Agenda Item 5C
April 22, 2014
Action
MEMORANDUM
TO:
FROM:
County Council
JlAmanda Mihill, Legislative
Attorne~iAW
~'Michael
Faden, Senior Legislative Attorney
Action: Bill 5-14, Environmental Sustainability - Social Cost of Carbon
Assessments
SUBJECT:
Transportation, Infrastructure, Energy and Environment Committee recommendation
(3-0): enact Bill 5-14 with an amendment to require that when the Department of General
Services is reviewing the energy efficiency of a County building, the Department should
include the social cost of carbon as a factor in determining the return on investment of the
proposed energy efficiency improvements.
Bill 5-14, Environmental Sustainability - Social Cost of Carbon Assessments, sponsored
by Councilmembers Berliner, Floreen, Riemer, EIrich, Andrews, and Navarro, was introduced on
January 28, 2014. A public hearing was held by the Committee on February 11 and a
Transportation, Infrastructure, Energy and Environment Committee worlcsession was held on
March 24. At the hearing, a representative of the Executive expressed the Executive's general
support for the package of environmental initiatives (©23).
As introduced, Bill 5-14 would require the Office of Management and Budget to submit
an analysis of the social cost of carbon with certain capital projects in the Capital Improvements
Program. The use of conventional fuels, particularly coal, extracts a cost on society that is not
reflected in its price. These "external" costs should be factored into the costlbenefit calculations
that the County uses when it assesses the potential for energy efficiency improvements.
Councilmember Berliner explained the purpose of this Bill in his January 14
memorandum describing his proposed energy/environmental package (see ©24).
Bill 5-14 is not expected to have a fiscal impact (©28).
A fact sheet from the Environmental Protection Agency providing background
information on the social cost of carbon, including how the values are determined and the
process used to determine the cost, is on ©6. The most recent social cost of carbon estimates for
certain years is on ©8.
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Committee DiscussionlRecommendation
At the Committee worksession on February 26, the Committee discussed with the
Executive Branch the challenges in applying a social cost of carbon analysis to new building
projects in the Capital Improvements Program. Chairman Berliner explained his intent that Bill
5-14 not apply generally to new building projects. Rather, when the Department is reviewing the
energy efficiency of a County building, the Department should include the social cost of carbon
as a factor in determining the payback period of the proposed energy efficiency improvements.
At the Committee worksession on March
24,
the Committee
(3-0)
recommended
amending Bill 5-14 to reflect the intent as described above. Staff from the Department of
General Services noted that that they were generally supportive of the language proposed by
Council staff, but recommended minor changes. Most notable, the Department preferred to use
the phrase "return on investment" rather than "payback period". These changes are incorporated
into the Committee bill on
©
1.
This packet contains:
Circle
#
1
Bill 5-14
Legislative Request Report
4
OMB and Finance Memo
5
6
EPA fact sheet on social cost ofcarbon
Select correspondence
10
American Institute of Architects, Potomac Valley Chapter
16
Chamber of Commerce
Charles Nulsen
19
23
County Executive
Councilmember Berliner memo
24
28
Fiscal and Economic Impact Statement
F:\LAW\BILLS\1405 Social Cost OfCarbon\Action Memo.Doc
2
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Bill No.
5-14
Concerning: Environment Sustainabilitv
Social
Cost
of
Carbon
Assessments
Revised:
3/31/2014
Draft No. 2
Introduced:
January 28, 2014
Expires:
July 28. 2015
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
EffectNe: _ _ _ _ _ _ _ _ ___
Sunset Date:
-!..!.No~n~e:..._
_ _ _ _ __
Ch. _ _• Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmembers Berliner, Floreen, Riemer, EIrich, Andrews, and Navarro
AN
ACT to:
(1)
require the Office of Management and Budget to submit an analysis of the social
cost of carbon with certain capital projects in the Capital Improvements Program;
and
generally amend County law regarding the analysis of capital projects and
environmental sustainability.
(2)
By adding
Montgomery County Code
Chapter 18A, Environment Sustainability
Section 18A-16A
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law
by
original
bill.
Deletedfrom existing law
by
original
bill.
Added
by
amendment.
Deletedfrom existing law or the
bill by
amendment.
Existing law unqffected
by bill.
The County Council for Montgomery County, Maryland approves the following Act.'
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BILL No. 5-14
1
2
3
4
5
Sec. 1. Section 18A-16A is added as follows:
18A-16A.
Social cost of carbon assessment.
Definitions.
In this Section, the following words have the meanings
W
indicated:
Department
means the Department of General Services.
Director
means the Director of the [[Office]] Department or the
6
7
Director's designee.
Energy Project
means an energy efficiency or renewable energy
8
9
10
11
12
13
improvement to a' building or facility that is expected to reduce the
onsite consumption of electricity, natural gas. or other fuels.
[[Applicable capital project
means any proposed building project
administered
.by
the Department of General Services or the Parking
Management Division of the Department of Transportation.]]
[[OUice
means the Office of Management and BUdget.]]
Return on Investment
means a performance measure used to evaluate
14
15
16
the fmancial return of an energy project. including reasonable
forecasts of energy costs and other factors.
Social cost
Q[
carbon
means an estimate of the economic damages or
17
18
19
20
21
22
23
damages avoided associated with the increase or reduction of one
metric ton of carbon dioxide emissions.
®
[[For each applicable capital project in the Capital Improvements
Program during facility planning. the Office of Management and
Budget must include
!!h
or transmit with, the CIP an analysis of the
social cost of carbon from that project]] When evaluating a building to
determine whether to improve the building's energy efficiency, the
Department must include the social cost of carbon as a factor in
determining the return on investment of the proposed energy
efficiency improvements.
24
25
26
27
28
®
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Bill
No.
5-14
29
30
31
32
33
34
(£!
In
performing its analysis, [lOMB]] the Department must use the
standard developed
.by
the United States Environmental Protection
Agency or
~
standard the Director finds equivalent.
@
In performing its analysis, [[OMB]] the Department should consult
the Department of Environmental Protection and any other County
department or agency with expertise in environmental sustainability.
35
36
37
38
Approved:
Craig
L.
Rice, President, County Council
Date
39
40
41
42
Approved:
Leggett, County Executive
Date
43
44
45
46
This is a correct copy o/Council action.
M. Lauer, Clerk ofthe Council
Date
(f)
F:\LAW\BILLS\1405 Social Cost
Of
Carbon\BiII 2 Committee.Doc
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LEGISLATIVE REQUEST REPORT
Bill 5-14
Environmental Sustainability
-
Social cost ofCarbon Assessments
DESCRIPTION:
'
Would require the Office of Management and Budget to submit an
analysis of the social cost of carbon with certain capital projects in
the Capital Improvements Program.
The use of conventional fuels, particularly coal, extracts a cost on
society that is not reflected in its price. These "external" costs should
be factored into the cost/benefit calculations that the County uses
when it assesses the potential for energy efficiency improvements.
To require the County to use EPA's "social cost of carbon"
calculation or a comparable methodology for Capital Improvements
Program purposes.
Office of Management and Budget, Department of General Services
To be requested.
To be requested.
To be requested.
To be researched.
Michael Faden, Senior Legislative Attorney, 240-777-7905
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Not applicable.
