Michigan Office of Administrative Hearings and Rules  
Administrative Rules Division (ARD)  
MOAHR-Rules@michigan.gov  
REGULATORY IMPACT STATEMENT  
and COST-BENEFIT ANALYSIS (RIS)  
AGENCY INFORMATION:  
Department name:  
Licensing and Regulatory Affairs  
Bureau name:  
Bureau of Construction Codes  
Name of person filling out RIS:  
Tony Williamson  
Phone number of person filling out RIS:  
517-241-9303  
Email of person filling out RIS:  
WilliamsonT5@michigan.gov  
RULE SET INFORMATION:  
ARD assigned rule set number:  
2021-48 LR  
Title of proposed rule set:  
Construction Code - Part 10. Michigan Uniform Energy Code  
COMPARISON OF RULE(S) TO FEDERAL/STATE/ASSOCIATION STANDARDS  
1. Compare the proposed rules to parallel federal rules or standards set by a state or national licensing agency  
or accreditation association, if any exist.  
There are no federal rules or standards set by a state or national licensing agency or accreditation association.  
A. Are these rules required by state law or federal mandate?  
Yes, these rules are required by state law in MCL 125.1504(6) and federal mandate in 42 U.S.C. Sec. 6833(a).  
B. If these rules exceed a federal standard, please identify the federal standard or citation, describe why it  
is necessary that the proposed rules exceed the federal standard or law, and specify the costs and  
benefits arising out of the deviation.  
These rules, as required by MCL 125.1504(6), do not exceed the federal standards indicated in 42 U.S.C. Sec.  
6833(a).  
2. Compare the proposed rules to standards in similarly situated states, based on geographic location,  
topography, natural resources, commonalities, or economic similarities.  
The proposed rules incorporate by reference the 2021 edition of the IECC, published by the International Code  
Council (ICC), and ASHRAE standard 90.1-2019 with Michigan amendments, deletions, and additions. All  
surrounding Great Lakes states (Ohio, Illinois, and Wisconsin) follow the International Energy Conservation Code.  
Ohio and Illinois follow the 2018 IECC and Wisconsin follows the 2015 IECC. In addition, it is anticipated the  
surrounding states will adopt the latest version of the IECC, protecting the health, safety, and welfare of the public,  
while ensuring sustainable human welfare.  
A. If the rules exceed standards in those states, please explain why and specify the costs and benefits  
arising out of the deviation.  
The IECC is a nationally recognized model code used through the United States as a minimum standard. The  
Michigan rules do exceed the standards of other Great Lake States (Ohio, Illinois, and Wisconsin), because the  
MCL 24.245(3)  
RIS-Page 2  
surrounding Great Lakes states have not yet updated their codes. (Ohio and Illinois follow the 2018 IECC, and  
Wisconsin the 2015 IECC), but it is anticipated that the surrounding states will adopt the latest version of the  
IECC. There are costs of deviation from other Great Lakes States because the State of Michigan is using the  
newest Energy Code, which accounts for new technologies in energy use and conservation. Once the other  
Great Lakes States adopt the newest Energy Code, or newer than what they currently use, those States will fall  
into line with what Michigan is currently adopting. The State of Michigan will be at the forefront of the most up to  
date Energy Code. Regardless of which Energy Code other States use, structure owners within the State of  
Michigan only use the Energy Code when building a new structure or renovating an existing structure. The  
costs the structure owner will realize is predicated upon the size of the structure. Therefore, the smaller the size  
of the new build, or renovated structure, the less it will cost that owner.  
3. Identify any laws, rules, and other legal requirements that may duplicate, overlap, or conflict with the  
proposed rules.  
There are no federal, state, or local laws, rules or other legal requirements that may duplicate, overlap, or conflict with  
the proposed rules.  
A. Explain how the rules have been coordinated, to the extent practicable, with other federal, state, and  
local laws applicable to the same activity or subject matter. This section should include a discussion of  
the efforts undertaken by the agency to avoid or minimize duplication.  
There are no federal, state, or local laws, rules or other legal requirements that may duplicate with the proposed  
rules.  
4. If MCL 24.232(8) applies and the proposed rules are more stringent than the applicable federally mandated  
standard, provide a statement of specific facts that establish the clear and convincing need to adopt the more  
stringent rules.  
While 42 U.S.C. Sec. 6833(a) does not specifically mandate states to update standards, the code being adopted is a  
successor to the CABO Model Energy Code, 1992, or successor (i.e. 2021 IECC), and establishes the energy  
efficiency requirements for residential structures in the state. The proposed rules are not more stringent than the 2021  
IECC.  
5. If MCL 24.232(9) applies and the proposed rules are more stringent than the applicable federal standard,  
provide either the Michigan statute that specifically authorizes the more stringent rules OR a statement of the  
specific facts that establish the clear and convincing need to adopt the more stringent rules.  
While 42 U.S.C. Sec. 6833(a) does not specifically mandate states to update standards, the code being adopted is a  
successor to the CABO Model Energy Code, 1992, or successor (i.e. 2021 IECC), and establishes the energy  
efficiency requirements for residential structures in the state. The proposed rules are not more stringent than the 2021  
IECC.  
PURPOSE AND OBJECTIVES OF THE RULE(S)  
6. Identify the behavior and frequency of behavior that the proposed rules are designed to alter.  
The proposed rules adopt the 2021 IECC with technical provisions designed to alter the outdated residential energy  
efficiency standards and provide a more energy efficient built environment. The frequency of behavior change due to  
the proposed rules is only required when altering, renovating, or building a new residence. The requirements outlined  
in this rule set establish a more economical and environmentally friendly home energy use standard.  
A. Estimate the change in the frequency of the targeted behavior expected from the proposed rules.  
The proposed rules adopting the 2021 edition of the IECC will continue to establish a more progressive energy  
efficient Michigan Uniform Energy Code, allowing more flexibility while keeping current with technological  
innovations. However, there are no changes in the frequency from the current ruleset to the proposed rules, as  
the rules will continue to apply to alterations, renovations, or building of a new residence.  
B. Describe the difference between current behavior/practice and desired behavior/practice.  
To comply with the requirements of the Stille-DeRossett-Hale Single State Construction Code Act the proposed  
rules adopt the updated IECC. These adjustments will improve energy efficiency in residential construction  
when required to be applied to the alteration, renovation or building of a new residence.  
C. What is the desired outcome?  
The desired outcome is to bring the Michigan Energy Code rules in line with current IECC standards, to  
eliminate unnecessary requirements in the code, improve clarity, and align all codes with the Michigan rules.  
MCL 24.245(3)  
RIS-Page 3  
The rules are designed to provide consumer safety while allowing latitude for innovation and new technologies.  
