This New Biden Rule Will Save Americans $2 Billion On Utility Bills

The Biden administration has finalized from the start. But volunteers on the committee writing residential codes — including industry professionals — managed to negotiate a package of rules for the 2024 codebook. Advocates of stronger efficiency rules compromised on key components of the code, weakening the certain aspects in exchange for the industry supporting the inclusion of rules mandating the wiring for going electric.

While the 2024 code might have loosened some insulation standards from the 2021 rulebook, the new circuitry provisions promised to hasten the Biden administration’s lagging effort to promote a shift away from internal combustion engine vehicles and gas furnaces to electric cars and heat pumps. The rules seemed more ironclad this time.

When gas companies once again asked to scrap wiring rules at the end of the code-writing process last fall, the ICC’s appeals board this time sided against the fossil fuel industry, rejecting all the challenges. But last month the ICC’s board of directors defied its staff and 90% of the volunteers who helped write the code and granted the gas groups’ request.

Instead of including the circuitry provisions in the widely adopted base code, the ICC relegated the rules to a bonus-menu appendix for municipalities that wanted — and had the legal right under state law — to go further. Against the advice of ICC experts, the board of directors slapped a warning note on the appendix, suggesting that using the codes could lead to legal blowback.

Only a handful of states currently use codes that comply with the latest standards. President Joe Biden’s landmark Inflation Reduction Act included over $1 billion in aid to states to help energy regulators adopt newer codes. But the update to federal loan requirements marks the most forceful step yet the administration has taken to promote stricter codes.

Federal law from 2007 requires the U.S. government to consistently analyze and adopt the latest codes from the ICC within a year of the codebook’s latest update. But only one president so far has followed the statute — and only sort of.

In 2015, the Obama administration raised federal standards for loans to the ICC’s 2009 codes. For builders in states like Illinois, which updates its code within a year of the ICC’s release, the Biden administration’s latest move won’t do much. But meeting the 2021 codes may soon require builders in laggard states like Idaho who want buyers with access to federal loans to leapfrog more than a decade of codes.

Under that state federal statute, the Department of Energy will now be tasked with assessing whether the 2024 ICC codes improve efficiency enough to merit nationwide adoption via the criteria for U.S. housing loans. It’s unclear what outcome the process may bring.

But advocates of stricter codes want the federal government to start using the 2021 code as a benchmark for more housing loans.

Unlike mortgages backed by HUD or the Agriculture Department, loans issued under the Federal Housing Finance Agency do not set any specific criteria for energy codes. The same is true for mortgages the federally related Fannie Mae and Freddie Mac lenders purchase. In November, campaigners began pushing for those agencies to adopt similar standards to those HUD uses. The administration signaled in December it would consider the move.

Doing so would “decrease burdensome energy costs for future homeowners and renters, which in turn may help lower default risks and loan delinquency rates, and set forth a path to stabilize our shaky housing financial system,” said Jessica Garcia, senior policy analyst for climate finance at Americans for Financial Reform Education Fund.

“Implementing up-to-date energy codes will help ease the financial strain on homeowners and renters across the country as they fight to remain housed,” Garcia said. “We are encouraged by HUD’s decision, and urge the Federal Housing Finance Agency to follow suit and swiftly adopt the latest energy efficiency codes.”