1. H.57 “ENERGY PERFORMANCE DISCLOSURE” February 10, 2011 Richard Faesy, Energy Futures Group

2. Overview 2  Background (RF and EFG)  Ratings in Vermont  Some terms and concepts  History of ratings in the world  Rating and labeling examples  Why disclosure is important  Some recommendations

3. Background for Richard Faesy 3  Principal at Energy Futures Group (EFG) of Hinesburg since May 2010  Previously: 20+ years at Vermont Energy Investment Corp. (VEIC)  Energy Efficiency Division Manager within Consulting Group  Board Director for Vermont non-profit Building for Social Responsibility  Representing BSR

4. Energy Futures Group Consulting 4 Areas of Expertise  Program Design  Policy Development  Building Codes  Evaluation  Cost-Effectiveness Analysis  Green Building  Energy Financing  Building Science Range of Clients  Government Agencies  Advocates  Regulators  Utilities Clients in more than 10 states/provinces plus regional, national and international organizations.

5. HERS in Vermont 5  Home Energy Rating Systems (HERS)  Started Energy Rated Homes of Vermont in 1987  Board director of RESNET (national HERS standards-setting organization) since its inception in 1995 (www.resnet.us)  Developed and ran Energy Improvement Mortgage programs in Vermont through the 90s with the VHFA etc.  HERS have been the basis for ENERGY STAR Homes  HERS Energy Ratings:  National standards  Vermont’s accredited provider: Vermont Energy Investment Corp. (VEIC)  Certified Energy Raters: primarily VEIC staff

6. Terms & Concepts 6  Asset rating  Based on the structure with standardized occupancy  Operational rating  Based on the building’s actual energy use  Site vs. Source Energy  Customer side “of the meter” vs. from extraction and utility  Audit  RESNET and Building Performance Institute (BPI) have standards  Information collection, analysis and reporting requirements by certified auditor  No quantification presented for house-to-house comparisons

7. Hierarchy for “Rating Tools” 7

8. 8 Building Labeling History

9. EU Labels 9

10. Some U.S. Options 10

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13. DOE’s New Home Energy Score 13

14. 14 Less Granular HERS Concept

15. Why is disclosure important? 15  Allows markets to work by providing energy information at the time of transaction  Encourages markets to value and reward energy efficient buildings and make buyers aware of under- performing buildings  Encourages improving the energy efficiency of low- performing homes by focusing attention on energy performance  Will help Vermont meet its goal of improving 80,000 homes by 2020  Save energy and create jobs

16. Building Energy Labeling Cycle 16 + Bill savings + Green jobs – CO 2 emissions

17. Success Story: Australia 17  “The study looked at whether a relationship exists between the EER of a house and sale price using data from 2005 and 2006 and found that a statistically significant relationship does exist. This means, if a house has a higher EER than another house, but in all other respects the houses are the same, the house with the higher EER will command a higher price.”  “EER was found to be positively associated with house price. The association on average for 2005 was 1.23 percent for each 0.5 EER star and 1.91 percent in 2006, holding all other variables constant.” (0-10 EE Rating)  E.g. for a $200,000 home,.5 EER adds ~$3,000 in value

18. Recommendations on H.57 18 1. I strongly support (EFG and BSR)  This can be an effective tool to move retrofit markets  Leaving the tool specifics and rater certification to rule-making is a good approach 2. Clarify some of the language  Don’t use the term “audit”  Use “rating”, “label” or “score” 3. Don’t require energy improvement recommendations  Too expensive and lack of standard approach  Let BPI contractors offer as a value-added service

19. Recommendations, con’t 19 4. Provide guidance to rule-making to balance the time, accuracy and cost in deciding on a rating tool (e.g., < 2 hrs) 5. Given the lack of energy code compliance in VT, consider including code documentation for new buildings as part of this

20. Richard Faesy Energy Futures Group rfaesy@energyfuturesgroup.com Phone: 802-482-5001 Cell: 802-355-9153 Q&A 20