In fall of 2015, the California State Legislature passed Assembly Bill 802 (AB 802), which repeals Assembly Bill 1103 (AB 1103) and paves the way for easier access to whole-building energy data. Under AB 1103, non-residential building owners are required to provide energy benchmarking and disclosure of a building’s energy data and ENERGY STAR score to prospective whole building buyers, lessees or lenders. This can be a major headache for building owners when buildings are separately metered (each tenant receives and pays their own bill) because tenants are not always forthcoming with their energy usage and utilities typically will not give out usage information for a building without authorization from all tenants.
What changes with AB 802?
AB 802 is meant to correct some of the issues with gaining access to whole building data. In particular, AB 802 makes it easier to collect the required energy consumption data from utility companies without first gaining permission from tenants. Through a comprehensive benchmarking policy implemented by the California Energy Commission, multifamily and commercial buildings must publicly report building energy use on a regular basis. As reporting is mandatory, this bill will provide specific aggregation thresholds that will apply to all utilities serving commercial and multifamily properties in California. Owners of commercial buildings with three or more accounts and owners of multifamily properties with five or more accounts will have access to whole-building data provided by the utility. Buildings that do not meet these thresholds will still need authorization from tenants.
AB 802 complements the recently adopted Existing Buildings Energy Efficiency Action Plan which provides a roadmap to reduce building energy use by 20% by 2030. These two policies will increase building benchmarking and transparency and have the ability to transform the existing buildings industry.
Why is whole building energy data important?
Building owners and managers need access to energy usage data such as monthly kilowatt hour (kwh) usage to begin to benchmark and better manage building operations and utility usage. This information is crucial to the success of sustainability and energy efficiency programs. In addition, as California codes and policies on energy efficiency become stricter, whole building energy data is a necessity to comply.
Many affinity groups including BOMA International and the Real Estate Roundtable have called for better access to this information. Similarly, the Data and Transparency Alliance (DATA), a collaborative led by the commercial real estate industry and energy efficiency organizations, such as IMT, aim to provide building operators with the necessary data to advance building energy efficiency and energy cost savings.
When will AB 802 go into effect?
The new assembly bill will go into effect in January 2017. This means that there is no disclosure requirement for building owners in 2016. However, it is still beneficial to continue benchmarking energy performance as it demonstrates leadership in efficient building operation. Tracking utility consumption and understanding building performance can result in higher NOI, value, occupancy and rent rates, and many more benefits. In addition, transparency in building performance is becoming an expectation for buyers and lenders. Although it is not legally required to disclose energy data for 2016, many buyers and sellers will continue to expect transparency.
How are CA Cities Preparing for AB 802?
City of Los Angeles
The City of L.A. recently proposed an Existing Building Energy and Water Efficiency Ordinance (EBEWE) to address Benchmarking, Transparency and Efficiency Action.
Excerpt from the proposed ordinance:
BENCHMARKING: All buildings over 20,000 square feet will annually benchmark their energy and water usage (including municipal buildings over 7,500 square feet) with a free online tool (Portfolio Manager)
TRANSPARENCY: City will share benchmarking output information (Energy Star Score, water use per square foot, etc.) on a website once a year
EFFICIENCY ACTION: All buildings over 20,000 square feet will be required to take action to reduce energy and water consumption once every five years or show they are already efficient. Options include:
Perform an energy audit and conduct retro-commissioning,
Proof of Energy Star certification, or
Show they have reduced energy usage by 15% over the five year period
Perform a water audit and conduct retro-commissioning,
Show they have reduced water usage by 20% over the five year period, or
Proof that the building’s water use meets the requirements in the current code
NOTE: Does not apply to single family homes, duplexes, residential hotels, or utility treatment facilities