DOS-24-14-00002-P State Energy Conservation Construction Code (Energy Code)

6/18/14 N.Y. St. Reg. DOS-24-14-00002-P

NEW YORK STATE REGISTER

VOLUME XXXVI, ISSUE 24

June 18, 2014

RULE MAKING ACTIVITIES

DEPARTMENT OF STATE

PROPOSED RULE MAKING

HEARING(S) SCHEDULED

 

I.D No. DOS-24-14-00002-P

State Energy Conservation Construction Code (Energy Code)

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Repeal of Part 1240; and addition of new Part 1240 to Title 19 NYCRR.

Statutory authority:

Energy Law, section 11-103

Subject:

State Energy Conservation Construction Code (Energy Code).

Purpose:

To repeal the existing provisions of the Energy Code and adopt new code provisions to reduce energy use in commercial buildings.

Public hearing(s) will be held at:

10:00 a.m., Aug. 11, 2014 at Department of State, 99 Washington Ave., Conf. Rm. 505, Albany, NY; 10:00 a.m., Aug. 15, 2014 at Department of State, 123 William St., Exam Rm. 1, New York, NY.

Interpreter Service:

Interpreter services will be made available to hearing impaired persons, at no charge, upon written request submitted within reasonable time prior to the scheduled public hearing. The written request must be addressed to the agency representative designated in the paragraph below.

Accessibility:

All public hearings have been scheduled at places reasonably accessible to persons with a mobility impairment.

Substance of proposed rule (Full text is not posted on a State website):

Article 11 of the Energy Law provides for adoption of a State Energy Conservation Construction Code by the State Fire Prevention and Building Code Council. Such code shall protect the health, safety and security of the people of the State of New York, assure a continuing supply of energy for future generations, and mandate that economically reasonable energy conservation techniques be used in the design and construction of all public and private buildings in New York. The rule making would repeal 19 NYCRR Part 1240 which currently establishes the provisions of the State Energy Conservation Construction Code and replace it with a new Part 1240 which will provide for a distinction between those energy code provisions applicable to residential buildings and those applicable to commercial buildings. The revised code provisions for commercial buildings will meet or exceed the requirements of the 2010 edition of the publication entitled ANSI/ASHRAE/IES Standard 90.1: Energy Standards for Buildings Except Low-Rise Residential Buildings (ASHRAE 90.1-2010).

Section 1240.1 of proposed new Part 1240 states that provisions of Part 1240 along with publications incorporated by reference therein shall constitute the State Energy Conservation Construction Code. Section 1240.2 sets forth definitions for certain terms used in the text of the regulation.

Section 1240.3 establishes the energy code provisions that shall be applicable to residential buildings. The construction of all new residential buildings, of all additions to, alterations of, and/or renovations of existing residential buildings, and of all additions to, alterations of, and/or renovations of building systems in existing residential buildings shall comply with the requirements of Chapters 1, 2, 3, 4, and 6 of the publication entitled Energy Conservation Construction Code of New York State, publication date August 2010 (2010 ECCCNYS), provided however that such chapters of the 2010 ECCCNYS shall be deemed to be amended to the extent set forth in Chapter 1 of the publication entitled 2014 Supplement to the New York State Energy Conservation Construction Code (the 2014 Supplement). The 2010 ECCCNYS, the 2014 Supplement and certain codes and standards denoted in Chapter 6 of the 2010 ECCCNYS are incorporated by reference to be part of the new Part 1240 text.

Section 1240.4 establishes the energy code provisions that shall be applicable to commercial buildings. The construction of all new commercial buildings, of all additions to, alterations of, and/or renovations of existing commercial buildings, and of all additions to, alterations of, and/or renovations of building systems in existing commercial buildings shall comply with the requirements of Chapter 1 of the 2010 ECCCNYS and Chapters C2, C3, and C4 of the Commercial Provisions portion of the publication entitled 2012 International Energy Conservation Code published by the International Code Council, Inc. (2012 IECC). As with the energy code provisions applicable to residential buildings, certain provisions of the 2010 ECCCNYS and the 2012 IECC shall be deemed to be amended in the manner set forth in applicable chapters of the 2014 Supplement. To the extent provided in the Commercial Provisions portion of the 2012 IECC, compliance with the requirements of the publication entitled Energy Standard for Buildings Except Low-Rise Residential Buildings, standard reference number 90.1-2010, published by the American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc. (ASHRAE 90.1-2010) shall be permitted in lieu of compliance with specified sections of the 2012 IECC. However, certain provisions of ASHRAE 90.1-2010 shall be deemed to be amended in the manner specified in Chapter 3 of the 2014 Supplement. Chapter 1 of the 2010 ECCCNYS, Chapters C2, C3 and C4 of the Commercial Provisions of the 2012 IECC, the 2014 Supplement, ASHRAE 90.1-2010, and certain codes and standards denoted in Chapter 4 of the 2014 Supplement are incorporated by reference to be a part of the text of the new Part 1240.

