NC bill delays energy upgrades to building code. Will it affect homeowners’ costs?

A bill that would stymie a years-long effort to make new North Carolina homes more energy efficient is on its way to Gov. Roy Cooper’s desk.

House Bill 488 prevents the N.C. Building Code Council — whose members were all appointed by Cooper — from changing chapters of the state’s Residential Building Code that address energy, fuel gas or mechanical aspects of construction. A handful of Democrats in both the House and Senate joined Republicans in supporting the legislation.

The U.S. Department of Energy’s Pacific Northwest National Lab reviewed the proposed changes to North Carolina’s Energy Code and estimated they would increase construction costs on single-family homes between $4,700 and $6,500. But, the lab concluded, homebuyers would recoup those costs in two to four years.

“Adopting the 2024 NCECC in North Carolina is expected to result in homes that are energy efficient, more affordable to own and operate, and which are designed and constructed to modern standards for health, comfort, and resilience,” Rob Salcido, a senior research engineer at the lab, wrote in a June 16 memo to the Building Code Council.

The N.C. Home Builders Association produced its own estimate based on what eight builders statewide said it would take to comply with the proposed code. They estimated it would cost about $17,000 more for the builder to make the changes, with a consumer paying about $20,400 more for a home with the changes.

Steven Webb, a Home Builders’ lobbyist, said the group stands behind its estimate.

“We believe in our reports we’ve accounted for everything that would be required in the new energy code and that would include materials and labor,” Webb said.

The Clean Energy Plan released by Cooper’s office in 2019 called for more energy efficiency efforts in North Carolina buildings, as well as updated energy conservation codes.

During a Monday interview in Charlotte, Cooper said homeowners and renters would save money if energy conservation codes were updated.

“I hope that they don’t do this,” Cooper said of passing the bill. “I’ve told the members of the legislature that I have deep concerns about it. I mean, this is something the Building Code Council has worked on for a number of years and to just automatically delay something that they haven’t even adopted yet is frustrating.”

U.S. Department of Energy Secretary Jennifer Granholm, who was sitting beside Cooper, noted that the federal government is providing grants specifically to help with such upgrades. North Carolina will receive more than $195 million in Inflation Reduction Act funds to help add heat pumps, replace outdated appliances and upgrade insulation, among other projects.

“To the extent that they’re concerned about lower income folks, et cetera, which we all are, that’s exactly what these incentives are on the table to bring down the cost of,” Granholm said.

Asked if he planned to veto the legislation, Cooper said he had to see what was passed first but had concerns. The N.C. General Assembly completed overrides of five of Cooper’s vetoes on Tuesday.

“Most everything we are doing in that fight (against climate change) affects everyday people’s pocketbooks. It is a smart investment for people to make. It is creating great-paying jobs, and in this instance it saves people on their electricity bills,” Cooper said.

Impact on resilience funding?

A common critique of the legislation is that it would lock in what many already see as an outdated energy code. That code was first incorporated into the 2012 residential code and then renewed in 2018.

When the Federal Emergency Management Agency considers what projects to fund via its Building Resilient Infrastructure and Communities grant program, it includes a state’s building code in its score. The FEMA program has provided $22.5 million for the relocation of a flood-prone pump station in Salisbury, and $1 million for Hillsborough to add a pumping station allowing it to connect with the Orange County Water and Sewer Authority to protect against drought.

Kim Wooten, an energy and sustainability engineer and member of the Building Code Council, and others are worried that parts of North Carolina’s codes are so outdated that the state could soon miss out on millions of dollars of grants each year, particularly before a new Residential Code Council would make potential updates.

Asked about possible impacts to the FEMA funding, Webb noted that the General Assembly wouldn’t be preventing the current Building Code Council from passing a new residential code.

In fact, he said, the Home Builders Association and General Assembly worked to include a provision requiring the Building Code Council to pass a 2024 code, albeit one that doesn’t update the energy and two other sections.

“We carefully threaded the needle on that,” Webb said.

Wooten doesn’t think the needle was threaded at all, arguing that FEMA requires the entire international code to be adopted, not bits and pieces.

“You can’t have a 2021 residential code unless you adopt all of the residential code chapters including energy, including mechanical, including fuel gas,” Wooten said.

North Carolina’s energy efficiency code is an adopted version of the International Code Council’s 2015 code that is as effective as the 2009 code, according to the Department of Energy.

A FEMA guidance document said future versions of the resilience program will likely place more weight on building codes.

Building code council changes

Webb told The News & Observer that commercial and residential construction can be very different. Instead, Webb said, a council focusing solely on residential construction could better address those specific concerns.

“We feel like the current Building Code Council leans heavily to the commercial side,” Webb said, adding that businesses operating in commercial buildings are often more concerned about energy efficiency than people living in homes.

Rep. Mark Brody, a Monroe Republican and home builder who has championed the legislation, said the current Building Code Council features too many people who are focused on commercial buildings. Prior to the Cooper administration, the council prominently featured the Home Builders Association and its associates.

Brody pointed to differences between commercial and residential building processes, calling many of the processes used for commercial buildings “overkill” for residential buildings.

“Commercial buildings are built by design professionals, residential are built by craftspeople,” Brody said.

The proposed 13-person council would have seven appointees from the governor and six from the General Assembly. It would include several contractors, a plumber, an electrician, an engineer specializing in residential construction, a code enforcement official and a representative of the natural gas industry.

Part of House Bill 488 tasks the proposed Residential Building Code Council with considering amendments to North Carolina’s existing energy, fuel gas and mechanical codes as part of its first revisions. Any changes would need to be approved by 2026.

“I wouldn’t begin to guess as to where a residential code council would go in terms of any code, let alone the energy code. But I do think they’re better positioned to make that call for residential,” Webb said.

Wooten said the code should be updated now and argued that a new Residential Building Code Council wouldn’t be able to fundamentally write a new code in 2026, only alter the outdated one that is in place.

“What kind of energy code are you going to pass in 2026? Are they going to pass one that is less effective than the one that they have today? Are they going to pass one that is more effective than the one that they have today?” Wooten said.

This story was produced with financial support from 1Earth Fund, in partnership with Journalism Funding Partners, as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.