will be very challenging. In 
new buildings, the potential energy savings with current technology are 
40 to 60% compared to current code,\7\ but these are rarely achieved in 
practice and it is difficult to reach the EISA'07 goals for 2030 cost-
effectively.
---------------------------------------------------------------------------
    * All figures and charts have been retained in committee files.
    \7\ Note that current codes are for designed intent, and not based 
on actual performance. See Section 3(ii) for details.
---------------------------------------------------------------------------
    It is critical to continue current research, development, 
demonstration and deployment (RDD&D) activities in buildings, extending 
known technologies. In addition, the U.S. needs an aggressive and bold 
approach for advanced RDD&D to realize the full opportunity in the 
buildings sector to address the challenges of energy security and 
climate change.
                  2. framework of a national strategy
    The goal of zero-net energy building (ZNEB) is bold and I believe 
the right one. The scale and magnitude of this challenge is daunting, 
but if successful, the US could witness significant increase in jobs, 
technological leadership with global impact, and a modernized 
infrastructure that has been largely underserved for the last 30 years.
    Despite the scale of the problem and perhaps the best opportunity 
that it offers to reduce energy demand and carbon emissions, the budget 
for EERE's Buildings Technologies Program is on the order of $100M/
year, which includes only about $12M/year for the Commercial Buildings 
Initiative. With these limited resources, the program has done a 
remarkable job in conducting some R&D, but has necessarily focused 
mostly on technology deployment through the creation of the Commercial 
Buildings Energy Alliances. While this is necessary and important, it 
is not sufficient.
    Our past successes in building energy efficiency have taken 10-20 
years to move from lab invention to mainstream market impacts as 
documented by NAS studies and other reports. We need to accelerate the 
process. It is critical that the Nation have a strong, long-term 
commitment to a balanced portfolio and a seamless pipeline of 
integrated RDD&D ranging from basic research to market transformation. 
This would require coordination, integration, alignment, and leveraging 
among several key thrusts, all of which require innovations:

          i. science and technology;
          ii. policy and finance;
          iii. technology deployment and market transformation
          iv. work force development through education and training.

    Any one thrust alone cannot successfully address the challenge, but 
collectively they can.
    The short-term goals ought to be focused on creating jobs, but 
without a long-term R&D base focused on science and technology, the US 
could be out-innovated by Asia and Europe, which in some cases are 
currently more advanced than the US. With a well-coordinated bold RDD&D 
program, the US has the intellectual capital and the capacity to be a 
global leader. EISA'07 authorizes $20M/yr for the Commercial Buildings 
Initiative in 2008, ramping up to $200M/yr between 2013-2018. It is 
unclear whether this level of investment is sufficient to address the 
challenge.
           3. what are the key barriers, gaps and challenges
    While the numbers are compelling for reducing energy consumption in 
buildings, in reality it has been difficult to reduce energy 
consumption in buildings because:

          i. The Value of energy efficiency is uncertain and 
        unappreciated.--Energy is usually a small (if any) part of 
        building design, which focuses mostly on cost, aesthetics, 
        comfort, and function. There is no clear market signal for 
        reducing energy consumption. Since building energy performance 
        is rarely measured (see ii below), and there are large 
        uncertainties in designed performance, the value of energy 
        efficiency is fraught with uncertainties, making it difficult 
        to evaluate and to have financial transactions without legal 
        implications.
          ii. Actual performance does not often correlate to design 
        intent.--Today's building codes are for designed energy 
        performance, NOT for measured or actual energy performance (see 
        Fig. 2 later). Code-compliant solutions are typically much 
        worse than best practice; by definition they represent the 
        worst, cheapest building that can be legally built and 
        occupied. There are no requirements for performance 
        measurement, and only about 5% of new buildings are ever 
        commissioned--95% are operated without ever testing their 
        systems upon completion of building construction.
          iii. The Buildings industry is fragmented (see Appendix A-
        Chart 3).--The buildings industry is fraught with functional 
        gaps as well as management discontinuities that lead to 
        ineffective coordination between operational islands. There is 
        virtually no feedback loop from occupied buildings back to 
        designers, beyond lawsuits, that might correct past mistakes.
          iv. Lack of systems integration in building design and 
        operation.--Building components (cement, steel, insulation, 
        glass windows, coatings, sheet rock,. . .) and systems 
        (lighting; heating, ventilation and air conditioning (HVAC); 
        appliances) are developed by independent firms whose products 
        are tested for individual performance independent of each 
        other. While this must be encouraged and is necessary, it is 
        insufficient. A whole building approach to design and 
        operation, where these components are integrated in a way that 
        they reduce energy consumption through cooperation, is rarely 
        used, which commonly leads to significant system-level 
        inefficiencies.
          v. Lack of quantitative energy consumption evaluation.--
        Building operators often have neither the training nor the 
        information handoff from builders they need to properly operate 
        the building to meet performance expectations. Most operators 
        are flying blind with three sets of uncorrelated data: (a) a 
        time dependent snapshot of performance; (b) real-time complaint 
        calls, and (c) an ``after-the-fact'' monthly utility bill. Most 
        buildings don't have proper instrumentation or an Energy 
        Information System to integrate, digest and display actionable 
        performance data for the operator.
          vi. Incentives for energy efficiency are not aligned.--In 
        leased buildings, the building designers and developers specify 
        components and decide how they are integrated in the design, 
        primarily based on capital expenditure and not generally on 
        energy efficiency. On the other hand, occupants' patterns of 
        energy consumption determine how much energy is actually used, 
        which is related to the operational expenses. The dichotomy of 
        capital and operational cost between owner and user leads to 
        split incentives, and makes it difficult to spread financial 
        benefits or burdens due to efficient use of energy.

    Since the Commercial Buildings Initiative is focused on achieving 
zero net energy in buildings, it is worth noting as an example, a 
recent study of some high-performance buildings. Frankel\8\ recently 
conducted an analysis of 121 LEED\9\ buildings (certified, silver, gold 
and platinum rated) that were in the low-to-mid range in energy use 
intensity (EUI in kBTU/sqft), and studied their actual versus design 
performances. Figure 2 plots the spread of measured EUI, and ratio of 
actual-to-design energy use as a function of design EUI. While this may 
not be a definitive study and perhaps does not contain a sufficiently 
large statistical sample, some trends and indications are worth noting:
---------------------------------------------------------------------------
    \8\ M. Frankel, ``The Energy Performance of LEED Buildings,'' 
presented at the Summer Study on Energy Efficient Buildings, American 
Council of Energy Efficiency Economy, Asilomar Conference Center, 
Pacific Grove, CA, August 17-22, 2008.
    \9\ Leadership in Energy and Environmental Design (LEED) is a Green 
Building rating system introduced by the US Green Building Council 
(http://www.usgbc.org/). LEED is a third-party certification program 
and the nationally accepted benchmark for the design, construction and 
operation of high performance green buildings.

          a) While the average EUI of LEED rated buildings is lower 
        than the national average, there is a large amount of scatter. 
        Hence, LEED rating is useful on an average, but design intent 
        does not generally correlate with actual performance in 
        individual buildings.
          b) For buildings with lower design EUI (i.e. towards zero net 
        energy building), the discrepancy between the actual and 
        designed EUI is larger, showing that it becomes more 
        challenging to accurately predict performance as the 
        performance goals are tightened.

    There are multiple reasons for why this is so and details can be 
found in Frankel's study. Clearly, further studies are required, but 
some of the gaps and challenges are well known in the buildings 
community and can be acted upon now.
             4. recommendations for science and technology
    The US needs a comprehensive and balanced R&D program to achieve 
significant reductions in energy use in commercial buildings through 
innovations. To complement existing near-to mid-term technology 
development with longer-term development of transformative 
technologies, we need to integrate basic and applied R&D much more than 
has often been the case in the past. Today, building commissioning and 
simple retrofits may be cost-effective, but they reduce energy 
consumption on average by only 15-20%. On the other hand one can design 
and build new buildings that almost reach zero-net energy goals,\10\ 
but at a higher cost and not easily scaled up to wide market 
introduction. The science and technology challenge is two fold: (a) how 
to reduce energy consumption to approach zero-net energy goals; and 
(ii) how to achieve this in a cost-effective, measurable and scalable 
manner. The innovations ought to focus not only on new technology but 
also towards dramatic reductions in risk and cost in existing 
technologies that would enable deep market penetration. Here are some 
potential elements.
---------------------------------------------------------------------------
    \10\ P. A. Torcellini, M. Deru, B. Griffith, N. Long, Shanti Pless, 
R. Judkoff, ``Lessons learned from field evaluation of six high-
performance buildings,'' Technical Report NREL/TP-550-37542, June 2006 
(http://www.nrel.gov/docs/fy06osti/37542.pdf)

          i. Information Technology Infrastructure for Fundamental Data 
        Gathering, Processing and Management.--As suggested by Fig. 2, 
        design intent and current simulation tools are insufficient to 
        model and predict energy use in buildings. The US needs a 
        significant program in collecting, analyzing, and displaying 
        measured performance of all public buildings. Without these 
        data, it would be very difficult to identify common 
        inefficiencies, best practices, and best opportunities for 
        smart retrofits. Furthermore, there is a need for tools to 
        process and manage the data such that it is readily available 
        and can easily be mined. This addresses 3(i), 3(ii), and 3(v).
          ii. Whole System & Process Integration for Design and 
        Operation of Smart Buildings.--To achieve the goals of zero-net 
        energy buildings, optimizing individual components for energy 
        efficiency, while necessary, is unlikely to be sufficient. We 
        need a whole building approach that can treat the building as a 
        system and minimize the energy consumption of the whole system 
        while still optimizing comfort and other performance metrics. 
        Furthermore, given the fragmentation of the buildings industry, 
        sophisticated tools are required that help in integrating the 
        process of building design, build and delivery, which promotes 
        feedback and iteration. This needs:

                  a. science-based approach that couples building 
                science (thermodynamics, heat transfer, fluid 
                mechanics, sensors, materials, components. . .) with 
                architecture (structure, facade, comfort, aesthetics, . 
                . .) and information science (communication, 
                computations, control) that will lead to deeper 
                understanding and pathways of how to integrate 
                subsystems that will cooperate and collectively reduce 
                energy consumption as a system.
                  b. the above endeavor will form the foundations for 
                tools for accurate simulation, analysis, optimization 
                and data mining that can be used for both building 
                design and operation
                  c. continuous visualization, monitoring, reporting, 
                diagnostics and demand-response of buildings--self-
                tuning buildings. This addresses 3(iii) and 3(iv).

          iii. High-Performance Building Components and Sub-Systems.--
        Inefficiencies in buildings can largely be attributed to 
        thermal management as well as inefficient lighting. Hence, it 
        is necessary (but not sufficient) to focus R&D effort on 
        innovations in:

                  a. Building Fabric/Envelop Materials and Device 
                Technology: We need to identify new approaches for 
                cost-effective super-insulations for both walls and 
                windows. ``Smart glass'' or dynamic shading whose 
                properties are dynamically controlled and adjusted to 
                minimize cooling and maximize glare-free daylight are 
                also necessary. Integration of phase change materials 
                (``energy storage'') into buildings must be 
                investigated.
                  b. Mechanical Equipment, Controls, and Thermal 
                Storage Technologies: HVAC accounts for over 30% of the 
                total commercial building energy consumption. A robust 
                program could help develop the next generation of HVAC 
                and controls suitable for use in buildings with loads 
                approaching 10-20% of today's loads. New opportunities 
                for further improving efficiencies include enhancing 
                heat transfer using technologies such as micro-channels 
                and nano-scale surface treatments, or supplementing or 
                substituting for vapor-compression cycles with 
                thermoelectric, magnetocaloric, thermoacoustic, 
                absorption, or other systems. Indeed, cooling 
                technologies in the buildings, industry, and 
                transportation sectors account for about 10% of primary 
                national energy use and are a major driver of peak 
                utility loads, among other impacts. Cooling 
                technologies in use today also use hydrofluorocarbons 
                as working fluids, which are strong greenhouse gases. 
                Advances in this area could have broad application and 
                significant benefits.
                  c. Electrical and Lighting Equipment Technology and 
                Controls: Lighting accounts for about 12% of energy use 
                in homes but often 30-50% in commercial buildings. 
                While steady progress is being made with improved lamp 
                efficacy with gas discharge and solid-state lighting 
                sources, large savings can also come from robust, 
                reliable, addressable and dimmable networked controls 
                that allow light levels and distribution to be 
                dynamically tuned to meet user needs over space and 
                time. The next most important source of energy use is 
                ``miscellaneous electric loads'' (MELS), such as 
                computers, appliances etc. A robust effort is needed to 
                find ways of minimizing and controlling these loads 
                without inconveniencing occupants. This addresses 
                3(iv).

          iv. Integration of Buildings with Grid & Novel Energy Storage 
        Concepts.--A goal of net-zero energy buildings requires both 
        substantial increases in energy efficiency (up to 70 percent or 
        more) with the balance provided by some form of renewable 
        energy generation, either on-site (e.g., photovoltaic) or from 
        off-site renewable generation. Research is needed to reduce the 
        cost and enhance the performance of approaches to integrate 
        renewable energy and energy storage systems. Research is also 
        needed to capitalize on saving opportunities available from 
        integrating intelligent buildings with the emerging smart grid. 
        This addresses 3(iv).
          v. Field Test Beds and Reconfigurable Test Facilities.--A 
        wide diversity of real buildings ought to be used for 
        collecting data and understanding common inefficiencies, best 
        practices and best opportunities for reducing energy 
        consumption. However, if one needs to incubate, debug and 
        ``crash-test'' new technologies, they could potentially pose 
        safety and occupational hazards to the occupants. Testing in 
        facilities that are reconfigurable allows pinpointing of 
        technical problems and rapid correction of design flaws, and 
        also allows for ``crash-testing'' and debugging new 
        technologies before they are rolled out in real buildings with 
        occupants. They also provide much-needed measured evidence to 
        builders and operators that proper systems integration can 
        indeed significantly reduce energy consumption. Furthermore, 
        such test facilities can also be used for education and 
        training. This addresses 3(i)-3(v).
          vi. Advanced Construction Methods.--Often, poor on-site 
        assembly result in buildings that adversely affect their energy 
        use performance. New construction approaches are needed that 
        are more effective at achieving energy efficiency and renewable 
        energy integration. Advanced techniques also reduce 
        construction wastes and enable utilization of newer materials 
        with lower embedded energy and carbon emission consequences. 
        This addresses 3(iv).
               5. recommendations for policy and finance
    To achieve the zero-net energy goals given the barriers, gaps and 
challenges identified in Section 3, market forces alone are unlikely to 
enable market transformation. Innovations in policy must be used, but 
these need to be researched and evaluated for feasibility as well as 
impact on energy consumption, economics, law etc. Here are some 
elements--some of these are fundamental shifts from current policies, 
but these are necessary to achieve the bold goals outlined before.

          i. National Building Standards Based on Measured 
        Performance.--This requires new policy to benchmark and label 
        all commercial buildings based on measured performance. 
        Measuring and disclosing real building energy performance 
        consistently and reliably across the commercial building sector 
        is essential to stimulate market awareness and demand for 
        valuing and achieving improved energy performance levels. This 
        addresses 3(i) and 3(ii), and will be enabled by 4(i).
          ii. New financial instruments, valuation and performance-
        based compensation.--There are many aspects of commercial 
        buildings finance that could be altered to encourage investment 
        in higher performance building solutions, such as: (a) grants, 
        subsidies, tax credits, or other financial incentives to defray 
        higher first costs associated with the design, construction, 
        and operation of efficiency and renewables integration and 
        subsequent measured performance; (b) including building actual 
        performance parameters in real-estate valuation; (c) developing 
        and promoting alternative leasing provisions that address split 
        incentives--such as between owners and renters. This addresses 
        3(v) and 3(vi), and is enabled by 4(i) and 4(ii).
          iii. Incentives for action--tax rebates and utility 
        programs.--There is a wide and growing array of tax incentives 
        and utility programs to promote energy efficiency more 
        aggressively. The options proposed here build on this 
        foundation to identify and implement a comprehensive, 
        integrated set of financial and business incentives to 
        supplement existing energy price signals that: (a) Develop and 
        expand utility incentives; reward higher measured performance; 
        (b) Decouple sales and revenues for utilities nation-wide; (c) 
        Develop and expand tax credits for high performance buildings 
        based on measured performance; (d) Develop programs for capital 
        subsidies, grants, and loans; (e) Promote expedited permitting 
        for high performance buildings. This addresses 3(v) and 3(vi), 
        and is enabled by 4(i) and 4(ii).
          iv. Incentives for Retrofits and Upgrades.--Since the 
        lifetime of commercial buildings is generally more than 50 
        years, we must promote retrofitting and upgrading the existing 
        building stock. Financial programs that could amortize the 
        initial cost for upgrades over a time period could 
        substantially minimize the financial burden for retrofits.
 6. recommendations for technology deployment and market transformation
    In the commercial buildings area, there is a market transformation 
challenge that includes educating, incentivizing and assisting 
stakeholders involved in building design, construction and operation. 
The market is fragmented and incentives are not always aligned. While 
the proposed National Building Standards and affiliated financial 
incentives and disincentives might push the market towards common 
performance goals, other levers are also needed. Some examples are:

          i. Standards generally provide the bare-minimum performance 
        requirements for products in the market. Programs such as 
        EnergyStar can help pull the top of the market, which then 
        helps identify and make possible the next generation of 
        standards. These activities can be further expanded and 
        strengthened.
          ii. Conduct technology demonstrations and field performance 
        evaluations for new technology
          iii. Test products to ensure they meet manufacturers' claims 
        and conduct independent assessments of technology cost and 
        performance
          iv. Create a best practices network domestically and 
        internationally that will provide guidance for design and 
        operation of new and existing buildings based on location and 
        building type/use
          v. Conduct studies of human behavioral responses to energy 
        use and evaluate ways to better fit products and processes to 
        natural responses
          vi. Conduct studies of institutional responses to energy use 
        and identify mechanisms that can more effectively assist 
        implementation of cost-effective energy efficiency and 
        renewable energy technologies into the buildings sector.
             7. recommendations for education and training
    From my experience as a University professor interacting with 
undergraduate and graduate students both at Berkeley and other 
universities, I can safely say that the youth of this Nation are ready 
to roll up their sleeves and save the world. We are in one of the rare 
``moonshot'' moments in history, where we have the opportunity to 
harness and galvanize the intellectual horsepower of the youth. We must 
grab this opportunity to attract the best minds and unleash them to 
address one of the biggest challenges of our lifetime and truly change 
the course of history. However, we need a framework for this purpose, 
part of which I have described in the previous sections. We also need 
adequate resources. Some of the recommendations I propose below go 
beyond the buildings program, and could be used in DOE and possibly 
other federal agencies:

          i. Initiate a significant program of graduate student and 
        post-doctoral fellowships as well as young investigator awards 
        that will attract the best young minds to energy science and 
        technology, and help create intellectual capital for the 
        nation.
          ii. Initiate a program to support joint curricula at 
        universities or R&D centers that combines various aspects of 
        science, engineering, architecture, business, public policy and 
        law to collectively address the needs of the buildings 
        industry, as well as for energy issues in other sectors of our 
        economy.
          iii. Combine research and education through the use of test 
        facilities for education and training.
          iv. Create education/training bootcamps that rapidly enable 
        retraining for students and existing professionals

    In the current marketplace, many stakeholders are unaware of proven 
existing methods, while others may have an interest in energy 
efficiency yet lack the ability to implement effective measures. 
Construction, commissioning and operations of more efficient buildings 
often require skill sets that are not yet widely available. The DOE 
program should include an expanded, robust training program for 
existing design professionals, contractors, commissioning agents, etc. 
as well as developing accreditation and certification programs, higher 
education programs that foster high-performance, integrated design, and 
other activities.
           8. concluding remarks and overall recommendations
    Given the magnitude of energy use in buildings, the opportunity it 
offers for reducing carbon emissions, and the scale and urgency at 
which RDD&D needs to occur, the US needs a sustained and well-
coordinated public-private partnership of adequate scale. Furthermore, 
it is important to create a balanced portfolio and an integrated 
seamless pipeline of RDD&D activities ranging from basic to applied R&D 
and finally to market transformation. Here are some recommendations to 
enable this:

          i. Increase linkages between the Building Technologies 
        Program in EERE with other programs within EERE and with other 
        offices of DOE (e.g. Office of Science, Office of Electricity 
        Delivery and Energy Reliability) so that the intellectual 
        horsepower and knowledge-base within DOE can be leveraged and 
        brought to bear on this challenge. Some of this has been done 
        but more is possible. Identify linkages and leveraging between 
        DOE and other federal agencies to coordinate RDD&D efforts.
          ii. Use the geographical distribution, domain expertise, and 
        availability of intellectual capital of the national 
        laboratories to create on a competitive basis, multiple 
        Regional Centers or Institutes of Excellence of adequate scale 
        where researchers and practitioners from multiple national 
        laboratories, industries, academia and other critical 
        buildings-related organizations can collaborate and jointly 
        address integrated RDD&D in the buildings sector. The Centers 
        could complement each other in focus areas and collectively 
        address the needs of the Nation in a comprehensive manner.

    Thank you very much for giving me the opportunity to appear before 
you and testify.

    The Chairman. Thank you very much.
    Ed, why don't you go right ahead.

  STATEMENT OF EDWARD MAZRIA, FOUNDER AND EXECUTIVE DIRECTOR, 
                ARCHITECTURE 2030, SANTA FE, NM

    Mr. Mazria. Thank you, Senator Bingaman, Senators. Thank 
you for having me testify. You have before you a booklet that 
we prepared.* I'm going to call out the page numbers and 
they're in the lower left-hand corner. We'll start at page 2, 
and I'll talk to each one of these, each one of these graphics.
---------------------------------------------------------------------------
    * Document has been retained in committee files.
---------------------------------------------------------------------------
    So on page 2 you'll see that the building sector is not 
only the largest energy-consuming sector in the U.S., it is 
growing at the fastest rate.
    Page 3, the building sector today is responsible for now 
50.1 percent of total U.S. energy consumption. That's in 2008.
    Page 4. You can break that down even further. Building 
operations, what Arun was just discussing, is responsible for 
42 percent in 2008 of total U.S. energy consumption.
    Page 5. Of U.S. electricity consumption, the building 
sector is responsible for 75 percent of all the electricity 
produced in the United States. That's just building operations.
    Page 6. This is electricity consumption. It illustrates 
that the rate of electricity consumption by the building sector 
is increasing dramatically and will continue to increase 
between now and 2030. The entire projected increase in 
electricity consumption between now and 2030 is due just to 
building operations.
    7. We issued the 2030 Challenge targets a few years ago 
calling for all new buildings and major renovations to meet an 
energy consumption performance standard of 30 percent below the 
regional average for that building type and then moving on to 
carbon neutral by the year 2030. 50 percent of the regional 
average is roughly equal to about 30 percent below our latest 
building codes.
    8. Everyone from the Federal Government; we now have five 
States; many, many local governments have adopted the targets; 
most of the professional organizations; the EPA supports the 
targets through Target Finder.
    9. In 2005 at the G-8 summit the parties, with the support 
of the United States, committed themselves to ``with resolve 
and urgency,'' to cost-effective energy efficiency standards 
for buildings based on a 30-year payback. That's the definition 
of ``cost effectiveness.''
    Page 10. NREL completed a study for Greensburg, Kansas, 
showing that at 30 percent more efficient it would cost about 
$4,000. If you amortize it over 30 years, over the life of a 
mortgage, your energy savings far outweigh that; that a 
homeowner on an annual basis will save about $512 a year. The 
little chart on the right illustrates that at cost-neutral you 
would go to 58 percent below code.
    Page 11. The DOE completed a study for 30 percent below 
code in all different climate zones in cities and they came up 
with the same results, below ICC 2006.
    Page 12. So we're calling for the Federal Government to 
update the National Energy Conservation Code 2010, 30 percent 
below our current code standards, IECC 2006, and ASHRAE 90.1 
2004; and on a 6-year cycle, 2016, 50 percent below code, 2022, 
75 percent, 2028 carbon neutral, giving the States 2 years to 
get up to speed, and at the 50 percent make it a true 
performance code because performance codes don't pick clean 
energy technology winners and losers.
    We're also calling for the DOE to put out reach codes so 
that those States and cities and counties that want to go 
beyond the standards can do so, and we really need reach codes 
to take precedence over any Federal appliance standards.
    14. The public building sector represents 7 percent of 
total building square footage in the U.S. The private building 
sector represents 93 percent. The public building sector is not 
decreasing yet in terms of construction as of November and I 
still don't think it's decreasing now. The private building 
sector is tanking and taking the entire economy down with it.
    So we've called for an economic recovery, a 2-year, 9 
million job investment plan, asking the Federal Government to 
put in $200 billion, roughly $96 billion a year, in a housing 
mortgage interest rate buydown and a commercial building 
accelerated depreciation program, tied to the energy reduction 
targets that we just called for: 30 percent below, 50 percent, 
75 percent, and carbon neutral.
    That would create 9 million new jobs almost instantly, a 
trillion dollars of new private investment. For every dollar 
public spent, private money has to be spent. A new renovation 
market, huge consumer savings, and we would drive down energy 
consumption.
    The tax base from the 9 million new jobs would pay for the 
plan on an annual basis. The way it works, if you go to the 
next page, page 17, let's just take a buy-down to 2.5 percent. 
If you wanted to get a 2.5 percent mortgage, you'd have to meet 
a standard of 75 percent below code, and those mortgage 
interest rates could change depending upon how many jobs you 
wanted to create.
    Next page. This is how it would work. To get the 75 percent 
below code you would need to spend about $51,000 to tighten up 
your building and put a solar system on and do a number of 
things. That's about 25 percent in additional cost that it 
would cost for a new building. Let's just say you have a 
mortgage of $272,300 at 6 percent. Your monthly payment would 
be $1600 a month. So in order to get the 75 percent below and 
to get a 2.5 percent mortgage, you'd have to invest the 
$51,000.
    If you rated that into your new mortgage, then, if you go 
to page 21, you would have a new mortgage of $304,550. You will 
have spent $51,250 on the solar system, on tightening up your 
building, but now your new mortgage, with a tax credit, would 
be $1203 a month.
    So if you go to page 22, your original mortgage payment 
would be 1632 a month, your new monthly payment would be 1200. 
You would save 429 on your mortgage. You would save 145 on 
energy savings on a monthly basis. Your total monthly savings 
would be 575. That money goes back into the economy. You will 
have spent $51,000 or more putting people back to work.
    If you do that, you basically bring back, page 23, every 
conceivable industry in the United States because they're all 
tied to the building sector, from demolition through architects 
and engineers, hardware, wood, plastics, you name it.
    The last page, 24, illustrates if you implement the codes 
between now and the year 2030 that we're able to then not only 
stabilize the building sector, but begin to get some major 
reductions in terms of building energy consumption.
    Thank you.
    The Chairman. Thank you very much.
    Mr. Giudice, why don't you go right ahead.

   STATEMENT OF PHILIP GIUDICE, COMMISSIONER, MASSACHUSETTS 
           DEPARTMENT OF ENERGY RESOURCES, BOSTON, MA

    Mr. Giudice. Great. Thank you, Chairman Bingaman and 
Ranking Member Murkowski, members of the committee. On behalf 
of Governor Patrick, the Commonwealth of Massachusetts, and the 
National Association of State Energy Officials, I appreciate 
you asking me to be here as a witness and I appreciate your 
confronting our energy and our climate challenges.
    The prior speakers talked about the energy consumption that 
does exist in buildings and the opportunities for savings, 
substantial savings. We concur completely that there is 
gigantic opportunities for significant savings here that would 
spur our economy and help to address our climate and energy 
needs.
    In Massachusetts we've been working on many of these issues 
for decades. We've been doing energy efficiency programs with 
utilities, investing in specific incentives through the 
utilities for both new building and existing buildings to 
reduce their energy consumption. We've just now adopted new 
regulations, new legislation that actually will call for our 
utility efficiency programs to spend everything that is cheaper 
than buying energy from the market. That looks like it'll be 
two or three times as much energy efficiency activity going on 
in the State of Massachusetts than we have to date of 3.5 cents 
to to get energy from energy efficiency and we're paying 8 or 9 
cents from the wholesale market. So a significant uptake in 
energy efficiency programs.
    The Regional Greenhouse Gas Initiative is going to spur a 
significant amount of that growth, and the stimulus funding 
that has just recently been provided is going to further that 
dramatically and tremendously and we're quite appreciative of 
being able to deliver on the promises that have been laid out.
    Second, we've been pushing renewable energy in 
Massachusetts. One example is our solar programs, a 250-
megawatt goal. In the last year we've had a threefold increase 
in solar companies in Massachusetts to get on people's homes 
and businesses, put solar panels on there. We used to have 20 
or 30 or 50 companies doing it. Now it's over 150 companies in 
Massachusetts. A little bit of private money, a little bit of 
State money, and spurring substantial growth and really seeing 
it change there.
    Third, we've attacked building codes. We had our own 
State's building code mechanisms in the past and now with this 
new legislation that we passed in the State we've adopted the 
International Energy Conservation Code and have automatic 
updates whenever that gets updated, as well as training and 
compliance requirements for building inspectors to assure that 
we're fulfilling that.
    So that's some of the stuff that's going on in 
Massachusetts. Lots is going on on a voluntary basis around the 
country that we're quite excited about, including in 
Massachusetts. The LEED standards that have been talked about, 
the green building initiatives activities, very exciting, 
Energy Star for buildings and Energy Star for appliances--all 
very good steps. NASEO is partnering with the Real Estate 
Roundtable to work on commercial buildings, getting rankings 
and ratings and help to reduce their energy consumption and 
energy monitoring.
    But much more is needed. It really behooves on the Federal 
leadership to really take the next steps here. Working this on 
a State by State basis doesn't move us fast enough or far 
enough.
    Department of Energy has an ability and we would encourage 
them to take that initiative to put in place national building 
codes at 50 percent improvements in energy efficiency from the 
existing standard building codes across the country, regionally 
specific because what works in the Northeast doesn't work in 
the Southeast or the West or the Southwest, but nonetheless 
substantial improvements in building codes.
    Clearly they're going to have to work with all kinds of 
industry and collaborators to make that work, but I encourage 
this body to give DOE very strict deadlines and very strict 
expectations that we're going to move massively to much more 
significant building codes.
    Second, we need to address some of the issues of our 
buildings. Right now we design buildings to leak and they need 
to leak to actually allow fresh air to come in and be able to 
power our gas boilers and furnaces and hot water heaters in our 
basements. That's not the right way to be dealing with these 
issues.
    We do know, and it's on the shelf right now, technologies 
that are sealed combustion, direct air from the outside to work 
the furnaces, and then we can really seal up these buildings 
really, really tight, monitor the humidity, monitor the 
CO2 content inside very inexpensively, have air-to-
air heat exchangers to be able to transfer outside air into 
inside air, and then not have to have these buildings leak to 
make them healthy buildings.
    We also need to move--and there was a mention of this 
before--to much more specific and significant energy labeling 
of buildings. It would be great for every buyer of a building, 
be it a renter or purchaser, to be able to know precisely what 
that energy consumption has been and what the expected energy 
consumption going forward is, just like we do when we buy a 
car; we know what the miles per gallon is. This is completely 
doable and we would like to see significant movement along that 
front.
    Then we have to remember that it's not just about large 
commercial and residential single family homes. Significant 
populations obviously live multifamily, live in manufactured 
housing, and it's often not addressed in building codes to the 
sufficient level that it needs to be. We encourage significant 
steps to focus on those folks, who are often some of the most 
vulnerable economically amongst us, because tremendous 
opportunities exist there as well.
    So I applaud the actions being taken today and the 
expectations over the next months of what's going to come out 
of this process. I know that we're going to go boldly with the 
challenges in front of us. But I would caution us to think 
about a decade from now or more we will very likely be looking 
back and wishing we were bolder at this time in what we get 
accomplished. So if that can be any helpful for us all to just 
move as far along the path right now, because it is really the 
time and the opportunity to do so much more with the challenges 
in front of us.
    I thank you for your attention.
    [The prepared statement of Mr. Giudice follows:]
   Prepared Statement of Philip Giudice, Commissioner, Massachusetts 
               Department of Energy Resources, Boston, MA
    Chairman Bingaman and members of the Committee, on behalf of 
Governor Patrick and the Commonwealth of Massachusetts, and the 
National Association of State Energy Officials (NASEO), thank you for 
taking on the energy and climate challenges. We look forward to 
continuing to work with you, as the federal government takes a leading 
role in the months and years ahead in confronting our energy future.
    You have asked me to address use of energy in buildings, which 
accounts for approximately 39% of total energy consumption in the 
United States, and more than half of all energy use in several states, 
such as my own. It is critical that we drastically cut our use of 
fossil-fuel energy to meet these needs, in order to improve our energy 
security, protect against the rising prices of energy which are sure to 
come after our economy recovers, and to address the worldwide threat of 
climate change. As my testimony will demonstrate, it is also very 
doable to dramatically reduce our energy waste in buildings. 
Technologies and building practices exist today which would provide the 
same or better comfort with a fraction of the energy consumed. We 
simply need to be much more strongly motivated to fully deploy these 
better approaches.
    Massachusetts strives to be a leader in promoting the use of energy 
efficiency and renewable energy sources to meet the electricity, 
heating, and hot water needs of buildings, but there is much more for 
us to do. Let me briefly list a few of our programs, but then move on 
to address specific areas that are of most interest in terms of 
designing federal policies.
    First, for over three decades we have continuously provided 
incentives to businesses and homeowners to install efficiency measures 
in their own buildings. Legislation passed last year will greatly 
increase these subsidies, as it mandates that electric and gas 
utilities invest in all efficiency that is less costly than purchasing 
more electricity and gas supplies.
    Second, we have supported development of clean, renewable energy, 
both through a renewable portfolio standard for electric utilities and 
through specific funding for research, development, and installation of 
renewables. Under Governor Patrick's leadership, we are two years into 
a program to install 250 megawatts of solar photovoltaics by 2017--with 
7.2 MW awarded in 2008, spurring a 300% increase, to 150, in the number 
of solar companies in Massachusetts. Last year we broke into the top 
five states\1\ in terms of solar PV market size in the U.S.; and we are 
now aggressively pushing development of wind power and biomass in the 
state.
---------------------------------------------------------------------------
    \1\ ``Tracking the Sun'' report from Lawrence Berkeley National 
Labs--Feb 2009 http://eetd.lbl.gov/ea/emp/reports/lbnl-1516e.pdf
---------------------------------------------------------------------------
    Third, we are focused on energy efficient building codes for 
residential and commercial construction. Massachusetts passed a raft of 
energy and environmental legislation in 2008, including a provision 
that requires us to adopt the most recent version of the International 
Energy Efficiency Code within one year of its publication, and specific 
initiatives to train inspectors and assure full code compliance. We 
have also developed an advanced or `stretch' code, for voluntary 
adoption by towns and cities that wish to go significantly beyond these 
base code standards, in order to accelerate our transformation of the 
building construction and renovation sector in our state.
    Congress and the President have made a huge effort to increase 
energy efficiency and promote renewable energy with the recently passed 
stimulus package. Mr. Chairman, your efforts have been in the forefront 
of these energy efficiency issues for many years. The package's funding 
of $3.1 billion for the State Energy Program, $5 billion for 
Weatherization, $3.2 billion for the Energy Efficiency and Conservation 
Block Grant and $300 million for Energy Star appliance rebates can all 
make a huge difference in promoting energy efficiency in buildings. The 
expansion of the existing homes tax credit to 30% and $1,500 will be 
strongly promoted by the state energy offices as part of our 
comprehensive effort to improve energy efficiency in homes. We hope 
that additional funding of $100 million can be provided in the near 
future to fund training and technical assistance to improve energy 
codes, and especially to train contractors, local code officials, 
architects and others to comply with higher building code standards.
                 energy codes, past, present and future
    Allow me to focus particularly on energy codes for new 
construction. This is a critical area, since once constructed a 
building will be consuming, or wasting, energy for the next 50 to 100 
years, and in many cases much longer. It is relatively simple to 
construct commercial and residential buildings with measures that 
ensure 20% to 50% less energy waste than current leading codes, and the 
incremental cost is generally low. The additional cost may even 
approach zero if the building is planned and designed thoughtfully. 
However, if this opportunity is missed, then once a building is 
completed it is far more difficult and expensive to greatly improve the 
efficiency through retrofits. Thus, ensuring that initial design and 
construction is done with full attention to high energy performance 
standards is vital.
    Yet we know that developers of buildings, and purchasers, all too 
often are concerned primarily with minimizing the initial capital costs 
of a building. Exceptionally few building developers, designers or 
owners care about lifecycle energy costs of a building. Quickly 
building the aesthetically pleasing, least expensive initial cost 
building is seen time and again as the way to make the most money when 
developing real estate. Stringent energy codes are needed and need to 
be fully followed to reduce energy waste. In our current economic 
circumstances, where construction may be difficult to finance and 
energy costs are low, it is especially tempting to minimize the initial 
capital costs of construction and to disregard opportunities to save on 
future energy use. But our economy will recover within the next few 
years, energy prices will rise again, and buildings constructed today 
will be with us for a very long time.
    Valiant voluntary efforts to increase awareness of the energy 
choices in buildings has had an affect. More and more tenants are 
asking for green buildings. Programs such as LEED and Energy Star are 
raising awareness. Even today, in a difficult real estate market, there 
is significant demand in Massachusetts for ``green'' high-efficiency 
buildings, in both the commercial and residential sectors. However, 
market forces alone are not moving us fast enough or far enough to 
reduce our energy wastage.
                          iced--tea buildings
    There is a litany of what's wrong in our current practices. For 
instance, the result of the current status quo is all too often what 
has been called `Iced-Tea buildings.'
    While iced-tea is typically served at a temperature only slightly 
cooler than tap water, it requires both energy extremes of boiled water 
and frozen water to produce.
    This is an apt analogy for how our current buildings are designed 
to operate. Typically using over-powered heating and cooling equipment, 
often running simultaneously, in an attempt to achieve a desired 
temperature that varies within a narrow range of only around 65-75 
degrees Fahrenheit throughout the year. Due to building envelopes and 
labyrinthine ductwork networks that leak air and are poorly insulated, 
these buildings need to be regularly topped off with heating and 
cooling to maintain their precarious state of comfort. In addition to 
massive energy use, many buildings use water with similar abandon, and 
yet despite all these energy inputs we have widespread mold and air 
quality concerns, leading to the relatively modern `sick building' 
phenomenon.
    Modern technology provides excellent opportunities to provide 
occupant comfort while minimizing energy waste. Yet, in general, the 
owners and managers of buildings fail to utilize this technology well. 
I've been in commercial buildings in winter that are running roof top 
chillers on a high rise to cool IT equipment, when simple air to air 
heat exchangers would have done the same thing for a fraction of the 
energy needed.
    In many, perhaps most, cases buildings are never commissioned. 
Commissioning is the last item on the punch list before occupancy, and 
even if completed it is seldom a thorough job. Consequently buildings' 
heating, cooling, ventilation and other systems are never adjusted in 
order to perform correctly.
    A representative of a major commercial building controls company 
recently visited my office. I asked how many of their commercial 
buildings were fully utilizing their building control systems to 
minimize their energy consumption. He estimated that at best 10% of 
their systems were ever commissioned and fewer still are re-
commissioned at any point subsequent to initial installation of the 
systems.
    Even when buildings operate appropriately on day one, the 
complexity of modern controls, and the thousands of mechanical moving 
parts in modern commercial buildings, means that they will not continue 
to operate optimally without ongoing monitoring, maintenance and 
commissioning. This is rarely in the budget, but even more importantly 
these complex systems are not designed for longevity and ease of use. 
Instead, they resemble proprietary black-boxes with future consulting 
revenue potential for the designer, rather than appropriate technology 
to meet the building operators' long-term needs.
    The building that our agency is located in is an unfortunate 
example. We are in a privately-owned high-rise, several floors of which 
house state agencies. Not that many years ago the building was 
renovated, and it has fully automated timing systems and motion sensors 
for the lighting. Yet until recently, due to malfunctioning controls, 
and the difficulty of making adjustments, the lights on most floors 
have been on all night every night. The private offices and conference 
rooms have motion sensors, but many of these have not been adjusted 
correctly, so that the lights stay on for more than an hour even when 
no one is present.
    Tenants also commonly lack incentives to control their own 
electricity, heating, and cooling usage, because they don't pay utility 
bills based on their specific consumption, as separate from other 
occupants of the building. This could be corrected by submetering of 
utilities, which modern technology increasingly has made feasible and 
affordable. In Europe such sub-metering is expected, but in the U.S. it 
remains the exception rather than the rule.
    There is a saying that what is measured can be fixed, but what is 
not measured will be ignored. This is highly applicable to energy 
consumption in buildings. When someone purchases a building or takes 
out a lease, they rarely know what the structure's past energy 
consumption has been or what it's specific energy-related features are. 
If purchasers and prospective tenants knew what their future energy 
bills were likely to be, they would demand efficiency improvements 
before making financial commitments. For this reason, it is essential 
that past energy use of buildings be calculated in a standardized way, 
such as BTU's per square foot, and that these figures be publicly 
available. Then these numbers need to be converted to an easily 
understandable universal ranking system, such as an A to F scale. This 
is being done in several European countries, including the United 
Kingdom, Germany, and Austria. ASHRAE has just announced that it will 
develop such a scale, and in Massachusetts our Zero Net Energy 
Buildings Task Force is recommending that we begin mandating such 
rankings, first for new construction, and eventually for all buildings 
in the state.
    While we have these systemic problems within the construction 
sector, at the same time we also have the technical knowledge and 
design professionals to avoid and solve these problems. It is a 
relatively easy option to set our sights higher and choose a different 
path, one that achieves dramatic increases in energy efficiency, while 
also improving indoor air quality and day lighting. A movement to zero-
energy buildings is within our sights, as California and Massachusetts 
have recognized, with other states giving this goal increasing 
attention.
    One primary barrier to these intertwined and complementary goals is 
one of capital, or `first' costs, and investment in design. We no 
longer build the way we used to a century ago, not just because we have 
better technology and materials, but also because our real estate 
industry does not have incentives to afford the time or the capital to 
invest in new construction the way that humanity has in the past.
    transformational, not incremental, improvements in energy codes
    Massachusetts urges a `step change' in energy codes to reflect the 
policy imperative of moving our buildings away from exorbitant use of 
fossil fuel-generated heat, light and power--the Iced-Tea model--
towards efficient and integrated design. We believe that a dramatic 
shift in energy awareness in the design and management of buildings is 
needed to reduce our long-term energy costs, improve our energy 
security, and address climate change. Massachusetts and several other 
states are acting to update codes, but we urge Congress to consider 
federal action, and a state and federal partnership to ensure an 
adequate response at the state level.
    Historically, energy codes in the U.S. have not been set at the 
federal level. But this is a time for change, and federal leadership on 
energy codes is needed. Moreover, a federal and state partnership could 
reinvigorate the construction industry by raising standards across the 
board, reaching for and achieving high-performance buildings. 
Eventually our buildings will have to be net-zero consumers of fossil 
fuels, so efficient that their consumption can be balanced by on-site 
production of renewable energy, and we need to be designing for that 
future now.
   current code development leads to incremental energy improvements
    Current code updates from the International Codes Council (ICC), 
which creates the
    International Energy Conservation Code, IECC) and ASHRAE are 
iterative, incremental processes that largely protect the status quo of 
building construction. ICC and ASHRAE are non-profit membership 
organizations, essentially private, unelected, undemocratic bodies. 
These organizations do self-select for the most technically minded code 
officials, however, decisions are made by whoever happens to show up at 
meetings, as voting has to be in-person. Votes at IECC are won by 
whoever organizes the most people around their issue. For example, at 
last year's Minneapolis annual meeting over 1,000 people voted on 
requiring sprinkler systems in new residential homes, while only 150 or 
so voted on adoption of most other provisions. These included a package 
of measures to improve energy efficiency by 30% that DOE, NASEO and 
others had worked for two years to develop. The 30% energy efficiency 
improvement vote was taken at 1:30 am on a Sunday morning, and failed 
to pass by five votes. What was passed is estimated to improve energy 
efficiency by 12% to 14%. This is far too timid an improvement. The 
time is now to be much bolder.
     doe should publish a national building code within six months
    We need more advanced building energy efficiency codes and we need 
specific incentive funding to implement these codes and train local 
code officers, builders and contractors.
    During the last Congressional session advocates pushed legislation 
which said that if the latest IECC (2009) does not improve efficiency 
by 30% over the last version, then DOE must write its own code which 
does raise efficiency by 30%. Such legislation should be proposed 
again, including possibly with higher efficiency goals. This would 
substantially improve upon the relatively small efficiency gains that 
typically flow from the ASHRAE and IECC updates.
    DOE has begun development of model energy codes that are 50%, not 
30%, better than existing code. These need to be implemented, and could 
form the basis for a national minimum code in the next two to three 
years. This level of improvement will require more attention to 
building design, including continuous air and radiant barriers in the 
building envelope, higher minimum standards for windows, increased use 
of insulation, and a rethinking of heating and cooling systems; but 
existing off-the-shelf technology can meet these goals.
    In order to provide for state innovation, federal legislation could 
specify that a national code from DOE set an aggressive minimum floor 
which states must adhere to, but each state is free to set even 
stricter standards for its own code. Since there are large climate 
differences among the states, along with economic differences, a 
federal code should preserve the variance in code requirements by 
climate regions.
    We would also recommend that if a federal code is developed, there 
be a requirement to update it every three years, as the IECC and ASHRAE 
do now. Technologies are constantly changing, and much progress would 
be missed by waiting more years for updates. This is a primary reason 
why Massachusetts passed a law mandating that we always update to the 
most recent IECC code, because until recently it had taken us eight 
years between one update and the next one.
    In addition to building codes, efficiency standards for appliances, 
electronics, and other equipment are critical to reducing energy use, 
particularly because `plug-loads' are rising rapidly as a fraction of 
total energy use in buildings. Federal standards for equipment are an 
integral part of ensuring energy smart codes. The performance and 
sizing of heating and cooling equipment in particular need renewed 
federal action, and a commitment to regular future updates. 
Massachusetts has petitioned DOE to set it's own higher performance 
standards for heating equipment; but for all states it is essential 
that the federal bar is raised, and that the new generation of 
renewable heating equipment options are fully developed and promoted.
         specific recommendations for federal code requirements
    Federal Energy Star standards for new buildings need to be improved 
in several specific areas:

          Heating systems should not require leaky buildings--Heating 
        with any fuel should require sealed combustion units. This 
        technology is already in widespread use today, and is far safer 
        and more efficient, not least because it doesn't require a hole 
        in the building shell to vent fumes to the outside.
          Solar thermal--the Energy Star program already has a proposed 
        Advanced New Home Construction package that would require solar 
        water heating in Southern U.S. climate zones (zones 1-3). We 
        would like to see this implemented and consideration given to 
        solar thermal throughout the U.S.
          Higher insulation standards--the same draft Advanced Energy 
        Star package has also proposed 50% improvements in insulation 
        above the latest IECC requirements.
          Move away from forced-hot air heating--heating or cooling 
        with forced air in leaky buildings is a recipe for 
        inefficiency. Hot water heating and cold water cooling is not 
        only more efficient and more comfortable, it is also much more 
        compatible with efficient use of solar thermal, geothermal and 
        biomass pellet or woodchip heating systems. Exemplary heating 
        and cooling systems include radiant floor heating in Northern 
        climates, efficient mini-split ductless heat pumps in mixed 
        climates, and radiant water cooled wall and ceiling panels in 
        cold climates. None of these systems require any ducts, so 
        leaky, dusty, mold-inducing air delivery can be a thing of the 
        past. While traditional air-conditioning is likely here to stay 
        for a while, lets make it compete with other more efficient and 
        healthier technologies.
               `stretch codes'--massachusetts and federal
    There will always be a market for buildings built `beyond code' by 
progressive builders and owners who value leadership in this area. To 
date the EPA and DOE have filled this residential market with the 
Energy Star for Homes program, and left the commercial sector more to 
private and non-profit groups such as the LEED green building programs.
    In Massachusetts, as in many states, there is a growing Energy Star 
for Homes market. Even during the dramatic housing downturn, Energy 
Star homes are retaining value and showing rapid sales. However, the 
Energy Star base requirements are only a 15% energy improvement over 
the 2004 IECC code, and in the higher tier a 35% improvement. These 
goals equate to a Home Energy Rating System (HERS) score for new homes 
of 85 and 65 respectively, where zero would be a zero-energy home.
    Our newly proposed Massachusetts advanced or `stretch' code builds 
on the extensive research and sound building science of the Energy Star 
Homes program. But based on actual buildings constructed in the past 
two years we have proposed a minimum standard HERS score of 60, 
improving to 50 in three years time--roughly 30% to 40% better energy 
performance than current Massachusetts code (which yields a HERS score 
of around 92). Thus, our proposed stretch code would be substantially 
more aggressive than the existing Energy Star Homes program. Last year, 
270 homes built in Massachusetts achieved a HERS score of 60, despite 
there being no financial incentives at that time to go below a score of 
70.
    Our stretch code is paving the way for future improvements to our 
statewide base code, based on 3rd party certified performance and 
heading rapidly towards a zero energy future. A more detailed plan of 
action for our state will be released in March by the Zero Net Energy 
Buildings Task Force commissioned by Governor Patrick last year. 
California has also called for zero net energy buildings in the next 
decade, in quite different climate zones from New England. Matching or 
exceeding the current Massachusetts and California targets would be a 
logical step to take nationwide, and we believe that the program staff 
at the EPA and DOE have done the work to prepare for this opportunity. 
They just need leadership from Congress and the executive branch to 
send the signal to step up the planning and roll out a more forward-
looking Energy Star standard for new home construction.
       existing buildings--renovations, additions, and retrofits
    New construction matters, but particularly in old states like 
Massachusetts, it is just the tip of the iceberg. We have massive 
energy liabilities in our existing building stock, both residential and 
commercial. As previously mentioned, we have a well developed energy 
efficiency retrofit program operated by our electric and gas utilities, 
that is undergoing rapid expansion, but we need to do more.
    NASEO is working to promote Home Performance with Energy Star and 
we are members of the National Home Performance Council. We are 
attempting to more aggressively promote comprehensive energy efficiency 
improvements in existing homes.
    As a result our stretch code also applies to renovations or 
additions to existing residential units, requiring any major projects 
to meet the same 3rd party verified improvements as new construction, 
but with a maximum HERS rating of 70, or in some cases 85, improving to 
60 and 75 respectively in three years time. We are confident that bold 
action will strengthen, not weaken our real estate sector, and add 
green jobs and skills to our workforce.
    For existing construction that is not undergoing major renovations 
or additions--which is most of our housing--we also need to 
dramatically improve efficiency. At present this cannot be done through 
building code requirements, but can be brought about through providing 
financial carrots to building owners. Massachusetts has had such 
incentives for many years, through programs operated by our electric 
and gas utilities, and we are in the process of greatly expanding those 
programs due to legislation passed in 2008.
    We have long had residential energy auditors, insulation 
contractors, and plumbers making our aging housing stock more energy 
efficient. And for decades we have had engineers examining our 
commercial office buildings, city halls, hospitals, and industrial 
facilities replacing outdated lighting, motors, refrigeration 
equipment, and more.
    The measures covered by the programs have varied over time, but 
include steps as simple as caulking and weather-stripping leaky doors 
and windows, and as complex and expensive as switching out a 50-year-
old boiler for a brand new energy-efficient one. Often, commercial and 
industrial customers will get a comprehensive energy audit from 
experienced engineers that will provide a list of more than a dozen 
energy efficiency measures that will reduce energy expenses, cut 
pollution, and improve aging capital.
    These programs have been highly cost effective, delivering great 
benefits to the Commonwealth. These include energy bill savings through 
direct reductions in energy use by homes and businesses that have made 
efficiency upgrades. But the benefits go farther than that. Energy 
efficiency reduces demand for electricity from the regional electricity 
grid, which means that all these measures significantly reduce 
pollution from power plants and forestalls the need to build new 
expensive peaking power plants.
    Under our 2008 law, the state will make energy efficiency programs 
compete on price with traditional energy supply. Utility companies will 
be required to purchase all available energy efficiency improvements 
that cost less than it does to generate power to meet the same energy 
need, ultimately saving money on consumers' electricity bills. And it 
will be done not as an add-on to utility bills, but as an integral part 
of the way utility companies meet their customers' energy needs.
                 multi-family and manufactured housing
    Within the existing building stock, multi-family and manufactured 
buildings stand out for special attention. Such homes represent over a 
quarter of the housing units in the U.S. and comprise 20% of energy 
consumed by all housing units, yet receive little attention in the 
implementation of energy efficiency programs. Saving energy is more 
difficult in such housing, both because many residents are low-income 
and because a large majority are renters. The `split incentive' between 
tenants and landlords is a major barrier to efficiency investments.
    Given the limited program experience to date, now is the time to 
encourage innovative approaches, to evaluate these approaches, and 
based on these evaluations to develop broader programs. We suggest a 
competitive grant program to seek creative solutions to multi-family 
and manufactured housing efficiency. Administered by DOE, this program 
would provide grants to state and local government agencies as well as 
nonprofit organizations to create effective, replicable projects. 
Priority should be given to projects that provide substantial energy 
savings while targeting recipients with the greatest financial need. 
Prioritizing highly cost effective programs with significant matching 
funds will help maximize the return on federal grant funds. We 
recommend funding of about $50 million in the first year, rising to 
about $500 million in year five for multi-family homes.
    In the area of manufactured housing, models in Maine and New 
Hampshire are instructive. We recommend providing rebates through state 
energy offices in cooperation with state housing finance agencies. 
$10,000 rebates to individuals in pre-1976 manufactured homes in order 
for them to move to Energy Star homes would be a good start. $2 billion 
would address 10% of the over two million pre-1976 manufactured housing 
units.
    There are some successful local programs in operation, including in 
California, Massachusetts, and Vermont, but these are few and far 
between. Programs could be developed to encourage retirement of old 
manufactured homes (over 60% of mobile homes are at least 20 years 
old), to invest in efficiency upgrades for new or existing publicly 
assisted housing, or to institute multifamily heating system retrofits.
    Historically, manufactured homes have been some of the least energy 
efficient units, provided for the least financially able members of 
society. Yet such housing is also an efficient method for producing 
well-constructed and sealed homes, from both an air and water tightness 
perspective. This makes manufactured homes some of the lowest hanging 
fruit on a heavily laden tree. Technologies such as structurally 
insulated panels, coupled with energy recovery ventilation systems and 
ductless mini-split heat-pumps can and should transform the 
manufactured homes sector, so that formaldehyde and mold scandals and 
energy poverty are things of the past.
       current examples of step-changes in building construction
    If these recommendations sound bold, let me briefly relate two 
examples that show how major changes in building design are being made 
today.

          Zero Net Energy Buildings in Massachusetts.--In the small 
        town of Townsend, in northern Massachusetts, we learned of a 
        small construction firm building affordable housing with HERS 
        ratings of zero and minus two. These are zero-net energy 
        buildings, using no fossil fuel, and heated and cooled with 
        solar thermal and photovoltaics. Equally remarkable, they are 
        affordable housing units, although the builder has also pre-
        sold several market-rate houses in the same development. This 
        is but one example of a nascent but growing trend across the 
        U.S. and around the world.
          Efficiency and solar heat in Upper Austria.--In Upper 
        Austria, a region about the size and population of Connecticut 
        that gets less sunshine than Montreal, Canada,\2\ the regional 
        government passed legislation last summer requiring solar 
        thermal space heating to be provided on all new residential 
        buildings. This is also a requirement in Israel and Hawaii, 
        where there is considerably more sunshine.
---------------------------------------------------------------------------
    \2\ Data from NASA for Lintz, Upper Austria 1,216 kWh/
m2, and Montreal, Canada 1,319 kWh/m2
---------------------------------------------------------------------------
          In Upper Austria they were able to do this because they also 
        have very strong building energy codes that minimize the number 
        of BTU's needed to heat a home. Their new buildings are 
        currently required to be three times as energy efficient as 
        average existing buildings on a square meter basis. Their 
        energy star equivalent program pushes `Passive Haus' standards 
        that have energy demands less than 10% of existing buildings, 
        and their zero energy homes number in the thousands. They also 
        require all publicly funded buildings to have an energy audit 
        and an energy certificate showing how that building performs on 
        an A-F scale. They now have over 70,000 buildings\3\ with 
        publicly available energy certificates, and seven square feet 
        per capita of solar thermal panels.
---------------------------------------------------------------------------
    \3\ Data from the Energy Agency of Upper Austria: http://
www.esv.or.at/esv/index.php?id=33&L=1
---------------------------------------------------------------------------
          Their stated goals are to reduce building energy use a 
        further 39% by 2030 and to move to 100% renewable heating, 
        cooling and electricity in buildings, thereby achieving zeronet 
        energy buildings sector-wide and statewide.
          In Upper Austria there used to be a significant market share 
        of oil heating, just like the northeastern U.S. states today. 
        In 1999 36% of new homes installed oil heating systems. By 2007 
        this had dropped to less than 1%, and they tell us that there 
        were only 17 new oil heating systems installed in Upper Austria 
        last year. The oil heating industry has disappeared in a 
        decade, yet this has not led to an expansion of natural gas. 
        Instead, renewable energy heating from solar thermal, biomass 
        wood chips and pellets, and biogas from agricultural waste, 
        have grown from an impressive 32% of new installations in 1999 
        to a 76% market share in 2007. Upper Austria now exports their 
        pellet boilers and solar thermal heating and cooling technology 
        throughout Europe. In Massachusetts, we will be hosting our 
        second Upper Austrian delegation this April.
                               conclusion
    We must all look to the future and design and build for it now. 
That requires educating the public, both private citizens and 
companies, on the vast potential for improving the efficiency of our 
buildings. Energy labeling of all homes and commercial space is 
critical, much as refrigerators and cars are labeled today. We need to 
know if our buildings are an `A' or an `F' and be able to make choices 
about the `miles per gallon' equivalent of a building that we are 
considering a 30 year mortgage or a four year lease on. Massachusetts 
is committed to doing this, but we, like Upper Austria, are only a 
small state with big ideas. We encourage a federal--state partnership, 
to raise national standards while allowing state innovation to 
transform our energy landscape.
    I am encouraged by your engagement in this matter, and as my 
testimony has indicated, encourage us all to be bold. I suspect that 
decades from now, no matter how bold we think we are being in this 
process today, we will look back at this time and wish we had been 
bolder.

    The Chairman. Thank you very much.
    Ms. Amann.

   STATEMENT OF JENNIFER AMANN, DIRECTOR, BUILDINGS PROGRAM, 
    AMERICAN COUNCIL FOR AN ENERGY-EFFICIENT ECONOMY (ACEEE)