Section 1240.5 specifies that provisions of the State Energy Conservation Construction Code shall not apply to the alteration or renovation of an historic building. In addition, the code shall not apply to certain listed alterations of existing buildings provided such alteration will not increase the energy usage of the building.

A copy of the rule text (excluding the publications that will be incorporated by reference in Title 19 of the Official Compilation of the New York Codes, Rules, and Regulations, Part 1240) is posted on the Department of State’s website and is available by clicking the “draft text” link or the “full text of Draft Rule” link on the following web page: http://www.dos.ny.gov/DCEA/noticadopt.html.

A copy of the 2014 Supplement (one of the publications which, if this rule is adopted, will be incorporated by reference in Title 19 of the Official Compilation of the New York Codes, Rules, and Regulations, Part 1240) is posted on the Department of State’s website and is available by clicking the “2014 Supplement” link on the following web page: http://www.dos.ny.gov/DCEA/noticadopt.html.

Text of proposed rule and any required statements and analyses may be obtained from:

Mark Blanke, Department of State, Division of Building Standards and Codes, One Commerce Plaza, 99 Washington Ave., Albany, NY 12231-0001, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

Five days after the last scheduled public hearing.

Summary of Regulatory Impact Statement

The State Energy Conservation Construction Code (the “Energy Code”) is a building energy code for commercial buildings and residential buildings promulgated by the State Fire Prevention and Building Code Council (the “Code Council”) pursuant to Article 11 of the Energy Law. This rule will amend the provisions of the Energy Code that apply to commercial buildings.¹

This rule is authorized by Energy Law section 11-103(2).

The current Energy Code for commercial buildings meets or exceeds the requirements of the 2007 edition of the publication entitled ASHRAE Standard 90.1: Energy Standards for Buildings Except Low-Rise Residential Buildings (“ASHRAE 90.1-2007”), published by the American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc. The Energy Code for commercial buildings, as amended by this rule, will meet or exceed the requirements of the 2010 edition of the publication entitled ANSI/ASHRAE/IES Standard 90.1: Energy Standards for Buildings Except Low-Rise Residential Buildings (“ASHRAE 90.1-2010”), published by the American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc.

The current Energy Code for commercial buildings is set forth in Chapter 5 of the 2010 edition of the publication entitled Energy Conservation Construction Code of New York State (the “2010 ECCCNYS”), published by the International Code Council, Inc. In general, the Energy Code for commercial buildings, as amended by this rule, will be set forth in the “commercial provisions” of the 2012 edition of the publication entitled International Energy Conservation Code (the “2012 IECC”), published by the International Code Council, Inc. However, a study dated August 2013 issued by Pacific Northwest National Laboratory entitled Energy and Energy Cost Savings Analysis of the IECC for Commercial Buildings (the “PNNL Comparison Study”) indicates that certain sections in the “commercial provisions” of the 2012 IECC must be amended to assure that the 2012 IECC will meet or exceed ASHRAE 90.1-2010. To assure that the Energy Code for commercial buildings, as amended by this rule, will meet or exceed the requirements of ASHRAE 90.1-2010, this rule will amend the commercial provisions of the 2012 IECC in the manner recommended by the PNNL Comparison Study.² The amendments to the 2012 IECC are made in the publication entitled 2014 Supplement to the New York State Energy Conservation Construction Code (the “2014 Supplement”), published by the New York State Department of State.³

The Energy Code for commercial buildings, as amended by this rule, will specify three compliance options:

Option 1 (ASHRAE): comply with ASHRAE 90.1-2010 (as amended by Chapter 3 of the 2014 Supplement);

Option 2 (Prescriptive): comply with the “prescriptive” requirements relating to building envelope, building mechanical systems, service water heating, and electrical power and lighting systems as specified in Sections C402, C403, C404 and C405 of the 2012 IECC (as amended by Chapter 2 of the 2014 Supplement) and with one of the three Additional Efficiency Package Options specified in Sections C406.2, C406.3 and C406.4 of the 2012 IECC (as amended by Chapter 2 of the 2014 Supplement); or

Option 3 (Performance): comply with the “total building performance” requirements specified in Section C407 of the 2012 IECC (as amended by Chapter 2 of the 2014 Supplement), comply with the requirements specified in Sections C402.4, C403.2, C404, C405.2, C405.3, C405.4, C405.6, and C405.7 of the 2012 IECC (as amended by Chapter 2 of the 2014 Supplement), and demonstrate that the proposed building will have an annual energy cost equal to or less than eighty five percent of the annual energy cost of a “standard reference design” building.