Overall, this code is intended to protect the health, safety, and welfare of the public from potential dangers  
associated with the installation and operation of more energy efficient designs while ensuring sustainable  
human welfare.  
7. Identify the harm resulting from the behavior that the proposed rules are designed to alter and the likelihood  
that the harm will occur in the absence of the rule.  
Without implementation of the proposed rules, the businesses would not be able to take advantage of new methods,  
materials, or technologies leading to improved energy efficiency. The rules are designed to provide consumer safety  
while allowing latitude for innovation and new technologies. Overall, this code is intended to protect the health, safety,  
and welfare of the public from potential dangers associated with the installation and operation of more energy efficient  
designs while ensuring sustainable human welfare.  
A. What is the rationale for changing the rules instead of leaving them as currently written?  
MCL 125.1504(6): The director shall add, amend, and rescind rules to simultaneously update all chapters of  
the Michigan residential code not less frequently than once every 6 years or more frequently than once every 3  
years as the director determines is appropriate.  
42 U.S.C. Sec. 6833(a): The state, not later than 2 years after the date of the publication of a determination by  
the Secretary of Energy that revision of residential energy efficiency code standards would improve energy  
efficiency (CABO Model Energy Code, 1992, or any successor), to certify that it has reviewed the provisions of  
its residential building code regarding energy efficiency and made a determination as to whether it is  
appropriate for the state to revise the residential building code provisions to meet or exceed the revised code for  
which the Secretary made such determination.  
8. Describe how the proposed rules protect the health, safety, and welfare of Michigan citizens while promoting  
a regulatory environment in Michigan that is the least burdensome alternative for those required to comply.  
Aligning the Michigan Energy Code with the 2021 IECC will protect the health, safety, and welfare of Michigan citizens  
while promoting a regulatory environment that is the least burdensome alternative for those required to comply. These  
rules ensure the ongoing assessment of safety in various energy efficient measures and training of staff to keep  
current with the most updated information. The rules are designed to provide consumer safety while allowing latitude  
for innovation and new technologies. Overall, this code is intended to protect the health, safety, and welfare of the  
public from potential dangers associated with the installation and operation of more energy efficient designs while  
ensuring sustainable human welfare.  
9. Describe any rules in the affected rule set that are obsolete or unnecessary and can be rescinded.  
The following rules are unnecessary because they are outdated and will be rescinded: R 408.31060c, R 408.31060e,  
R 408.31061, R 408.31062, R 408.31063, R 408.31063a, R 408.301064, R 408.31065, R 408.31069, R 408.31070,  
R408.31071, and R 408.31071a.  
FISCAL IMPACT ON THE AGENCY  
Fiscal impact is an increase or decrease in expenditures from the current level of expenditures, i.e., hiring  
additional staff, higher contract costs, programming costs, changes in reimbursements rates, etc. over and  
above what is currently expended for that function. It does not include more intangible costs for benefits, such  
as opportunity costs, the value of time saved or lost, etc., unless those issues result in a measurable impact on  
expenditures.  
10. Please provide the fiscal impact on the agency (an estimate of the cost of rule imposition or potential savings  
for the agency promulgating the rule).  
The proposed rules have no fiscal impact to the agency beyond the current operational costs.  
11. Describe whether or not an agency appropriation has been made or a funding source provided for any  
expenditures associated with the proposed rules.  
The proposed rules will not result in additional fiscal impact on the agency. Thus, there is no need for an additional  
appropriation or funding source as a result of the changes in the rules.  
MCL 24.245(3)  
RIS-Page 4  
12. Describe how the proposed rules are necessary and suitable to accomplish their purpose, in relationship to  
the burden(s) the rules place on individuals. Burdens may include fiscal or administrative burdens, or  
duplicative acts.  
The application of the rules and adopted IECC is required to set the minimum standards for uniform energy code  
compliance, fostering better solutions for the safety and care placed upon individuals and communities in compliance  
with the Stille- DeRossett-Hale Single State Construction Code Act. Although there is no administrative burden on the  
individual, each person must review expenses for the project and decide if costs match budget. There will be an  
increase in upfront costs for materials for alterations, renovations, or building of a new residence.  
A. Despite the identified burden(s), identify how the requirements in the rules are still needed and  
reasonable compared to the burdens.  
The amendments will clarify code requirements which will make compliance less burdensome. The individual  
will realize a net savings in energy costs pursuant to these requirements in accordance with MCL 125.1504(3)(f)  
and (g), the cost-effective analysis provides details of cost reduction for homeowners meeting the required cost-  
effective energy efficiency standards. To evaluate the cost-effectiveness of the changes introduced by the 2021  
IECC over the Michigan-amended 2015 IECC, Pacific Northwest National Laboratory (PNNL) estimated the  
incremental construction cost associated with these changes. For this analysis, cost data sources consulted by  
PNNL include:  
Building Component Cost Community (BC3) data repository  
2020 RSmeans Residential Cost Data  
2018 ENERGY STAR Cost & Savings Estimates23  
Price data from nationally recognized home supply stores.  
The incremental costs are calculated separately for each code change (Michigan amended 2015 IECC to the  
2021 IECC) and then added together to obtain a total incremental cost by climate zone, building type, and  
foundation type.  
Tables 5 and 6 show the climate zone-specific incremental construction costs when updating to the 2021 IECC  
based on the single-family and multifamily prototypes used in this analysis. These costs have been adjusted  
using a construction cost multiplier of 0.989 to reflect local Michigan construction costs based on location  
factors provided by 2020 RS Means and converted to 2023 dollars. Incremental construction costs for individual  
measures included in this analysis were compared to the incremental costs in the 2021 CONSOL Report –  
Impact of 2021 IECC on 2015 Michigan Residential Code. Measure level cost estimates between the two  
reports were found to be similar, with PNNL costs being slightly higher on average.  
Table 5. Total Single-Family Construction Cost Increase for the 2021 IECC Compared to the Michigan  
Amended 2015 IECC  
Single-family Prototype House  
Climate Zone Crawlspace  
Heated Basement  
$4,442  
Slab  
$4,915  
$4,415  
$4,972  
$4,861  
5A  
6A  
7
$4,238  
$3,738  
$4,972  
$3,480  
$4,714  
$4,339  
Average  
$4,189  
Table 6. Multifamily Construction Cost Increase for the 2021 IECC Compared to the Michigan Amended 2015  
IECC  
Multifamily Prototype Apartment/Condo  
Climate Zone Crawlspace  
5A $1,933  
Heated Basement  
$1,743  
Slab  
$2,033  
MCL 24.245(3)  
RIS-Page 5  
$1,528  
6A  
7
Average  
$1,428  
$2,249  
$1,170  
$1,990  
$1,682  
$2,249  
$1,979  
$1,880  
IMPACT ON OTHER STATE OR LOCAL GOVERNMENTAL UNITS  
13. Estimate any increase or decrease in revenues to other state or local governmental units (i.e., cities,  
counties, school districts) as a result of the rule. Estimate the cost increases or reductions for other state or  
local governmental units (i.e., cities, counties, school districts) as a result of the rule. Include the cost of  
equipment, supplies, labor, and increased administrative costs in both the initial imposition of the rule and  
any ongoing monitoring.  
