Real Estate and Land Use

New Regulations Require Disclosure of Energy Use in Certain Buildings

By Jordan C. Tessier, Associate, Real Estate

On March 7, 2018, the California Energy Commission (CEC) implemented the regulations behind California Assembly Bill 802 (AB 802). AB 802 directed the CEC to create a statewide building energy use benchmarking and public disclosure program for buildings larger than 50,000 square feet. The following is what you need to know about the new regulations.

What is a disclosable building?

  • Any commercial building over 50,000 square feet, or
  • Any residential building over 50,000 square feet that has more than 17 residential utility accounts

What are the exceptions to the disclosure requirements?

The following buildings are not subject to disclosure requirements:

  • A building in which more than half of the gross floor area is used for scientific experiments, manufacturing or industrial purposes;
  • A building that did not have a certificate of occupancy or temporary certificate of occupancy for more than half of the calendar year for which reporting to the CEC is required;
  • A building scheduled to be demolished one year or less from the required reporting date; or
  • A building that complies with the applicable local energy disclosure program implemented by the local jurisdiction and approved by the CEC.

What must be reported to the CEC?

All owners of a disclosable building must establish an Energy Star Portfolio Manager account. The owner of a disclosable building with more than three active utility accounts must do the following:

  • Request energy use data for the building from the utility company and upload it to the owner’s Energy Star Portfolio Manager account (this will typically all be done through the Energy Star Portfolio Manager account interface); and
  • Complete the reporting steps in the Energy Star Portfolio Manager account interface.

Are there different rules for owners of buildings with fewer than three utility accounts?

Yes. Building owners must first receive the permission of each utility account customer before uploading and reporting the energy use data for the building. Permission may be granted through a provision in a lease or through any other written means, so long as it also permits public disclosure of the information. If any utility account customers do not provide the necessary permission, the building owner will be required to report energy use data according to a modified process that is outlined in the Energy Star Portfolio Manager, and the data will not be publicly reported. Building owners may also request that the executive director of the CEC determine that the building owner’s energy use data is proprietary information, if (i) a building owner owns a utility account within the building, (ii) the building has fewer than three active utility accounts, and (iii) the other utility account customers within the building consent to reporting the energy use data of the building. If the executive director grants such request, the building owner will report the building’s energy use data through a modified process and the data will not be publicly reported. If the executive director denies the request, the building owner will be required to report the building’s energy use data through the standard procedure and such data will be publicly reported.

What must be reported to tenants?

Nothing must be reported to tenants.

What are the reporting deadlines?

Energy data must be requested by March 1 of each year. Energy data must be reported by June 1 of each year. Owners of commercial disclosable buildings will be required to report energy data to the CEC by June 1, 2018, and annually thereafter. Owners of residential disclosable buildings will be required to report energy data to the CEC by June 1, 2019, and annually thereafter.

What are the penalties for noncompliance?

The CEC may impose civil penalties if the offending party has not cured a violation after 30 days’ notice. The civil penalty will be at least $500, but no more than $2,000, for each category of data the person did not provide or fraudulently provided and for each day the violation has existed and continues to exist.