Because this rule will amend the 2012 IECC in the manner recommended in the PNNL Comparison Study, the Energy Code for commercial buildings, as amended by this rule, will equal or exceed ASHRAE 90.1-2010 without regard to which of the three available compliance options is selected.

The 2012 IECC, ASHRAE 90.1-2010, and the 2014 Supplement will be incorporated by reference into 19 NYCRR Part 1240 by this rule. In addition, the requirements contained in certain published referenced standards will be applicable to commercial buildings. Those referenced standards are identified in Chapter 4 of the 2014 Supplement. Those referenced standards will also be incorporated by reference into 19 NYCRR Part 1240 by this rule.

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¹ The term “commercial building” is defined in the rule as any building that is not a “residential building.” The term “residential building” is defined in the rule as including (1) detached one-family dwellings having not more than three stories above grade plane; (2) detached two-family dwellings having not more than three stories above grade plane; (3) buildings that (i) consist of three or more attached townhouse units and (ii) have not more than three stories above grade plane; (4) buildings that (i) are classified in accordance with Chapter 3 of the 2010 BCNYS in Group R-2, R-3 or R-4 and (ii) have not more than three stories above grade plane; (5) factory manufactured homes (as defined in section 372(8) of the Executive Law); and (6) mobile homes (as defined in section 372(13) of the Executive Law).

² The PNNL Comparison Study provides suggested changes to the text of the “commercial provisions” of the 2012 IECC that will assure that those provisions meet or exceed ASHRAE 90.1-2010.

³ The United States Department of Energy and Pacific Northwest National Laboratories (PNNL) have provided a report entitled “Cost-Effectiveness of ASHRAE Standard 90.1-2010 Compared to ASHRAE Standard 90.1-2007”, (PNNL 22043) dated May 2013, with subsequent updated report published, November 2013, PNNL-22972), published by Pacific Northwest National Laboratory, Richland, WA (the “PNNL Cost-Effectiveness Study”). The PNNL Cost-Effectiveness Study builds on an earlier technical report issued by PNNL, entitled Achieving the 30% Goal: Energy and Cost Savings Analysis of ASHRAE Standard 90.1-2010 (Thornton et al. 2011), which analyzed sixteen building prototypes in 17 climate locations representing all eight U.S. climate zones.

Summary of Regulatory Flexibility Analysis

1. EFFECT OF RULE.

The State Energy Conservation Construction Code of New York State (the “Energy Code”) applies to both residential buildings¹ and commercial buildings.² This rule will amend the portion of the Energy Code that applies to commercial buildings.

This rule will affect any small business or local government that constructs, renovates, alters or enlarges a commercial building. It is not possible to estimate the number of small businesses and local governments that will be affected by this rule. Small businesses that provide services to owners of commercial buildings, such as design professionals (architects and engineers) and contractors, while not directly regulated by this rule, will be impacted by this rule. It is not possible to estimate the number of such indirectly affected parties. However, as of January 1, 2014, there were over 25,000 registered design professionals in New York State.

Approximately 1,500 municipalities are required by existing law to enforce the Energy Code, with respect to buildings within their borders. When this rule becomes effective, those cities, towns, villages, and counties that are currently required to enforce the Energy Code will continue to be required to enforce the Energy Code as amended by this rule, with respect to buildings within their borders.

2. COMPLIANCE REQUIREMENTS.

When this rule becomes effective, any small business or local government will be required to comply with the Energy Code as amended by this rule; to prepare construction documents, including documents that demonstrate compliance with the amended Energy Code; and to submit those documents with its building permit application.

When this rule becomes effective, local governments that enforce the Energy Code will be required (much as they are now) to review permit applications relating to commercial buildings for compliance with the amended Energy Code, to issue permits, to conduct construction inspections, to issue certificates of occupancy, and to keep applicable records.

Local governments that enforce the Energy Code and certain indirectly affected parties, such as design professionals who provide services to owners of commercial buildings, will be required to obtain the 2012 edition of the publication entitled International Energy Conservation Code (the “2012 IECC” ) published by the International Code Council, Inc., the 2010 edition of the publication entitled ANSI/ASHRAE/IES Standard 90.1: Energy Standards for Buildings Except Low-Rise Residential Buildings (“ASHRAE 90.1-2010”) published by the American Society of Heating, Refrigerating and Air Conditioning Engineers, Inc., and the publication entitled 2014 Supplement to the New York State Energy Conservation Construction Code (“2014 Supplement”), published by the York State Department of State (collectively, the “New Code Books”) and must require that their code enforcement personnel receive training on the amended Energy Code.

