Governor’s Bill 979, Public Hearing before Environment Committee 2/27/23
An Act Promoting Energy Affordability, Energy Efficiency, and Green Cities
Testimony in support, with changes. Submitted by Gannon Long, Policy & Public Affairs Director, Operation Fuel.
Co-Chairs Sen. Lopes and Rep. Gresko, Vice Chairs Sen. Hochadel and Rep. Palm, and Ranking Members Sen. Harding and Rep. Callahan,
Thank you for the opportunity to testify on Governor’s Bill 979. Operation Fuel supports the bill, particularly Section 2 which focuses on energy transparency for renters. We also recommend language changes that will make the legislation more impactful for households, the economy, and the environment in our state.
This past fall, Operation Fuel identified energy transparency for home renters and buyers as our priority issues for this legislative session. We are grateful to Gov. Lamont and Commissioner Dykes at DEEP for again raising this issue for the legislature’s consideration. In 2022, the framework in Bill 979, Section 2 passed the House, but didn’t get called for a Senate vote. We hope that with the support of Operation Fuel, the CT Green Building Council, People’s Action for Clean Energy, CT Roundtable for Climate and Jobs, Sierra Club, the City of New Haven, and many other advocates in the Coalition for Energy Transparency (fact sheet appended to this testimony), that 2023 is the year to pass this bill. Operation Fuel and our partners are available to the committee as you work through language and seek support from the broader assembly. Thank you for your leadership on this crucial energy affordability and transparency issue.
The bill 979 has 7 sections, which run the gamut from transmission policy, to workforce development, to urban canopies. Regarding Section 1, Operation Fuel supports the comments of the Nature Conservancy, advocating for more transmission to bring renewable energy online. Regarding Section 4, Operation Fuel associates with the comments from the CT Green Building Council and City of New Haven, whose expertise in stretch codes will clarify and improve the bill’s language, and thus its impact upon passage. We also support Sections 5 and 6, which would bolster our state’s workforce and training to meet our state’s energy efficiency needs as we continue to decarbonize our economy and provide valuable training for workers. Finally, Section 7 is a good beginning step to increasing the tree canopy in our cities. We believe the goal of 5% is low, as some CT cities have already achieved this. We recommend increasing the goal, requiring DEEP to report on progress, and providing resources to invest in our urban canopies.
Operation Fuel’s testimony will focus primarily on Section 2, which would provide energy transparency for renters. This section has many crucial elements that we applaud the governor and committee for including. We also have friendly recommendations to bill language that we believe will improve outcomes for those the legislation is written to help: Renters in CT who can’t afford or predict their high energy bills.
First, why is energy transparency for renters important? Families that face unexpectedly high energy (heat and/or light) bills are more likely to face housing insecurity. When people can’t pay their bills for basic needs, the impacts on families’ budgets and health are profound. For neighborhoods and municipalities with high energy burdens (defined as the % of household income dedicated to heat and electricity bills), these costs destabilize communities and local economies. Operation Fuel explored energy burden in CT as a community partner for Yale and Vermont Law School, who published a report based on focus group findings of high energy burdened residents of the New Haven area in June 2022. [Energy Justice Report]
The goal of Bill 979, Section 2 is to ensure renters understand the energy efficiency of a building before they move in – helping consumers make better decisions about where to live and how to budget for basic needs. When dealers lease a car, they tell the customer its miles per gallon. Yet someone renting an apartment at $900 a month may find themselves paying hundreds more for utilities in a poorly weatherized building. Additionally, decarbonizing our building sector is necessary to fulfill CT’s climate goals. Unfortunately, recent data shows we are currently moving in the wrong direction here [CT Mirror, 2/2/23]. While the bill requires disclosure and not any landlord investment, energy transparency will encourage property owners to improve their buildings’ weatherization and efficiency. This is critical for our state, particularly for renters who live in older housing stock with mold, vermiculite, asbestos, and other health hazards. In addition to exacerbating health issues for residents including respiratory and cardiac diseases, inefficient, carbon intensive buildings pollute our climate and endanger frontline communities.
Understanding why Section 2’s goals matter, we will now highlight bill language we support and believe is particularly important.
