HB 341-SCHOOL CONSTRUCTION, DESIGN & FUNDING  8:51:16 AM CHAIR GATTIS announced that the final order of business would be HB 341, "An Act relating to school construction and major maintenance funding; relating to school design standards." 8:51:26 AM The committee took an at-ease from 8:51 a.m. to 8:56 a.m. 8:56:08 AM VASILIOS GIALOPSOS, Staff, Representative Charisse Millett, Alaska State Legislature, on behalf of the prime sponsor, stated that HB 341 is an outcome of the sponsor's participation in the House Education Sustainable Task Force and her interest in obtaining efficiencies in construction, major renovations, and rehabilitation of school buildings. This stems from the basic philosophy that budget reduction means considering whether funds will fund programs or facility construction. There needs to be a real conversation about the source of construction. In 2012, the Alaska Housing Finance Corporation (AHFC) took advantage of funds received from the American Reinvestment Recovery Act (ARRA) as well at AHFC's own funds to conduct the most comprehensive audit of public schools and facilities in general in the state. He characterized some of their findings as extraordinary. He acknowledged that this bill needs serious revision, but the legislative intent is not to use a "cookie cutter" approach since the geographical and climactic diversity of Alaska could never yield the types of desired outcomes. One goal is to ensure that buildings being built do not need serious upgrades five years later. The AHFC and the Cold Climate Housing Research Center can help provide objective and measurable criteria and outcomes. 8:59:29 AM REPRESENTATIVE KITO III asked whether Alaska Housing Finance Corporation will offer the presentation. 9:00:00 AM STACY SCHUBERT, Director, Governmental Affairs & Public Relations, Alaska Housing Finance Corporation (AHFC), Department of Revenue (DOR), described the work that AHFC has been recognized for with energy rebate, weatherization, and energy efficiency in homes. In 2010, AHFC received federal funds through the ARRA, which were used to consider energy efficiency in public facilities and schools throughout the state. The AHFC examined 1,200 buildings and performed investment grade audits on 327 buildings. This effort resulted in a white paper on energy use in Alaska's public facilities [included in members' packets]. She provided a brief overview of today's presentation. 9:01:28 AM JOHN ANDERSON, Program Officer, Weatherization, Alaska Housing Finance Corporation (AHFC), Department of Revenue, presented a PowerPoint on HB 341. He stated that in 2010 Senate Bill 220 established this process for AHFC by establishing a $250 million revolving loan fund for energy efficiency improvements on public facilities [slide 2]. The AHFC used ARRA funds, which fit well with the AHFC's efforts. Ms. Schubert mentioned the AHFC reviewed 1,200 buildings using a benchmarking process, the initial review of a building, as well as seeking two years of energy data when available. That effort identified high energy use buildings and AHFC conducted American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) level two audits on 327 buildings. The AHFC developed the Alaska Retrofit Information System (ARIS) database, a clearinghouse for information on Alaska buildings to track energy use in buildings throughout the state [slide 3]. Many organizations, such as the Department of Transportation & Public Facilities, the Alaska Native Tribal Health Consortium (ANTHC) and some schools are using ARIS to track energy use. 9:04:00 AM MR. ANDERSON stated that the Building Energy Efficiency Standard (BEES) is at the core of AHFC. All of the projects that AHFC funds must meet certain standards, including the energy and structural codes. Tied to the Building Energy Efficiency Standard (BEES) is the Home Energy Rating System (HERS), noting the AHFC has invested considerable funds to develop its software program. 9:04:53 AM MR. ANDERSON described the assessment process [slide 5]. The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) process or the benchmarking process provides standardized audit processes. He reported 327 of 1,200 buildings examined were identified as the highest energy use buildings and investment grade audits were done to gather and analyze data and report the findings. The AHFC spent $7.2 million over a two-year period. The AHFC provided the University of Alaska a $1 million grant to audit its facilities. Additionally, another $10 million was passed on to DOT&PF for audits on its facilities. Over 5,000 facilities exist resulting in energy use costs totaling $641 million annually. The 32 audits resulted in significant savings of $14.7 million just from changing windows, control modifications, and adding insulation. One