Local jurisdictions with administrative enforcement of the code may incur some cost in training of inspection staff and  
would not realize any cost reduction. However, when construction is up in general, there will be increased revenue  
from permits, (re)inspections, and plan reviews. The construction market is subject to numerous outside influences  
such as: material costs, labor costs, and interest rates.  
Local jurisdictions will be required to comply with the rules when engaging in construction projects on structures  
owned by the jurisdiction. The agency has no way of knowing what the additional specific expenses will be, as each  
individual structure will be unique to the needs of the governmental unit. Overall, a person must review expenses for  
the project and decide if costs match budget. There will be an increase in upfront costs for materials for alterations,  
renovations, or building of a new structure.  
14. Discuss any program, service, duty, or responsibility imposed upon any city, county, town, village, or school  
district by the rules.  
It is anticipated that a local government unit would incur added responsibility due to the proposed rules if a local unit  
of government has decided to administer and enforce the code under the Stille-DeRossett-Hale Single State  
Construction Code Act. They would be responsible for learning, understanding, and applying the new code accurately.  
However, no additional program, service, duty, or responsibility will be imposed on any city, county, town, village, or  
school district by the rule changes.  
A. Describe any actions that governmental units must take to be in compliance with the rules. This section  
should include items such as record keeping and reporting requirements or changing operational  
practices.  
The proposed rules would require additional or new responsibilities on behalf of governmental units to be in  
continued compliance with the rules. They would be responsible for learning, understanding, and applying the  
new code accurately, which would require training of all applicable staff.  
15. Describe whether or not an appropriation to state or local governmental units has been made or a funding  
source provided for any additional expenditures associated with the proposed rules.  
No additional appropriations for additional expenditures associated with the proposed rules have been made to state  
or local governmental units. However, $1.2T in federal grant programs through the Bipartisan Infrastructure Law  
and/or the Inflation Reduction Act are available to states, local governments, and other organizations contingent upon  
the adoption of the 2021 IECC.  
RURAL IMPACT  
16. In general, what impact will the rules have on rural areas?  
The proposed rules affect the state of Michigan as a whole. There is no specific rural impact, rules are applicable to  
both urban and rural new build structures alike. Where allowed under the Stille- DeRossett-Hale Single State  
Construction Code Act, there continue to be limited agricultural exemptions under the applicable construction codes.  
Therefore, there is no specific rule impact as these rules are applicable to urban and rural new building structures  
alike.  
MCL 24.245(3)  
RIS-Page 6  
A. Describe the types of public or private interests in rural areas that will be affected by the rules.  
Pursuant to the Stille- DeRossett-Hale Single State Construction Code Act, there is an agricultural exemption to  
the applicability of the construction codes from permits and inspections for those reasons; however, any  
structures not falling under the agricultural exemption, would still need to follow the code. It is unlikely that the  
proposed rules will have any impact on public or private interests in rural areas.  
ENVIRONMENTAL IMPACT  
17. Do the proposed rules have any impact on the environment? If yes, please explain.  
As cited in PNNL Cost-Effectiveness Analysis of the 2021 IECC for the State of Michigan, it is expected with the  
adoption of the 2021 IECC during the first year alone, collectively, Michigan residents could expect to save over  
$7,229,392 in energy costs and 44,850 metric tons in avoided CO2 emissions.  
SMALL BUSINESS IMPACT STATEMENT  
18. Describe whether and how the agency considered exempting small businesses from the proposed rules.  
Because the Stille-DeRossett-Hale Single State Construction Code Act does not allow for exemption of small  
businesses from the Michigan Energy Code, the agency has no authority to exempt small businesses from the  
proposed rules.  
19. If small businesses are not exempt, describe (a) the manner in which the agency reduced the economic  
impact of the proposed rules on small businesses, including a detailed recitation of the efforts of the agency  
to comply with the mandate to reduce the disproportionate impact of the rules upon small businesses as  
described below (in accordance with MCL 24.240(1)(a-d)), or (b) the reasons such a reduction was not lawful  
or feasible.  
The agency was obligated to follow the Stille-DeRossett-Hale Single State Construction Code Act, which is applicable  
to scenario “(b) the reason such a reduction was not lawful or feasible” as the act did not provide for such an  
exemption within the act.  
A. Identify and estimate the number of small businesses affected by the proposed rules and the probable  
effect on small businesses.  
According to the most current federal data available, Michigan has 765,487 small businesses. Business  
involved in residential construction will see an increase in costs related to the standards in the rule set. It is  
likely these costs will be passed along to the person contracting for the residential construction project. The  
analysis conducting by PNNL demonstrates that although there will be an increase in upfront costs, the energy  
efficiency improvements result in a positive net cash flow within 3 years.  
B. Describe how the agency established differing compliance or reporting requirements or timetables for  
small businesses under the rules after projecting the required reporting, record-keeping, and other  
administrative costs.  
The agency did not establish differing compliance or reporting requirements or timetables for small businesses  
as the agency was obligated to follow the Stille-DeRossett-Hale Single State Construction Code Act which  
applies to all structures, regardless of the size of the business owning the structure or contracting for  
improvements of the structure.  
C. Describe how the agency consolidated or simplified the compliance and reporting requirements for  
small businesses and identify the skills necessary to comply with the reporting requirements.  
The agency did not establish consolidated or simplified the compliance and reporting requirements for small  
businesses as the agency was obligated to follow the Stille-DeRossett-Hale Single State Construction Code Act  
which applies to all structures, regardless of the size of the business owning the structure or contracting for  
improvements of the structure.  
D. Describe how the agency established performance standards to replace design or operation standards  
required by the proposed rules.  
R 408.31059 adopts by reference the 2021 IECC which is a nationally recognized model code. For that reason,  
the agency need not establish performance standards as the design and operation standards are established  
through the 2021 IECC.  
MCL 24.245(3)  
RIS-Page 7  
20. Identify any disproportionate impact the proposed rules may have on small businesses because of their size  
or geographic location.  