F:\LA W\BILLS\ 1405 Social Cost OfCarbon\LEG ISLA TIVE REQUEST REPORT,Doc
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ROCKVIJ.LE, MARYlAND
MEMORANDUM
·February 5,
2014
TO:
FROM:
Craig Rice, >r'sident. County Council
1
r, (1ce of Management and Budget
epartment of Finance
BiH 2-14, Environrrlclltal Sustainability .. Buildings - Benchmarking
Bill 3-l4, Build.jugs ­ .. Energy Efficiency --­ Energy Standards
Bill 4-14. Street and Roads·- County Street Lights
Bill 5-14, Environmental Sustainability -- Social Cost of Carbon Assessments
Bill 6-14, Environmental Sustainability - Office of $ustainability - Established
Bill 7-14, Contracts and Procurement .. Certified Green Business Program
Bill 8-14,
Buildings .. County Buildings .. -Clean
Energy
Renewable
Techno]og.y
Bill 9-14, Environmental Sustainability .. Renewable Energy .. County Purchase
Bill 10-14, Buildings - Solar Permits -- Expedited
Review
Bill
11-14,
Buildings _. Electric Vehicle Charging Station Permits - Expedited
Review
SUBJECTS:
As required
by
Section 2-81 A of the County Code, ,ve are informing you that transmittal of
the fiscal and economic impact statements for the above referenced legislation
will
be delayed
because more time is needed to coordinate with the affecte.d departments, collect information. and
complete our analysis of the fiscal and economic impacts. While we are not able to conduct the
required detailed analyses at this time, it is clear that a number of these bills could have significant
fiscal impacts.
Due to this year's
heavy workload
on
Executive branch staff
ill
developing both a full
capital
budget
and an operating
budget,
the
fiscal and economic
statements
will
be
transmitted after March
17,2014,
JAH:fz
cc: Bonnie Kirkland, Assistant Chief Administrative Officer
Lisa
Austin, Offic.es of the County Executive
Joy Nunl1L
Special Assistant to the County
Executive
Patrick Lacefield, Director, Public Information Otlice
Marc P. Hansen, Office of the County Attorney
Robert Hagedoorn,
_Depart.ment of Finance
David
Platt.
Department of Finance
Alex Espinosa, Office of Management and Budget
Mary
Beck, Office of Management and Budget
Naeem fvlia, Office
of
Management nnd Budget
Felicia Zhang, Otlice of Management and Budget
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November
2013
Fact Sheet: Social Cost of Carbon
Background
EPA and other federal agencies use the social cost of carbon
(SeC)
to estimate the climate
benefits of rulemakings. The
sec
is an estimate of the economic damages associated with a
small increase in carbon dioxide (C0
2)
emissions, conventionally one metric ton, in a given year.
This dollar figure also represents the value of damages avoided for a small emission reduction
(i.e. the benefit of a C02 reduction).
The
sec
is meant to be a comprehensive estimate of climate change damages and includes,
among other things, changes in net agricultural productivity, human health, and property
damages from increased flood risk. However, it does not currently include all important
damages. As noted by the
!pee
Fourth Assessment Report, it is "very likely that [the
seC]
underestimates" the damages. The models used to develop
sec
estimates do not currently
include all of the important physical, ecological, and economic impacts of climate change
recognized in the climate change literature because of a lack of precise information on the nature
of damages and because the science incorporated into these models naturally lags behind the
most recent research. Nonetheless, the
sec
is a useful measure to assess the benefits of
e02
reductions.
The timing of the emission release (or reduction) is key to estimation of the
sec,
which is based
on a present value calculation. The integrated assessment models first estimate damages
occurring after the emission release and into the future, often as far out
as
the year
2300.
The
models then discount the value of those damages over the entire time span back to present value
to arrive at the
sec.
For example, the
sec
for the year
2020
represents the present value of
climate change damages that occur between the years
2020
and
2300
(assuming
2300
is the final
year of the model run); these damages are associated with the release of one ton of carbon
dioxide in the year
2020.
The
sec
will vary based on the year of emissions for multiple reasons.
In model runs where the last year is fixed (e.g.,
2300),
the time span covered in the present value
calculation will be smaller for later emission years-the
sec
in
2050
will include
40
fewer years
of damages than the
2010
see
estimates. This modeling choice-selection of a fixed end
year-will place downward pressure on the
see
estimates for later emission years.
Alternatively, the
see
should increase over time because future emissions are expected to
produce larger incremental damages as physical and economic systems become more stressed in
response to greater levels of climatic change.
One of the most important factors influencing
sec
estimates is the.discount rate. A large portion
of climate change damages are expected to occur many decades into the future and the present
value of those damages (the value at present of damages that occur in the future) is highly
dependent on the discount rate. To understand the effect that the discount rate has on present
value calculations, consider the following example. Let's say that you have been promised that in
50
years you will receive
$1
billion.
In
"present value" terms, that sum of money is worth
$291
million today with a
2.5
percent discount rate. In other words, if you invested
$291
million
today at
2.5
percent and let it compound, it would be worth
$1
billion in
50
years. A higher
1
I
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November 2013
discount rate of 3 percent would decrease the value today to $228 million, and the value would
be even lower-$87 million-- with a 5 percent rate. This effect is even more pronounced when
looking at the present value of damages further out in time. The value of $1 billion in 100 years
is $85 million, $52 million, and $8 million, for discount rates of 2.5 percent, 3 percent, and 5
percent, respectively. Similarly, the selection of a 2.5 percent discount rate would result in higher
SCC estimates than would the selection of 3 and 5 percent rates, all else equal.
Process Used to Develop the
see
An interagency working group was convened by the Council of Economic Advisers and the
Office of Management and Budget in 2009-2010 to design an SCC modeling exercise and
develop estimates for use in rulemakings. The interagency group was comprised of scientific
and economic experts from the White House and federal agencies, including: Council on
Environmental Quality, National Economic Council, Office of Energy and Climate Change, and
Office of Science and Technology Policy, EPA, and the Departments of Agriculture, Commerce,
Energy, Transportation, and Treasury. The interagency group identified a variety of
assumptions, which EPA then used to estimate the SCC using three integrated assessment
models, which each combine climate processes, economic growth, and interactions between the
two in a single modeling framework.
sec
Values
The 2009-2010 interagency group developed a set of four SCC estimates for use in regulatory
analyses. The first three values are based on the average SCC from three integrated assessment
models, at discount rates of 5, 3, and 2.5 percent. SCC estimates based on several discount rates
are included because the literature shows that the SCC is highly sensitive to the discount rate and
because no consensus exists on the appropriate rate to use for analyses spanning multiple
generations. The fourth value is the 95th percentile of the SCC from all three models at a 3
percent discount rate, and is intended to represent the potential for higher-than-average damages.
See the
sec
Technical Support Document (PDF, 5Ipp, 848K) for a complete discussion about
the methodology and resulting estimates.
The interagency group recently updated these estimates, using new versions of each integrated
assessment model and published them in May 2013. The 2013 interagency process did not revisit
the 2009-2010 interagency modeling decisions (e.g., with regard to the discount rate, reference
case socioeconomic and emission scenarios or equilibrium climate sensitivity). Rather,
improvements in the way damages are modeled are confined
to
those that have been incorporated
into the latest versions of the models by the developers themselves and as used in the peer­
reviewed literature.
The SCC estimates using the updated versions of the models are higher than those developed in
the 2009-2010 modeling exercise. The four 2020 SCC estimates reported in the 2010 interagency
group were $7, $28, $44 and $86 per metric ton (2011$). The corresponding four updated SCC
estimates for 2020 are $13, $46, $68, and $137 per metric ton (2011$). The May 2013
sec
Technical Support Document (PDF, 22pp, 780K) provides a detailed discussion of the model
updates relevant to these estimates.
21
([)
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November 2013
The table below summarizes the four SCC estimates in certain years.
Social Cost of C02,
2015-2050
a
(in
2011
Dollars)
Discount Rate and Statistic
Year
5%
Average
$12
$13
$15
$17
$20
$22
$26
$28
3%
Average
$39
$46
$50
$55
$60
$65
$70
$76
2.5%
Average
$61
$68
$74
$80
$85
$92
$98
$104
95
percentile
$116
$137
$153
$170
$187
$204
$220
$235
th
3%
2015
2020
2025
2030
2035
2040
2045
2050
• The
see
values are dollar-year and emissions-year specific.
