Monday, March 26, 2012

Green Effort Failures Cost Taxpayers Millions

State Audit Shows Most "Green" Schools Cost More and Are Less Efficient Than Average School

Recently the Joint Legislative Audit & Review Committee (JLARC) released its report on the state's green buildings requirements. The title of the report indicates that the "Impact on Energy Use is Mixed." A casual look at the report shows that the word "mixed" is a generous assessment.

The evidence in the report shows the buildings add millions in costs but deliver little in the way of energy savings or environmental improvement. Here are a few of the conclusions.

•For 14 schools studied in the report, the state and districts paid an additional $10 million to comply with the rules, an average of 2.6 percent more than buildings built before the regulations were imposed.

•Energy savings projections for the buildings are wildly inaccurate. Green building advocates often point to projected energy use to argue the buildings will be more efficient. JLARC found that energy projections for the nine buildings it examined were 52 percent lower than the actual use once buildings opened.

•Of nine "green" schools examined, only one was the most efficient in its school district. Five of the nine schools were actually less efficient than the average school of any age in the district. Most of the new "green" schools are less efficient than buildings that are decades old.

•Most "green" schools improved their energy efficiency over time. The data demonstrate, however, this is primarily because the schools were so inefficient in their first year. For example, Grove Elementary in Marysville ranked in the 26th percentile in energy efficiency of all similar buildings according to the Energy Star rating. The subsequent 19 percent improvement in efficiency was primarily a result of it starting out from such a low point.

•Most "green" schools do not meet Energy Star standards. Eight of 13 "green" schools would not achieve Energy Star rating, awarded to those buildings in the top 25 percent of "similar buildings." This is especially noteworthy because many "similar buildings" are much older. Even those that do meet the standards are still poor when compared to other local schools. Sherwood Forest Elementary school in Bellevue is the 12th most efficient of 16 elementary schools in Bellevue. Rachel Carson Elementary in the Lake Washington School District is 8th of 27. This indicates both that the Energy Star rating is a questionable measure of performance for these buildings and that district officials were building efficient buildings long before the new regulations took effect.

•JLARC's study notes that of $455,826 spent by the Spokane School District to bring Lincoln Heights Elementary up to the "green" requirements, only $81,000, about 18%, was spent on the energy efficiency elements. The other 82 percent was spent to meet other elements of the standard that did not yield savings. Put simply, the mandates required the district to waste hundreds of thousands of dollars simply to meet the law's guidelines.

Most importantly, the report shows the "green" building standards do not pay for themselves in any reasonable time frame. Examining two "green" schools, JLARC notes the payback time ranged from 27 to 30 years. Even this is generous for two reasons.

First, these don't include a discount rate. They assume that paying a dollar today to save a dollar in thirty years makes sense, when clearly it does not. When adjusting for rising energy costs (which makes the payback time shorter) and the discounted value of money (which increases payback time), the time to recover the costs increases to 43 years. Since no school building goes 43 years without changes and improvements, the "green" requirements will never pay for themselves.

Second, the study looks at only two schools. One of them, Lincoln Heights elementary in Spokane, is the best performing "green" school in that district. If the study had examined Lidgerwood or Ridgeview, two "green" schools which perform worse than Lincoln Heights, the payback time might have been even longer. It is unclear, however, because the JLARC study does not report the additional construction costs for those schools.

When the green schools legislation was passed in 2005, the Washington Conservation Voters and other advocates promised the schools would cut energy use by about 30 percent and the buildings would quickly pay for themselves. JLARC has now confirmed that this is false, backing up the analysis we have been providing for the past six years.

Given this failure, what will the legislature do? If the goal is to improve energy efficiency and put funding where it will make the best impact on the environment, the legislature will remove these failed regulations. If, however, adopting "green" building legislation is primarily about cultivating a "green" political image, little will be done because changing the rules will risk the political benefits candidates received by supporting the legislation. Time will tell which is more important to legislators.

By Todd Myers
Director, Center for the Environment

Read More at Washington Policy Center

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