Mayor Bowser's Budget Proposal Would Saddle DC with Dirty Fuels and Excessive Waste

Testimony of Lara Levison
Sierra Club District of Columbia Chapter
Budget Hearing on the Department of General Services
Committee on Facilities and Family Services
April 5, 2024

Councilmember Lewis George, thank you for the opportunity to testify at this hearing on the proposed budget for the Department of General Services (DGS), and thank you for your leadership. My name is Lara Levison, and I’m the Energy Committee Chair for the Sierra Club District of Columbia Chapter. The Sierra Club is America’s largest and most influential grassroots environmental organization. The DC Chapter has about 3,000 dues-paying members and thousands more supporters in DC.

Our testimony focuses on DGS’s role in transitioning DC government buildings away from burning fossil fuels to highly efficient “net zero” facilities as required by the Greener Government Buildings Act, on energy efficiency improvements required by the Building Energy Performance Standards, on a problematic budget gimmick, and on DGS’s progress toward zero waste. In all these areas, we are very concerned by the proposals in Mayor Bowser’s budget.

As we were writing this testimony, the text of the budget legislation was not yet available, and we could not fully analyze the mayor’s proposals. We may submit an updated version of this testimony when we have had the opportunity to analyze the proposals in detail.

Greener Government Buildings Act

As you know, as of October 2023, the Greener Government Buildings Act requires that all new DC government buildings be built to a net zero standard, meaning that they are highly energy efficient, produce all or most needed energy onsite, and do not combust fossil fuels on-site. The law covers buildings that receive a significant amount of financial support from the DC government, as well as buildings owned by the DC government.

Net zero energy buildings have many benefits. Since they are highly energy efficient, they reduce energy costs and climate pollution. Since they include no fossil fuel combustion, air quality is better both inside and outside the building. Since they operate using renewable energy resources like solar and ground-source geothermal, they reduce greenhouse gas emissions and create jobs in the clean energy economy.

The Sierra Club strongly opposes the “Greener Government Buildings Amendment Act of 2024” that is included in the mayor’s FY25 budget. It would largely eviscerate the law.. We urge the committee to strike the entire section from the Budget Support Act, which can be easily done since it has no fiscal impact on the budget. If there is a need for adjustments to the law, they should not be shoved into the budget bill. Changes should be considered through regular order.

The mayor is proposing several changes that we oppose based on the summary of the bill in the Fiscal Impact Statement (p. 34-35). First, we oppose the proposal to weaken and delay compliance for several years for nonresidential and mixed-use projects. These long delays would likely result in the installation of gas boilers and other fossil fuel infrastructure that would remain in use for many years in commercial buildings.

Second, we oppose the blanket exemption from the net zero requirements for all residential buildings over 10,000 square feet. The Sierra Club recognizes the urgent need for more affordable housing in the District, and we recognize that net zero standards may be harder to achieve in renovation projects. However, we strongly believe that residents in affordable buildings deserve healthy buildings with clean indoor air and lower energy costs. If exemptions are needed to ensure that affordable housing projects move forward, the exemptions should be as narrow and specific as possible, and they should be thoroughly discussed in a legislative hearing. In fact, the mayor already proposed such a bill, in February.^[1]

Next, we oppose the proposal to greatly expand the list of exemptions that could be applied to individual projects by the Green Building Advisory Council and DOEE. Based on the short description in the Fiscal Impact Statement, these exemptions would create a Swiss cheese of holes in the Greener Government Buildings Act. Finally, we are deeply concerned by a proposal that could perpetuate the use of fossil fuel appliances in District buildings.

Going forward, net zero construction should be the norm for DC government buildings to reduce energy costs, improve indoor and outdoor air quality, and combat the climate crisis.

Building Energy Performance Standards

The Sierra Club strongly opposes the mayor’s plan to significantly delay and weaken the Building Energy Performance Standards (BEPS). In fact, some legislative proposals on amending BEPS have already been drafted, based on thoughtful discussions in the BEPS Task Force, and they should be considered through regular council hearings and markups. We urge the DC Council to drop this section from the Budget Support Act. The Fiscal Impact Statement indicates that the BEPS proposals have no fiscal impact in this budget.

The Building Energy Performance Standards, enacted by the DC Council in 2018, form an essential cornerstone of DC’s climate and clean energy policies. BEPS will increase energy efficiency and reduce greenhouse gas emissions from large buildings in the District. Sierra Club continues to be deeply concerned that DGS and the mayor are not committed to the required retrofits to DGS buildings to comply with BEPS. As the old saying goes, this approach is “penny-wise and pound foolish.” Over time, improving energy efficiency reduces DGS’s operating budget and saves money for DC taxpayers.