The impact of these proposed rules will be directly correlated to the size of the new build structure, or renovation, a  
small business chooses to design. The larger the square footage of the new building structure or renovation, the  
higher the material costs and other associate expenses will incur. The proposed changes to the rules have a  
disproportionate impact on small businesses engaged in residential construction in the three different climate zones  
defined in the IECC, with each climate zone having its own unique building requirements (installation) effect cost  
because of their size or geographical location. Small businesses located in climate zone 5 (southern lower peninsula)  
will have lower compliance costs than small businesses located in climate zone 7 (upper peninsula) due to the  
environmental differences in the climate zones.  
21. Identify the nature of any report and the estimated cost of its preparation by small businesses required to  
comply with the proposed rules.  
There are no increased costs of preparing reports to small businesses, or requirements mandating completion of  
reports with the proposed rules.  
22. Analyze the costs of compliance for all small businesses affected by the proposed rules, including costs of  
equipment, supplies, labor, and increased administrative costs.  
The agency was able to determine variables to estimate compliance costs utilizing the PNNL Cost-Effectiveness  
Analysis of the 2021 IECC for the State of Michigan. In particular, the size of the new build structure, or its renovation,  
will dictate the ultimate expenses to the business. Additionally, inflationary costs and specific material selections, will  
factor into the expenses for the businesses. The impact of these proposed rules will be directly correlated to the size  
of the new build structure, or renovation, a small business chooses to design. The larger the square footage of the  
new building structure or renovation, the higher the material costs and other associate expenses will incur. It is likely  
that any increase in cost will be passed along from the small business engaged in the residential construction project  
to the homeowner contracting for the project. Homeowners will incur upfront, higher costs, but these expenses will be  
offset by the long-term financial savings because of this rule set. Overall, the agency has no way of knowing what the  
additional specific expenses will be, as each individual structure will be unique to the needs. The following are impacts  
due to the proposed rules, but are not limited to the list below:  
The resulting analysis shows that a home designed to comply with the residential provisions of the 2021 IECC would  
yield short-term and long-term consumer benefits compared to a home built to the Michigan-amended 2015 IECC.  
When building to the 2021 IECC, Michigan households can expect to save 10.7% in energy costs, equating to $396 of  
annual utility bill savings.  
When amortizing costs and benefits over a typical 30-year mortgage, homeowners will see a positive cash flow in the  
first two to six years, depending on building type and climate zone.  
Over the course of 30 years, a first-time homebuyer will net approximately $7,300, and an average-income  
homebuyer around $9,250 in life-cycle cost savings.  
During the first year alone, collectively, Michigan residents could expect to save over $7,229,392 in energy costs and  
44,850 metric tons in avoided CO2 emissions.  
Adopting the 2021 IECC in Michigan is expected to result in homes that are energy efficient, more affordable to own  
and operate, and which are designed and constructed to modern standards for health, comfort, and resilience.  
A first-time homebuyer will be cashflow positive in year three of owning the home.  
Moving to the 2021 IECC is cost-effective for first-time homebuyers living in single-family and low-rise multifamily units  
in Michigan.  
Michigan is currently ranked third in mortgage foreclosures nationally. By updating to the 2021 IECC, Michigan  
homeowners will see more stable energy bills month over month, reducing the financial strain that can lead to  
foreclosure.  
States adopting the latest model energy codes are provided favorable insurance underwriting as they rank higher on  
the ISO’s Building Code Effectiveness Grading Schedule (BCEGS®).  
MCL 24.245(3)  
RIS-Page 8  
Energy-efficient homes built to the latest energy-efficient codes are more durable, resilient, and help lower mortgage  
default rates, nationally, on average, by 32 percent.  
Regulated small businesses may incur training costs for energy code continuing education courses with fees ranging  
from free to $400.00 from ASHRAE. If the regulated small businesses desire use of the code book, a fee of $52.00  
will be required for the energy code. The agency leaves it to the discretion of the regulated small businesses to  
choose how they obtain their training.  
23. Identify the nature and estimated cost of any legal, consulting, or accounting services that small businesses  
would incur in complying with the proposed rules.  
There is no anticipated change to the nature and estimated cost of any legal, consulting, or accounting services that  
small businesses would incur in complying with the proposed changes to the rules.  
24. Estimate the ability of small businesses to absorb the costs without suffering economic harm and without  
adversely affecting competition in the marketplace.  
It is likely that any increase in cost will be passed along from the small business engaged in the residential  
construction project to the homeowner contracting for the project. Homeowners will incur upfront, higher costs, but  
these expenses will be offset by the long-term financial savings because of this rule set. It is assumed that all builders  
who are small businesses will pass the costs along to the homeowner, therefore, competition would not be impacted.  
25. Estimate the cost, if any, to the agency of administering or enforcing a rule that exempts or sets lesser  
standards for compliance by small businesses.  
There are no rules that exempt or set lesser standards for compliance by small businesses. If the agency were to  
administer or enforce a rule that exempted or set lesser standards for compliance by small businesses the agency  
would incur some cost in training of inspection staff. Based on the current numbering of staff who would need to be  
trained, the estimated cost would be approximately $2,195.00 (average of $43.90 per hour times for 50 people).  
26. Identify the impact on the public interest of exempting or setting lesser standards of compliance for small  
businesses.  
There is no public interest at play as it relates to exempting standards of compliance for small businesses. To  
maintain the integrity, security, and fairness of business conducted in Michigan, all businesses must be held to the  
same compliance and exempting small businesses or setting lesser standards of compliance is not an option for fair  
and equal businesses practices. The code is applied uniformly across the state to ensure all jurisdictions are providing  
for the health, safety, and welfare of the public. Setting lesser standards of compliance for small businesses would  
negatively impact the safety of structures built by the small businesses and therefore the occupants of those homes  
and other structures.  
27. Describe whether and how the agency has involved small businesses in the development of the proposed  
rules.  
The agency involved small businesses through the Code/ Rule Change Proposal Form as well as at the in person  
Public Advisory Meeting, the in person Public Hearing, along with having the ability to submit written comments to the  
agency.  
A. If small businesses were involved in the development of the rules, please identify the business(es).  
The agency received proposed rules from the plumbing trade, electrical trade, mechanical contractors, building  
inspectors, residential builders, energy rating companies, and small home and residential builders in addition to  
the following small business, associations of small businesses, stakeholder organizations, and governmental  
entities involved within the development rules:  
The Home Builders Association of Michigan  
Consumer’s Energy & DTE, municipalities (specifically the City of Grand Rapids)  
Building officials (inspectors)  
The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE)  
MCL 24.245(3)  
RIS-Page 9  
Pacific Northwest National Laboratory, architects and engineers, Masonry Institute and energy home raters.  
