United States Government Accountability Office

GAO Report to Congressional Addressees

ENERGY 

EFFICIENCY 

Important Challenges 

Must Be Overcome to 

Realize Significant 

Opportunities for 

Energy Efficiency 

Improvements in Gulf 

Coast Reconstruction 

June 2007 

 

GAO-07-654 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

June 2007

ENERGY EFFICIENCY

Important Challenges Must Be Overcome 

to Realize Significant Opportunities for 

Energy Efficiency Improvements in Gulf 

Coast Reconstruction 

Highlights of GAO-07-654, a report to 

congressional addressees

Following several hurricanes in 

2005, the need to rebuild and repair 

destroyed and damaged homes and 

buildings in the Gulf Coast region

may create opportunities for 

making energy efficiency

improvements and realizing energy

cost savings. While numerous

federal agencies are involved in the 

recovery process, the Department

of Housing and Urban 

Development (HUD) and the 

Department of Energy (DOE) 

interact with the states on a regular

basis regarding matters of energy

efficiency. This report, initiated 

under the authority of the 

Comptroller General of the United

States, examines (1) the extent of

opportunities for incorporating 

energy efficiency improvements in

the Gulf Coast reconstruction, (2)

potential challenges to realizing the 

energy cost savings during the 

reconstruction, and (3) the role of

HUD and DOE in promoting energy

efficiency in the rebuilding of the 

Gulf Coast. 

GAO limited the scope of its work 

to Louisiana and Mississippi since 

these states experienced the 

majority of the hurricane damage. 

GAO assessed opportunities for 

incorporating energy efficiency

measures by conducting site visits

and interviewing federal, state

government officials; home

builders; and energy efficiency

experts. GAO also worked with a 

DOE national laboratory to develop 

energy cost savings estimates. GAO 

is making no recommendations. 

Reconstruction in the Gulf Coast creates a significant opportunity for 

incorporating energy efficiency improvements that could produce long-term 

energy costs savings in residential and commercial buildings. The sheer

magnitude of the reconstruction effort and Louisiana’s and Mississippi’s 

recent adoption of more energy-efficient building codes makes this an 

opportune time for incorporating energy efficiency improvements in the 

rebuilding efforts. In partnership with a DOE national laboratory, GAO 

analyzed energy cost savings opportunities and estimated that adopting 

these newer building codes could reduce residential energy costs in these

two states by at least $20 to $28 million per year, depending on the extent of 

the rebuilding efforts in these states. Furthermore, the analysis also showed 

that annual energy expenditures for commercial buildings—hospitals, 

schools, offices, and retail buildings—built to newer energy standards could 

be about 7 to 34 percent lower than buildings built to older standards. There 

also are opportunities for consumers to make additional energy efficiency 

improvements to both building types by replacing old, damaged equipment. 

There are three substantial challenges to realizing the energy cost savings

opportunities presented by the Gulf Coast reconstruction: (1) the shortage of 

a skilled construction workforce, and specifically, the shortage of workers 

trained to meet the newer building codes; (2) the lack of trained building 

code inspectors to ensure compliance with newer building codes in 

Louisiana and Mississippi; and (3) the difficult financial issues facing

consumers, such as the sufficiency of insurance and other compensation 

payments, that may make decisions about energy efficiency a low priority. 

States have efforts under way to address many of these challenges and it will

take time and sustained commitment for them to be successful. 

The rebuilding of the Gulf Coast is largely a state and local matter, but HUD 

and DOE have played a supportive role in promoting energy efficient 

rebuilding. HUD and DOE have provided financial and educational 

resources that can encourage energy efficient rebuilding, and both agencies

have broader national programs that may support energy efficiency 

improvements in the rebuilding of the Gulf Coast. HUD has made $16.7 

billion in funding available for general rebuilding purposes, such as restoring 

damaged housing, and allows states to determine how to spend these funds, 

including using them for energy efficient improvements. HUD also has 

several national initiatives that may directly improve the energy efficiency of 

the public housing stock in Gulf Coast states. DOE has sponsored education 

and training on energy efficiency issues to state and local officials, private 

industry, and consumers in Louisiana and Mississippi. As part of its 

nationwide effort to assist all states with energy efficiency initiatives, DOE 

provides grants to states to design and carry out their own energy efficiency

programs. DOE’s energy expertise as well as HUD and DOE resources may 

prove valuable to the states and consumers as they make decisions about 

energy efficient rebuilding in the Gulf Coast. 

www.gao.gov/cgi-bin/getrpt?GAO-07-654.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Mark Gaffigan 

at (202) 512-3841 or gaffiganm@gao.gov. 
Contents 

Letter 1

Results in Brief 5

Significant Opportunities Exist for Incorporating Energy Efficiency 

Measures into Gulf Coast Reconstruction Efforts, Which Could 

Reduce Energy Expenditures 8 

Home Builder, State, and Consumer Challenges Are Substantial 

and May Limit Energy Cost Savings Opportunities from Being 

Realized 14

HUD and DOE Are Providing Funding and Educational Resources 

to Encourage Gulf Coast States to Incorporate Energy Efficiency 

in Rebuilding 20 

Concluding Observations 25 

Agency Comments 25 

Appendix I Objectives, Scope, and Methodology 28 

Appendix II Energy Cost Savings Estimates for Residential 

Buildings 30 

Appendix III Energy Cost Savings Estimates for Commercial 

Buildings 33 

Appendix IV GAO Contact and Staff Acknowledgments 36 

Tables 

Table 1: Annual Energy Cost Savings for Heating and Cooling 

Homes Built in Accordance with Various Energy 

Efficiency Codes and Standards with Slab-on-Grade and 

Elevated Foundations 30 

Table 2: Estimated Construction Cost Increases and Cost Recovery 

Periods for Building Homes in Accordance with Various 

Energy Efficiency Codes and Standards 31 

Table 3: Annual Energy Cost Savings for Selected Home Energy 

Efficiency Improvements 31 

Page i GAO-07-654 Energy Efficiency
Table 4: Annual Energy Cost Savings for Home Lighting and

Appliance Upgrades 32 

Table 5: Annual Incremental Energy Cost Savings per Building for 

Various Commercial Buildings Constructed in Accordance 

with a Newer ASHRAE Standard 33 

Table 6: Estimated Energy Cost Savings from Commerical 

Buildings in Accordance with Selected “Above Code” 

Levels 34 

Table 7: Annual Lighting Cost Savings for Commercial Buildings in 

Louisiana and Mississippi 35 

Abbreviations 

ASHRAE American Society of Heating, Refrigerating and Air- 

 Conditioning Engineers 

CDBG Community Development Block Grant 

CFL Compact Fluorescent Lighting 

DOE Department of Energy 

EPACT Energy Policy Act 

FEMA Federal Emergency Management Agency 

GREAT Gulf Rebuild, Education, Advancement, and Training 

 Campaign 

HUD Department of Housing and Urban Development 

ICC International Codes Council 

IECC International Energy Conservation Code 

IRC International Residential Code 

LEED Leadership in Energy and Environmental Design

PATH Partnership for Advanced Technologies in Housing 

PD&R Office of Policy Development and Research 

PNNL Pacific Northwest National Laboratory 

SEP State Energy Program 

This is a work of the U.S. government and is not subject to copyright protection in the 

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reproduce this material separately. 

Page ii GAO-07-654 Energy Efficiency
United States Government Accountability Office

Washington, DC 20548 

June 26, 2007 

Congressional Addressees 

Each year in the United States, consumers spend more than $160 billion to 

light, cool, heat and operate homes, and about $110 billion is spent 

annually in energy costs for commercial buildings, making improving the 

energy efficiency of homes and buildings an important aspect of any effort

to reduce energy consumption and lower energy costs. Improving building 

efficiency to reduce energy consumption is normally a very incremental 

process. However, after the destruction caused by the 2005 Gulf Coast 

hurricanes1

 the need to rebuild and repair hundreds of thousands of 

destroyed and damaged buildings in the Gulf Coast region creates unique 

opportunities to address energy efficiency issues on a large scale.2

The Gulf Coast hurricanes battered the Gulf Coast region causing over 

$150 billion in estimated damage.3

 Louisiana and Mississippi were the 

states hit the hardest by the hurricanes, sustaining extensive destruction 

and damage to residential and commercial buildings. For example, the 

hurricanes are estimated to have destroyed or caused severe or major 

damage to nearly 270,000 single-family homes in Louisiana and Mississippi. 

In all, the Gulf Coast hurricanes caused more than 1,500 deaths; left 

hundreds of thousands of people displaced without shelter or employment 

and had a disproportionate impact on certain populations, especially the 

poor, elderly, and minorities. In response to the Gulf Coast devastation the 

federal government has committed a historically high level of resources—

over $110 billion—through an array of grants, loan subsidies, and tax relief 

and incentives. A substantial portion of this assistance was directed 

toward providing emergency assistance and meeting short-term needs 

arising from the hurricanes. A relatively small portion of federal assistance 

 1

In this report, we refer to Hurricanes Katrina, Rita, and Wilma collectively as the “Gulf

Coast hurricanes.” 

2

For purposes of this report, the term “building codes” refers to state and local government 

requirements for design and construction of residential and commercial buildings that are

based on industry standards including those related to energy efficiency. 

3

Cost estimates for damages due to these storms have varied and a definitive cost estimate 

may never be known. See Gulf Coast Rebuilding: Preliminary Observations on Progress 

to Date and Challenges for the Future GAO-07-574T (Washington, D.C., April 12, 2007). 

Page 1 GAO-07-654 Energy Efficiency
is available for longer-term rebuilding activities, such as the restoration of 

the regions housing and infrastructure. 

