Legislature(2015 - 2016)CAPITOL 17
01/27/2015 10:15 AM House ENERGY
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| Audio | Topic |
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| Start | |
| Presentation: Ahfc Weatherization Program | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON ENERGY
January 27, 2015
10:19 a.m.
MEMBERS PRESENT
Representative Jim Colver, Co-Chair
Representative Liz Vazquez, Co-Chair
Representative Benjamin Nageak
Representative David Talerico
Representative Cathy Tilton
Representative Matt Claman
Representative Adam Wool
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
PRESENTATION: AHFC WEATHERIZATION PROGRAM
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JOHN ANDERSON, Director
Department of Research and Rural Development (R2D2)
Alaska Housing Finance Corporation (AHFC)
Anchorage, Alaska
POSITION STATEMENT: Responded to questions, during the overview
of the Alaska housing weatherization program.
JIMMY ORD, Program Information Manager
Department of Research and Rural Development (R2D2)
Alaska Housing Finance Corporation (AHFC)
Anchorage, Alaska
POSITION STATEMENT: Presented the overview of the Alaskan
housing weatherization program.
ACTION NARRATIVE
10:19:27 AM
CO-CHAIR JIM COLVER called the House Special Committee on Energy
meeting to order at 10:00 a.m. Present at the call to order were
Representatives Nageak, Talerico, Vazquez, and Colver.
Representatives Wool, Tilton, and Claman arrived as the meeting
was in progress.
^PRESENTATION: AHFC WEATHERIZATION PROGRAM
PRESENTATION: AHFC WEATHERIZATION PROGRAM
10:19:46 AM
CO-CHAIR COLVER announced that the only order of business would
be an overview of the housing weatherization program, from the
Alaskan Housing Finance Corporation (AHFC). He opined that the
energy efficiency program is perhaps one of the most cost
effective programs offered by the state.
10:21:25 AM
JOHN ANDERSON, Director, Department of Research and Rural
Development (R2D2), Alaska Housing Finance Corporation (AHFC),
said the presentation would provide an up-dated and in-depth
view of the program.
10:21:48 AM
JIMMY ORD, Program Information Manager, Department of Research
and Rural Development (R2D2), Alaska Housing Finance Corporation
(AHFC), indicated his intention to provide a broad overview, as
well as details on how the various programs work.
10:22:19 AM
MR. ORD said that Alaska Housing Finance Corporation (AHFC) is a
public corporation that provides housing, finance and energy
programs statewide. Established in 1971, AHFC's mission is to
provide Alaskans access to safe, quality, affordable housing.
In order to fulfill that mission, AHFC focuses on several key
areas, which include: issuing bonds; providing residential
loans; managing competitive grants to developers of affordable
housing and special needs populations; operating public housing
in Alaska by utilizing U.S. Housing & Urban Development (HUD)
funds; and managing federal and state-funded energy-efficiency
programs. He distinguished AHFC as being primarily focused on
the demand side of energy, whereas, other agencies, such as the
Alaska Energy Authority, is focused on the supply side.
10:23:18 AM
MR. ORD established the intent of the overview, to wit: outline
the framework and tools used to maintain the infrastructure and
programs; share information regarding the specific programs;
address the tools offered to homeowners; acknowledge the
partnerships in place with local organizations that assist in
running the states program; and explore why an efficiency first
approach is best.
10:23:43 AM
MR. ORD explained how, in 1992, legislation was enacted
establishing the Building Energy Efficiency Standard (BEES), for
new homes receiving AHFC financing. The agencies framework
starts with BEES; created to promote the construction of energy-
efficient buildings to set standards for thermal resistance, air
leakage, moisture protection, and ventilation. He said that all
residential homes constructed after January 1, 1992, using AHFC
funds, are BEES compliant. The current building energy
efficiency standard is comprised of the 2012 International
Energy Conservation Code, the American Society of Heating,
Refrigerating and Air-Conditioning Engineers (ASHRAE)
ventilation standards, and the Alaska specific amendments to
both documents. The updated BEES became effective July 1, 2013,
requiring homes be built to a rating standard commonly referred
to as 5 Star energy rated.