American Chemistry Council  
New Buildings Institute  
Natural Resources Defense  
The American Institute of Architects  
Dream Development & Energy Technology, LCC  
Grand Rapids 2030 District  
VonMelle Construction  
Metro Detroit Construction Consultants, LLC  
Calabria Homes, INC  
Michigan Environmental Council  
Michigan Energy Innovation Business Council  
Ecology Center  
Midwest Energy Efficiency Alliance (MEEA)  
The Michigan Conservative Energy Forum (MICEF)  
Residential Energy Services Network (RESNET)  
COST-BENEFIT ANALYSIS OF RULES (INDEPENDENT OF STATUTORY IMPACT)  
28. Estimate the actual statewide compliance costs of the rule amendments on businesses or groups.  
The agency was able to determine variables to estimate compliance costs utilizing the PNNL Cost-Effectiveness  
Analysis of the 2021 IECC for the State of Michigan. In particular, the size of the new build structure, or its renovation,  
will dictate the ultimate expenses to the business or group. Additionally, inflationary costs and specific material  
selections, will factor into the expenses for the businesses or groups. The impact of these proposed rules will be  
directly correlated to the size of the new build structure, or renovation, a business or group chooses to design. The  
larger the square footage of the new building structure or renovation, the higher the material costs and other associate  
expenses will incur. It is likely that any increase in cost will be passed along from the business or group engaged in  
the residential construction project to the homeowner contracting for the project. Homeowners will incur upfront,  
higher costs, but these expenses will be offset by the long-term financial savings because of this rule set. Overall, the  
agency has no way of knowing what the additional specific expenses will be, as each individual structure will be  
unique to the needs. The following are impacts due to the proposed rules, but are not limited to the list below:  
The resulting analysis shows that a home designed to comply with the residential provisions of the 2021 IECC would  
yield short-term and long-term consumer benefits compared to a home built to the Michigan-amended 2015 IECC.  
When building to the 2021 IECC, Michigan households can expect to save 10.7% in energy costs, equating to $396 of  
annual utility bill savings.  
When amortizing costs and benefits over a typical 30-year mortgage, homeowners will see a positive cash flow in the  
first two to six years, depending on building type and climate zone.  
MCL 24.245(3)  
RIS-Page 10  
Over the course of 30 years, a first-time homebuyer will net approximately $7,300, and an average-income  
homebuyer around $9,250 in life-cycle cost savings.  
During the first year alone, collectively, Michigan residents could expect to save over $7,229,392 in energy costs and  
44,850 metric tons in avoided CO2 emissions.  
Adopting the 2021 IECC in Michigan is expected to result in homes that are energy efficient, more affordable to own  
and operate, and which are designed and constructed to modern standards for health, comfort, and resilience.  
A first-time homebuyer will be cashflow positive in year three of owning the home.  
Moving to the 2021 IECC is cost-effective for first-time homebuyers living in single-family and low-rise multifamily units  
in Michigan.  
Michigan is currently ranked third in mortgage foreclosures nationally. By updating to the 2021 IECC, Michigan  
homeowners will see more stable energy bills month over month, reducing the financial strain that can lead to  
foreclosure.  
States adopting the latest model energy codes are provided favorable insurance underwriting as they rank higher on  
the ISO’s Building Code Effectiveness Grading Schedule (BCEGS®).  
Energy-efficient homes built to the latest energy-efficient codes are more durable, resilient, and help lower mortgage  
default rates, nationally, on average, by 32 percent.  
For homeowners, the size of the new build structure, or its renovation, will dictate the ultimate expenses to the  
individual. The PNNL Cost-Effectiveness Analysis of the 2021 IECC for the State of Michigan indicates cost of the  
material is based on the project size and scope. Additionally, inflationary costs and specific material selections, will  
factor into the expenses for the individual. The analysis indicates the increased upfront costs to be approximately  
$3,500 to $5,000 per single-family home. According to data from the Home Builders Association of Michigan was on  
pace to issue 15,546 new home permits in 2023, resulting in a statewide compliance cost of approximately  
$54,411,000 to $77,730,000. According to the PNNL analysis, these upfront costs would be offset through life-cycle  
cost savings as indicated in the chart below.  
Table 7. First Time Homebuyer Life-Cycle Cost Savings of the 2021 IECC Compared to  
the Michigan Amended 2015 IECC  
Climate Zone  
Homebuyer  
7 yr. LCC ($)  
7 yr. LCC ($)  
First-Time  
Homebuyer  
First Time  
Income  
Average  
Income  
Average  
30 yr. LCC ($)  
30 yr. LCC ($)  
Homebuyer  
Homebuyer  
5A  
6A  
7
$614  
$962  
$46  
$7,288  
$7,785  
$4,463  
$662  
$1,018  
$74  
$9,259  
$9,675  
$6,000  
MCL 24.245(3)  
RIS-Page 11  
$696  
Average  
$648  
$7,322  
$9,281  
A. Identify the businesses or groups who will be directly affected by, bear the cost of, or directly benefit  
from the proposed rules.  
The businesses and groups who will be directly affected by the proposed rules are those entities who either  
build a new structure or renovate an existing structure to work in or renovate an existing structure. Also,  
contractors will be affected by these proposed rules because they will be hired to construct to the new energy  
requirements. The businesses or groups who will directly benefit from the proposed rules will be the individuals  
producing the energy products and commercial and residential contractors because they will be able to profit  
through the hired work to be performed based upon the new energy code requirements. Additionally, structure  
owners will realize an energy costs savings, long-term, as these standards are implemented through new build  
or renovations. The individuals who will build a new structure or renovate an existing structure will bear the cost  
of the new standards.  
B. What additional costs will be imposed on businesses and other groups as a result of these proposed  
rules (i.e., new equipment, supplies, labor, accounting, or recordkeeping)? Please identify the types and  
number of businesses and groups. Be sure to quantify how each entity will be affected.  
Residential builders and skilled trades licensees may incur training costs for energy code continuing education  
courses, which typically cost $400.00 from qualified training organizations. If the residential builder or skilled  
trade licensee desired the use of the code book, a fee of $52.00 will be required for the energy code. The  
agency leaves it to the discretion of the residential builders and skilled trades licensees to choose how they  
obtain their training. There are over 54,000 licensed residential builders and over 61,000 skilled trades  
licensees in this state who will be impacted.  
29. Estimate the actual statewide compliance costs of the proposed rules on individuals (regulated individuals or  
the public). Include the costs of education, training, application fees, examination fees, license fees, new  
equipment, supplies, labor, accounting, or recordkeeping.  
