Better Building: The Responsible Developer's Blog : Northwest Construction Lawyers & Attorneys : Foster Pepper Law Firm : Sustainable Building & LEED Projects in Seattle & Spokane, WA

 Does the Responsible Developer aspire to LEED for health care facilities?

Local Washington cities and health care providers say, Yes!

The latest addition to Puyallup’s MultiCare Good Samaritan Hospital, the nine-story, $300-million Dally Tower, has received the Green Building Institute’s LEED Gold award.

The hospital tower, which doubled the space at Good Samaritan, is the state’s first hospital structure to win the Gold award for energy and resources conservation, said Tacoma’s MultiCare Health System, the hospital’s parent company.

The gold award was based on the new building’s water and energy saving features and environment-friendly construction methods.  The building and parking structure replaced surface parking lots and a public street, and also replaced impervious surfaces with permeable green space. The structures added no new impacts to the stormwater system.

Other sustainable features include:

• Ecoroofs, bioswales and rain gardens that gather stormwater runoff.

• An energy-efficient building form that minimizes east-west exposure; sun shades on the windows to reduce heat gain.

• Renewable, recycled and regionally sourced materials; certified wood, low-VOC interior finishes and linoleum and rubber flooring.

• Reduction of potable water use by 20 percent compared with a normal hospital.

• HVAC system with low-velocity ducting, high-efficiency chillers and mid-building air handlers.

• Air drawn 100 percent from outside the building to help control infections, and a heat-recovery system to conserve energy.

The architect for the project was the Good Sam Design Collaborative which included Clark/Kjos Architects and GBJ Architecture. Skanska USA was the general contractor.

Another area hospital serving southeast King and northeast Pierce counties, Enumclaw’s St. Elizabeth Hospital, last summer was awarded a LEED Silver designation. St. Elizabeth is owned by Tacoma’s Franciscan Health System.

So to sum up the attributes of Green hospitals, its good for the environment, it saves energy and reduces costs, it's also gorgeous, and, it's undeniably healthy (see new USGBCCleanMed protocol).  

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Does the Responsible Developer avoid conflicts in Renewable Energy Production that could lead to litigation?  Apparently not all of the time.

At the end of last month we reported the Bonneville Power Administration's ("BPA") decisions to allow more water to be spilled over dams and to shut down many wind turbines.  We speculated that the decision would create conflicts that could lead to litigation.  And so it has, the Wind Wars have begun.

A coalition of five PNW energy companies (Iberdrola Renewables, PacifiCorp, NextEra Energy Resources, Horizon Wind Energy and Invenergy have filed a one hundred and thirteen page complaint with the Federal Energy Regulatory Commission ("FERC").  The coalition claims to have invested $6 billion in renewable energy generation in the region.  The coalition is howling mad and alleges that BPA violated the Federal Power Act by using its control of the region's power grid to breach its contracts and seize transmission rights. 

The American Wind Energy Association ("AWEA") also filed a motion to intervene with comments in support of the coalition, decrying BPA's alleged acts as discriminatory in favor of its own interests, and further voicing its support for the energy companies' allegations.  

"BPA is using its control of the region's transmission system and exploiting unusually high water levels to break contracts," said Rob Gramlich, senior vice president for public policy at the AWEA and former FERC policy advisor. "Contracts cannot be broken for wind or anything else.  BPA, a government-owned monopoly, cannot play by different rules and shred contracts with private companies. FERC can rise above the politics and adjudicate based on facts and the law".

According to BPA's newsroom it was aghast that the complaint had been filed.  BPA spokesman Mike Hansen stated "We are disappointed that this filing has proceeded as we are participating in mediation sponsored by FERC that we believe is worthy of effort". 

BPA also argues the complaint is overblown because the BPA already has authority to limit wind generation, particularly during periods of overgeneration. “We have the legal authority to implement the Environmental Redispatch policy and, in addition to that, we believe our transmission contracts also give us the legal authority to limit generation,” stated Hansen.

BPA's position is unlikely to keep it out of the courts or away from an expensive and protracted  battle at FERC.  Other Northwest energy companies are expected to blast these and other BPA policies in the Ninth District Circuit Court of Appeals by alleging BPA actions are in violation of the Northwest Power Act.  Individual companies and utilities may also file actions to recover losses from BPA for its actions this spring in the U.S. Court of Federal Claims.

Stay tuned, this is a major, reoccurring conflict with very high stakes.  Anticipate it may take a long time for the wind wars to blow over. 

