by PAUL MORTON

Associate editor

What do cities like Houston, London, Paris, Tokyo, and Oberlin have in common? They are all part of an initiative to bring sustainable remodeling into the mainstream.

Well, Oberlin's participation is still tentative, but it is the only small city invited to join the Clinton Climate Initiative. According to Daniel Gardner, who made a presentation to city council last week, the initiative, sponsored by the William J. Clinton Foundation, seeks to create a market for products to make existing buildings more energy efficient.

"We know energy efficiency is the cheapest, most reliable, and easiest source of electricity and space conditioning," Gardner said. "However there are some problems so far in market for energy efficiency, particularly as it pertains to the already-built environment. One is simply that people don't want to buy it. If your electricity bill is lower than your cell phone bill -- and it is for many people -- then you're not so worried about the incremental cost of leaving your TV on or not switching out your lightbulbs."

Gardner said high up-front capital costs and inflated claims of potential energy savings have also soured many consumers to making energy-efficient improvements. And the difficulty in creating retrofit products to improve energy efficiency, compared to energy-efficient new construction, has suppressed the market for energy-efficient retrofit products.

The Clinton Climate Initiative works with C-40 cities -- originally 40, but now 45, of the largest cities in the world -- who have pledged to accelerate their efforts to reduce greenhouse gases and serve as models for other cities. Using the economic clout of those cities, the initiative hopes to develop a market for cost-effective energy-efficient retrofit products.

Gardner said he and Oberlin College environmental studies professor David Orr applied to the Clinton foundation on behalf of Oberlin to participate in the initiative. The foundation asked Gardner and Orr to develop a hybrid of the initiative program for small cities, known as the Oberlin Building Efficiency Retrofit (OBER) Program.

The initiative program works in a similar manner to the Ohio House Bill 264 Program, begun in 1985, which allows school districts to make energy-efficient improvements to their facilities and pay for them using the energy savings.

For the Clinton Climate Initiative, the foundation enlisted the services of 10 of the largest energy service companies in the world to conduct energy audits of public and commercial buildings and guarantee projected energy savings. The foundation has also reached agreements with 25 product suppliers to date, and gotten commitments from six world banks to provide $1 billion each for upfront financing of installed products.

"In the program we are developing, there is not upfront capital outlay by the building owner," Gardner said. "Those are paid for through energy savings, and they are paid for through energy savings alone."

He said the key is the guarantee of energy savings by the energy services company. He said if savings are less than predicted, the company will make up the difference to the building owner.

Gardner used an example of a building with an annual energy cost of $1 million, undertaking improvements with a project cost of $883,000, resulting in 18 percent energy savings. The example assumes energy prices would rise three percent per year, and the debt service on the improvements would be seven percent for 10 years.

"In the first year your actual energy savings are $180,000, but you took out a loan for $883,000 worth of stuff, and your repayment on that is $150,000 per year," Gardner said. "So in the first year of this program, your total cost is going to be $970,000, a modest $30,000 savings over what you were paying. But you now have a new roof, you have a new heating system, et cetera. And in year 11, all that savings is yours, and in year 12 and year 13 and so on."

Gardner said the OBER Program would necessarily deal with large-scale projects which had the potential for significant energy savings.

"Oddly enough, Oberlin has presented probably the most difficult case for the Clinton foundation," Gardener said. "That's partly because of our size, partly because we're doing it earlier than any of the other cities I've mentioned what ultimately they hope to achieve. That is to work across sectors of the economy with private building owners, with public building owners, with owners of buildings of all types."

He said individual residences would not work in the program because varied lifestyles would make it difficult for energy service companies to guarantee the energy savings. It would be open to industrial, commercial, government, school, and institutional customers.

Gardner said the OBER Program would have some particular challenges, including creating a common procurement process that could work for the city, schools, and other public agencies as well as private building owners. It would also require a central organization which would connect the energy service companies with clients.

"The energy service companies are thinking about things like the Sears Tower or Houston's 73 fire stations," Gardner said. "We've got one, so we're not as tasty a morsel to work with, especially if you have 10 different owners of 15 different buildings. It would be difficult to get them to work in that environment. So we are creating or modifying an organization that will, perhaps, be the financial intermediary to get the money and relend it to whoever participates.