Examples of SCC Applications to Rulemakings
EPA has used the SCC to analyze the carbon dioxide impacts of various rulemakings since the
interagency group first published estimates in 2010. Examples of these rulemakings include:
• The Joint EP AlDepartment of Transportation Rulemaking to establish Light-Duty
Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy
Standards (2012-2016)
• Amendments to the National Emission Standards for Hazardous Air Pollutants and New
Source Performance Standards (NSPS) for the Portland Cement Manufacturing Industry
• Regulatory Impact Results for the Reconsideration Proposal for National Emission
Standards for Hazardous Air Pollutants for Industrial, Commercial, and Institutional
Boilers and Process Heaters at Major Sources
• Proposed National Emission Standards for Hazardous Air Pollutants (NESHAP) for
Mercury Emissions from Mercury Cell Chlor Alkali Plants
• Standards of Performance for New Stationary Sources and Emission Guidelines for
Existing Sources: Commercial and Industrial Solid Waste Incineration Units Standards
• Final Mercury and Air Toxics Standards
• Joint EP AlDepartment of Transportation Rulemaking to establish Medium- and Heavy ­
Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel
Economy Standards
• Proposed Carbon Pollution Standard for Future Power Plants
• Joint EPAlDepartment of Transportation Rulemaking to establish 2017 and Later Model
Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel
Economy Standards
3
I
(j)
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November 2013
Limitations of
see
The interagency group noted a number of limitations to the SCC analysis, including the
incomplete way in which the integrated assessment models capture catastrophic and non­
catastrophic impacts, their incomplete treatment of adaptation and technological change,
uncertainty in the extrapolation of damages to high temperatures, and assumptions regarding risk
aversion. Additional details are discussed in the 2010
1
and 2013
2
SCC Technical Support
Documents.
Next Steps
The U.S. government committed to updating the current estimates as the science and economic
understanding of climate change and its impacts on society improves over time. For example,
EPA and Department of Energy also hosted a series of workshops to inform SCC development.
The first workshop focused on conceptual and methodological issues related to integrated
assessment modeling and valuing climate change impacts, along with methods of incorporating
these estimates into policy analysis. The second workshop reviewed research on estimating
impacts and valuing damages on a sectoral basis. Papers based on the presentations from both
workshops were published in a special issue of Climatic Change (April 2013). In addition, EPA
funded a workshop on discounting in September 2011 that invited world-recognized experts to
discuss how the benefits and costs of regulations should be discounted for projects with long
horizons.
In
particular, it explored what principles should be used to determine the rates at
which to discount the costs and benefits of regulatory programs when costs and benefits extend
over very long horizons.
EP A and other agencies continue to engage in research on modeling and valuation of climate
impacts to improve these estimates.
See http://www. whitehouse. gov/sites/defaul tlfiles/omb/inforegifor-agencies/Social-Cost-of-Carbon-for-RIA.pdf
2
See http://wVvw. whitehouse. gov!sitesldefaultlfiles/omb/assetslinforeg/technical-update-socia I-cost -of-carbon-for­
regulator-impact-analysis.pdf
1
41
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AIA Potomac
Valley
A Chapter of the American Institute of Architects
Date:
To:
February 11. 2014
Roger Berliner, Nancy Floreen, Hans Reimer
Montgomery County Council. Transportation and Energy Committee Members
American Institute of Architects, Potomac Valley Chapter
From:
Subject: February 11, 2014, Public Hearing on Proposed Environmental and Energy Bills
The local American Institute of Architects, Potomac Valley Chapter (AIA-PV) is writing to provide comment
on proposed environmental, sustainability, green building and energy legislation that is summarized in
Attachment
A.
Throughout 2013. the AIA-PV has been working to assist the Department of Permitting Services by
providing multi-disciplinary expert review and comment on green building codes that the county is
considering adopting. We have submitted detailed comments to the Department and urged them to
proceed slowly and cautiously in order to give design professionals, builders, and owners time to acclimate
to the requirements, especially criteria that have the potential to slow economic development in the county.
We advise you to do the same before moving forward to adopt new or revised environmental and energy
legislation.
In addition. we advise you to seek green building
code solutions
that are effective industry-standard tools
to achieve your goals and avoid regulations that make development more time consuming and confusing.
Sincerely.
Eileen Emmet, AlA, IgCC Task Force Co-Chair. eemmet.aia@gmail.com
William (Bill) LeRoy, AlA, IgCC Task Force Co-Chair, wI70@icioud.com
cc:
Loreen Arnold, AIA-PV President 2014, larnold@ktgy.com
Scott Knudson, AlA; AIA-PV Past-President 2013. sdgknudson@gmail.com
Ralph Bennett, AIA-PV, IgCC Task Force, ralph@bfmarch.com
Dan Coffey, AIA-PV, IgCC Task Force, dcoffey@therrienwaddell.com
Attachment A: AIA-PV July 30, 2013 IgCC Executive Summary
Attachment B: AIA-PV Feb. 4, 2014 Letter to Diane Schwartz-Jones w/AIA-PV Executive Summary
7.30.2013
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AlA Potomac Valley
A Chapter of the American Institute of Architects
Attachment A
2-14: Benchmarking
Benchmarking typically means a baseline against which performance is measured. Reporting for a year is
required here (reasonable given seasonal variation) using Portfolio Manager (appropriate). but continuing
energy reporting is inevitable and could be addressed by the legislation.
3-14: Building Energy Efficiency - Countywide
The County adopted the International Energy Conservation Code in 2013. This proposal refers to other
energy codes included in'LEED, and its impact should be assessed. Assumedly, the law intends to include
LEED v.3; it should specify since v.4 is more stringent. LEED addresses many more issues than energy; if
energy is the concern, it may be better to use energy codes.
4-14: County Street Lights
The assumed purpose is to reduce energy costs while maintaining appropriate lighting levels. LEED may
not be, and is not the only answer here. So energy performance of possible alternatives should be
addressed.
5-14: Social Costs of Carbon
Good intention - Many sectors of the economy exist only by shedding externality costs onto others. This
also addresses the equity leg of the three-legged stool of sustainability.
Metrics here are new, unevenly available, and contentious. As long as the measurements are for
information and not used to penalize or qualify projects, this may be a useful window into real sustainability.
6-14: Office of Sustainability
Parallels such agencies elsewhere - their success should be studied before full commitment. Full inclusion
of appropriate agencies should be mandated - turf wars are inherent in the placement of such an agency
within DEP. Implementation expertise is in permitting. Consider attaching to the Executive.
7-14: Certified Green Business Program
Which Certification will DEP use? Without this, it is difficult to know what the impact will be. The procedures
included for selection of a system or systems will take ayear, at least.
8-14: County Buildings, Renewable Energy Technology
This assumes that all county buildings can feasibly provide 1
kw/1
000 sf by photovoltaic generation. This
may not be feasible for all buildings - offsets and other on-site energy technologies should be permitted
including ground source heat pumps which LEED does not recognize as on-site energy. Renewable Energy
Credits be clarified in lieu of 'Offsets.'
9-14: Renewable Energy Purchase: 50% by next year, 100% by 2020
Assumedly, this addresses County government's energy use. Will this extend to quasi-government
agencies like HOC? Do they know about this?
10-14: Expedited Review of Solar Permits; 50% permit fee reduction.
Good idea.
11-14: Electric Vehicle Charging Station Permits; 50% permit fee reduction
Good idea.
12-14: County Employee Telecommuting
Good idea.
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AlA Potomac
Valley
A Chapter of the American Institute of Architects
ATTACHMENT A
EXECUTIVE SUMMARY
A1A-PV IgCC Task Force
July 30, 2013
Start Small:
There are many reasons to start small and expand with subsequent revision cycles. This allows time for the
industry to come to grips with the new requirements of green codes. It also allows the opportunity to gather
real data on the costs and benefits of its implementation.
Montgomery County has diverse building types in urban, suburban and rural settings therefore allowing
alternative compliance paths is helpful and necessary to address these varying conditions.
One method for a phased approach is to make compliance optional and create incentives for complying
with the code. Incentives can take the form of tax breaks, expedited permitting, or reduced permitting fees.