10:24:49 AM
MR. ORD described the infrastructure factors used to assess and
oversee compliance with BEES. To accomplish this task, the Home
Energy rating System (HERS) is used, which includes all steps
necessary to evaluate and score home energy performance. This
includes establishing a rating score from 1-6 Stars, cultivating
a network of trained energy raters, and building and maintaining
a comprehensive energy modeling software program known as
AkWarm. He explained that AkWarm was first created in 1996,
specifically for Alaska. It uses a wide range of statewide
weather data, and is continuously updated to account for the
variability of associated energy costs. AkWarm is free and the
preferred energy modeling software for the state, offering easy
onscreen inputs for accurate, accessible data. He pointed out
that, although only authorized raters are qualified to issue an
official energy rating certificate, anyone is able to visit the
website and download the software for personal use. One of the
biggest benefits of the HERS, to AHFC and the state, is that it
has created a recognizable, standardized rating system. The
universal understanding of what a 5 or 6 Star rating means,
avoids confusion and provides useable data. MR. ORD described
how, behind the scenes, the database Alaska Retrofit Information
System (ARIS) is used to collect valuable housing information
from across the state; every time an energy rating is completed
it is entered into this system. The ARIS system contains more
than 75,000 unique records. One in every three occupied housing
units in the state is listed in this database. Informational
data points include: number of bedrooms, square footage of the
home, heating system efficiency, tightness of the home, and many
more. The valuable information collected provides answers to a
variety of questions not only about the housing characteristics,
but energy end use and program effectiveness. The largest and
most in-depth study produced from ARIS data is the 2014 Housing
Needs Assessment, released in the spring [of 2014].
10:29:03 AM
REPRESENTATIVE CLAMAN said he has not reviewed the 1,200 page
report and asked for a brief explanation of any identifiable
trends.
MR. ORD offered a couple of the outcomes from the report:
75,000 homes are cost burdened; 15,000 are overcrowded; and one
in three households are overspending the federally suggested
maximum of 30 percent of total income on housing costs.
Programs and services are in place that may have a direct effect
on some of these outcomes.
10:30:15 AM
CO-CHAIR COLVER inquired whether the reason that so many
households spend over 30 percent total income on housing costs
could be attributable to low incomes or high energy costs.
MR. ANDERSON opined that it represents a combination of low
income and rising energy costs. He pointed out that an
executive summary, to the voluminous report, may prove helpful
in understanding these outcomes, and agreed to provide copies to
the committee.
10:31:51 AM
REPRESENTATIVE CLAMAN asked about the progress being made in
creating energy efficient homes, since the inception of the
program.
MR. ANDERSON answered that, to date, over 40,000 retro-fits have
been accomplished through both programs, reducing energy
consumption on an average of 30 percent per unit.
MR. ORD offered an example of the housing stock in Juneau,
stating that houses built pre-1940 are considered 1-Star status.
All homes built post 2005 are constructed at a 4-Star efficiency
level and is indicative of the increase in building standards
throughout the state.
10:33:14 AM
MR. ORD introduced another energy saving measurement tool, under
development by AHFC, known as the Building Monitory System
(BMS). It is designed primarily for use in commercial and
public buildings. The goal this system is to provide up-to-the-
minute, real time data of energy use, as well as other details,
to the facility managers. Efficient operations is the goal, and
he provided an anecdote to illustrate how the device was used,
at the Glacierview Apartment complex, in Seward, and ultimately
resolved an energy use issue. He added that one of the simplest
benefits of a BMS is that the public housing maintenance staff
can remotely monitor how a building is functioning rather than
physically visiting each complex. Reliable information is
received at monitored via an office computer, or other internet
connected device. The software has also been expanded beyond
AHFC use and made available to other organizations. The Alaska
Native Tribal Health Consortium (ANTHC), looking to maximize
building efficiency, is utilizing the system in buildings
throughout the state.
10:34:48 AM
CO-CHAIR COLVER asked whether the system can be used by any
rental manager who has access to the internet.
10:35:19 AM
MR. ANDERSON answered that it is internet accessible and AHFC
expects to make the program fully available; a step currently in
the legal process. To a follow-up question, he said the
monitored information can be accessed via any device with
internet capabilities.