3. PROFESSIONAL SERVICES.

Small businesses and local governments that own commercial buildings typically rely on design professionals for advice on the requirements of the Energy Code. When this rule becomes effective, small businesses and local governments that own commercial buildings will continue to rely on design professionals for advice on the requirements of the amended Energy Code.

Local governments that enforce the Energy Code will continue to rely on trained code enforcement personnel to review permit applications and/or to conduct construction inspections to determine compliance with the amended Energy Code. When this rule becomes effective, local governments that enforce the Energy Code will continue to rely on trained code enforcement personnel to determine compliance with the amended Energy Code.

4. COMPLIANCE COSTS.

For a small business or local government that constructs, renovates, alters or enlarges a commercial building, the initial capital cost of compliance with this rule will include the increased, (or decreased cost) of constructing, renovating, altering or enlarging the commercial building to the more stringent requirements of the amended Energy Code.

The United States Department of Energy /Pacific Northwest National Laboratories (PNNL) have provided a report of cost impact study of constructing commercial buildings in accordance with ASHRAE 90.1- 2010 instead of ASHRAE 90.1-2007.³ The economic report(s) are identified as PNNL 22043 and as a subsequent updated report published, November 2013, as PNNL-22972.The following, information has been taken from this study (PNNL-22972), which is more fully discussed in both the Regulatory Impact Statement and Regulatory Flexibility Analysis for Small Business and Local Governments which are a part of the rulemaking documents. Within the Regulatory Flexibility Analysis for Small Business and Local Governments, Table 5⁴ indicates that using the weighted average construction volume for the six building prototypes covered by the PNNL Cost Effectiveness Study, the present value of the energy savings that can be expected over the first 10 years is, on average, $184,582 greater than the “first costs” ( the increase in initial construction costs) in Climate Zone 4A, $112,668 greater than the “first costs” ( the increase in initial construction costs) in Climate Zone 5A, and $149,384 greater than the “first costs” ( the increase in initial construction costs) of the average of costs arising from a combination of Climate Zones 4A and 5A. Based on the foregoing, the Department of State concludes that on average, the cost of the materials required to comply with this rule and the cost of installing those materials will be paid back through savings in energy costs in less than ten years.

Based on the foregoing, the Department of State and the Code Council conclude that the New York State Energy Code, as amended by this rule, will remain “cost effective” within the meaning of Energy Law section 11-103(2).

The ongoing costs of continuing to comply with this rule will include the changes in the annual cost of maintaining energy-related systems and equipment and the changes in the annual costs of replacing energy-related systems and equipment. These changes will vary depending on the occupancy and use type of building and the climate zone in which the building is located.

Variations in the changes in the initial construction costs, annual maintenance costs, and annual replacement costs are likely to depend on the occupancy, location, and use type of building being constructed and the climate zone in which the building is located, and not on the type or size of the entity or local government that owns the building.

All who use New Code Books may purchase the 2012 IECC from the publisher at a cost of $40 per copy. ASHRAE 90.1-2010 can be purchased from the publisher at a cost of $125 per copy. DOS will make the 2014 Supplement available by download from the DOS website at no cost.

The cost of obtaining the New Code Books will vary based on the number of copies of each publication a government or design professional will choose to obtain.

Local governments that enforce the Energy Code will be required to provide that their code enforcement personnel receive training on the requirements of the amended Energy Code. DOS and NYSERDA intend to offer training courses to code enforcement officials at no cost to the officials or to the local governments that employ them, and some of this training may also be made available to other impacted parties, such as design professionals.

Code enforcement officials are required by existing law to receive at least 24 hours of in-service training each year. Design professionals are required by existing law to receive 36 hours of continuing professional training every 3 years. DOS anticipates that code enforcement officials and design professionals (including code enforcement officials and design professionals in rural areas) will be able to receive training on the amended Energy Code within their already required training programs, at little or no cost to the local government or design professional over the costs they are already required by existing law to incur.

5. ECONOMIC AND TECHNOLOGICAL FEASIBILITY.

Based on the Notice published by the U.S. Department of Energy in the Federal Register on October 19, 2011 (76 Federal Register 64904), DOS anticipates that a commercial building constructed to the amended Energy Code (which will meet or exceed ASHRAE 90.1-2010) will realize energy costs savings of approximately 18% compared to a commercial building constructed to the existing Energy Code (which meets or exceeds ASHRAE 90.1-2007) and hence this rule will have a positive economic impact.