Regulated individuals may incur training costs for energy code continuing education courses with fees ranging from  
free to $400.00 from qualified training organizations. The 2021 IECC essentials course offered by ICC online costs  
$198.00 for non-members. If the regulated individual desires use of the code book, a fee of $52.00 will be required for  
the energy code. The agency leaves it to the discretion of the regulated individual to choose how they obtain their  
training. Estimated statewide compliance costs, assuming all regulated individuals take a course and purchase a code  
book is $28,750,000. The qualitative effect will be to improve licensee knowledge of the code, as well as new  
technologies and techniques derived when completing training.  
For homeowners, the size of the new build structure, or its renovation, will dictate the ultimate expenses to the  
individual. The PNNL Cost-Effectiveness Analysis of the 2021 IECC for the State of Michigan indicates cost of the  
material is based on the project size and scope, only if the cause for alterations, renovations or building of a new  
residence is required. Additionally, inflationary costs and specific material selections, will factor into the expenses for  
the individual. The analysis indicates the increased upfront costs to be approximately $3,500 to $5,000 per single-  
family home. According to data from the Home Builders Association of Michigan was on pace to issue 15,546 new  
home permits in 2023, resulting in a statewide compliance cost of approximately $54,411,000 to $77,730,000.  
According to the PNNL analysis, these upfront costs would be offset through life-cycle cost savings as indicated in the  
chart below.  
Table 7. First Time Homebuyer Life-Cycle Cost Savings of the 2021 IECC Compared to  
the Michigan Amended 2015 IECC  
Climate Zone  
Homebuyer  
First-Time  
First Time  
Income  
Average  
Income  
Average  
Homebuyer  
MCL 24.245(3)  
RIS-Page 12  
Homebuyer  
7 yr. LCC ($)  
7 yr. LCC ($)  
30 yr. LCC ($)  
30 yr. LCC ($)  
Homebuyer  
5A  
$614  
$962  
$46  
$7,288  
$7,785  
$4,463  
$7,322  
$662  
$1,018  
$74  
$9,259  
$9,675  
6A  
7
$6,000  
$9,281  
Average  
$648  
$696  
According to PNNL, energy-efficient building codes impact job creation through two primary value streams:  
1.Dollars returned to the economy through reduction in utility bills and resulting increase in disposable income, and;  
An increase in construction-related activities associated with the incremental cost of construction that is required to  
produce a more energy efficient building.  
A. How many and what category of individuals will be affected by the rules?  
It is anticipated that approximately 54,000 licensed residential builders and 61,000 skilled trades licensees and  
other regulated individuals (including architects and engineers) will be affected by these proposed rules, but  
only when new build structures or renovations are contracted for. An estimated 15,546 homeowners engaged in  
new home construction or home renovation projects will be impacted through the requirement for the projects to  
be completed in compliance with the rules and the adopted code.  
B. What qualitative and quantitative impact do the proposed changes in rules have on these individuals?  
In particular, the size of the new build structure, or its renovation, will dictate the ultimate expenses to the  
individual. Additionally, inflationary costs and specific material selections, will factor into the expenses for the  
individual. The qualitative impact to the individual will result in a Life-Cycle Cost (LCC) savings in the long-term.  
As cited in PNNL Cost-Effectiveness Analysis of the 2021 IECC for the State of Michigan. The following are  
impacts due to the proposed rules, but are not limited to the list below:  
The resulting analysis shows that a home designed to comply with the residential provisions of the 2021 IECC  
would yield short-term and long-term consumer benefits compared to a home built to the Michigan-amended  
2015 IECC.  
When building to the 2021 IECC, Michigan households can expect to save 10.7% in energy costs, equating to  
$396 of annual utility bill savings.  
When amortizing costs and benefits over a typical 30-year mortgage, homeowners will see a positive cash flow  
in the first two to six years, depending on building type and climate zone.  
Over the course of 30 years, a first-time homebuyer will net approximately $7,300, and an average-income  
homebuyer around $9,250 in life-cycle cost savings.  
During the first year alone, collectively, Michigan residents could expect to save over $7,229,392 in energy  
costs and 44,850 metric tons in avoided CO2 emissions.  
Adopting the 2021 IECC in Michigan is expected to result in homes that are energy efficient, more affordable to  
own and operate, and which are designed and constructed to modern standards for health, comfort, and  
resilience.  
MCL 24.245(3)  
RIS-Page 13  
A first-time homebuyer will be cashflow positive in year three of owning the home.  
Moving to the 2021 IECC is cost-effective for first-time homebuyers living in single-family and low-rise  
multifamily units in Michigan.  
Michigan is currently ranked third in mortgage foreclosures nationally. By updating to the 2021 IECC, Michigan  
homeowners will see more stable energy bills month over month, reducing the financial strain that can lead to  
foreclosure.  
States adopting the latest model energy codes are provided favorable insurance underwriting as they rank  
higher on the ISO’s Building Code Effectiveness Grading Schedule (BCEGS®).  
Energy-efficient homes built to the latest energy-efficient codes are more durable, resilient, and help lower  
mortgage default rates, nationally, on average, by 32 percent.  
30. Quantify any cost reductions to businesses, individuals, groups of individuals, or governmental units as a  
result of the proposed rules.  
If the aforementioned groups stay within their existing building, and never make changes, they will neither incur costs  
nor realize savings based on this new set of rules. The cost reductions will depend upon if the individual, business,  
group of individuals, or governmental units build a new structure or renovate an existing structure where they are  
located. The following are results of cost reductions due the proposed rules, but are not limited to following listed  
below:  
The resulting analysis shows that a home designed to comply with the residential provisions of the 2021 IECC would  
yield short-term and long-term consumer benefits compared to a home built to the Michigan-amended 2015 IECC.  
When building to the 2021 IECC, Michigan households can expect to save 10.7% in energy costs, equating to $396 of  
annual utility bill savings.  
When amortizing costs and benefits over a typical 30-year mortgage, homeowners will see a positive cash flow in the  
first two to six years, depending on building type and climate zone.  
Over the course of 30 years, a first-time homebuyer will net approximately $7,300, and an average-income  
homebuyer around $9,250 in life-cycle cost savings.  
During the first year alone, collectively, Michigan residents could expect to save over $7,229,392 in energy costs.  
A first-time homebuyer will be cashflow positive in year three of owning the home.  
Moving to the 2021 IECC is cost-effective for first-time homebuyers living in single-family and low-rise multifamily units  
in Michigan.  
States adopting the latest model energy codes are provided favorable insurance underwriting as they rank higher on  
the ISO’s Building Code Effectiveness Grading Schedule (BCEGS).  
Energy-efficient homes built to the latest energy-efficient codes are more durable, resilient, and help lower mortgage  
default rates, nationally, on average, by 32 percent.  
