The American Clean Energy and Security Act of 2009

On June 26, 2009, the U.S. House of Representatives passed the American Clean Energy and Security Act (ACES) in a 219-212 vote.

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View the full text of the bill as passed by the House, and use the following links to see the National Trust's overview and analysis of the five major topic areas:

This comprehensive energy bill stands to create millions of clean energy jobs and to increase the energy efficiency of older and historic homes and businesses. Home and businesses owners would be provided financial incentives for weatherization under a new Retrofit for Energy and Environmental Performance (REEP) program included in the bill by Rep. Peter Welch (D-VT).

REEP would fund state and municipal investments of up to half the cost of retrofitting the nation's existing homes and buildings. Homeowners could qualify for $1,000-$3,000 in financial incentives for achieving a 10% to 20% percent increase in efficiency, with another $150 for every additional percentage point of energy savings achieved. Historic buildings on the National Register of Historic Places would be eligible for a 120% boost in these same awards because of the special needs and higher costs associated with retrofitting historic buildings. In addition, REEP would give businesses up to $2.50 per square foot for making major energy reductions, and historic buildings would get the same 120% boost made available to historic homes.

The Senate released its draft version of the climate change bill on September 30, 2009, which would affect historic preservation in the areas of smart growth, energy efficiency, building codes, and the creation of green jobs for restoration work. The Senate bill places a high premium in the following areas important to historic preservation:

Location Efficiency: The Senate bill calls for updates to zoning and other land use regulations, and plans to support development that coordinates transportation and land use planning that focuses future growth close to existing and planned job centers and public facilities as well as use existing infrastructure.
National Building Codes: As in the House, the Senate bill poses another challenge and opportunity for historic preservationists to advocate for the inclusion of performance based standards as an alternative to prescriptive codes in the establishment of a national building code.
Retrofit for Energy and Environmental Performance (REEP) program: The Senate bill also includes the REEP provisions in the House bill that provides a 120% boost in incentives for achieving energy-efficiency goals through retrofits of existing homes and buildings.
Green Job Training: The Senate bill provides for a Energy Efficiency and Renewable Energy Worker Training Fund that would "place an emphasis on facilitating collaboration between the renewable energy industry and job training programs and on identifying industry and technological trends and best practices to better help job training programs maintain quality and relevance." This aspect of the Senate bill could help spur job training in the retrofit industry that specializes in historic buildings, which will require specialized skills to accommodate preservation needs and promote quality rehabilitation.

There are many aspects of the House and Senate bills that deserve the attention and scrutiny of preservationists because of the effect they would have on older and historic structures. The National Trust is continuing to monitor and advocate for provisions in both the House and Senate that will benefit older and historic structures while meeting the energy efficiency goals in any final legislation.

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Green Jobs & Rehabilitation

Under the American Clean Energy and Security Act (ACES), the Secretary of Education is authorized to award grants on a competitive basis to eligible partnerships to develop programs of study that are focused on emerging careers and jobs in renewable energy, energy efficiency, and climate change mitigation. An eligible partnership can include educational agencies, vocational or technical school, postsecondary institution, and representatives of the community (business, labor organizations, and industry) that have experience in clean energy.

The Secretary of Education shall convene a peer review process to review applications for grants and to make recommendations regarding the selection of grantees. Grants awarded shall be used for the development, implementation, and dissemination of programs of study in areas related to clean energy, renewable energy, energy efficiency, and climate change mitigation.

Opportunities: The education grants provided under ACES are a critical human capital investment in the future of the energy retrofit industry, and could include a sizeable investment and basis for training the next generation of historic preservationists.

Challenges: Unfortunately, the need to create green jobs with the necessary expertise to tackle older and historic structures is immediate and needs a dedicated source of funding that will train professionals who are already in the retrofit business, but may lack the training and knowledge necessary to do sensitive historic rehabilitation projects. A larger share of grant awards should be steered towards eligible partnerships with business, labor and industries that have experience in clean energy and energy efficiency to ensure that an adequate workforce of retrofit specialists is trained in preservation techniques.

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National & State Building Codes

The American Clean Energy and Security Act (ACES) sets up an ambitious schedule for establishing both a national building code and targets for the national average percentage improvement of energy performance for residential and commercial buildings.

No later than one year after a national energy efficiency building code is established or revised, each state shall review and update the provisions of its building code to meet or exceed the target of the new national code.

Each state will be required to document that local governments representing 80% or more of the state's urban population have either adopted the new national code, or have adopted local codes that meet or exceed the target established in the new national code. States must then provide certification to the Secretary of Energy demonstrating that energy efficiency building code provisions throughout the state meet or exceed the target met by the new national code. The Secretary of Energy may contract with organizations with expertise on codes to provide training for state and local officials and building inspectors in the implementation and enforcement of such codes.

A state shall be considered to achieve compliance if at least 90% of its new and substantially renovated building space meets the requirements of the code upon inspection in the preceding year. Certification shall include documentation of the rate of compliance based on either (1) independent inspections of a random sample of the buildings covered by the code, or (2) an alternative method that yields an accurate measure of compliance as determined by the Secretary of Energy.