Based on the analysis referred to above in Part 4 (Compliance Costs) of this Regulatory Flexibility Analysis for Small Business and Local Governments, DOS anticipates that the increase (if any) in construction costs caused by compliance with this rule will be recovered through savings in energy costs, with the “payback” of no more than 10 years (in the case of a standalone retail building). The analysis also indicates that in each case, the increase (if any) in construction costs is less than the present value of the savings in energy costs that can be expected over a 10 year period, rendering this rule “cost effective” within the meaning of Energy Law section 11-103(2).⁵

Based on the foregoing, DOS believes that compliance with this rule will be economically feasible for small businesses and local governments that construct or modify commercial buildings.

DOS anticipates that the cost of obtaining copies of the 2012 IECC, ASHRAE 90.12010, and the 2014 Supplement will have only a negligible impact on a typical local government’s code enforcement expenses and a typical design professional’s operating expenses.

The amended Energy Code will be based, in large measure, on ASHRAE 90.1-2010, a standard that was released in 2010. Therefore, by the time this rule becomes effective, parties involved in the construction industry will have had over three and one-half years to anticipate and prepare for the amended Energy Code. DOS anticipates that design professionals will be able to design commercial buildings that comply with the amended Energy Code, that materials and equipment required to construct compliant commercial buildings will be available, that builders will be able to construct compliant buildings, and that local governments will be able to interpret and enforce the amended Energy Code.

6. MINIMIZING ADVERSE EFFECTS.

The amended Energy Code will provide several compliance options, including a performance-based option. This will allow small businesses and local governments that own commercial buildings to select the most cost-effective alternative.

The American Recovery and Reinvestment Act of 2009 (Pub.L. 111-5, Feb. 17, 2009, 123 Stat. 115) requires participating states to develop a plan for achieving at least a 90% rate of compliance with energy codes. Therefore, the Code Council and DOS did not consider establishing differing compliance or reporting requirements or timetables for small businesses and local governments or providing an exemption from coverage by the rule, or by any part thereof, for small businesses and local governments.

7. SMALL BUSINESS AND LOCAL GOVERNMENT PARTICIPATION.

DOS attempted to assure that small businesses and local governments were given an opportunity to participate in the rule making through activities including the following:

DOS established a technical subcommittee to review the Commercial Provisions of the 2012 IECC and ASHRAE 90.1-2010 and to recommend New York State-specific modifications to those documents. Meetings of the technical subcommittee were open to the public and public participation was encouraged. Meeting agendas and meeting minutes were posted on the DOS website.

DOS published an explanation of the proposed rule in Building New York, an electronic news bulletin covering topics related to the Uniform Code and the construction industry which is prepared by DOS and which is currently distributed to approximately 10,000 subscribers, including local governments, design professionals, and others involved in all aspects of the construction industry. DOS also posted a draft of the proposed rule and a draft of the 2014 Supplement on the DOS website. The explanation published in Building New York and the DOS website posting included an invitation to all interested parties, including small businesses and local governments, to comment on the proposal and otherwise to participate in the development of the rule.

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¹ The term “residential building” includes detached one-family dwellings having not more than three stories above grade plane; detached two-family dwellings having not more than three stories above grade plane; buildings that consist of three or more attached townhouse units and have not more than three stories above grade plane; buildings that are classified in accordance with Chapter 3 of the 2010 edition of the Building Code of New York State in Group R-2, R-3 or R-4 and have not more than three stories above grade plane; factory manufactured homes as defined in section 372(8) of the Executive Law; and mobile homes as defined in section 372(13) of the Executive Law.

² The term “commercial building” includes all buildings that are not residential buildings.

³ The United States Department of Energy and Pacific Northwest National Laboratories (PNNL) have provided a report entitled “Cost-Effectiveness of ASHRAE Standard 90.1-2010 Compared to ASHRAE Standard 90.1-2007”, (PNNL 22043) dated May 2013, with subsequent updated report published, November 2013, PNNL-22972), published by Pacific Northwest National Laboratory, Richland, WA (the “PNNL Cost-Effectiveness Study”). The PNNL Cost-Effectiveness Study builds on an earlier technical report issued by PNNL, entitled Achieving the 30% Goal: Energy and Cost Savings Analysis of ASHRAE Standard 90.1-2010 (Thornton et al. 2011), which analyzed sixteen building prototypes in 17 climate locations representing all eight U.S. climate zones.

⁴ Please refer to the Regulatory Flexibility Analysis for Small Business and Local Governments for the full content of Table 5.

⁵ Energy Law section 11-103(2) provides, in pertinent part, that “in determining whether the [Energy Code] remains cost effective, the code council shall consider whether the cost of materials and their installation to meet its standards would be equal to or less than the present value of energy savings that could be expected over a ten year period in the building in which such materials are installed.”