MR. ORD added that home use monitoring units are available for
purchase.
10:36:51 AM
CO-CHAIR VAZQUEZ inquired whether a BMS is used, or planned to
be used, in state buildings.
MR. ANDERSON reported that roughly 15 AHFC and 17 ANHTC
buildings, are now on the system. It can also be custom
tailored, as was done for the ANHTC to include specific water
usage data. This feature makes it a very useful tool, and he
opined that it is on track to become an industry model program.
10:37:55 AM
MR. ORD moved on to the home programs being offered, which
provide weatherization and rebate opportunities. These
successful programs are increasing home efficiency and comfort
levels, as well as stimulating local economies. He said that
the low income weatherization program was placed under AHFC, at
about the same time BEES was established, in a cost saving
consolidation effort regarding housing and energy conservation.
Since that time, the program has been providing free energy
efficiency improvements to income qualified applicants. The
funding comes from state and federal sources, but primarily the
state. He reported that AHFC does not directly install any of
the improvements or handle day to day customer interaction.
Rather the work is performed by 17 organizations throughout the
state: 4 service providers and 14 housing authorities who act
as regional contacts for program participants. There are
several reasons the program excels beyond just energy savings,
he opined, beginning with education. An example is how the
interior weatherization service provider, in Fairbanks,
establishes a working relationship with each client via a
requirement to attend an agency sponsored class. The applicant
gains an understanding of what changes may occur in their home
and what they can expect from the program. He cited a health
and safety factor included in the program, as the participating
homes are fitted with smoke and carbon dioxide detectors, as
well as receiving verification that any combustion appliance,
such as a furnace or gas stove, is operating safely and
efficiently. Mr. Ord noted that since 2008, the program has
helped in excess of 15,000 homeowners and renters across the
state to improve the energy efficiency, as well as health and
safety standards of their homes. He pointed out that AHFC
distributes a monthly legislative program update, which includes
statistics on unit completions, savings, and other valuable, up
to date information regarding the current status of the energy
programs. He assured that all new legislators have been added
to the contact list and will be receiving the report at the
beginning of every month.
10:40:45 AM
REPRESENTATIVE CLAMAN asked for a breakdown of the federal
versus state funding receipts.
MR. ANDERSON responded that the federal support is a formula
based on state population. Alaska receives roughly $1-1.5
million per year. The state contribution has been approximately
$350 million, annually.
REPRESENTATIVE CLAMAN concluded that the federal funding equates
to one percent of the funding and the state covers 99 percent.
He also established that RurAL CAP (Rural Alaska Community
Action Program, Inc.) is the service provider of this program in
the western region of the state.
10:42:13 AM
MR. ORD provided a state map locating the 185 communities that
have benefited from the weatherization program. Especially
notable are the rural communities, he said, which pose
logistical challenges. The benefits that are brought to each
community include local training and hiring of employees. He
reported that the average energy savings of program participants
statewide is about $60.8 million BTUs per year, which equates to
about 28 percent. To put a million BTUs in perspective, he said
the average home in Juneau, that was built in the 1970's has an
energy rating of 2 Star Plus and uses 187 million BTUs every
year. The most energy efficient home that AHFC has on record,
is a 6 Star unit with an annual energy use of just over 11
million BTUs per year.
10:43:18 AM
MR. ORD turned to the AHFC energy rebate program to state that
it applies to existing homes and is open to all Alaskan
homeowners regardless of income. The current program is modeled
after one that was introduced in the 1990's. Today's program is
widely successful and offers up to a $10,000 rebate for
qualified energy efficient improvements. He explained the
various steps of the program beginning with the on-line
application. An approved energy rater is then selected, AHFC
approves eligibility based on the information that the homeowner
provides and dispatches the project. Once dispatched, the
homeowner schedules an as-is energy rating. The rater conducts
a home evaluation, issues a home energy rating certificate,
enters information into the state database, and provides the
owner with an improvement options report. The homeowner chooses
the items to upgrade, and is allowed 18 months to complete the
work. A post energy rating is conducted. The difference
between the as-is and post ratings is the determining factor for
the rebate amount. MR. ORD said that a sister rebate program is
offered by AHFC, which applies to new construction. The New
Home Rebate offers $10,000 for 6 Star and $7,000 for 5 Star Plus
rated homes. The rebate is available for homeowners who are the
original owner of a newly constructed home that is not more than
one year old. All participants must meet AHFC financing
requirements, such as applicable building inspections and BEES.