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Does the Responsible Developer need to track Green energy savings?

Absolutely, whether voluntary or mandatory, it is your best interest as the Responsible Developer because it means you are saving money or at least offsetting the cost of the money you spent on all that Green energy saving technology.  If can also show you that your building performs better which makes it more attractive to tenants and prospective buyers!

If tracking energy use is voluntary, you still need to do it as part of good risk management.  You need to at least track performance before any applicable warranties have ran, because monitoring will tell you if actual performance is within the guarantees, warranties or performance specifications for your building.  If before that time energy use and cost are unexpectedly high it may indicate you have a problem that needs to be immediately investigated.  While there is probably a contract requirement for you to timely notify the applicable design professionals and contractors, it is always a good idea to consider hiring a unbiased and objective energy use audit consultant (link is a sample reference only there are many available locally).  This becomes critical when, in the face of well documented sub-par energy performance, your project team is doggedly representing that all is as it should be.

If tracking energy use is mandatory (yes many state and federal authorities are requiring mandatory production of records showing energy consumption) then you have no choice. 

Locally, as of today, May 12, the City of Seattle's Department of Planning and Development is requiring that 800 commercial property owners of non-residential buildings over 50,000 sq. ft. must start tracking energy use and must report on October 3, 2011.  Then, for both non-residential and and multifamily residential buildings over 10,000 sq. ft., annual reporting begins on April 1, 2012 (no not a belated April Fools joke). 

These effected property owners must employ use of the EPA's Energy Star Portfolio Manager that is used to set "energy use benchmarks".  This energy information must then be provided to the parties in real estate transactions (buyers, tenants and lenders).

So with this information becoming generally available to players in the RE market,  this new "energy bench marking" is expected to be used by local RE agents to help owners see where they stand in the market and how competitive their building(s) are regarding energy use.  Kidder Mathews was already working with its clients to do this voluntarily and has not had much push back from owners.

So again, whether mandatory or not, spending money on tracking the energy performance of your buildings means businesses and consumers that value green built will be willing to pay more, if you have empirical proof of performance.     

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In the Better Building Initiative, President Obama proposes new measures to improve energy efficiency in commercial buildings around the United States. The initiative aims to make commercial buildings 20 percent more energy efficient over the next decade by encouraging private sector investment with incentives to upgrade offices, stores, schools, municipal buildings, universities, hospitals, and other commercial buildings.

The goal is to increase cost effective upgrades that will reduce energy bills and save business owners money. The hope is that this cost savings will be used to hire more workers, invent new products, and create shareholder value.

The initiative calls for a reform of existing tax and other incentives for commercial building retrofits, and proposes a new competitive grant program. President Obama is also asking corporate leaders to commit to making progress towards these energy goals. The President’s budget proposal will include efforts to make American businesses more energy efficient through several new initiatives:

• President Obama is asking Congress to redesign the current tax deduction for commercial building upgrades to make the current deduction a tax credit that is more generous and will encourage building owners and real estate investment trusts to retrofit their properties.
   
• President Obama is also making an effort to address the financing access problems for building retrofits. The Small Business Administration is working to encourage lenders to take advantage of increased loan size limits to promote new energy efficiency retrofit loans for small businesses. Further, the President’s budget will also propose a new Department of Energy program that will guarantee loans for energy efficiency upgrades at hospitals, schools and other commercial buildings.
   
• The President’s budget will also propose new competitive grants to states and local governments that streamline commercial energy efficiency standards to encourage upgrades.
   
• President Obama is challenging CEOs and University Presidents to have their organizations set an example in saving energy. Committing to a series of actions to make their facilities more efficient will make the organizations eligible for many benefits including public recognition, technical assistance, and best practices sharing with their peers.
   
• The Obama Administration is also working to implement reforms that will improve transparency around energy efficiency performance and provide more training in energy auditing and building operations.

The end goal of the Better Building Initiative is to increase energy efficiency in commercial buildings by 20 percent and create a potential cost savings of $40 billion per year.

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On February 7, 2011, Judge Bryan dismissed the Building Industry Association of Washington’s (“BIAW”) claims that certain newly enacted provisions of the Washington State Energy Code are preempted by federal law. The Washington State Building Code Council (the “Council”) promulgated the revisions, contained in WAC 51-11-0900 (“Chapter 9”), in order to comply with its statutory requirement to achieve a 15 percent reduction in annual net energy consumption in new construction, and originally set the effective date as July 1, 2010.   As we previously reported, BIAW filed suit in federal court in the western district of Washington on May 25, 2010, seeking an injunction and a declaratory judgment that Chapter 9 violated the Energy Policy and Conservation Act of 1975 (“EPCA”).