In Louisiana and Mississippi, housing and infrastructure restoration is 

taking place in the context of broader regional planning and coordination 

activities. The Louisiana Recovery Authority is the planning and 

coordinating body created by the governor to assist in implementing the 

state’s vision for the recovery of Louisiana. Working in collaboration with 

local, state, and federal agencies, the authority serves to address shortterm recovery needs and guide the long-term planning process. In 

Mississippi, the Governor’s Commission on Recovery, Rebuilding, and

Renewal was formed to develop a strategy for rebuilding the affected 

areas of Mississippi. In early January 2006, the commission released a 

report with numerous recommendations intended to guide Mississippi’s 

post-hurricane rebuilding. Current Gulf Coast rebuilding activities, 

including the bulk of the federal rebuilding assistance, are directed 

primarily toward restoring the region’s stock of livable housing and 

essential infrastructure. 

States and their subdivisions, such as counties and cities, adopt codes and 

standards that establish minimum requirements for energy-efficient design

and the construction of residential and commercial buildings. Building 

codes and standards regulate components that affect the amount of energy 

that a building will use, such as the building envelope,4

 electrical power, 

and lighting. These codes and standards vary from one state to another 

and sometimes within a state. States and local jurisdictions may choose to 

adopt model codes developed and published by nonprofit organizations, 

such as the International Code Council (ICC) and the American Society of 

Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE). 

Louisiana and Mississippi adopted statewide residential building codes 

created by the ICC to guide the reconstruction of housing after the 

hurricanes. Louisiana adopted the 2006 version of the ICC’s code as its 

mandatory statewide residential building code, while Mississippi adopted 

the 2003 version of this code as its voluntary statewide residential building 

 4

The building envelope is the structural elements (walls, roof, floor, and foundation) of a 

building that encloses conditioned space—the building shell. 

Page 2 GAO-07-654 Energy Efficiency
code—except for five coastal counties where it is mandatory.5

 In addition, 

both of these states were already using ASHRAE’s commercial energy 

standards prior to the Gulf Coast hurricanes. Louisiana used ASHRAE’s 

2001 standard and Mississippi employed ASHRAE’s 1975 standard.6

While numerous federal agencies, including the Department of Housing 

and Urban Development (HUD) and Department of Energy (DOE), are 

involved in providing emergency assistance as part of the recovery 

process, HUD and DOE have also been working with states regarding 

matters of energy efficiency. HUD works to increase homeownership, 

support community development, and increase access to affordable 

housing. DOE is the nation’s lead agency on energy use and energy 

efficiency issues. DOE provides education and training through a diverse 

set of national, state, and local programs that promote energy efficiency, 

such as its Building America, Building Energy Codes, and High

Performance Building Programs. DOE sponsors research in partnership 

with industry and academia to advance building science and improve 

technologies and practices that make both residential and commercial 

buildings more energy efficient. 

In light of the widespread congressional and public interest in rebuilding 

the Gulf Coast, we have prepared this report under the authority of the 

Comptroller General of the United States as part of an effort to assist the 

Congress in reviewing opportunities and challenges related to

incorporating improved energy efficiency practices into the reconstruction 

of residential and commercial buildings in the affected Gulf Coast states. 

This report (1) analyzes the extent of opportunities for incorporating 

energy efficiency improvements and realizing energy cost savings in the 

Gulf Coast reconstruction, (2) discusses potential challenges to realizing 

energy cost savings during the reconstruction, and (3) describes the roles 

of HUD and DOE in promoting energy efficiency in the rebuilding of the 

Gulf Coast. We limited the scope of our work to Louisiana and Mississippi 

because these states experienced the majority of the damage from the Gulf 

Coast hurricanes and their building stock is generally similar to the 

 5

Mississippi requires the counties of Jackson, Harrison, Hancock, Stone and Pearl River to

enforce, on an emergency basis, all the wind and flood mitigation requirements of the code. 

According to state officials, although the energy provisions are optional, some counties are 

considering making the provisions mandatory. 

6

ASHRAE’s 1975 standard and ASHRAE’s 2001 standard refer to ASHRAE standards 90-75 

and 90.1-2001, respectively. 

Page 3 GAO-07-654 Energy Efficiency
residential and commercial buildings found in the other Gulf Coast states, 

according to the data we that analyzed. 

We assessed the opportunities for incorporating improved energy 

efficiency measures in the reconstruction efforts in Louisiana and 

Mississippi by soliciting the views of federal and state government 

officials, home builders, and energy efficiency practitioners and by 

conducting site visits to these states. In addition, we worked with DOE’s 

Pacific Northwest National Laboratory (PNNL) to develop energy cost 

savings estimates for residential and commercial buildings in the Gulf 

Coast. PNNL used energy simulation programs to develop these estimates 

under several scenarios. PNNL calculated energy consumption and energy 

expenditures for these building types assuming they were constructed to 

meet newer building codes and standards and compared these data with a 

baseline that approximately reflected the energy consumption and 

expenditures of buildings prior to the hurricanes. To aggregate potential

residential energy cost savings to the Gulf Coast region, we made 

estimates of annual savings that could occur as the result of 

reconstruction efforts. A more in-depth description of the methodology 

that DOE’s PNNL used to develop energy cost savings for residential and 

commercial buildings can be obtained from their January 2007 and 

December 2006 reports.7

 These reports can be found at 

http://www.energycodes.gov/impacts.stm. 

To understand the potential challenges that may limit energy cost savings 

from being realized, we relied on site visits to Louisiana and Mississippi, 

interviews with state and local government officials, and attendance at 

local building conferences and housing summits. Furthermore, we 

interviewed energy efficiency practitioners, building industry 

representatives, and non-profit organizations as well as HUD and DOE 

officials to solicit their views on the challenges of incorporating energy

efficiency measures in the rebuilding and repairing of destroyed and 

damaged buildings. 

To describe the roles of HUD and DOE in promoting energy efficiency in 

the rebuilding of the Gulf Coast, we interviewed agency officials and 

obtained and reviewed documentation describing the actions that these 

 7

R.G. Lucas, Analysis of Energy Savings Impacts of New Residential Energy Codes for

the Gulf Coast, PNNL-16265, (January 2007); and M.A. Halverson, K. Gowri, E.E. Richman,

Analysis of Energy Savings Impacts of New Commercial Energy Codes for the Gulf

Coast, PNNL-16282, (December 2006). 

Page 4 GAO-07-654 Energy Efficiency
agencies have taken to assist Louisiana and Mississippi. We also 

conducted site visits to these states to obtain firsthand knowledge from 

state government officials, non-profit organizations, home builders, and 

energy efficiency practitioners about their views on HUD’s and DOE’s 

efforts to promote or work with various stakeholders to consider energy

efficiency in the rebuilding process. A more detailed discussion of our 

methodology is provided in appendix I. We conducted our work from 

March 2006 through May 2007 in accordance with generally accepted

government auditing standards, which included an assessment of data 

reliability. 

The anticipated reconstruction in the Gulf Coast creates a significant 

opportunity for incorporating energy efficiency improvements that could 

produce long-term energy cost savings. First, the sheer magnitude of the 

reconstruction effort creates a tremendous opportunity for incorporating 

energy efficiency improvements during the rebuilding and repairing of 

residential and commercial buildings. Second, state and local governments 

in Louisiana and Mississippi are still engaged in short and long term 

planning efforts to recover from the hurricanes. Since these planning 

efforts are evolving, now is an opportune time to consider fully 

incorporating energy efficiency improvements in the reconstruction. 

Third, Louisiana’s and Mississippi’s recent adoption of newer and more 

energy efficient building codes and standards creates a unique opportunity

for energy efficient rebuilding. In partnership with DOE’s PNNL, we 

analyzed energy cost savings opportunities and estimated that these newer 

building codes could reduce energy expenditures for residential buildings 

in Louisiana and Mississippi by at least $20 to $28 million per year, 

depending on the scale of rebuilding in these states. For example, the 

annual energy expenditures for heating and cooling a typical home in 

Louisiana and Mississippi built to newer codes could be reduced by $167 

to $233, a range of savings of 24 to 28 percent, depending on the type of 

foundation upon which the home is built and the specific code to which it

is built. Furthermore, our results showed that annual energy expenditures 

for commercial buildings—hospitals, schools, offices, and retail—built to 

newer commercial energy standards could be about 7 to 34 percent lower 

than buildings built to older standards, depending on the building type.

Fourth, our analysis showed that even greater energy cost savings could 

be obtained for both residential and commercial buildings if consumers 

and builders voluntarily embrace energy efficiency measures that exceed

minimum building code and standard requirements. Finally, in addition to 

rebuilding homes and commercial buildings, there are opportunities for 

consumers to make energy efficiency improvements as they replace

Results in Brief 

Page 5 GAO-07-654 Energy Efficiency
damaged equipment with more energy efficient air conditioners, 

appliances, lighting, and windows. 

There are three primary challenges to realizing energy cost savings 

opportunities presented by the Gulf Coast reconstruction. First, home 

builders, state officials, and energy efficiency practitioners told us that 

there is a shortage of construction workers and more specifically a 

shortage of skilled labor trained to meet the newer building codes and 

standards—including wind, flood, and energy provisions. These shortages 

are of particular concern given the number of homes and buildings that 

may need to be rebuilt or repaired in accordance with newer building 

codes and standards. Second, states will confront substantial challenges to

ensuring compliance with new building codes and standards because of a

lack of trained building code inspectors. State compliance and 

enforcement programs are essential for ensuring that buildings are 

constructed to the mandatory building codes and standards. Despite 

states’ efforts to improve their compliance and enforcement programs, 

state and local officials as well as building industry representatives 

repeatedly told us that they do not have enough trained staff and will have 

to create building inspection offices, hire additional code officials, and 

train them in the application of the new codes. Third, consumers 

considering rebuilding and repairing their homes are faced with making 

other decisions that may make energy efficiency a low priority. Because of 

the catastrophic losses caused by the hurricanes, many residents must 

determine whether they have the financial resources to rebuild or repair 

their homes at all and whether existing employment opportunities make 

returning to their homes feasible. Once consumers address these issues, 

they will have to decide whether it is in their best financial interest to pay 

the additional costs to make their homes more energy efficient through 

purchases, such as energy efficient appliances, or to use their money for 

other purposes. For consumers, especially poor and low-income 

consumers, this decision will be further compounded by their loss of 

income, assets, and other financial needs that must be met. Indeed, for 

some, these short-term financial needs may be so pressing that they 

preclude long-term thinking about the future financial savings that might 

be gained by making energy efficiency improvements. 

