Press

Energy proposition hot election issue Plan would reduce consumption in city by 30 percent in five years

K. Kaufmann
The Desert Sun
November 1, 2006

A new law aimed at promoting energy-efficient construction could send housing prices up and energy bills down in Palm Desert.

The proposed law is part of the city's plan to reduce energy use by 30 percent in five years. And it's the first in California to factor in solar energy as part of a conservation plan.

And the California Energy Commission, which sets energy efficiency standards for the state, gave its approval Monday with a unanimous vote allowing the city to enact the new law.

"It's a huge victory for the city. All those 6,000 units going up in the northern sphere will be energy efficient," said Mayor Jim Ferguson, referring to the city's residential building boom in the area north of Frank Sinatra Drive.

"(It will) help us take a huge chunk out of that 30 percent and benefit homeowners who will pay less in utility bills as a result," Ferguson said in a phone interview Tuesday.

In a nutshell, the new law would require any new buildings in Palm Desert to be between 5 percent to 15 percent more efficient than state standards, already considered the most stringent in the United States.

And it would actively promote solar energy by allowing builders to use solar as one way to exceed the state standards.

Other towns in California - Santa Monica and Mill Valley - have passed similar laws, but Palm Desert is the first to factor in solar, said Patrick Conlon, the city's director of energy management.

"This could open up a whole new door of energy (efficiency) by using photovoltaic power as a credit for energy conservation," Conlon said.

State officials have historically categorized solar power as energy generation, rather than conservation and not allowed it to be used for meeting state standards.

Impact tough to tell

The ordinance's impact on housing prices and return on investment are harder to gauge, depending on whose figures you use.

The city's research backing up its presentation to the Energy Commission show that for an average-sized new home, around 2,300 square feet, additional costs for energy efficiency would be about $1,700. The cost savings on energy would be $171 a year, giving home owners payback for their investment in about 10 years.

The average size for American homes in 2005 was 2,414 square feet, according to the National Association of Home Builders.

The city has been testing its program by encouraging developers like Taylor Woodrow Homes to adopt some of the stricter standards, even before the law is adopted.

The company is building Spanish Walk, a 604-unit project at 75-600 Gerald Ford Drive. Eveline Miller, the company's purchasing agent, said including the extras, like more energy-efficient air conditioning and lighting systems, does cost more.

"We are spending a little bit more than we should because we are having to meet (the city's) requirements," Miller said.

Miller did not comment on how the added construction spending might affect the cost of the units, which are being listed in the low $400,000s.

The ordinance has a few more hurdles to overcome, including hearings before the City Council in December, when a newly elected member - either Cindy Finerty or Sabby Jonathan - will be voting on the law.

And the Desert Chapter of the Building Industry Association is contesting the city's figures on investment and payback periods.

"It would cost for a median home $4,000 more for a yield of $160 a year in energy cost savings," said Fred Bell, executive director of the chapter. "We're looking at a median home average payback period of 30.7 years."

Bell stressed the association supports energy-efficient construction, but he said, "There are things about this process that are just broken."

Conlon defended the city's figures.

"Our exercise is to show that a builder making wise design choices can make this ordinance cost effective," he said.

Beyond the figures, the other big question is whether energy-efficient housing will sell in the Coachella Valley's current sluggish real estate market.

In the short term, "it's never good to raise the price of housing," said Greg Berkemer, executive director of the California Desert Association of Realtors.