    Ms. Amann. Thank you, Chairman Bingaman, Ranking Member 
Murkowski, and members of the committee. I appreciate the 
opportunity to testify here today. My name is Jennifer Amann 
and I'm Director of the Buildings Program for the American 
Council for an Energy Efficient Economy. ACEEE is a nonprofit 
organization dedicated to increasing energy efficiency as a 
means of promoting economic prosperity, energy security, and 
environmental protection.
    Buildings in the U.S. account for approximately 40 percent 
of our national energy consumption. As you've noted, energy 
efficiency is the fastest, cheapest, and cleanest energy source 
we have, so tapping this resource in our buildings is a 
critical step toward economic recovery and climate protection.
    In collaboration with a range of stakeholders in the energy 
efficiency, environmental, and business communities, ACEEE is 
developing consensus recommendations for enhancing our existing 
efficiency programs and creating new initiatives that will 
accelerate an overhaul of our building stock. Our 
recommendations include improvements to existing policies, such 
as advanced building codes, appliance and equipment standards, 
and efficiency tax incentives, that have been covered by other 
witnesses or that will be addressed in future hearings.
    These programs have an ongoing role to play in a 
comprehensive suite of efficiency policies and programs, but my 
recommendations on those are covered in greater detail in my 
written testimony.
    Today I wanted to focus my comments on some new programs 
that we're developing to yield deeper levels of energy savings 
and to broaden the reach of our existing programs. 
Specifically, we urge adoption of: first, a building training 
and assessment center program based on the industrial 
assessment center program that DOE has operated successfully 
since 1976. The skills of well-trained technicians, designers, 
and contractors are needed to achieve and maintain buildings 
that operate productively, efficiently, and with minimal 
environmental impact.
    The BTAC program will leverage existing programs at our 
universities, community colleges, vocational tech schools, and 
apprenticeship programs and develop new programs to expand and 
accelerate the numbers of qualified individuals with the 
appropriate skills and capabilities. BTACs would serve as an 
important source of new work force in the field and its 
graduates would be in high demand for their expertise and 
experience.
    Second, comprehensive building energy use disclosure, to 
provide building owners and potential purchasers and renters 
access to the information they need to understand the 
efficiency of a given building and opportunities for 
improvement. Through the program, EPA and-or DOE would develop 
ratings based somewhat on existing rating programs to help 
compare the efficiency of homes and commercial buildings. The 
rating systems would build on these existing ratings and should 
include a measured component based on estimated or actual 
energy use and a modeled component based on building's 
construction, envelope, and major energy systems.
    Public disclosure of building energy ratings should be 
required for all public buildings, and for privately owned 
buildings disclosure should be encouraged for the parties to a 
purchase, finance, or lease transaction, along with annual 
disclosure of measured ratings to tenants of large buildings.
    Third, we recommend a residential retrofit program. Tapping 
into the energy efficiency potential in our homes puts money in 
pockets and creates durable domestic jobs in energy efficiency 
that can never be sent overseas. Congress should act to 
implement a national home efficiency retrofit program, 
expanding on the EPA home performance with Energy Star program 
that now operates in 22 States.
    To encourage greater participation in the program, Congress 
should establish a performance-based rebate system rewarding 
high levels of efficiency with higher rebates. The expanded 
program should include support for the training of contractors 
and home energy raters who would help implement the program.
    This program has the support of more than 160 organizations 
and businesses, including energy and environmental advocates, 
contractors, and their related trade associations.
    Fourth, we recommend a commercial retrofit program that 
would be established to encourage the near-term launch of 
large-scale deep retrofitting of private and publicly owned 
commercial buildings or portfolios of buildings. The program 
would provide an incentive to building owners for efficiency 
improvements of no less than 20 percent, with incentives 
calibrated to encourage 30 percent savings or greater. Partial 
payment of the incentive would be granted upon completion of 
the efficiency project and the remainder conditioned on 
verification of actual performance over a 3-year period. This 
program has support among energy and environmental advocates 
and the commercial real estate community.
    Fifth, we recommend a multifamily and manufactured housing 
program. We propose Congress establish a competitive grant 
program to seek creative solutions to multifamily and 
manufactured housing efficiency. These homes represent more 
than a quarter of building housing units and comprise 20 
percent of residential energy consumption. These homes demand 
special attention because it's proven difficult to implement 
energy efficiency programs in this sector and because of the 
disproportionate numbers of low to moderate income families 
that live in these homes and that have the greatest difficulty 
making efficiency investments without assistance.
    These programs would be administered by DOE with grants 
provided to State and local government agencies, as well as 
nonprofit organizations, to create effective, replicable 
projects. Priority should be given to projects that provide 
substantial energy savings while targeting recipients with the 
greatest financial need. Further details on each of these 
program recommendations can be found in my written testimony.
    In order to succeed, the new programs must receive adequate 
funding and we see several potential mechanisms for allocating 
program funds. State and local stimulus funds may be a source 
of funding for programs with significant administration or 
coordination by State and local governments. Similarly, any new 
stimulus funds can be directed toward the recommended programs.
    Other potential sources include emissions allowances 
resulting from climate legislation or appropriations made as 
part of the normal budget process to allow for startup of 
climate-related programs prior to final passage of climate 
legislation.
    Even if funds are not immediately available, we recommend 
that these programs be authorized so that they're ready when 
and if funds become available.
    If implemented, our recommended policies and programs would 
reduce peak demand by about 41,000 megawatts, which is the 
equivalent to the power produced by 136, 300-megawatt power 
plants. Carbon emission reductions would total approximately 53 
million metric tons in 2030, the equivalent of taking 9 million 
cars off the road. In addition, the savings would amount to 
approximately 3 percent of total projected U.S. energy 
consumption in 2030.
    These policies would also yield significant economic 
benefits, including consumer energy bill savings of $12 billion 
in 2030 alone, and substantial additional building energy 
savings could be achieved with passage of a strong stand-alone 
Federal energy efficiency resource standard.
    So in conclusion, buildings represent the largest energy-
using sector of the U.S. economy. Improving the efficiency of 
our new and existing building stock should be a core component 
of our energy and climate policies. The policies and programs 
recommended here will impact all Americans by reducing energy 
expenditures, creating jobs, and cutting carbon emissions. We 
urge you to give serious consideration to these policies and to 
include them in upcoming energy legislation.
    I'm happy to answer any questions that you may have.
    [The prepared statement of Ms. Amann follows:]
  Prepared Statement of Jennifer Amann, Director, Buildings Program, 
        American Council For An Energy-Efficient Economy (ACEEE)
                                summary
    Buildings in the U.S. account for approximately 40% of our national 
energy consumption. Improving the efficiency of our buildings can free 
up energy resources to reduce the need for additional power generation 
and free up money for productive use and investment in our families, 
communities and enterprises. Energy efficiency is the fastest, 
cheapest, cleanest energy source we have; tapping this resource in our 
buildings is a critical step toward economic recovery and climate 
protection.
    In collaboration with a range of stakeholders in the energy 
efficiency, environmental, and business community, ACEEE is developing 
recommendations for enhancing our existing efficiency programs and 
policies and creating new initiatives that will accelerate an overhaul 
of our existing buildings stock. Our recommendations focus on: 1) 
increasing the availability and adoption of high efficiency appliances, 
equipment, and building components in new and existing buildings; 2) 
training the highly-skilled workforce needed to design, operate and 
maintain buildings and building systems to optimize energy efficiency; 
3) improving information on building energy performance available to 
building owners, operators, purchasers, and renters; and 4) improving 
the efficiency of existing residential and commercial buildings through 
comprehensive building retrofits.
    Specific recommendations include improvements to existing policies 
including advanced building codes, appliance and equipment standards, 
and energy efficiency tax incentives and adoption of new programs to 
retrofit residential and commercial buildings with additional attention 
directed to multifamily and manufactured housing, train a skilled 
workforce to design and operate buildings for optimal energy 
performance, and provide for disclosure of building energy consumption.
    If implemented, these recommended policies and programs would 
reduce peak demand by about 41,000 megawatts with carbon emissions 
reductions totaling approximately 53 million metric tons in 2030.\1\ 
The peak demand impacts are equivalent to 136 power plants of 300 MW 
each. The carbon emissions reductions are equivalent to taking 9 
million cars off the road for a year. In 2030, annual savings would 
total 3.19 quads of primary energy,\2\ including 153 billion kilowatt-
hours (kWh) of electricity and 1,500 billion cubic feet of natural gas. 
These policies would also yield significant economic benefits including 
consumer energy bill savings of $12 billion in 2030. In 2020, impacts 
would be about 50% of the 2030 impacts. Substantial additional energy 
will be saved by the Energy Efficiency Resource Standard.
---------------------------------------------------------------------------
    \1\ Note: These are carbon emissions, not carbon dioxide emissions. 
Carbon dioxide emissions will be 3.67x the carbon emissions.
    \2\ A ``quad'' is a quadrillion Btu's. The U.S. uses about 100 
quads annually.
---------------------------------------------------------------------------
                              introduction
    My name is Jennifer Amann and I am the Director of the Buildings 
Program for the American Council for an Energy-Efficient Economy. ACEEE 
is a nonprofit organization dedicated to increasing energy efficiency 
as a means of promoting economic prosperity, energy security, and 
environmental protection. For more than 25 years, ACEEE has contributed 
in key ways to energy legislation including the Energy Independence and 
Security Act of 2007, the Energy Policy Acts of 2005 and 1992, and the 
National Appliance Energy Conservation Act of 1987. ACEEE's niche is to 
conduct research on successful and promising technologies and programs 
and base our policy recommendations on the results of this research. I 
am here today to provide recommendations for reducing energy 
consumption in buildings through improved implementation of authorized 
DOE programs and through other innovative federal energy efficiency 
policies and programs. I thank you for the opportunity to testify here 
today.
    Buildings in the U.S. account for approximately 40% of our national 
energy consumption.\3\ This doesn't have to be the case. Within our 
homes, businesses, schools, and gathering places there exists a 
tremendous resource of wasted energy that can be captured and put to 
productive use elsewhere. Improving the efficiency of our buildings can 
free up energy resources to reduce the need for additional power 
generation and free up money for productive use and investment in our 
families, communities and enterprises. Energy efficiency is the 
fastest, cheapest, cleanest energy source we have; tapping this 
resource in our buildings is a critical step toward economic recovery 
and climate protection.
---------------------------------------------------------------------------
    \3\ Energy Information Administration. 2008. Annual Energy Outlook 
2009 Early Release. http://www.eia.doe.gov/oiaf/aeo/index.html. 
December. Washington, D.C.: U.S. Department of Energy.
---------------------------------------------------------------------------
    Over the past forty years, energy efficiency has been an important 
factor contributing to U.S. economic growth--while income per capita 
doubled over the period, energy resources to meet the needs of our 
growing economy increased by only 50%.\4\ Moving forward, efficiency 
has an even more critical role to play in addressing our current 
economic downturn, aggressively reducing carbon emissions, and shoring 
up our energy infrastructure. ACEEE studies demonstrate the large 
potential for energy savings in new and existing buildings using 
existing technologies and practices. A recent analysis, focusing on the 
state of Maryland, found that electricity use reductions of 29% by 2025 
are not only achievable, but cost-effective.\5\ Emerging technologies 
offer the promise of even greater savings well into the future.
---------------------------------------------------------------------------
    \4\ Ehrhardt-Martinez, K. and J.Laitner. 2008. The Size of the U.S. 
Energy Efficiency Market: Generating a More Complete Picture. May. 
Washington, D.C.: ACEEE.
    \5\ Eldridge, M. et al. 2008. Energy Efficiency: The First Fuel for 
a Clean Energy Future Resources for Meeting Maryland's Electricity 
Needs. February. Washington, D.C.: ACEEE.
---------------------------------------------------------------------------
    Existing efficiency policies save American citizens and businesses 
money every day while reducing pollution and easing demand on our 
energy infrastructure. Appliance and equipment standards already in 
place will save more than 5 quadrillion Btu, over 4% of U.S. energy 
consumption in 2020.\6\ Building energy codes have contributed to 
reductions in new home and commercial building energy use, savings 
consumers an estimated $1 billion or more per year in energy costs. 
These policies have an ongoing role to play in a comprehensive suite of 
buildings energy efficiency policies and programs.
---------------------------------------------------------------------------
    \6\ Nadel, S., de Laski, A., Eldridge, M., and Kliesch, J. 2006. 
Leading the Way: Continued Opportunities for New State Appliance and 
Equipment Efficiency Standards. Washington, D.C.: ACEEE
---------------------------------------------------------------------------
    New programs and policies can build on the success of these 
programs to yield deeper levels of energy savings and to broaden the 
reach of programs to improve energy efficiency throughout our diverse 
building stock. These policies will build on our growing understanding 
of building science; promote the latest best practices in construction, 
retrofits, and building operations and maintenance; and enable a new 
generation of highly-skilled building professionals to keep our 
building operating productively, efficiently, and with minimal 
environmental impact.
    The American Recovery and Reinvestment Act of 2009 demonstrates 
Congress' recognition that building energy efficiency improvements can 
play an important role in saving consumers and businesses money and 
creating new jobs here in the U.S. The legislation provides a mix of 
grants, rebates, loan guarantees, and tax incentives for retrofitting 
federal buildings and low-income housing, expanding state-based 
efficiency programs, and increasing adoption of high-efficiency 
appliances and equipment. These investments in a more efficient 
buildings stock are a good start, but more needs to be done. We have a 
great opportunity to build on this momentum by strengthening existing 
buildings efficiency policies and creating new programs to address 
certain critical gaps.
    In collaboration with a range of stakeholders in the energy 
efficiency, environmental, and business community, ACEEE is developing 
recommendations for enhancing our existing efficiency programs and 
policies and creating new initiatives that will accelerate an overhaul 
of our existing buildings stock. Our recommendations focus on: 1) 
increasing the availability and adoption of high efficiency appliances, 
equipment, and building components in new and existing buildings; 2) 
training the highly-skilled workforce needed to design, operate and 
maintain buildings and building systems to optimize energy efficiency; 
3) improving information on building energy performance available to 
building owners, operators, purchasers, and renters; and 4) improving 
the efficiency of existing residential and commercial buildings through 
comprehensive building retrofits.
                        specific recommendations
    Below we provide a number of specific policy recommendations; some 
are relatively minor tweaks of existing programs while others are new 
programs that will require significant funding to succeed. Following 
the recommendations, we discuss potential mechanisms for funding any 
new programs.
Improving Existing Policies
    Advanced Building Codes: In order to meet long-term energy goals, 
it is important that new buildings be as energy-efficient as is 
economically justified, since it will be much more expensive to 
retrofit these buildings after they are completed. Model code 
organizations are in the process of updating building codes to achieve 
aggressive levels of savings. The International Energy Codes Council 
recently adopted changes to residential building codes and will 
consider additional changes in the coming months. The American Society 
of Heating Refrigerating and Air-Conditioning Engineers (ASHRAE) has 
set a 30% savings target for the pending 2010 update of their model 
commercial building code. To support these efforts, the 2007 House 
energy bill contained a provision calling for DOE and states to update 
energy codes for new buildings. This provision directed DOE to support 
efforts by model code organizations to update building codes to reduce 
energy use of new buildings by at least 30% by 2010, and 50% by 
2020.\7\ As new codes are finalized, states were directed to either 
adopt these model codes or their own state-specific equivalents. 
Funding and technical assistance to states was authorized. This 
provision should be adopted in 2009, with the date for the second new 
code accelerated to 2016. Six years between code upgrades is 
reasonable, particularly since the 50% savings level is already being 
promoted by federal tax incentives enacted by Congress in 2005.
---------------------------------------------------------------------------
    \7\ The 50% goal is a qualification level for energy efficiency tax 
credits adopted by Congress in 2005.
---------------------------------------------------------------------------
    In addition, Congress should consider provisions to allow higher 
minimum equipment efficiency requirements in building codes (i.e., 
levels exceeding federal equipment efficiency standards) provided the 
code offers an explicit pathway for meeting code levels with equipment 
just meeting federal minimums (e.g., by including other efficiency 
measures to make up for the lower efficiency equipment).
    ACEEE estimates that by 2030, this building code provision would 
save 1.4 quads of energy (including 75.7 billion kWh of electricity and 
567 billion cubic feet of direct natural gas), with carbon emissions 
reductions totaling approximately 23.4 million metric tons in 2030. The 
policy would also yield significant economic benefits including net 
energy bill savings for customers of $5.13 billion in 2030.
    Appliance and Equipment Standards: Federal minimum efficiency 
standards have been set by Congress on more than 40 products. New 
legislation should add a few additional products, based on negotiations 
now underway with industry to develop consensus recommendations on 
several products. New legislation should also clarify aspects of the 
process by which DOE periodically revises these standards including: 
clarifying DOE's authority to set multiple performance standards for a 
product (this was in the House and Senate 2007 energy bills, but 
dropped from the final bill); directing DOE to consider the impact of 
carbon emissions and the impact of the energy savings on energy prices 
when setting standards; strengthening the ``rebuttable presumption 
test'' for setting standards when efficiency savings are highly cost-
effective, and setting standards on ``BR'' reflector lamps, a major 
loophole in current DOE standards. We understand the Committee is 
likely to have another hearing on appliance and equipment efficiency 
standards and we will provide further comments for that hearing, 
including energy savings estimates.
    Energy Efficiency Tax Incentives: In addition to the recent changes 
to the tax incentives available for energy efficient equipment and 
building upgrades, Congress should adopt long-term extensions of the 
tax credit for high efficiency new homes. The new homes credit has been 
particularly effective, spurring the construction of more than 20,000 
highly-efficient homes in 2007 (2008 data not yet available). Also, the 
amount of the efficient commercial buildings tax deduction should be 
increased from $1.80 to $3 per square foot, as participation at $1.80 
per square foot is very small. To increase the effectiveness of the tax 
incentives, Congress should also make certain policy changes such as 
simplifying and clarifying the commercial building tax incentive 
paperwork requirements and including labor costs in any extension of 
residential retrofit credits (for labor-intensive measures such as 
insulation and duct sealing, a credit limited to a small percentage of 
material cost has very little value or impact). We also recommend 
adoption of a tax credit to cover the costs of approved certifications 
for contractors. We have not yet analyzed the energy savings from such 
a provision.
New Policies and Programs
    Building Training and Assessment Center Program: Higher performance 
buildings that save energy by operating with greater energy efficiency 
are readily attainable today. These buildings are dependent on well-
trained technicians, designers, and contractors to perform optimally. 
The effort and resources to properly train, recognize, and reward these 
individuals can yield enormous benefits given high and unpredictable 
energy costs. By carefully designing and engineering commercial and 
institutional buildings to be more energy-efficient, up to 50% of 
energy costs can be eliminated for owners of new buildings and 
potential savings in existing buildings of 20% to 30% or more. However, 
even well-designed commercial buildings may run 10-15% below expected 
energy performance levels because of poor installation, poor 
commissioning, and operational errors. Improving building energy 
efficiency is a cost-effective way to make buildings more affordable, 
improve comfort, and reduce costs for building owners.
    We recommend that Congress establish a Building Training and 
Assessment Center (BTAC) program, based on the Industrial Assessment 
Center (IAC) program that has operated since 1976. This program has 
been one of DOE's most effective programs, training industrial 
engineers and providing them with practical hands-on experience by 
providing free energy audits to industrial firms. While there are 
existing building engineer and building and equipment technician 
training programs in some parts of the country, there is a fundamental 
need for more students trained in these skills and for increased levels 
of hands-on training addressing the real-world problems encountered in 
the field. The BTAC program will focus on leveraging existing programs 
at universities, community colleges, vocational-tech schools (secondary 
level), and apprenticeship programs, and developing new programs to 
expand and accelerate the numbers of qualified individuals with these 
skills and capabilities. BTACs would serve as an important source of 
new workforce for the field, and its graduates would likely be in high 
demand for their experience and expertise, as have the graduates from 
the IAC program. Graduates from the programs will be prime candidates 
for high-paying, high-skilled jobs.
    In the BTAC program, engineering students in universities across 
the country will work closely with professors to provide free building 
energy assessments. The audits performed for commercial and 
institutional buildings will emphasize easy-to-execute, inexpensive 
energy saving measures for the buildings. The BTAC program will improve 
the operational efficiency and performance of thousands of buildings 
across the country, creating energy and dollar savings for owners and 
tenants. In addition, the technicians and building operators trained in 
the program will have the skills needed to maintain these energy 
savings and will be guaranteed practical experience in real buildings. 
By providing continuing education for building technicians, BTACs can 
work with local firms and technicians to improve capacities already in 
the market. A more detailed description of the program is attached to 
this testimony.
    Building Energy Disclosure: Building owners and potential 
purchasers and renters rarely have access to the information they need 
to understand the energy efficiency of a given building and 
opportunities for improvement. This information can motivate owners to 
upgrade their buildings, and help prospective buyers and tenants select 
more efficient buildings. Through the Energy Star buildings and new 
homes programs, EPA has a good track record in this area. Moving 
forward, a more comprehensive and effective building energy use 
disclosure program can have a much greater impact.
    We recommend that EPA and/or DOE develop a rating system designed 
primarily to help home buyers and renters compare the energy efficiency 
of homes, and rating systems to help buyers and tenants compare the 
energy efficiency of commercial buildings of the same type. The rating 
systems should include an operational component based on estimated or 
actual source energy use (adjusted for weather and operating 
conditions) and an asset component based on the construction, envelope 
and major energy systems. The rating methods may be different for new 
and existing buildings but should attempt to yield comparable ratings. 
Existing ratings such as the Home Energy Rating System and the Energy 
Star benchmarking system for commercial buildings may be the basis for 
these ratings. To ease comparisons, the rating systems should include 
the efficiency of a similar building that meets the model building 
energy code as of the date of the rating and of a similar building that 
meets Energy Star criteria.
    These rating systems should form the basis for building energy 
disclosure requirements. Rating and public disclosure of building 
energy consumption should be required for all public buildings. For 
privately-owned buildings, disclosure should be encouraged for the 
parties to a purchase, finance or lease transaction along with annual 
disclosure of operational ratings to tenants of large buildings. The 
program should include provisions for DOE and EPA to work with states, 
counties and local governments to implement programs that encourage 
building owners to have publicly accessible certificates showing the 
individual building's performance relative to similar buildings, the 
building's energy efficiency potential, and the location and type of 
transit services within walking distance of the building.
    If implemented, building disclosure will directly save 
approximately 8.2 billion kWh of electricity and 68 billion cubic feet 
of direct natural gas, with carbon emissions reductions totaling 
approximately 2.7 million metric tons in 2030. The policy would also 
yield significant direct economic benefits including energy bill 
savings for customers of $580 million in 2030. These are only direct 
benefits from assessments conducted under the program. In addition, the 
increased number and quality of building engineers and technicians will 
enable substantial additional energy savings which we have not 
attempted to quantify.
    Residential Retrofits: The untapped potential of our homes to 
operate efficiently is a drag on consumer spending, as dollars are 
wasted on energy. Tapping in to this potential puts money in pockets 
and creates durable, domestic jobs in home efficiency that can never be 
sent overseas. Congress should act immediately to implement a national 
home efficiency retrofit program to save Americans money and stimulate 
the economy. This program would expand the EPA Home Performance with 
Energy Star comprehensive retrofit program that now operates in 22 
states and should encourage much greater participation in the program 
by establishing rebates for homes that undertake comprehensive energy 
efficiency retrofits. The rebate would be performance based, rewarding 
higher levels of energy efficiency improvement with higher rebates. 
Funding for the state-administered rebates could initially come out of 
stimulus funds being given to states and cities, with longer-term 
funding provided under climate legislation. The expanded program should 
include support for the training of contractors and home energy raters 
who would help implement the program. A more detailed description of 
the program is attached to this testimony.
    Significant environmental and economic benefits would result. For 
homeowners, the benefits are meaningful and immediate. The average 
homeowner will spend around $2,300 on energy bills this year, and a 
performance retrofit will likely reduce these costs by about 25%, 
corresponding to nearly $6,000 in energy savings through the 10th year. 
This money represents extra cash for necessities or disposable income 
that will be injected back into the larger economy. At a national 
scale, the benefits of home retrofits are enormous. If the program 
reaches a million homes per year the 10 year energy savings would be 
enough to fully power about 15 million homes for a year. Scaling up the 
home efficiency industry would provide about 50,000 net jobs. This 
program has the support of more than 160 organizations and businesses 
including energy and environmental advocates, contractors, and related 
trade associations.
    If implemented, residential retrofits will save approximately 26 
billion kWh of electricity and 560 billion cubic feet of direct natural 
gas, with carbon emissions reductions totaling approximately 13.3 
million metric tons in 2030. Energy savings in 2030 total 0.84 quads 
with energy bill savings for homeowners of $3.1 billion in that year.
    Commercial Retrofits: Improving the efficiency of commercial 
buildings can yield higher returns for owners, increase tenant 
retention, and improve the productivity of workers, students, and 
others using the facilities. Congress should establish a program that 
would encourage the near term launch of large scale, deep retrofitting 
of private and publicly owned commercial buildings or portfolios of 
buildings. The program would provide an incentive to building owners 
for efficiency improvements based on demonstrated energy savings of no 
less than 20% with incentives calibrated to encourage 30% savings or 
greater. The Energy Star Building benchmarking program would be used to 
document and verify performance and the incentive would take the form 
of a rebate per square foot. A loan guarantee, proportional to the 
targeted energy savings level, would be established to enable upfront 
investment in energy efficiency projects. Partial payment of the 
incentive would be granted upon completion of the efficiency project 
and with the remainder of the incentive conditioned on verification of 
actual performance over a three year period. This proposal was 
initially developed by the Real Estate Roundtable and NRDC. This would 
be another program for which initial incentives might come out of 
stimulus funds, with long-term funding incorporated into climate 
legislation.
    ACEEE estimates that commercial retrofits would save approximately 
40 billion kWh of electricity and 266 billion cubic feet of direct 
natural gas, with carbon emissions reductions totaling approximately 
11.9 million metric tons in 2030. Energy savings in 2030 total 0.67 
quads with energy bill savings for businesses of $2.6 billion in that 
year.
    Multi-Family and Manufactured Housing: Multifamily buildings and 
manufactured (mobile) homes offer a vital opportunity to save 
significant amounts of money through energy efficiency program 
implementation. These housing types represent more than a quarter of 
U.S. housing units and comprise 20% of residential energy consumption. 
Multifamily and manufactured homes demand special attention because it 
has proven difficult to implement efficiency programs targeting these 
homes and the disproportionate numbers of low to moderate income 
families have the greatest difficulty making efficiency investments 
without assistance.\8\ Given the limited experience with such programs 
to date, we recommend a process that will encourage a variety of 
innovative approaches for trial and evaluation. The most successful 
approaches could be developed into broader programs.
---------------------------------------------------------------------------
    \8\ According to the 2005 Residential Energy Consumption Survey 
(EIA 2007), 71% of households in multi-family buildings and 80% of 
households in manufactured housing are low-income (earning less than 
$40,000), while 28% in each housing type are living below the poverty 
line ($20,000).
---------------------------------------------------------------------------
    Past experience has shown that multifamily buildings have the 
potential to realize energy efficiency savings up to, and even 
exceeding, 20%. To tap the potential savings, we propose that Congress 
establish a competitive grant program to seek creative solutions to 
multifamily and manufactured housing efficiency. These programs would 
be administered by DOE, with grants provided to state and local 
government agencies as well as non-profit organizations to create 
effective, replicable projects. Priority should be given to projects 
that provide substantial energy savings while targeting recipients with 
the greatest financial need. Prioritizing highly cost effective 
programs with significant matching funds will help maximize the return 
on investment of federal grant funds. A more detailed description of 
the program is attached to this testimony ACEEE's preliminary estimates 
indicate that this program would yield 0.15 quads of energy savings in 
2030, with consumer energy bill savings of $570 million and carbon 
emissions reductions of 2.4 million metric tons.
    Energy Efficiency Resource Standard: Though not specifically a 
buildings energy efficiency policy, the substantial majority of savings 
from an energy efficiency resource standard would come from energy 
efficiency improvements in residential and commercial buildings. 
Providing each major electricity and natural gas distributor with a 
simple and equitable target for achieving energy savings will serve to 
drive investment in cost-effective energy efficiency as an energy 
resource for large-scale acquisition. Eighteen states have enacted 
successful energy efficiency resource standards; a national policy 
would expand the savings and benefits throughout the country and yield 
national emissions reduction and price reduction effects that would 
benefit all states, including those that have already enacted the 
standard. ACEEE estimates that by 2020, a well-designed federal energy 
efficiency resource standard would reduce peak demand by about 90,000 
megawatts with carbon emissions reductions totaling approximately 260 
million metric tons in 2020. The policy would also yield significant 
economic benefits including net energy bill savings for utility 
customers of $144 billion and the creation of 260,000 net jobs. Our 
analysis only looks at energy savings targets through 2020, and thus 
energy savings drop off somewhat in 2030 as measures installed in 
earlier years wear out. If targets are increased over the 2020-2030 
period, much higher 2030 savings would result.
                    funding the recommended programs
    In order to succeed, the new programs we recommend must receive 
adequate funding. We see several potential mechanisms for allocating 
the necessary program funds. State and local stimulus funds may be a 
source of funding for programs with significant administration or 
coordination by state and local governments, such as the Residential 
Retrofit and Multifamily and Manufactured Housing program. Similarly, 
any new stimulus funds could be directed toward the recommended 
programs. Other potential sources include emissions allowances 
resulting from climate legislation or appropriations made as part of 
the normal budget process to allow for start up of climate-related 
programs prior to final passage of climate legislation. Even if funds 
are not available immediately, we recommend that these programs be 
authorized so they are ready when and if funds become available. 
Several new programs were authorized in the Energy Policy Act of 2005 
and Energy Independence and Security Act of 2007 and first funded under 
the American Recovery and Reinvestment Act. We anticipate a similar 
process with emerging 2009 energy legislation authorizing programs that 
could be funded under future climate legislation.
                            overall savings
    ACEEE has developed estimates of energy savings and carbon 
emissions reductions associated with each of the recommended policies 
and program. The table below summarizes our preliminary estimates of 
savings for each provision we discuss. Together, the recommended 
improvements to existing policies and adoption of new policies and 
programs will save 3.19 quads of primary energy in 2030, avoiding 
41,000 mega-watts of peak demand and creating annual consumer energy 
bill savings of $12 billion. The peak demand reductions are equivalent 
to the output of 136 300-MW power plants. Carbon emissions reductions 
from the buildings programs will total approximately 53 million metric 
tons in 2030, the equivalent of taking 9 million cars off the road.\9\ 
Substantial additional energy will be saved by the Energy Efficiency 
Resource Standard.
---------------------------------------------------------------------------
    \9\ Note: Based on 6 metric tons of CO2 per vehicle per 
year.
---------------------------------------------------------------------------
                               conclusion
    Buildings represent the largest energy using sector of the U.S. 
economy. Improving the energy efficiency of our new and existing 
building stock should be a core component of our energy and climate 
policies. The policies and programs recommended above will impact all 
Americans by reducing energy expenditures, creating jobs, and cutting 
carbon emissions. We urge you to give serious consideration to these 
policies and to include them in upcoming energy legislation.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The Chairman. Thank you very much.
    Mr. Hubbell, go right ahead.

     STATEMENT OF WARD HUBBELL, PRESIDENT, GREEN BUILDING 
                    INITIATIVE, PORTLAND, OR

    Mr. Hubbell. Mr. Chairman, Ranking Member Murkowski, and 
Senators: I appreciate the opportunity to come and talk to you 
today. I'd like to talk to you about voluntary green building 
rating systems and the role that we have seen that they can 
play in accelerating our common objectives of improving our 
energy efficiency in buildings.
    I represent the Green Building Initiative, which is a 
nonprofit organization dedicated to accelerating the adoption 
of green building practices by mainstream builders and 
designers. First let me say that we strongly support the 
increased focus on improving the energy efficiency of existing 
buildings. New building design remains a very important issue, 
but existing buildings represent a much larger opportunity for 
improvements.
    According to the DOE's building data base, there are fewer 
than 200,000 new commercial buildings constructed each year 
versus more than 5 million that exist today. So the opportunity 
for improvement there is fairly obvious.
    My organization owns the U.S. rights to the Green Globes 
Environmental Assessment and Rating System for Commercial 
Buildings. Green Globes is web-based and interactive and 
therefore easy to use and affordable for any type of building 
or budget. Green Globes includes two modules, one for new 
construction and one for existing buildings. They can be used 
separately or together to create an ongoing cycle of 
benchmarking, measurement, and improvement.
    Because of its affordability and ease of use, Green Globes 
has been used to evaluate dozens of U.S. Federal buildings as 
well as State and local government facilities, like the 
Arkansas Department of Environmental Quality Headquarters and 
the Summit County, Colorado, Recycling Center. Green Globes has 
been used by higher education institutions, like Drexel 
University, who recently certified their entire campus, and a 
number of local school districts.
    It's also been used by a growing list of global 
corporations like Dow Chemical and Newell Rubbermaid that need 
a credible but cost-effective certification for a large 
portfolio of commercial buildings.
    Voluntary green rating systems like Green Globes help 
incentivize building design and building operation in three 
important ways. First, they define goals beyond mandatory code 
in critical areas such as energy conservation and carbon 
reductions.
    Second, they provide the means to measure progress against 
these goals so that building owners can set priorities, measure 
outcomes, and plan improvements.
    Third, rating systems create a market dynamic that rewards 
those who go beyond what is required. The financial sector, for 
example, has begun to reward green certification through green 
insurance policies and green mortgages, and there is mounting 
evidence supporting the marketing benefits of green building 
certification.
    Now, given the interest and goals of this committee, I 
would now like to describe how Green Globes addresses energy 
efficiency and carbon reduction specifically. To our knowledge, 
Green Globes allocates a greater percentage of its points 
toward energy conservation than any other comprehensive green 
building rating system in operation today. More than a third of 
its points are weighted in energy and a building must first be 
at least 25 percent more efficient than average before earning 
any points in energy.
    Our system is integrated with U.S. EPA's Energy Star 
program and benchmarks against actual building data from the 
building Department of Energy CBECS data base. We currently 
report on carbon emissions based on direct energy consumption 
and in our next version of the standard we will require a 
performance goal that is based on calculating carbon dioxide 
equivalency in order to reflect the true carbon footprint of 
the building.
    We will also incorporate scoring to reflect cradle-to-grave 
carbon emissions and embodied energy of hundreds of common 
building assemblies, so that material selections can also be 
evaluated against global climate impacts.
    Green Globes is the only green building rating system that 
requires a rigorous onsite building inspection prior to 
certification, and will soon become the first and only American 
national standard for commercial green buildings. A similar 
ANSI standard, I should note, for residential green building 
was recently published by the National Association of Home 
Builders and the International Code Commission.
    In conclusion, I'd like to leave the committee with three 
observations. First, green design is important, but it's only 
part of the equation. Effective building operation and 
maintenance is necessary for substantial nationwide reductions 
in energy use and carbon emissions.
    Second, although good energy benchmarking data exists 
through the Department of Energy and EPA's Energy Star program, 
there is a need for better data on building performance. The 
State of California's Cal Arch data base appears to be a good 
model and we would encourage the DOE to look closely at it.
    Finally, while many will follow good green design and 
construction practices because it's the right thing to do, many 
more will do so for an economic return. For that reason, better 
information on the economic benefits of certified green 
buildings will likely increase their numbers.
    Thank you very much.
    [The prepared statement of Mr. Hubbell follows:]
     Prepared Statement of Ward Hubbell, President, Green Building 
                        Initiative, Portland, OR
    Chairman Bingaman, Ranking Member Murkowski and members of the 
committee, thank you for the opportunity to discuss voluntary green 
building rating systems and the role they can play in helping to 
increase the energy efficiency of buildings nationwide.
    I represent the Green Building Initiative, a non-profit 
organization dedicated to accelerating the adoption of green building 
practices among mainstream design and building professionals.
    First let me say that we strongly support the increased focus on 
improving the efficiency of existing buildings. While new building 
design remains a very important issue, existing buildings represent a 
much larger opportunity for energy improvements due to sheer numbers.
    On average, there are fewer than 200,000 new commercial buildings 
constructed each year, versus 5.5 million that exist today, many of 
which could be made significantly more energy efficient.
                          about green globes
    My organization owns the US rights to the Green Globes 
environmental assessment and rating system for commercial buildings. 
Green Globes is unique in that it is web-based and interactive, and 
therefore easy to use and affordable for any building type or budget.
    Green Globes includes two modules--one for new construction and the 
other for existing buildings. They can be used separately or together 
to create an ongoing cycle of benchmarking, measurement and 
improvement.
    Because of its affordability and ease of use, Green Globes has been 
chosen for evaluating buildings:

   By federal agencies such as the US Departments of Health and 
        Human Services, Interior, Veterans Affairs, State and the 
        General Services Administration.
   By local governments like Summit County, Colorado; and state 
        agencies such as the Arkansas Department of Environmental 
        Quality;
   By higher education institutions like Drexel University and 
        a number of local school districts; and
   By a growing list of global corporations with a need for 
        credible but cost effective certification.
       how green rating systems can accelerate energy efficiency
    Voluntary green building rating systems like Green Globes can help 
incentivize better building design and operation in three important 
ways:

   First, they define goals beyond mandatory codes in critical 
        areas such as energy conservation and carbon reductions.
   Second, they provide the means to measure progress against 
        these goals so that building owners can set priorities, measure 
        outcomes and plan improvements.
   And third, rating systems create a market dynamic that 
        rewards those who go beyond what is required. Private sector 
        incentives such as green insurance products and green mortgages 
        are evidence of the financial sector's response to green 
        certification and there is a growing body of information 
        supporting the marketing benefits of green building 
        certification.
                        green globes and energy
    Given the interests and goals of this committee, I would now like 
to describe how Green Globes addresses energy efficiency and carbon 
reduction.
    To our knowledge, Green Globes allocates a greater percentage of 
its points toward energy conservation than any other comprehensive 
green building rating system in operation today. More than a third of 
our points are weighted in energy and a building must be at least 25% 
more efficient than average before earning any points for energy 
consumption.
    Our system is integrated with US EPA's ENERGY STAR program and 
benchmarks against real building data from the US Department of 
Energy's Commercial Buildings Energy Consumption Survey (or CBECS) 
database.
    We currently report on carbon emissions based on direct energy 
consumption and in the next version of our tool, we will require a 
performance goal that is based on calculating carbon dioxide 
equivalency (or CO2e). Additionally, the cradle to grave 
carbon emissions and embodied energy of common building assemblies has 
been addressed and weighted helping teams to evaluate their material 
selections against global climate impacts as well.
    Because credibility is a key to the success of an organization such 
as ours, it is also worthwhile to note that GBI has a rigorous third-
party assessment requirement. Highly trained and qualified assessors 
review paperwork to assess evidence of compliance to our protocols as 
well as visit the building prior to awarding a Green Globes 
certification. We are the only green building rating system to include 
site visits as a requirement to certification.
    Finally, GBI has further elevated the level of rigor expected of 
green building rating systems by being the first to take a commercial 
building rating system through a third-party codified consensus 
process. As such, GBI is on track to release this year the first 
American National Standard for commercial green buildings, which will 
incorporate the improvements mentioned earlier in my testimony.
    I will also note that there is already an American National 
Standard for residential green building, which was recently published 
by the National Association of Home Builders and the International 
Codes Council. Truly, these organizations and ours are working to make 
mainstream buildings and the concept of going `beyond code' more than 
just a lofty goal.
                               conclusion
    In conclusion, I'd like to leave the committee with three 
observations:

          1. Green design is important, but it's only part of the 
        equation. Effective building operation and maintenance is 
        necessary for substantial nationwide reductions in energy use 
        and carbon.
          2. Although good energy benchmarking data exists through the 
        Department of Energy, and has been built upon by the EPA 
        through the Energy Star program, there is a need for more 
        Energy Star tools and better data on building performance. I 
        note for the committee that the state of California's Cal Arch 
        database appears to be a model worth investigation and we would 
        encourage the federal government to look closely at it and 
        other efforts that can further build and improve upon on our 
        existing baseline data.
          3. Finally, while many will follow good green design, 
        construction, and operations practices because it's the right 
        thing to do, many more will do so for an economic return on 
        investment. For that reason, more and better information on the 
        economic benefits of certified green buildings and Energy Star 
        buildings will likely increase their numbers.

    The Chairman. Thank you very much.
    Mr. Zimmerman, go right ahead.

 STATEMENT OF CHARLES ZIMMERMAN, VICE PRESIDENT, INTERNATIONAL 
DESIGN AND CONSTRUCTION, WAL-MART STORES, INC., BENTONVILLE, AR

    Mr. Zimmerman. Chairman Bingaman, Ranking Member Murkowski, 
and distinguished members of the committee: My name is Charles 
Zimmerman. I'm International Vice President of Design and 
Construction for Wal-Mart Stores, Inc., and I'd like to thank 
you for your work on this important issue, for holding this 
hearing today, and for inviting us to appear.
    Since energy is Wal-Mart's second largest operating 
expense, it should be no surprise that we have been focused on 
energy efficiency practically since our founding. We have 
always recognized what many others have not: Energy truly is a 
controllable expense.
    Because nearly one-third of Wal-Mart's energy consumption 
is in the form of lighting, we have developed over the years 
one of the most energy efficient lighting systems in the world. 
In fact, the installed lighting load in one of our newer stores 
is nearly 50 percent less than the baseline requirements 
established in the Energy Policy Act of 2005. This truly 
innovative system results in the fact that during daylight 
hours our sales floor lighting is either off or significantly 
dimmed. This is possible thanks to a sophisticated daylight 
harvesting system comprised of hundreds of skylights per store, 
that are connected to sensors and state-of-the-art control 
technologies. This allows our sales floor lighting system to 
continually modulate the amount of energy needed based on the 
natural light available.
    This system is so dynamic that it even gradually ramps the 
lighting levels up and down as clouds pass over the store. The 
result is a building where most of the lighting is dynamic and 
only on to the degree that conditions warrant. This is just 
lighting. Similar efforts are under way with HVAC and 
refrigeration.
    Recently, at the request of Wal-Mart, Lennox International 
has developed a new rooftop heating and air conditioning unit 
that it has marketed as being, and I quote, ``the most 
efficient unit of its kind,'' end quote. Lennox also states 
that this equipment is up to 66 percent more efficient than 
U.S. Department of Energy regulations. Today every rooftop unit 
purchased in the U.S. and Canada for all of our new stores and 
retrofits is this Lennox super-high efficiency unit.
    Of course, as efficient as all this equipment is, without 
proper control technology it will never meet expectations. That 
is why every Wal-Mart store in the U.S. includes a 
sophisticated energy management system that allows us to 
monitor and control the lighting, temperature, humidity, and 
refrigeration in each and every one of our stores from our home 
office in Bentonville, Arkansas. If an associate in Denver 
leaves the door to a walk-in cooler open, we know it. If a 
store manager in Bernalio overrides the daylight harvesting 
system, we know it. If a freezer in Ketchikan is icing up and 
needs defrosting, we know it, and we can do something about it 
from Bentonville.
    As efficient and forward-thinking as our energy practices 
have always been, we have very aggressive goals in our 
sustainability and energy efficiency efforts for the future as 
well. In October 2005 we announced plans to reduce the 
greenhouse gas emissions in our already energy efficient 
existing buildings by another 20 percent by 2012. We also 
announced plans to develop a new store prototype that will 
increase efficiency by another 25 to 30 percent by October 
2009.
    So how are we doing in achieving these goals? With regards 
to our existing stores, we recently approved capital for this 
year alone for more than 1,200 energy-related retrofit projects 
in our 4,000 U.S. stores. This is on top of a similar program 
last year and more than likely a similar program next year. A 
majority of these projects have paybacks between 2 and 3 years. 
When it comes to our new store program, we have been equally 
aggressive and have seen promising results there as well.
    As proud as we are of these accomplishments and 
innovations, we're even more proud to share what we are 
learning with everyone, including our competitors, like Target, 
Best Buy, and Costco, and several Federal agencies like the 
EPA, DOE, and OMB. The best thing about the information we are 
sharing is that it's not theory; it is proven results of real 
initiatives with real paybacks.
    While Wal-Mart is not waiting for legislation to cause us 
to act proactively in the area of energy efficiency, we would 
encourage Congress to continue to look at new incentives that 
will help others to act proactively as well, whether it be 
expanding the penetration of smart metering or smart grid 
technologies or adopting energy efficient building codes which 
set a floor for building performance to ensure that the lowest-
hanging fruit of efficiency upgrades are met at abroader range 
of buildings.
    We hope that our experience proves insightful and helpful 
and we stand ready to assist you in any way we can.
    Finally, as you contemplate energy policy we encourage you 
to remember the every day Americans like the roughly 150 
million shoppers who pass through our U.S. stores every week. 
More than ever before, we see these consumers struggling to 
make ends meet. We see them choosing between healthy food or 
their prescription medication. We see them leaving the toys out 
of the cart to make room for baby formula and diapers.
    At Wal-Mart our energy efficiency practices not only help 
us save energy and protect the environment; they also help us 
keep costs low for our consumers.
    We at Wal-Mart applaud Congress in its efforts to 
communicate the necessity and the benefits of energy 
efficiency.
    Thank you for your time and allowing me to speak on behalf 
of Wal-Mart on this very important topic, and we look forward 
to working with you to effectively and constructively address 
these issues. Thank you.
    [The prepared statement of Mr. Zimmerman follows:]
Prepared Statement of Charles Zimmerman, Vice President, International 
    Design and Construction, Wal-Mart Stores, Inc., Bentonville, AR
    Chairman Bingaman, Ranking Member Murkowski and distinguished 
Members of the Committee:
    My name is Charles Zimmerman, and I'm Vice President of 
International Design and Construction for Wal-Mart Stores, Inc. In my 
current role, I'm responsible for coordinating the Architectural and 
Engineering System Design for all of our international retail 
facilities.
    Prior to joining Wal-Mart's international division earlier this 
month, I was the U.S. Vice President of New Prototype Development and 
the captain of the Sustainable Buildings Network, where I oversaw our 
company's efforts to make our buildings more energy and water 
efficient, and lower their overall environmental impact. In that role, 
I led a team of architects and engineers to experiment, pilot, and 
deploy a range of clean technologies in our buildings. I helped design 
Wal-Mart's most recent two experimental stores--where we test a range 
of emerging technologies in real world applications; and then develop 
our fleet of High Efficiency stores across the country where we pilot 
promising technologies from our experimental stores to see how they 
succeed in different climatic regions; and finally deploy the most 
successful technologies across all our new store prototypes and into 
our retrofit of existing stores.
    On behalf of Wal-Mart and our 2.2 million associates around the 
world I would like to thank the Committee for its work on this 
important issue and for holding this hearing today. Wal-Mart 
appreciates the opportunity to participate in this critical discussion.
    Our company holds a unique position in the world of energy. While 
there are no firm statistics, it is widely understood that Wal-Mart is 
one of the largest ``private'' purchasers of electricity in the United 
States. In fact, the only entity thought to purchase more energy in the 
U.S. than Wal-Mart is the U.S. Government. Since energy is also Wal-
Mart's second largest operating expense, it should be no surprise that 
we have been focused on energy efficiency practically since the day we 
were founded.
    Fortunately, our global presence gives us a great opportunity for 
energy efficiency comparisons. As Wal-Mart has continued to expand into 
other countries, our primary mode of expansion has been to acquire 
existing stores in those countries. Therefore, it is interesting to 
note that the stores we have built in the US are actually more energy 
efficient than those we have acquired in any other country thus far. 
This is even true for stores in countries with much more stringent 
energy regulation and much higher utility rates than the US; such as 
the UK and Japan. In fact, our stores in the UK actually use twice the 
energy per square foot, and our stores in Japan one and a half times as 
much energy per square foot as our stores in the US.
    We have always recognized what many others have not: energy is a 
controllable expense.
    Because nearly one-third of Wal-Mart's energy consumption is in the 
form of lighting, we have developed during the last decade, what we 
feel, is one of the most efficient lighting systems in the world. In 
fact, the installed lighting load in one of our newer stores is nearly 
50% less than the baseline requirements established in the Energy 
Policy Act of 2005.
    This truly innovative system results in the fact that during 
daylight hours, our sales floor lighting is either off (or at the very 
least) significantly dimmed. This is possible thanks to a sophisticated 
daylight harvesting system comprised of hundreds of skylights per store 
that are connected to a sensor and state of the art control technology. 
This allows our sales floor lighting system to continually modulate the 
amount of energy needed, based on the natural light available. This 
system is so dynamic that it even gradually ramps the lighting levels 
up and down as clouds pass over the store. In our non-sales floor areas 
such as offices, break rooms and restrooms, lighting is controlled by 
occupancy sensors that turn off the lights when no one is in the space. 
Even our freezer case lighting has now evolved into a display of 
advanced technology as it is now comprised of ``LEDs'' or ``Light 
Emitting Diodes''. The result is a building where most of the lighting 
is dynamic and only ``on'' to the degree that conditions warrant.
    And this is just lighting; similar efforts are underway with HVAC 
and refrigeration.
    At the request of Wal-Mart, Lennox Industries has developed a new 
rooftop heating and air-conditioning unit that it marketed as ``the 
most efficient unit of its kind''. Lennox also states that this 
equipment is ``up to 66% more efficient than U.S. Dept. of Energy 
regulations''. EVERY roof top unit purchased in the US for all of our 
new stores and retrofits for over the past year has been this unit.
    Of course as efficient as all of this equipment is, without proper 
control technology it will never meet expectations. That is why every 
Wal-Mart store in the US includes a sophisticated energy management 
system that allows us to monitor and control the lighting, temperature, 
humidity and refrigeration in each and every one of our stores from our 
home office in Bentonville, Arkansas.
    If an associate in Sacramento leaves the door to a walk-in cooler 
open, we know it. If a store manager in Chicago over-rides her daylight 
harvesting system, we know it. And if a freezer in Miami is icing up 
and needs to be defrosted, we know it. And we can correct the situation 
from Bentonville.
    As efficient and forward-thinking as our energy practices have 
always been, we have very aggressive goals in our sustainability and 
energy efficiency efforts for the future.
    In October of 2005, we announced plans to reduce the greenhouse gas 
emissions in our already energy-efficient existing buildings by another 
20% by 2012. We also announced plans to develop a new store prototype 
that will increase efficiency another 25%--30% by October of 2009.
    So, how are we doing in achieving these goals?
    With regards to our existing stores we recently approved capital 
for more than 1,200 energy related retrofit projects in our existing 
4,000 US stores. This is on top of a similar program last year, and 
more than likely a similar program next year. A majority of these 
projects have paybacks between two and three years. And remember, these 
are in already efficient stores that have daylight harvesting systems, 
heat reclaim systems, energy management systems, etc.
    When it comes to our new store program, we have opened in the last 
two years 8 of what we refer to as our ``higher efficiency'' 
prototypes. These stores are predicted to be up to 20-40% more 
efficient than our earlier prototypes, depending upon the climate zone. 
We are now in the midst of a 6 month strenuous audit of these 
facilities until the end of July in order to quantify exactly what the 
savings are prior to rolling them out to our entire program.
    As proud as we are of these accomplishments and innovations, we are 
even more proud to share what we are learning with everyone, including 
our competitors.
    In the past two years or so we have shared the details on our 
energy initiatives and their related paybacks with the Environmental 
Protection Agency, the US Department of Energy, the Defense Science 
Board, the Office of Management and Budget and with our retail 
competitors, Office Depot and Best Buy. We have even shared our story 
with the Pentagon and with the National Academy of Science. We have 
also taken representatives from Food Lion, Target, Publix, Costco and 
many others on tours of our recently opened stores that featured some 
of our newer energy efficient technologies. The best thing about the 
information we are sharing is that it is not theory; it is the proven 
result of real initiatives with real paybacks.
    I am often told by others that until there are new technologies or 
until there is additional legislation, energy efficiency will never 
achieve mainstream attractiveness. Believe me, the technology exists, 
we are proof of that, and while Wal-Mart is not waiting for legislation 
to cause us to act proactively in the area of energy efficiency, we 
would encourage Congress to continue to look at new incentives that 
will help others to act as well, whether it be expanding the 
penetration of ``smart metering'' and ``smart grid'' technologies that 
would allow utilities, businesses and individuals to enjoy the kind of 
energy saving information management abilities that we have adopted; or 
adopting energy efficient building codes which set a floor for building 
performance to ensure that the lowest hanging fruit of efficiency 
upgrade benefits are met at a broader range of buildings. We hope that 
our experience proves insightful and helpful and stand ready to assist 
you in any way we can.
    Finally, as you contemplate energy policy, we encourage you to 
remember the kinds of everyday Americans like the roughly 150 million 
shoppers who pass through our U.S. stores every week. More than ever 
before, we see these consumers struggling to make ends meet--we see 
them choosing between healthy food or their prescription medication; we 
see them leaving the toys out of the cart to make room for baby formula 
and diapers. At Wal-Mart, our energy efficiency practices not only help 
us save energy and protect the environment, they also help us keep 
costs low for our consumers.
    And by making sure we have everyday low prices on products like 
energy efficient light bulbs, home winterization kits, and cold-water 
laundry detergent, we are helping Americans save money on energy costs, 
and live better.
    In conclusion, I'm very proud to work for a company that has 
committed to, and is actively moving towards, a goal of eventually 
being supplied by 100% renewable energy; I am proud to work for a 
company that is demonstrating its commitment to environmental 
sustainability while saving consumers money; and I am proud that the 
company encourages me to pro-actively share our innovations with the 
world.
    We at Wal-Mart applaud Congress in its efforts to communicate the 
necessity and the benefits of energy efficiency.
    Thank you for your time in allowing me to speak on behalf of Wal-
Mart on this very important topic. We look forward to working with you 
to effectively and constructively address these issues.

