Housing Energy Code Dispute

By: Associated Press
By: Associated Press

LANSING, Mich. (AP) -- Michigan has not updated its housing energy code in eight years because of a fight over whether changes aimed at saving energy will cost homebuyers too much money.
The state says new houses and additions must have better insulation and more energy-efficient windows, doors and other features to contain rising energy bills. Homebuilders agree homes should be greener but say a planned new code goes too far, is too expensive and is illegal.
A judge temporarily blocked the changes from taking effect in 2005, and the dispute has been tied up in the courts ever since -- dragging on so long that Michigan could have been working on the next energy code by now.
"It is simply unfair to ask Michigan consumers to pay more for energy efficiency measures than what they're going to save in fuel costs," said Lee Schwartz, executive vice president for government relations at the Michigan Association of Home Builders. "It is unfair to price them out of the market."
The controversy centers on a state law that says any extra construction costs required by the code must be made up by energy savings within seven years. If it costs an extra $4,500 for thicker insulation and more energy-efficient windows in a new home, for example, the owner has to save $643 a year on energy over seven years.
In December 2004, the state Department of Labor and Economic Growth set rules adopting the International Energy Conservation Code -- stricter building standards than had been pushed by homebuilders. The homebuilders association filed suit alleging the code did not meet the cost-effective threshold and would hurt homebuyers.
The group says it and other members of a panel appointed by the state had compromised on a less expensive, middle-of-the-road code in 2003 -- with improved energy efficiency -- but Gov. Jennifer Granholm's administration reversed course and went with tighter rules.
"This isn't something we wanted to do," Schwartz said of suing. "But the state is the reason we don't have an energy code."
Labor and Economic Growth officials referred calls to Attorney General Mike Cox's office, which defends the state in legal matters. Cox spokesman Matt Frendewey declined to comment.
But Alecia Ward, president and CEO of the Chicago-based Midwest Energy Efficiency Alliance, defended state regulators, saying the code they created is reasonable. Homes would cost about $1,700 more but residents would recoup that through energy savings in just two-and-a-half to five years, she says.
The Granholm administration received a lot of public comments favoring higher energy efficiency standards than those backed by homebuilders, according to Ward, whose group has intervened in the suit.
"To lay the blame at the state for the fact Michigan has not adopted an energy code is ludicrous," she said. "The most cost-effective and efficient way for consumers in Michigan to begin saving money on their energy bills is for homebuilders to withdraw their litigation."
Michigan's current code ranks in the bottom quarter of states in efficiency standards, Ward says, after former Gov. John Engler and Republican lawmakers rolled back requirements in the 1990s. The Granholm administration's code would boost Michigan into the top quarter, Ward said.
All sides for now are awaiting a ruling from the state Court of Appeals before the case may go to trial. Homebuilders say they proposed a settlement six months ago and have gotten no formal response from the state.
"For the sake of Michigan's citizens and businesses, there need to be some kind of movement," Schwartz said.
Ward responds that the settlement proposal was "nowhere close" to being acceptable.
With the trial possibly not starting until next year -- three years after the suit was filed -- it may be up to the Legislature to move forward.
Rep. Gabe Leland, D-Detroit, and Sen. Ray Basham, D-Taylor, are sponsoring bills that would adopt a new code following international standards and repeal requirements that it be cost-effective. But the legislation could get a cool reception from the GOP-led Senate.
In the meantime, Michigan's 1999 energy code remains in effect.

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