Because the rebuilding of the Gulf Coast is largely a state and local matter,

HUD and DOE have played a supportive role in promoting energy efficient 

rebuilding. More specifically, HUD and DOE have provided financial and 

educational resources that can encourage the incorporation of energy 

efficiency in the reconstruction of the Gulf Coast. In addition, both 

agencies have broader national programs that may assist Louisiana and 

Page 6 GAO-07-654 Energy Efficiency
Mississippi in incorporating energy efficiency improvements during their 

rebuilding efforts. HUD has made $16.7 billion in funding available for 

general rebuilding purposes, such as damaged housing and infrastructure, 

and allows states to determine how to spend these funds, including using 

them for energy efficient improvements. In addition, HUD had several 

national initiatives that were either planned or under way prior to the 

hurricanes, and that may directly improve the energy efficiency of the

public housing stock in Gulf Coast states. For example, HUD developed an 

energy strategy for public and assisted housing that includes actions to, 

among other things, provide incentives for energy efficiency in housing 

financed through HUD’s competitive grant programs and to promote the 

use of energy efficient appliances and equipment through a HUD 

partnership with DOE. In its capacity as the nation’s lead agency on energy 

use and energy efficiency issues, DOE’s primary role in the Gulf Coast 

reconstruction has been to provide education and training to state and 

local officials, private industry, and consumers. In direct response to the 

Gulf Coast hurricanes, DOE partnered with several entities, including state 

energy offices, to conduct training workshops for home builders, 

contractors, and consumers on rebuilding with energy efficiency and 

storm resistance practices. The department also developed a Disaster 

Recovery and Building Reconstruction Web site to provide information to 

state and local officials, builders and contractors, and consumers to 

promote cost-effective and energy-efficient reconstruction. As part of its 

ongoing nationwide effort to encourage state energy efficiency initiatives, 

DOE provides grants to state energy offices to design and carry out their 

own energy efficiency programs. For example, DOE recently awarded $6 

million to fund 22 federal-state partnerships, 4 of which involve Gulf Coast 

states, with the aim of creating initiatives to increase energy and cost 

savings in residential and commercial buildings. 

Page 7 GAO-07-654 Energy Efficiency
The anticipated rebuilding and repairing of residential and commercial 

structures in the Gulf Coast creates an important opportunity for 

incorporating energy efficiency improvements that could produce longterm energy cost savings. We estimated that newer building codes and 

standards could significantly reduce energy expenditures for residential 

and commercial buildings in Louisiana and Mississippi, depending on the 

rebuilding efforts in these states. 

Significant 

Opportunities Exist 

for Incorporating 

Energy Efficiency 

Measures into Gulf 

Coast Reconstruction 

Efforts, Which Could 

Reduce Energy 

Expenditures 

The Scope and Status of 

the Reconstruction Efforts 

Create Significant 

Opportunities to Reduce 

Energy Expenditures 

through New Building 

Codes and Standards 

The sheer magnitude of the reconstruction effort creates a tremendous 

opportunity for incorporating energy efficiency improvements into rebuilt 

homes and buildings. Many Gulf Coast neighborhoods and communities 

need to be rebuilt—some from the ground up—especially since an 

estimated 122,261 homes in Louisiana and Mississippi were destroyed or 

severely damaged. This rebuilding creates an opportunity for these states

to make wide-scale improvements to their building stock, especially the 

older vintage housing in the areas.8

 In addition, state and local

governments in Louisiana and Mississippi are still engaged in short-and 

long-term planning efforts to recover from the hurricanes. Since these 

planning efforts are evolving, now is an opportune time to consider fully 

incorporating energy efficiency improvements in the reconstruction 

efforts. Furthermore, Louisiana’s and Mississippi’s recent adoption of 

newer and more energy efficient building codes creates a unique 

opportunity for rebuilding all of the destroyed and severely damaged 

homes in a manner that could result in significant energy cost savings for 

these two states. 

In partnership with DOE’s PNNL, we analyzed a range of energy efficiency

levels to determine the potential energy cost savings that could be 

achieved if single-family homes and commercial buildings in Louisiana and 

Mississippi were constructed in accordance with various residential 

 8

The Energy Information Administration estimates that 38 percent of housing in the South

Census Region was built prior to 1970; 58 percent was built before 1980; and 81 percent 

was built before 1989. 

Page 8 GAO-07-654 Energy Efficiency
building codes and commercial energy standards. For residential 

buildings, we examined four energy efficiency levels associated with 

building in accordance with various codes—a “baseline” level,

9

 a “code” 

level, and two “above- code” levels. The baseline level we used represents 

the estimated energy efficiency associated with construction practices in 

areas of the Gulf Coast that do not have building codes or where the codes 

may not be enforced. The code level represents the energy efficiency

associated with building in accordance with the energy provisions of the 

ICC’s 2006 residential code.10 The third level represents the energy 

efficiency associated with building to meet the Energy Star New Homes 

Guidelines, which requires a 15 percent improvement over the ICC’s code

for all energy used in a house. The fourth level represents the energy 

efficiency necessary to qualify for the $2000 home builders’ federal tax

credit for energy efficient new homes, which requires a 50 percent 

reduction in space heating and air conditioning energy use compared with 

the ICC’s code.11

We estimated that homes built to meet the ICC’s 2006 residential code

could reduce energy costs between 24 to 28 percent, resulting in an 

aggregate annual savings ranging from $20 to $28 million, depending on 

the type of foundation used, the energy efficiency measures to which the 

homes are built, and the number of homes being rebuilt.12 More 

 9

PNNL modeled two baselines. The first baseline is an approximation of measures in 

typical existing housing in the rebuilding region. The second baseline represents the 

estimated energy efficiency associated with construction practices in areas of the Gulf

Coast that do not have building codes or where the codes may not be enforced. 

10We use the term “ICC’s residential code” in this report to refer to the ICC’s International 

Residential Code (IRC), which is a comprehensive, stand-alone residential code that 

creates minimum regulations for one- and two-family dwellings of three stories or fewer 

and brings together all building, plumbing, mechanical, fuel gas, energy, and electrical 

provisions for one- and two-family residences. In terms of energy efficiency, the energy

provisions of the IRC references the International Energy Conservation Code (IECC), 

which requires energy conservation through efficiency in areas, such as, envelope design

and mechanical systems. We technically analyzed the energy efficiency requirements of the 

IECC 2006, which is similar in stringency to the energy provisions of the 2003 and 2006 

versions of the IRC. 

11This tax credit is provided by section 1332 of the Energy Policy Act of 2005, Pub. L. No.

109-58 (Aug. 8, 2005). 

12The amount of rebuilding can vary. The aggregated and individual ranges of energy cost 

savings depend on the type of foundation used, the energy efficiency measure to which the

houses are built, and the number of homes being rebuilt. Our aggregate range of energy

cost savings is based on the assumption that an estimated 122,261 severely

damaged/destroyed homes are rebuilt with either a slab-on-grade or elevated foundation. 

See appendix II of this report for more information. 

Page 9 GAO-07-654 Energy Efficiency
specifically, our analysis showed that, depending on the parameters of 

individual homes, an estimated annual per house energy cost savings 

ranging from $167 to $233 could be achieved if new homes were built in 

accordance with the ICC’s 2006 residential code, rather than current 

construction practices in the Gulf Coast region where there are no 

building codes or where codes are not enforced. Furthermore, greater 

home energy cost savings could be obtained if consumers rebuild their 

homes to meet Energy Star New Home Guidelines or if home builders take 

advantage of the energy efficient home tax credit provisions of the Energy

Policy Act of 2005 (EPACT) by building homes that use 50 percent less 

energy for heating and cooling than those built to meet the ICC’s code. For 

example, annual per house energy cost savings of $310 to $364 over 

baseline levels could be achieved by meeting Energy Star Home 

specifications, while $371 to $447 in savings can be realized by building to

meet the tax credit criteria in EPACT. The potential for Louisiana and

Mississippi to achieve significant energy cost savings if the estimated 

122,261 homes that were destroyed or severely damaged are rebuilt in 

accordance with various energy efficiency measures is shown in more 

detail in appendix II, table 1.13

In general, the improved energy efficiency features that are part of the 

ICC’s 2006 residential code, Energy Star New Home Guidelines, and the 

EPACT tax credit include more efficient windows and heating and cooling 

equipment, improved building envelope and duct sealing, and increased 

insulation. While building homes in accordance with the newer building 

codes and above code measures will improve a home’s energy efficiency, it 

will also increase home construction costs because more expensive and

efficient energy features are required. However, these additional costs can 

generally be recovered within several years. Details on the cost recovery 

period for several key energy efficiency features can be found in appendix

II, table 2. 

For commercial buildings—offices, hospitals, schools, and retail—we used 

the current commercial energy standards for Louisiana and Mississippi as 

baselines: the ASHRAE 2001 standard for Louisiana and the ASHRAE 1975 

standard for Mississippi. We then estimated the potential energy cost 

 13On the basis of our review of HUD’s report entitled Promoting Energy Efficiency at HUD 

in a Time of Change: Report to Congress (Washington DC: August 8, 2006), it appears that

the department could similarly reduce its utility-related energy expenditures for its public 

and assisted housing programs in the Gulf Coast region by implementing energy efficiency

practices similar to those that we identified for single-family homes. 