10:45:15 AM
MR. ANDERSON, responding to a question posed by Co-Chair Colver,
stated that the fiscal note does not distinguish the components
for existing home versus new construction programs. However,
new construction units have numbered about 2,700 since 2008.
Upon application approval, AHFC encumbers the money for the
expected rebate. To a follow-up question, he said this is a
popular program with approximately $190 million spent, an
obligation of encumbered funds for $33 million, and a remaining
balance in the fund of roughly $28-29 million; pending review of
the wait list.
10:46:59 AM
CO-CHAIR COLVER asked to whom is this program available.
MR. ANDERSON answered that units up to the four-plex size are
eligible if one of the units is owner occupied.
CO-CHAIR COLVER asked about the mechanics of how the fund is
accessed by contractors, building an energy efficient home for
the housing market.
MR. ANDERSON clarified how a contractor built, speculation home,
can be qualified; usually via the application of the purchaser.
To a follow-up question, he said that, based on the current
building trends, the program funds are projected to last into
the next fiscal year.
10:49:38 AM
MR. ORD continued, stating that the rebate program for existing
homes requires both state and homeowner investment. Directing
attention to the slide, titled "Home Energy Rebate Program;
Program Snapshot," contained in the committee packet, he
explained the monetary breakdown: $11,681 represents the
overall average investment in improvements, less the average
rebate of $6,389, and figuring the reimbursement amount allowed
for the as-is, $325.00, and post, $175.00, ratings, the
homeowner's investment would be $4,792.00. Considering these
calculations, he said, the average homeowner will realize a
simple payback period of 3.3 years. The payback time will be
reduced, depending on location; Fairbanks averages 2 years. He
then provided figures to illustrate the economic stimulus
provided by the program. Based on 22,447 rebated homeowners,
multiplied by the average combined state and homeowner
contribution of $11,681, the result for the total energy
efficiency improvement economic boost is $262 million, which, he
stressed, represents a conservative figure. Summing up the
savings, represented by the program, he said the average
homeowner saves 34 percent, or about 100 million BTUs, annually.
10:51:35 AM
CO-CHAIR VAZQUEZ asked for specific information regarding
waitlists for each rebate program to include the number, the
estimated length of time for service, and the geographic area
for those waiting. She asked if priority is being given to
particular geographic areas that experience weather extremes and
high energy costs.
MR. ORD responded that the home energy rebate program does not
recognize location preference or priority. However, policy
allows AHFC to sponsor an energy rater to any community that is
lacking one, if a minimum of three homeowners request service.
Regarding the waitlist, he said dispatches range from 80-100 per
week, which currently keeps pace with the number of requests.
Responding to a follow-up question regarding the weatherization
program waitlist, he said, he would provide further information.
MR. ANDERSON added that AHFC relies heavily on the partnership
agencies to maintain the waitlists and work plans. The
partnership and outreach organizations are vital to the success
of the programs, considering the 300 communities being served.
To a follow-up from Representative Claman, he said that at one
time the waitlist was a lengthy two months, with 10,000
applicants on the docket, but the last couple of years have seen
a leveling out.
10:55:37 AM
MR. ORD turned to the Alaska Energy Efficiency Revolving Loan
Program (AEERLP), and said it was placed in statute in 2010.
This AHFC program provides financing for permanent energy
efficient improvements to buildings owned by Regional
Educational Attendance Areas (REAAs), the University of Alaska
(UA), the state, or state municipalities. He noted that AHFC
was given the ability to loan up to $250 million. The funding
source is the AHFC's bond authority, not state appropriation.
Describing how the program works, he explained that borrowers
obtain an investment grade audit, and energy efficiency measures
are identified and listed. The borrower selects from the list,
prioritizes improvements, and AHFC finances programs that prove
an energy saving result. A 365 day completion is required.