    The Chairman. Thank you very much. Thank you all for your 
excellent testimony.
    Just for the information of folks, I've got a note here 
that we're going to have probably two roll call votes starting 
about 3:45. So I'll take 5 minutes and ask questions and then 
I'm sure my colleagues will, and we'll see if anyone else has 
questions after that.
    We're trying, as you all know, to figure out what this 
Congress could do and the Federal Government could do to 
accomplish the objectives that you've all talked about in 
various ways. One of the suggestions, one concrete suggestion, 
is the one that Ms. Amann refers to and that is that we take 
this provision that the House of Representatives passed in 2007 
containing a provision calling for the Departments of Energy 
and State to update energy codes for new buildings. The 
provision directed the Department of Energy to support efforts 
by model code organizations to update building codes to reduce 
energy use of new buildings by at least 30 percent by 2010 and 
50 percent by 2020.
    Let me ask some of the rest of you. Ms. Amann, you're on 
record saying we ought to go ahead and adopt that. Are some of 
the rest of you familiar with that? Is that the right way to 
go? Mr. Mazria, do you think that's the right way for us to go, 
or should we do something different or in addition to that? 
What are your thoughts?
    Mr. Mazria. I think it's the right way to go, but I think 
it needs to be tightened up a little bit. We have a group that 
talks, of about 15, 20 organizations, and we've come to I think 
a tentative conclusion that we ought to go on a 6-year cycle: 
2010, 30 percent; 2016, 50 percent; and then on out, giving the 
DOE the authority to tighten it up as we move out in time. I 
think you'll find that most organizations will support that.
    The Chairman. Now, this really just addresses new building 
construction as I understand it?
    Mr. Mazria. I think it's if you go in for a building--if 
you go in for a permit, then----
    The Chairman. Then you have to update.
    Mr. Mazria. Then you'd have to update, yes.
    The Chairman. Upgrade to the code.
    Mr. Mazria. Yes.
    The Chairman. Is there something in addition to this? If we 
were to take your new improved version of this House-passed 
legislation and go with that, is that sufficient to the purpose 
or should there be something else that relates to retrofitting 
existing buildings. Or what are your thoughts there? Go ahead.
    Mr. Mazria. On that point the discussion has been around 
reach codes. What reach codes are is for the Department of 
Energy to actually generate codes that go out in time, but make 
them available for cities and States and counties to adopt if 
they want to be out in front, because right now you have many 
cities and States that are adopting standards that are much 
better than code. You have Dallas, you have albuquerque, you 
have Santa Barbara. There are all sorts of cities, and these 
codes are all over the place.
    So if we have a set of standards that cities and States can 
adopt, that are way beyond code, that would be really helpful. 
But that has to take precedence over any appliance and 
equipment minimum standards that the reach codes would have to 
take precedence. I think that would stimulate a lot of 
innovation in this country.
    The Chairman. Mr. Giudice, I think you referred to the 
International Energy Codes that you've adopted, I guess, up in 
Massachusetts. How does that relate to what I've been asking 
about here? I mean, is this the same thing?
    Mr. Giudice. It is similar. There's ASHRAE and the 
International Energy and Conservation Codes, which are parallel 
code bodies. The idea of going to a 30 percent better is a good 
step. I do think that DOE should be tasked with the idea of 
maybe going to 50 percent better on a national code basis at 
this juncture and to get back to the Congress as to whether or 
not that's doable. So that that would push us even further 
faster on this.
    The International Energy Conservation Code, which drives a 
lot of the energy code-setting, is a body that has had sort of 
a difficult process to really move codes further. there was an 
important initiative this last summer to move it to a 30 
percent step and the process did not result in getting to that 
30 percent step because there was so much sort of resistance to 
that kind of a change. It ended up getting I think a 12 or 13 
percent improvement of the International Energy Conservation 
Code.
    It signifies to me the difficulty of these sort of 
incremental processes that are being tried to be worked on 
almost a voluntary basis on the national. Great intentions, 
great collaboration, but it sort of gets to be they get kind of 
ground round to the lowest common denominator, instead of 
aspirational and more significant steps, which I think this 
policy code do, as well as, as Ed was indicating, initiating 
every specific potential stretch codes for towns and States to 
adopt in addition to the base Federal codes.
    The Chairman. My time is up. Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Mr. Zimmerman, I was suggesting to the chairman up here 
that we in the government could use a little bit of help. If 
you guys know that a refrigerator needs defrosting in Ketchikan 
and you can do something about it in Bentonville, Arkansas, we 
could use your help here.
    Mr. Zimmerman. We'd love to help you replace these 
incandescent lights.
    [Laughter.]
    Senator Murkowski. Actually I was going to suggest, Mr. 
Chairman, you spoke about dynamic lighting. Do you think the 
way that we should start is by opening up the blinds and by 
getting some natural daylight in here. We do need to work on 
this.
    Mr. Zimmerman. Senator, you might also note that the air 
conditioning is on in this room in February, to offset the heat 
gain from those lights.
    Senator Murkowski. We are probably the best example of the 
highest inefficiency in lighting and in cooling and heating 
here in these buildings. We need to be a better role model in 
this area. So I appreciate you pointing that out.
    Professor Majumdar, you spoke to the integration and how we 
can be smarter in these systems. The comment that you made was 
that ``design and performance don't always match.'' We have 
great plans in mind, but if the systems don't come together in 
your building--if you're doing things right in one room and 
right in another room, but they're not talking to each other, 
we can be at odds and basically defeating this efficiency.
    How do we adequately allocate the $4.5 billion from the 
stimulus bill?
    I was quite concerned to learn that we don't have standards 
that are clearly set, to allow for this interoperability, and 
exchange of communication. It sounds like we're doing much the 
same when talking about efficiencies and making sure that we 
have a level of interoperability and a connection.
    How do we make sure that we've got integrated systems when 
we're putting those buildings together or when Wal-Mart is 
retrofitting some of their old stores. Are we able to do what 
you have said we need to do in terms of integration.
    Mr. Majumdar. Thank you, Senator Murkowski. I think that's 
a great question. I think in terms of integration--first of 
all, let me just say that you mentioned the stimulus as well. I 
think this is a great opportunity. Obviously with the stimulus 
we want to create jobs immediately and we want to put their 
double-pane windows and fluorescent lighting, etcetera.
    But I think this is a great opportunity to put in a 
measurement security to actually what we are doing is working 
or not, so that once, 2 years from now, 3 years from now, we 
can actually quantify that this is actually happening. That's 
sort of the basic--if you want to see what's going on 2 years 
from now, we'll have some numbers. So that's one.
    The second thing is the integration today. As I mentioned, 
it's not working in most buildings and the buildings are 
fighting each other: We are using HVAC cooling when we are 
almost freezing outside. That's part of the integration.
    So if you think about, let's say, a computer. It has a 
microprocessor, it has a display, it has memory. How does it 
integrate? It integrates because of a few things. There's an 
operating system that coordinates the activity of all that, and 
that operating system, if you may, for a building is not there 
today. We need to develop the science and technology, the 
engineering----
    Senator Murkowski. Do we have that science and technology, 
that engineering?
    Mr. Majumdar. Absolutely. We have elements of that and we 
need to devote some R and D toward developing the sort of open 
source, the integration, the building operating system. Right 
now the building operators are doing a heroic job trying to 
manage thousands or hundreds of zones and trying to use their 
intelligence, which is great. But at some point when the 
building becomes really complex and it's fighting each other--
you know, the building operator, it's asking too much of them. 
I think some element of automation is a good thing out here, 
just like we have in other sectors. I think that's where some 
of the R and D ought to be focused.
    Senator Murkowski. I know that the chairman and I are 
working on some legislation that would hopefully speak to 
exactly what you're talking about within the R and D area.
    Mr. Giudice, you mentioned the energy labeling and I think 
it was Mr. Hubbell that also spoke to the energy certification. 
I think your reference was: When you buy a car, on the sticker 
it tells you your expected miles per gallon and other details.
    But that is when you first buy the car, but a couple years 
down the road, if perhaps you haven't kept up with your tune-
ups. The performance isn't really there.
    In terms of energy labeling, are we envisioning this to be 
static or how do we make sure that there's continual truth in 
advertising with our energy labeling?
    Mr. Giudice. Yes, it's an important issue. As some speakers 
have talked about it, it can't be just about what the design 
was. It has to be about how it's actually operating. So I think 
at every significant transaction--when a new lease owner comes 
in, when a building is sold--there has to be a public 
disclosure of what the energy consumption on a per square foot 
basis is for that building and how that ranks and rates against 
similar usage type buildings in similar climates.
    It's very doable. We're actually working a zero net energy 
building task force in Massachusetts and that's one of the 
recommendations that's going to come out of that.
    Senator Murkowski. Do you have energy auditors that would 
go in and do that assessment?
    Mr. Giudice. It's not even requiring energy auditors. You 
can use Web-based tools to load up what the energy consumption 
has been. We're going to take all public buildings actually in 
Massachusetts, both State and local, and load up the data so 
that we're watching the energy consumption, we'll know the 
square footage of them and we can rank and rate them 
accordingly, and start the public disclosure of what our 
building consumptions are.
    Energy Stars are useful. That has a useful profiler tool 
that can help bring some of that in. It's just a matter of 
building on what exists today.
    I did want to touch on the building control systems. There 
is standards like Zigby that actually are interoperability 
standards for new building control systems. I worked with a 
company INTERNOC--I've only been in public service here for 2 
years--that is working nationwide on talking to building 
control systems and enabling them to drop load when the peak 
demands are really high, and working with even proprietary 
systems as well as some of the open architecture systems.
    So there's a lot of technology that exists today. It's just 
a question of rolling it out and making it more widespread.
    Senator Murkowski. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Cantwell.
    Senator Cantwell. Thank you, Mr. Chairman, and I thank the 
panelists for being here.
    Professor Majumdar, I wanted to start with you if I could 
about standby power. Obviously, you probably know a lot about 
what we're doing at the Federal Government on standby power, 
but its obvious focus is on domestic appliances and the use of 
power that they consume when they're in off mode. The estimates 
are they account for about 10 percent of all household power 
consumption.
    In the 2007 bill, we inserted the requirement that 
electronic devices purchased by the Federal Government use less 
than one watt of power while in standby mode. Do you have some 
assessment of how we're doing with this? I know the House 
expanded that language, but how well are Federal agencies doing 
in complying with this, and what else we need to do?
    Mr. Majumdar. Thank you for the question, Senator Cantwell. 
I think this is a very important issue. There's a lot that can 
be done. I'm not the expert in this, but there are people in my 
staff in LBL who are working on this. From my understanding, 
right now it's about 10 percent, about 40 appliances on average 
in California.
    That there is technology that exists that could bring down 
to a few percent, like 1 or 2 percent. But right now I think if 
I remember in ISA 2007 it sort of goes appliance by appliance, 
whereas this is a horizontal issue and so one could do it 
sweeping it at one level and that could be done.
    In terms of actual progress that has been made, that's a 
matter for the Department of Energy. I don't know exactly how 
it is progressing. I can get back to you on that after talking 
with DOE.
    Senator Cantwell. You don't think anybody's measuring it?
    Mr. Majumdar. I am not familiar with it. I'm not quite 
sure, but I can get back to you.
    Senator Cantwell. OK. Thank you. We'll ask DOE. But you 
think it's an important area for us in building savings?
    Mr. Majumdar. It is a low-hanging fruit. It has to be done.
    Senator Cantwell. Thank you.
    The other issue I'd like to ask either Mr. Zimmerman or Mr. 
Hubbell about is China. While we're focusing here on the United 
States, China is expected to have half the world's building 
construction in the next 10 years. So while we look at what's 
happening in the United States, obviously it's no comparison to 
what will happen in China. They are less efficient per square 
meter on their building code standards.
    I was interested in what either one of you think are the 
opportunities for us to work with them. The Pacific Northwest 
Lab is already working with them to try to help get energy 
efficiency standards compliance in China. But I was wondering 
what potential you see there for U.S. markets in lighting, 
motion sensors, advanced windows, all of that.
    Mr. Zimmerman. Actually, we rank all of the countries we 
operate in, nearly 20 countries now, and China ranks about 
third or fourth in energy efficiency. Of course, our stores in 
China are fairly new. While we have a 25 to 30 percent goal for 
our new buildings in the U.S., China actually--Wal-Mart China 
has a 40 percent goal.
    In Beijing we recently opened up our first store that is 
100 percent lit with LED lighting. While we're using a lot of 
LEDs in the U.S., our general sales floor lighting is still T8 
fluorescent. In our Wal-Mart China store in Beijing it's all 
LED. They're also doing things with motion activation on their 
cases, etcetera.
    So we're working with our suppliers in China. We recognize 
that our global greenhouse gas footprint is small compared to 
our suppliers, and a lot of those suppliers are based in China. 
So we're working not only with our suppliers, but our stores, 
to even exceed our U.S. goals.
    Senator Cantwell. Mr. Hubbell.
    Mr. Hubbell. Senator, we're a domestic organization, so I 
don't have a lot to say about China, other than to point out in 
our part of the world, the Pacific Northwest, there's a lot of 
design expertise in building design, building operation, that I 
know is being exported to China. I think that's a very good 
thing.
    The other thing I would say about that is in the rating 
system business, which is the business that I'm in, I think 
that there can be some helpful things in China if we share with 
them the expertise we have in evaluating buildings, recognizing 
that a plaque on the wall is not the objective; the performance 
goal is the objective. But I think educating the Chinese and 
others about how market dynamics and other things can be 
created through recognition and certification I think could be 
something that we could talk to them about.
    Mr. Zimmerman. May I add one more thing, Senator? My title, 
``International Vice President, Design and Construction,'' 
that's new for me. Until a month ago I was in our U.S. program. 
Part of the reason I'm in international now is to take the best 
practices we're learning in the U.S. share them with our other 
countries, and vice versa. Many of the things we're doing in 
the U.S. we're doing in China. We're watching closely this LED 
experiment in China so that we can roll it out to our other 
countries as well.
    Senator Cantwell. I'm very appreciative of the best 
practices, but I look at this and I think this is an enormous, 
enormous opportunity for U.S. businesses and companies and 
services that they provide on efficiency. If China's going to 
have half of the buildings in the world in the next 10 years, 
then having U.S. access to those markets to help them would be 
a great source of economic revitalization for us.
    So thank you for your work.
    The Chairman. Senator Sessions.
    Senator Sessions. Thank you, Mr. Chairman.
    Mr. Zimmerman, being of a practical bent, let me ask you, 
does Wal-Mart take the view that all of their energy 
conservation practices should pay for themselves over some 
period of time in savings? In other words, the cost of 
implementing the new system you desire to pay for itself?
    Mr. Zimmerman. You know, I don't know if that--that's not 
necessarily a policy, but that's the reality. When I present 
any initiative, I present a payback, and so far those paybacks 
have been in the 2- to 3-year range. Given the environment 
today, that's an easy decision for our company to make, is to 
invest in those type technologies.
    Senator Sessions. That is very easy to invest in. Anything 
that will pay back in 2 or 3 years I think is clearly a winner. 
What about 5, 6, 8, 10 years? Is there some point that a 
business would begin to wonder or you would have a cutoff as to 
whether it would be good business?
    Mr. Zimmerman. Currently, if it's in the 5- to 6-year range 
we target our new store construction first and we work through 
making things more efficient, value engineering the process, so 
that we can drive the return even better to get it into our 
retrofit program. If you're starting to get out 10 years, we'd 
have to start looking at other benefits from a standpoint of 
maintenance, etcetera.
    But again, we haven't run across any initiatives that 
really get beyond about that 5-year window.
    Senator Sessions. So how much have you reduced, say in a 
model store, how much do you feel like that you've saved in 
that store?
    Mr. Zimmerman. In Senator Bingaman's State we opened up a 
store in Bernalio, New Mexico, about a year ago now. It's one 
of our eight higher efficiency pilot stores. They represent 
what our new prototype going forward we anticipate to be. It's 
about 25 to 30 percent more efficient than the stores we would 
have been building in 2005. Again, the stores in 2005 had heat 
reclaim systems, energy management systems, daylight harvesting 
systems. So that's a decrease on an already very efficient 
base.
    Out in more western climates such as Las Vegas, California, 
where you have very arid climates, we're seeing even closer to 
a 40 to 35 percent decrease in energy.
    Senator Sessions. Do you have an opinion as to whether or 
not the average retail store, whether a grocery store, a 
clothing store, that's not focused on this issue, how much they 
might reasonably save if they were to utilize practical cost-
saving energy efficiencies?
    Mr. Zimmerman. Looking at the other retailers we've 
acquired in other countries, like in Japan, where those 
buildings have been designed and maintained under the umbrella 
of the Kyoto Protocol, we use 50 percent less energy per square 
foot in our U.S. stores today than we do in those Japanese 
stores. I would venture to guess we would be able to save 
similar savings in most of the U.S. retail environments. That's 
why with the Department of Energy we formed the Retail Energy 
Alliance, to share what we're doing with our competitors.
    Senator Sessions. That's very significant. The 40 percent 
of our energy, I think, Ms. Amann, that you said, that's the 
total counting gasoline and everything else? Buildings utilize 
40 percent? That's more than I--I've heard that figure, but I 
guess I didn't believe it or it didn't register on me. But 
that's quite a bit, so if you could reduce that by 40 percent 
or 50 percent with cost-efficient technology.
    Now, Mr. ''GUY-diss``?
    Mr. Giudice. ''Jue-DEE-see,`` yes.
    Senator Sessions. ''Jue-DEE-see.`` You mentioned solar. 
Now, that makes me a little nervous. If you've got to get there 
with solar, my impression is that today solar will not pay for 
itself. Is that right?
    Mr. Giudice. It depends on the kind of solar. There are 
solar thermal technologies that can augment, especially in the 
South, Southwest area, very cost-effectively other thermal 
technologies. But you're right, solar PV today is not cost 
competitive. The reason to invest in solar PV today is not 
because it's a stable circumstance. We have seen PV pricing 
come down significantly over the last decades and right now 
it's actually coming down with the slackening of the market, 
coming down very substantially over the last couple of months. 
We've seen the alternatives--the cost of natural gas-fired 
generation and so forth--over the last years go up.
    The Department of Energy suggests that in the 5- to 10-year 
timeframe and maybe less for some places that have particularly 
expensive power, it will be cheaper to buy electricity from PV 
on your roof than it is by buying it from the conventional 
grid. That's not today and I wouldn't bet on that for all of 
our investments, but I think it is appropriate to put some 
resources toward those technologies and to help them come down 
the cost curve and have it a viable option for us as we move 
forward.
    Senator Sessions. Those are all good ideas. When the 
government rates appliances, air conditioning, heating systems, 
and all of that, do you do them by brand name? Is there anyone 
that--I guess you can't, or do we, explicitly recommend one 
brand name, or is there any private groups out there that have 
got the gumption to stand there: This is the best brand name to 
buy for energy efficiency?
    Professor Majumdar.
    Mr. Majumdar. Yes. Again, I'm not an expert in this 
particular topic, but from my understanding it is by the type 
of the device and the actual energy used. So they have to meet 
those standards. Again, these are measurements--these are 
performance based on measured standards and that's how it is 
done.
    Senator Sessions. But historically the government hasn't 
said, Brand X is better than Brand You?
    Mr. Giudice. In Energy Star labeling they actually get 
brand specific and model specific. I think it can move much 
more dramatically forward. There are also independent bodies 
that will rank and rate specific brands on their energy 
consumption. But I do think the national government can take a 
much more proactive role, and I think we have to look at a lot 
of those performance standards also, which really aren't 
testing the right things from an energy consumption standpoint. 
How we're actually using air conditioning doesn't actually 
relate directly to the SERE ratings that air conditioners, for 
instance, are rated on.
    So there's lots to be done in terms of appliance standards 
and appliance testing.
    Senator Sessions. Yes, briefly.
    Ms. Amann. I would just agree that there's a lot to be done 
in terms of improving our rating systems so they better match 
what's happening in the field. Then as far as the programs that 
are run by EPA and DOE on Energy Star and others, they set a 
performance standard and any manufacturer that can meet that 
qualifies. But you can get specific information, so you could 
go in and find the best product from those lists.
    Senator Sessions. Mr. Giudice, just briefly--my time is up. 
I read something critical of Energy Star. Do you share those 
criticisms?
    Mr. Giudice. I think that it's easy to look in the rear 
view mirror and say things could have been better, and I don't 
think it has gone nearly far enough. But we have to understand. 
Kind of, it has filled the void from a national leadership 
standpoint and it has done it very well, and has moved a lot of 
awareness. A lot of the mass market, a lot of consumers, look 
at that Energy Star rating and it triggers something in them.
    So not perfect, but nothing is. I think it has added a lot 
of value, and I think there's tremendous opportunity to build 
further on that.
    The Chairman. Let me just ask one other follow-up to what 
Senator Sessions was asking about. Do we have reliable, well 
recognized ratings for manufactured housing, so that if I go on 
a lot to buy a mobile home I can make a judgment there that 
this is the most energy efficient mobile home or this one is 
substantially below par?
    Mr. Giudice. I don't think we do from my knowledge. It 
would be very simple to----
    The Chairman. I would think that would be the simplest 
thing to accomplish, if you were looking at trying to rate 
building construction or building efficiency.
    Mr. Giudice. Agreed.
    The Chairman. Let me ask if Senator Murkowski has any 
additional questions.
    Senator Murkowski. Just very quickly, Mr. Chairman. It 
follows up on comments from Senator Sessions here as well.
    You had mentioned, Mr. Hubbell, that Green Globes is a 
voluntary certification standard. There's been a little bit of 
a push or activity at the State and local levels to impose, 
whether it's Green Globes or LEED or other standards. Should 
Federal legislation specifically name or identify Green 
Globes--kind of unfair to you, sir, because you represent 
them--but lock us into that standard, if you will?
    Mr. Hubbell. You know, Senator, I'm of the opinion that 
it's not the rating system that matters; it's the performance 
goal.
    Senator Murkowski. Right.
    Mr. Hubbell. So what I think is more appropriate and 
productive for public policy would be to set performance goals, 
and if rating systems can accelerate our progress to those. But 
let's not let the plaque on the wall be the objective. Let's 
let the energy performance and the carbon reductions be the 
objective, and that's been our approach all along. So that 
would be how I would answer it.
    Senator Murkowski. Anyone else?
    Mr. Giudice.
    Mr. Giudice. One quick reaction is I do think that moving 
the minimum standards much, much higher through building codes 
is a necessary step. We can't just rely on the voluntary 
efforts and just sort of publishing benchmarks. We actually 
have to in my mind take the bad choices off the shelves, 
because there are so many broken aspects of the energy picture.
    Senator Murkowski. But would you do that through 
performance standards or measurements?
    Mr. Giudice. I would do building code-based performance 
standards, so that we have to get to a much higher minimum 
standard in our buildings, and then I would rank and rate the 
buildings above that standard.
    Senator Murkowski. Coming from the States' perspective, you 
are OK with a national standard?
    Mr. Giudice. I am. It's got to be regionally specific, but 
I think this is a challenge and an opportunity and a need for 
national leadership, that doing it on a State by State basis is 
just going to take too long and it's going to be too much of a 
hodge-podge of solutions.
    Senator Murkowski. It's something that we in Alaska look at 
very carefully, of course, because we're a little bit up there 
in the cold and the dark, except we're in 2-hour sunlight----
    Mr. Giudice. Six months a year.
    Senator Murkowski. But it is something that I appreciate 
the recognition that you've got to acknowledge the regional 
differences that we all face.
    Mr. Hubbell.
    Mr. Hubbell. I just want to add to that. I think what 
public policymakers can do is define the criteria for good 
rating systems. I think it's important, for example, that 
rating systems be developed through an open consensus process. 
I think it's important that rating systems sufficiently address 
energy and carbon reductions. I think rating systems ought to 
rely on life cycle assessment and real building data.
    So those are things that I think that the policymakers at 
this level and all the way down can create as hurdles for those 
of us in the rating system business, if you will, and let the 
powers of competition do their thing. Knowing what your 
criteria are, we're working real hard to make sure that our 
rating system meets that.
    Senator Murkowski. Thank you, Mr. Chairman.
    The Chairman. Senator Sessions, did you have another 
question?
    Senator Sessions. No, thank you.
    The Chairman. Let me thank the witnesses. This is very 
useful testimony and we will conclude the hearing with that. 
Thank you.
    [Whereupon, at 3:57 p.m., the hearing was adjourned.]
                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

    Responses of Jennifer Amann to Questions From Senator Murkowski
    Question 1. What are some examples where the market has moved 
energy efficiency in the right direction regardless of government 
mandates?
    Answer. The combined efforts of manufacturers, retailers, 
contractors, utilities and other energy efficiency programs have moved 
the market toward adoption of more efficient technologies. Particular 
successes include compact fluorescent lamps, adjustable speed drives, 
T8 fluorescent lamps, and several categories of Energy Star qualified 
appliances and electronics.
    Question 2. The federal and state governments have been engaged in 
several standardized programs to promote energy efficiency in the last 
few decades. It is also true that there have been advances in energy 
efficient technology without the government playing a role. Please 
describe the pros and cons of these two approaches.
    Answer. While each approach has pros and cons, the most effective 
strategy is to use government and market approaches to complement each 
other. Government support of R&D often plays an important role in the 
development of new energy efficiency technologies. Programs such as 
Energy Star help build the market for high efficiency products and 
leverage the efforts of utilities, manufacturers and retailers to 
increase adoption of high efficiency products. Government mandates in 
the form of codes and standards can capture the full energy savings 
benefits of these advances once they are proven in the market and 
ensure that all consumers reap the benefits of investments in energy 
efficiency R&D and program activity.
    Question 3. The recent stimulus bill directs billions to energy 
efficiency measures. How can these funds be targeted to be most 
effective?
    Answer. These funds should be targeted toward the full array of 
cost-effective efficiency opportunities in the residential, commercial, 
and industrial sectors. Programs designed to reward actual performance 
can maximize energy savings and cost-effectiveness. Good opportunities 
can be found in comprehensive retrofits of existing buildings; 
promotion of very high efficiency appliances, equipment and other 
products; improvements in building codes including assistance to states 
for training of code officials and inspectors; and training of building 
contractors and service providers. Existing programs operated by state 
and local agencies, utilities and other program implementers have the 
infrastructure in place to get stimulus funding into the market 
rapidly.
    Question 4. Also, as you know, $3.1 billion of energy efficiency 
block grants came with preconditions, namely energy efficiency 
rulemaking measures and updating building codes. Are you concerned with 
the inevitable delay in getting the energy efficiency funding out to 
states and localities?
    Answer. As passed, the energy efficiency block grants provided 
through the ARRA require states to demonstrate that they are making 
their best efforts to pass specific regulatory actions such as 
decoupling and updated building codes, but do not require that these 
new rules be formally enacted or in place. This should reduce the delay 
in getting funds distributed to states and localities. DOE has recently 
published guidance on how the process will work and I understand that a 
considerable number of governors have already submitted certifications.
    Question 5. In the 2007 Energy Independence and Security Act, 
Congress authorized an initiative for the development and establishment 
of zero net energy commercial buildings which applies to any commercial 
building newly constructed in the United States by 2030 as well as 50% 
of the of the commercial building stock of the United states by 2040. 
Groups such as the American Institute of Architects (AIA) have endorsed 
an immediate 50% reduction in fossil fuel-generated energy and a 10% 
reduction target every five years until new and renovated buildings 
achieve carbon neutrality in 2030.
    Have we made any progress on these initiatives?
    Answer. Through its Commercial Buildings Initiative, the Department 
of Energy is working on industry partnerships, research, and tool 
development--all important activities laying the groundwork for meeting 
the stated goals for zero net energy commercial buildings. Details of 
their efforts are available on the DOE website at www1.eere.energy.gov/
buildings/commercial_initiative/index.html.
    Question 6a. Like some of our other panelists, your testimony 
highlights a number of programs we endorsed during EPAct and EISA that 
haven't obtained the necessary funding for implementation or only 
recently received funding under the American Recovery and Reinvestment 
Act (stimulus).
    Do you believe that Congress should authorize new programs with 
more stringent guidelines when many of our existing programs are not 
yet up and running, or have been tested?
    Answer. Many of the new programs we recommend target markets or 
opportunities that have not received adequate attention in the past or 
where unusually high barriers to energy efficiency exist. These 
programs do not necessarily require more stringent guidelines so much 
as they expand the depth and reach of our efficiency policies. 
Authorization of these programs can lay the groundwork so they can be 
rolled out when funds are available. In the case of the recent stimulus 
bill, many good programs were not included for funding since there was 
not prior authorizing language.
    Question 6b. How can we best spend the money that has now been 
allotted for these programs? What should our priorities be if an 
opportunity for more funding comes along?
    Answer. States and municipalities must be given the support and 
assistance needed to enable them to run robust and effective programs. 
One critical need is technical assistance and training for contractors 
selling and installing energy efficiency measures and other market 
actors influencing product selections and purchase decisions. EPA has a 
lot of experience with this type of assistance through the Energy Star 
program, but unfortunately EPA Energy Star was not funded under ARRA.
    A key priority for any additional funding should be retrofits in 
residential and commercial buildings including multifamily and 
manufactured housing. Retrofits yield significant energy savings and 
carbon reductions while creating jobs and saving consumers and 
businesses money that can be redirected to other important needs.
      Response of Jennifer Amann to Question From Senator Cantwell
    Question 1. I understand standby power is a growing source of 
energy consumption in buildings. While the typical power loss per 
appliance is low--about one to 25 watts--when multiplied by the 
billions of appliances in buildings across America, and the fact that 
they occur basically 24 hours a day, standby losses are estimated to 
account for about 10 percent of all household power consumption.
    To try and address this problem, I inserted an amendment in the 
2007 energy bill that required that any electronic device or appliance 
purchased by the federal government use less than one watt of power 
while in standby mode. I was pleased that the House subsequently 
expanded this provision to incorporate standby power into all products 
already subject to federal efficiency standards.
    Are there other steps you believe we could be taking at the federal 
level to reduce standby power loads?
    Answer. In addition to the constructive efforts currently underway 
to reduce standby power consumption, there are other actions with the 
potential to yield greater energy savings. An increasing number of 
appliances and electronic products are incorporating networking 
capabilities allowing for communication with home and/or external 
networks. Research is needed to better understand ``network modes'' as 
one of the many low power modes comprising ``standby power,'' in terms 
of power use and opportunities for managing and minimizing power 
consumption in network modes. Standards recently finalized in the 
European Union (eur-lex.europa.eu/LexUriServ/
LexUriServ.do?uri=OJ:L:2008:339:0045:01:EN:HTML) also provide a useful 
model for further federal action on standby power. In particular, a 
horizontal standard covering standby power for most energy-using 
products could capture savings from a broader range of product types 
and eliminate the need for developing standards on a product-by-product 
basis.
                                 ______
                                 
     Responses of Ward Hubbell to Questions From Senator Murkowski
    Question 1. What are some examples where the market has moved 
energy efficiency in the right direction regardless of government 
mandates?
    Answer. Systems like Green Globes, which bake in' energy metrics 
and environmental programs like EPA's Energy Star program, are gaining 
significant acceptance in the marketplace. Green Globes in particular 
has embraced the already successful Energy Star program--which has 
proven to help building owners arrive at performance that keeps them in 
the top 25% of buildings nationwide. We drive our users to `design to 
achieve' Energy Star while they are pursuing Green Globes-New 
Construction certification. The market incentives that we create for 
owners to seek Green Globes certification, in turn encourages them to 
pursue Energy Star and other measures that reduce energy consumption.
    Other incentives such as green insurance products and green 
mortgages also prove that the market is driving the move towards 
reduced energy consumption and environmentally-friendly buildings. 
These products exist because there is market-driven demand and because 
it makes business sense to encourage the development of buildings that 
use less energy, reduce waste and have a high indoor air quality.
    Question 2. The federal and state governments have been engaged in 
several standardized programs to promote energy efficiency in the last 
few decades. It is also true that there have been advances in energy 
efficient technology without the government playing a role. Please 
describe the pros and cons of these two approaches.
    Answer. Governmental involvement (whether it's on the local, state 
or federal level) has been successful in helping spur innovation and 
adoption in all areas of energy efficiency, through incentive programs, 
such as tax rebates, abatements, expedited permits, etc. Governmental 
bodies have also played a large role in helping educate the general 
public about the need for energy efficiency and the various benefits 
(environmental, economic) associated with these practices. However, 
this involvement can also lead to an unfair competitive market, 
especially if the involvement of a local, state or federal government 
favors one particular approach, or one particular organization. 
Governmental involvement is essential to the growth and expansion of 
energy efficiency practices and technology; however it must be done in 
a way that is fair and allows for an open and competitive free market.
    Another area of concern is that there has been a strong emphasis on 
rewarding good design and construction practices without measured 
(documented) energy savings being part of the package. Government can 
help the marketplace by finding ways to reward a more holistic approach 
to creating more efficient portfolios. Examples would be creating 
innovative policy that de-emphasizes first cost budgeting in favor of 
more holistic budgeting that accounts for long term maintenance and 
operations costs and potential savings. Additionally, design, bid, 
build strategies are not always the most effective for achieving 
desired performance goals. Government should be asking how can we 
change our own procurement policies to encourage integrated design, 
delivery, and operations (e.g. a 10 to 30 year view of costs/savings 
vs. 1-3 year view of immediate budget limitations).
    Question 3. The recent stimulus bill directs billions to energy 
efficiency measures. How can these funds be targeted to be most 
effective?
    Answer. The best way to meet our energy efficiency goals is to 
ensure that the nation's existing building stock is performing 
efficiently. The only way to do that is to measure, benchmark, and plan 
for improvement. Government grants to non-profit associations with 
standards and tools that can assist in making the benchmarking and 
planning process easier so that it can be done by every building owner 
in the country would create exponential benefits. These market 
generated tools can then be used by government (without naming one tool 
in particular) to gauge the before and after success of dollars 
invested versus dollars/energy saved.
    Additionally, there is a great need for education. Government 
dollars focused on helping organizations deliver training to the masses 
of building owners, operators, managers, and related workforce would be 
dollars well spent.
    Question 4. Also, as you know, $3.1 billion of energy efficiency 
block grants came with preconditions, namely energy efficiency 
rulemaking measures and updating building codes. Are you concerned with 
the inevitable delay in getting the energy efficiency funding out to 
states and localities?
    Answer. While delays are a concern, a bigger problem will exist if 
the necessary rulemaking and building code updates are hastily done 
without proper vetting and input from the building community. These 
preconditions can, and will, have a significant impact on the entire 
building community, and considering the devastating business climate 
they are currently facing, any new rules and code updates must be done 
with full input from architects, engineers, designers, building owners 
and other relevant organizations. We should also use this opportunity 
to incentivize the use of a feedback loop to determine the actual 
building performance that is achieved by these measure. Energy Star and 
green rating systems that utilize Energy Star tools could be beneficial 
to this effort.
    Question 5. In the 2007 Energy Independence and Security Act, 
Congress authorized an initiative for the development and establishment 
of zero net energy commercial buildings which applies to any commercial 
building newly constructed in the United States by 2030 as well as 50% 
of the of the commercial building stock of the United states by 2040. 
Groups such as the American Institute of Architects (AIA) have endorsed 
an immediate 50% reduction in fossil fuel-generated energy and a 10% 
reduction target every five years until new and renovated buildings 
achieve carbon neutrality in 2030.
    Have we made any progress on these initiatives?
    Answer. While it's too early to know if these initiatives will 
ultimately be successful, these programs have increased awareness about 
the need to reduce energy consumption and focus on efficiency. However 
there is still a lot of work that needs to be done. The next step for 
these goals to be met is for the focus to shift to actual building 
performance data, instead of just looking at design.
    Question 6a. As I understand it, the concept behind systems like 
Green Globes and the US Green Building Council's LEED standards was to 
promote sustainability practices through voluntary leadership actions.
    This seems to be an expanding market. Do you think we should be 
specifically naming Green Globes, LEED, or any other program in federal 
legislation?
    Answer. It is essential that whatever language is ultimately 
included in federal legislation be worded in a way that allows for 
options. This means being inclusive of all nationally recognized and 
credible existing rating tools while still allowing for the development 
and use of rating tools that are not yet in existence. Listing any 
rating tool by name in legislation will ultimately give that tool an 
inherent advantage in the marketplace, limiting competition and 
impeding innovation. Therefore, it is imperative that if one rating 
tool is going to be named, all other nationally recognized rating tools 
are also named.
    The ideal option is legislation that rewards a specific performance 
outcome and allows the architects, engineers, owners and tenants to 
decide what, if any, rating tools will help them meet those goals. 
However, this is not always practical; as the oversight required to 
implement this type of performance based program can be extensive. That 
is why green rating tools are helpful, as a certified green rating from 
a credible organization (such as GBI or USGBC) is a sign that at least 
a minimum amount of sustainability and efficiency measures have been 
met.
    If legislation does reference green rating tools, the best option 
is to set forth criteria that an acceptable rating system must meet in 
order to be recognized, and require that all rating tools meeting the 
criteria be named in the subsequent rules. The legislation must be 
carefully worded to ensure the process of judging and selecting 
qualified rating tools is fair and free of preconceived bias.
    Question 6b. Have any challenges arisen due to these state and 
locally driven initiatives?
    Answer. The major challenges arise when a given piece of 
legislation only recognizes one rating tool. As discussed above, this 
sole-sourcing isn't just bad public policy, but will also, in all 
likelihood, hamper the development and adaptation of green building 
practices. Every building and every project is different, and there is 
no one-size-fits-all solution to green building. Architects, engineers, 
owners and tenants need options, and whether it is an elementary school 
or a skyscraper, being able to choose which rating tool works best for 
a given project is vital to long-term growth and success of green 
building.
    Question 7. Please describe how your rating system works with 
private sector incentives such as green insurance products and green 
mortgages.
    Answer. Insurance companies, such as Liberty Mutual, AON, 
Travelers, and Fireman's Fund offer premium discounts and other 
incentives to ensure that buildings are built, enhanced and restored to 
achieve green certifications. The marrying of green rating system 
certification and mortgages and insurance is a natural alignment 
allowing for similar market based goals to be accomplished. For 
instance, buildings that are Green Globes certified have achieved 
compliance with requirements that are intended to reduce maintenance 
and indoor environmental issues that are of great concern to insurance 
providers.
    Question 8. Once a building becomes certified, is there additional 
follow-up with the building owner concerning the operation of the 
building and its overall sustainability?
    Answer. GBI is investing substantial time and resources to educate 
its current users and the general public about applying life cycle 
approaches to buildings. For instance, our training includes a 
discussion of 5-8 year asset management strategies and how Green Globes 
for New Construction and Green Globes for Continual Improvement of 
Existing Buildings work together. GBI offers, in addition to our New 
Construction tool, the Continual Improvement of Existing Building 
(CIEB) tool to not only benchmark existing buildings but also to 
provide assistance in the operations and maintenance activities 
required to improve and maintain a green high performing building. 
Recertification of existing buildings is currently required every three 
years.
    Question 9. Please describe the point system your rating system is 
based upon. In order to achieve the 1,000 points, how did you rank the 
areas of assessment?
    Answer. The 1,000 points in Green Globes for New Construction 
breakdown is as follows (and Green Globes-CIEB is ranked similarly):