Summary of Rural Area Flexibility Analysis

1. TYPES AND ESTIMATED NUMBERS OF RURAL AREAS.

The State Energy Conservation Construction Code of New York State (the “Energy Code”) is a building energy code adopted pursuant to Article 11 of the Energy Law that is applicable in all parts of the State, including all rural areas which will be affected by this rule. The Energy Code applies to both residential buildings¹ and commercial buildings.² This rule will amend the portion of the Energy Code that applies to commercial buildings.

2. REPORTING, RECORDKEEPING AND OTHER COMPLIANCE REQUIREMENTS.

Any person who constructs, renovates, alters or enlarges a commercial building in any part of the State, including any rural area, and is now required to comply with the current version of the Energy Code and to prepare construction documents, including documents that demonstrate compliance with the existing Energy Code, will be required to comply with the Energy Code as amended by this rule; to prepare construction documents, including documents that demonstrate compliance with the amended Energy Code; and to submit those documents with his or her building permit application.

Local governments (including local governments in rural areas) that enforce the Energy Code are now required to review permit applications relating to commercial buildings for compliance with the Existing Commercial Energy Code, to issue permits, to conduct construction inspections, to issue certificates of occupancy, and to keep applicable records. When this rule becomes effective, local governments (including local governments in rural areas) that enforce the Energy Code will be required to review permit applications relating to commercial buildings for compliance with the amended Energy Code, to issue permits, to conduct construction inspections, to issue certificates of occupancy, and to keep applicable records.

The portion of the amended Energy Code that applies to commercial buildings will consist of the Commercial Provisions of the 2012 edition of the International Energy Conservation Code (the “2012 IECC”) and the 2010 edition of the Energy Standard for Buildings Except Low Rise Residential Buildings (“ASHRAE 90.1-2010”), as amended by the 2014 Supplement to the New York State Energy Conservation Construction Code (the “2014 Supplement”). Local governments that enforce the Energy Code will be required to obtain the 2012 IECC, ASHRAE 90.1-2010, and the 2014 Supplement (collectively, the “New Code Books”).

Certain businesses that provide services to owners of commercial buildings (including owners of commercial buildings in rural areas), such as design professionals (engineers and architects) and contractors, while not directly regulated by this rule, will be indirectly affected by this rule. Such indirectly affected parties may find it necessary to obtain the New Code Books.

Local governments (including local governments in rural areas) that enforce the Energy Code will be required to provide training to their code enforcement personnel on the amended Energy Code. Design professionals who provide services to owners of commercial buildings (including owners of commercial buildings located in rural areas), may find it necessary to receive similar training.

3. PROFESSIONAL SERVICES.

Owners of commercial buildings (including owners of commercial buildings located in rural areas) typically rely on design professionals for advice on the requirements of the Energy Code. When this rule becomes effective, owners of commercial buildings (including owners of commercial buildings located in rural areas) will continue to rely on design professionals for advice on the requirements of the amended Energy Code.

Local governments (including local governments in rural areas) that enforce the Energy Code rely on trained code enforcement personnel to review permit applications and/or to conduct construction inspections to determine compliance with the Energy Code. When this rule becomes effective, local governments (including local governments in rural areas) will continue to rely on trained code enforcement personnel to determine compliance with the amended Energy Code.

4. COSTS.

For a building owner that constructs, renovates, alters or enlarges a commercial building, the initial capital cost of compliance with this rule will include the increased cost of constructing, renovating, altering or enlarging a commercial building. Changes in annual replacement costs can also vary from year to year because of differences in equipment replacement schedules.

The United States Department of Energy /Pacific Northwest National Laboratories (PNNL) have provided a report of cost impact study of constructing commercial buildings in accordance with ASHRAE 90.1- 2010 instead of ASHRAE 90.1-2007.³ The economic report(s) are identified as PNNL 22043 and as a subsequent updated report published, November 2013, as PNNL-22972.

The following, information has been taken from this study (PNNL-22972), which is more fully discussed in both the Regulatory Impact Statement and the Rural Area Flexibility Analysis which are a part of the rulemaking documents. The Rural Area Flexibility Analysis, Table 5⁴ indicates that using the weighted average construction volume for the six building prototypes covered by the PNNL Cost Effectiveness Study, the present value of the energy savings that can be expected over the first 10 years is, on average, $184,582 greater than the “first costs” (the increase in initial construction costs) in Climate Zone 4A, $112,668 greater than the “first costs” ( the increase in initial construction costs) in Climate Zone 5A, and $149,384 greater than the “first costs” (the increase in initial construction costs) of the average of costs arising from a combination of Climate Zones 4A and 5A. Based on the foregoing, the Department of State concludes that on average, the cost of the materials required complying with this rule and the cost of installing those materials will be paid back through savings in energy costs in less than ten years.