Michigan can ensure more energy efficient and resilient homes by adopting the latest building energy codes, which  
lower utility bills, improve construction quality, create local jobs and support workforce training for Michiganders.  
31. Estimate the primary and direct benefits and any secondary or indirect benefits of the proposed rules. Please  
provide both quantitative and qualitative information, as well as any assumptions.  
The agency was able to determine variables to estimate compliance costs utilizing the PNNL Cost-Effectiveness  
Analysis of the 2021 IECC for the State of Michigan. In particular, the size of the new build structure, or its renovation,  
will dictate the ultimate expenses to the business or group. Additionally, inflationary costs and specific material  
MCL 24.245(3)  
RIS-Page 14  
selections, will factor into the expenses for the businesses or groups. The impact of these proposed rules will be  
directly correlated to the size of the new build structure, or renovation, a business or group chooses to design. The  
larger the square footage of the new building structure or renovation, the higher the material costs and other associate  
expenses. It is likely that any increase in cost will be passed along from the business or group engaged in the  
residential construction project to the homeowner contracting for the project. Homeowners will incur higher upfront  
costs, but these expenses will be offset by the long-term financial savings because of this rule set. While each  
individual structure will be unique to the needs of the occupant, the following are impacts due to the proposed rules,  
but are not limited to the list below:  
The resulting analysis shows that a home designed to comply with the residential provisions of the 2021 IECC would  
yield short-term and long-term consumer benefits compared to a home built to the Michigan-amended 2015 IECC.  
When building to the 2021 IECC, Michigan households can expect to save 10.7% in energy costs, equating to $396 of  
annual utility bill savings.  
When amortizing costs and benefits over a typical 30-year mortgage, homeowners will see a positive cash flow in the  
first two to six years, depending on building type and climate zone.  
Over the course of 30 years, a first-time homebuyer will net approximately $7,300, and an average-income  
homebuyer around $9,250 in life-cycle cost savings.  
During the first year alone, collectively, Michigan residents could expect to save over $7,229,392 in energy costs and  
44,850 metric tons in avoided CO2 emissions.  
Adopting the 2021 IECC in Michigan is expected to result in homes that are energy efficient, more affordable to own  
and operate, and which are designed and constructed to modern standards for health, comfort, and resilience.  
A first-time homebuyer will be cashflow positive in year three of owning the home.  
Moving to the 2021 IECC is cost-effective for first-time homebuyers living in single-family and low-rise multifamily units  
in Michigan.  
Michigan is currently ranked third in mortgage foreclosures nationally. By updating to the 2021 IECC, Michigan  
homeowners will see more stable energy bills month over month, reducing the financial strain that can lead to  
foreclosure.  
States adopting the latest model energy codes are provided favorable insurance underwriting as they rank higher on  
the ISO’s Building Code Effectiveness Grading Schedule (BCEGS®).  
Energy-efficient homes built to the latest energy-efficient codes are more durable, resilient, and help lower mortgage  
default rates, nationally, on average, by 32 percent.  
Regulated individuals may incur training costs for energy code continuing education courses with fees ranging from  
free to $400.00 from qualified training organizations. The 2021 IECC essentials course offered by ICC online costs  
$198.00 for non-members. If the regulated individual desires use of the code book, a fee of $52.00 will be required for  
the energy code. The agency leaves it to the discretion of the regulated individual to choose how they obtain their  
training. Estimated statewide compliance costs, assuming all regulated individuals take a course and purchase a code  
book is $28,750,000. The qualitative effect will be to improve licensee knowledge of the code, as well as new  
technologies and techniques derived when completing training.  
The businesses and groups who will be directly affected by the proposed rules are those entities who either build a  
new structure or renovate an existing structure. Also, contractors will be affected by these proposed rules because  
they will be hired to construct to the new energy requirements. The businesses or groups who will directly benefit from  
the proposed rules will be the individuals producing the energy products and commercial and residential contractors  
MCL 24.245(3)  
RIS-Page 15  
because they will be able to profit through the hired work to be performed based upon the new energy code  
requirements. Additionally, structure owners will realize an energy costs savings, long-term, as these standards are  
implemented through new build or renovations. The individuals who will build a new structure or renovate an existing  
structure will bear the cost of the new standards  
It is anticipated that approximately 54,000 licensed residential builders and 61,000 skilled trades licensees and other  
regulated individuals (including architects and engineers) will be affected by these proposed rules, but only when new  
build structures or renovations are contracted for. An estimated 15,546 homeowners engaged in new home  
construction or home renovation projects will be impacted through the requirement for the projects to be completed in  
compliance with the rules and the adopted code.  
For homeowners, the size of the new build structure, or its renovation, will dictate the ultimate expenses to the  
individual. The PNNL Cost-Effectiveness Analysis of the 2021 IECC for the State of Michigan indicates cost of the  
material is based on the project size and scope. Additionally, inflationary costs and specific material selections, will  
factor into the expenses for the individual. The analysis indicates the increased upfront costs to be approximately  
$3,500 to $5,000 per single-family home. According to data from the Home Builders Association of Michigan was on  
pace to issue 15,546 new home permits in 2023, resulting in a statewide compliance cost of approximately  
$54,411,000 to $77,730,000. According to the PNNL analysis, these upfront costs would be offset through life-cycle  
cost savings as indicated in the chart below.  
Table 7. First Time Homebuyer Life-Cycle Cost Savings of the 2021 IECC Compared to  
the Michigan Amended 2015 IECC  
Climate Zone  
Homebuyer  
7 yr. LCC ($)  
7 yr. LCC ($)  
First-Time  
Homebuyer  
First Time  
Income  
Average  
Income  
Average  
30 yr. LCC ($)  
30 yr. LCC ($)  
Homebuyer  
Homebuyer  
5A  
$614  
$962  
$46  
$7,288  
$7,785  
$4,463  
$7,322  
$662  
$1,018  
$74  
$9,259  
$9,675  
$6,000  
$9,281  
6A  
7
Average  
$648  
$696  
Jobs Creation through Energy Efficiency  
According to PNNL, energy-efficient building codes impact job creation through two primary value streams:  
1. Dollars returned to the economy through reduction in utility bills and resulting increase in disposable income, and;  
MCL 24.245(3)  
RIS-Page 16  
2. An increase in construction-related activities associated with the incremental cost of construction that is required to  
produce a more energy efficient building.  
The agency relied on the following information as cited in the PNNL Cost-Effectiveness Analysis of the 2021 IECC for  
the State of Michigan when determining the existence and extent of the impact of the proposed rules:  
The primary and direct benefits of our proposed rules include things such as long-term costs savings, a reduction in  
the carbon footprint and other energy savings to the owners of new build structures and renovations.  