Recognizing the difficulty of funding improvements to building energy efficiency in a time of tight budgets, we again put forward a cost-effective solution: Energy Savings Performance Contracts (ESPCs). These contracts are a mechanism used to pay for today’s facility upgrades with tomorrow's energy savings – without tapping the DGS capital budget. An ESPC is a partnership between an energy service company (ESCO) and a facility owner such as DGS. The ESCO designs and installs energy savings measures. Savings are monitored and verified, and the facility owner reimburses the ESCO over a certain number of years out of operating budgets.^[2]

We have heard a concern that the District’s Anti-Deficiency Act could stand in the way of DGS entering into energy savings performance contracts. This law prevents the District government from entering into a contract for the payment of money before an appropriation is made, unless authorized by law. The federal Anti-Deficiency Act includes an exemption so that the federal government can enter into energy savings performance contracts. If an exemption is needed, the DC Council could enact a similar exemption. We ask the committee to consider adding such an exemption to this year’s budget legislation.^[3]

Budget Gimmick using RPS/REDF

There’s an odd and very concerning maneuver described on p. 32-33 of the Fiscal Impact Statement. It would require several actions which could result in reduced resources in the Renewable Energy Development Fund (REDF), undercutting the Solar for All program. It could also place downward pressure on the value of Solar Renewable Energy Credits in the District.

As we understand it, companies supplying electricity to the DC government could comply with the District’s renewable energy requirements (Renewable Portfolio Standard) by paying alternative compliance payments rather than purchasing renewable energy credits. The RPS law directs alternative compliance payments into the Renewable Energy Development Fund, which is managed by the Department of Energy and the Environment and used to support the Solar for All program among other activities. An amount of funding equivalent to the alternative compliance payments from these energy suppliers would then be transferred to the general fund. It appears to be a budget gimmick designed to siphon money from the REDF to the general fund for years to come.

DC Archives Building

As we have stated on multiple occasions, the new DC Archives building should comply with the Greener Government Buildings Act. The building should be constructed to net zero energy standards, include no fossil fuel combustion, and obtain electricity from on-site renewable energy sources and off-site renewable energy power purchase agreements. We have heard that DGS is now proposing to use electric resistance heating rather than gas boilers. This is a bad and costly idea because electric heat pumps are much more efficient.

Zero Waste

The mayor’s transmittal letter of the Fiscal Year 2025 (FY2025) Proposed Budget and Financial Plan said she was building a budget on three pillars: public schools (emphasis added), public safety, and Downtown. As we testified in the February Performance Oversight Hearing, DGS, as the agency responsible for managing waste in both DC Public Schools buildings and District government managed and occupied buildings, needs to step up to contribute to DC’s Zero Waste goals.

Action 37 of the Zero Waste DC Plan, released by the mayor on February 8, establishes “Zero Waste Schools” to be accomplished between 2023 and 2028. Action 37 calls for hands-on learning about zero waste practices and ensuring that school cafeterias instill best practices on food waste reduction, donation, and composting. Hands-on learning and best practices can only be taught if composting services are provided to public schools. How much has DGS allocated in the FY25 budget to implement Action 37 of the Zero Waste DC Plan? The Fiscal Year 2025 Budget should include funding for composting services in public schools.

Action 14 of the Zero Waste DC Plan further calls for adoption of an ordinance to make recycling and composting available city-wide by 2025, including in all institutional and governmental buildings.^[4] DGS is identified as a partner agency in the implementation of this action. What steps is DGS taking to develop this ordinance? 

We are concerned that DGS may be facing a $3M decrease in funds available for waste diversion from landfills and incinerators and other services. We note the significant $3.8 million reduction in the “Sustainable DC'' budget line item (from $5.6 to $1.8 million), allocated for programs and services that reduce demand on resources, including, but not limited to waste diversion, offset by the $0.8 million increase in the DGS “waste management” budget line (from $2.7 to $3.5 million). This marks a net $3 million decrease for DGS.  

We understand that the public housing trash collection contract is up for renewal. The last Request for Proposal for a five-year contract was issued in April 2019 by the DC Housing Authority (DCHA). Prior trash hauling contracts were issued by DGS. We also understand that the Department of Public Works Office of Waste Diversion has suggested the new RFP be issued for both trash and recycling collection and hauling. Whether the contract is issued by DGS or DCHA, we support ensuring that residents of public housing benefit from recycling services. This is a matter of equity. As now enshrined in Action 14 of the Zero Waste DC Plan, all District residents should have access to recycling collection.

In addition, we request to identify the budget allocations for DGS to comply with existing building material reuse and recycling requirements for renovation or demolition projects of DGS-controlled buildings. What costs does DGS forecast will be spent to comply with Section 503 of the DC Green Construction Code which requires projects to salvage at least 50 percent of construction materials? We urge DGS to prepare a list of buildings slated for renovation or demolition in FY25, and to indicate which projects will recycle or reuse 50 percent of construction materials. Action 5 of the Zero Waste DC Plan requires all new construction, demolition, and building retrofit projects to submit a Deconstruction Plan that achieves a waste diversion rate of 80% of recoverable materials. We urge DGS to report annually on its implementation of these building material reuse, recycling, and deconstruction requirements in the buildings it controls.

Thank you for the opportunity to testify at this DGS budget hearing. Please let us know if you have any questions.