discovery was that the age of the building had little correlation to energy use so new doesn't always mean efficient [slide 6]. Additional analysis is still being completed to provide information for a comprehensive commercial outcomes report, he said. MR. ANDERSON related the AHFC headquarters building was purchased in 2011, following a 14-year lease. The AHFC completed a heating and ventilation retrofit, roofing upgrades, and exterior lighting and control systems. Currently, the AHFC has realized a 40 percent savings on gas and 30 percent in electrical use [slide 7]. MR. ANDERSON reviewed the overall energy audit recommendations, including appropriately sized new buildings, establish a level of accountability, meter and track energy use data, and consolidate facility use where possible. One challenge was to obtain accurate costs for components of facilities since some buildings did not have individual meters to provide the specific information. 9:11:08 AM MR. ANDERSON indicated the recommendations for building design, that a design should take certain aspects into consideration, including: life-cycle cost of building components and equipment, especially in areas with high energy costs; building use, system sizes, controlled ventilation, and lighting to maximize efficiency, and reduction of excessive glass and maximize daylight harvesting. He reported the average age of the buildings audited was 30 years. MS. SCHUBERT estimated the savings for the 5,000 buildings across the state could be in excess of $125 million each year. She directed attention to Senate Bill 220, which passed the legislature in 2010, which required AHFC create a revolving loan fund for energy efficiency improvements for public facilities. This program is available for municipalities and school districts, she said. 9:14:31 AM REPRESENTATIVE KITO III directed attention to slide 4, to the HERS and BEES standards. He related his understanding that the Department of Education and Early Development (EED) has not adopted the BEES standards, but the department has adopted ASHRAE 90.1. MR. ANDERSON answered that is correct. The BEES standards are stringent, but the AHFC also accepts the ASHRAE 90.1 standard, which has also been adopted by the DOT&PF and some other agencies. In further response to a question, he agreed the amendments to the BEES standards are Alaska specific. 9:15:18 AM REPRESENTATIVE KITO III referred to slide [8] entitled "Overall Energy Audit Recommendations." Referring to the recommendation that the department appropriately size new buildings, he commented that the EED's control over school construction is based on the square footage allowed for the number of students. The district doesn't have control over the student increases or decreases, and fluctuating student population creates challenges for districts. He suggested that the party paying the utility bill is not in the school, which disconnects school personnel from the costs since the administrator might not know the lights were on all night in the facility. He suggested one way to connect costs could be to include energy monitoring equipment in the schools' common areas so the school principal, teachers, students, and parents can view energy use, identify costs, and try to reduce them. He asked for further clarification on the applicability for the Leadership and Energy Efficiency Design (LEED) standards outside of the urban centers and whether the LEED standard could be a tool in Alaska to increase energy efficiency. MR. ANDERSON answered that LEED is a good process but it is restricted to site and materials and there is a benefit to allow that analysis; however, modeling is probably a better way to obtain energy costs. He agreed using LEED as an up-front process would be beneficial and something he supports. 9:19:02 AM REPRESENTATIVE SEATON noted energy standards are important but all of the LEED standards may not make sense. He related a scenario that illustrated the LEED process could still result in inefficient energy when built in Alaska since the LEEDS process balances other aspects, not just energy use. CHAIR GATTIS commented that LEED has merits. She expressed frustration over the system, primarily, noting that the state spends hundreds of millions, that the intentions are often good; however, efficiencies need to happen. She appreciated the sponsor bringing this bill forward and she sees it as the next step in saving money for schools. 9:22:06 AM MS. SCHUBERT said HB 341 would make AHFC a consultant in the process for developing schools. The AHFC understood that when the revolving loan fund was created that it would take time to implement. She acknowledged that AHFC has held good discussions with the DOT&PF, in particular, as well as with other agencies. REPRESENTATIVE P. WILSON directed attention to the white paper, entitled "A White Paper on Energy Use in Alaska's Public Facilities. She highlighted that pages 7-22 provide targeted recommendations. She said she will be certain to distribute them to her district superintendents and city managers. 