   Energy--360 points
   Indoor Environment--200 points
   Site--115 points
   Water--100 points
   Resources--100 points
   Emissions, Effluents and Other Impacts--75 points
   Project/Environmental Management--50 points

    As detailed above, 36% of the total points allocated in Green 
Globes is focused on Energy, the largest percentage of any rating tool 
in the U.S. Green Globes also uses the Energy Star Target Finder 
program for new construction and the Energy Star Portfolio Manager for 
existing buildings.
    Projects that achieve a score of 35% or more become eligible for a 
Green Globes rating of one, two, three or four globes, as follows:

   One Globe: 35-54%
   Two Globes: 55-69%
   Three Globes: 70-84%
   Four Globes: 85-100%
       Response of Ward Hubbell to Question From Senator Cantwell
    I believe another promising area for improving the efficiency and 
many other aspects of our nation's buildings is adding on green roofs. 
On efficiency benefits in particular, according to the EPA, the surface 
temperature of a green roof can be as much as 90 degrees Fahrenheit 
cooler than the surface of a traditional rooftop.
    Question 1a. Since your testimony did not specifically address 
green roofs, could you talk about what potential roles do you see for 
green roofs in achieving higher levels of building energy efficiency?
    Question 1b. What is the energy savings potential of green roofs 
and what federal incentives and programs might help to accelerate the 
deployment of green roofs nationwide?
    Answer. Vegetated roofs are believed to be effective in minimizing 
heat island effect. Green Globes rewards the use of vegetated roofs 
within our Energy section. We did not have sufficient time to gather 
our technical experts to assess data that may be relevant to actual 
measured savings from studies of green roofs. We would be happy to 
follow up with staff following this submission.
    Question 1c. Do you believe the Federal Energy Management Program 
an effective vehicle for the acceleration of green roof deployment in 
the federal building sector?
    Answer. Our technical committee members have extensive experience 
in vegetated roof systems as well as in FEMP vehicles. However, we were 
not able to obtain sufficient input in time for inclusion in this 
document. We would be happy to follow up with staff following this 
submission.
                                 ______
                                 
     Responses of Edward Mazria to Questions From Senator Murkowski
    Question 1. What are some examples where the market has moved 
energy efficiency in the right direction regardless of government 
mandates?
    Answer. Unfortunately, without government mandates, the market 
moves the Building Sector towards increased energy efficiency slowly, 
escalating development only when the country enters a recession and/or 
the price of energy increases dramatically. This can be seen clearly in 
the graph on Page #2 of my testimony. The drop in Building Sector 
energy consumption is most apparent with the spike in oil prices that 
began with the 1973 Arab oil embargo and continued through the short 
recession that followed, and during the early 1980's recession when oil 
reached the equivalent of $103.76 barrel (today's dollars) following 
the 1979 Iranian Revolution.
    After the crisis ended, lighting and energy management technologies 
that were initiated during this period continued to develop, albeit 
slowly, due in part to state initiatives and mandates. For example, 
lighting technology continued to improve with the introduction of 
higher efficiency lamps (T-8, T-5, and compact fluorescent bulbs) and 
electronic ballasts. Several states (California, for example) adopted 
stricter energy codes for commercial buildings that were partly 
responsible for the development of markets for these more-efficient 
lighting products. Over time, these advances in energy-efficient 
technology were adopted more widely by the building sector. But 
government programs were instrumental in promoting the early use of 
these advances and creating markets so the costs for these products 
could be reduced.
    Question 2. The federal and state governments have been engaged in 
several standardized programs to promote energy efficiency in the last 
few decades. It is also true that there have been advances in energy 
efficient technology without the government playing a role. Please 
describe the pros and cons of these two approaches.
    Answer. Relatively little has been accomplished in building sector 
energy efficiency over the past few decades, so it is difficult to 
single out the pros and cons of each approach. The two approaches seem 
to only work well when they work in tandem. For example, when fossil 
fuel prices increase dramatically, business and industry look to 
innovate and deliver alternatives to the marketplace, while governments 
deliver market incentives, new building codes, and fund R&D and 
technology transfer through universities, research institutions and 
national laboratories.
    This was evident during the energy crisis of the 1970's and early 
1980's. At that time, there were major advances in Building Sector 
technologies--in glazing materials (heat mirror and low-e coatings), 
passive and active solar energy systems design and applications, 
passive and active cooling applications, natural ventilation systems, 
phase-change materials, moveable insulation, building simulation 
modeling programs, daylighting systems and controls, energy management 
systems, night set-back thermostats and occupancy sensors, solar hot 
water heating, solar thermal electric generation and storage, 
photovoltaics and advances in low-energy lighting systems, to name just 
a few. While some of these technologies continued to advance slowly 
over the past twenty-four years, relatively little has happened in 
developing innovative new energy efficiency and building energy 
technologies and systems. The energy intensity of commercial buildings 
has changed little over this period (total energy use per square foot 
increased), while a decrease in the energy intensity of housing was 
offset by an increase in housing size.
    Government programs also play a critical role in advancing building 
sector technologies due to the relationship between construction costs 
and energy costs. For many commercial or leased building projects, 
capital costs for construction and operating costs for energy use are 
budgeted and paid for from different accounts. The project owner pays 
for the building design and construction, while the tenants pay for the 
resulting operating costs for energy and resource use. In this fiscal 
environment, government programs (state energy codes and tax credits, 
for example) have been very important in advancing the adoption and 
promoting the improvement of cost-effective, energy-efficient 
technologies.
    The situation we find ourselves in today, with three major crises 
converging at the same time--foreign energy dependence, climate change 
and a deep economic recession--is very different from anything we have 
ever experienced before. I believe both approaches to the Building 
Sector, which is at the center of all three crises, must play a 
critical role if we are to successfully meet these challenges.
    Question 3. The recent stimulus bill directs billions to energy 
efficiency measures. How can these funds be targeted to be most 
effective?
    Answer. I have carefully read through the American Recovery and 
Reinvestment Act 2009, specifically to analyze the bill's requirements 
on energy efficiency. I find that only in some cases are there 
requirements, and that the few programs with requirements are somewhat 
vague. There are no benchmarks or energy reduction targets (which are 
essential to attaining real and significant reductions) mentioned in 
the bill.
    What this means is that many of the building projects put forward 
in response to the bill will have minimal energy reduction strategies, 
and as a result, minimal energy reductions.
    The following language, if included in the energy bill, would help 
to prioritize projects and serve as a guideline for projects submitted 
for grants. While the language does not prohibit any projects from 
going forward, it makes clear that projects will be competing for funds 
and meeting specific energy reduction targets will be a priority 
consideration in the judgment criteria.
    This language also sets the benchmark based on i) CBECS and RECS 
for federal and federally-owned buildings as called for in the Energy 
Independence and Security Act 2007, and ii) ASHRAE and IECC for other 
buildings. In addition, it also allows the Secretary of Energy to set 
other benchmarks and reduction targets, since there are states that 
have their own codes with specific criteria.
    The following language would send a strong message to the building 
community that significant energy reductions are important, and that 
the federal government will lead the way:

          A. That any new and renovated federal buildings receiving 
        stimulus money be required to meet the 2010 energy reduction 
        standard set by the Energy Independence and Security Act of 
        2007. Funding preference will be given to projects that achieve 
        overall energy savings compared to the Commercial Building 
        Energy Consumption Survey 2003 for commercial buildings and 
        Residential Energy Consumption Survey 2005 (RECS) for 
        residential buildings (or other comparable codes, standards or 
        measurement protocols authorized by the Secretary of Energy) 
        of, in the following order of priority--(1) carbon neutral, (2) 
        85 percent, (3) 70 percent, (4) 55 percent.
          B. For any new building construction or renovation project 
        grants made with stimulus money by state and local governments, 
        preference shall be given to projects that achieve overall 
        energy savings compared to ASHRAE 90.1-2004 for commercial 
        buildings and IECC 2006 for residential buildings (or other 
        comparable codes, standards or measurement protocols authorized 
        by the Secretary of Energy) of, in the following order of 
        priority--(1) 75 percent to carbon neutral, (2) 50 percent, (3) 
        30 percent.

    Question 4. Also, as you know, $3.1 billion of energy efficiency 
block grants came with preconditions, namely energy efficiency 
rulemaking measures and updating building codes. Are you concerned with 
the inevitable delay in getting the energy efficiency funding out to 
states and localities?
    Answer. The answer to this question is multifaceted and requires 
some explanation.
    Since professional architects and engineers design most commercial 
and public buildings and large-scale housing developments, it is 
instructive to look at A/E firm billings to project future Building 
Sector construction activity. It takes 6 months to a year or two to 
design and prepare construction documents for a building project, a few 
months for bidding, a month or two for contract negotiations and 
another month or two for construction start up. Billings for housing 
began to decline sharply at the end of 2007, followed by a decline in 
commercial and industrial project billings in early 2008. It was not 
until August of 2008 that we began to see a decline in public building 
project billings. At the end of 2008, while construction in housing and 
commercial buildings were in steep decline, construction in the public 
sector was steady with school construction up 6% and government 
building construction up 6% (Page 14 of my testimony).
    Most of the stimulus money and energy efficiency block grants for 
buildings are slated for the public building sector. Projects that have 
been designed but shelved for lack of tax dollars will be pulled off 
the shelf as shovel ready. Other projects will begin the design process 
taking advantage of efficiency block grant monies. As a result, the 
public building sector should continue on without a construction 
downturn for another few years.
    While I do not foresee a delay in using the efficiency block grant 
money, the anticipated building energy consumption reductions will fall 
short unless the actions recommended in answer #3 above are 
implemented.
    Question 5. In the 2007 Energy Independence and Security Act, 
Congress authorized an initiative for the development and establishment 
of zero net energy commercial buildings which applies to any commercial 
building newly constructed in the United States by 2030 as well as 50% 
of the of the commercial building stock of the United states by 2040. 
Groups such as the American Institute of Architects (AIA) have endorsed 
an immediate 50% reduction in fossil fuel-generated energy and a 10% 
reduction target every five years until new and renovated buildings 
achieve carbon neutrality in 2030.
    Have we made any progress on these initiatives?
    Answer. Yes, interest in the 2030 Challenge energy reduction 
targets has increased significantly since we issued the 2030 Challenge 
in January of 2006. Many state and local governments, professional 
organizations, A/E firms and institutions have adopted the targets and 
have begun to implement them, and many more would like to do so. 
However, without clear and sustained leadership and support from the 
federal government, these efforts will not be enough. Specifically, we 
will not see any significant reductions in the rate of increase in 
building sector energy consumption, let alone a decline, until the 
National Model Building Energy Code Standards are updated as indicated 
on Pages 12 and 13 of my testimony.
    My emphasis on performance standards is deliberate. By setting 
performance rather than prescriptive standards, Congress will not be 
picking energy and efficiency technology winners and losers. The 
marketplace, individual practitioners and building owners will 
determine the most cost-effective strategies that meet the performance 
standards. Many new strategies and technologies will emerge (and 
existing ones will re-emerge) to meet the particular conditions of 
various climatic regions and economic conditions. Performance standards 
bring out the best in our competitive and entrepreneurial spirit and 
create a level playing field for all technologies.
    For this approach to be most effective, performance standards and 
`reach codes' must preempt federal minimum appliance standards to 
insure the emergence of new technologies, systems and design practices.
    Also, I would ask that the Committee be mindful of the dates for 
the Model Energy Code updates specified on Page 12 of my testimony. The 
dates correspond with the 2007 Energy Independence and Security Act's 
initiative for the development and establishment of zero net energy 
commercial buildings in the United States by 2030 as well as 50% of the 
commercial building stock of the United States by 2040. They also 
coincide with the code standard update cycles set by IECC and ASHRAE. 
For example, the 2016 date for the 50% standard is critical and is set 
to coincide with the 2018 IECC code release date of April 2017. The 
next IECC code cycle is not until 2024. The dates specified on Page 
12--2016, 2022, and 2028, giving the states two years to adopt the code 
standards--meets both the 2030 Congressional target date and code cycle 
upgrade timelines.
    Question 6. As part of your vision to stimulate the economy, you 
provide a plan that would adjust interest rates on homes, pursuant to 
their energy reduction capability, and an accelerated depreciation 
schedule for commercial buildings, who demonstrate energy savings. 
Please describe who would manage these mortgage and depreciation 
programs.
    Answer. The Plan would leverage the benefits of energy reductions 
by offering for both existing and new homes, through Fannie Mae and 
Freddie Mac, mortgage financing with reduced interest rates in 
proportion to the energy reduction target reached. The Treasury 
Department is currently doubling its financial support to Fannie Mae 
and Freddie Mac. It will buy as much as $200 billion of preferred stock 
in the two mortgage companies, twice as much as previously promised. 
This support provides the capital to implement the Plan and tie the 
Treasury's support of Fannie and Freddie to private investment and job 
creation.
    The new `conforming' mortgages would be no larger then that allowed 
by law. The interest rate buy-down schedule would be determined by 
available funds and the level of job creation desired. For existing 
homes, a minimum amount of private investment in efficiency would be 
required according to the energy reduction target and mortgage rate 
offered. Homeowners taking advantage of the Plan would be required to 
have an energy audit and a certification that the work was performed 
properly. Equity can be built into the Plan by allowing existing 
efficiency and solar tax credits to be used up to a maximum mortgage 
amount or home value. Tying the mortgage rate buy down to minimum 
energy reduction targets insures that every federal dollar spent will 
stimulate private investment and create jobs.
    Since my testimony, the US Treasury and the Federal Reserve are 
expected to offer refinancing through the Term Asset-backed Loan 
Facility (TALF) next month to help free up money for the commercial 
real estate sector. Given this new development, the way to create jobs 
through commercial building energy reductions is through existing 
federal, state and local programs. At the federal level we recommend 
increasing The Energy Efficient Commercial Buildings Deduction from 
$1.80 per square foot for the 50% energy consumption reduction (cost 
savings) to 1) $3.50 per square foot for meeting a minimum 50% energy 
consumption reduction target below ASHRAE 90.1-2004, 2) $5.00 per 
square foot for meeting a minimum 75% energy consumption reduction 
target, and 3) $6.50 per square foot for a building that is carbon 
neutral.
    Building energy consumption from non-depletable energy sources 
collected on site or provided from within a development would be 
considered an energy reduction. The tax deduction should be offered for 
a period of 3 years.
    Question 7. I understand that there have been several green 
mortgage products developed to assist homeowners interested in these 
types of improvements. How different would your program be from these 
types of products?
    Answer. Interest in `green' homes has increased dramatically in the 
past few years. There are rebates, tax breaks and cash incentives for 
green homes offered by states and local governments. Fannie Mae 
provides a `green mortgage' program where the added value of a home's 
energy efficiency translates into more buying power not necessarily a 
lower net monthly outlay. The program is for both new construction and 
existing properties.
    The problem is very few people are applying for these incentives 
and mortgages. Right now, the public is averse to purchasing big-ticket 
items and increasing their monthly outlay, regardless of how small.
    Our Plan is very different. By tying the mortgage interest-rate 
buy-down proposed in our Plan to specific energy reduction targets and 
homeowner investments, three highly beneficial and desired results are 
achieved: 1) new demand for Building Sector jobs is immediately 
generated, benefiting not only the Building Sector, but all the 
industries and sectors that support the Building Sector, 2) a 
homeowner's monthly mortgage payments and energy bills are 
significantly reduced, providing disposable income and making it much 
more likely that they can meet their payments, and 3) creation of a new 
$236 billion per year renovation market that does not currently exist. 
A mortgage buy-down that is not tied to aggressive energy reduction 
targets and private investment will not create many jobs or new 
business opportunities.
    Question 8. Is it reasonable to demand Net Zero Energy performance 
from existing buildings, regardless of size, and geographic location? 
What obstacles exist in practice, to obtain net zero energy?
    Answer. In the 2007 Energy Independence and Security Act, Congress 
authorized an initiative for the establishment of 50% of the commercial 
building stock of the United States to be zero net energy by 2040. In 
the Act, the definition of a `zero-net-energy commercial building' is:

          a commercial building that is designed, constructed, and 
        operated to--(A) require a greatly reduced quantity of energy 
        to operate; (B) meet the balance of energy needs from sources 
        of energy that do not produce greenhouse gases (GHG); (C) 
        therefore result in no net emissions of greenhouse gases; and 
        (D) be economically viable.

    Given this definition, I believe it is possible to achieve zero-
net-energy for 50% of the commercial building stock of the United 
States by 2040 for the following reasons; i) over the next 30 years 
three quarters of the built environment in the US will be either new or 
renovated; ii) low-rise commercial buildings, which are easier renovate 
to zero-net-energy, make up 77% of total US commercial building stock; 
iii) most existing buildings can reduce their energy consumption using 
economically viable and readily available, strategies, technologies and 
equipment; and iv) the definition allows for existing buildings that 
cannot produce as much clean (non-GHG emitting) energy on-site as they 
consume, to purchase clean energy from a local or central utility.
      Response of Edward Mazria to Question From Senator Cantwell
    I believe another promising area for improving the efficiency and 
many other aspects of our nation's buildings is adding on green roofs. 
On efficiency benefits in particular, according to the EPA, the surface 
temperature of a green roof can be as much as 90 degrees Fahrenheit 
cooler than the surface of a traditional rooftop.
    Question 1a. Since your testimony did not specifically address 
green roofs, could you talk about what potential roles do you see for 
green roofs in achieving higher levels of building energy efficiency?
    Answer. Green roofs and cool roofs (solar reflective roofing 
membrane or surface) are part of a new generation of roofing strategies 
that have a high potential to reduce energy consumption in buildings. 
Each has advantages and disadvantages that are well documented in 
government literature. It must be noted however, that green roofs 
provide benefits beyond energy savings, such as storm-water management, 
filtering and reducing the temperature of water runoff, cooling ambient 
air temperatures (heat island effect), and increasing green space (see: 
Reducing Urban Heat Islands: Compendium of Strategies, EPA 2008).
    Question 1b. What is the energy savings potential of green roofs 
and what federal incentives and programs might help to accelerate the 
deployment of green roofs nationwide?
    Answer. The energy savings potential of green roofs depends on 
local climatic conditions and individual building and roof 
characteristics, such as size, use and insulation values. Greater 
energy savings are weighted toward a reduction in summer heat gain 
through shading, thermal mass and evapotranspiration, rather than in 
winter heat loss. Of critical importance in low-rise green-roofed 
buildings is their thermal resiliency, or their ability to maintain 
acceptable interior conditions when exterior conditions reach extremes 
(heat waves and cold spells), especially during a blackout or brownout.
    The Cities of Portland, OR and Chicago, IL have been very 
successful with their green roofing efforts by offering density bonus 
incentives in their zoning codes. This type of policy promoted 
nationally may accelerate green roof deployment. Federal tax credits to 
building owners are another avenue. We believe however, that updating 
the National Model Building Energy Code Standards (Page 12 of my 
testimony) will lead to the greatest deployment of all building energy 
savings strategies and technologies.
    Question 1c. Do you believe the Federal Energy Management Program 
an effective vehicle for the acceleration of green roof deployment in 
the federal building sector?
    Answer. Yes, the Federal Energy Management Program is charged with 
assisting federal agencies to use energy, water, and other resources 
wisely; green roofing is an effective design option that accomplishes 
these goals.
  evaluation of study titled ``achieving 30% and 50% over ashrae 90.1-
 2004 in a low-rise office building'', prepared for naiop (commercial 
     real estate development association), published december 2008
    After a thorough review of the NAIOP-commissioned energy efficiency 
study, it is my professional opinion that the study is of no value and 
is intentionally misleading for the following reasons:

          1. The study analyzes a square-shaped, four-story office 
        building configuration with completely sealed windows and an 
        equal amount of un-shaded glass on all four sides of the 
        building. In other words, the study analyzes an extremely 
        inefficient and outdated building design typology.
          2. The study looks at only three cities and climates--Newport 
        Beach, Chicago and Baltimore--and does so without changing the 
        design of the building to respond to these very different 
        climates.
          3. Of the numerous energy saving measures that can be applied 
        to, or integrated into a building design, the study analyzes 
        only five measures.
          4. The study intentionally does not analyze any of the 
        readily available (and well known) low-cost, no-cost and cost-
        saving measures that reduce a building's energy consumption. 
        For instance, the study does not investigate changing the shape 
        of the building, its orientation or form; redistributing 
        windows or using different windows to take advantage of natural 
        light for daylighting or sunlight for heating (office buildings 
        are day-use facilities); shading the glass in summertime to 
        reduce the need for air-conditioning; using operable windows 
        for ventilation (not even in Newport Beach with its beautiful 
        year-round climate); or using low-e glazing. It also does not 
        investigate employing a heat recovery system, cost-effective 
        solar hot water heating system or energy management control 
        system. In fact, the study fails to analyze so many of the no-
        cost and inexpensive energy-saving options available, that it 
        is impossible for the building configuration studied to reach 
        commonly achievable energy-consumption-reduction targets.
          5. NAIOP contends that its analysis is ``aimed at 
        understanding the practical and economical impacts'' of energy 
        efficiency measures available. Yet, the study intentionally 
        analyzes high-cost, low-energy-reduction measures to falsely 
        demonstrate that increases in efficiency are expensive and 
        unachievable. For example, the roof area in a four-story 
        building is only 25% of the building floor area. Increasing the 
        insulation values in the roof well beyond code will yield only 
        marginal efficiency results and at steep costs. However, seven 
        roof insulation options are analyzed in this category (see 
        Graph 1. below).*
---------------------------------------------------------------------------
    * Graph has been retained in committee files.
---------------------------------------------------------------------------
          6. Upgrading to commonplace low-e double glazing is 6.5 times 
        more efficient at half the cost per square foot than upgrading 
        to R-38 roof insulation, yet the study does not consider this 
        option.
          7. The study is statistically irrelevant. A four-story office 
        building represents less than one percent (approx. 0.29%) of 
        commercial building square footage and 0.08% of all building 
        square footage in the US.** A four-story, square office 
        building with equally distributed sealed glazing on all four 
        sides is a small fraction of this 0.08%.
---------------------------------------------------------------------------
    ** Source: US Energy Information Administration, 2007 Building 
Energy Data Book, Tables 2.2.3 and 7.4.2, and the EIA AEO 2008, Tables 
4 and 5.
---------------------------------------------------------------------------
                                 ______
                                 
    Responses of Philip Giudice to Questions From Senator Murkowski
    Question 1. What are some examples where the market has moved 
energy efficiency in the right direction regardless of government 
mandates?
    Answer. Over the past three decades there are relatively few 
instances in which the market alone has moved toward energy efficiency 
without some local, state, or national mandates or other government 
involvement. Interest by producers and consumers in energy efficiency 
has tended to rise and fall with the price of gasoline and other fuels. 
It would be great for markets and the private sector to move us toward 
a much more energy efficient world without government intervention but 
it is not doing so at present.
    For a host of reasons, minimizing the first cost of a purchase is 
weighted dramatically higher in priorities than minimizing life cycle 
costs, by both consumers and producers. This tendency contributes to a 
classic tragedy of the commons situation whereby each individual 
perceives themself as being better off by minimizing their first cost 
of a purchase, even though as a society we are all worse off by 
consuming far more energy than we need for the comfort, convenience and 
work we need to accomplish. The fact that individuals would also 
actually be better off from a life cycle cost standpoint provides an 
even greater impetus for government intervention. Much more energy 
efficiency will allow consumers and society to consume far less energy 
and producers will produce more valuable products. A relatively small 
amount of government intervention can and does provide dramatic 
benefits for all.
    EnergyStar labeling is a powerful example of public-private 
partnership, where the combination of branding and development of 
consensus standards has raised the bar for energy efficiency across 
many types of appliances and equipment. Products from computers to 
windows to power supplies are more efficient than previously. Equally 
important, the EnergyStar brand is widely recognized, respected and 
accepted as a standard of energy efficiency. Unfortunately, the 
consensus standards set in EnergyStar are often only modest 
improvements over what existed before, and so the acceptance of 
EnergyStar in the public mind as the efficiency standard may actually 
inhibit more ambitious energy efficiency. The public does not recognize 
that further highly cost-effective product improvements are possible 
and available, and thus does not buy those higher-performing products.
    Domestic appliance efficiencies showed little gain until federal 
standards mandated improvements. A ``golden carrot'' competition to 
produce a highly efficient refrigerator in the 1990's demonstrated that 
such products could be manufactured, but the industry responded by 
producing a few very high-end models that didn't find a significant 
market. Nonetheless, with federal standards now in place through 
legislation, the average refrigerator now consumes half the electricity 
required by a typical 1990 refrigerator.
    Periodically updated and constantly improving appliance standards 
based on the performance of a top tier of the most efficient appliances 
available could provide exactly the private--public process to 
stimulate continuous innovation and much greater energy efficiencies. 
This ever-escalating performance standards approach is being utilized 
in Japan and is helping to stimulate innovation and much more efficient 
appliances.
    Energy Services Companies (ESCOs) operate in the private sector but 
tend to specialize in niches, such as institutional buildings. ESCO's 
utilizing privately financed shared-savings approaches have effectively 
improved clients' energy efficiency. However without support from 
ratepayer-funded utility programs or public funds, ESCOs are not able 
to provide as deep energy savings as possible and miss many 
opportunities that could result in improved savings lasting decades 
rather than several years. Unsupported ESCO work tends only to capture 
the lowest hanging fruit and not the fullest potential of savings.
    One notable example of a market moving towards higher energy 
efficiency with a small amount of government support is data centers. 
EPA and DOE's green computing initiatives have helped bring a spotlight 
on data centers' needs and options. Also, California's state-run energy 
efficiency programs, which have specific tailored programs for data 
centers administered by the investor owned utilities, have been very 
helpful. These government programs have sparked much greater interest 
and awareness of energy efficiency in data centers and much better 
practices are emerging.
    In the past, data centers added processing power and servers 
without regard to their energy consumption. Increasingly data centers 
are recognizing that their single largest cost is the cost of energy 
for their operations--more than the cost of hardware, software, 
telecommunications, personnel and buildings. With this recognition, 
innovation has been unleashed and new solutions have emerged. Software 
is helping to realize a three fold or more increase in storage capacity 
from the same servers. Servers and processors have been redesigned to 
consume much less electricity and produce much less heat. Cooling 
requirements are being focused on exactly the components that need 
cooling and not the empty space between. All in all great strides are 
being made at the best data centers to produce the same amount of 
useful output while consuming much less energy.
    Question 2. The federal and state governments have been engaged in 
several standardized programs to promote energy efficiency in the last 
few decades. It is also true that there have been advances in energy 
efficient technology without the government playing a role. Please 
describe the pros and cons of these two approaches.
    Answer. The most effective energy efficiency efforts are those in 
which both the private and public sectors play strong interactive 
roles. Energy efficiency has `public good' benefits in addition to the 
private benefits to the end-user, therefore, economic theory suggests 
that appropriately targeted government regulation is likely to improve 
the market outcome. As a result, there are relatively few circumstances 
in which the market has found solutions completely on its own, leading 
to more energy efficiency without at least some governmental 
participation.
    The underlying reason for this is the relatively low cost of most 
forms of energy, even in high-cost regions like New England. The low 
cost of energy until very recently has been coupled with the further 
perception that energy costs only amounted to a very small percentage 
of operations costs in all but the most energy-intensive industries. 
Without the drivers of high costs and the negative impacts high energy 
costs have on competitiveness, there has been little motivation across 
most sectors of the economy to pursue energy efficiency for its own 
sake. Higher energy prices and increasing concern about climate change 
are just now having a serious effect on attitudes toward energy use at 
home and at work.
    Over the past 30 years the first impetus for increased energy 
efficiency came from low income households. Low income families, 
including the working poor, have had virtually no income growth during 
this period, but these families typically occupy the leakiest homes and 
must use the least efficient heating and cooling equipment. DOE's Low 
Income Weatherization Assistance Program was for many years virtually 
the only national energy efficiency and conservation program. In 
Massachusetts our low income program regularly delivers 20% to 30% 
energy savings for each family served and provides a national model for 
programs in other states. That program is also a model for the deeper 
savings that we are now beginning to implement in ratepayer-supported 
energy efficiency programs.
    Government, non governmental organizations, and the private sector 
all have roles in energy efficiency. The EnergyStar consensus standards 
process shows the impact that cooperative action can bring. But 
EnergyStar is not the leading edge of energy efficiency--the consensus 
process slows upgrading of EnergyStar standards primarily because 
private sector partners impede adoption of better standards. Homes can 
be built that are far more energy-efficient than the EnergyStar New 
Homes standard, with only small increases in first cost, costs that are 
offset in just a few years by superior performance.
    Government has a role in setting strong, responsive standards where 
the private sector has failed to do so. Government solutions are needed 
in the form of strong building codes that are enforced on the ground, 
strong appliance standards for highly efficient heating and air 
conditioning, strong standards that eliminate electricity waste from 
''instant on'' electronic appliances and other ``vampire'' electricity 
consumption.
    Government mandates have produced results and should continue to be 
used, but there needs to be room for regional variation based on 
differences in climate, and for experimentation. In most cases where 
the federal government has set efficiency standards it has pre-empted 
state standards. This leaves the unfortunate situation in which high-
cost states like Massachusetts are not allowed to have stronger 
standards than the out-of-date federal standards allow. The most 
egregious example concerns gas-fired furnaces. A federal standard, 
which will become effective only in 2015, raises the minimum furnace 
efficiency from 78% to 80%; while most furnaces purchased for private 
homes in Massachusetts are currently at 90%. Yet tenants, who are often 
in the lower income brackets, must continue to pay for the operation of 
inefficient furnaces because we cannot mandate landlords to provide 
better efficiencies.
    Question 3. The recent stimulus bill directs billions to energy 
efficiency measures. How can these funds be targeted to be most 
effective?
    Answer. Collaborative strong working relationships between the 
states and the federal government can and will provide a basis for 
assuring that the stimulus funds are put to work quickly, 
transparently, productively and get the results we all need. State 
energy offices and the well-established weatherization agencies and 
service providers have long-standing established relationships with 
their federal counterparts to do exactly what is needed. There are no 
single silver bullet answers to the question of how to best achieve 
energy efficiency, and the right solution in one state is not 
necessarily the right solution in another state due to varied climate, 
industry makeup, age of building stock, etc.
    Question 4a. Also, as you know, $3.1 billion of energy efficiency 
block grants came with preconditions, namely energy efficiency 
rulemaking measures and updating building codes. Are you concerned with 
the inevitable delay in getting the energy efficiency funding out to 
states and localities?
    Answer. We are not concerned about these requirements for 
Massachusetts or any state. Massachusetts has fulfilled the 
requirements fully. Further, as specified in the ARRA bill, the 
requirements are not onerous for any state to commit to working towards 
regulations that support increased energy efficiency and better 
building codes.
    Question 4b. In the 2007 Energy Independence and Security Act, 
Congress authorized an initiative for the development and establishment 
of zero net energy commercial buildings which applies to any commercial 
building newly constructed in the United States by 2030 as well as 50% 
of the of the commercial building stock of the United states by 2040. 
Groups such as the American Institute of Architects (AIA) have endorsed 
an immediate 50% reduction in fossil fuel-generated energy and a 10% 
reduction target every five years until new and renovated buildings 
achieve carbon neutrality in 2030. Have we made any progress on these 
initiatives?
    Answer. California and Massachusetts have active policy development 
to push forward zero net energy buildings (similar to carbon 
neutrality) for both the commercial and residential sectors. During the 
past year Massachusetts convened a Zero Net Energy Buildings Task 
Force, which issued its report on March 11. The report can be found at 
this link: http://tiny.cc/aJRwi
    The Task Force and report were built around a goal set by Governor 
Patrick to achieve universal adoption of zero net energy buildings for 
new construction by 2030. We have defined this goal as:

          A zero net energy building is one that is optimally efficient 
        and, over the course of a year, generates energy onsite, using 
        clean renewable resources, in a quantity equal to or greater 
        than he total amount of energy consumed onsite.