The main basis of BIAW’s claims was that Chapter 9 was preempted by EPCA, and therefore invalid. EPCA, as amended, set federal energy efficiency standards for certain "covered products, including heating, ventilating, and air conditioning equipment (“HVAC”) and water heaters, as part of its energy conservation program.  (EPCA is responsible for the familiar bright yellow energy conservation guides you see on new major appliances for sale in retail stores.)

As reported in one of our prior blogs, in a June 8, 2010 letter to the Council, Governor Chris Gregoire asked the Council to delay implementation of the revisions until April 1, 2011, for fear of further delaying the construction industry’s recovery from the recession. The Council did in fact delay the effective date to January 1, 2011.

BIAW had joined with various industry groups to bring their claims, and the NW Energy Coalition, Sierra Club, and others were allowed to intervene for the Council. Both sides brought summary judgment motions. EPCA expressly states that it preempts any state regulations concerning the energy efficiency of “covered products”, but did provide for exceptions, if a state code complied with seven specific requirements. The Council argued Chapter 9 fell within the exceptions, BIAW argued it did not.

In his 23 page opinion, Judge Bryan carefully analyzed each of the contested exceptions and, referring to a combination of legislative history, expert testimony, and computer simulations, found that Chapter 9 passed muster. Judge Bryan granted the Council’s summary judgment motion, denied BIAW’s motion, and dismissed the complaint.

As Washington and other state and local governments amend their energy codes to improve energy efficiency, there will likely be more challenges similar to BIAW’s.  Judge Bryan distinguished one challenge already decided in New Mexico, where a federal court granted an injunction against the City of Albuquerque’s high performance building ordinance because it was preempted by EPCA.

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Washington Governor Christine Gregoire just wrote a letter to John Cochran, the Chair of the Washington State Building Code Council asking him to defer the new energy code until April 2011.  Gregoire's concern is of the probable negative impact the code would have on the recovery of the economy and the construction industry.

The Governor's request is timely given the lawsuit filed recently by the BIAW (that we posted earlier).

We also posted two questions in April and May about green codes: "Can homebuying consumers bear the cost of new green and energy codes during recession?" and "Should green building codes be mandatory?"  Both questions appear to have been answered by the Governor.  In the long term, Green can be affordable, but in the short term, during hard economic times it may have to be deferred or remain voluntary.  

It seems that between the executive, legislative and judicial branches of our state government that until the recession is over, there should be no further mandates requiring taxpaying citizens and businesses to pay more for greener and more energy efficient homes.  However, once recovery happens and the construction industry exhausts existing supplies of non-green materials and components, that the cost benefit of green energy efficient materials and components may be mandated and embraced by all Washington residents for the obvious future long term benefits.  

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Some of our prior posts included information about new energy efficient “Net Zero” Homes and California’s landmark decision to mandate a Green Building Code (CALGREEN). However, there may be unintended financial consequences when code officials mandate green and more energy efficient homes. 

Concern about these consequences caused the Building Industry Association of Washington (BIAW) to file a lawsuit on behalf of its members.  The complaint alleges that the end result of new provisions in the Washington State Energy Code that go into effect in July 2010 will be that fewer homes will be built and sold because consumers cannot afford to buy the homes that would be built under the new code requirements.  BIAW alleges that the cost to comply with these code requirements would increase the cost of an average home by $4,000-$15,000.  Probably a tough sell to first time buyers in recession. 

According to the Washington State Building Code Counsel (SBCC) in the long run these code requirements will result in lower energy costs over the life of the homes.  However that may be small consolation to buyers who cannot afford these energy efficient and code compliant homes in the first place.

This possible energy and code conflict would not be the first of its kind in Washington.  In the 1990s building and energy codes mandated tighter insulated buildings that featured exterior fire resistive gypsum sheathing.  The problem was that in wet climates like western Washington, when rain penetrated behind cladding, the result was mold, a loss of structural capacity and hundreds of millions of dollars in property damage.  This conflict also dramatically increased the cost of insurance on residential construction projects and hence increased the cost of homes.

So apparently major changes in building and energy code requirements may need to be tested by the courts and mother nature before code officials, builders and consumers all realize the intended benefits.

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