Any state that is not in compliance will be ineligible to receive emission allowances or federal funding in excess of that state's annual share. Where a state fails (and local governments in that state also fail) to enforce the applicable state or national energy efficiency building codes, the Secretary of Energy shall enforce such codes as follows:

The Secretary of Energy will establish within two years after the enactment of ACES an energy efficiency building code enforcement capability.
The enforcement capability will be designed to achieve 90% compliance with such code in any state within one year after the date of the Secretary of Energy's determination that such state is out of compliance with this section.
The Secretary of Energy may set and collect reasonable inspection fees to cover the costs of inspections required for such enforcement. Revenue from fees collected will be available to the Secretary to carry out the requirements of this section upon appropriation.

The Secretary of Energy shall propose and – no later than three years after the enactment of ACES – determine and adopt what shall constitute violations of the energy efficiency building codes to be enforced, as well as the penalties that will apply to violators. To the extent that the Secretary of Energy determines that the authority to adopt and impose such violations and penalties requires further statutory authority, the Secretary shall report such determination to Congress, but not later than one year after the enactment of ACES.

Opportunities: This provision of ACES poses opportunities for establishing a separate schedule for the substantial rehabilitation of existing buildings to meet or exceed a national building code for energy efficiency. Older and historic structures could not possibly be held to the same standards as new construction, which have an advantage of being able to start from scratch to meet the new standards for energy efficiency. Key to leveling the playing field is a more progressive standard for "substantially rehabilitated" that is relative to a reasonable timetable for phased rehabilitation and energy retrofits based on available incentives and awards.

Challenges: Historic preservation must be ready to confront an enforcement landscape that may actually encourage demolition of existing buildings in order to gain access to emission allowances and awards. A separate efficiency index for older and historic structures may be required to allow for longer transitions and realistic compliance with a national building code.

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National Interstate Electric Transmission Corridors

Renewable energy and the transmission lines needed to transport these sources of energy will involve critical siting decisions that will impact natural, historic, and cultural resources. The American Clean Energy and Security Act (ACES) states that "it is the policy of the United States that regional electric grid planning should facilitate the deployment of renewable and other zero-carbon energy sources for generating electricity to reduce greenhouse gas emissions while ensuring reliability, reducing congestion, ensuring cyber-security, and providing for cost-effective electricity services throughout the United States." The Federal Energy Regulation Commission (FERC) will play a central role in this planning process and any subsequent conflict resolution that is necessary.

FERC is tasked with working with states, public utilities transmission providers, load-serving entities, transmission operators, and other organizations to resolve any conflict or competition among proposed planning entities in order to build consensus. FERC is required to also provide support to and participate in the grid planning processes conducted by regional planning entities. FERC may provide planning resources and assistance as required or as requested by regional planning entities, including system data, cost information, system analysis, technical expertise, modeling support, dispute resolution services, and other assistance as appropriate. In the event that regional grid plans conflict, FERC will assist planning entities in resolving such conflicts. As regional grid plans are submitted, FERC may convene multi-regional meetings to discuss grid plan consistency and integration.

Opportunities: ACES encourages an open-ended approach to planning and coordination to ensure maximum opportunity to build consensus among regional planning entities. Determining the pecking order of any regional planning entity outside of the transmission and power providers is critical to establishing a fair and efficient planning process. Historic preservation should be well-represented in these regional planning entities, including State Historic Preservation Officers, Tribal Historic Preservation Officers, Federal Preservation Officers, and other state and local officials. This will ensure that preservation and local jurisdictions are respected in the siting decision process.

Challenges: FERC is given free reign to develop conflict resolution procedures, primarily through multi-regional meetings that may ignore local concerns. Also, legal protections for historic and cultural resources may not be necessarily considered a high priority in these siting decisions, which may be more attuned to regulatory streamlining. All FERC recommendations on this front need to be closely monitored.

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Renewable Clean Energy & Energy Efficiency

The American Clean Energy and Security Act (ACES) will establish a method by which the federal government funds and incentivizes broad-based energy efficiency, conservation, and carbon reduction from the sale of emission allowances. The bill creates State Energy and Environment Development (SEED) Accounts under which a state, through its energy office or other agency, may operate a SEED Account. The purpose of these accounts is to serve as a common state-level repository for managing emission allowances provided to states designated for renewable energy and energy efficiency purposes, including: implementation and enforcement of building codes; low-income community energy efficiency; and implementation of the Retrofit for Energy and Environmental Performance (REEP) program, which is established to facilitate the retrofitting of existing buildings to achieve maximum cost-effective energy efficiency improvements, as well as significant improvements in water use and other environmental attributes.

