For Homebuyers, Bge's Energywi$e Program Creates A No-lose Situation

July 30, 1995|By Daniel Barkin | Daniel Barkin,Sun Staff Writer

On blustery winter days, when Malissa Kirszenbaum would stroll by the front door of her previous home in Randallstown, it was like walking in front of a fan.

She and her husband, Leon, were stunned by soaring utility costs.

"Our bills were absolutely phenomenal. Our neighbors had the same problem," recalled Mrs. Kirszenbaum.

Running the air conditioner on most summer days was out. They didn't feel like cooling the great outdoors.

But today, despite moving to a larger house in Ellicott City, the Kirszenbaums are paying significantly less to Baltimore Gas and Electric Co., and BGE is just fine with that.

The Kirszenbaums bought a home participating in BGE's ambitious "EnergyWi$e" program. The program, inaugurated last fall, has already certified 549 new homes in the Baltimore region, with 1,270 in the inspection pipeline. BGE hopes that 70 percent of the new homes built locally in the year 2000 will have EnergyWi$e technology and construction mandated by the program. The key to the effort's success is the dollar sign in the program's name.

BGE is paying participating builders for the extra costs of higher-efficiency water heaters, better insulation and pricier windows.

Bob Ward, one of the biggest builders in Harford County, said that the program is a "big benefit to the buyer that doesn't cost me anything and doesn't cost the buyer anything."

The average per-dwelling rebate paid by BGE to builders who pass the utility's EnergyWi$e inspections has been $1,800. The maximum per townhouse is $1,500. The minimum for a single-family detached home is $2,000. BGE and builders in the program say that the rebates allow builders to upgrade homes without having to charge higher prices.

The biggest winners, they say, are the homebuyers, who will not only get energy-efficient homes, but will also find it easier to secure mortgages for those homes.

According to BGE, many lenders will increase the debt-to-income ratio of a prospective borrower as much as two percent for EnergyWi$e.

The rationale is that the heating and air-conditioning bills will be lower, thus allowing more of the household's income to go for monthly mortgage, insurance and tax payments.

For example, lenders traditionally have wanted to see the monthly mortgage payments plus tax and insurance total no more than 28 percent of pretax monthly income, and payments of all debts to reach no more than 36 percent.

An energy-efficient home can help borrowers whose payments put them over these traditional ratios. The savings can be as much as 25 percent on the heating bill of an all-electric new home with a heat pump, according to BGE.

A 2,600-square-foot Colonial home built to EnergyWi$e standards uses around 12,869 kilowatt hours a year, while the same home not built to those standards will use 17,186, according to J. Mark Duerr, a BGE marketing administrator. At current rates, the savings for the Energy- Wi$e home can be as much as $400 per year.

Mrs. Kirszenbaum says that in their new Doughhoregan Homes-built residence, from November 1994 through March, the average BGE bill ran $104 a month. She says their bills have come down between $50 and $75 a month from what they were paying in Randallstown.

The savings are impressive, but the improved comfort in the winter is noticeable as well, she said. "There's no drafts."

Conservation programs such as EnergyWi$e are seen by state regulators and utilities as a way to defer costly and controversial generating plant construction. The program and similar ones for existing homes and businesses have the potential to restrain the peak load demands of BGE customers.

Maryland utilities were ordered by the state Public Service Commission to begin designing conservation programs in 1988, according to Greg Stagg, a PSC regulatory economist, and the current programs are the result of a collaborative effort of utilities, regulators, industrial users and consumer representatives.

By the end of next year, BGE hopes to have 4,700 new homes built to EnergyWi$e standards, and estimates that energy-saving measures will reduce these homes' demand by 3 megawatts from what less efficient housing would require.

While that is helpful, it is still just a start. By way of comparison, BGE got some additional capacity with the recent completion of its newest generating project, Perryman Unit 51, a gas-fueled facility in Harford County that will produce 140 megawatts in normal operations.

But BGE still has to purchase power from neighboring utilities on the coldest winter days when customer demand pushes past 6,000 megawatts.

BGE officials say EnergyWi$e is an effective approach because it is "passive" -- built into the home and thus requiring no extra effort -- and because it makes sense financially to homebuyers.

"American consumers want to be 'green,' " said Barry K. Hedden, a BGE marketing administrator. "But they want incentives."

Builders wooed

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