Arkansas Homebuilders Get Their Way on Energy Code

Arkansas Homebuilders Get Their Way on Energy Code
Ron Hughes, owner of Home Energy Rating Services of Little Rock, wanted the Arkansas Energy Code to include mandatory energy testing of new homes. The city of Fayetteville requires new homes to list an "Energy Scorecard."  (Photo of Hughes by Mark Friedman)

In the fight between the Arkansas Homebuilders Association and energy auditors over updating the Arkansas Energy Code, the first round went to the homebuilders.

The association was able to remove the language in the proposed Arkansas Energy Code that would have required all new homes in the state to go through an inspection of the type performed by energy auditors before being sold, a process that’s currently required in the city of Fayetteville.

Under an earlier proposal, an “Arkansas Home Performance Label” would have been posted on the new home to show the estimated annual energy cost of the building. The label would be similar to the familiar EnergyGuide labels that disclose the annual operating costs and relative efficiency of specific appliance models.

The proposed energy code still needs to be approved by the Arkansas Legislature’s Joint Committee on Energy and then the Administrative Rules & Regulations Subcommittee of the Arkansas Legislative Council, said J.D. Lowery, the deputy director of the Arkansas Energy Office, a division of the Arkansas Economic Development Commission. The code is expected to go before the committees in April.

Ron Hughes, owner of Home Energy Rating Services of Little Rock, wanted the energy code to include mandatory energy testing of new residential homes. Hughes and other energy raters would have benefited from requiring homes to undergo a mandatory energy rating — but they argue that the end buyer would benefit even more.

“The Energy Office removed the things that the Homebuilders Association didn’t like,” said Hughes. “We’ve got the homebuilder’s code, no testing of ducts, no energy rating of houses.”

The cost for the energy audit is estimated to start at $700, but could be more depending on the size of the structure.

Steve Rucker, the president of the Arkansas Homebuilders Association, said homebuilders support implementing a number of energy efficiency proposals in the code but not the mandatory energy rating.

The association worked closely with the Arkansas Energy Office and others to draft the energy code “that results in more energy efficient homes while maintaining affordability,” Rucker said in a statement he read to Arkansas Business. “Energy-efficient measures must always be weighed against the cost of those measures to achieve a balance in which the cost of implementation doesn’t outweigh the savings to be gained. And we believe the proposed 2014 Arkansas Energy Code achieves that balance.”

Instead of having an energy performance label, the code now calls call for the home to have an energy disclosure label, which will include all the energy-efficiency items in the home. This code is similar to a nutrition label that tells consumers the ingredients in a food or beverage.

“We’ve kind of scaled back our approach,” said Lowery of the Energy Office. “We think it will hopefully meet everybody’s needs.”

Lowery said the Energy Office worked with a number of interested parties in creating the code. But the homebuilders “are the main ones that are impacted by this increased cost,” he said. “We’re still moving forward to try and come up with the best policy possible that’s going to meet everybody’s needs.”

But not all homebuilders were against the energy performance label.

Keith Wingfield, who along with his wife, Patty, owns River Rock Builders of Little Rock, said he supported having the disclosure.

“So the consumer will know and be able to rely on what they’re buying,” he said. “I’m in the overwhelming minority of my building brethren, but that still doesn’t make me not know what’s right.”

Fayetteville Codes

Rucker, from the Homebuilders Association, said that when the Arkansas Energy Code is approved, it won’t prevent a homebuyer from having an energy audit or a city from adopting stricter requirements if they want.

The city of Fayetteville already has higher energy standards than the current Arkansas Energy Code. And those standards have its supporters and critics.

In December 2007, the city of Fayetteville formed a committee to improve energy efficiency in new construction in the city. The committee helped create Fayetteville’s “Energy Scorecard”, which allows builders and buyers to know how the home’s energy efficiency compares with other homes in the area, according to the city of Fayetteville’s website.

The scorecard also will help the homebuyer understand what the home’s energy costs will be, the website said.

Architect Bradley Edwards of Fayetteville praised the scorecard and said a number of his clients were looking for ways to save on energy. He added that Fayetteville’s energy codes aren’t daunting.

“It’s actually a good thing and usually helps the quality of the project improve as well,” Edwards said. “There’s kind of a win-win in that respect because you’re using more sustainable building products and you’re building a more efficient” home.

He said there is a conflict with the stricter Fayetteville codes and the homebuilder, who is trying to make money on the project.

“Sustainability means you have to make the building last,” he said. “That’s not the incentive for the builder who’s trying to turn around a building really quick.

“The vast majority of people in the building industry are there to make money and not to save the world,” Edwards said.

Stan Roemer, owner of Bella Home of Arkansas Inc. in Fayetteville, said future homebuyers don’t seem to care about the energy scorecards of the homes.

“They haven’t told me that they were really glad that we’re doing it,” Roemer said.

He said meeting the requirements of Fayetteville’s energy-efficiency program, though, has added about $2,000 to the price of a home.

Edwards, the architect, said spending more to make a home energy efficient pays for itself in utility bill savings over time. He said he added 1,200 SF to his 1950s ranch home around 2010 and used more expensive spray foam insulation rather than the traditional fiberglass or cellulose insulation.

“The upfront cost is probably triple that of bad insulation,” Edwards said. But “you could make that back in two years in energy costs.”

He said his utility bills are is the same now as when the home was only 1,200 SF.

And it’s changed the way he designs homes.

“It’s definitely made me think more about” sustainability,” Edwards said. “Now were putting that into new designs as well.”

The Energy Code

Lowery, of the Arkansas Energy Office, said that when the state of Arkansas received about $140 million as part of the American Recovery & Reinvestment Act of 2009, it had to update its energy code to meet the 2009 International Energy Conservation Code.

He said the federal government requires that the state is 90 percent in compliance with the IECC standards by 2017 or the state might miss out on federal funds for projects such as weatherization assistance or city grants for energy-related projects that use federal money.

Lowery said the Energy Office began working on updating the residential energy code in 2012.

Hughes, the home energy rater who also is the coordinator of sustainability and energy sector programs at Pulaski Technical College, said that the energy testing is vital because homeowners don’t know how much energy their home is losing.

About 3,000 homes in Arkansas have had an energy test in the last several years, he said.

“The average duct leakage is 39 percent of design air flow,” Hughes said. “That means you’ve either just heated or cooled this air and you’re throwing it away through leaky supply ducts.”

He said most homeowners expect all new houses will be energy efficient and have low utility bills. “And that’s not the case,” Hughes said.

Having an energy performance label would give the homebuyers some idea how energy efficient their home is, he said.

In October, the draft of the energy code came before the Joint Interim Committee on Energy and was returned to the Energy Office and the Homebuilders Association to iron out a code that both sides could live with, said state Rep. Bruce Cozart, R-Hot Springs, who is on the energy committee and was the past president of the Arkansas Homebuilders Association.

Cozart told Arkansas Business last week that the homebuilders feared the proposed code was going to raise the price of a new home.

And the ones who were going to profit from the new energy codes were the ones supporting the energy audits — the energy raters, he said. “So I kind of felt that was a one-sided deal from them,” Cozart said.

In addition, Cozart said, he wasn’t sure potential homebuyers want to have an energy audit to comparison shop. “Not everyone wants their house to cost more money; most people want it to cost less,” he said.