Users of the code will need to obtain the 2012 IECC which can be purchased from the publisher at a cost of $40 per copy. ASHRAE 90.1-2010 can be purchased from the publisher at a cost of $125 per copy. The Department of State (“DOS”) will make the 2014 Supplement available by download from the DOS website at no cost.

The cost of obtaining the New Code Books will vary based on the number of copies of each publication a local government or design professional firm will choose to obtain. A local government that employs more than one code enforcement official, and a design professional firm that employs more than one design professional, may find it convenient to obtain more than one copy of the New Code Books.

Local governments (including local governments in rural areas) that enforce the Energy Code will be required to provide that their code enforcement personnel receive training on the requirements of the amended Energy Code. DOS will offer training courses to code enforcement officials at no cost to the officials or to the local governments that employ them.

Indirectly impacted parties, such as design professionals who provide services to owners of commercial buildings, may also be required to obtain such training. DOS anticipates training costs for design professionals will be approximately $150 to $200 per person, based upon a class size of 20 to 25 persons.

Code enforcement officials are required by existing law to receive at least 24 hours of in-service training each year. Design professionals are required by existing law to receive 36 hours of continuing professional training every 3 years. DOS anticipates that code enforcement officials and design professionals (including code enforcement officials and design professionals in rural areas) will be able to receive training on the amended Energy Code within their already required training programs, at little or no cost to the local government or design professional over the costs they are already required by existing law to incur.

5. MINIMIZING ADVERSE IMPACT.

DOS believes that this rule will have a positive economic impact.

The analysis described above in Part 4 (Costs) of this Rural Area Flexibility Analysis indicates that in the case of each building type in climate design zones 4A and 5A, the increase (if any) in construction costs will be recovered through savings in energy costs. The following, information has been taken from PNNL-22972, which is more fully discussed in both the Regulatory Impact Statement and The Rural Area Flexibility Analysis. Table 5⁵ of this study indicates that using the weighted average construction volume for the six building prototypes covered by the PNNL Cost Effectiveness Study, the present value of the energy savings that can be expected over the first 10 years is, on average, $184,582 greater than the “first costs” (the increase in initial construction costs) in Climate Zone 4A, $112,668 greater than the “first costs” (the increase in initial construction costs) in Climate Zone 5A, and $149,384 greater than the “first costs” (the increase in initial construction costs) of the average of costs arising from a combination of Climate Zones 4A and 5A. Based on the foregoing, the Department of State concludes that on average, the cost of the materials required complying with this rule and the cost of installing those materials will be paid back through savings in energy costs in less than ten years.

The analysis also indicates that the increase (if any) in construction costs is less than the present value of the savings in energy costs that can be expected over a 10 year period, rendering this rule “cost effective” within the meaning of Energy Law section 11-103(2).⁶ The analysis also indicates that for all building types and all climate zones reviewed, this rule will result in a positive net present value.

The amended Energy Code will provide several compliance options, including a performance-based option. This will allow regulated parties (including regulated parties in rural areas) to select the most cost-effective alternative.

Energy Law section 11-101 provides that the Energy Code shall “mandate that economically reasonable energy conservation techniques be used in the design and construction of all new public and private buildings in New York” (emphasis added). Federal law requires states that participate in federal energy funding to adopt a building energy code for commercial buildings that meets or exceeds ASHRAE 90.1-2010. The American Recovery and Reinvestment Act of 2009 (Pub.L. 111-5, Feb. 17, 2009, 123 Stat. 115) requires participating states to develop a plan for achieving at least a 90% rate of compliance with energy codes. Therefore, the Code Council and DOS did not consider establishing differing compliance or reporting requirements or timetables that take into account the resources available to rural areas or providing an exemption from coverage by the rule, or by any part thereof, for public or private entities in rural areas.

6. RURAL AREA PARTICIPATION.

DOS attempted to assure that public and private interests in rural areas were given an opportunity to participate in the rule making through activities including the following:

DOS established a technical subcommittee to review the “commercial provisions” of the 2012 IECC and ASHRAE 90.1-2010 and to recommend New York State-specific modifications of those documents. Meetings of the technical subcommittee were open to the public and public participation was encouraged. Meeting agendas were posted on the DOS website. Meeting minutes were posted on the DOS website.

DOS notified interested parties throughout the State, including interested parties in rural areas, of the proposed rule by publishing an explanation of the proposal in Building New York, an electronic news bulletin covering topics related to the Uniform Code and the construction industry which is prepared by DOS and which is currently distributed to approximately 10,000 subscribers, including local governments, design professionals, and others involved in all aspects of the construction industry. DOS also posted a draft of the proposed rule and a draft of the 2014 Supplement on the DOS website. The explanation published in the Building New York news bulletin and the posting on the DOS website included an invitation to all interested parties, including all interested parties, including those representing public or private interests in rural areas, to comment on the proposal and otherwise to participate in the development of the rule.