Currently, the AHFC board has approved two projects, both are
pending developer commitment, and a third project application is
under review. Outreach is ongoing by AHFC, to promote this
program and general energy efficiency improvements of public
facilities.
10:57:02 AM
CO-CHAIR COLVER asked what the fund utilization has been, since
the bonding authority was adopted, and he asked for the number
of energy upgrades to public buildings.
MR. ANDERSON emphasized that the AEERLP program is restricted to
public facilities, excluding non-profit and for-profit
organizations and businesses. To date there is no utilization,
only the two loans awaiting borrower commitment. He indicated
that at least twelve projects have been undertaken, using AHFC
energy information but other funding sources.
CO-CHAIR COLVER asked for the interest rate and what it is based
upon.
MR. ANDERSON responded that the $3.79 million loan, currently
approved by the AHFC board, has an interest rate of 3.625
percent. He pointed out that this rate is based on the cost of
doing business, as there is no intent for profit.
CO-CHAIR COLVER inquired whether it is difficult to find
employees to do the energy ratings.
MR. ANDERSON indicated that Commercial Energy Auditors (CEAs)
were scarce in 2010, when the program began; however, that
number has increased to 60-70 throughout the state. The CEAs
are accredited through the Association of Energy Engineers.
CO-CHAIR COLVER questioned the lack of program utilization and
asked if that is due to the current process.
MR. ANDERSON responded yes, there is a direct connection
primarily because the service providers are geared for large
projects. He explained that the process is being modified to
provide development service companies that address smaller
projects, which should encourage more participation.
CO-CHAIR COLVER posed the possibility of including non-profits
and the commercial sector, as a means to improve utilization of
the program, and benefit from the energy use expertise of AHFC.
MR. ANDERSON said AHFC would be interested in having the
discussion and then deferred.
CO-CHAIR COLVER said the discussion will continue as the goal of
this committee is to provide energy conservation opportunities.
MR. ANDERSON agreed to provide further information on new
concepts.
11:04:12 AM
REPRESENTATIVE CLAMAN noted the underutilization of the funds,
and asked whether it may be attributable to the lack of a
competitive interest rate, or the newness of the program.
MR. ANDERSON offered that commercial banks may provide better
rates or loan funding structures; however, it is anticipated
that the AHFC program will become more popular through continued
promotion.
11:05:15 AM
CO-CHAIR VAZQUEZ expressed concern for the reported
underutilization and asked for clarity on the inception of the
program, who the manager is, and noted that only $3.7 million
has been thus far approved.
MR. ANDERSON responded that the program was initiated in 2010,
under SB220, that he is the director/manager, and concurred with
the members understanding of the amount of funding committed to
date. He said the approved projects are a combination of
airport equipment and building modifications.
CO-CHAIR VAZQUEZ asked to have a plan of action to increase
participation of the program and suggested that a starting point
could be a survey sent to department heads, with a follow-up and
coordination via the governor's office. It is important to get
this ball rolling, she stressed, and requested a report be made
to the committee addressing these concerns, to be submitted in
three weeks.
MR. ANDERSON agreed to provide the report.
11:08:00 AM
MR. ORD moving on, said that when the AEERLF was created, little
was known collectively about energy use in Alaskan public
facilities. Stimulus money was received from the American
Recovery and Reinvestment Act (ARRA) [2009], and used by AHFC to
benchmark more than 1,200 public buildings across the state.
Benchmarked documents of a building include: ownership, uses,
size, year built, and type of energy used. Of the 1,200
buildings, AHFC selected 327 candidates for an investment grade
audit. At the time of the report [2012], the estimated energy
cost to the public totaled approximately $641,245,000 per year.
The projected savings was $25,000 per building per year, for a
potential savings of $125 million. The benchmark audit resulted
in about 50 energy efficiency measure recommendations, including
the adoption and enforcement of energy codes; tracking energy
use; and establishing a level of accountability for better
energy use control.
11:09:52 AM
MR. ORD returned to the residential sector to describe
additional programs available through AHFC to benefit savings
from energy efficiency improvements. The corporation offers a
low interest, home loan incentive that can be applied to the
first $200,000 with a blended interest rate on the balance.