Page 10 GAO-07-654 Energy Efficiency
savings associated with rebuilding commercial structures in Louisiana in 

accordance with the ASHRAE 2004 standard14 and in Mississippi in 

accordance with ASHRAE’s 2001 standard. We also estimated the potential

savings that could be achieved by constructing buildings to meet “above 

code” levels, such as the requirements of the Leadership in Energy and

Environmental Design (LEED) green building program and the EPACT 

commercial tax credit level, requiring 50 percent less energy use than the

ASHRAE 2001 standard.15

The results of our commercial building analysis showed that an estimated 

annual energy cost savings for commercial buildings between 7 and 34 

percent could be achieved in Mississippi if commercial structures were 

rebuilt in accordance with the ASHRAE 2001 standard and a savings of 

between 7 and 13 percent could be achieved in Louisiana if commercial 

structures were rebuilt in accordance with the ASHRAE 2004 standard. 

More detailed information on these potential savings is presented in 

appendix III, table 5. The primary reason for this significant savings is that 

the newer energy standards call for the use of less lighting power, which 

directly saves energy and indirectly reduces cooling needs because less 

heat is given off from lighting fixtures. Overall, adopting newer and more 

efficient commercial energy standards in the Gulf Coast would reduce 

energy operating costs as well as construction costs because the newer 

standards can be met with fewer, more efficient lighting fixtures resulting 

in immediate cost recovery. 

Our analysis also shows that greater energy cost savings could be obtained 

for commercial buildings if they were constructed in accordance with 

even higher energy efficiency measures. These efficiency measures 

include the LEED rating system,16 which awards points for buildings that 

 14Technically, the ASHRAE standards referred to in this report are the 

ANSI/ASHRAE/IESNA Standard 90-75, ANSI/ASHRAE/IESNA Standard 90.1-2001, and the 

ANSI/ASHRAE/IESNA Standard 90.1-2004. 

15The LEED Green Building Rating System is the nationally accepted benchmark for the 

design, construction, and operation of high performance green buildings and is operated by 

the U.S. Green Building Council. EPACT created certain requirement and incentives to help

improve energy efficiency, including residential and commercial buildings. 

16The U.S. Green Building Council has developed a national rating system—LEED—for

constructing high-performance, sustainable buildings. The LEED system awards points for 

various building parameters, including energy. For example, the LEED system awards 1 

point for a building that uses 10.5 percent less energy than required using the ASHRAE

2004 standard and 10 points for a building that uses 42 percent less energy than required 

using the ASHRAE 2004 standard. 

Page 11 GAO-07-654 Energy Efficiency
use less energy than required by the ASHRAE 2004 standard and the 

federal tax credit level for commercial buildings.17 The energy cost savings 

associated with these two “above code” energy efficiency approaches 

could range from $17,263 to $286,285 per building, depending on the 

building type and size. Additional information about these potential 

savings are presented in appendix III, table 6. 

Making Energy Efficient 

Improvements to 

Residential and 

Commercial Buildings by 

Replacing Damaged 

Equipment and Appliances 

Could Further Decrease 

Future Energy 

Expenditures 

Some residential and commercial buildings damaged by the Gulf Coast 

hurricanes will not need to be replaced completely, but they will require 

repairs. Consumers who decide to repair homes or commercial structures 

can reduce their energy expenditures by replacing older and less efficient 

energy consuming equipment that may have been destroyed or damaged 

with more energy efficient products. We identified several common energy 

efficiency improvements that can be made to both residential and 

commercial buildings. For some items, such as cooling systems, minimum 

federal standards set by DOE require the manufacture of more efficient 

units than would have been used prior to the Gulf Coast hurricanes. 

Therefore, energy cost savings from these kinds of equipment could be 

achieved by simply replacing older equipment with a standard newer 

model. Some of the more common energy efficiency improvements 

include more efficient air conditioning systems, better insulating 

windows,18 and improved duct sealing.19 Although these systems are 

generally more costly than older, less efficient units, with the exception of 

window replacements, the additional costs can usually be recovered in a 

 17A tax deduction of up to $1.80 per square foot is available to owners or designers of new

or existing commercial buildings that save at least 50 percent of the heating and cooling 

energy of a building that meets ASHRAE standard 90.1-2001. Partial deductions of up to 

$0.60 per square foot can be taken for measures affecting any one of three building 

systems: the building envelope, lighting, or heating and cooling systems. 

18The cost recovery period for the windows that we previously mentioned may not appear 

attractive. However, if the existing building has single-pane windows, these windows can 

have substantial disadvantages that are not accounted for in an energy cost analysis. For 

example, the inner surface temperature of a single-pane aluminum window will become 

quite low during the coldest winter conditions. This low temperature can result in an

unpleasant drafty feeling for occupants in the vicinity of the windows. Also, the cold 

surface can lead to possible water condensation, which could eventually result in water 

damage to the windows or walls over an extended period of time. 

19Tax credits are available for many types of home improvements including adding 

insulation, replacing windows, and purchasing certain high efficiency heating and cooling 

equipment. The maximum amount of homeowner credit for all improvements combined is

$500 during the 2-year period of the tax credit. 

Page 12 GAO-07-654 Energy Efficiency
few years. Additional information on the estimated energy cost savings 

that these improvements could bring to both Louisiana and Mississippi is 

presented in appendix II, table 3. 

Residential consumers can also reduce their energy costs by replacing

damaged incandescent lighting and appliances with compact fluorescent 

lighting (CFL) and Energy Star appliances. On a per house basis, switching 

to CFLs can save consumers an estimated $48 a year in electricity costs for 

lighting.20 Installing Energy Star appliances can produce modest annual 

dollar savings compared with appliances that simply meet the current 

minimum federal manufacturing standards. However, according to PNNL, 

if these appliances are used to replace older appliances that may be much 

less efficient, the costs savings can be considerable. According to Energy

Star data, an Energy Star refrigerator is at least 15 percent more efficient 

than federal minimum manufacturing standards, meaning that it would 

save an estimated $9 a year over a new conventional refrigerator. Savings 

from replacing an older refrigerator could be much higher, for example 

$65 a year over a pre-1993 refrigerator. The additional costs and the energy 

cost savings that may be achieved if these lighting and appliance upgrades 

are made in the estimated 143,862 homes that received major damage is 

outlined in appendix II, table 4. 

Our analysis demonstrated that lighting upgrades are the primary area 

where energy cost savings can be achieved from renovating damaged 

commercial buildings in the Gulf Coast region. For example, if commercial 

buildings—offices, schools, hospitals, and retail—in Mississippi were 

renovated to meet the ASHRAE 2004 standard, rather than the state’s 

current standard ( the ASHRAE 1975 standard), the cumulative savings per 

building would be $18,689 to $150,538 per year depending on the building 

type. In contrast, renovating these same building types in Louisiana so that 

they go beyond the state’s current ASHRAE 2001 standard to meet the 

ASHRAE 2004 standard would result in $5,704 to $30,537 in annual savings 

per building. According to PNNL officials, all other building renovations 

pale in comparison to the impact that lighting changes would have in

terms of producing energy cost savings for commercial buildings. 

Additional information about the potential energy cost savings associated 

with lighting in commercial buildings is presented in appendix III, table 7. 

 20On the basis of a house with 20 light fixtures, the Energy Star Advance Lighting Package’s 

minimum requirements would save $48 a year in electricity costs for lighting. 

Page 13 GAO-07-654 Energy Efficiency
Three substantial challenges may limit the energy cost savings 

opportunities presented by the Gulf Coast reconstruction from being 

realized. First, a general shortage of a skilled construction workforce and,

specifically, the shortage of construction workers trained to meet newer 

building codes may limit energy cost savings. Second, states will face 

serious challenges ensuring compliance with newer building codes, 

thereby potentially limiting energy cost savings opportunities from being 

realized. Third, consumers who consider rebuilding and repairing their 

homes are faced with making other decisions that may make energy 

efficiency a low priority. 

Home Builder, State, 

and Consumer 

Challenges Are 

Substantial and May 

Limit Energy Cost 

Savings Opportunities 

from Being Realized 

Availability of a Skilled 

Construction Workforce 

Trained to Meet Newer 

Building Codes and 

Standards May Limit 

Energy Cost Savings 

The shortage of a skilled construction workforce capable of sustaining the 

rebuilding and repairing of destroyed and damaged homes in Louisiana 

and Mississippi may limit the energy cost savings that can be achieved by

rebuilding to the newly adopted building codes. The construction 

workforce shortage is twofold—that is, there is a general shortage of 

construction workers and, more specifically, a shortage of skilled 

construction workers trained in the application of the newer building 

codes. 

A 2004 Department of Labor report cited an industry study that said in the 

year prior to the Gulf Coast hurricanes, nearly 75 percent of contractors 

nationwide reported experiencing skilled construction labor shortages.21

Louisiana and Mississippi builders told us that the labor shortage 

worsened when the hurricanes displaced some of their construction 

workforce to other states and caused an overwhelming demand for 

rebuilding and repairing destroyed and damaged residential and 

commercial buildings. Consequently, the demand for construction in the 

Gulf Coast region far exceeds the capacity of the local construction 

workforce. For example, a study conducted by the RAND Corporation 

reported that to sustain the rebuilding efforts in New Orleans, the city 

would have to expand its number of construction firms, labor force, and 

building supply networks.22

 21U.S. Department of Labor, Americas Construction Industry: Identifying and Addressing 

Workforce Challenges (December 2004). 

22Kevin McCarthy, D.J. Peterson, Narayan Sastry, and Michael Pollard, The Repopulation of 

New Orleans After Hurricane Katrina, a technical report prepared by the RAND Gulf 

States Policy Institute (January 2006). 

