A recent survey by the National Association of Realtors found that in the Rocky Mountain states, “rising electrical, fuel and other energy costs” was the No. 1 factor homeowners identified that would force them to sell their home. Clearly, it’s crucial that we invest in measures that cut this burden.
Unfortunately, there’s a trio of bills moving through the Montana Legislature that will leave us with a whole new generation of inefficient homes and high utility bills, do away with a proven market tool that drives energy savings, and remove popular tax credits for energy conservation.
Senate Bill 159, sponsored by Sen. Jason Priest, R-Red Lodge, eliminates significant future energy savings by setting an arbitrary five-year payback requirement for improvements to Montana’s energy efficiency standards. Energy codes play a crucial role in helping to ensure that homebuyers don’t get stuck paying exorbitant energy bills, and they lower energy costs for the business community, making Montana more economically competitive. This bill erodes the consumer protections provided by our energy codes.
As a practical matter, almost all of the substantial efficiency improvements on the horizon will pay for themselves in five to 20 years and would not meet the proposed limit. For example, significant changes to insulation levels would be stifled. By mandating a five-year payback on efficiency measures in buildings that last more than 75 years, this bill will slow the industry-wide adoption of energy saving materials and building practices, putting Montana’s building industry behind the rest of the country.
Ultimately, it’s cheaper to build a home right the first time than to go back and fix it later, but with this legislation we’re setting homeowners up for a lot of expensive work down the road.
Another bill by Priest, SB104, would make it impossible for the Montana Public Service Commission to establish effective “inclining block rates”. This sort of rate design sets incrementally higher rates for bigger electricity and natural gas users.
An inclining block rate structure is a way of giving customers who use less energy a break on their bill. It makes sense for utility customers because it’s cheaper for our utilities to encourage conservation than to build expensive new power plants. It makes sense for low-income families because a large majority would be paying the lower rate. It’s good for the construction industry too: With inverted block rates, more people will invest in retrofit and insulation services and in turn will walk away with lower power bills. SB104 tosses a very useful tool out the window.
Finally, Senate Bill 253 sponsored by Sen. Bob Lake, R-Hamilton, eliminates Montana’s popular conservation tax credit. In the last tax year, more than $8.4 million was claimed in income tax credits for things like insulation, new windows, and more efficient heating systems. An individual can claim up to $500 each year. It is clear that these tax credits are working to incentivize investments that will pay dividends for years to come in the form of energy savings, increased property value, and Montana jobs.
As businesses in Montana’s construction and real estate industry, we hope the Legislature and the governor can see the wisdom in supporting a vibrant and innovative building industry that provides good-paying jobs, makes housing affordable, and helps to build our energy independence.