First, the bill gives authority to the DEEP commissioner to develop a label that is consistent with existing scores, such as a federal Department of Energy Home Energy, a Home Energy Rating System (HERS) Index, and Energy Star [Lines 79-85]. The bill also requires an opportunity for public comment [Lines 96-97]. This provision is key – stakeholders including landlords, realtors, renters, building experts, agency staff, and the public need a consensus, workable definition to use. In addition, the public comment process helps educate the public about the importance of building energy use, and measures that can improve efficiency and lower costs. Operation Fuel regularly engages in administrative procedures like this, which help agencies implement new programs.
While a robust public engagement process is encouraged, we also want to be sure that the program moves forward in a timely way. To that end, it may be helpful to add a deadline or time limit to this section.
Regarding Lines 86-95 describing the criteria the Commissioner will use to determine the labeling system, Operation Fuel recommends explicitly adding two clauses to clarify the consumer education thrust of the bill. The first is G) Ability of a prospective tenant to understand the rating. While standardization, accuracy, and reliability are essential, we must also ensure that the person the label is written for can clearly read it. Second is H) Opportunity for a prospective tenant to act on the information. If the label is shared after the person has already decided to sign the lease, or after they did sign, it won’t be useful to the rental property consumer.
Section (c) (1) addresses how the landlord would disclose the label to prospective tenants [Lines 98-111]. Operation Fuel strongly supports this section, which would require anyone listing apartments on an internet website to disclose the label there.
We also know that many apartments, particularly older buildings owned by larger management companies, don’t always advertise online. The bill requires landlords to disclose the labels “at the tenant’s request”; however, it will take time for renters to learn about the law change, and they may not know to ask. For these cases, we recommend that the legislation require landlords to disclose the label to prospective tenants upon or before receiving an application fee. The burden to disclose should be on the building owner, not the unit renter.
Section (c) (2) addresses when the provisions will take effect, starting on 7/1/24 or 30 “days after the commissioner’s public release of the Connecticut home energy label, whichever is later” [Lines 112-13]. The requirements are phased in through 2027, starting with municipalities with the highest energy burden census tracts (over 10%); then to municipalities with census tracts 6-10% energy burden in 2025; with 4-6% in 2026; and <4% in 2027 [Lines 114-123].
Operation Fuel recommends changes to this section. First, we data such as assessors’ grand lists, the Energy Estimator tool, and other technology allow fairly accurate labels without energy audits. We support Lines 88-90, which clarify that the building owner should not need professional assistance to develop the label. While energy audits should and will contribute to the label development, the legislation makes clear this is not necessary. Therefore, Operation Fuel recommends moving up the deadlines, so that the bill can be implemented statewide by 2025, instead of town by town. If the highest energy burden municipalities, which tend to host the lowest resourced and highest need populations, can implement this in 2025, why can’t the state’s wealthiest, and best resourced towns?
The bill is designed to help renters choose an energy efficient place to live. But renters frequently look for dwellings in more than one town, and don’t necessarily look at state websites to determine which neighborhoods have the highest energy burdens when deciding where to live. Requiring energy labels for some towns but not others may disadvantage renters and landlords in the market. Requiring a uniform approach throughout the state will also reduce the administrative burdens on state agencies to distinguish among the towns every year [Lines 124-30], and to enforce the provisions.
Operation Fuel supports phasing the bill in, but not geographically. We recommend a robust public comment period for DEEP to design the label; a voluntary period where stakeholders can try it out and recommend modifications if necessary; a mandatory period that requires statewide compliance; and then a civil enforcement requirement, which would allow DEEP or municipalities to impose fines, and which alleged violators could appeal.
Section (c) (4) addresses exceptions for who the bill applies to [Lines 131-7]. Operation Fuel supports the first group, which includes tenants who pay fixed rent that already includes utilities. These renters have no problem predicting the energy costs because they’re already disclosed in the total rent. However, Operation Fuel recommends removing the other 2 exempt groups, which are buildings built after 2000 and buildings with owner occupants. In the first case, renters in the market don’t know whether a building they’re looking to rent in was constructed in 1999 or 2001. The exemption for newer buildings that may still use internal combustion fuel sources and have not necessarily been audited for efficiency is a way of scrambling the market signals that consumers look to in deciding where to live. If renters are comparing different dwellings, full disclosure is the way to achieve this. Secondly, if the town-by-town phasing is removed as Operation Fuel recommends, there is no reason to exempt owner-occupied buildings from the disclosure requirements.
