City of Portland Proposes Home Energy Scoring

The City of Portland’s Bureau of Planning and Sustainability (BPS) recently proposed a “Home Energy Score” policy that CUB supports, with recommended changes. But before getting into CUB’s position – first some background.

What is a home energy score? A home energy score describes the energy efficiency of the home on a scale from one to ten. Five is an “average” score with a ten considered very efficient.

Rather than assessing how the home is used, think of a home energy score as an “asset rating”, describing the physical/structural integrity of a home and the major equipment, like a furnace, that runs the internal energy system. This approach is similar to miles-per-gallon ratings for cars, though actual mileage depends on the driver’s behavior.

How does one determine a home energy score? An accredited home energy assessor determines a home’s score using data from several tests and specialized software. For instance, “blower door” analysis evaluates the air tightness of a home by temporarily installing a large fan in a doorway and closing off other entry points. This “home energy audit” generally costs in the neighborhood of $150.

The proposed city ordinance would require assessors to use the U.S. Department of Energy’s tool, with short-term exemptions for new homes using the Energy Trust of Oregon’s “Energy Performance Scoring” or the lesser-utilized “Home Energy Rating System” tool. The energy score is adapted from a report in accordance with Oregon statute that provides (at a minimum):

1. An estimate of total energy used in the home, by fuel type;
2. An estimate of the total monthly or annual cost of energy purchased for use in the home, in dollars, by fuel type;
3. The current average annual utility retail energy prices, again, by fuel type.

Why does CUB support energy scoring? A score itself does not increase energy efficiency and reduce carbon emissions. CUB, however, has long supported home energy scoring as an effective means to reduce residential carbon emissions by highlighting to people the cost savings and improved comfort associated with energy efficiency improvements in the home.

More to the point, CUB supports homebuyers’ improved understanding of what is likely the largest purchase of their lifetime. A useful example might be purchasing a hybrid or electric vehicle. Customers are willing to pay, in some cases, a greater upfront cost knowing that the car will be less expensive to operate over its life due to improved efficiency.

Under the proposed policy, a Portland single-family, owner-occupied seller would be required to obtain a home energy score and report prior to listing their home for sale. The seller submits the report directly to the City. The City would then attach the report on Portland Maps, allowing interested parties to view the data online.

Performing a home energy audit prior to or at the point of listing would also allow the seller to share the resulting energy score and report with a real estate professional who can then submit this information to any third-party vendors to further inform prospective buyers.

What else is in the proposed policy? It is important to highlight that the policy applies only to sellers of single-family, owner-occupied homes. Portland City Council already adopted “mandatory energy benchmarking and disclosure” for large commercial buildings within city limits. BPS recommends phasing in supplementary requirements for rental homes.

The proposed policy impacts enclosed accessory dwelling units (ADUs) but not detached ADUs. (Think converted basement or attic apartment versus a separate, stand-alone apartment on the same property.)

Policy exemptions take into account financial or other hardship and include the following:

1. Foreclosure sales;
2. Trustee’s sales;
3. Deed-in-lieu of foreclosure sales;
4. Pre-foreclosure sales in which the seller has reached an agreement with the mortgage holder to sell the property for an amount less than that which is owed on the mortgage;
5. Demonstrated hardship examples (defined during rulemaking).

Did CUB find any issues with the proposed policy? CUB agrees, in large part, with BPS’s approach and applauds their effort to meet the carbon reduction goals outlined in the city’s Climate Action Plan.

According to BPS, 80 percent of Portland’s commercial building space will have been “scored” for energy performance by 2017. CUB believes the time is right, then, for the residential arena to provide similar data to reduce overall carbon output from this sector.

However, CUB is also sensitive to the costs associated with a home energy audit in terms of dollars and time spent for the seller. Requiring the seller to submit the report to the City also assumes technological savvy. Therefore, CUB recommends thorough review of the requirements around economic hardship, and that the person or agency performing the audit upload the report to Portland Maps rather than placing the onus on the seller.

CUB is also concerned that an audit is only required once. Our recommendation is to audit a home’s performance at every sale throughout its life or, perhaps, any sale that occurs more than five years after the most recent audit.

Finally, an essential element of the proposed policy is the public access to information. In this same spirit, CUB encourages BPS to develop clear, timely, and comprehensive evaluation requirements to share with the public the successes or failures of the policy.

The next steps for the proposed policy include review of public comments, followed by a presentation to Portland City Council. Assuming adoption of the ordinance, rule making will follow.

CUB looks forward to following every step of the way with a keen eye toward observation and analysis. Stay tuned.

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