Page 14 GAO-07-654 Energy Efficiency
In addition, there is currently a lack of skilled construction workers 

trained to meet the states’ new building codes and standards. According to

many different stakeholders with whom we spoke, building code training 

is an important part of ensuring that buildings are properly constructed to 

meet the newer building codes, including the energy provisions. Training 

the construction workforce will require time and involve a learning curve, 

which may delay or even limit the energy cost savings achieved during the 

Gulf Coast reconstruction. According to state officials and home builders 

that we spoke to, prior to the Gulf Coast hurricanes the general 

construction workforce in Louisiana and Mississippi did not have to 

comply with any particular statewide building codes, and some parishes 

and counties had no residential building codes to guide home 

construction. As a result, there was not an overwhelming need for the 

general construction workforce to be familiar with the building codes 

developed by the ICC. However, the construction workforce in Louisiana 

and the five coastal counties in Mississippi will now need training on the 

application of the newer building codes that include wind, flood, and 

energy provisions. This is especially true for Louisiana, since it adopted 

mandatory statewide building codes. Home builders, energy efficiency

practitioners, state officials, and non-profit organizations with whom we 

spoke acknowledged that fully implementing newer building codes will 

take time and will involve a learning curve before construction workers 

understand and are able to comply with the requirements. State officials 

and home builders told us that it will be difficult for local home builders—

consisting of small volume builders—-to make the transition from not 

building according to a building code to now constructing buildings to 

meet the requirements of the most recent residential codes. In addition, 

according to the National Association of Home Builders, the ICC’s energy 

code has caused problems for home builders because they have trouble 

finding the lowest cost solution that also complies with the code. All of 

these challenges may delay or even limit the energy cost savings. 

In an effort to address the skilled construction workforce shortage, the 

Business Roundtable—an association of chief executive officers of leading 

U.S. companies with $4.5 trillion in annual revenues and more than 10 

million employees—in partnership with federal, state, and local 

government agencies, construction trade groups, businesses, and nonprofit organizations, created the Gulf Coast Workforce Development 

Initiative as an effort to recruit and train up to 20,000 skilled construction 

laborers for the Gulf Coast region by the end of 2009. Recruitment efforts 

for this initiative are under way through the Gulf Rebuild, Education, 

Advancement, and Training (GREAT) Campaign. Under this campaign, 

participants enroll in a 4-week course to gain entry-level skills in 

Page 15 GAO-07-654 Energy Efficiency
preparation for jobs in the construction industry. In addition to the 

GREAT Campaign, there are other efforts under way to build a skilled 

construction workforce in the Gulf Coast states, including courses and 

related workshops at local colleges and universities and construction and 

building summits/expos being offered throughout the Gulf Coast states. 

States Will Be Challenged 

to Ensure That New 

Construction Meets the 

Recently Adopted Building 

Codes and Standards 

Having an adequate number of trained code officials to inspect buildings is 

vital to ensuring that rebuilding the hundreds of thousands of destroyed 

and damaged structures is done in accordance with the newly adopted 

building codes so that energy cost saving opportunities are actualized. 

However, building industry representatives and state officials told us that 

Louisiana and Mississippi lack code offices, lack an adequate number of 

code officials,23 and may find it difficult to secure the resources to hire a 

sufficient number of adequately trained staff. Despite these challenges, 

however, efforts to enforce the new codes and standards in Louisiana and 

Mississippi are currently under way. 

Louisiana and Mississippi may not have adequate resources to open 

additional code offices and may not currently have adequate numbers of 

trained staff. For example, only a few Louisiana parishes and Mississippi 

counties have code compliance and enforcement programs, and 

implementing the new building codes will require more building code 

offices to be established. According to one Louisiana code official, 

because 57 of the state’s 64 parishes did not have to comply with any 

mandatory statewide building codes before the Gulf Coast hurricanes, 

there was no need for building code offices in those particular parishes. In 

Mississippi, only those five coastal counties affected by the hurricanes are 

required to meet the new statewide building codes. According to 

Mississippi officials, despite the fact that three of the five counties had 

building codes and offices in place prior to the hurricanes, these counties 

will still need to hire and train additional code officials because of the 

overwhelming amount of rebuilding that remains and the new building 

codes. In addition, there was a consensus among the groups we 

interviewed that building code offices are currently overburdened, 

because there are too few officials and too many inspections.

 23The terms “code officials” or “inspectors”, in this report, refer to building officials,

inspectors, plans examiners, and others in the position of regulating building codes and

standards. 

Page 16 GAO-07-654 Energy Efficiency
Furthermore, Louisiana and Mississippi will face serious challenges in 

securing the adequate staff and resources to support code enforcement. 

Both states reported that the local governments in the most severely

affected parishes and counties have limited financial resources to provide 

staff to implement the newer building codes. State officials, home builders, 

and non-profit organizations pointed out that code officials are taking 

other jobs in the private sector, which means code offices will have to fill 

those vacated positions as well as hire and train additional code officials. 

According to 1 state official in Louisiana, there were only 35 code 

inspectors statewide, only 7 of whom were certified to enforce the ICC 

building code recently adopted by the state that includes energy 

provisions. 

Furthermore, local governments will face challenges in training code

officials and code users24 in the application of the new building codes. 

Building codes are inherently complex and technical, thereby potentially

affecting compliance and enforcement, especially for larger commercial 

buildings. One study on compliance and enforcement methods reported 

that enforcing energy codes may require a higher level of expertise, and 

found that some local governments hire multiple code officials with 

specialized areas of expertise.25 Another study suggests that the 

complexities of energy codes make them impossible to enforce without a 

labor-intensive review of energy plans and documentation supported by 

extensive investments in hardware, software, training, and other 

resources. Energy efficiency practitioners suggest that education and 

training are critical during implementation, and that adopting jurisdictions 

must prepare code officials to enforce the energy code and prepare the 

building industry to comply with the code. According to one study, the 

inability to ensure compliance with energy codes will risk failing to 

capture the energy efficiency and cost savings they are designed to 

achieve.

26

 24The term “code users,” as used in this report, refers to builders and contractors,

architects, designers, and others in the position of compliance with building codes and 

standards. 

25Maine Public Utilities Commission, “Building Code Compliance and Enforcement 

Methods Investigation” (presented to the Utilities and Energy Commission, December 

2004). 

26D.L. Smith and J.J. McCullough, Alternative Code Implementation Strategies for States, 

A report prepared for the U.S. Department of Energy (May 2001). 

Page 17 GAO-07-654 Energy Efficiency
Despite the challenges, efforts to implement the new codes and standards 

in Louisiana and Mississippi are currently under way. For example, 

according to Louisiana Code Council officials, to some extent parishes 

have been enforcing the new building code since February 2006. The 11 

most affected parishes have collaborated with surrounding governmental

bodies to expand their existing offices or hired third-party service 

providers. One official estimated that the number of code officials in the 

state has increased from about 35 to 100, mainly because the Louisiana 

Code Council is giving existing code officials, who are not certified to 

enforce the new code, up to 3 years to acquire their certification as they 

continue to conduct building inspections. Moreover, as of December 2006, 

the state had allocated $8 million for those parishes that did not previously 

have building code offices. Furthermore, Louisiana has a $14 million 

program, funded by Federal Emergency Management Agency (FEMA) 

funds,27 to provide assistance to local governments as they implement the 

new statewide building codes. The Mississippi Development Authority is 

using HUD funding to administer a $5 million grant program to coastal 

county governments to hire additional building code officials and 

inspectors to ensure compliance with the new building codes. The 

program also intends to help to fund salaries, fringe benefits, travel, and 

training for building code enforcement officials for 1 year. 

Finally, Louisiana and Mississippi state energy office officials are 

providing education and training to code users to encourage the 

incorporation of energy efficiency and sustainable practices into the 

rebuilding of the state. According to Louisiana officials, they will continue 

to provide training on energy codes and compliance methods, sponsor 

energy efficiency projects, and work with experts and universities to host 

forums to provide hands-on, project-specific, one-on-one assistance to 

those rebuilding and repairing destroyed and damaged structures. Officials 

from the Mississippi state energy office said that they are conducting 

similar efforts in their state. 

 27FEMA is tasked with responding to, planning for, recovering from, and mitigating against 

disasters. Its Hazard Mitigation Grant Program provides grants to states, to implement longterm hazard mitigation measures after a major disaster declaration. 

Page 18 GAO-07-654 Energy Efficiency
According to state officials, home builders, and non-profit organizations in 

Louisiana and Mississippi, consumers who desire to return to their homes 

face difficult financial questions regarding compensation payments, the 

higher costs of construction and insurance, and the availability of 

employment, which may make decisions about energy efficiency a low 

priority. Some state officials and non-profit organizations believe that 

compensation payments awarded to homeowners may not be enough to

cover their mortgage balances or rebuilding costs. Qualified Louisiana and 

Mississippi homeowners may receive up to $150,000 in financial assistance 

from their state’s homeowner’s assistance program, which is funded by the 

federal government. However, the most recent available data show that 

the average amount received by residents in Louisiana and Mississippi is 

about $75,177 and $70,045, respectively. Representatives from non-profit 

organizations with whom we spoke told us that in some cases, homeowner 

mortgage balances and rebuilding costs exceed the payment amounts, 

leaving a funding gap that homeowners will have to fill. In addition, state 

officials whom we spoke with told us that the housing program does not 

provide additional funds to use for energy efficiency, thus homeowners 

will have to pay any additional costs associated with making their homes 

more energy efficient. 

Energy Efficiency May Be 

a Low Priority When 

Consumers Consider 

Rebuilding or Repairing 

Destroyed and Damaged 

Homes 

According to home builders, non-profit organizations, and energy 

efficiency practitioners, homeowners may also have to consider the 

additional construction costs associated with new elevation requirements. 

That is, some consumers will have to consider the additional costs to 

elevate their homes. Although FEMA provides $30,000 to cover the costs 

for building to higher elevations, it may cost more than that to build in 

some neighborhoods, based on FEMA’s advisory base flood elevations and

local parish and county community decisions to implement higher 

elevation requirements, according to some home builders. Representatives 

of a state home builders association told us that it can cost as much as 

$40,000 to more than $100,000 depending upon the house. 

