The Legislative Framework in New Jersey and Pennsylvania
Building codes and standards are the regulatory basis upon which construction companies, contractors, and real estate developers make structural decisions about new construction, rehabilitation, and retrofitting. The rules, codes, and standards are essentially the guiding framework that all stakeholders in the construction industry must follow, and the manual by which public authorities can license and approve buildings for occupation by residents and businesses. While many smaller countries have a single building code nationwide, the United States, with its federal system that delegates many responsibilities to the state and local levels, does not. Building codes and the processes by which they are adopted vary from state to state. The building codes in Pennsylvania and New Jersey, the two states served by CBEI, exhibit some key differences, with potential implications for the trajectory of energy efficient building retrofits in CBEI’s coverage area.
Where Do Building Codes Come From?
State and local legislatures are responsible for updating or amending their building codes. Since 1994, decision-makers have often deferred to the recommendations of the International Code Council, a non-profit membership association headquartered in Washington, D.C. The International Codes, or I-Codes, cover a wide range of building topics, from plumbing to fire to zoning to mechanical systems. Of particular interest to energy efficient building stakeholders are the International Energy Conservation Code (IECC) and International Green Construction Code (IgCC). The former focuses on energy efficiency aimed at reducing total energy usage and cost savings for building occupants, with provisions for both residential and commercial buildings. The latter is the first model code to incorporate sustainability measures from design to construction to occupation, including energy conservation strategies. ICC codes are updated every three years, with legislatures generally reviewing them on a similar triennial basis. At present, IECC 2012 and IgCC 2012 are the most current iterations of these codes, though IgCC has been adopted by far fewer states (Pennsylvania and New Jersey have not adopted it).
The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) also issues standards and guidelines for commercial buildings, with new editions published every three years. Under the federal Energy Policy Act of 1992 (EPAct 1992), the U.S. Department of Energy (DOE) mandates that states’ building codes must, as a minimum requirement, conform to ASHRAE regulations. Since 1975, ASHRAE has published a series of energy efficiency standards covering all buildings except low-rise residential buildings. In October 2011, DOE issued a final determination that ASHRAE Standard 90.1-2010 would achieve greater energy efficiency than ASHRAE Standard 90.1-2007; therefore, states, as required by EPAct 1992, had to certify that their building energy codes or standards met or exceeded the requirements of ASHRAE Standard 90.1-2010 within two years. Consequently, all states are required to update their commercial building codes by October 2013 to reflect this standard, which could potentially save 18.2% of energy consumption as compared to ASHRAE’s 2007 standard .
ASHRAE 189.1 is another standard that bears on energy efficiency in commercial buildings and is in some ways a parallel to IgCC, which incorporates 189.1 as an alternative path to compliance, and like IgCC it uses 90.1 as a baseline code and has a broader focus than energy efficiency, encompassing many other high performing building practices.
While there are key differences between ASHRAE 90.1 and the IECC, the most recent standards – ASHRAE 90.1-2010 and IECC 2012 – are considered rough analogues when measuring states’ compliance to the requirements of EPAct 1992 . According to the DOE, “many more states… directly adopt the IECC than Standard 90.1-2010. This is predominately because the IECC is a model code and part of a coordinated set of model building codes that state and local government have historically adopted to regulate building design and construction.”
State of the Code: New Jersey
New Jersey’s current commercial building energy subcode is ASHRAE Standard 90.1-2007 with amendments, adopted in August 2010 and slated for an update in 2013, per the triennial review mandated by the New Jersey Uniform Construction Code Act . The state is also in the process of updating its residential building energy subcode to IECC 2012, as part of the ICC suite. Specifically, at the August 2012 meeting of the Uniform Construction Code Advisory Board, the Board voted to propose the 2012 ICC national model codes (with amendments) and the 2012 National Standard Plumbing Code (NSPC) for public comment. Proposed amendments mainly concern insulation and diagnostic testing requirements. According to Jennifer Senick, Executive Director of the Rutgers Center for Green Building, an EEB Hub member, New Jersey has a strong history of adopting code with changes by inserting its own amendments.
New Jersey also has an award-winning Rehabilitation Subcode, a first-in-the-nation effort focused specifically at balancing compliance and economic objectives in older commercial buildings. Established in 1998, the code had an immediate effect, increasing the number of building rehabilitations by 60% that year (compared to a mere 1.6% increase in 1997) . For its efforts, the New Jersey Department of Community Affairs received the Innovations in American Government Award in 1999. The subcode, with its focus on existing buildings is directly relevant to the EEB Hub’s work.
Some proactive communities in New Jersey also choose to take additional steps that are synergistic with statewide regulations. New Jersey municipalities do not have jurisdiction over building codes so they are somewhat limited in their ability to impact building energy design and performance; however, the Local Redevelopment and Housing Law, and planning and zoning per the Municipal Land Use Law, provide opportunities to encourage energy efficiency. The Local Redevelopment and Housing Law empowers municipalities to act to improve areas in need of redevelopment. Redevelopment plans provide an opportunity to incorporate specific energy efficiency measures into redevelopment projects.
One such community is West Windsor Township in Mercer County, which is implementing an energy efficiency pilot program with the Rutgers Center for Green Building that encourages building owners and managers to increase their buildings’ energy efficiency . Commercial and multifamily building owners have been invited to complete an energy efficiency survey. They are also encouraged to participate in free energy benchmarking and the Pay for Performance Program available through New Jersey’s Clean Energy Program and to receive recognition for their efforts through a municipal energy leader recognition program. Over time, the benefits realized through participation in the pilot and existing state programs will create a community of conscious building owners that can share information to promote energy efficiency.
