Working Together, Advancing Efficiency

Federal Tax Benefits for Energy Efficient Construction and Renovation

BOMA BoiseApril 20, 2006

Ed WisniewskiDeputy Director

CEE

Working Together, Advancing Efficiency

About CEE

• 501c(3) nonprofit organization• Funded by 79 members in 28 states and 2

provinces as well as government grants• Members direct more than $2 billion in efficiency program

resource procurement -- over 90% of US ratepayer efficiency funding

• Provides a forum for working together as a virtual industry (and with ENERGY STAR, other industries)

Disclaimer: Presentation is for general information purposes. Consult with a professional tax advisor.

Working Together, Advancing Efficiency

Acknowledgements

David GoldsteinEnergy Program Director

Natural Resources Defense Council

Joseph MikrutPartner

Capitol Tax Partners, LLC

Kyle PitsorVice President, Government Relations

National Electrical Manufacturers Association

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What’s EPACT and What’s In It For Me?

• SECTION 1331 OF H.R. 6, (PUBLIC LAW 109-58)

• Tax Deduction Provision for Energy- Efficient Commercial Building Property

• Extra Financial Assistance

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Building and Expenditure Type

• Tax Deduction for Measures to Achieve 50% Savings Compared to ASHRAE 90.1-2001 Baseline.

– Interior Lighting– Heating, Cooling, Ventilation,

Hot Water Systems– Building Envelope

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Deduction Available

• Equal to the Cost of the EE Measure • Subject to a Cap of $1.80 per sq/ ft.• Allowed During the Year Property is Placed in

Service • Current Law – 2006 and 2007• Bill to Extend Additional 5 Years

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Partial Deductions For Sub Systems

• Up to $.60 per sq. ft. for Each of Three Subsystems

– Interior Lighting (Interim Rules in Place)

– Heating, cooling, ventilation, and hot water systems

– Building Envelope

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Lighting Partial Deduction

• Sliding Scale Based Upon Lighting Power Density Reductions

• Table 9.3.1.1 or 9.3.1.2 of ASHRAE/IESNA Standard 90.1 - 2001

• $.30 for 25 Percent Reduction

• $.60 for 40 Percent Reduction

• Control Requirements Must Be Met

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Sample Measures

• Compliance is similar to energy codes such as the IECC or ASHRAE 90.1.

• Technologies that are credited include:

– More efficient cooling and water heating equipment

– Better controls than required by code– Reductions in losses from ducts and

fans– Better insulation and windows– Reducing or eliminating simultaneous

heating and cooling– More efficient luminaires, ballasts, and

lamps, and selection of more efficient light sources

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Additional Examples

– Daylighting– Commissioning– CHP– Semi-Conditioned

Spaces– Low-Pressure Duct

Systems

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Certification Requirements

• Secretary of Treasury to Promulgate Regulations

– Describe Methods to Calculate Energy and Power Costs

– “Qualify” Software– Establish Requirements

for “Certifiers”– Identify Verification

Requirements

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Beneficiary

• Deduction for the Company that Owns the Property

• For Public Buildings -- Provision to Allocate Deduction to Primary Designer of the Property

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Resources for Potential Support

• Idaho Power www.Idahopower.com• Northwest Energy Efficiency Alliance

www.nwalliance.org• Commercial Building Tax Coalition

www.efficientbuildings.org• American Society of Heating, Refrigerating and Air-Conditioning

Engineers www.ashrae.org • New Buildings Institute www.newbuildings.org• US Department of Energy www.doe.gov• US Environmental Protection Agency www.epa.gov• BOMA Energy Efficiency Program

www.boma.org/aboutboma/beep• Consortium for Energy Efficiency www.cee1.org

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www.Idahopower.com

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Potential Utility Incentives

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BOMA Training

– BOMA Energy Efficiency Program (BEEP). BEEP is an operational excellence program designed to educate owners and managers about the financial and environmental benefits of improving energy efficiency. www.boma.org/aboutboma/beep

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NW Alliance – Better Bricks

• Resource for information and services to help architects, developers, builders and facilities managers incorporate energy efficiency into their building designs, construction plans and day-to-day maintenance operations. www.betterbricks.com

                                

 

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US EPA ENERGY STAR®

• ENERGY STAR offers guidelines for energy management and improving energy efficiency

• Includes online national energy performance rating system to benchmark energy performance

• Provides no-cost training programs geared toward commercial real estate professions

• Also includes an online directory of product and service providers

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Possible Guidance on Meeting Advanced Energy Targets

• New Buildings Institute (NBI)– Advanced Buildings™ Suite:

• Benchmark™ • Benefits Guide• Reference Guide

– Advanced Lighting Guidelines

• These documents describe processes for designing with energy efficiency as well as architectural and engineering choices

• Case Studies Available at:www.advancedbuildings.net

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CBTD Coalition

• Implementation requires promptly getting the regulatory rules right and to vigorously promote the provision.

• NEMA has brought together a broad stakeholder coalition representing building owners, designers, manufacturers, distributors, installation contractors, efficiency advocates, and government to work together to ensure success.

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CBTD Progress to Date

• Routine Coalition meetings held with stakeholder associations• 40 organizations represented• Website devoted to the CBTD was launched in December 05

www.efficientbuildings.org• Communications plan developed -- CBTD clearinghouse• NEMA has prepared a tri-fold pocket guide to the deduction, which

is on the NEMA website, www.nema.org

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Working Together

• Consortium for Energy Efficiency (www.cee1.org) members are working with private sector companies and trade associations to provide support to comply.

Working Together, Advancing Efficiency

Contact information:

• David B. Goldstein, Ph.D.Natural Resources Defense Council dgoldstein@nrdc.org

• Joseph MikrutCapitol Tax Partnersmikrut@capitoltax.com

Kyle PitsorNational Electrical Manufacturers Association kyl_pitsor@nema.org

Ed WisniewskiCEEewisniewski@cee1.org

Working Together, Advancing Efficiency

MARK YOUR CALENDARS!

Want more information on this topic? Plan to attend BOMA International’s North American Commercial Real Estate Congress and The Office Building Show where updates and additional education on the Energy Bill are planned!

When: June 24-27Where: Dallas, TX

For more information visit: www.bomaconvention.org or call

202-326-6341.