Building Codes

Opportunities: ACES includes an option that allows the Secretary of Energy to establish a national building code energy efficiency target for residential or commercial buildings achieving greater reductions in energy use than existing targets (30% reduction by 2014 for residential buildings and 50% reduction by 2015 for commercial buildings) if the Secretary determines that greater reductions can be achieved with a code that is life cycle cost justified and technically feasible. The Secretary of Energy may also establish a national building code energy efficiency target for residential or commercial buildings achieving a reduction in energy use that is greater than zero but less than the existing targets if the Secretary determines that the lesser target is the maximum reduction in energy use that can be achieved through a code that is life cycle cost justified and technically feasible. These provisions provide the Secretary with maximum flexibility to determine energy reduction targets based on a national building code that takes into account life cycle analysis (LCA), which favors older and historic buildings that have superior building construction and materials.

Challenges: It will be important for federal policy to keep LCA in the context of using older and historic structures as baselines for new construction, instead of the reverse. It is also critical that LCA be given a numerical value that can be indexed to construction type, design and building materials. This will provide a level playing field for distribution emission allowances equitably between older structures and new construction.

Low-Income Property

Opportunities: Combining the Low-Income Housing Tax and the Federal Rehabilitation Tax Credit in new and innovative ways that also tackle energy efficiency retrofits for existing low-income property will yield a more robust development and investment market for older residential properties that have typically suffered from basis reduction issues. Pursuing expanded energy provisions and amendments to the Federal Rehabilitation Tax Credit will advance this agenda, particularly in extending and opening up the existing 10% non-historic rehabilitation credit for income-producing commercial buildings to affordable residential housing.

Challenges: Tax incentives need to be generous enough to support considerable investment in both rehabilitation and energy efficiency so that they meet or even exceed new construction costs to accommodate affordable housing demand. Inventory of our older and historic building stock eligible for conversion to affordable residential housing is also critical to establishing this market.

Energy Retrofits for Historic Properties

Opportunities: REEP offers bountiful opportunities for historic preservation outside of the provision's 120% boost in incentives and awards. Of particular importance is REEP's emphasis on performance-based building retrofits that take into account the entire structure's energy efficiency attributes, including building construction, materials, and LCA costs. This tends to favor older and historic structures that generally have superior construction and materials. In addition, REEP generously provides for public financing mechanisms, such as revolving loan funds and "repayments by beneficiary building owners over time through their tax payments, calibrated to create net positive cash flow to the building owner."

Challenges: Historic preservation will need to provide considerable background and research data to support the performance-based superiority embodied in the construction and materials present in older and historic structures that can easily be incorporated into existing energy efficiency indexes. In addition, REEP provides no incentives for non-historic buildings that are at least 30 years old, which are considered a prime target for demolition if they are in poor or deteriorating condition. A separate or supplemental index for embodied energy would be most conducive to saving these older, non-historic structures that may have additional years of useful life cycle.

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State Programs & Climate Change

Under the American Clean Energy and Security Act (ACES), states shall, in accordance with an approved state climate adaptation plan, use the proceeds of sales of emission allowances exclusively for the implementation of projects, programs, or measures to build resilience to the impacts of climate change, including:

Extreme weather events such as flooding and tropical cyclones;
More frequent heavy precipitation events;
Water scarcity and adverse impacts on water quality;
Stronger and longer heat waves;
More frequent and severe droughts;
Rises in sea level;
Ecosystem disruption;
Increased air pollution;
And effects on public health.

When implementing any project, program, or measure funded under this section and designed to reduce flood events, a state should consider prioritizing projects that seek to:

Mitigate the destructive impacts of climate-related increases in the duration, frequency, or magnitude of rainfall or runoff, including snow melt runoff and hurricanes.
Improve flood protection for densely-populated urban areas.
Mitigate the destructive impact of ocean-related climate change effects through a variety of means and measures, including the construction of jetties, levies, and other coastal structures in densely-populated coastal areas impacted by climate change.

Opportunities: Historic and cultural resources located in coastal areas are at high risk from rising sea levels, and therefore should be incorporated into state climate plans with the assistance of State Historic Preservation Officers, Tribal Historic Preservation Officers, and Federal Preservation Officers, who can provide proper inventories of the cultural properties that may be at risk.

Challenges: As written, disaster mitigation and state climate plans are focused entirely on natural resource mitigation and conservation from the effects of global warming. Presenting a case for the built environment will require separate plans and documentation of historic and cultural resources that are at risk from both the rising sea levels in our coastal areas and the flooding from rivers inland.

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Comments

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Submitted by HP in Cent Virginia at: July 24, 2009
I am closely watching the legislative process associated with climate change and energy efficiency bills. I hope that we will not see our elected representatives produce legislation that is written by, and tailored to the needs of, corporate special interests while forsaking the needs of the American people. After the rampant cronyism, corruption, and nepotism that happened from 2001 through 2008, Congress has a lot of work to do to win back the trust of the American people. So far, ACES appears to be a pretty good bill. Almost everyone is unhappy with some aspect of it, but almost everyone can find at least one thing to like about it as well. Compromise is the essence of a functioning democratic political system. That ACES appears to be the result of a process of genuine negotiation and compromise, rather than kowtowing to powerful corporate special interests, is encouraging. I hope that the National Trust will continue its vigorous work to remind legislators that historic preservation offers many, many solutions to the issues being addressed in ACES.