State of the Code: Pennsylvania
The Commonwealth of Pennsylvania’s current commercial building code for energy efficiency is IECC 2009 with reference to ASHRAE 90.1-2007 . Recent efforts by the Pennsylvania legislature aim to retain the current code without keeping pace with new developments in international standards. The Uniform Construction Code (UCC) Review and Advisory Council (RAC) – which advises the governor, legislature, and Department of Labor & Industry – previously recommended adoption of updated ICC codes, including IECC, on a recommendation of exclusion basis. In other words, the RAC would highlight any provisions of the new triennial code that should not be adopted, but otherwise adoption was more or less automatic. However, state policy changed in 2011 with the passage of PA House Bill 377, requiring the RAC to now explicitly recommend new code provisions . The amended process sets a much higher threshold to adoption of the triennial code updates.
With the new UCC adoption process in place, Pennsylvania declined to adopt IECC 2012, on the grounds that it will discourage construction activity in Pennsylvania due to the higher upfront costs of meeting the stricter standards. This topic is under debate as others believe that more energy efficient buildings are ultimately more competitive in the marketplace, because lower energy costs yield higher returns. Shari Shapiro, an attorney with Cozen O’Connor and a LEED Accredited Professional who authored an October 2011 EEB Hub study on commercial building energy efficiency in the two states, points out feedback by industry professionals stating that Pennsylvania could lose out, in terms of economic growth and job creation, to nearby New York, Washington DC, New Jersey, and Maryland, all of which have or are in the process of adopting more stringent standards . The report reasons that, despite the upfront costs for builders and developers, properties in those jurisdictions will ultimately be more appealing to tenants because of their lower energy costs.
It is uncertain what the next round of code adoption in 2015 will yield in Pennsylvania with the amended rules stipulating that only changes made between 2012 and 2015 can be adopted during that period. Under current state law, ICC 2012 will never be adopted.
As in New Jersey, municipalities in Pennsylvania are not permitted to set building code standards that are higher than those of the Pennsylvania UCC, except in very narrowly defined circumstances. Municipalities may present more rigorous requirements through voluntary standards and also promote adoption of energy efficiency measures through incentive programs. To that end, tools in the Philadelphia region include EnergyWorks, a regional retrofit effort funded by federal stimulus funds which provides construction loans, term loans, and lease financing from $100,000 to over $1,000,000 at interest rates between 3.5% and 6.5% as long as the project results in a 25% or greater reduction in energy consumption. In the City of Philadelphia, the Philadelphia Industrial Development Corporation (PIDC) and The Reinvestment Fund (TRF) have teamed up to make similarly sized loans at below-market interest rates to help businesses finance energy efficient construction projects, while a rebate fund will reimburse up to $10,000 for energy retrofits .
CBEI is focused on improving the energy efficiency of commercial and multi-family real estate in the Philadelphia region. Building codes that set more stringent energy efficiency requirements are a tool that can help in achieving this goal. EEB Hub practitioners are working with state and local code setting bodies to promote code adoption and to help to establish programs such as the one launched in West Windsor Township. They are also working with these jurisdictions to help ensure proper enforcement of codes that are already required by law during construction plan review.
 Federal Register. (2011, October 19). Building Energy Standards Program: Final Determination Regarding Energy Efficiency Improvements in the Energy Standard for Buildings, Except Low-Rise Residential Buildings, ANSI/ASHRAE/IESNA Standard 90.1-2010 [Notice of final determination]. Retrieved from https://www.federalregister.gov/articles/2011/10/19/2011-27057/building-energy-standards-program-final-determination-regarding-energy-efficiency-improvements-in.
 Makela, Eric, et al. (2011, September). Comparison of Standard 90.1-2010 and the 2012 IECC with Respect to Commercial Buildings. U.S. Department of Energy. Retrieved from http://www.energycodes.gov/sites/default/files/documents/2012IECC_ASHRAE%2090%201-10ComparisonTable.pdf.
 U.S. Department of Energy. (2012). New Jersey. Retrieved from http://www.energycodes.gov/adoption/states/new-jersey.
 State of New Jersey Department of Community Affairs. (1999). New Jersey Wins National Award for Rehabilitation Subcode $100,000 Prize Recognizes Innovation and Leadership [Press release]. Retrieved from http://www.state.nj.us/dca/divisions/codes/offices/innovations_award.html.
 Massand, Rikki N. (2012, October 9). Green Building: Partnership for West Windsor and Rutgers. West Windsor and Plainsboro News. Retrieved from http://www.wwpinfo.com/index.php?option=com_us1more&key=10-19-2012WW.
 U.S. Department of Energy. (2012). Pennsylvania. Retrieved from http://www.energycodes.gov/adoption/states/pennsylvania.
 Karrer, Paul. (2011, May 4). Pennsylvania Legislature Approves Bill Altering Code Update Process. Online Code Environment and Advocacy Network Retrieved from http://energycodesocean.org/news/2011/may/04/pennsylvania-legislature-approves-bill-altering-code-update-process.
 Shapiro, Shari. (2011). Policy and Process Factors Impacting Commercial Building Energy Efficiency in Pennsylvania and New Jersey. http://www.eebhub.org/media/files/eebhub_reports_commercial-impact.pdf
 City of Philadelphia, Mayor’s Office of Communications. (2010, January 27). Mayor Nutter Announces $27 Million in New Loans, Grants for Small Businesses [Press release]. Retrieved from http://www.pidc-pa.org/news/123.