9:23:35 AM MS. SCHUBERT encouraged members to visit the AHFC's website [ahfc.us] that includes all of the audits performed in Alaska to gain a better understanding of the potential in communities and in schools. MR. ANDERSON, regarding building monitoring, interjected that the AHFC is currently working on its own facility and will develop a software program that will be available to public entities as an online resource that will assist agencies in monitoring their own facilities. 9:25:58 AM RYAN COLGAN, Chief Programs Officer, Cold Climate Housing Research Center, first said Mr. Hebert apologizes for not being present since he very much wanted to participate. He said that tremendous potential to reduce energy costs in Alaska exists. He explained the Cold Climate Housing Research Center (CCHRC) is a 501 (c)(3) non-profit organization formed by the Alaska State Homebuilding Association (ASHBA) in 1999 to address the challenges of building in Alaska's extreme environment through applied research, policy research, design consulting and other means. Alaskans tend to take on the challenges themselves and not wait for others. The CCHRC does this through advanced modeling, applied research, product testing, policy research, and performs design and consulting and provides construction mentoring services throughout the state. He characterized his organization as being "problem solvers" who solve problems through collaboration with stakeholders. MR. COLGAN referred to a familiar image of a map of Alaska superimposed on the Lower 48 [slide 1]. This image illustrates how remote and diverse the communities of Alaska are, which is important in terms of standards. He characterized the necessary approach as being not focused on the "cookie cutter" but on the cookie recipe. Another factor to consider in Alaska is the logistics since it is difficult to get to construction sites in many places [slide 2]. Additionally, the work itself can be difficult due to the environmental conditions [slide 3]. 9:30:46 AM MR. COLGAN said one of Alaska's assets is that the state consists of problem solvers, which is inherent in its people [slide 4]. In fact, it is necessary to problem solve in order to survive in parts of Alaska [slides 5-6]. Not only do animals need to have problem solving skills, but people do, too, and this slide illustrates the collaborative nature of problem solving. MR. COLGAN turned to slide 6, entitled "How does CCHRC Solve Problems?" The CCHRC first seeks to understand the problem, gathers information, and identifies solutions; basically this is the research process. He showed some slides that illustrate the types of problems encountered, including snow drifting, heat loss, and mold and rot due to an aging building [slides 6-8]. MR. COLGAN said that CCHRC gathers information through peers, those who have researched and found solutions, and through advanced modeling, applied research, and demonstration or applying what is known and observing it in the real world [slides 9-11]. The CCHRC identifies solutions, such as developing a number of wall systems to address the challenges of constructing building envelopes to meet the environmental challenges, logistical design or construction, and dealing with water or wastewater [slides 12-13]. MR. COLGAN reported that CCHRC communicates with end users and has about 50,000 hits per year on its website, 20,000 hits per year on its blog for homeowners, and 200,000 views on the website podcasts [slides 14-16]. He described the CCHRC's facility as a 22,000 square feet building that represents the farthest north platinum LEED building in the world [slide 18]. It represents what is possible and achievable with research and smart application. He reviewed the problem solving approach used by the CCHRC in the context of where the state is at [slide 19]. In terms of understanding the problem, the state understands the challenges: high energy costs in some public facilities and budget deficits create a long-term burden on the state's budget. The state has gathered information through benchmark information, investment grade audits, and a white paper on public facilities. He recommended members read the white paper, which he characterized as a very good document. The state has identified solutions, through the AHFC's revolving loan fund, holding conversations on standards, and many of its stakeholders are already collaborating in various ways. CHAIR GATTIS stated that public testimony would be kept open. [HB 341 was held over.]