Another method is to make the most demanding requirements electives and specify a minimum number
required. This also provides the opportunity to collect real world data. There is still skepticism about the
business model for green building and energy efficient operational directives. Carefully crafted electives
and pilot studies can help address that issue. This is the approach taken in the PV-Task Force's detailed
recommendations in Attachment B.
Administrative Provisions:
The manner in which the DPS will manage review of projects under the green code is critical to its success.
The PV-TF recommends that the DPS create standard forms, templates, and electronic submission
protocols and have them in place on the date of adoption in order to administer the requirements in an
efficient and effective manner. The requirements of the code also indicate a need for additional DPS
review staff to avoid lengthening already long review times. DPS staff will need to be educated and fluent
in the code criteria of several compliance paths because alternative compliance paths will have the best
chance of a successful implementation process.
Jurisdictional Requirements:
Chapter 3 Jurisdictional Requirement 301.1.1. Scope Application: The task force recommends retaining
the option of IgCC
.Q!
ASHRAE 189.1 compliance paths, thus retaining maximum flexibility for the design
team to choose the compliance path applicable to the building type and location. The task force further
recommends that LEED Silver should be allowed as an alternative. non-mandatory, compliance path,
because it has an established format, method of compliance, and documentation templates.
Electives:
Table 302.1! Requirements Determined by the Jurisdiction: The task force recommends striking the
adoption of Table 302.1, the list of 22 additional requirements to be designated by the AHJ. The group
feels that the overall number of electives required should apply to the entire code with some exceptions as
noted in the Detailed Chapter Analysis and Recommendations.
Flexibility for the applicant is important. For new construction, 20% of electives are a reasonable number if
the credits are spread among a minimum of four chapter categories. For existing buildings, 15% of
electives are a reasonable number if the credits are spread among a minimum of two chapter categories.
@
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. A Chapter of the American Institute of Architects
AlA Potomac
Valley
Square Footage (SF) Size Thresholds:
Across-the-board square-footage size requirements will make adoption of the IgCC a hardship for many
project types. The recommendation is to scale the SF thresholds based on the industry standards for type
of use and energy use because the variables fall into three categories: a) applicability of the code, b)
mechanical systems, and 3) envelope design. This will take more time to analyze and the PV-Task Force
can assist the DPS to better define these thresholds.
Adoption in Other Jurisdictions:
While the scope of regional adoption of the IgCC was not a primary task for the PV-Task Force, the group
notes the following observations in regard to green code adoption in the region:
Baltimore City Adoption
• In Baltimore City all newly constructed, extensively modified buildings that have or will have at least
10,000 square feet must be LEED-Silver certified or comply with the Baltimore City Green Building
Standards (a LEED-like standard).
• Baltimore City is soon to introduce legislation expanding the options for building owners to select
from a menu such that a project can be: LEED-Silver certified, or complies with the IgCC, or meets
the ASHRAE 189.1 standard, or satisfies Enterprise Green Communities requirements, or
complies with ICC 700. (This menu approach is similar to what DC is moving to.)
• The menu approach under legislative consideration will amend the existing Baltimore City Green
Building Law whereby the listed options may be available in
4th
quarter 2013 and the existing
city-drafted regulatory alternative to LEED will remain available until June
1.
2015.
• The only real controversy in proposed legislation has been about the definitions for modified (Le.
the threshold for renovated buildings) structures and in the newly proposed code nearly all
renovations will have to comply with the law.
Washington, D.C.
• Although typically slower than Maryland in adopting new code cycles, DC includes stakeholders in
the process of code adoption. In the case of the IgCC, to date the input seems to
be
a great
success.
• DC is considered a national green building leader. Green building standards there do not seem to
be a deterrent to deveiopment.
• DC has adopted a modified approach to IgCC adoption. They moved many items to the Appendix
section and recommended 15 credits be achieved, in any category, from 75 credit options.
• DC is more urban than Montgomery County, yet has several paths to compliance: IgCC, ASHRAE
189.1, LEED, and Enterprise Green Communities
Virginia Adoption
Adoption of the IgCC does not seem imminent. In conversations with VA officials, one of the main
issues in adopting the IgCC is related to the land use, zoning, related impact the overlay code might
have. Since the state of Virginia sets building codes, without local amendments, tpe IgCC might be
considered too difficult to implement with such a diverse landscape, the officials stated that they do
not plan to adopt at this time. If less restrictive to permit there, it could be perceived as an economic
disadvantage to build or renovate in Montgomery County.
2
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AIA Potomac Valley
A Chapter of the American Institute of Architects
February 4, 2014
Ms. Diane Schwartz-Jones, Director
Department of Permitting Services
255 Rockville Pike, 2nd Floor
Rockville, Maryland 20850-4166
Dear Ms. Schwartz-Jones,
Copy via email to diane.jones@montgomervcountymd.gov
Re: AlA-Potomac Valley Chapter, IgCC/ASHRAE 189.1 Task Force Recommendations
On July 30,2013, the AlA-Potomac Valley Chapter (AIA-PV) submitted recommendations to you in regard
to possible adoption of the International Green Construction Code (lgCC). As you know, the AIA-PV has a
task force group who has been working together on this subject matter for some time. The group is
comprised of a multi-disciplinary group of design professionals: architects, engineers, a
developerllandscape architect, a builder, and others.
This letter provides supplemental information that responds to your staffs request that our group also
review and make recommendations in regard to possible adoption of the ANSIIASHRAE/USGBC/IES
Standard 189.1-2011
--
Standard for the Design of High-Performance Green Buildings, Except Low-rise
Residential Buildings (also referred to as ASHRAE 189.1, 2011. ASHRAE 189.1 Is an alternative means
of compliance incorporated into the IgCC 2012 codebook. We hope this additional information meets your
needs:
As mentioned in our July 30,2013 letter, the AIA-PV group still recommends that Montgomery County:
• Refer to our July 30, 2013 Executive Summary (Attachment A) and detailed recommendations
previously submitted
• Proceed slowly and cautiously in order to give design professionals, builders, and owner's time to
acclimate to the requirements, especially criteria that have the potential to slow economic
development in the county while other nearby jurisdictions are taking a measured approach or not
yet shifting to these codes.
• Adopt the IgCC and alternative compliance paths (including ASHRAE 189.1) and do away with the
current Montgomery County Green Building Law.
In addition, we recommend you create an industry advisory panel to make a solid implementation plan with
the Department of Environmental Protection (DEP). We feel this is important because most of the details
and issues to implement the County Council's proposed green building legislation are at the direction and
responsibility of the Director of DEP and because those legislations overlap with requirements in green
building codes that DPS is proposing.
.
The following items in Attachment B summarize the detailed analysis and recommendations of the
AIA-PV-Task Force in regard to ASH RAE 189.1*:
Section
Section
Section
Section
Section
Section
5, Site Sustainability
6, Water Use Efficiency
7, Energy Efficiency
8, Indoor Environmental Quality
9, The Building's Impact on the Atmosphere, Materials, and Resources
10, Construciton and Plans for Operation
* Unlike the IgCC, ASHRAE 189.1 does not have a chapter for historic and existing buildings so
comments on those building types have been incorporated into each section's recommendations.
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AIA Potomac Valley
A Chapter of the American Institute of Architects
Once you have had a chance to review our recommendations, the PV-Task Force members would be
pleased to meet with you in person to answer questions, clarify our recommendations, or address any item
of interest that we may have overlooked. Thank you for giving us this opportunity to assist you.
Sincerely,
L-e.