    Among the key commercial-sector recommendations are that energy 
performance standards be set for all new buildings and major 
renovations, differentiated by building type, by January 1, 2012. These 
standards would then be updated in future years, and specifically tied 
to ``exemplars,'' meaning the highest-performing new buildings in the 
Commonwealth, by January 1, 2018. Performance standards would be 
established for existing buildings by January 1, 2014. Also important 
is a recommendations that all commercial buildings display ``energy 
certificates'' that make visible their energy use in comparison to 
recognized standards, by January 1, 2012.
    A key early step in this direction is improving the efficiency 
requirements in the state's building code. A 2007 law requires that the 
Commonwealth adopt the latest version of the International Energy 
Conservation Code (IECC) within one year of its publication. We have 
now proposed to go beyond the IECC by adopting a ``stretch code'' that 
would be available for municipalities to adopt at their option. The 
Stretch Code is now being considered by our Board of Building 
Regulation and Standards (BBRS). It would require that most commercial 
buildings above 5,000 square feet (excluding several types of 
``specialty'' buildings) use 20 percent less energy per square foot 
than would occur under the ASHRAE 90.1 2007 standard, which is widely 
used in the United States as the basis for state commercial building 
codes. Modeling conducted by the two largest electric utilities in 
Massachusetts has shown, for several particular buildings, that the 20 
percent reduction can be achieved with lifetime savings on energy bills 
that are far larger than the incremental addition to initial capital 
costs. For example, in one case of a mid-sized office building that has 
been completed, modeling estimated a three-year payback on the capital 
costs, which was reduced to one year after the incentives provided by 
the utility, National Grid.
    Question 5. You highlight a number of energy efficiency programs 
that Massachusetts has successfully undertaken. Which ones, in your 
opinion, have been the most effective? Why?
    Answer. We are now meeting approximately 8% of our electricity 
needs through efficiency rather than greater electricity supply. In 
fact, we are effectively saving electricity at about 3.5 cents per kWh, 
compared to approximately 9 cents for the cost of conventional supply. 
A primary means through which this has been accomplished is effectively 
spending substantial funds on well designed, measured and verified 
efficiency. These funds have been collected through the systems benefit 
charge (SBC) on electric bills at a rate of \1/4\ of a penny for ever 
kWh distributed by investor owned utilities in MA. As of 2006, out of 
the nine states with the highest rankings for their electric efficiency 
programs, Massachusetts had the highest level of total spending, at 
$125 million, which constituted 1.5% of total electric revenues.\1\ For 
natural gas programs spending was lower (but this will change under the 
least-cost spending law passed in 2008), at $25.6 million in 2006, yet 
this still ranked us fourth in the nation, as measured by efficiency 
spending per unit of gas consumption.\2\ For the 2003-2005 time period, 
estimated lifetime benefits from all the utility programs is estimated 
at $1,229 million, compared to $504 million in spending by the 
utilities and program participants (businesses and residents), for an 
average benefit to cost ratio of 2.84.\3\
---------------------------------------------------------------------------
    \1\ ``The 2008 State Energy Efficiency Scorecard,'' ACEEE, October 
2008, Table 4, page 7.
    \2\ ACEEE, Table 8, page 11.
    \3\ ``Massachusetts Saving Electricity: A Summary of the 
Performance of Electric Efficiency Programs Funded by Ratepayers 
Between 2003 and 2005 , Executive Office of Energy and Environmental 
Affairs Massachusetts Division of Energy Resources,'' April 2, 2007, 
page 2.
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    These levels of spending enable Massachusetts utilities to provide 
appropriate incentive levels to businesses, homeowners, and owners of 
rental property for the completion of efficiency measures. Because of 
the serious marketplace barriers to energy efficiency that are largely 
inherent in the economy (average ownership of a building by one company 
or household only lasting a few years; lack of information; lack of 
certainty over the gains from efficiency; shortages of capital funding; 
``split incentives'' when the owner of the facilities is different from 
the party paying the energy bills; energy prices that do not reflect 
full societal costs of energy use), such incentives are vital to 
convince building occupants to engage in efficiency.
    The keys to having successful energy efficiency programs are 
straightforward in concept but not necessarily in execution. Successful 
programs require all of the following:

   Identify an efficiency need not being successfully addressed 
        in the marketplace;
   Identify a cost-effective strategy to meet the need, 
        including appropriate marketing, incentive type and delivery, 
        presentation to the target market, and implementation 
        strategies;
   Test models in pilots, adjust, implement at full scale;
   Evaluate and adjust, substantially revise or end, as 
        appropriate.
   Educate and train an appropriate work force
   Enlist people in their homes and businesses to take active 
        roles.
   Rigorous measurement and verification of results

    In Massachusetts, utility-based incentives have, on average, paid 
for about 60 percent of the capital cost of installing energy-efficient 
equipment. Among the various programs, efficient lighting provided 54 
percent of the total energy savings for commercial, industrial, and 
residential sectors combined, with HVAC (heating, ventilation, and air 
conditioning) providing another 23 percent.\4\
---------------------------------------------------------------------------
    \4\ Massachusetts Saving Electricity. . .'', page 7.
---------------------------------------------------------------------------
    Among the programs that have led to increased consumer purchases of 
high-efficiency light bulbs, light fixtures, and appliances are 
``negotiated cooperative promotions.'' Rather than require consumers to 
fill in and mail back a rebate form in order to obtain an incentive, 
which yields lower participation levels, cooperative promotions 
subsidize retailers to directly reduce their prices on these products. 
These promotions have been a major aid in raising sales of items such 
as compact fluorescent bulbs (CFLs), torchiere lamps that take CFL 
bulbs, and EnergyStar rated appliances. In 2006, these programs 
provided incentives for the purchase of 4 million CFLs discounted to 
$1-$2/bulb. Equally, or more important, an additional 5 million CFLs 
were purchased through other channels in the state, as years of CFL 
incentives have yielded their widespread acceptance among consumers.
    Also important has been the availability of energy audits at a 
major discount to businesses and free to homeowners. Since the possible 
gains from efficiency are largely unknown to the public, particularly 
for their own individual buildings, the hurdle of paying several 
hundred to several thousand dollars for an initial evaluation of their 
potential savings is a major obstacle. Providing these evaluations at 
low or zero cost gives building owners the information they need to 
consider making efficiency investments, without first having to make a 
substantial cash outlay before they have an idea of the potential 
benefits. However, we also know from long experience that audits alone 
do not generate energy efficiency. Homeowners, renters and businesses 
also need technical, process and financial assistance to undertake 
energy efficiency improvements.
    For low-income residential households efficiency services are 
provided at zero cost, since such households lack the capital to pay 
for even a small fraction of installation costs. We estimate that for 
the 2003-2005 time period, lifetime utility bill savings for these 
households were $140 million, with a large fraction of the savings 
coming from reduced winter heating bills, in contrast to other 
customers, who obtained most of their savings on electricity. 
Installations focus on air sealing and insulating buildings, and where 
necessary replacing heating systems.
    Question 6. As we know, it does no good to mandate a code if the 
standards are not adequately enforced. Do you have any challenges with 
ensuring code compliance? If so, what are they?
    Answer. Code compliance is enforced by municipal building 
inspectors in Massachusetts and almost all other states. There is 
clearly a challenge here, due to shortages of staffing that make it 
difficult for the inspectors to adequately check on all projects, the 
fact that inspectors see their primary mission as insuring the safety 
of buildings, and also due to inadequate training programs for the 
inspectors on efficiency requirements and on the need to enforce the 
energy code. With increased funding that is becoming available from 
several sources, including the federal stimulus bill and the Regional 
Greenhouse Gas Initiative auction proceeds, the Commonwealth plans to 
provide greater assistance to cities and towns on both these fronts. 
Under the Green Communities Act passed in 2008, we are required to 
provide assistance for training of the inspectors.
    In the case of our `stretch' code proposal to go beyond the 
existing building code, we are moving the burden of energy code 
enforcement for residential homes away from the overburdened municipal 
building inspectors by requiring a 3rd party certified rating and 
inspection from a certified rater. These raters are already used by a 
host of voluntary programs including the Energy Star Homes program, the 
DOE home rating initiative, the LEED for homes program and the recently 
announced National Association of Home Builders Green Homes program. 
Third party inspection may well prove to be the most desirable path for 
ensuring that homes are built to at least the minimum performance 
standards embodied in the existing energy efficiency codes and the more 
aggressive codes to come. Still, it will be a challenge to develop and 
deploy a corps of home energy raters in a time of slow new 
construction.
    Question 7. You mention that several European countries, including 
the UK, Germany and Austria have implemented standardized building 
energy calculations that are made available to the public, and that 
ASHRAE has just announced that it will develop such a scale. Has there 
been any feedback on the success, or any challenges that may have 
arisen, due to this measure in Europe?
    Answer. There is broad agreement that effective action on building 
codes is necessary but by itself is insufficient without a 
complementary approach to rating building performance. Building energy 
ratings allow the real estate market to factor in the energy efficiency 
of a building in the purchase price or lease or rental costs of a 
building. The UK, Germany and Austria have been leading adopters of 
this approach, but it has been developed in response to a standardized 
European policy called the EU Energy Performance of Buildings 
Directive. The original European Building Energy Directive of 2002 is 
summarized here: http://www.diag.org.uk/media/18835/cibse_briefing.pdf.
    However, the EU is in the process of finalizing an expansion of 
this directive given its success. A press release on the revisions to 
the EU directive is available here: http://tiny.cc/6wQIT
    The UK policy to fulfill the EU buildings directive is available 
here: http://www.diag.org.uk/
    Question 8. Your testimony provides a number of examples where 
states are moving forward with their own energy efficiency programs. 
Are states taking the lead in this area? If so, please describe whether 
or not a `one-size fits all'' approach may impact different 
jurisdictions.
    Answer. Some states are taking a lead with energy efficiency 
programs. For the most part the most active leaders are the same as 
those from the last 20+ years: Massachusetts, California, the Pacific 
Northwest, Wisconsin, Minnesota, Vermont, Connecticut, and New York. 
These states have developed critical mass in their infrastructures, and 
have maintained and extended their energy efficiency efforts over time. 
They have also been laboratories for each other and for states that are 
just beginning to ramp up their efforts. There has been a great deal of 
cross pollination among the most active players, including state 
governments, utilities, NGO's and other professional energy efficiency 
organizations. Emerging states include Maryland, Illinois, New Jersey 
and others.
    Different strategies are appropriate for different states and 
regions, due mainly to variations in climate conditions. These have 
been expressed in state government requirements and incentive programs, 
and also in the regional specificity of both model building codes 
published by ASHRAE and the IECC, and in Energy Star standards. Such 
differences are appropriate and should continue, but there also many 
areas where climate is not relevant to a standard, and in these 
situations uniform national standards are appropriate.
    The federal role, expressed by DOE and EPA, has been most effective 
in nurturing existing efforts and extending the knowledge base in 
almost all aspects of energy efficiency. National Laboratories--
Lawrence Berkeley, Oak Ridge, National Renewable Energy Laboratory and 
the Pacific Northwest National Laboratory--have made many contributions 
through technical studies, evaluations, and direct assistance to state 
and utility programs. The National Labs have been a baseline resource 
and should be supported and further encouraged in their efforts.
    Question 9. Please describe how the weatherization program has 
worked from your state's perspective. There remain differences in 
weatherization standards from area to area. Do you support further 
modifications to harmonize standards of the weatherization program to 
ensure that providers are maximizing the efficiency gains made in these 
building projects?
    Answer. The Low Income Weatherization Assistance Program is the 
oldest national energy conservation and efficiency program in the 
country. It's precursors date to 1975; the program as we know it today 
was first funded through the Federal Energy Administration, now the 
Department of Energy, in the late 1970''s. Since that time the program 
has evolved greatly from minimal `low-cost no-cost efforts that used 
part-time trainees, to the current programs that use the evolved 
knowledge of building science, experienced contractors and local 
program administrators to provide systematic approaches that provide 
substantial real savings to low income homeowners and renters. The 
Massachusetts program typically achieves savings in the 20-25% range 
for all fuels. In Massachusetts and other states, the DOE funds 
leverage additional funds from utility energy efficiency programs, so 
that the average expenditure per home from all sources is now in excess 
of $3,000. The program emphasizes treating the house as a system . The 
program provides additional non-energy benefits, such as healthier 
environments.
    Housing types, climate, and living arrangements vary across the 
country. The specific solutions needed to address Boston and New York 
apartment dwellers are different from those in single family housing in 
Virginia or New Mexico. Certainly some variation is appropriate to 
accommodate specific conditions. What should not vary is a national 
approach that addresses all fuels, heating and cooling needs as 
appropriate, and most importantly takes a systemic approach to 
addressing energy needs. What should also not vary are bold goals for 
reaching the low income population's energy needs broadly and deeply, 
energy efficiency solutions based in proven science and techniques, 
strong training and quality control, and finally, strong educational 
efforts to enlist low income households in energy efficient behaviors.
      Response of Philip Giudice to Question From Senator Cantwell
    Question 1. I understand standby power is a growing source of 
energy consumption in buildings. While the typical power loss per 
appliance is low--about one to 25 watts--when multiplied by the 
billions of appliances in buildings across America, and the fact that 
they occur basically 24 hours a day, standby losses are estimated to 
account for about 10 percent of all household power consumption.
    To try and address this problem, I inserted an amendment in the 
2007 energy bill that required that any electronic device or appliance 
purchased by the federal government use less than one watt of power 
while in standby mode. I was pleased that the House subsequently 
expanded this provision to incorporate standby power into all products 
already subject to federal efficiency standards.
    Are there other steps you believe we could be taking at the federal 
level to reduce standby power loads?
    Answer. The issue of standby power losses is an important one given 
the growing percentage of energy use in buildings now taken by `plug 
load,' of which standby losses are a significant portion.
    One way to tackle this issue is to ensure that standby power 
requirements are in place for all DOE appliance standards in addition 
to peak usage requirements. Some of the existing DOE appliance 
standards have not been updated since the 1990s and may presume that 
appliances are switched off completely when not in use, rather than 
continuing to require electricity. The energy star appliances program 
has required these standards for many years, but might benefit from a 
review of its potential to do more on phantom loads on small appliances 
such as cellphone chargers.
    In addition there needs to be significant consumer education to 
raise awareness of the issue of standby power as simple and non 
intrusive behavioral changes can do a lot to mitigate this energy use. 
The use of power bricks to combine electric plugs on one device with an 
on-off switch (and optionally a timer switch) is one simple and low 
cost mitigation strategy that requires primarily end user education to 
implement.
    One effective way to do this education and outreach is through the 
implementation of building energy rating standards and home energy 
audits as these typically break out the primary uses of energy and 
would illustrate the significant role of plug load from appliances in 
the overall building energy load. Utility and public information 
programs are another potentially effective means of educating the 
public, as well as businesses. Standby losses in computers, copiers and 
all sorts of office equipment represent significant but often 
unrecognized business costs. Networked computers, which still represent 
the bulk of business personal computers are generally shipped with 
power management features turned off because network administrators 
continue to specify that as the default setting.
                                 ______
                                 
     Responses of Arun Majumdar to Questions From Senator Murkowski
    Question 1. What are some examples where the market has moved 
energy efficiency in the right direction regardless of government 
mandates?
    Answer. Heat pumps were developed in the 1950s without government 
mandates, in part motivated by reducing operating costs of electric 
heating. Joint private and public R&D contributed to efficient 
technologies, for example refrigerator compressors (NRC, 2001) and 
condensing gas-fired furnaces (DOE and industry, ca. 1981). It is 
useful to note that industry first attempted condensing gas-fired 
furnaces in 1928, but the units suffered excessive corrosion and early 
failure. Subsequent private efforts similarly failed until a joint DOE-
private program beginning in 1979 identified materials that solved the 
corrosion problem\1\. Prior to the existence of government programs, 
such as development of test procedures and labels, little information 
existed in the market about energy efficiency. Voluntary government 
programs, e.g., Energy Star, have helped move the market toward higher 
energy efficiency. Market adoption of these technologies was assisted 
by state-mandated utility incentive programs, as well as by mandatory 
regulations such as state building codes and federal energy efficiency 
standards. The existence of a persistent government program for 
updating energy efficiency regulations has likely shifted the amount of 
private R&D toward energy efficiency from other issues.
---------------------------------------------------------------------------
    \1\ James R. Brodrick, Alex Moore, ``Conquering carrion'', ASHRAE 
Journal, April 2000, pp.29-33
---------------------------------------------------------------------------
    Note that manufacturers frequently introduce energy-saving features 
when they add new functionality or features to a product. However, in 
my view, there are relatively few cases where manufacturers have 
modified a device solely to raise its energy efficiency in the absence 
of government programs. Furthermore, manufacturers sometimes convert 
the efficiency gains into higher performance, such as greater 
acceleration in cars, larger refrigerators, or brighter lights, rather 
than only giving consumers greater energy savings.
    In general, market forces push higher energy efficiency when 
efficiency is a side benefit of some other technological improvements. 
The development of switch-mode power supplies about 1998 resulted in 
large increases in the efficiency of small power supplies for consumer 
electronics (first cell phones, then laptop computers). The initial 
impetus for this technology was their reduced weight and waste heat. 
They also permitted huge reductions in standby power use.
    Another example is the change from CRT to LCD computer monitors. 
The main feastures of LCD monitors are light weight, efficient use of 
desk space and improved resolution. That changeover is almost complete, 
and the LCDs use \1/2\ to \1/3\ the power of CRTs for screens of the 
same size. LCDs are typically advertised as ``flat screen'' rather then 
``energy efficient'' ones.
    For the case of efficient electronic ballasts for fluorescent 
lamps, government programs (e.g., state minimum efficiency standards) 
appear to be solely responsible for the uptake of the efficient 
technology\2\.
---------------------------------------------------------------------------
    \2\ Koomey, Jonathan, Alan H. Sanstad, and Leslie J. Shown. 1996. 
``Energy-Efficient Lighting: Market Data, Market Imperfections, and 
Policy Success.''. Contemporary Economic Policy. vol. XIV, no. 3. July 
(Also LBL-37702.REV). pp. 98-111. )
---------------------------------------------------------------------------
    Question 2. The federal and state governments have been engaged in 
several standardized programs to promote energy efficiency in the last 
few decades. It is also true that there have been advances in energy 
efficient technology without the government playing a role. Please 
describe the pros and cons of these two approaches.
    Answer. These two approaches (government programs and market 
advances) are complementary, not conflicting. Competitive markets lead 
to innovation. Large corporations seek to maximize profits and can 
invest capital in a variety of opportunities world-wide. However, there 
are market failures as well. For example, in commercial buildings, 
builders or landlords select the energy-related equipment while 
consumers pay the energy bills, leading to misalignment in incentives 
to reduce capital cost versus energy efficiency. Market failures limit 
the private profits available from commercializing energy-efficient 
technologies that are attractive from a societal benefit-cost 
perspective.
    Government programs can align private profits from efficient 
technologies with societal benefits (lower operating costs, lower 
emissions of pollutants and greenhouse gases and associated health and 
productivity benefits). Those government programs--such as labels, 
government procurement, tax credits to manufacturers and consumers, 
utility incentives--help create or expand markets for efficient 
technologies, whether those technologies are originally researched and 
developed with private or public funds. As an example of the 
convergence of private and public interests, appliance manufacturers 
sometimes negotiate simultaneously three government programs that 
support energy efficiency: i) updates to energy efficiency standards, 
ii) Energy Star levels and iii) tax credits to manufacturers and to 
consumers.
    On the research front, a recent study of R&D100 awards found that, 
in contrast to 30 years ago when about 80% of winners were large firms 
acting on their own, today roughly two-thirds of the winners involved 
collaborations across companies and increasingly with the public 
sector. Factors that likely contributed to this include the increasing 
complexity of technology and the corresponding challenges of any single 
company to bring sufficient technical expertise to bear, and the value 
of the public sector in catalyzing research and bringing disparate 
parties around a common problem. Further work is needed to evaluate 
this issue, but it may be indicative of the larger challenges facing 
the R&D enterprise\3\.
---------------------------------------------------------------------------
    \3\ Fred Block, Matthew R. Keller, ``Where Do Innovations come 
From? Transformations in the U.S. National Innovation System, 1970-
2006'', The Information Technology and Innovation Foundation, 2008
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    Question 3. The recent stimulus bill directs billions to energy 
efficiency measures. How can these funds be targeted to be most 
effective?
    Answer. The economic stimulus package offers a unique opportunity 
to make energy efficiency investments in a way that not only creates 
jobs in the short term, but also addresses long-term goals of energy 
efficiency.
    Consider the long-term first. The Commercial Buildings Initiative 
(CBI), as legislated by EISA'07, requires the US to approach zero-net 
commercial buildings by 2030 (within the next 20 years). As I have 
identified in my written and oral testimonies, there are two major gaps 
today:

   Lack of measurement of building actual energy performance 
        and policies requiring it
   Lack of integration in design and operation of buildings

    The stimulus funds could play a very critical role in overcoming 
some of these barriers. As an example, consider Figure 1 which shows a 
flow chart and feedback loops of how long-term goals could be achieved, 
and identifies in the gray box where and how the stimulus funds could 
play a critical role.* In collaboration with states, counties, and 
cities, here are some early steps that the stimulus funds could help 
achieve:
---------------------------------------------------------------------------
    * Figures 1-4 have been retained in committee files.

          1. Create and deploy an integrated information technology 
        (IT) infrastructure (hardware, communications, and software) to 
        obtain sub-metered energy performance of all public buildings.
          2. Create generic non-proprietary energy-related operations 
        and maintenance dashboard visualization architectures and apply 
        them to every public, so that facilities managers can begin 
        reducing their energy use immediately.
          3. Create a national repository to collect and store 
        standardized energy performance data of every public building.
          4. Develop efficient and accurate modeling and simulation 
        tools through calibration to data so the models can be used to 
        rapidly identify retrofit measures that can have the maximum 
        energy savings at minimum cost.
          5. Deploy those retrofit measures.

    If these key steps outlined here are enabled by the stimulus 
package, they could pave the way in the long-term for:

          (i) buildings that continually optimize their own 
        performance;
          (ii) whole building integration for both design and 
        operation;
          (iii) real-time continuous commissioning, prognostics and 
        diagnostics;
          (iv) validation of reductions in energy consumption;
          (v) lessons learned and best practices of what energy 
        efficiency measures provide the maximum benefit, which can be 
        used for new building design and operation;
          (vi) national commercial whole-building energy labels (like 
        mpg) of both `asset' (modeled potential) and `operational' 
        (actual measured performance) types.

    Here are some early steps that have been taken locally:

          a) Given our location in the Bay Area, there have been 
        preliminary discussions between LBL to partner with local 
        cities (Richmond, Berkeley, Emeryville, Oakland) to introduce 
        the IT infrastructure to measure the performance of all public 
        buildings in these cities.
          b) LBL has also helped General Services Administration (GSA) 
        come up a plan of how to introduce an infrastructure of 
        measurement and feedback control to create ``smart'' GSA 
        buildings.
          c) UC Berkeley campus is also considering introducing the IT 
        infrastructure in the campus buildings.

    While I am aware of only the above-mentioned steps in our locality, 
I suspect such steps are being taken in other localities as well. I 
believe the national laboratories in partnership with the federal and 
state agencies could play a role as regional centers to provide the 
necessary guidance and stewardship for using stimulus funds to achieve 
long-term energy efficiency goals.
    Question 4. Also, as you know, $3.1 billion of energy efficiency 
block grants came with preconditions, namely energy efficiency 
rulemaking measures and updating building codes. Are you concerned with 
the inevitable delay in getting the energy efficiency funding out to 
states and localities?
    Answer. I believe it would be most appropriate for DOE-EERE to 
respond to this question. Having said that, in my view, the benefits 
from these block grants will be substantial. For the purpose of 
stimulus, minimizing delay is best since job retention and creation are 
urgently necessary. However, if we are to connect the dual goals of 
short-term job creation to long-term energy efficiency, it would be 
useful and prudent to create a plan (see response to Question #3), 
which could provide guidance to states and localities for ongoing 
implementation of cost-effective efficiency measures after the stimulus 
is over. As I mentioned before, the national laboratories in 
partnership with the federal and state agencies could play a role as 
regional centers to provide the necessary guidance and stewardship.
    Question 5. In the 2007 Energy Independence and Security Act, 
Congress authorized an initiative for the development and establishment 
of zero net energy commercial buildings which applies to any commercial 
building newly constructed in the United States by 2030 as well as 50% 
of the of the commercial building stock of the United states by 2040. 
Groups such as the American Institute of Architects (AIA) have endorsed 
an immediate 50% reduction in fossil fuel-generated energy and a 10% 
reduction target every five years until new and renovated buildings 
achieve carbon neutrality in 2030. Have we made any progress on these 
initiatives?
    Answer. I believe it would be most appropriate for DOE-EERE to 
respond to the question of how much progress has been made on the 
above-mentioned initiatives. Having said that, I will provide some 
details of what measures have been taken so far.
    In response to EISA'07, DOE launched the Commercial Buildings 
Initiative as part of the EERE Buildings Technology (EERE-BT) Program. 
In August 2008, DOE created the National Laboratory Collaborative on 
Buildings Technology, which consists of a team of 12 people (2 from 
each of the 5 national laboratories and 2 from EERE-BT program) to 
better support DOE's CBI activities. That group has now begun to become 
engaged in a new round of planning the RDD&D agenda, and has recently 
been asked by EERE to create a roadmap for CBI. EERE-BT program has 
updated its multiyear plan that begins to address the issues raised in 
EISA'07 with respect to CBI. EISA also requires DOE to designate a 
consortium to assist DOE in the management and implementation of the 
program. A Federal Register notice was released to address this and 
responses are now being evaluated by EERE-BT.
    The Architecture 2030 ZEB goals that have been adopted by the AIA 
and many cities and other organizations are generally consistent with 
the DOE EISA ZEB goals. While EISA sets only the long term performance 
target, Architecture 2030 sets a specific timetable that starts 
immediately with a mandate that all new buildings use 50% less energy 
than current building stock. While these goals are achievable in 
principal, with motivated owners and skilled design teams, they are not 
easily met today for a variety of reasons related to technology, 
finance and design process so that in fact only a very small number of 
buildings achieve the Architecture 2030's initial 50% target. We also 
lack a comprehensive data collection and reporting program that would 
make it practical and efficient to track progress toward these long 
term goals.
    Question 6. There are several rating programs available to use in 
obtaining differing ``green'' building ratings. Within your testimony 
you reference a study by Frankel concerning one such program and raise 
the issue of whether there is a means to improve the correlation 
between design intent and actual performance in individual buildings 
rated by these programs. Are there ways to accurately predict overall 
performance of these `green' rated buildings?
    Answer. Green building ratings address many performance factors, 
and overall the ``green building rating'' movement has been a positive 
force to focus additional attention on the importance of energy 
efficiency in our building stock. Different green building rating 
systems assign different levels of priority to achieving energy 
efficiency. So there are many claims for green buildings in which 
energy efficiency has not been a major driver in the design of the 
building, which is one reason why one sees a wide range of energy 
performance even from buildings with the same green building rating. 
But even if we focus solely on energy, as I noted in my testimony, 
there has been a historical disconnect between ``design intent'' and 
actual measured performance. There are some fundamental 
``understandable'' reasons why measured performance may not meet design 
expectations. Consider for example a case where designs are formulated 
around a building with one 8-hour shift, with a low density of staff, 
and little office equipment, and energy predictions are made 
accordingly. Now consider the situation some time later when 
construction is complete and the building owner now uses two 8 hour 
shifts, more people per shift, and adds extensive amounts of new energy 
consuming equipment, e.g. servers. In this case we would expect the 
measured performance to be much larger than predicted. This could 
potentially be addressed if the simulation is modified to incorporate 
such changes and additions to buildings energy use.
    While significant progress has been made in our current simulation 
tools, such as Energy Plus, over ones that were developed in the 1980s 
(e.g. DOE-2), more can be done, especially to make them useful for 
operations as well. The designers and their consultants may not be 
adequately trained in the use of the tools or may not have adequate 
understanding of the new efficiency technologies to be employed. 
Inappropriate materials and equipment substitutions may have been made 
compared to original designs, thus compromising performance. New and 
complex controls and operating systems may not have been adequately 
commissioned to ensure their proper operation. Occupants of the 
building may not fully understand how control systems work, thus 
reducing performance and increasing energy use. Operators often do not 
have the real time energy metering, monitoring, visualization and 
interpretation tools that would allow them to reliably operate the 
facility to achieve energy performance targets. In order to bring 
measured performance into alignment with design intent and 
expectations, each of these issues must be properly addressed.
    In the future, if information regarding occupancy, lighting, HVAC, 
appliance use, and other energy consuming activities are integrated 
with advanced simulation tools, it is highly likely that we will reduce 
the mismatch between design intent and actual performance.
    Question 7. Please describe the most effective steps to move 
towards reductions in risk and cost in existing technologies that could 
enable a deeper market penetration to meet zero-net energy goals.
    Answer. Your question properly identifies a key focus on the role 
of innovation to enable these new ZEB designs. We not only need 
entirely new, disruptive scientific breakthroughs that dramatically 
increase performance but we need innovation that addresses cost and 
risk as perceived by designers and owners as well. I have identified 
these in my written testimony as well.
    The specifics will vary with different technologies and building 
systems but let me illustrate with some examples. Daylighting 
strategies are good examples of the ``integrated systems'' I described. 
They can reduce electric lighting use by 50-80%, and they are 
reportedly used in many of the high performance buildings today. 
However the dimming ballasts that help capture the lighting savings are 
far too expensive to be routinely used or specified. We have been 
advised by manufacturers that if the technology moved from small niche 
markets to much larger mainstream markets, then new investment in 
cheaper more effective integrated chip technology and volume production 
could reduce current costs by 80%. So we would propose a national 
program of cost-shared demonstration projects with states, utilities, 
etc to create these high volume mainstream markets to provide deeper 
market penetration at much lower cost. These systems also involve 
integration of sensors and controls, and proper calibration and 
maintenance over time. Today these functions are complex, costly, 
risky--and therefore not widely used. We believe that an aggressive 
RDD&D effort-that links sensor improvements in the lab with field 
demonstrations of measured performance with state and utility 
partnerships, would rapidly move these systems into mainstream markets 
and could greatly accelerate progress toward these goals. We are 
confident that these systems will work as we have already partnered 
with owners, state agencies and suppliers to produce such an integrated 
daylighting/shading system in the New York Times building in Manhattan. 
We would invite you to visit this building to see first hand the 
potentials for these systems. The challenge is now that noted in your 
question: moving from single examples to widespread application and 
use.
    Many building owners and developers do not believe that an 
integrated system will actually reduce energy consumption in a 
building. However, we know from practice that even partial integration 
(lighting only or HVAC only) can lead to such reductions, and if a 
building is fully operated like a system, reductions can be much more. 
We need testbed facilities around the country that are reconfigurable, 
and which demonstrate that a fully integrated building can dramatically 
reduce energy consumption, much more than is achievable today through 
simple retrofitting and retrocommissioning. Such regional facilities 
would make deep reductions in energy consumption credible to building 
owners, and it would enable to them make financial decisions based on 
actual data. This would reduce risk and enable a deeper market 
penetration.
    Question 8. Please describe how you would develop a science-based 
approach towards Whole Building Systems.
    Answer. A building is made up of materials, HVAC, lighting, 
windows, appliances etc. These components and sub-systems are supplied 
by different companies, which don't generally interact with each other. 
Yet, when these components are assembled in a building, they do indeed 
interact with each other, and sometimes fight each other and waste 
energy. We need a science-based approach to develop deeper 
understanding of how these components interact with each other. Based 
on that fundamental understanding, we need to develop tools to design 
and operate buildings. The design should integrate physical sciences 
and engineering (see below) with architecture and information science 
and technology. An example of such a tool is what we are calling the 
``Building Operating System'', which is the ``intelligence'' or the 
brain behind building operation. It will take in sensor data from 
lighting, HVAC, plug loads, and occupancy, and then make decisions of 
how the achieve the right comfort and indoor environment and yet 
exploit cooperation between sub-systems to reduce overall energy 
consumption of the system. While feedback control system do exist for 
HVAC or lighting individually, a Building Operating System for all the 
energy systems in a building does not exist today.
    The Building Operating System must be based on fundamental 
understanding of how fluid and heat flows in the building, the dynamics 
of building systems and how to use feedback control to stabilize the 
system. Figure 3 shows the time and length scales involved. It is 
necessary to use the basic science of thermodynamics, fluid mechanics, 
heat transfer and feedback control systems as the underlying 
``foundational science'' in the next generation simulation and 
operational tools.
    Question 9. Please describe how you would develop an educational 
system to promote the type of workers needed to design whole buildings 
systems, and other buildings that may lead to the goal of zero-net 
energy buildings.
    Answer. The major gap in the buildings industry is the 
fragmentation of the process of designing, constructing and operating 
buildings. This is depicted in Fig. 4, which illustrates how fragmented 
operational islands are created. Lack of communication and integration 
occurs because there are no common goals and incentives. Unless this is 
addressed, it is unlikely that we can achieve zero-net energy buildings 
in a cost effective and scalable way.
    This can be addressed through integrated education programs at 
multiple levels. Professional architects and engineers need improved 
educational curricula so that every architect graduating from an 
accredited program has the skills to design a zero energy building. At 
the university levels, we must create joint curricula that integrate 
science, engineering, architecture, business, public policy and law to 
collectively address the needs of the buildings industry. Such 
integrated programs can provide a holistic view of all aspects of how 
can one reduce energy consumption in buildings. However, they do not 
exist today, but can be created with existing know-how. I note the 
superb efforts of a small group of educators, the Society of Building 
Science Educators, who have struggled to upgrade the quality and 
quantity of classes and training experiences that architects must 
master in their educational programs. Similar efforts are needed to 
educate a new generation of electrical and mechanical engineers. More 
generally, the challenge is to integrate the concepts of energy 
efficiency into the graduate curricula, such as architecture, 
engineering, business, and agriculture.
    An equal or larger challenge is continuing education programs to 
improve the skill levels of existing professionals, and perhaps methods 
to help finance those who may be interested in returning to classrooms 
to sharpen or extend their energy design skills. We need to create 
education/training bootcamps and certificate programs that provide an 
integrated view of the buildings industry. Both professional training 
and continuing education programs must not only expand the knowledge 
base in terms of materials, products and systems, but must train 
designers to think and act in a more collaborative and integrated 
manner to address the systems integration issue I described in my 
presentation. The AIA and other professional groups are exploring how 
this ``integrated design process'' can be most effectively implemented 
to equip our designers with the process skills needed to produce a new 
generation of zero energy buildings.
    In my testimony, I have recommended the creation of Regional 
Centers of Excellence that can integrate R&D with professional training 
and continuing education program through the use of test-bed facilities 
for hands-on experience. For example, if we are to achieve zero-net 
energy buildings through the judicious integration of IT 
infrastructure, advanced simulation tools and a Building Operating 
System, the next generation of architects, building designers and 
operators must be exposed to the integrated tools and approaches.
    Finally, as I mentioned in my testimony, we need to initiate a 
significant program of graduate student and post-doctoral fellowships 
as well as young investigator awards that will attract the best young 
minds to energy science and technology, and help create intellectual 
capital for the nation. For many years the DOE funded a fellowship 
program in Nuclear Engineering to create and maintain the academic 
infrastructure to support nuclear energy. Now it is time to create a 
large, graduate fellowship program to support students pursuing Ph.D.s 
in energy efficiency. Such a program could be quickly established and 
have a long-term impact on energy efficiency technologies. My Division 
at Lawrence Berkeley National Laboratory and my University, UC 
Berkeley, would be pleased to host some of these Ph.D. students.
    Question 10. Is it possible for a new building to reach the goal of 
zero-net energy, be cost effective, and be easily scaled up to a wide 
market introduction?
    Answer. Your question gets to the heart of the challenge today. It 
is possible for a new building to approach the zero net energy goal on 
a one-off basis today IF an enlightened owner with a large budget 
selects a skilled integrated design team, and if the construction, 
commissioning and operations are also intelligently and skillfully 
executed. Even then the building type, size and climate will influence 
the outcome. As an example--it is much easier today to achieve ZEB 
levels of performance in a small office building in a coastal 
California climate, than to achieve that level in a highrise building 
in Houston that houses a data center and restaurant. Since your 
question addresses scaling to wide markets in a cost-effective manner, 
I would then have to say that this goal cannot be achieved today. It 
could be made cost-effective if all the benefits--not just energy 
savings, but productivity, livability/quality of experience, health, 
long-term costs of emissions, live cycle assessment--are included. 
Scaling up to wide market introduction will require significant effort, 
but may be more desirable than the consequences of inaction, including 
long-term costs of later retrofit, environmental consequences, etc. 
Scaling up will decrease the costs of achieving zero-net energy. We are 
confident that with policy changes (e.g. standards based on measured 
performance), and appropriate investment in new breakthrough 
technologies and systems, and with better trained designers with new 
design methods and better tools, these goals are attainable on the time 
scale envisioned by EISA'07.
    While the focus of the responses so far has been zero-net energy 
buildings for new construction, it is important to remember that we 
should achieve 50% saving in existing buildings as well. This can be 
more difficult than new construction, and should be a significant focus 
of any program.
      Response of Arun Majumdar to Question From Senator Cantwell
    Question 1. I understand standby power is a growing source of 
energy consumption in buildings. While the typical power loss per 
appliance is low--about one to 25 watts--when multiplied by the 
billions of appliances in buildings across America, and the fact that 
they occur basically 24 hours a day, standby losses are estimated to 
account for about 10 percent of all household power consumption.
    To try and address this problem, I inserted an amendment in the 
2007 energy bill that required that any electronic device or appliance 
purchased by the federal government use less than one watt of power 
while in standby mode. I was pleased that the House subsequently 
expanded this provision to incorporate standby power into all products 
already subject to federal efficiency standards.
    Lawrence Berkeley National Laboratory has been a world leader in 
identifying and explaining the standby power problem. Can you describe 
the standby power problem in the United States and the prospects for 
reducing this growing demand source?
    How would you assess the how well federal agencies are complying 
with the standby power provisions in the 2007 Energy Bill? What have 
been the resulting benefits to taxpayers from reduced federal energy 
use?
    Answer. My colleagues at Berkeley Lab estimate that standby power--
that is, the electricity use of appliances while switched off or not 
performing their primary functions--is responsible for roughly 8% of 
residential electricity use and 1% of global carbon emissions. In 
California, for example, the average home has about forty appliances 
continuously drawing electricity.
    EISA'07 requires DOE to take into account standby when establishing 
new energy efficiency regulations for new appliances and in government 
purchasing. The DOE can better comment on what I believe is its 
considerable progress towards implementation; however, I would like to 
reflect on three aspects that deserve further consideration.

          1) First, the definition of the standby mode set out in 
        EISA'07 is potentially restrictive and difficult for DOE to 
        convert into effective regulations. I would recommend 
        authorizing additional research to create a clear definition.
          2) Second, EISA'07 treats standby power in the context of 
        each appliance. In some cases it is simpler, from both 
        technical and administrative perspectives, to think of standby 
        as a ``horizontal'' issue affecting many types of products. I 
        would recommend authorizing DOE to regulate certain kinds of 
        functionality across many energy-using products rather than on 
        a product-by-product basis. This approach will also be valuable 
        when dealing with time of use pricing and with ``smart'' 
        appliances communicating with the proposed ``smart'' grid.
          3) Third, EISA'07 focused on standby power use in products 
        already covered by energy efficiency standards. This is 
        understandable: however, recent research by my colleagues 
        suggests that standby power use is growing most rapidly among 
        the hundreds of smaller products. The energy use of each of 
        these products is small, but the combined impact is 
        significant. I would recommend consideration of a 
        ``horizontal'' approach to reduce the electricity use of these 
        smaller devices.