According to state officials, home builders, and non-profit organizations, 

homeowners continue to deal with insurance claims and face difficult 

decisions about future coverage in light of higher insurance costs, if any 

coverage is available at all. By some news reports, insurance premiums 

have doubled or tripled in some areas. Increasing insurance costs may 

affect consumers purchasing decisions regarding energy efficiency, thus 

limiting energy cost savings opportunities presented by the Gulf Coast 

reconstruction from being realized.

Page 19 GAO-07-654 Energy Efficiency
State officials and non-profit organizations told us that homeowners also 

will have to decide whether existing employment opportunities make 

returning to their homes feasible. Many residents lost their jobs when 

infrastructure was destroyed and employees and customers were 

displaced. The employment level statewide in Mississippi returned to their

pre-hurricane levels, while levels in the hardest hit area remained down, as

did the rate in Louisiana. In the absence of employment opportunities, 

many residents will likely not return to their homes. Without adequate 

employment opportunities, even those residents who do return are likely 

to face financial hardships that will make decisions about repairing or 

rebuilding their homes in an energy efficient manner a low priority. 

Even after addressing these issues, homeowners will have to decide 

whether it is in their best financial interest to pay the additional costs to 

make their homes more energy efficient through purchases, such as 

energy efficient appliances, or to use their money for other purposes. For 

consumers, especially poor and low-income consumers, this decision may 

be compounded by their loss of income, assets, and other financial needs

that will have to be met. One study we reviewed suggest that among the 

most important barriers generally affecting consumers and their 

purchasing decisions are limited information, limited awareness and 

interest in energy costs and reducing energy expenses; and limited capital

and rapid payback requirements. Consumers are less likely to voluntarily 

adopt energy efficiency measures without financial incentives and 

education on the costs and benefits.

Because the rebuilding of the Gulf Coast is largely a state and local matter,

HUD and DOE have played a supportive role in promoting energy efficient 

rebuilding. More specifically, HUD and DOE have provided financial and 

educational resources that can encourage the incorporation of energy 

efficiency in the reconstruction of the Gulf Coast. In addition both 

agencies have broader national programs that may assist Louisiana and 

Mississippi in incorporating energy efficiency improvements during their 

rebuilding. 

HUD and DOE Are 

Providing Funding 

and Educational 

Resources to 

Encourage Gulf Coast 

States to Incorporate 

Energy Efficiency in 

Rebuilding 

Page 20 GAO-07-654 Energy Efficiency
HUD officials told us that they provided the affected Gulf Coast states with

funding that can be used for, among other things, rebuilding in an energy 

efficient manner. Congress has appropriated a total of $16.7 billion in 

Community Development Block Grants (CDBG) supplemental funding that

has been allocated for use in the five affected Gulf Coast states for general 

rebuilding. These grants afford states a great deal of discretion in 

designing, rebuilding, and repairing housing; in neighborhood 

revitalization; and in economic development activities. The federal 

coordinator for Gulf Coast rebuilding has said that the CDBG program 

allows state leaders “who are closest to the issues” to make decisions 

regarding how the money should be spent.28 In Louisiana and Mississippi, 

these funds are mostly being used for restoring housing infrastructure. To 

receive CDBG funding, Louisiana and Mississippi as well as the other 

affected Gulf Coast states were required to submit a Disaster Action 

Plan—an overall plan for short-and long-term disaster recovery—to HUD 

for review and approval. States were required to describe, among other 

things, how their Disaster Action Plan would encourage construction 

methods that emphasize energy efficiency and promote the enactment and 

enforcement of modern building codes as part of their rebuilding process. 

HUD officials said they also have been working with Louisiana and 

Mississippi homeowner assistance programs to target CDBG funds to 

better assist states and consumers in rebuilding homes that are more 

energy efficient, safer, and storm resistant. In addition, HUD officials told 

us that they encourage public housing authorities to use energy efficient 

construction practices, appliances, and equipment. According to HUD, this 

was the case when the department approved and funded a $22 million 

grant to the Housing Authority of New Orleans and $7 million in grants to

the Biloxi Mississippi Housing Authority from its Capital Fund Reserve for 

Emergencies and Natural Disasters to rebuild, repair, modernize, and 

improve the energy efficiency of damaged public housing units. 

HUD Is Making Funding 

Available to Gulf Coast 

States for Rebuilding and 

Repairing Residential 

Buildings 

HUD officials told us that they also have disseminated information on 

energy efficiency to public housing authorities and participated in 

educational and training activities to assist state and local offices, 

consumers, and builders with considering energy efficient rebuilding. For 

example, the department distributed a special disaster recovery edition of

its Public Housing Energy Conservation Clearinghouse e-newsletter, 

 28Statement made by Donald Powell, the Federal Coordinator for Gulf Coast Rebuilding; on 

January 25, 2006, when he announced the distribution of CDBG funds to the five Gulf Coast 

states impacted by hurricanes. 

Page 21 GAO-07-654 Energy Efficiency
outlining energy efficiency measures that public housing authorities and 

residents can take to save energy and reduce utility costs. In addition, 

HUD was involved in several reconstruction activities that while focused 

on hurricane preparedness and reconstruction, also provided information 

on energy efficiency. These activities included the Mississippi Governors 

Reconstruction “Expo” where HUD disseminated extensive materials on 

its Partnership for Advanced Technologies in Housing (PATH) program, 

and the release of HUD “Tech Sets” on storm-resistant roofing and wind 

resistant openings for use by homeowners, builders, and community 

officials in the affected Gulf Coast states. 

HUD also has actions that were planned or under way prior to the Gulf 

Coast hurricanes that are designed to improve the energy efficiency of the 

nation’s public housing stock and that could potentially benefit the Gulf 

Coast states.29 These actions included the following: 

• HUD’s Energy Task Force developing standard training program modules 

to promote energy efficiency in both new and existing HUD-assisted and 

financed housing. HUD also will develop materials on ways to improve 

household energy efficiency for housing authorities to disseminate to 

public housing residents. 

• HUD, through its new Partnership for Home Energy Efficiency with DOE 

and the Environmental Protection Agency, working to ensure that 

information on Energy Star products and appliances, Energy Star 

Qualified New Homes, and Home Performance with Energy Star for 

existing homes is available for distribution to public housing authorities, 

grant recipients, property managers, and new Federal Housing 

Administration (FHA) homebuyers.30

• HUD improving its tracking and monitoring of energy efficiency in pubic 

housing with an automated system to provide public housing authorities 

with data that serves as an indicator of the relative efficiency of individual

properties and their potential for energy savings. 

 29Section 154 of EPACT requires HUD to develop and implement an integrated strategy to

reduce utility expenses through cost-effective energy conservation and efficiency measures 

and energy-efficient design and construction of public and assisted housing. HUD also is 

required to monitor the energy use of public housing agencies and submit a report update 

every 2 years on its progress in implementing the strategy. 

30Home Performance with Energy Star is a whole-house Energy Star retrofit initiative 

aimed at existing homes. 

Page 22 GAO-07-654 Energy Efficiency
In its capacity as the nation’s lead agency on energy efficiency issues, 

DOE’s primary role in the Gulf Coast reconstruction has been to support 

states by provide training and education to state and local officials, private 

industry, and consumers. In direct response to the Gulf Coast hurricanes, 

DOE partnered with several entities, including state energy offices, to 

conduct training workshops on rebuilding with energy efficiency and

storm-resistance practices for home builders, contractors, and consumers. 

For example, DOE, in partnership with HUD’s PATH program, Home 

Depot, and Entergy Corporation, sponsored free home repair workshops 

in Louisiana and Mississippi that highlighted energy efficiency.31 Attendees 

had the opportunity to receive hands-on instructions on repairing storm 

damaged roofs, ceilings, walls, and floors; installing windows, doors, and 

hurricane shutters; and improving a home’s energy efficiency and 

durability. DOE also responded to a request from the Louisiana State 

Energy Office to provide Web-based code training sessions to architects, 

engineers, and code officials to train them on how to comply with the 2005 

Louisiana ASHRAE Commercial Energy Building Code as they renovate 

and replace commercial buildings. 

DOE also made educational resources available to all parties involved in 

the rebuilding efforts by developing a Disaster Recovery and Building 

Reconstruction Web site (www.eere.energy.gov/buildings) to (1) provide 

various educational resources to state and local officials, builders and 

contractors, and consumers and (2) promote cost-effective and energyefficient reconstruction. This Web site includes information on energy

efficiency and rebuilding training opportunities and a wide range of 

guidelines, fact sheets, and case studies developed by DOE, HUD, FEMA, 

the National Association of Home Builders, and other organizations. 

DOE has taken other actions to encourage parties involved in the 

rebuilding process to consider energy efficiency. For example, it awarded 

a $100,000 grant to Louisiana, Mississippi, and other affected Gulf Coast 

states to incorporate energy efficiency and sustainable design practices 

into their rebuilding strategy. DOE also partnered with state energy offices

to encourage the regional exchange of information and best practices. As

part of its partnership with states, DOE hosted the Katrina Green Informal 

DOE Is Providing Energy 

Efficiency Training and 

Education to Consumers 

and State and Local

Officials 

 31PATH is a voluntary partnership between leaders of the homebuilding, product

manufacturing, insurance, and financial industries and representatives of federal agencies 

concerned with housing. HUD’s Office of Policy Development and Research (PD&R)

coordinates all PATH activities. PD&R manages PATH’s budget, strategy, and daily 

operations.

Page 23 GAO-07-654 Energy Efficiency
Working Group, a biweekly conference call with various federal and state 

officials, industry associations, builders, nonprofit organizations, and 

energy efficiency and housing experts, aimed at networking and sharing 

information about the rebuilding efforts in Gulf Coast states. DOE officials 

said that the agency plans to continue its efforts to encourage Louisiana 

and Mississippi and other affected states to rebuild more energy 

efficiently.

