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A Greener, Level Playing Field With Boulder's SmartRegs

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In 1974...we discovered that Western Europe and Japan were using only a third as much energy as the U.S. for each dollar of gross domestic product, yet they certainly weren't "freezing in the dark" as the saying went.

~ Art Rosenfeld, Wall Street Journal, April 17, 2010

Dr. Rosenfeld helped found the center for Building Science at the Lawrence Berkeley National Lab that developed lighting and coatings for windows for more efficient buildings, plus tools for state building codes. Starting in 1978 California's per capita energy use has stayed flat -- while the rest of the nation's per capita consumption has leaped by over 50 percent. California has saved about $56 billion in electricity and natural gas expenses.

So Boulder, when it comes to SmartRegs, what are we waiting for?

The proposed SmartRegs would require rental property owners to update their residential properties on a points system, through measures such as installing efficient light bulbs, dishwashers, insulation or solar heating (for more on that, go here). Many properties will meet the standard as compliance with ten year old code is sufficient; but many units, which have been written up as being downright windy inside, would need to have lots of work done.

Sheila Horton of the Boulder Area Rental Housing Association has been a vocal opponent of SmartRegs, scoffing that they are "irresponsible" for not accounting for banks, which are not loaning money.

Uh, remember a little thing called the ClimateSmart Loan Program? It was authorized by Boulder voters in 2008 so the County could sell bonds and make loans to property owners for efficiency and renewable energy upgrades, with their debts being repaid through property tax bills. (It's also known as a Property Assessed Clean Energy or PACE program, like the flagship program developed by the City of Berkeley.)

Oh right, the ClimateSmart Loan Program for energy retrofits! D'oh!

In fact, Boulder's CSLP is so highly regarded it's being imitated in fifteen other states. The Colorado Legislature has passed two bills to allow the program to be replicated across the state. Also, partly because of CLSP, Boulder County won a $25 million "Retrofit Ramp Up" grant from the Department of Energy, on Earth Day. The grant was won in partnership with Denver, Xcel Energy, and Garfield County.

The County Commissioners have estimated that the DOE award could help leverage $180 million for energy upgrades - this is ten times the $18 million that city staff estimated for updating all 19,600 rental properties in the city, and far surpasses the $35 million cost that was grimly estimated by SmartRegs' opponents who see the program as an unjustified burden.

Lack of loans is not a problem -- particularly as about one third of the DOE grant is allocated to buy down interest rates. Jonathan Koehn for the City of Boulder has said that grant shall also help with micro loans starting at $300.

The Climate Smart Loan Program costs the taxpayer nothing. This needs to be understood so the program's expansion cannot be voted down in future elections over fiscal worries, as it was last November.

Former County Commissioner Paul Danish wrote valiantly of how he used CSLP funding to replace his old furnace and saw his natural gas bill cut in half. The financial payoff of any retrofit is a function of how deplorable the situation was beforehand, so energy audits need to be conducted and interpreted with care to prioritize the biggest bang for the buck. Meanwhile, critics of SmartReg's puff up the "unknowns" - the sames fear based logic which keeps people from marrying or having children.

One thing we know for sure is that rental property owners cannot feel how deplorable their properties may be; it is the job of the renter to suffer, often silently, in leaky dwellings as they blast away at their utility bills and our children's future. This is the "split incentive" that's been an enduring policy logjam enriching no one but fossil fuel sellers.

It's too bad Colorado's legal tradition is not inclined to allow counties to mandate that owners pay for all average energy costs of their tenants; this would be an elegant way to unite incentives in a snap. But with SmartReg's instead, owners should not fret - research out of the state of Washington shows that environmentally certified housing sells much faster and at higher prices per square foot than ordinary housing, suggesting that SmartRegs in Boulder can not only create local jobs that cannot be outsourced -- but they can also allow the free market to compete on a greener and level playing field.