Scott Knudson, AlA; AIA-PV Past-President 2013, sdgknudson@gmail.com
Eileen Emmet, AlA, IgCC Task Force Co-Chair, eemmet.aia@gmail,com
William (Bill) LeRoy, AlA, IgCC Task Force Co-Chair, wI70@icloud.com
I
Attachment A: AIA-PV July 30, 2013 IgCC Executive Summary
Attachment B: AIA-PV ASHRAE 189.1 Recommendations
cc DPS: Hadi Mansouri, hadLmansouri@montgomervcountymd.gov,
Mark Nauman, mark.nauman@montgomerycountymd.gov
Hemal Mustafa, hemal.mustafa@montgomerycountymd.gov
Cc: IgCC/ASHRAE 189.1 Task Force Members:
Ralph Bennett, AlA; Bennett, Frank, McCarthy Architects
Bruce Blanchard, Senior Consultant, Polysonics Acoustics
&
Technology Consulting
Daniel Coffey, Vice President. Therrien Waddell, Inc., Chairman USGBC·NCR, Montgomery County
Chapter
Stephen Kirk, International Code Council, Associate Member
Suketu Patel AlA LEED AP BD+C; President, Integrated Design Studio LLC
Kirill Pivovarov, AlA, LEED AP; Principal, RTKL Associates Inc.
Steven Schwartzman, AlA, LEED AP; Associate Principal, WDG ARCHITECTURE
Geoff Sharpe, ASLA
Catherine E. Sheehan, AlA, LEED AP
. Adam Spatz, PE, LEED AP; Senior Mechanical Engineer, Greenman-Pedersen, Inc.
Paul Tseng, PE, CxAP, CPMP, CMVP CEM, LEED AP; President, Founder, Advanced Building Performance
Amy Upton, LEED AP BD+C; Director of Environmental Design, Senior Associate, Grimm + Parker
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THE
VOICE OF MONTGOMERY COUNTYBUSINESS
MONTGOMERY COUNTY COUNCIL
PUBLIC HEARING
BILLS 2-14 THROUGH 12-14
FEBRUARY 10,2014
As a Chamber of Commerce that recognizes the economic and environmental imperative of
greening the way we do business, we commend the County Council for the intent of this package
of bills. We believe that positioning our county as a place to do green business is a compelling
competitive advantage in to days marketplace. Supporting a green infrastructure is critical, as is
growing the number of green jobs that are created to meet the needs of the new marketplace.
There are, however, areas of concern with regard to the package. Below are specific comments on
a few of the bills. Broadly speaking, the fiscal impact statements will likely address the costs
associated with the various activities. It will be important to review these so as not to impose
undo burden as we
try
to move the marketplace. Where possible, incentives should be deployed
to encourage adoption of new practices and attainment of environmentally sustainable goals. We
would also like to see these bills work in concert with other county regulations so there is not
confusion in following or enforcing the regulations.
We see green as part of a larger economic development strategy for the county. The Green
Business Certification program is a terrific example of the business community working in
partnership with the Department of Environmental Protection and Montgomery College to
achieve environmental goals through a voluntary program. We look forward to working with you,
the County Council, to make sure this package is able to realize the stated intention of addressing
climate change at the local level to the greatest extent possible.
Comments on specific bills:
Bill 7-14 Contracts and Procurement -Certified Green Business Program
We applaud the County Council for recognizing the Montgomery County Green Business
Certification Program and finding ways to incentivize those companies interested in working with
the county to participate. We encourage the county government - or units within it - to become
"Green Certified" and to green its own supply chain by using environmentally preferable
purchasing of products and practices where appropriate. There is a green procurement bill
requested by DGS (HB 629) pending at the state which could serve as a guide.
According to the information provided by the Council staff, "The goal is to encourage businesses to
develop strategies for protecting the environment in their day to day operations." If the goal is
Gigi Godwin, President and CEO
Montgomery County Chamber of Commerce
51 Monroe Street,. Suite 1800 Rockville, MD 20850
301-738-0015
www.montgomerycountychamber.com
@
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indeed to encourage more businesses to adopt green practices internally (such that they can be
certified by Montgomery County or another comparable entity), the county may also want to
explore using one or more of the many tools available outside of the county procurement process
and appropriate to all businesses to incentivize that initiative.
Coincidentally, there is also a bill in the General Assembly that focuses on creating Green Business
Incentive Zones (HB 473/SB 787) which also encourages the growth and success of this new
market player by offering incentives such as tax credits.
This bill, as drafted, uses the procurement process and the opportunity to gain preference as an
incentive. The procurement process is complex. Any modification to that process should be to
make it easier to do business with the county. We are concerned that by restricting the language
to "percentage price preference" companies that do have the right products or services, but have
not met the green business certification preference, may be at a disadvantage that ultimately
undermines the overall effort to reduce our collective ecological footprint. Therefore, we suggest
reviewing the ways that the procurement process can be used effectively, perhaps by including
green certification in the evaluation criteria or as a "tip over." This may more effectively
encourage companies to green themselves without inadvertently making the procurement
process more cumbersome and ultimately counter-productive in meeting the goal. It is worth
noting that "percentage price preference" language was struck from HB 629 mentioned above.
Bill 2-14,
Environmental Sustainability - Buildings - Benchmarking
To the extent that buildings are a critical piece of the climate puzzle, it is important to understand
energy usage and work to conserve where We can. That being said, we encourage the Council to
look to federal regulations as mariy tenants in the county are federal offices or contract with the
federal government. Therefore, any new requirements for owners and/or tenants should conform
to federal standards.
Second, we firmly believe that if the county requires benchmarking of private property owners,
the county must be able to participate in the program as well. Taxpayers should know the
efficiency of the buildings they are paying to operate. Last, for those older buildings that will be
among the least efficient, the program must provide some process to help with mitigation,
whether it be providing priority for county programs or other education and incentives to address
problems.
Bill 5-14, Environmental Sustainability - Social Cost of Carbon
Assessments
It is unclear, based on our reading of this bill, how the EPA method that was developed for
regulations/legislation would be applied to Capital Improvement Projects or energy efficiency
improvements in general. It is also unclear how information gleaned from the calculation would
be used to reach any conclusion on the viability of a project.
Gigi Godwin, President and CEO
Montgomery County Chamber of Commerce
51 Monroe Street, Suite 1800 Rockville, MD 20850
301-738-0015
wwvv.montgomerycountychamber.com
@
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Bill 6-14, Environmental Sustainability - Office
of
Sustainability - Established
Based on the bill as written, this new office would record and manage the county's greenhouse gas
emissions. We see Montgomery County's position as a leader in sustainability as a driver of
economic development. We therefore believe that this effort should include an economic
development component as well as clear coordination with the extensive land use and
transportation work that happens throughout the county government and with Park and
Planning. In addition to producing an annual report, there should be some demonstrable gain to
county taxpayers to justify the creation of a new office, which will require additional staffing and
new responsibilities.
With regard to the remaining bills that are part of this package, we would encourage Council
Members to be mindful of hidden costs and unintended consequences that may arise from the
adoption of some of these bills. We hope that the fiscal impact statement will speak to some of
these and that the committee work sessions will be constructive and produce useful information.
As mentioned at the outset, we see green as part of a larger economic development strategy for
the county. We look forward to working with you to make sure this package is able to realize the
stated intention of addressing climate change at the local level to the greatest extent possible.
Gigi Godwin, President and CEQ
Montgomery County Chamber of Commerce
51·Monroe Street, Suite 1800 Rockville, MD 20850
301-738-0015
www.montgomerycountychamber.com
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s
Charles K. Nulsen, 111- Speaker #5
Against Bills 2, 3, 5, and
6-14
Outline Testimony
I.
Thank you for letting me speak tonight. My name is Charlie Nulsen. I am the
President and Owner of Washington Property Company, a small Bethesda
based real estate company. I have worked in real estate in Montgomery
County for 35 years. I am here to speak in opposition of 4 of the bills. #2, 3,
5, and 6, I disapprove more than just these 4. I have been warned that I will
speak to you in English, but you will hear a foreign language. Not a great
characterization from my business brothers, but bad communication is a 2
way street and I am here for the first time as my attempt to help address this
issue.
II.