Finally, DOE also has ongoing nationwide energy efficiency initiatives to 

assist all states with their own energy efficiency initiatives through several

national programs and projects including the following: 

• Federal-State Partnership Projects: DOE recently awarded $6 million to 

fund 22 federal-state partnerships that will help implement training 

programs and provide technical assistance and education that is intended 

to ultimately result in the construction of more energy efficient buildings. 

Louisiana and Mississippi were among the states that were awarded 

partnership grants. Louisiana’s project proposal, entitled Gulf Region 

High Performance Homes Program, is intended to spur market 

transformation in Louisiana and the Gulf Coast region through educational 

outreach, demonstration, technical assistance, and training on locally

appropriate, hazard-resistant, energy-efficient, and healthy-building 

science and technologies. The goal of Mississippi’s proposal, entitled 

Promoting Energy Codes and “Beyond Code” Programs through EPACT 

Tax Incentives, is to integrate building energy codes and “better than 

code” programs using the tax incentives of EPACT as a coordinating 

framework, and to promote building energy codes, DOE Building America 

approaches, and Energy Star Home procedures as avenues for qualifying

for the buildings-related tax incentives in EPACT. 

• State Energy Program (SEP): DOE’s SEP provides grants to the states to 

design and carry out their own renewable energy and energy efficiency

programs. Funding from SEP goes to state energy offices in all states and 

U.S. territories. States use these grants to address their energy priorities 

and to adopt emerging renewable energy and energy efficiency 

technologies. SEP projects are managed by state energy offices, not by 

DOE directly. In 2006, DOE provided over $650,000 in SEP grants to 

Louisiana and about $400,000 to Mississippi. 

• Weatherization Assistance Program: This program enables low-income 

families to permanently reduce their energy bills by making their homes 

more energy efficient. According to DOE, it is this country’s longest 

running and perhaps most successful energy efficiency program. During 

the last 30 years, DOE’s Weatherization Assistance Program has provided 

Page 24 GAO-07-654 Energy Efficiency
weatherization services to more than 5.5 million low-income families. DOE 

reported that, on average, weatherization reduces overall energy bills by 

$358 per year at current prices. In 2006, about $2 million in weatherization

funds were provided to Louisiana and about $1.9 million went to 

Mississippi.

While the current level of reconstruction and the difficulties surrounding 

the return of residents is unsettling for both individuals and communities, 

the nature and status of rebuilding actually creates significant 

opportunities for incorporating energy efficiency measures into 

reconstruction and rebuilding efforts. Nonetheless, as great as the 

potential opportunities are, the challenges that must be overcome to 

capitalize on these opportunities and actually achieve energy cost savings 

are equally significant. Since most of the reconstruction in Louisiana and 

Mississippi is still in the planning phase, there is still time to address the 

challenges of incorporating energy efficiency in the rebuilding of the Gulf

Coast. Meeting these challenges will undoubtedly benefit consumers, the 

Gulf Coast region, and the nation. 

While the rebuilding of the Gulf Coast is largely a state and local matter, 

HUD and DOE have provided states and consumers with funding and 

educational resources to assist in the largest reconstruction effort in the 

nation’s history. Going forward, there will be a growing opportunity to 

incorporate energy efficiency measures during the rebuilding process—as 

states and local governments decide on how and to what extent to 

implement and enforce new building codes, and consumers begin to make

decisions about whether making energy efficient choices is in their best 

financial interest. Given that improved energy efficiency measures, such as 

updated building codes and energy efficient building materials are new to 

the Gulf Coast region, states and consumers can greatly benefit from DOE 

expertise in these areas. DOE expertise as well as HUD and DOE 

resources may prove invaluable to states and consumers as they make 

decisions about building code training and enforcement, energy efficiency

construction practices, and purchasing energy efficient appliances and

equipment. 

We provided a draft of this report to DOE and HUD for their review and 

comment. DOE provided technical and clarifying comments, which we 

incorporated as appropriate. HUD had no comments on the report. 

Concluding 

Observations 

Agency Comments 

Page 25 GAO-07-654 Energy Efficiency
We are sending copies of this report to interested congressional 

committees, the Secretary of Energy, the Secretary of Housing and Urban 

Development, and other interested parties. We will also make copies 

available to others on request. In addition, the report will be available at 

no charge on GAO’s Web site at http://www.gao.gov. 

If you or your staffs have any questions regarding this report, please 

contact me at (202) 512-3841 or gaffiganm@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff who made major contributions to this 

report are listed in appendix IV. 

Mark E. Gaffigan 

Acting Director, Natural Resources 

 and Environment 

Page 26 GAO-07-654 Energy Efficiency
List of Congressional Addressees 

The Honorable Jeff Bingaman 

Chairman 

The Honorable Pete V. Domenici 

Ranking Member 

Committee on Energy and Natural Resources 

United States Senate 

The Honorable Susan M. Collins 

Ranking Member 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

The Honorable Mary L. Landrieu 

Chairwoman

Ad hoc Subcommittee on Disaster Recovery 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

The Honorable John D. Dingell 

Chairman 

Committee on Energy and Commerce 

House of Representatives 

The Honorable Peter J. Visclosky 

Chairman 

Subcommittee on Energy and Water Development 

Committee on Appropriations 

House of Representatives 

The Honorable John W. Olver 

Chairman 

Subcommittee on Transportation, Housing and Urban Development, 

 and Related Agencies 

Committee on Appropriations 

House of Representatives 

Page 27 GAO-07-654 Energy Efficiency
Appendix I: Objectives, Scope, and Appendix I: Objectives, Scope, and Methodology 

Methodology 

During our review, our objectives were to (1) analyze the extent of 

opportunities for incorporating energy efficiency improvements and 

realizing energy cost savings in the Gulf Coast reconstruction, (2) discuss 

potential challenges to realizing energy cost savings during the 

reconstruction, and (3) describe the role of Department of Housing and 

Urban Development (HUD) and the Department of Energy (DOE) in 

promoting energy efficiency in the rebuilding of the Gulf Coast. 

To estimate potential energy cost savings from rebuilding and repairing 

residential and commercial structures on the Gulf Coast, we worked with 

DOE’s Pacific Northwest National Laboratory (PNNL). PNNL modeled the 

levels of energy efficiency that could be achieved if the buildings were 

rebuilt or repaired to meet newer building codes and standards or “above 

code” levels, and compared these measures with a baseline that 

approximately reflected the energy efficiency of these buildings prior to 

the Gulf Coast hurricanes. Separate analyses were conducted for 

representative residential and commercial building types. We worked with 

PNNL in developing the model assumptions, including the size and 

characteristics of representative residential and commercial buildings, the 

building codes and standards that were used, the future costs of fuels, the 

heating and cooling climate of the area, the discount rate used for 

consumers’ valuation of future fuel cost savings from more energy 

efficient equipment and materials. We found PNNL’s models and 

assumptions reasonable and sufficiently reliable for the purposes of this 

report. 

For a representative residential Gulf Coast home, PNNL modeled several 

energy efficiency scenarios—two baseline measures,1

 an energy code

level, and two “above code” levels. PNNL used an energy simulation tool 

developed at the Florida Solar Energy Center and DOE’s Energy 

Information Administration forecasts of natural gas and electricity prices. 

PNNL also modeled the efficiency gains that could be achieved by bringing 

Gulf Coast commercial buildings into compliance with current, more 

efficient, energy standards for four prototypical buildings—offices, 

schools, hospitals and retail. PNNL estimated the annual energy cost 

savings associated with three levels of energy standards—baseline 

 1

PNNL modeled two baselines. The first baseline is an approximation of measures in 

typical existing housing in the rebuilding region. The second baseline represents the 

estimated energy efficiency associated with construction practices in areas of the Gulf

Coast that do not have building codes or where the codes may not be enforced. 

Page 28 GAO-07-654 Energy Efficiency
Appendix I: Objectives, Scope, and 

Methodology 

efficiency, the current code’s higher-efficiency, and “above code” building 

standards. 

To aggregate potential residential energy cost savings from rebuilding or 

repairing destroyed and damaged homes in the Gulf Coast region, we used 

PNNL’s estimates of annual energy cost savings for a representative home 

built to different levels of energy efficiency and federal estimates of the 

aggregate number of these homes to estimate the scope for savings. We

reviewed the methodology used to estimate the damaged and destroyed 

homes, including the steps that were taken to ensure the reliability of 

these data and were satisfied that the estimates were satisfactory for our 

purposes. 

To understand the potential challenges that may limit energy cost savings 

from being realized, we relied on site visits to Louisiana and Mississippi, 

interviews with state government officials, and attendance at local 

building conferences and housing summits. Furthermore, we interviewed

energy efficiency practitioners, building industry representatives, and nonprofit organizations as well as HUD and DOE officials to solicit their views 

on the challenges of incorporating energy efficiency measures in the 

rebuilding and repairing of destroyed and damaged buildings.

To describe the role of HUD and DOE in promoting energy efficiency in 

the rebuilding of the Gulf Coast, we interviewed agency officials and 

obtained and reviewed documentation describing the actions that these 

agencies have taken to assist Louisiana and Mississippi. We also 

conducted site visits to these states to obtain firsthand knowledge from 

state government officials, non-profit organizations, home builders, and 

energy efficiency practitioners about their views on HUD’s and DOE’s 

efforts to promote or work with various stakeholders to consider energy

efficiency in the rebuilding process. We conducted our work from March

2006 through May 2007 in accordance with generally accepted government 

auditing standards, which included an assessment of data reliability. 

Page 29 GAO-07-654 Energy Efficiency
Appendix II: Energy Cost Savings Estimates Appendix II: Energy Cost Savings Estimates for Residential Buildings 

for Residential Buildings 

Tables 1 through 4 contain energy cost savings estimates for homes built 

in accordance with various energy efficiency standards and for homes 

repaired with selected energy efficiency-related improvements. 