Section (d) (1) enables municipalities to levy penalties not to exceed $500 for the first offense, and $1000 for the second Municipal penalties allowed [Lines 138-43]. The bill does not specify how the fine monies are divided, which indicates they would redound to the municipality’s general fund. Operation Fuel recommends against 169 different enforcement systems, which would not provide the market transparency that the bill aims to accomplish. Further, the costs of providing the labels for larger landlords with properties in different towns would be higher, increasing confusion and non-compliance. We support a statewide enforcement system that would require DEEP to issue civil penalties, and would allow renters, municipalities, and other stakeholders to report non-compliance to the state. Even municipalities with housing inspectors, which high energy burden locations tend not to have enough of, do not necessarily have energy efficiency or labeling training to enforce these policies. DEEP, on the other hand, manages the state’s energy efficiency programs through the $700 million, three-year Conservation & Load Management plan, which is updated each year. Agency staff has the requisite expertise to educate municipalities and landlords, to produce the labels, and to enforce the policy.
While we support the enforcement through fines not to exceed $500 for the first offense, we note that the goal of the bill should be to educate and encourage, more than to punish. We want landlords to improve their building efficiency; disclosure is a method to encourage these updates. It would be highly unfortunate if a building owner got a fine like this without any further recourse or education on energy efficiency; negative experiences may sour them on the concept for years to come. To that end, Operation Fuel recommends that the bill be amended to include more robust public education around energy efficiency broadly. We also support increasing funding for energy efficiency programs, particularly in high energy burden communities in the state.
Section 3: Defines terms used in Section 2; Operation Fuel supports this bill language as is [Lines 156-210].
Section 4: Enables municipalities to enact net zero building codes. Operation Fuel supports this section with changes. Specifically, we align recommendations with the testimony from the CT Green Building Council and City of New Haven.
Sections 5 and 6: Require new certifications for electricians and plumbers to successfully install heat pumps and other emerging clean energy technologies. Operation Fuel supports state efforts to build this workforce, which employs CT residents to do work benefiting our state’s economy and environment.
Section 7: Sets a goal of 5% tree cover in CT cities by 1/1/24. Operation Fuel supports this concept. However, we encourage the committee to set a higher goal, to require a periodic status update from DEEP on our current and changing canopy coverage, and that the bill include resources to achieve this goal. We refer the committee to American Forests, which researches tree equity [https://www.americanforests.org/tools-research-reports-and-guides/tree-equity-score/].
In conclusion, Operation Fuel is pleased to support Bill 979 with changes. We appreciate the commitment of Governor Lamont, Commissioner Dykes, the committee, and the legislature in advancing these important consumer protections for home renters in our state, that will make our housing market more transparent and our environment more clean. Below is a fact sheet developed before the session began, by the Coalition for Energy Transparency, which articulates our goals for this initiative. We are available anytime to discuss our comments further with the committee as you review the bill language.
Thank you.
Gannon Long, Policy & Public Affairs Director, Operation Fuel.
REFERENCES
Energy Transparency for Home Renters
Coalition for Energy Transparency: City of New Haven, Conservation Law Foundation, CT Green Building Council, CT Roundtable for Climate and Jobs, Neighborhood Housing Services of New Haven, Operation Fuel, People’s Action for Clean Energy (PACE), Sierra Club. Updated 2/22/2023. Contacts: Gannon Long, Operation Fuel, 860-837-0317, gannon@operationfuel.org
Melissa Kops, CT Green Building Council, 203-824-5001, melissa@ctgbc.org
Energy Justice & Health in a Changing Climate, July 2022. https://ysph.yale.edu/yale-center-on-climate-change-and-health/policy-and-public-health-practice/energy%20justice%20in%20ct%20report_443325_48542_v1.pdf
Energy Transparency: Using Home Energy Labels to Make Smarter Decisions. CT Green Building Council, Energy News Network, PACE. October 2022. https://pacecleanenergy.org/cten-oct22/