I want to start with big picture
a. Montgomery County is in a double dip recession of the likes it has never
seen. Ever!
b. The Federal Government's economic impact on Montgomery County will
be declining for the next 20 years -It is a technology thing -Montgomery
County for the first time must rely heavily on private sector growth.
c. Our commercial tenant base is dwindling - 25% vacancy in our office
market is structural.
d. WPC's commercial property taxes have decreased 30% in last five years
and I predict another 15-20% drop in the next two because of lower rents,
increased vacancy, causing lower assessments. I have commercial
lof4
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properties in Bethesda, Silver Spring, Rockville, 1-270; they are all at the
distressed stage.
e. Montgomery County has supplemented this loss in commercial real estate
income with taxes - particularly on utilities to the tune of $233M in 2013.
Montgomery County Energy Tax accounts for approximately 30% of
commercial Pepco bill and 15% of residential Pepco bill.
III.
Bill 2-14 - Environmental Sustainabilitv - Buildings Benchmarking
a. Modelled after the District - creates 2 weeks of reporting man hours for
the owner. Probably 3 times that on the Government side. D.C. owners
do their own energy assessments as a matter of business. So do
Montgomery County owners.
b. Taken in the context of Montgomery County.
i.
It will highlight to corporate tenants a Corporate Energy Tax that
could be highest in the country! Montgomery County utility bills are
30% higher than DC or VA. Montgomery County collects more for
the distribution of electricity than Pepco itself. What policy goal are
we serving here?
ii. It comes at a terrible time for the commercial industry. More cost ­
zero pay back. "The house is on fire, but turn out the lights before
you leave."
IV.
Bill 3-14 Silver LEED requirements
a. Silver LEED for residential is very hard to obtain and further drives up the
cost of rental and for-sale product.
2of4
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b. Commercial Construction is dead - inside beltway development activity is
11-1 residential
I
office. Why throw up another road block to commercial
growth?
c. County Buildings - ok
V.
Bill 5-14 Carbon Assessment
a. If you have a Silver LEED requirement for County Buildings why is there a
need for social carbon assessment?
VI.
Bill 6-14 Office of Sustainability
a. Does the County, within it's current budget constraints, really have the
resources to add an additional department?
b. Sustainability is an often used term: but let's look at Montgomery County's
overall direction: Decreasing commercial tax base
I
exploding residential
base (especially rental) Is this really sustainable?
I am the poster child for a real estate owner in Montgomery County. I had
a $16M office building on 270, then Lockheed moved out. An appraisal 2
weeks ago (done by lender) gave the value at $6M. Basically the value of
the ground. But, in 2 months I will be starting my 3
rd
apartment project in
Montgomery County, which will bring in more renters that need County
services.
I don't think this path is sustainable for a healthy Montgomery County. We
need balance.
30f4
®
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.\
.;
(
To put it in another context - over the past 8 years Montgomery County
has gotten an A- in environmental stewardship and an F in economic
stewardship. I suggest we collectively, as a community, focus on pulling
our F up to a C instead of our A- to an A so we may pass on to future
generations a healthy, sustainable Montgomery County.
Thank you.
4of4
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TESTIMONY ON BEHALF OF COUNTY EXECUTIVE ISIAH LEGGETT
ON ENVIRONMENTAL AND SUSTAINABILITY PACKAGE
Bills 2-14,3-14,4-14,5-14,6-14,7-14,8-14,9-14,10-14, 11-14, 12-14
February 11, 2014
Good evening Council President Rice and members of the County Council. My name is Bonnie
Kirkland and I am pleased to be here on behalf of County Executive Isiah Leggett to testify on
the package of environmental and sustainability measures introduced on February 4, 2014 by
Councilmember Berliner and others.
Mr.
Leggett supports Councilmember Berliner's initiative
and the Council's efforts to address the need for more sustainable development in Montgomery
County. Following up on recommendations from the Sustainability Workgroup, this package of
renewable energy, energy efficiency and sustainability measures will take the County to the next
level of environmental excellence.
Sustainable development has been defined as meeting the needs of the present without
compromising the ability of future generations to meet' their own needs.
l
The path forward
requires understanding and plaiuring: understanding how existing buildings perform and how
planned buildings are expected to perform; imd desigmng buildings and other infrastructure that
reduce materials consumption, reuse materials, reduce energy consumption and maximize the
use of renewable resources.
County Executive Leggett recognizes that the path forward will involve substantial change and
commitment on the part of both the public sector and the private sector. He is committed to
working with the Council on this package during the coming weeks to develop the most
progressive and reasonable legislation achievable that will balance both the compelling need to
achieve sustainable developmerit and the budgetary realities faced by the County and our local
businesses to fully implement the approved changes the legislative package requires.
Stewardship for future generations has been a cornerstone of
Mr.
Leggett's Smart Growth
Initiative in terms of planning fo; future growth at appropriate transit oriented locations. The
County Executive applauds Councilmember Berliner's and the sponsoring council members'
vision and recognition of the need for stewardship of our precious resources for future
generations.
1
International Institute for Sustainable Development quoting from the World Commission on Environment and
Developme,nt {WCED}.
Our common future.
Oxford: Oxford University Press, 1987 p. 43.
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MONTGOMERY COUNTY COUNOl
ROUE.
BULil'lER
CO\:NCU.JrtlMUR
DlsTIlIC'rl
C'HAJI~A'"
TUN
$
r
ORr
Arll)~.
1I'tfJtASTII.IJCTU'·R.e
E~u::aoy
I:
ENylR.oillW£NT C'OMNITTm
Jauualy
14.2014
Peat
Colleagues.
Next
week
1will
beintrOduclng
a
packiaeof
13
energy/eo~entaI.~
that
are
dcsipe,d
to
~
tliaI
Mon~mery
COunty
muaiD*
at
the.
sust.ai~tY
forefront.
1 WbUld
be
pleased
to
ha\~e
]IOU
cosponsor
some or all
ofd=se~.
These
measures focus en.renewable
ene;rgy. enc:rgy !d&iCDcy.1!8DSpOrt.atitm.
and
~ ~ty.
1
bne
attacbcdafact
~
lballi:ves
a
b,riefdescr~oD
or
each
oflbem. aDd
of
~
wouJd
be
happy
to
discuss
any
oftbem
in
greater
deaal1
should you
have
questions.
1
was
inspired
by
our Couagl*! decision
t(J
8$Sert
iu
~p.
in
the
context of
redu.;.ing
the gap
hi
~
disparities
by
passing
a
local
mini,mum
WIIgl!j
law.
I
JhiDk
all
of
us
appreei.re
that
lhc
federal
fl.OVcmmcn1
bas
bc:c:omc so
dyst.imc:tiooal
that
\\Ie
CIbl
expect liUle
pI'Ogm!
on
many
oflhe
issues
we
CIIlt
deeply
about.
Indeed.
Bp.u:c
Katz of
Brookings teeently described
the
fedc$l
perm:m:nt
as a
"1ar&c
bea1th
~
.
~y
With
an
'anny."
Sis
thesis..
wb~.1
share. is
u.t
our governing
paradjp
has
shihed (rom atopdow.n
Jed
by
the
federaljfUVet:nJllent
to
a bottomuplcd by
local
govamQCDts
like
~
.
I
say
all
of
this
~
we
~
to
do
IJ)OfC';
if
we
ate 10 -.ddl'CSl
ciiuurtc
cbanJC.
It
1$
obviously not a
hoax
and·
we
toow
wbal
we
n=d.
10
do to adct&as
it.
W,e
J1CCd
to
usc
less cuergy
and
c1earic:;r
caergy.
Period,. 1'l'U3.packaB.e of
bills
is takal
in
maay
initanccs
ftom
what
oCbcr
~"&jurisdid:ions
arc dQing.- from
Chicago
to
~e
to
Cafitbmia
andNewYork$18tCs.. They·m: a mixoflca.diag
by
exampl~
rewarding
grecQ .
buainesscs,$UppOI1ing
JDSIket
f~
adopting
mqte
exactiilg
staDcIards,
IIDd
boJdil1,l
our
county
.&OlImuncnt
accountability.