    With regard to Federal procurement of low standby products, I would 
like to note that this activity originated with a presidential 
Executive Order (13221) in 2001. Berkeley Lab has been active advising 
the Federal Energy Management Program (FEMP) in its implementation 
since then. For example, we advise FEMP about the appropriate standby 
level for each product. Products complying with the Executive Order 
(and now EISA) are listed on a website presently managed by Berkeley 
Lab (oahu.lbl.gov). No evaluation of EISA's impact has taken place but 
anecdotal evidence suggests that federal purchasing specifications with 
respect to standby power have strongly influenced the way manufacturers 
design equipment for both the government and public.
    With regards to prospects to reduce standby power, I believe that 
considerable savings are still possible although the problem has become 
much more complex in the last decade. Increasingly, appliances and 
consumer electronics need to stay continuously linked to a 
communications network and perform other functions even when they are 
not truly ``on''. As a result, many new low-power modes are appearing, 
all consuming significant power. An important research task will be to 
ensure that consumers gain the functionality that they desire in future 
devices but in the most energy-efficient way possible.
                                 ______
                                 
   Responses of Charles Zimmerman to Questions From Senator Murkowski
    Question 1. What are some examples where the market has moved 
energy efficiency in the right direction regardless of government 
mandates?
    Answer. Because energy is Wal-Mart's second largest operating 
expense, we've been focused on efficiency practically since the day we 
were founded. Over the years we've taken a number of innovative steps 
to become more efficient, most or all of which were adopted without a 
government mandate. Because lighting accounts for one third of our 
energy consumption, it provides a good example of energy efficiency 
measures we've taken. We've developed a daylight harvesting system that 
is utilized in more than 95% of newly constructed Wal-Mart Supercenters 
and Sam's Clubs. By integrating dimmable T-8 fluorescent lamps, 
electronic continuous dimming ballasts, computer-controlled daylight 
sensors, and approximately one skylight for every 1000 square feet, we 
take full advantage of natural daylight. Daylight harvesting can reduce 
up to 75% of the electric lighting energy used in a Supercenter during 
daylight hours. Each daylight harvesting system saves an average of 
800,000 kWh per year, which is enough energy to power 73 single family 
homes (11,020 kWh average annual usage) for an entire year.
    Question 2. The federal and state governments have been engaged in 
several standardized programs to promote energy efficiency in the last 
few decades. It is also true that there have been advances in energy 
efficient technology without the government playing a role. Please 
describe the pros and cons of these two approaches.
    Answer. We believe that governments at the state and/or federal 
level and the private sector each have a role to play in achieving 
greater efficiency. Federal and state incentives and mandates have 
played an important part in achieving efficiency gains over the last 
few decades, while the private sector has driven the innovative 
products and practices that have helped to meet, or--in our case--
exceed federal and state requirements.
    Question 3. The recent stimulus bill directs billions to energy 
efficiency measures. How can these funds be targeted to be most 
effective?
    Answer. We believe that state and local governments are uniquely 
positioned to distribute stimulus funding based on their specific needs 
and the criteria established in the American Recovery and Reinvestment 
Act of 2009.
    Question 4. Also, as you know, $3.1 billion of energy efficiency 
block grants came with preconditions, namely energy efficiency 
rulemaking measures and updating building codes. Are you concerned with 
the inevitable delay in getting the energy efficiency funding out to 
states and localities?
    Answer. Given that the stimulus bill became law a few short weeks 
ago, we believe it is too soon to judge whether or not the conditions 
placed on additional state energy grants will result in funding delays.
    Question 5. In the 2007 Energy Independence and Security Act, 
Congress authorized an initiative for the development and establishment 
of zero net energy commercial buildings which applies to any commercial 
building newly constructed in the United States by 2030 as well as 50% 
of the of the commercial building stock of the United states by 2040. 
Groups such as the American Institute of Architects (AIA) have endorsed 
an immediate 50% reduction in fossil fuel-generated energy and a 10% 
reduction target every five years until new and renovated buildings 
achieve carbon neutrality in 2030.
    Have we made any progress on these initiatives?
    Answer. We have been in discussions with DOE and the National Labs 
regarding the potential of this program and Wal-Mart's involvement. The 
details of the specific program and what we will do, if anything, has 
not yet been determined. We'll be sure to update you as we make 
progress.
    Question 6. Please explain how your partnerships with other private 
entities have led to more energy efficient products coming into the 
market. Have these partnerships been cost-effective?
    Answer. The story of our partnership with Lennox Industries, cited 
in my testimony, is a great example of how we've been able to work with 
our partners to push the envelope in terms of efficiency gains. 
According to Lennox, the rooftop heating and cooling unit they 
developed for us is ``up to 66% more efficient than U.S. Department of 
Energy Regulations.'' That unit is the one that has been installed on 
all of our new U.S. stores and retrofits over the past year. We believe 
that partnerships like this one are cost effective for us and good for 
our customers.
    Question 7. Wal-mart has the luxury of building most, if not all, 
of their own stores in the United States. `New construction stores,' 
provide you the opportunity to make these buildings energy efficient 
from day one. What steps have you had to take with existing structures 
in the United States, the UK and Japan that you have purchased to 
incorporate into a Wal-Mart? What challenges have you had?
    Answer. With the exception of daylight harvesting, most of our 
other energy initiatives are easily retrofitted into existing stores. 
Our stores in all of our countries are expected to meet the same 
corporate / global goal of reducing greenhouse gas emissions by 20% by 
2012. All of our countries share their best practices with one another 
as to how they are going to achieve this goal. Regarding the U.K., they 
have already exceeded this 20% goal in only half of the allotted time 
frame.
    Question 8. You make a very important point that as efficient as 
your equipment might be, without the proper control technology, your 
systems will never meet energy efficiency expectations. Can you 
elaborate a little on the `sophisticated energy management system' you 
use to monitor all of your stores from the home office in Bentonville, 
AR? Do you have any thoughts on how this could be translated into a 
smart grid system?
    Answer. The Energy Management System allows us to monitor and 
control the heating, air conditioning, refrigeration and lighting 
systems for all stores and Sam's Clubs from Wal-Mart corporate 
headquarters in Bentonville, Arkansas. Through the EMS we are able to 
constantly monitor and control energy usage, analyze refrigeration 
temperatures, observe HVAC and lighting performance, and adjust system 
levels from a central location 24 hours per day, seven days a week. 
This system is sophisticated and complex, but the functionality it 
provides is quite simple: we can control our energy intensive systems 
in real-time to conserve and use energy more efficiently. While the 
households of the everyday Americans who shop in our stores may not 
require this level of interaction, the promise of smart grid is that a 
version of these very technologies will allow residential and smaller 
commercial consumers to similarly make informed decisions about when 
and how to consume energy.
    Question 9. What has been the result of you sharing your 
information and results with EPA, DOE, etc.?
    Answer. One result was the formation of the Retailer Energy 
Alliance (REA) at the Department of Energy. The REA provides a forum 
for leading retailers to share information about energy efficiency and 
conservation practices. Topics of focus include HVAC systems, 
refrigerated display cases, interior and exterior lighting systems, and 
integrated energy management systems.
    Question 10. What was it that prompted Wal-Mart to make energy 
efficiency adjustments, with the end goal of ultimately achieving 100% 
renewable energy in your stores?
    Answer. Energy efficiency has always been a business priority for 
Wal-Mart. In 2005, our then-CEO Lee Scott announced a new corporate 
sustainability initiative that had among its overarching goals for Wal-
Mart to ultimately be supplied by 100% renewable energy. Mr. Scott 
believed that a strong commitment to sustainability would make Wal-Mart 
a better and more innovative company and that as a leading corporate 
citizen, we could contribute to America's energy security, provide more 
sustainable products to our customers, and maintain our commitment to 
low prices while addressing the real challenge of climate change.
    Question 11. Have your collaborations with Lennox Industries, and 
perhaps others, helped bring new efficient technologies to market that 
otherwise may not have been developed? If so, please explain.
    Answer. Our collaboration with Lennox grew out of our 
sustainability commitments and has been an important partnership for 
each of us. We've recently taken another step in our sustainability 
commitment by creating the Wal-Mart Green Jobs Council comprised of 
leading technology manufacturers to discuss ways to get more innovative 
technology into the field by marrying Wal-Mart's large scale market 
demand with innovation in design and supply of more sustainable 
technologies from Wal-Mart's vendor community, with the end of goal of 
preserving, protecting and creating more green jobs in the U.S.
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                 Statement of the Department of Energy
                building technologies: program overview
    Today, the nation's 113 million households and more than 4.7 
million commercial buildings consume more energy than the 
transportation or industry sectors, accounting for nearly 40% of total 
U.S. energy use, including:\1\
---------------------------------------------------------------------------
    \1\ 2008 Building Energy Data Book.

   72% of electricity and 54% of natural gas
   Energy bills totaling $392 billion each year
   Contribute to 38% of Carbon, 18% of Nitrogen Oxide, and 55% 
        of Sulfur Dioxide emissions
   Construction and renovation accounts for 9% of GDP and eight 
        million people are employed in the sector

    The Building Technologies Program (BT) develops technologies, 
techniques, and tools for making residential and commercial buildings 
more energy efficient, productive, and affordable. BT's strategic goal 
is ``To create technologies and design approaches that enable net-zero 
energy buildings\2\ at low incremental cost by 2025. These efficiency 
gains will have application to buildings constructed before 2025 
resulting in a substantial reduction in energy use throughout the 
sector.''\3\ To accomplish this goal, BT utilizes three strategies:
---------------------------------------------------------------------------
    \2\ A net-zero energy building is a residential or commercial 
building with greatly reduced needs for energy through efficiency gains 
(60 to 70 percent less than conventional practice), with the balance of 
energy needs supplied by renewable technologies.
    \3\ 2008 Building Technologies Multi-Year Program Plan. http://
www.eere.energy.gov/buildings/publications/pdfs/corporate/
myp08complete.pdf

   Research and Development
   Technology Validation and Market Transformation
   Appliance and Commercial Equipment Standards

    The R&D subprogram has a whole buildings approach to energy 
efficiency, considering the system interactions to develop optimal 
solutions to Zero Energy Buildings.

   Residential buildings are addressed through Building America 
        and the Builder's Challenge, which conduct systems research 
        with builder partners to reach Zero Energy Homes by 2020.
   The Commercial Buildings works towards Zero Energy Buildings 
        through:

    --National Energy Alliances--associations of building owners and 
            operators who share best practices, ideas, and needs for 
            energy efficient technologies and services
    --National Accounts--builders and owners who commit to build new 
            buildings that use 50% less energy\4\ and retrofit existing 
            buildings for 30% energy savings.
---------------------------------------------------------------------------
    \4\ Compared to ASHRAE 90.1-2004.

   Emerging Technologies develops the new technologies and 
        strategies that address technical and market barriers to energy 
        efficiency. These technologies include advanced lighting, 
        building envelopes, windows, space conditioning, water heating, 
---------------------------------------------------------------------------
        solar heating and cooling, and appliance technologies.

    Technology Validation and Market Transformation addresses market 
transformation ensuring energy efficient technologies are implemented 
in homes and businesses, through ENERGY STAR, Building Energy Codes and 
Energy Smart Hospitals and Schools.
    Appliance and Commercial Equipment Standards program addresses the 
growing legislative requirements to increase energy efficiency by 
implementing national efficiency standards for appliances and 
commercial equipment. By eliminating the most inefficient technologies, 
the program saves consumers money and reduces energy consumption.
                                 ______
                                 
   International Council of Shopping Centers, Inc.,
                            Office of Global Public Policy,
                                 Washington, DC, February 26, 2009.
Hon. Jeff Bingaman,
Chairman, Energy and Natural Resources Committee, U.S. Senate, 304 
        Dirksen Senate Building, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Energy and Natural Resources Committee, U.S. Senate, 
        304 Dirksen Senate Building, Washington, DC.
RE: Hearing on Reducing Energy Consumption in Buildings

    Dear Chairman Bingaman and Ranking Member Murkowski: Thank you for 
this opportunity to add to the record of your February 26, 2009 Senate 
Energy Committee Hearing seeking recommendations for reducing energy 
consumption in buildings through innovative federal energy efficiency 
policies and programs.
    The International Council of Shopping Centers (ICSC) is the premier 
global trade association of the retail real estate industry. Founded in 
1957, ICSC has more than 70,000 members in the U.S., Canada, and over 
90 other countries. ICSC represents owners, developers, retailers, 
lenders, and other professionals as well as academics and public 
officials. ICSC has over 5,000 public sector members including mayors, 
city managers, and economic development and planning professionals. 
Among its many initiatives, ICSC promotes retail development in 
underserved urban and rural markets. ICSC's award winning Alliance 
Program encourages public-private partnerships and open dialogue on 
emerging issues impacting the retail real estate industry and the 
quality of life in local communities, including sustainability and 
energy efficiency.
    ICSC's membership is well aware of the need to enhance energy 
efficiency together with overall economic efficiency--particularly in 
times of economic crisis. Yet ICSC is also aware that well intended 
efforts to impose goals for specific reductions in energy consumption 
may inadvertently result in economic harm to thousands of small 
entrepreneurs, their employees and their customers.
    The shopping center industry recognizes better than anyone that 
``one size does not fit all.'' This is as true for the commercial 
property sector as it is for shoes.
    Therefore, ICSC would like to take this opportunity to highlight a 
few of the distinct features of the retail real estate industry in the 
hope of informing the discussion as Congress moves forward with a 
national energy efficiency policy. Obviously, any such list will be 
incomplete but ICSC hopes this information can serve as the beginning 
of an important and necessary dialogue on diversity within the real 
estate industry.
                               tenant mix
    The tenant mix within a shopping center or mall determines the 
energy consumption profile of the overall property. For example, a 
grocery store (with significant refrigeration requirements) will 
consume more electricity than a similar-sized shoe store. A restaurant 
may consume more energy than a comparably sized boutique. The tenants 
present in any particular shopping center will be determined by a wide 
array of economic and demographic factors--and the tenant mix will 
change over time.
    Because of this complexity in the multi-tenant retail sector, 
Energy Star benchmark ratings are not available for this format of 
commercial property. Therefore, any federal legislation that relies 
upon or incorporates Energy Star ratings should reflect this fact.
                          cooling and heating
    Shopping centers and malls generally have a central unit to provide 
heating, cooling and ventilation (HVAC) for the ``common area'' only. 
This general rule has many exceptions among enclosed mall properties 
but fewer exceptions at non-enclosed shopping centers such as the 
typical grocery-anchored neighborhood center. Therefore, most retail 
tenants will have a separate HVAC unit on the roof. Multiple sizes and 
numerous manufacturers may be represented on a shopping center's roof 
because the size and specifications for the HVAC system serving a 
tenant's premises will be dictated by that particular tenant's needs 
and the size and configuration of its premises.
                           triple net leases
    Most shopping center tenant leases are ``triple net'' leases. While 
not unique to retail properties, the triple net lease is pervasive 
among shopping centers. A triple net lease is one where the tenant pays 
a base rent as well as the tenant's proportionate share of the expenses 
incurred by the landlord to operate the overall property. These 
expenses include real estate taxes, property insurance and some repair 
and maintenance costs. The tenants also typically pay for the costs to 
operate their premises, including electricity consumption. There are 
many varieties of the triple net lease and the details vary between 
properties--even within a single multi-tenant property--and from 
landlord to landlord and from tenant to tenant.
    As if this contractual diversity were not enough of an obstacle to 
rapid changes in pre-existing procedures, the traditional ``triple 
net'' lease often lacks financial incentives for the landlord to 
enhance the energy efficiency of an operating shopping center or mall. 
The reason for this is that the landlord will typically have to bear 
the upfront cost of the energy efficiency upgrade, while the tenants 
typically would enjoy the benefits of reduced energy costs.
    The retail real estate industry is developing appropriate lease 
clauses to deal with many of the issues created by the traditional 
triple net approach but it will take many years for existing leases to 
be replaced by newer versions that take energy efficiency and advanced 
sustainability practices fully into account.
                     ``daylighting'' and skylights
    Similar to a modern office building, in the typical multi-tenant 
retail property, suspended acoustic tile panels are used as the 
ceiling. Suspended ceilings have generally been seen as an obstacle to 
the use of ``daylighting'' (skylights) in shopping centers. ``Big Box'' 
stores, which typically lack the suspended ceiling in favor of a 
``warehouse'' look, have been better able to experiment with skylights 
and have produced impressive results for direct energy savings.
    However, for smaller tenants the suspended ceiling can reduce the 
volume of air that must be heated or cooled, which itself can provide 
energy savings. And existing multi-level properties have great 
difficulty incorporating skylights on the lower levels. This is not to 
say that daylighting cannot provide specific value--only that it should 
be applied in the proper setting in a decision left to the private 
property owner.
                net metering and distributed generation
    Simply ``saving'' energy will not be enough. If America's economy 
is to grow with its population we will certainly need additional 
sources of energy together with improvements in energy efficiency.
    Therefore, any federal proposal that mandates or encourages energy 
efficiency should count toward that goal each building or multi-tenant 
property's on-site renewable power generation such as solar or wind.
    Currently, limitations in solar technologies and manufacturing 
capacities guarantee that solar is a highercost option than coal. As 
the technology improves and the cost-per-kilowatt declines there will 
still be obstacles to widespread use of on-site renewables. In 
particular, the absence of a consistent national standard for ``net 
metering'' means that many utility customers lack a key economic 
incentive to produce carbon-free power to their maximum potential. Many 
states have no allowance for net metering and many more have completely 
inadequate standards, such as extremely low generation limits, or 
``caps,'' which discourage the development of distributed and renewable 
power.
    Net metering is simply the regulatory requirement that utilities 
allow interconnection for customer generated power with a direct offset 
or payment for each kilowatt hour produced. In those states that allow 
net metering, when the on-site capacity is fully consumed by the 
customer-generator, the economic return is equivalent to the retail 
price for electricity that the customer normally pays. However, many 
utility companies refuse to pay anything near the retail price for any 
excess power that is contributed to the grid by the on-site generator. 
Often, the utility only pays a few pennies per kilowatt hour--a rate 
the utilities call the ``avoided cost.'' Yet the utility delivers that 
same power to other customers at the full retail price, even if the 
power merely crossed the property line to the next building--or the 
adjacent tenant in a sub-metered shopping center.
    Because individual states have traditionally regulated these market 
areas, there is a confusing quilt of net metering rules across the 
country--despite the fact that the electricity transmission system is 
truly a national asset. Indeed, Congress has recognized the national 
scope of the distribution grid numerous times, most recently in the 
energy provisions of the stimulus package dealing such as those 
addressing the ``smart grid'' and transmission capacity. National net 
metering and interconnection rules must be part of any future energy 
package.
                               conclusion
    The International Council of Shopping Centers and its individual 
members stand ready to assist Congress as it investigates and 
eventually addresses the nation's energy efficiency options. In 
particular, we look forward to helping Congress develop environmentally 
sound and economically sensible policies to enhance the energy 
efficiency of private sector buildings.
    Again, thank you for this opportunity to join the conversation 
about this critically important issue.
            Respectfully,
                                             Kent Jeffreys,
                                              Staff Vice President.
                                 ______
                                 
                          Statement of ConSol
   achieving 30% and 50% over ashrae 90.1-2004 in a low-rise office 
                                building
Prepared for: NAIOP
Date published: December 2008
                                abstract
    This report documents technical analysis aimed at understanding the 
practical and economical impacts of constructing a defined low-rise 
office building at levels 30% and 50% above the ASHRAE 90.1-2004 Energy 
Standard. The model evaluated was a 95,000 square foot, four-story, 
Class A low-rise office building. EnergyPlus was the simulation tool 
used for modeling building heating, cooling, lighting, ventilating and 
other energy flows. Practical, above 90.1-2004 energy features were 
determined by identifying building enhancements with less than a ten-
year utility savings' payback period. The analysis was not successful 
in identifying practical energy feature upgrades to achieve the 30% 
threshold. The best scenario evaluated achieved 23% over the ASHRAE 
90.1-2004 Standard.
                              introduction
    Several studies have highlighted the approaches required to design 
highly efficient theoretical commercial buildings. Fewer though, have 
focused on the energy saving potential of actual real world buildings. 
ConSol responded to a request for proposal from NAIOP asking for an 
analysis of a recently constructed low-rise office building, and the 
practicality of building it 30% and 50% above the ASHRAE 90.1-2004 
Energy Standard. The intention of this study is to form a high level 
understanding of the above ASHRAE 90.1-2004 Standard potential in a 
single model representative of a low-rise Class A office new 
construction.
    The objectives of this study are:

   To construct an energy model that accurately predicts the 
        energy use of the low-rise office building provided;
   To determine the baseline regulated energy use for the 
        building model in specific climate zones in the United States;
   To determine the percent over ASHRAE 90.1-2004 that specific 
        energy feature upgrades provide;
   To determine, via marginal cost of the energy feature 
        upgrades, practical limits of energy features within the 
        building model given a ten-year utility savings' payback 
        requirement.

    This report is organized into three parts: methodology, results and 
findings. Methodology describes the methods and assumptions used in 
this analysis. Results outline the energy use and energy savings 
potential of the features evaluated. Summary reviews the overall 
results of the study and describes technical barriers encountered.
                              methodology
    This section summarizes the methodology and assumptions used in the 
undertaking of this analysis.
Simulation Software
    Due to the important interaction between building energy systems in 
commercial structures, ConSol deemed it appropriate to use EnergyPlus 
v2.2 for this analysis. EnergyPlus is the U.S. Department of Energy 
(DOE) building energy simulation program for modeling building heating, 
cooling, lighting, ventilating and other energy uses. It is the most 
advanced building simulation tool to date, building on many popular 
features of legacy simulation engines, such as BLAST and DOE-2, and 
including many new capabilities. The EnergyPlus simulations were 
managed via the DesignBuilder v1.6 platform. DesignBuilder was chosen 
for its intuitive and powerful 3D modeling capabilities as well as its 
ability to organize the various energy efficiency measures employed.
Simulation Methodology
    A modified version of ASHRAE 90.1-2004 Appendix G was used for this 
analysis. Modifications include the exception of non-regulated loads, 
baseline glazing and energy savings, not energy cost, as the above 
ASHRAE 90.1-2004 metric. Percent savings are based on a code compliant 
building as described in ASHRAE 90.1-2004 with the exception of 
unregulated (receptacle and process) loads and baseline glazing 
percentage. It was deemed appropriate for this study to focus solely on 
regulated loads as only they could be affected by jurisdictional energy 
codes such as the International Energy Conservation Code and ASHRAE 
90.1 Standard. Baseline glazing was set at 50% to most accurately 
maintain architectural similarity to the actual building as 
constructed.
Prototype Building
    The scope of this project required analysis of a specific low-rise 
office building. NAIOP provided construction documents for a recently 
completed office building with its specifications in the following 
table:

                 TABLE 1: PROTOTYPE BUILDING DESCRIPTION
------------------------------------------------------------------------
              Feature                            Description
------------------------------------------------------------------------
Building Type                                           Low-Rise Office
------------------------------------------------------------------------
Total Area                                           95,000 square feet
------------------------------------------------------------------------
Number of Stories                                                     4
------------------------------------------------------------------------
Average Story Height                                            14 feet
------------------------------------------------------------------------
Class of Construction                                                 A
------------------------------------------------------------------------
Percentage of Facade Glazing                                        50%
------------------------------------------------------------------------
Glazing Sill Height                                              4 feet
------------------------------------------------------------------------
HVAC System                            VAV with Terminal Reheat and Gas
                                                           Fired Boiler
------------------------------------------------------------------------

Climate Zones
    Of the seven International Energy Conservation Code (IECC)/ASHRAE 
climate zones in the continental United States (as depicted in Figure 
1),* the scope of this analysis covers IECC Climate Zones 3, 4 and 5. 
Table 2 describes the specific cities in which the office building was 
evaluated. The IECC zones are categorized by Heating and Cooling Days 
(HDD and CDDs), and range from the very hot Zone 1 to the very cold 
Zone 7. Additional sub-zones A, B and C denote humid, dry and marine 
climates, respectively.
---------------------------------------------------------------------------
    * Figures 1-10 have been retained in committee files.

               TABLE 2: CITIES AND CLIMATE ZONES EVALUATED
------------------------------------------------------------------------
                   City                             Climate Zone
------------------------------------------------------------------------
Newport Beach, CA                                                    3B
------------------------------------------------------------------------
Baltimore, MD                                                        4A
------------------------------------------------------------------------
Chicago, IL                                                          5A
------------------------------------------------------------------------

Baseline Energy Features
    Energy savings are demonstrated in comparison with a baseline model 
that is minimally compliant with the ASHRAE 90.1-2004 Standard. Since 
the 90.1 Standard has separate requirements for each climate zone, the 
prototype building baseline was modeled individually to each climate 
zone via the energy feature levels listed in Table 3.

                                            TABLE 3: ASHRAE 90.1-2004 ENERGY FEATURES USED IN BASELINE MODEL
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            City                                   Newport Beach, CA                Baltimore, MD                   Chicago, IL
--------------------------------------------------------------------------------------------------------------------------------------------------------
Envelope
--------------------------------------------------------------------------------------------------------------------------------------------------------
  Roof                                                                               R-19                           R-19                           R-19
--------------------------------------------------------------------------------------------------------------------------------------------------------
  Walls                                                                              R-13                           R-13                    R-13 + R3.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
  Floors                                                                             R-19                           R-19                           R-19
--------------------------------------------------------------------------------------------------------------------------------------------------------
  Glazing SHGC                                                                        SHGC all = 0.19                SHGC all = 0.25                SHGC all = 0.26
------------------------------------------------------------
                                                                                      SHGC north = 0.26              SHGC north = 0.36              SHGC north = 0.36
--------------------------------------------------------------------------------------------------------------------------------------------------------
  Glazing U-value                                                                    0.46                           0.46                           0.46
--------------------------------------------------------------------------------------------------------------------------------------------------------
HVAC
--------------------------------------------------------------------------------------------------------------------------------------------------------
  EER                                                                                10.8                           10.8                           10.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
  Boiler Efficiency                                                                  0.78                           0.78                           0.78
--------------------------------------------------------------------------------------------------------------------------------------------------------
  Aux. Energy                                                                 3.34 W/sqft                    3.34 W/sqft                    3.34 W/sqft
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lighting
--------------------------------------------------------------------------------------------------------------------------------------------------------
  Lighting Power Density                                                       1.0 W/sqft                     1.0 W/sqft                     1.0 W/sqft
--------------------------------------------------------------------------------------------------------------------------------------------------------

    It is important to note that while the climate zones evaluated vary 
from mild to very cold, there are relatively little (slight) changes in 
the minimally compliant requirements inherent to ASHRAE 90.1-2004.
Energy Efficiency Measures Evaluated
    Energy efficiency measures assessed mainly consisted of increasing 
efficiency in existing energy features of the building. Energy 
efficiency measures evaluated included:

          Enhanced wall insulation
          Enhanced roof insulation
          Varying levels of exterior glazing
          Higher efficiency window assemblies
          Reduced air infiltration via the installation of an air 
        barrier
          Reduced lighting power densities
          Higher efficiency HVAC equipment
          Photovoltaic electricity energy generation

    Of these measures, several were included as recommendations from 
the ``Advanced Energy Design Guide for Small Offices'' (ASHRAE et al. 
2004). We did not evaluate all efficiency measures available to office 
buildings. For measures that could be included in a later study, see 
Summary.
Cost Data
    The majority of cost data was obtained through the ``RSMeans Green 
Building Cost Estimating Database'' (Keenan et al. 2006). These costs 
were usually available in per square foot or linear foot quantities and 
were multiplied by the appropriate area or distance of material. 
Increased costs related to HVAC auxiliary energy (fans, dampers, etc.) 
were determined via ``RSMeans Mechanical Cost Data'' (Mossman 2005). 
Few studies have determined the cost increases associated with reduced 
lighting power density (LPD); however, the ``Development of the 
Advanced Energy Design Guide for Retail Buildings--50% Savings'' (Hale 
et al. 2008) provided insight to possible cost ranges. Although Hale's 
work was based on a retail model, it was the only reduced LPD costing 
data found suitable. Infiltration was assumed to decrease 0.15% via 
installation of an air barrier with cost data found in ``Investigation 
of the Impact of Commercial Building Envelope Airtightness'' (Emmerich 
et al., 2005).
    Costs not available from the above sources were determined via 
personal correspondence with equipment manufacturers. Feature costs are 
assumed constant at all locations. Table 4 outlines the marginal cost 
increase, from code compliant material, associated with each energy 
feature. Marginal cost increases were found by subtracting code 
compliant feature cost from the upgraded energy efficiency measure 
cost. Cost estimates were installed costs. Labor and material were 
included.

                               TABLE 4: MARGINAL COST INCREASE PER ENERGY FEATURE
----------------------------------------------------------------------------------------------------------------
         Energy Feature             Marginal Cost                        Energy Feature          Marginal Cost
----------------------------------------------------------------------------------------------------------------
Lighting = 0.8 W/sqft            $60,420.00                       R-26 Roof                    $16,362.73
----------------------------------------------------------------------------------------------------------------
Lighting = 0.9 W/sqft            $30,210.00                       R-32 Roof                    $30,387.92
----------------------------------------------------------------------------------------------------------------
Infiltration = 0.35 ACH          $28,751.52                       R-48 Roof                    $44,413.11
----------------------------------------------------------------------------------------------------------------
HVAC--aux.energy = +10%          $29,563.73                       R-48 Roof                    $67,788.44
----------------------------------------------------------------------------------------------------------------
HVAC--EER = 12.0 EER             $12,409.11                       R-19 Cool Roof               $4,750.00
----------------------------------------------------------------------------------------------------------------
HVAC--EER = 11.5 EER             $7,332.66                        R-26 Cool Roof               $21,112.73
----------------------------------------------------------------------------------------------------------------
Boiler Efficiency = 90%          $17,500.00                       R-38 Cool Roof               $49, 163.11
----------------------------------------------------------------------------------------------------------------
R-17 Walls                       $2,300.65                        Window Glazing = 40%         N/A
----------------------------------------------------------------------------------------------------------------
R-26 Walls                       $7,870.63                        Window Glazing = 30%         N/A
----------------------------------------------------------------------------------------------------------------

Payback and Utility Rates
    Energy efficiency measure marginal cost divided by annual utility 
savings provided payback periods in years. Peak kilowatt savings were 
not included. State average utility prices were taken from data 
compiled by the Energy Information Administration (EIA 2007) and shown 
in Table 5:

          TABLE 5: AVERAGE COMMERCIAL UTILITY PRICES PER STATE
------------------------------------------------------------------------
                City                  California   Maryland    Illinois
------------------------------------------------------------------------
Electricity ($/kWh)                      0.1523      0.0847      0.1346
------------------------------------------------------------------------
Natural Gas ($/therm)                      1.02        1.33        1.04
------------------------------------------------------------------------

                                results
    This section summarizes the performance of the baseline models as 
well as the energy efficiency measures evaluated.
Baseline Annual Energy Use
    The annual energy use of the baseline, minimally code compliant 
building is shown in Figure 2. Table 6 outlines the breakdown of energy 
use by building system.

                                                                             TABLE 6: BASELINE ENERGY USE BREAKDOWN
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Newport Beach                                          Baltimore                                             Chicago
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    MMBtu/year          % of total                       MMBtu/year          % of total                       MMBtu/year          % of total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Domestic Water Heating                                      271.3                8.3%                            271.3                5.1%                            271.3                4.2%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Lighting                                                    985.5               30.2%                            792.4               15.0%                            801.4               12.3%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
System Misc.                                               1229.0               37.7%                           1229.0               23.2%                           1229.0               18.9%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Heat Generation                                             486.4               14.9%                           2741.4               51.8%                           4018.1               61.7%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Air Conditioning                                            286.0                8.8%                            263.0                5.0%                            197.8                3.0%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Total                                                    3258.2                                               5297.1                                               6517.5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    An important point is the difference in annual energy use between 
the mild and cold climates. Even though the minimally code compliant 
model in Chicago has similar building features as the model in Newport 
Beach, the colder Chicago climate drives the annual regulated energy 
use to nearly double that of the Newport Beach model.
Comparison of Baseline Model to CBECS' Derived Benchmarks
    Since the outputs from the EnergyPlus simulations are theoretical, 
it is valuable to compare these predictions to available benchmarks of 
energy use in comparable office buildings. The most recent Commercial 
Building Energy Consumption Survey (CBECS) database contains energy use 
estimates for nearly 4.9 million U.S. commercial buildings (EIA 2005). 
A brief summary comparing our model's energy estimates and CBECS' 
office building data is summarized in Table 7.

                             TABLE 7: ENERGYPLUS MODEL VERSUS CBECS COMMERCIAL DATA
----------------------------------------------------------------------------------------------------------------
                                                               Average of ConSol EP Models    CBEC Data  MMBtu/
                                                                        MMBtu/year                   year
----------------------------------------------------------------------------------------------------------------
Domestic Water Heating                                                               271.3                494.0
----------------------------------------------------------------------------------------------------------------
Lighting                                                                             859.8               1615.0
----------------------------------------------------------------------------------------------------------------
System Misc.                                                                        1229.0
----------------------------------------------------------------------------------------------------------------
Heat Generation                                                                     2415.3               3116.0
----------------------------------------------------------------------------------------------------------------
Air Conditioning                                                                     248.9                845.5
----------------------------------------------------------------------------------------------------------------
  Total                                                                             4775.3               5225.0
----------------------------------------------------------------------------------------------------------------

    Energy use from fans, dampers and other miscellaneous equipment 
within the HVAC system are labeled ``System Miscellaneous'' in 
EnergyPlus outputs, as opposed to the CBECS' database, which simply 
adds this energy consumption to the ``Air Conditioning'' or ``Heat 
Generation'' categories. With an approximate 9% difference in overall 
annual energy consumption, the baseline EnergyPlus model results are 
reasonable.
Energy Feature Reduction Potential
    The following table and figures describe and summarize the 
percentage above the ASHRAE 90.1-2004 Standard baseline each energy 
efficiency measure provided. It is important to note that each energy 
feature was evaluated independently. For example, 5.73% total building 
energy savings was solely due to reducing the lighting system power in 
the Newport Beach model from 1.0 watts per square foot (W/sqft) to 0.8 
W/sqft.

          TABLE 8: ENERGY EFFICIENCY FEATURES AND DESCRIPTIONS
------------------------------------------------------------------------
     Energy Feature Name                      Description
------------------------------------------------------------------------
Lighting = 0.8 W/sqft          Lighting power reduced from 1.0 watts per
                                square foot
------------------------------------------------------------------------
Lighting = 0.9 W/sqft          Lighting power reduced from 1.0 watts per
                                square foot
------------------------------------------------------------------------
Infiltration = 0.35 ACH        Building infiltration reduced from 0.5
                                air changes per hour
------------------------------------------------------------------------
HVAC--aux. energy = +10%       Non direct heating/cooling energy use
                                (fans, dampers, controls, etc.)
                                efficiency increased by 10%
------------------------------------------------------------------------
 HVAC--EER = 12.0 EER          HVAC cooling equipment efficiency
                                increased from ASHRAE 90.1-2004 minimum
------------------------------------------------------------------------
HVAC--EER = 11.5 EER           HVAC cooling equipment efficiency
                                increased from ASHRAE 90.1-2004 minimum
------------------------------------------------------------------------
Boiler Efficiency = 90%        Service boiler efficiency increase from
                                ASHRAE 90.1-2004 minimum
------------------------------------------------------------------------
R17 & R-25 Walls               Wall insulation increased from ASHRAE
                                90.1-2004 minimum
------------------------------------------------------------------------
R-48, R-38, R-32 & R-26 Roof   Roof insulation increased from ASHRAE
                                90.1-2004 minimum
------------------------------------------------------------------------
R-38 & R-26 Cool Roof          Roof insulation increased from ASHRAE
                                90.1-2004 minimum + roofing material
                                with solar reflectance 0.70 and
                                emittance 0.75
------------------------------------------------------------------------
Window Glazing = 30% & 40%     Exterior facade glazing ratio reduced
                                from baseline ratio of 50%
------------------------------------------------------------------------

Energy Feature Payback via Utility Savings
    Figures 6, 7 and 8 describe the payback period, in years, required 
for each energy feature to offset its incremental cost via energy 
savings. The alternative colored data points labeled ``PACKAGE'' 
represent a collection of energy features modeled together. These 
features were chosen because together would have a collective payback 
period of approximately ten years. The ten-year period was established 
in the project scope of work and is considered acceptable to a majority 
of commercial developers and owners. PACKAGE features are summarized in 
Table 9.