The secondary or indirect benefits of the proposed rules are the skilled trade professions who will benefit from the  
contracted work that will result from an updated energy code as property owners pursue energy efficiencies and  
skilled contractors will be needed for the projects.  
32. Explain how the proposed rules will impact business growth and job creation (or elimination) in Michigan.  
The proposed rules will benefit the skilled trades profession as well as the energy related industry due to the new  
requirements which are established in this rule set. Michigan can ensure more energy efficient and resilient homes  
and businesses by adopting the latest building energy codes, which lower utility bills, improve construction quality,  
create local jobs and support workforce training for Michiganders.  
33. Identify any individuals or businesses who will be disproportionately affected by the rules as a result of their  
industrial sector, segment of the public, business size, or geographic location.  
Overall, the proposed changes to the rules have a disproportionate impact on small businesses in the three different  
climate zones, with each climate zone having its own unique building requirements effect cost because of their size or  
geographical location. The code is applied uniformly across the state to ensure all jurisdictions are providing for the  
health, safety, and welfare of the public.  
34. Identify the sources the agency relied upon in compiling the regulatory impact statement, including the  
methodology utilized in determining the existence and extent of the impact of the proposed rules and a cost-  
benefit analysis of the proposed rules.  
Data for this Regulatory Impact Statement came from the PNNL Cost-Effectiveness Analysis of the 2021 IECC for the  
State of Michigan, information and data provided from public advisory meeting, stakeholders, the Construction Code  
Commission, the State Plumbing Board, the Electrical Administrative Board, the Board of Mechanical Rules, the  
Residential Builders Maintenance and Alteration Contractors Board, reviewed comments from the code/rule proposal  
forms, and research on other Great Lake States (Ohio, Illinois, and Wisconsin).  
Through the means identified above, the following stakeholders contributed to this regulatory impact statement:  
The Home Builders Association of Michigan  
Consumer’s Energy & DTE, municipalities (specifically the City of Grand Rapids)  
Building officials (inspectors)  
The American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE)  
Pacific Northwest National Laboratory, architects and engineers, Masonry Institute and energy home raters.  
A. How were estimates made, and what assumptions were made? Include internal and external sources,  
published reports, information provided by associations or organizations, etc., that demonstrate a need  
for the proposed rules.  
MCL 24.245(3)  
RIS-Page 17  
As cited in PNNL Cost-Effectiveness Analysis of the 2021 IECC for the State of Michigan, it is expected with the  
adoption of the 2021 IECC during the first year alone, collectively, Michigan residents could expect to save over  
$7,229,392 in energy costs and 44,850 metric tons in avoided CO2 emissions.  
Results due to the proposed rules include, but are not limited to, the following:  
The resulting analysis shows that a home designed to comply with the residential provisions of the 2021 IECC  
would yield short-term and long-term consumer benefits compared to a home built to the Michigan-amended  
2015 IECC.  
When building to the 2021 IECC, Michigan households can expect to save 10.7% in energy costs, equating to  
$396 of annual utility bill savings.  
When amortizing costs and benefits over a typical 30-year mortgage, homeowners will see a positive cash flow  
in the first two to six years, depending on building type and climate zone.  
Over the course of 30 years, a first-time homebuyer will net approximately $7,300, and an average-income  
homebuyer around $9,250 in life-cycle cost savings.  
During the first year alone, collectively, Michigan residents could expect to save over $7,229,392 in energy  
costs.  
A first-time homebuyer will be cashflow positive in year three of owning the home.  
Moving to the 2021 IECC is cost-effective for first-time homebuyers living in single-family and low-rise  
multifamily units in Michigan.  
States adopting the latest model energy codes are provided favorable insurance underwriting as they rank  
higher on the ISO’s Building Code Effectiveness Grading Schedule (BCEGS).  
Energy-efficient homes built to the latest energy-efficient codes are more durable, resilient, and help lower  
mortgage default rates, nationally, on average, by 32 percent.  
Michigan can ensure more energy efficient and resilient homes, and businesses by adopting the latest building  
energy codes, which lower utility bills, improve construction quality, create local jobs and support workforce  
training for Michiganders.  
The agency relied on the following information as cited in the PNNL Cost-Effectiveness Analysis of the 2021  
IECC for the State of Michigan When determining the existence and extent of the impact of the proposed rules:  
Commission and Stakeholders  
Pacific Northwest National Laboratory, Cost-Effectiveness Analysis of the 2021 IECC for the State of Michigan  
(PNNL-SA-188473)  
Life-Cycle Cost (LCC) cash flow analysis.  
The U.S. Department of Energy (DOE) cost-effectiveness methodology  
The U.S. Energy Information Administration (EIA).  
National Association of Realtors (NAR) report.  
MCL 24.245(3)  
RIS-Page 18  
National Association of Home Builders report “What Buyers Really Want.”  
Building Component Cost Community (BC3) data repository  
2020 RSMeans Residential Cost Data  
2018 ENERGY STAR Cost & Savings Estimates  
Price data from nationally recognized home supply stores  
ALTERNATIVE TO REGULATION  
35. Identify any reasonable alternatives to the proposed rules that would achieve the same or similar goals.  
No reasonable alternatives would achieve the same goals. The agency is required by statute to adopt the updated  
IECC.  
A. Please include any statutory amendments that may be necessary to achieve such alternatives.  
Although the agency does not believe any statutory amendments are necessary to the Stille-DeRossett-Hale  
Single State Construction Code Act, individuals who believe the energy code updates cause additional  
expenses to be incurred, may wish to lobby the legislature to extend the energy code adoption to greater than  
every three to six years.  
36. Discuss the feasibility of establishing a regulatory program similar to that proposed in the rules that would  
operate through private market-based mechanisms. Please include a discussion of private market-based  
systems utilized by other states.  
The agency is unaware of similar programs or private market-based systems in other states.  
37. Discuss all significant alternatives the agency considered during rule development and why they were not  
incorporated into the rules. This section should include ideas considered both during internal discussions  
and discussions with stakeholders, affected parties, or advisory groups.  
The most significant alternative, which was presented to the agency and not adopted, was the proposition to require  
all new structures or renovations be exclusively electric in nature. This would mean no use of propane or natural gas.  
This would result in extraordinarily expensive construction beyond the current normal practice. It also eliminates  
possible cheaper modes to energy.  
ADDITIONAL INFORMATION  
38. As required by MCL 24.245b(1)(c), please describe any instructions regarding the method of complying with  
the rules, if applicable.  
Upon promulgation of the Michigan rule’s, the agency will publish instructions on obtaining the updated code books.  
MCL 24.245(3)  
;