Holding
oursdves
accounta~ i.~
important.
When
the
Couatil:
passed
uimilar
package in
2008;
we
~ed
a
S-.ainability
Working
<lnNp
with
the
priac:ipJC'
responsibiJity
for
guiding
our
COUDty
to
acmevo
our formal
w;al
of
re~n.8
gree'Q1lousc
gas
emissions
by 80
pereentby
2050.
It
is rime
now ro
make
this
a core
SOVernmetlt
STaI.A
8.
WERta
0PflCE
8iJI1.DiN(i •
100
MAIrrt.NG
AIIENJI, 61'11
fI.aoII.
RclC:XV'IU.I.
MI\R.YuItI.l'
~
24Q-m-782! 0Iil2'1O-m-7900, TTY 2<1O-m-7914, FAX2.40-m·7989:
WWW-J1C'.lN'i'GcHEA~f»I
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rcsponsibUity~
and
ibis
pac~.!odudt~
aJDeasuJ'e
that
win
a:eatc
lUloft'l~
p(
S_iMbiJity
within
D1:'P
whose
principal
teSpODSibilit),
will
he
to
monitot
bow_
are
and
to
help
dewlop tile
porkies.
and
prac~ ~~
will
get
us to
~
we
need
to
"oms
be.
r
hope
yOu
willjoin me
in
maijng
$\R
Mom.gomery C.QuPty
burnishes
its
reputation
11$11
community.ihat
~
sustaiuability
at our
~"
Sincetely~
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FACT
SHEET
ON
COUNCH,MEMBER IJERUHER"S 13 ENEAGY/ENVIRONMENT LEGISlATIVE
INITIATlVfS
Coundlmember
-ROser Berliner
(0-1). Chair
ofthe
Montgomery
County
TranspQrtation,
Inf~r~ure, ~n:erlY&
EIJY.j(cmmeflt
Cpmm~ee,
wil!
be
introdL,!CinS
13
!!f1e!iY/.nylrOntn.nJiif
n1.asures
otIlanuary'21.
The
measures
Ilre,deslgne4tQ,underscore ancf'support the
County's
commitment
tQ
S;UstllRf'blf'rty and
WO~ld
(l)
p~mo~ltK;re.,ecj ~ne'IY '~121In(reliSt
u,.
of
rentwable
eneray; (3}
deerease..(on.sun'lJltfonof
.asOUne and,support electric vehICles;
and :(4)
create'
mor~ aa:ount~bility ~Jnd
re,spOfl$ibiilty within
cOul'dy
government
for
~ns ~Co.unty's
,oal'of
red'util'll,reenhouse
ps
emisSions'
8Q%'by20So. ':8eJoW
is
a
brief
descriptIon
of
each
01
theSe
measu~:
• Renewable EJlefIY
P'Llld'laSfnt-smt.
~e!!eWab!e$ltn01Si '1~
by
TQ~~
tht
County
PUn:hases
a~proXimateiy
3m6
of
Its
enert\l frQm renewable.MIlY
r.e,so~.
Washinstof\
~
Au,siin,
T~;
and
~orttan,d
..
Ore&On,a(.E!
atreadV
at
~ renewa~
ei1em'.
• kO!wables
Onsile -
This
bill,
modeled
a~
I
r~ntly
passed'faw
In
pn~
Geor,e's
C!),Ufttv,
woW~ ~q9ire
new
or
ext~m.1¥elv
remQq,1ed
cOw:ltv
'buj~H1gs/.
to
pner:ate,
iII~~.st
1
kilowatt
of
tenewable'ef1erJV fOr every
1,000
square
feet
of
fJoor
area.
mo:...
,.
iretnlapiDB SOlar:'" TWo
of
tlI~ i~j'ments
to
increased
501•.,
utirtUtlo"
ar~t~e
tost'.rid
time invo'tv.ed.ln
gettln,
~its.
This measure,
pattemed
after
l,su.O:eu.fut
Pl'OBfIm In
CN~IO. requi~
C),,'r
Department
of
~rmlttm.tServlces
to
tlevrs'~
In
e~lttnlllW
less
costlVptocesSfor$Olar'relatedpermits: ' ,"
,. ,
• Solar ZliniMAa:omrriodation- Curtent set back
r~uirements
limit
tl'Ie
use
of
sOlar in
r.esidQnttal
dweOi~. Th~iTA
wouid
modestly,,~end,our
zoning
la'lll(S
,t4;l
permit
solar
tq
extend 2
feet
Into the side-or rt'arsetbilck.
IDI!IX
Effldencv
,
,khChmarkins
'Buildinss -
ThjslegislatiOn, modeled after taws
in
New York,
~~.
and
~he
District
pf
Columbill.,
woijld
req~lre
building.
~I'$
to
qteas~U'".~
enerav efflQencv
9f
their.
bllildinas. make
that
Information
pUblic.
iIDd petiOdicatly commit
to.
ensunns
that
their
,e~
effidel'lq'
eQ.uipment~
WQrking
pro.perly.
It
is
d~llned tQ.'~
wit"
t~ ~ntly
'pisSed PACE
pt'OItal'h
to
create
market
based
inCenftves for
bUlldlnl'Clwnei'S
to
inctease'd1e
e~ncy'of
their
buildings.
Inf~nnation
provided would aid tenantS In fore:castil'll
fl.m.!re.
utitity COsts.
• SIlVer LEED
for
New
Buildings-Current
Q)un~y
law
requir.eS new cot'nmercial buiicflf1lS.lO
be
LEEQ
certified,
wh", countyblilldings
mu~ m~t
tJ'Ie
mOn!
,nvironrnentally
~t,rjnaertt
SUVer
standatd.
,This
bill would requite all
new
commerdai buildlnp.tO
meet
Silver LEED.
@
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" COst of
carbon"
The, use of
cotl~n,tianal
fueis
t
particularly
cbili.
extracts a'
cost
Otl
sodety,
that
is
not
reftected Itt
itS
prJi.'1
Tl'ieie
"extemar'cO~t5sh.Qi,lI~
be.
faj::tored,
inlQ
~e,
cost/bfnef!t
cal~~tiOr:l$
tttat
the-
~ty
\JtutzesWhen
It
Issessesthe
potential
for enel'lY
ffflclenty
fmprevemenlS.,
This
bill
would
require
the
C4UntJt() . '
EPA'S- itsoclai
c~
of
carbon'"
caleu,~n
or
II
cornparabl, methodolOiV for
those
purposes.
• LED StreettIRhtJng... It
is
genetanv
recogniz:ed
that
LED
II.ihtli1B'is
'fir
m~te en~riY e~nt
.
iod
requires far
Its,
majnt~"'~.
This
bill
would require
DoT,
upon
the
~plt.tion
of'Its
current
col)tr.1Ct,fOr street fighting,
to
contl'ict
with
an
LED company.
Tl'Jilsportatiog
• £V
Infiastructyre -
EIl!!ctric,vehicles
will
only
become mainstream
WIle"
~'.a!i
s¢Jicie.nt.
charl/n:g.statkmsto
inspire'
confldence
J~
ttie,pubf,lc,
Califomil rl!!cefrtly:PiSSf!d
leaislatlOn
re_qui'~
ali
new
bijlldJnp
(lve,.
i.certain
slze
to
be
"tV
readv," This
¥.i!o!.d4
requfn!
aff.
newbuildinst
to
irman 1 EV
charginS
~!Ion
for
ev~ry
SO pal1cing
Spa,CIS.
rr,..
• GreentaPR EVltil'!2!J!
-,J~stas
in
solar Installations,
f.V
.chars11'l8 statiOns can,be subjedta
a
"ngthy
and
costly.
permittins process.
This bill WOuld
requln~
DPS
to
inst~ute ~n
.expedited and
fi$S
msdy permitting
pr:9!=ess.
• Ttleworttnl':"
Teleworking
is
beJDmlng iar more common
8NhccepflitCf.