                                TABLE 9: PACKAGE ENERGY FEATURES PER CLIMATE ZONE
----------------------------------------------------------------------------------------------------------------
           Newport Beach                           Baltimore                               Chicago
----------------------------------------------------------------------------------------------------------------
R-26 Walls                           R-26 Walls                             R-26 Walls
----------------------------------------------------------------------------------------------------------------
R-38 Cool Roof                       R-38 Roof                              R-48 Roof
----------------------------------------------------------------------------------------------------------------
Lighting = 0.9 W/sqft                Lighting = 0.9 W/sqft                  Lighting = 0.9 W/sqft
----------------------------------------------------------------------------------------------------------------
HVAC--EER = 12.0 EER                 HVAC--EER = 12.0 EER                   HVAC--EER = 12.0 EER
----------------------------------------------------------------------------------------------------------------
HVAC--aux. energy = +10%             HVAC--aux. energy = +10%               HVAC--aux. energy = +10%
----------------------------------------------------------------------------------------------------------------
Boiler Efficiency = 90%              Boiler Efficiency = 90%                Boiler Efficiency = 90%
----------------------------------------------------------------------------------------------------------------
Infiltration = 0.35 ACH              Infiltration = 0.35 ACH                Infiltration = 0.35 ACH
----------------------------------------------------------------------------------------------------------------

Practical Limits Over ASHRAE 90.1-2004
    With the PACKAGE features noted in Table 9, the Chicago, Baltimore 
and Newport Beach models achieved 23.0%, 21.5% and 15.8%, respectively, 
over the ASHRAE 90.1-2004 Standard. These could represent the practical 
and economical limits of current construction within this office 
building model. Increased energy features from these levels would drive 
the PACKAGE payback period well beyond the ten-year time horizon.
    Additional energy savings are required to reach the 30% and 50% 
goals. Outside of increasing building energy features, one way to do 
this would be to generate electricity via photovoltaic panels. Assuming 
the same incident solar radiation in Baltimore and Chicago as Newport 
Beach, Figure 10 describes the approximate solar system size required 
for the PACKAGE-enhanced models to achieve 30% over the ASHRAE 90.1-
2004 Standard.
    These systems would cover approximately 11,000 square feet and 
could be installed on the building rooftop. However, with an installed 
cost of over $1.1 million (Keenan et al. 2006) and a payback period 
between 55 and 100 years, they would be economically impractical 
considering the industry accepted ten-year timeframe.
                                summary
Findings
    This study was to determine if 30%--50% savings over ASHRAE 90.1-
2004 Standard in a defined office building was achievable within a ten-
year payback. This report finds that 30%, let alone 50% net site energy 
savings, will be difficult to achieve in the low-rise office building 
within the ten-year payback time frame.
    The Newport Beach model achieved 15.8% over ASHRAE 90.1-2004. 
Enhanced energy features used were: R-16 walls; R-38 roofing with a 
cool roof coating; reduction of lighting power to 0.9 watts per square 
foot; increasing HVAC cooling efficiency to 12.0 EER; increasing HVAC 
auxiliary energy efficiency by 10%; increasing boiler efficiency to 90; 
and reducing overall infiltration to 0.35 air changes per hour. At a 
marginal cost increase of $169,898.13, this corresponds with a 12.2 
year payback via utility savings.
    The Baltimore model achieved 21.5% over ASHRAE 90.1-2004. Enhanced 
energy features used were: R-16 walls; R-38 roofing; reduction of 
lighting power to 0.9 watts per square foot; increasing HVAC cooling 
efficiency to 12.0 EER; increasing HVAC auxiliary energy efficiency by 
10%; increasing boiler efficiency to 90; and reducing overall 
infiltration to 0.35 air changes per hour. At a marginal cost increase 
of $165,148.13, this corresponds with an 11 year payback via utility 
savings.
    The Chicago model achieved 23% over ASHRAE 90.1-2004. Enhanced 
energy features used were: R-16 walls; R-48 roofing; reduction of 
lighting power to 0.9 watts per square foot; increasing HVAC cooling 
efficiency to 12.0 EER; increasing HVAC auxiliary energy efficiency by 
10%; increasing boiler efficiency to 90; and reducing overall 
infiltration to 0.35 air changes per hour. At a marginal cost increase 
of $188,523.45, this corresponds with an 8.8 year payback via utility 
savings.
    Several energy efficiency measures were not included in this study 
due to lack of modeling capability, sufficient data or project scope. 
Measures that warrant future study include solar thermal technologies, 
geothermal heat pumps, underfloor air distribution systems, radiant 
space conditioning, evaporative cooling technologies and light emitting 
diode (LED) lighting systems.
Technical Barriers
    As pointed out by Hale et al. in the ``Advanced Energy Design Guide 
for Medium Box Retail'' (2008), achieving significant levels above 
ASHRAE 90.1-2004 cost-effectively requires integrated building design, 
that is a design approach that analyzes buildings as holistic systems 
rather than as disconnected collections of individually engineered 
subsystems. Examples of this type of approach include building design 
that, at inception, revolve closely around the energy using systems. 
One approach could be the integration of day lighting, geothermal air 
conditioning and underfloor air distribution systems. Together, these 
systems could prove substantial achievement over the 90.1-2004 
benchmark. However, the design and subsequent construction of this 
building, using a holistic approach, would be in significant contrast 
to standard development practices that are designed to maximize 
leasable area. This approach is employed by the majority of commercial 
development in the United States.
    As modeled in Newport Beach, a geothermal system (a potential 
component of a holistic approach) would require more than two acres of 
space--an impossibility for the project site. Assuming the same bore 
depth, the geothermal space requirements would increase with colder 
climates, such as Baltimore or Chicago. In the case of an underfloor 
air delivery system, architecture and mechanical design would need to 
accommodate distribution plenums, therefore increasing relative cost 
and construction complexities.
    There are many examples of successful holistic designs, but in the 
case of this model, these approaches could be considered impractical. 
This design philosophy will be a hurdle for the architects and build 
teams of future commercial projects as it involves additional resources 
during design and construction.
    After upgrading building energy features, solar generation is the 
current solution for additional energy savings over the 90.1-2004 
Standard. However, installed solar cost would need to come down by a 
factor of five for it to meet the ten-year payback criteria. This 
presents a significant economic barrier. Federal, state and local 
incentives can further reduce this barrier.
                               conclusion
    Our model achieved 15.8% (Newport Beach, CA); 21.5% (Baltimore, 
MD); and 23% (Chicago, IL) over the ASHRAE 90.1-2004 Standard. This was 
done primarily by upgrading the building envelope insulation and 
increasing efficiency of energy using sub-systems. Representing the 
practical limit of current construction, together, these upgrades will 
save enough energy in approximately ten years to offset their marginal 
increase in cost. Solar can be used to make up the difference to 30%, 
but with a payback timeframe exceeding 50 years.
                                 ______
                                 
  Statement of Donna Harman, President and CEO, the American Forest & 
                           Paper Association
    The American Forest & Paper Association (AF&PA) appreciates this 
opportunity to present the forest products industry's views regarding 
recommendations for reducing energy consumption in buildings. AF&PA is 
the national trade association of the forest products industry, 
representing manufacturers of wood products, pulp, paper, and packaging 
and forest landowners. Our companies make products essential for 
everyday life from renewable and recyclable resources that sustain the 
environment. The forest products industry accounts for approximately 6 
percent of the total U.S. manufacturing GDP, putting it on par with the 
automotive and plastics industries. The industry produces $200 billion 
in products annually and employs more than 1 million people earning $54 
billion in annual payroll. The industry is among the top 10 
manufacturing sector employers in 48 states.
                reducing energy consumption in buildings
    AF&PA and its members are committed to reducing the environmental 
impact of buildings by encouraging energy-efficient, environmentally 
responsible choices during the design and construction process. Use of 
green building ratings systems is one of the most effective means to 
achieve both energy efficiency, and overall environmental 
responsibility. Below we summarize the positive attributes of wood 
building materials and green building rating systems, as well as a few 
concerns about the inadequacies of some systems.
                 wood products and ``green'' buildings
    Wood is among the most energy-efficient and environmentally 
friendly of all building materials. It is less energy and carbon 
intensive to produce than competing materials like steel and concrete. 
Among other positive environmental characteristics, wood stores huge 
amounts of carbon, contributing to the reduction of CO2 in 
the atmosphere. Wood products are a vital component of sound 
architectural design and construction, while providing inherent energy-
saving performance. Wood buildings are readily adapted to reuse or can 
be deconstructed and individual products reused in new construction. 
Lastly, wood is a renewable resource, a characteristic of unparalleled 
environmental value.
    Green building rating systems that do not fully recognize the 
environmental benefits provided by the use of wood products are flawed.
    We believe that rating systems should include all credible 
sustainable forestry programs in the U.S. Equal credit should be given 
to all programs that meet a commonly accepted set of objective 
criteria, including globally-recognized sustainable forestry programs, 
such as the Sustainable Forestry Initiative (SFI) program or the 
American Tree Farm System. They should also include life cycle 
assessment (LCA). It is critical that rating systems be grounded in 
objective, scientific criteria based on life cycle impacts. LCA 
provides objective criteria so that a rating system or standard yields 
consistent results through appropriate thresholds and baselines, and 
allows for the comparison of buildings in different locations on equal 
terms.
    It is also important that green building rating systems be 
developed in a consensus process that meets the spirit of the American 
National Standards Institute (ANSI) Essential Requirements\1\ or OMB 
Circular A119. Development of a standard under a recognized consensus 
process provides transparency and ensures the opportunity for 
meaningful participation by all groups that will be affected. A true 
consensus process also has procedures to ensure balance, consideration 
of dissenting views, and appeals procedures. ANSI is the coordinator of 
the U.S. standards process and provides strict objective requirements 
for accreditation of those processes. A credible rating system must be 
developed using a process that embodies the elements of consensus as 
defined by ANSI.
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    \1\ ANSI Essential Requirements: Due process requirements for 
American National Standards (http://publicaa.ansi.org/sites/apdl/
Documents/Standards%20Activities/American%20National%20Standards/
Procedures,%20Guides,%20and%20Forms/
2008%20ANSI%20Essential%20Requirements/
2008%20ANSI%20Essential%20Requirements%20031108.pdf)
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    Government entities should adopt green building policies that 
recognize the energy-saving attributes of wood, are inclusive of forest 
certification programs, based on sound science, including LCA, and have 
been developed in a consensus process. AF&PA and its members will 
continue to work with all interested parties to create and promote 
green building rating systems that meet the above criteria.
                   green buildings and climate change
    AF&PA recognizes that the environmental impact of buildings is 
significant. Construction and operation of residential and commercial 
buildings account for nearly 40 percent of all greenhouse gas (GHG) 
emissions in the U.S. In particular, the more than 500,000 federally-
owned and leased buildings often consume more energy than non-
governmental buildings and require billions in energy costs. It is 
critical that efforts to address climate change through green building 
construction recognize the positive environmental benefits of wood 
construction materials.
    It has been shown that the use of wood building materials can help 
mitigate the climate change impact of building construction. The 
Consortium for Research on Renewable Industrial Materials (CORRIM), a 
non-profit academic research consortium, undertook a study evaluating 
the energy and environmental impact of leading building materials. The 
study concluded that the use of wood-framing in buildings resulted in 
the generation of 26 percent fewer CO2 emissions than for 
comparable steel-frame buildings, and 31 percent fewer than for 
concrete-frame buildings. Also, the study found that manufacturing wood 
framing used at least 16 percent less energy than producing steel or 
concrete frames, and had other environmental benefits, as well.
    In addition, the ability of wood products to store carbon is 
recognized internationally by climate scientists and policymakers, 
including the most recent guidelines from the Intergovernmental Panel 
on Climate Change. Nearly one-third of carbon sequestered in forests 
becomes sequestered in the products made from them. Wood building 
materials can store carbon for their useful life keeping it out of the 
atmosphere for decades or even centuries. The EPA estimates that the 
amount of carbon in wood and paper products is equivalent to removing 
over 100 million tons of carbon dioxide from the atmosphere every year. 
This is equivalent to eliminating the carbon dioxide emissions from 18 
million passenger cars--13 percent of all passenger cars on the road in 
the U.S.
                 green building rating system concerns
    The U.S. forest products industry has been working for several 
years to assure that green building rating systems provide appropriate 
recognition for the positive environmental attributes of wood building 
materials, and follow recognized standard development procedures that 
assure fair treatment for all stakeholders. Unfortunately, the U.S. 
Green Building Council (USGBC) has failed so far to incorporate this 
recognition into its Leadership in Energy and Environmental Design 
(LEED) green building rating system.
    One of our primary concerns with the LEED program is its failure to 
recognize all credible, sustainable forestry certification programs in 
its certified wood credit. LEED only provides credit to builders using 
forest products certified by the Forest Stewardship Council (FSC). No 
credit is awarded for wood products produced by companies independently 
third-party certified to the SFI program standard or the American Tree 
Farm System (ATFS)--the two largest sustainable forest management 
systems in the U.S., and both accredited by PEFC, a third-party 
international group. These two programs account for over 100 million 
acres of forestland, yet are unable to qualify for points under the 
LEED rating system. This point structure forces builders to either 
eliminate wood products from their designs, or if they nonetheless use 
wood, must largely import their wood from overseas to receive LEED 
credits for certified forest products.
    Also, the LEED rating system does not recognize the positive 
attributes of renewable wood products. For instance, LEED provides 
credit for using ``rapidly renewable materials,'' which LEED 
arbitrarily defines as products originating from plants grown and 
harvested in a 10-year cycle. U.S.-based construction lumber does not 
qualify for this credit since domestic timber is grown and harvested on 
a longer rotation. The credit thus benefits exotic crops such as bamboo 
from overseas or wheatgrass. This suggests that under LEED it would be 
``greener'' to deforest an area of native trees that are being 
sustainably managed and replace it with a plantation crop of an 
invasive species like bamboo or wheatgrass. This is an outcome that 
would have negative consequences for the environment.
    Some building codes and a number of green building rating systems 
rely on an American Society of Heating, Refrigeration, and Air 
Conditioning Engineers standard, ASHRAE 90.1, to determine minimum 
building energy performance, while others recognize other state-ofthe-
art energy codes. Since 1999, ASHRAE 90.1 has unfairly required greater 
energy performance for wood wall construction than for walls 
constructed of other materials. Wood walls quickly become economically 
uncompetitive due to these more restrictive provisions. Energy codes 
will only be effective when equal performance is demanded from all 
building materials. Further, LEED relies entirely on ASHRAE 90.1 to 
determine energy efficiency and, in the process, not only discriminates 
against wood products, but gives preferential treatment to steel and 
concrete, which are permitted to underperform wood walls. Providing 
users with options in choosing rating systems will also help to 
mitigate these energy performance penalties imposed by LEED. Further, 
the Department of Energy should continue to review and revise the 
energy performance requirements in the codes and standards it 
references for this purpose.
    Additionally, the federal government must turn its focus to the 
existing building stock. In the case of residential construction, there 
are more than 70-million one-and two-family dwellings across the 
country. New starts represent 0.7 percent of all existing one and two--
family dwellings. It is important that the federal government focus on 
the energy performance of existing buildings to maximize impact on 
energy consumption.
    Finally, every existing version of LEED was not developed in a 
consensus process open to all interested parties. Our industry 
specifically asked to participate and was rebuffed. The process USGBC 
used to create and maintain these LEED versions did not meet generally 
accepted criteria for development of consensus standards. While USGBC 
has since obtained accreditation from ANSI as a green building 
Standards Developing Organization, USGBC has not developed any existing 
edition of LEED through their ANSI-accredited process.
          legislation should recognize multiple rating systems
    As the Committee is aware, several new green building rating 
systems have been developed and entered the marketplace in the past few 
years. Growing demand for building ``green'' is attracting competition 
in the green building marketplace. We believe this competition is 
healthy and will result in a rapid increase in the number of green 
buildings in the U.S., as well as improvements in the rating systems 
themselves.
    As Congress continues to explore this issue and contemplates policy 
options, we recommend that Congress avoid policies that may stifle 
competitive forces that are driving the green building rating system 
movement. We encourage Congress to explore and evaluate the full range 
of systems now available in the marketplace beyond just LEED. 
Legislation should not pick winners and losers in the constantly-
evolving green building marketplace, particularly as these rating 
systems are private-sector products. Solely including references to the 
LEED rating system prevents other credible systems, such as the Green 
GlobesTM system for commercial construction and the National 
Association of Home Builders' National Green Building Standard for 
residential construction, from contributing to legislative goals.
                               conclusion
    AF&PA appreciates this opportunity to present its views to the 
Committee regarding the design and construction of these green 
buildings. The forest products industry supports the construction of 
environmentally-friendly and energy-efficient green buildings. We 
believe that wood products can contribute greatly towards building 
green if treated appropriately in rating systems and energy codes. It 
is, therefore, important that legislation promoting green buildings not 
specify one rating system, but rather make all credible systems 
eligible to participate in its provisions. AF&PA and our member 
companies look forward to working with the Committee and Congress on 
this important set of issues.
                                 ______
                                 
   Statement of J. Michael McQuade, Senior Vice President, Science & 
              Technology, United Technologies Corporation
                              introduction
    As the Senate Committee on Energy and Natural Resources considers 
energy legislation, United Technologies Corporation (UTC) offers 
recommendations on cost effective, innovative and environmentally 
friendly ways to address energy efficiency using a whole building or a 
``systems'' approach. UTC is one of the largest capital suppliers to 
the building industry worldwide and the development of both sustainable 
and energy efficient products are of critical importance to the company 
and the markets and customers that UTC serves.
    Increasing energy efficiency in the building sector creates 
significant opportunities to reduce energy consumption and costs for 
producers and consumers, to develop new products, to commercialize 
existing technologies and to create and maintain ``green'' jobs. 
Increasing the efficiency of components in buildings--lighting, 
ventilation and other major elements--has been and must continue to be 
a key element of a policy to affect lower energy consumption. This 
document outlines an approach to realizing significant energy 
efficiency gains in buildings by adapting an integrated ``systems'' 
approach to design and operation. The integration of components is what 
a systems approach is and the full scope of a systems perspective 
includes the proper sizing of the components as well as the coupling of 
components together in novel ways. The recommendations contained herein 
serve the key U.S. goals of reducing dependence on foreign sources of 
energy, combating climate change and expanding national 
competitiveness:

   The federal government, in close collaboration with the 
        private sector and academic community, should encourage 
        investment in a ``systems'' approach to building energy 
        efficiency including a focus on technology research and 
        demonstration projects, performance based measurements, 
        interoperable building systems, and education and manpower 
        training.
   Congress should consider legislation that drives a market 
        transformation in the buildings industry and strategically 
        moves the United States toward net zero energy buildings. A 
        focus on economic recovery, energy efficiency, climate change, 
        tax and green building legislation is encouraged.

                need for energy efficiency in buildings
    The opportunity for energy savings through building efficiency 
gains is tremendous. The building sector consumes about 40 percent of 
the energy used in the United States and is responsible for nearly 40 
percent of greenhouse gas emissions. Compare this with the entire 
transport sector which represents only about 28 percent of energy use. 
A 50 percent reduction in buildings' energy usage would be equivalent 
to taking every passenger vehicle and small truck in the United States 
off the road. A 70 percent reduction in buildings' energy usage is 
equivalent to eliminating the entire energy consumption of the U.S. 
transportation sector. These levels of energy reduction in buildings 
are achievable but the United States today lacks the market and the 
underlying science and technology infrastructure to broadly realize 
these levels of efficiency improvements.
    An integrated approach is needed to reduce energy use and 
greenhouse gas emissions in the commercial buildings sector. The 
building sector is made up of multiple stakeholders and decision 
makers, including builders, architects, service and repair companies, 
owners, realtors, product manufacturers and energy suppliers. Buildings 
themselves are a complex web of equipment and energy sources that often 
have limited connections and communications. We believe that 
integrating the various separate technologies used in buildings, by 
definition a systems approach, will cut energy consumption and cost. A 
greater focus on systems requires coordination across technical and 
policy solutions and among the fragmented building industry.
      utc leadership on high-performance and sustainable buildings
    UTC takes an active industry role in addressing building energy 
usage. UTC is a co-chair of the three-year World Business Council for 
Sustainable Development (WBCSD) project on Energy Efficiency in 
Buildings (EEB). Along with thirteen other major multinational 
corporations representing various aspects of building design, 
construction, delivery and operations, UTC is working to identify the 
barriers, levers, and necessary actions to achieve market 
transformation and a pathway to net zero energy buildings (NZEB)--those 
buildings that over a period of a year on average consume no energy. 
Among other important findings of this project is the fact that 
professionals in the building industry have widely underestimated the 
impact of buildings on carbon emissions (by a factor of two) while 
significantly overestimating the cost of sustainable construction (by a 
factor of three). This knowledge gap is just one of several barriers to 
market transformation of the building sector.
    Increasing efficiency in buildings boosts productivity through the 
reduction of energy costs. Developing better products that improve 
energy efficiency offers new market opportunities. In 2006, George 
David, at that time the CEO and Chairman of UTC, spoke at the WBCSD 
meeting in Beijing:

          The lessons I bring from UTC are that we can always reduce 
        costs and increase productivity and performance. The same is 
        true for environmental impacts and potentially to an even 
        greater degree because companies generally haven't worked at 
        these as hard as they have at costs and corporate 
        profitability. Remember that more than 90 percent of the energy 
        coming out of the ground is wasted and doesn't end as useful. 
        This is the measure of what's in front of us and why we should 
        be excited.

    UTC has developed product offerings in the area of combined heat 
and power (CHP) to take advantage of so called ``waste heat.'' By using 
the heat escaping from prime movers used for power generation--
microturbines and reciprocating engines for example--and using this to 
drive heating, ventilation and air conditioning equipment--for example 
an absorption chiller to supply cooling or heat exchangers to supply 
hot water--the overall efficiency of the combined system that supplies 
power, heat and cooling to a building can move from around 33 percent 
efficiency of the individual components to nearly 80 percent efficiency 
of the combined system. This increase in efficiency is what a systems 
perspective is all about. The fact that the system is located at the 
point of use allows the building to productively use the waste heat and 
avoid transmission line losses. The onsite attribute is a key component 
of optimizing the system's performance.
                       systems approach and gaps
    Two basic flaws in current design and operation of buildings 
contribute to poor energy performance. First, the design and 
construction of commercial buildings do not utilize methodology or 
tools to identify and quantify interactions, or ``coupling,'' between 
subsystems. Computational tools are not used initially in the design 
phase nor are these couplings tracked during the changing construction 
process. Second, the coupling between subsystems are neither monitored 
nor controlled to avoid the erosion of performance in operation of the 
building.
    The key innovation in CHP products has been to increase energy 
efficiency by engineering what have been separate elements into an 
integrated whole. This is a ``systems view'' of the thermal exchange, 
the energy production and the consumption of electric power, cooling 
and hot water in the building. The integration of subsystems in the CHP 
products can be enlarged to consider energy efficiency in the entire 
building, namely looking at coupling through integrated design, 
delivery and operation of what today are separate systems in the 
building.
    The goal to obtain significant energy efficiency gains should be to 
design and operate systems and to fully couple the various elements of 
buildings (e.g., building material, farcade, equipment) that consume 
energy (e.g., lighting, heating, cooling) with other systems such as 
sources of information (e.g., fire alarms, access control and other 
security system devices) that taken together can increase 
functionality.
    The reality of today's methodology and tools is that attempting to 
couple subsystems--even using higher performance (efficient) components 
than are routinely used today--does not regularly deliver the levels of 
efficiency gains needed and, in some cases, provides negative effects 
from inefficient integration. Case studies show that even new buildings 
that are constructed with the state of the art ``energy efficient'' 
technologies can fail to meet the design intent due to the detrimental 
coupling of the modified subsystems. A study of high performance 
buildings by the National Renewable Energy Laboratory (NREL) showed 
that even with a range of advanced component technology (ground source 
heat pumps, an under floor air distribution system, daylighting, and 
high performance windows), when the systems were not properly 
integrated, the building measured a 44 percent reduction ratio versus 
80 percent when all components were fully coupled. Unfortunately, the 
NREL results are not atypical and represent a significant barrier to 
wide scale adoption of high-performance integrated building systems.
    The systems approach considers a building as a complex dynamic 
system that has considerable uncertainty in both operating parameters 
and the operating environment. The coupling of components is difficult 
to achieve and requires the development and use of new science and 
engineering approaches to avoid the detrimental coupling discussed in 
the NREL work above. The new science, design methodologies and tools 
will then be used to capture the complex couplings, thus enabling 
deployment of technologies that can take advantage of the natural 
dynamics of the building (e.g., natural ventilation, thermal storage 
concepts).
    The misses in the demonstrations of highly efficient buildings 
point to the promises and to the shortcomings that must be bridged with 
additional investments in science and technology. The systems approach 
can realize significant gains in energy efficiency and is a clear 
pathway to realizing net zero energy buildings.
    Technology enablers are emerging in much more capable ways of 
modeling and simulating building performance (computational abilities) 
and also much more capable ways of obtaining information from buildings 
and using the information for real time control and diagnostics 
(sensing and real time computation and embedded systems). The time is 
right to make national investments and to bring industry together with 
Department of Energy National Laboratories and universities to fully 
realize energy efficient buildings.
                            recommendations
    Congress should consider and enact legislation that promotes 
investment in energy efficiency in the buildings sector. The American 
Recovery and Reinvestment Act provided tax incentives to spur 
investment in energy efficiency, funding for energy efficiency and 
green buildings and support for various science and technology 
programs. Congress should continue to focus on energy efficiency as it 
considers comprehensive energy and climate change policy. For example, 
the Senate Energy and Natural Resources Committee will be considering 
legislation to require utilities to gradually increase the portion of 
electricity produced from renewable resources. The Committee should 
include energy efficiency as a component of renewable electricity or 
clean energy standard legislation to encourage low emission, high 
efficiency base load energy resources.
    Also, as Congress considers climate change, energy, appropriations 
and tax legislation that sustains a broad portfolio of energy efficient 
and greenhouse gas reduction technologies, it should support a systems 
approach to tying these technologies together in commercial buildings 
and remove regulatory barriers to implementing near- and long-term 
cost-effective net zero energy building approaches. In addition, energy 
audits for existing buildings as a component of a comprehensive energy 
efficiency policy will help ensure that existing property is operating 
in the way it was designed--significantly reducing waste energy lost as 
a result of poorly adjusted equipment.
    UTC believes that investments to fully realize the benefits of 
whole building design and operation must address a number of science 
and technology issues including technology development, standards, 
organization, facilities and talent.

   Recommendation I: Measurement and Transparency.--The Federal 
        government and especially the National Institute of Standards 
        and Technology should consider establishing common measurements 
        to ensure that building performance can be effectively 
        evaluated by the marketplace. Such evaluation should include 
        the measurement of energy efficiency and indoor environmental 
        quality.
   Recommendation II: Technology and Organization.--The Federal 
        government should create specific research programs carried out 
        in private-public partnerships to maximize the effectiveness of 
        technology development and transition. Research and technology 
        investments must be made in systems: the creation of system 
        engineering practices and associated design processes and 
        tools. The newly established Advanced Research Projects 
        Authority--Energy (ARPA-E) is supported by UTC and the 
        recommendation is to create an office within ARPA-E whose 
        investments would solely focus on systems methodologies, tools 
        and technologies for building energy efficiency. Projects in 
        the ARPA-E portfolio should be conducted on a multi-year basis 
        with joint university-National Laboratory-industry teams.
   Recommendation III: Facilities.--The Federal government 
        should encourage public-private partnerships with incentives to 
        promote facilities that help users validate and test the 
        performance of hardware and software in a real integrated 
        building environment to reduce risk and enable wide-scale 
        commercialization. Demonstration projects to engage key 
        stakeholders in the buildings industry will reduce risk for 
        deployment to the entire building stock. The DOE Energy 
        Efficiency and Renewable Energy program portfolio should be 
        augmented with systems technology and methods should be matured 
        through relevant demonstration programs that are planned and 
        executed with joint multidisciplinary university-National 
        Laboratory-industry teams.
   Recommendation IV: Talent.--The Federal government should 
        invest in education and training carried out to define the new 
        knowledge and skills required by the methods, systems, and 
        tools for deploying and maintaining systems. University and 
        government buildings and facilities should be used as case 
        studies and demonstration sites for advanced monitoring, 
        control, simulation models, prototypes, component, and systems 
        research. There must be engagement with all components of post 
        secondary education including professional and vocational 
        training with community colleges and other organizations for 
        building design, construction, commissioning, energy analysis, 
        energy accounting, and operations to ensure a talent base that 
        can design, install and maintain building systems.
   Recommendation V: Strategic Roadmapping.--The Federal 
        government should catalyze the movement toward a whole-
        buildings systems approach in the design of new buildings and 
        the renovation and retrofitting of existing buildings in order 
        to move toward net zero energy buildings. A national roadmap 
        for the development of net zero energy buildings should be 
        constructed jointly by Federal agencies and the private sector 
        to obtain alignment among research, development, demonstration 
        and market transition priorities from government, national 
        laboratories, universities and private industry. The Commercial 
        Buildings Initiative, as authorized under the Energy 
        Independence and Security Act of 2007, may be a vehicle to 
        implement a large and concerted multiyear initiative, with 
        sustained funding and with industry as a full partner, to 
        reduce commercial building energy use through a systems 
        approach.

    Thank you for the opportunity to submit this testimony to the 
Committee. We would be delighted to respond to any follow-up questions 
regarding this testimony or the recommendations contained within.
                                 ______
                                 
 Statement of J. Pauley, P.E., Vice President, Industry and Government 
 Relations, Schneider Electric and Chairman, High Performance Building 
      Council of the National Electrical Manufacturers Association
    Chairman Bingham, Ranking Member Murkowski and members of the 
committee, I am please to provide the perspective of an electrical 
equipment manufacturer on the issue of reducing energy consumption in 
buildings.
    My company, Schneider Electric, is the world's electric power and 
control specialist. We manufacture and market a comprehensive range of 
products and services for the residential, buildings, industry, and 
energy and infrastructure markets. Our United States sales were over 
$3.4 billion in 2008 and we have over 14,000 employees in the United 
States. Our Square D brand is recognized as the industry leading brand 
in electrical power distribution.
    The National Electrical Manufacturers Association (NEMA) is a trade 
association of over 400 electrical manufactures. NEMA formed a High 
Performance Building Council because of the extensive amount of 
technology and resource that NEMA members have in the energy efficiency 
arena. This council is a cross section of NEMA members; from lighting 
systems and controls, to electric motors and drives and from power 
transformers to building system controls and distribution equipment. 
For over 75 years, NEMA has been wellrespected in standards writing, 
and since we are the makers of the energy-efficient technologies, we 
are happy to be a resource to congress as legislation is formulated to 
make our country's buildings more efficient.
    In the United States, buildings account for 20% of the overall 
energy consumption. In order to have a significant impact on this 
energy usage, it is critical that energy efficiency be implemented with 
a combination of both passive and active energy measures. Passive 
energy efficiency is achieved through the use of energy efficient 
devices and by using energy efficient construction for buildings. 
Efficient construction includes measures such as proper insulation for 
the building, energy efficient windows and the use of design techniques 
such as day lighting. Energy efficient devices are electrical devices 
that are designed for low energy consumption such as energy efficient 
lighting, transformers and similar equipment. We estimate that you can 
achieve a 10-15% energy savings by taking advantage of such passive 
measures.
    Although the passive measures are a good start, there is more to do 
to fully achieve the potential savings. There are active energy savings 
to be achieved through proper control and use of the systems within a 
building. A simple way to think of this is that an energy efficient 
lamp will save energy, but it still wastes energy if it is left 
switched on when not needed. By implementing permanent change through 
monitoring and control of energy usage, another 5 to 15% of energy 
savings can be achieved above the level achieved with a passive energy 
approach alone. This means that systems such as lighting control and 
adjustable speed drives for HVAC systems along with continued 
monitoring and feedback are critical to sustain the energy savings. 
Passive and active energy combined can bring up to a 30% savings in 
overall energy usage for the building.
    The need for monitoring of the system and integration with building 
management systems should not be underestimated. Even the best energy 
saving devices and systems can quickly lose their energy saving 
qualities over time if they are not properly monitored. Occupants slip 
back into energy-wasting behavior and slight changes to even the 
automatic systems over time can result in a loss of savings. Through 
proper monitoring and maintenance these changes can be detected and 
corrective action taken much quicker. We estimate that up to 8% of the 
expected energy savings can be lost if active monitoring of the 
building is not in place.
    In summary, energy efficiency must be looked at with a lifecycle 
approach. Passive energy measures are used to fix the basics of the 
building. An active energy approach is then implemented by optimizing 
the system through automation and control of the energy using systems. 
Finally, monitoring of the system along with proper maintenance are 
used to continuously improve the system to achieve maximum savings.
    As DOE programs are implemented and federal policies are developed, 
the entire lifecycle of the energy efficiency systems must be taken 
into account. Focusing on only passive systems will yield some 
incremental results, but not achieve the level of savings that is 
possible with a complete approach to energy efficiency.
    Thank you for the opportunity to provide the perspective of the 
electrical equipment manufacturing community on what we see as a very 
important issue for the United States.
                                 ______
                                 
 Statement of NAIOP, the Commercial Real Estate Development Association
    study shows levels of achievable energy efficiency in buildings
Results show efficiencies unable to reach 30 percent mandates
    HERNDON, Va., February 24, 2009--NAIOP, the Commercial Real Estate 
Development Association, today released a report that demonstrates the 
levels of energy efficiency that standard office buildings can reach 
while remaining economically feasible.
    The study was initiated to determine if commercial development 
could achieve reduction targets of 30-50 percent above the ASHRAE 90.1-
2004 standard--the benchmark often cited in legislation and other calls 
for mandatory reductions.
    Using a recently completed four-story, 95,000 square-foot, Class A 
office building as the prototype, the research modeled the prototype in 
three climate zones represented by Chicago, Ill.; Baltimore, Md.; and 
Newport Beach, Calif.
    Findings show that although significant energy efficiencies can be 
achieved (varying by climate zone), reaching a 30 percent reduction 
above the ASHRAE standard is not feasible using common design 
approaches and would exceed a 10-year payback. The study concluded that 
achieving a 50 percent reduction above the standard is not currently 
reachable.
    ``The study provides an unbiased insight into the energy targets 
practical to commercial development today,'' said Thomas J. Bisacquino, 
NAIOP president. ``Identifying an energy reduction level that is both 
environmentally responsible and equitable to the developer is essential 
in protecting the prosperity of commercial real estate.''
                            about the study
    The study was conducted by ConSol, a California-based independent 
energy-modeling firm, using the Department of Energy's EnergyPlus v2.2, 
a building energy simulation program for modeling building energy uses.
    Modeling included enhanced wall and roof insulations; varying 
levels of exterior glazing; higher-efficiency window assemblies; 
reduced air infiltration via the installation of an air barrier; 
reduced lighting power densities; higher-efficiency HVAC equipment; and 
photovoltaic electricity energy generation.
    Using technologies and methods to increase effectiveness, the 
maximum efficiency reached was 23 percent in the Chicago model. Results 
across the climate zones vary by more than seven percent, given 
baseline energy uses in domestic water heating; lighting; heat 
generation; air conditioning; and fans, dampers and HVAC equipment.
    Overall, energy savings, cost increases and payback periods are:

   Chicago: 23 percent in energy savings; $188,523.45 cost 
        increase; 8.8 year payback;
   Baltimore: 21.5 percent in energy savings; $165,148.13 cost 
        increase; 11 year payback;
   Newport Beach: 15.8 percent in energy savings; $169.898.13 
        cost increase; 12.2 year payback.

    ``With the results of achieving higher efficiency targets differing 
so greatly across the climate zones, the study reveals that a `one-
size-fits-all' approach to mandatory energy reductions does not work in 
legislation or other mandates,'' said Bisacquino. ``It is important 
that policymakers and others realize the economic consequences that 
imposing mandated targets will have on the development industry.''
    Study results show that employing solar generation technologies 
could close the gap between the efficiencies achieved in the study and 
the 30 percent above the ASHRAE 90.1 -2004 standard. However, at an 
installed cost of more than $1 million and a payback of up to 100 
years, it far exceeds practical and economical limits.
    Additionally, elements of a holistic, integrated design approach 
that could yield higher energy efficiencies were identified as 
impractical in the study's building prototype, which represents more 
than 50 percent of total new Class A commercial construction. For 
example, in the Newport Beach model, a geothermal system (a component 
of a holistic approach) required more than two additional acres of 
space--an impossibility for the project site.
    ``We recognize that some buildings are able to achieve higher 
energy efficiencies by employing various holistic design approaches,'' 
said Bisacquino. ``These approaches could become more economically 
feasible with new technologies and federal, state and local 
incentives.''
    NAIOP commissioned the study as a proactive approach to engage the 
commercial development industry in advancing an economically prosperous 
and sustainable built environment. ``We are encouraged that study 
results show that increased energy efficiency and building 
profitability are not opposing concepts,'' said Bisacquino.
    NAIOP has an ongoing commitment to providing its members with 
tools, resources and education to aid in the employment of best 
practices for energy efficient development. In June 2008, NAIOP 
introduced an Energy Policy (www.naiop.org/resourcecenter/
greenresource/energypolicy.cfm) that encourages the development 
industry to employ every technically feasible, cost-effective, 
sustainable strategy available to increase energy efficiency of new and 
existing buildings, and advances public policies that accelerate 
ongoing energy efficiency and sustainability gains.

                                    

      
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