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¹ The term “residential building” includes detached one-family dwellings having not more than three stories above grade plane; detached two-family dwellings having not more than three stories above grade plane; buildings that consist of three or more attached townhouse units and have not more than three stories above grade plane; buildings that are classified in accordance with Chapter 3 of the 2010 edition of the Building Code of New York State in Group R-2, R-3 or R-4 and have not more than three stories above grade plane; factory manufactured homes as defined in section 372(8) of the Executive Law; and mobile homes as defined in section 372(13) of the Executive Law.

² The term “commercial building” includes all buildings that are not residential buildings.

³ The United States Department of Energy and Pacific Northwest National Laboratories (PNNL) have provided a report entitled “Cost-Effectiveness of ASHRAE Standard 90.1-2010 Compared to ASHRAE Standard 90.1-2007”, (PNNL 22043) dated May 2013, with subsequent updated report published, November 2013, PNNL-22972), published by PNNL, Richland, WA (the “PNNL Cost-Effectiveness Study”). The PNNL Cost-Effectiveness Study builds on an earlier technical report issued by PNNL, entitled Achieving the 30% Goal: Energy and Cost Savings Analysis of ASHRAE Standard 90.1-2010 (Thornton et al. 2011), which analyzed sixteen building prototypes in 17 climate locations representing all eight U.S. climate zones.

⁴ Please refer to the Rural Flexibility Analysis for the full content of Table 5.

⁵ Please refer to the Rural Flexibility Analysis for the full content of Table 5.

⁶ Energy Law section 11-103(2) provides, in pertinent part, that “(i)n determining whether the [Energy Code] remains cost effective, the code council shall consider whether the cost of materials and their installation to meet its standards would be equal to or less than the present value of energy savings that could be expected over a ten year period in the building in which such materials are installed.”

Job Impact Statement

The Department of State has determined that it is apparent from the nature and purpose of the proposed rule making that it will not have a substantial adverse impact on jobs and employment opportunities. The rule making will amend the State Energy Conservation Construction Code (the “State Energy Code”) by adopting a building energy code for commercial buildings which is based largely on (1) the 2012 edition of the International Energy Conservation Code (the “2012 IECC”), a model code developed and published by the International Code Council (“ICC”), and (2) the 2010 edition of ASHRAE-90.1 (the “2010 ASHRAE 90.1 Energy Standard for Buildings Except Low Rise Residential Buildings” ), a standard published by the American Society Of Heating and Refrigeration and Air Conditioning Engineers.

Both the 2012 IECC and the 2010 ASHRAE 90.1 incorporate more current technology in the area of energy conservation. By implementing new technology in all areas of building construction, the overall effect is a potential for increased employment in the construction of a building. This is evidenced by increased initial costs in certain building types, as more fully described in the Regulatory Impact Statement. Increases in building construction costs include (but are not limited to);

1.) Lighting systems; the installation of advanced controls for lighting systems, both interior and exterior lighting.

2.) Day lighting controls; which monitor the available sunlight to provide alternate interior building lighting.

3.) Building ventilation controls; which monitor need for ventilation air.

4.) Building air barriers; more detailed requirements for the installation of positive building air barriers, which potentially increase employment in the installation of a more positive air barrier, as well as the inspection of the same.

5.) Building mechanical systems commissioning and completion requirements; New code requirements for building mechanical systems commissioning, which requires the involvement of a registered design professional, or an approved agency, for the purpose of verifying and documenting the HVAC systems have been designed, installed and functioning according to project requirements, and minimum code requirements.

In addition, as a performance-based, rather than a prescriptive, code, the 2012 IECC provides for alternative methods of achieving code compliance, thereby allowing regulated parties to choose the most cost effective method. By using performance-based design, customized goals that may not have been anticipated by the building code, can be achieved while maintaining or exceeding the facility’s required level of energy efficiency. This software approach is sometimes referred to as a “trade off approach” as it allows, for example, less insulation in one area when made up in another.

As a consequence, the Department of State and the State Fire Prevention and Building Code Council conclude that regulations based upon the 2012 IECC and the 2010 ASHRAE 90.1 will provide a greater efficiency incentive for the construction of new buildings and the rehabilitation of existing buildings than exists with the current State Energy Code. Therefore, this amendment will not have a substantial adverse impact on jobs and employment opportunities within New York. In fact, the contrary may be true, in that the proposed amended State Energy Code may result in an increase in employment opportunities for those involved in the field of building technology. Each of the updated requirements for the incorporation of newer building technology have the potential to result in a need for increased engineering and inspection infrastructure which appear to positively impact New York State’s job markets.