Other
juris.dlttlons. fntludinS
Fatr:fil~ha~
:Il\,de
,sisnif.cantly more prosres.s'J.i,
estabU~
tele,workjn& goals
Iffld
.mee.t\ng them. 'This
Jeiislatlon
would requli'w! the CO!ii:lty
tx.tutive
to
pubJisll
re,uiatiOns
thaUet'forth a
definitivi~~leWor1tinS
poU,CV
and a
~uirement
t9'
designate
a
teJ~tI'lmuting
m•
.,,~er
..
Create an Office
of
SustainabilltY within
PEP -,
Thlsb~'1 ~uld 'crea~
I!I,
~
Offic.e
of
StJstalnabil!tV:
~~In
DEP. When
~
Cou.ndl
passed
"'islatiQn In
~OO8,;it
tasked a
S)Jstainabilily
Worldng
Group with
the
responsibitity
Of
guiding
0tIt
eo,,",W-s
areenho~
ga$.
reduction
I~plemeatation..
it
rs. now time
to
make this
8.
ful'Jdetmental respol'lSiblUty oftM
(:Quilty ,owmmenE
and
to hold ourselVes accountable.
QJuntY Green Ccrtiflest BUsinesses - The
County
~a5 cre~ted
a
program,
w1ler~
a
~,
~~ss
!;an
1M!
"g,een
(ertIf~
by
,adoptln&JOod sustainable practICes. This
bot
taUs
upon
the
COUnty
~c:ut!ve
to issue regulations that WOuld
iNa"
prefere~
in
C9f1.tra~l",
to local
.busihesses
tllat are sreen
teftified.
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ROCKVIllE, MARYIAND
MEMORANDUM
April 14, 2014
TO:
FROM:
Jennifer A. Hughes, Director, 0
of Management and Budget
Joseph F. Beach,
Director,~v"MI'l'rnnr'ofFinance
Council Bill 5-14, Environmental Sustainability - Social Cost of Carbon
Assessments
SUBJECT:
Please find attached the
fi~al
and economic impact statements for the above­
referenced legislation.
JAH:fz
cc: Bonnie Kirkland, Assistant Chief Administrative Officer
Lisa Austin, Offices of the County Executive
Joy Nurmi, Special Assistant to the County Executive
Patrick Lacefield, Director, Public Information Office
Joseph F. Beach, Director, Department of Finance
Michael Coveyou, Department ofFinance
David Platt, Department of Finance
Robert Hagedoom, Department ofFinance
Darlene Fairfax, Office ofManagement and Budget
Amy Wilson, Office of Management and Budget
Alex Espinosa, Office of Management and Budget
Felicia Zhang, Office of Management and Budget
Naeem Mia, Office of Management and Budget
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Fiscal Impact Statement
Council Bill 5-14
Environmental Sustainability - Social Cost of Carbon Assessments
1. Legislative Summary.
The proposed bill requires the Executive branch to transmit an analysis ofthe social costs of
carbon (SCC) for projects in the facility planning phase in the Capital Improvements Program
(CIP). The projects affected are those in facility planning that are administered by the
Department of General Services (DGS) or the Parking Management Division of the Department
of Transportation (DOT).t The scope of the proposed bill limits the scope of the analysis to
include the SCC as a factor
in
determining the payback period of a proposed energy efficiency
improvement for a building.
The proposed bill requires OMB
to
use standards developed by the U.S. Environmental
Protection Agency (EPA) or a standard that the OMB Director finds equivalent. The EPA and
other federal agencies use the social cost of carbon (SCC) to estimate the climate benefits of
rulemakings. The SCC is an estimate ofthe economic damages associated with a small
increase in carbon dioxide (C02) emissions, conventionally one metric ton, in a given year.
This dollar figure also represents the value of damages avoided for a small emission reduction
(Le. the benefit of a C02 reduction).
2. An estimate of changes in County revenues and expenditures regardless of whether the
revenues or expenditures are assumed in the recommended or approved budget. Includes
source of information, assumptions, and methodologies used.
No additional revenues or expenditures are expected to be generated from the proposed bill.
OMB assumes that the bulk ofthe analysis work will be performed by DGS and other County
departments.
As the scope ofthe proposed bill is limited to factoring the SCC into the payback period of a
proposed building or energy efficiency improvement, both DGS and OMB anticipate that
no
additional resources
will be required to implement the bill.
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
Not applicable see item #2 above.
4. An actuarial analysis through the entire amortization period for each bill that would
affect retiree pension or group insurance costs.
The legislation does not affect retiree pension or group insurance costs.
>
5. Later actions that may affect future revenue and expenditures
if
the bill authorizes future
spending.
The legislation does not authorize future spending.
6.
An
estimate of the staff time needed to implement the bill.
Projects administered by DGS include, but
!'IJ't'
not limited to: libraries, police stations, fire stations. recreation centers, and
other County administrative
buildings.
1
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DOS reports that no additional
staff
time will be required. OMB anticipates that most of its
activities under the proposed bill will be limited to coordination and review with other County
departments to determine the social costs of carbon and no additional
staff
resources will be
necessary.
7. An explanation of how the addition of new staff responsibilities would affect other duties.
DOS and OMB do not anticipate any impact on existing duties. Under the proposed bill, OMB
and other County staff will engage in the following duties:
• Initial assessment of which capital improvement projects in facility planning are applicable
for SCC analysis;
• Determining the applicable standard of analysis as adopted by the U.s. EPA (or equivalent
standard);
• Consulting and coordinating with DOS, DEP, and other affected departments to determine
the appropriate assumptions for the amount of carbon generated (or reduced) due to a
capital project or improvement, the payback period, and the discount rate (among other
factors); and
• Tracking changes to the project that could alter its SCC estimates, as it proceeds along the
development and planning phases.
8. An estimate of costs when an additional appropriation is needed.
Not applicable - see item #2 above.
9. A description of any variable that could affect revenue and cost estimates.
As
the scope·ofthe analysis is limited to using the SCC as a factor in determining the payback
period of a building or efficiency improvement, then there is likely to
be
no significant impact
to cost estimates as the workload can be absorbed by existing staff resources.
10. Ranges of revenue or expenditures that are uncertain or difficult to project.
Not applicable.
11.
If
a bill
is
likely to have no fiscal impact, why that is the case.
Not applicable ..
12. Other fIScal impacts or comments.
OMB notes that any project that includes the SCC analysis may be more or less feasible.
13. The following contributed to and concurred with this analysis:
Eric Coffinan, Department of Oeneral Services
Erika Lopez-Finn, Office ofManagement and Budget
Naeem
Mia,
Office of Management and Budget
Date
f
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Economic Impact Statement
Bill 5-14, Environmental Sustainability - Social Cost of Carbon Assessments
Background:
This legislation would require the Office of Management and Budget (OMB)
to
submit
an analysis of the social cost of carbon with certain capital projects in the Capital
Improvement Program; and generally amend County law regarding the analysis of capital
projects and environmental sustainability.
1.
The sources of information, assumptions, and methodologies used.
While the results of analysis of capital projects and environmental sustainability
could have an economic impact, Bill 5-14 only requires that such analysis be
undertaken and therefore this
Bill"
has no direct economic impact.
2. A description of any variable that could affect the economic impact estimates.
Not applicable.
3. The Bill's positive or negative effect, if any on employment, spending, saving,
investment, incomes, and property values in the County.
Bill 5-14 has. no effect on employment, spending, savings, investment, incomes, and
property values, therefore there is no economic impact.
4.
If
a
Bill
is likeJy to have no economic impact, why
is
that the case?
. I
Bill 5-14 only requires an analysis ofthe social cost of carbon for capital projects, and
therefore
this
bill has no economic impact.
5. The following contributed to and concurred with this analysis:
David Platt and Rob Hagedoorn, Department ofFinance;
Naeem Mia, Office ofManagement and Budget;
Eric Coffman, Department of General Services
Date
1-J--
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