Table 1: Annual Energy Cost Savings for Heating and Cooling Homes Built in Accordance with Various Energy Efficiency 

Codes and Standards with Slab-on-Grade and Elevated Foundations 

Per house dollar savings

over new housing baseline

Percentage savings over new

housing baseline 

Aggregate savings over new

housing baseline for 

122,261 homes (dollars in millions)

Energy 

efficiency 

alternative Slab-on grade Elevated Slab-on grade Elevated Slab-on grade Elevated

International 

Residential Code 

(IRC) 2006 $167 $233 24% 28% $20 $28

Energy Star $310 $364 45% 44% $38 $45

Tax credit $371 $447 54% 54% $45 $55

Source: GAO analysis of Pacific Northwest National Laboratory data. 

Notes: 

New housing baseline: estimated current practice for new construction in areas of the Gulf Coast 

region that does not have building codes. There will be a variation of energy efficiency in both new 

and existing buildings. Some buildings may be more energy efficient than the baseline assumed here,

some will be less. 

IRC 2006: For this analysis, we analyzed the energy efficiency requirements of the International 

Energy Conservation Code (IECC) 2006, which is similar in stringency to the energy provisions of the

IRC 2006 as well as the IECC 2003. 

Energy Star Homes Guideline: Energy Star requires a 15 percent improvement over the IECC for all 

energy used in a house. 

Tax Credit: Qualification for the $2,000 tax credit requires a 50 percent reduction in space heating 

and air conditioning energy use compared with the IECC 2003, including supplements. 

Page 30 GAO-07-654 Energy Efficiency
Appendix II: Energy Cost Savings Estimates 

for Residential Buildings 

Table 2: Estimated Construction Cost Increases and Cost Recovery Periods for Building Homes in Accordance with Various

Energy Efficiency Codes and Standards 

Cost recovery period

Energy 

efficiency 

alternative 

Per house dollar 

cost increase above 

new housing

baseline 

House with 

slab-on-grade

 foundation (years)

House with 

 an elevated

 foundation (years) 

Aggregate cost

 increase above new

housing baseline for 

122,261 homes

 (dollars in millions) 

IRC 2006 $618 3.7 2.7 $76

Energy Star $2,198 7.1 6.0 $269

Tax Credit $1,354 3.6 3.0 $166

Source: GAO analysis of Pacific Northwest National Laboratory data. 

Note: For this analysis, we analyzed the energy efficiency requirements of the IECC 2006, which is

similar in stringency to the energy provisions of the IRC 2006. 

Table 3: Annual Energy Cost Savings for Selected Home Energy Efficiency Improvements 

From: estimated

existing home energy 

features 

(prehurricane) 

To: more energy 

efficient home 

features 

Incremental cost

(per house) 

 Annual per

house energy 

cost savings

Cost recovery

period 

(years) 

Aggregate energy 

cost savings for 

143,862 homes

(dollars in millions) 

SEER-10 Cooling 

equipment 

SEER-13 cooling 

equipment 

$335 $127 2.6 $18 

Manual thermostat Programmable

thermostat 

$65 Unknown Unknown Unknown

Standard duct sealing Improved duct sealing $235 $63 3.7 $9 

Single pane, aluminum 

window 

Double pane vinyl lowE window $3,506.00 

($10.56 sq. ft.)

$202 17.4 $29

Source: GAO analysis of Pacific Northwest National Laboratory data. 

Note: Studies have been unable to verify any energy savings from programmable thermostats. In

addition, EPA recently decided to cease crediting any thermostats as Energy Star. Inherently, these 

thermostats save no energy but allow the consumers to set a temperature schedule that could reduce 

energy. 

Page 31 GAO-07-654 Energy Efficiency
Appendix II: Energy Cost Savings Estimates 

for Residential Buildings 

Table 4: Annual Energy Cost Savings for Home Lighting and Appliance Upgrades 

From: standard lighting 

and appliances 

To: more energy 

efficient lighting and 

appliances 

Incremental

cost

(per house)

Annual per

house energy 

cost savings

Cost recovery

period 

(years) 

Aggregate energy 

cost savings for 

143,862 homes

(dollars in millions)

Incandescent lighting Compact fluorescent 

lighting 

$99 $48 2 $7

New conventional 

refrigerator 

Energy Star labeled $65 $9 7 $1

New conventional clothes 

washer 

Energy Star labeled $440 $59 7.5 $8

New conventional dish 

washer 

Energy Star labeled $45 $13 3.5 $2

Source: GAO analysis of Pacific Northwest National Laboratory data. 

Page 32 GAO-07-654 Energy Efficiency
Appendix III: Energy Cost Savings Estimates Appendix III: Energy Cost Savings Estimates for Commercial Buildings 

for Commercial Buildings 

Tables 5 through 7 contain energy cost savings estimates for commercial 

buildings— office, school, hospital, and retail buildings—constructed in 

accordance with various commercial building energy standards, to “above 

code” levels, and with more efficient lighting requirements. 

Table 5: Annual Incremental Energy Cost Savings per Building for Various

Commercial Buildings Constructed in Accordance with a Newer ASHRAE Standard

Incremental savings

from moving to a

newer ASHRAE 

standard Office School Hospital Retail

 1975 standard

(Mississippi’s current 

standard) to 

2001 standard

$13,311

($0.18 sq. ft.)

(12%)

$28,060 

($0.23 sq. ft.) 

(18%) 

$37,822

($0.16 sq. ft.)

(7%)

$145,404

($0.61 sq. ft.)

(34%)

2001 standard

(Louisiana’s current 

standard) to 

2004 standard

$7,608

($0.10 sq. ft.)

(8%)

$10,524 

($0.09 sq. ft.) 

(8%) 

$32,567

($0.14 sq. ft.)

(7%)

$37,649

($0.16 sq. ft.)

(13%)

Source: GAO analysis of Pacific Northwest National Laboratory data. 

On a per building basis, we estimated the energy cost savings that could be

achieved in Mississippi and Louisiana by moving from their current energy 

standards to the LEED 1- point and 10-point levels as well as the federal tax

credit level, as shown in tables 6 and 7.1

 1

We did not evaluate the total cost-effectiveness of these options because the methods that 

designers might use to achieve these savings are highly variable. 

Page 33 GAO-07-654 Energy Efficiency
Appendix III: Energy Cost Savings Estimates 

for Commercial Buildings 

Table 6: Estimated Energy Cost Savings from Commercial Buildings in Accordance

with Selected “Above Code” Levels 

Estimated annual energy cost savings, per 

building type, by amount total and square feet 

Location Office School Hospital Retail

Louisiana - Current standard (ASHRAE 2001 standard) 

LEED 1-point level $17,263 

($0.23) 

$22,093 

($0.18) 

$77,259

($0.32)

$62,028

($0.26)

LEED 10-point level $45,785 

($0.61) 

$60,139 

($0.49) 

$219,706

($0.91)

$140,757

($0.59)

Tax credit level $49,538 

($0.66) 

$63,821 

($0.52) 

$239,021

($0.99)

$140,757

($0.59)

Mississippi – Current standard (ASHRAE 1975 standard) 

LEED 1-point level $30,773 

($0.41) 

$50,320 

($0.41) 

$115,889

($0.48)

$207,557

($0.87)

LEED 10-point level $59,295 

($0.79) 

$88,367 

($0.72) 

$258,335

($1.07)

$286,285

($1.20)

Tax credit level $63,048 

($0.84) 

$92,049 

($0.75) 

$277,650

($1.15)

$286,285

($1.20)

Source: GAO analysis of Pacific Northwest National Laboratory data. 

Page 34 GAO-07-654 Energy Efficiency
Appendix III: Energy Cost Savings Estimates 

for Commercial Buildings 

Table 7: Annual Lighting Cost Savings for Commercial Buildings in Louisiana and

Mississippi

ASHRAE standard

Location/Building

type 

1975 standard to

2001 standard

2001 standard to

2004 standard

Cumulative savings

(1975 standard to

2004 standard)

Louisiana

Office $11,334

($0.15 sq. ft.)

$5,704 

($0.08 sq. ft.) 

$17,038

($0.23 sq. ft.)

School $13,746

($0.11 sq. ft.)

$8,223 

($0.07 sq. ft.) 

$21,969

($0.18 sq. ft.)

Hospital $26,075

($0.11 sq. ft.)

$26,075 

($0.11 sq. ft.) 

$52,150

($0.22 sq. ft.)

Retail $107,118

($0.45 sq. ft.)

$30,537 

($0.13 sq. ft.) 

$137,655

($0.58 sq. ft.)

Mississippi

Office $12,459

($0.17 sq. ft.)

$6,230 

($0.08 sq. ft.) 

$18,689

($0.25 sq. ft.)

School $14,973

($0.12 sq. ft.)

$8,959 

($0.07 sq. ft.) 

$23,932

($0.19 sq. ft.)

Hospital $28,489

($0.12 sq. ft.)

$28,489 

($0.12 sq. ft.) 

$56,978

($0.24 sq. ft.)

Retail $117,138

($0.49 sq. ft.)

$33,400 

($0.14 sq. ft.) 

$150,538

($0.63 sq. ft.)

Source: GAO analysis of Pacific Northwest National Laboratory data. 

Note: The lighting cost saving reflect the typical building sizes used in our analysis, as well as the 

electricity prices used for Louisiana and Mississippi, which were 8.81 cents per kilowatt hour (kWh) 

and 9.64 cents per kWh respectively. 

Page 35 GAO-07-654 Energy Efficiency
Appendix IV: 

A

GAO Contact and Staff 

cknowledgments 

Page 36 GAO-07-654

Appendix IV: GAO Contact and Staff 

Acknowledgments 

Mark E. Gaffigan, (202) 512-3841, gaffiganm@gao.gov

In addition to the contact person named above, Dan Haas, Assistant 

Director; Mark Braza; Jacqueline Cook; John Delicath; Yvette GutierrezThomas; Raun Lazier; Paul Pansini; Anne Stevens; and Barbara 

Timmerman made key contributions to this report. 

GAO Contact 

Staff 

Acknowledgments 

(360679) Energy Efficiency
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