Does the Feebate Approach to A/E Compensation Lead to an Energy-Efficient Building?

The idea of a "feebate," in which the designers of a building receive payment based on the building's energy performance, has been proposed as a means of encouraging energy efficiency in commercial buildings. To demonstrate this approach, in 1995 the City of Oakland California held a design competition to select a design/build firm for a large commercial building project that involves both new construction and substantial retrofit. The winning team will be subject to financial incentives based on the building's energy performance during the second year of occupancy. If the building fails to meet the target energy efficiency level (roughly 20% less than the state code's energy requirements), then the design team will pay the City a penalty; likewise if the building exceeds the target energy efficiency level, then they receive a reward. Our paper reports on an evaluation of the process up to the construction phase of the project, which commenced in early 1996. Through nine interviews with the client, design/build firm and their subcontractors, and other consultants and participants in the project, we draw a picture of the process and the course it has followed through the design phase of the project. Different perspectives, conflicting incentives, and imperfect communication among the players during the programming, design competition, and design phases lead to designers not taking the "carrot" offered and only focusing on the "stick." We draw lessons offered by interviewees and from our own analysis of this pioneering project.