Another tool AHFC offers homeowners is a second mortgage for
energy conservation. The loan is up to $30,000 for energy
efficiency improvements. Borrowers apply through the Alaska USA
Federal Credit Union. The program works in conjunction with the
home energy rebate program, with the rebate going directly
towards paying down the loan balance. The upfront financing
allows homeowners a larger investment in energy efficiency
improvements and realize better savings. He continued, stating
that one of the largest AHFC components is for education for
consumers, professional, and children. The Alaska Energy Smart
curriculum teaches children how energy is all around them, why
energy is needed, and how it can be used wisely; providing
students with valuable insights to share with their family. The
lessons are aligned to the Alaska Grade Level Expectations
[Department of Education and Early Development]. For consumers,
classes are offered several times a week in Fairbanks, South
Central, and other parts of the state on topics ranging from
basic building science of doors and windows to lighting and
appliances. Participants of the classes, in line with the home
energy rebate program, have been shown to have a higher energy
savings, 9 percent, versus those who did not attend. Finally,
AHFC offers classes for professionals, such as realtors,
lenders, architects, and engineers.
11:12:43 AM
MR. ORD stressed the importance of the partnerships that are
integral to the success of the program, and pointed out the list
included in the committee packet.
MR. ANDERSON underscored the critical need for these
partnerships.
11:13:45 AM
MR. ORD summed up by providing some key statistics to illustrate
what can be accomplished by an investment in energy efficiency.
He said there are more than 40,000 homes in Alaska that have
improved their energy efficiency resulting in substantial use
reductions. Not only does an investment in energy efficiency
increase savings, it provides jobs and a boost to the economy.
More than 5,000 jobs have been created due to the home energy
rebate programs, over the last seven years. The 3.2 trillion
BTU's saved is a rather hard number to comprehend, and he
equated it to the image of every household in Anchorage and the
Matanuska-Susitna valley driving to Key Largo for vacation every
year.
11:14:42 AM
REPRESENTATIVE CLAMAN asked for dollar figures for the savings
that the program provides per household on average.
MR. ANDERSON said a 20 percent savings should be realized.
REPRESENTATIVE CLAMAN indicated that his constituents would be
better informed by numbers that relate to individuals.
MR. ORD offered that detailed statistics are available. On
average, he estimated, homeowners can expect to save about
$1,400 by participating in the rebate program and roughly $1,300
through the weatherization program.
11:16:44 AM
CO-CHAIR VAZQUEZ reviewed the information requested, during the
presentation, and echoed the concerns of Representative Claman
for relatable savings figures.
11:18:20 AM
REPRESENTATIVE CLAMAN asked to have a report submitted that
provides per household averages for: annual savings, actual
investment for new and existing programs, and the timeline for
realizing the investment return.
11:19:34 AM
CO-CHAIR COLVER referred to the governor's State of the Budget
speech, that money would be included for weatherization, and
asked if that includes the AHFC programs.
MR. ANDERSON responded that the governor's resubmitted capital
budget includes $3 million for the energy rebate and $6.6
million for weatherization programs and he detailed the
allocation timelines.
11:20:58 AM
CO-CHAIR COLVER called attention to the technological
improvements being made, particularly by the Cold Climate
Housing Research Center, and inquired how the legislature can
better work with HUD to incorporate these breakthroughs for use
in the federal building projects.
MR. ANDERSON assured the committee that AHFC works closely with
HUD and the energy standards are being met by the federal
agency.
11:24:30 AM
CO-CHAIR VAZQUEZ requested further information to include a
breakdown of grant details and what measures are in place to
ensure quality assurance.
MR. ANDERSON said quality assurance is conducted on-site via
physical monitoring as well as desk audit reviews of new
building projects. Desk reviews are conducted on all three
programs.
11:26:27 AM
CO-CHAIR COLVER thanked the participants and announced the next
committee meeting.
11:27:42 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Energy meeting was adjourned at 11:27 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2015-01-27 - HENE - AHFC Presentation Final.pdf |
HENE 1/27/2015 10:15:00 AM |
|
| 2015-01-27 - HENE - Agenda.pdf |
HENE 1/27/2015 10:15:00 AM |