Owners of Large Commercial Properties Must Report Energy Usage Data by June 1, 2018 (CA) | Practical Law

Owners of Large Commercial Properties Must Report Energy Usage Data by June 1, 2018 (CA) | Practical Law

The California Energy Commission implemented a series of complex and time sensitive regulations designed to enforce the energy usage disclosure requirements contained in California Assembly Bill 802. Owners of large commercial properties covered by these regulations are required to provide information to the Commission no later than June 1, 2018.

Owners of Large Commercial Properties Must Report Energy Usage Data by June 1, 2018 (CA)

by Practical Law Real Estate
Published on 22 May 2018 • California
The California Energy Commission implemented a series of complex and time sensitive regulations designed to enforce the energy usage disclosure requirements contained in California Assembly Bill 802. Owners of large commercial properties covered by these regulations are required to provide information to the Commission no later than June 1, 2018.
The California Energy Commission published regulations implementing California Assembly Bill 802, requiring owners of certain properties to report energy usage statistics annually. The deadline for reporting a large commercial building's 2017 energy usage is June 1, 2018.

Background

Governor Jerry Brown signed California Assembly Bill 802 in October 2015, in part expanding the energy usage disclosure requirements imposed on owners of certain buildings in California to aid state regulators in forecasting annual energy usage and demand. These changes were codified at California Public Resources Code Section 25402.10. For more information on AB 802, see Legal Update, Changes to Energy Use Disclosure Law for Commercial Buildings and Multifamily Residences Signed in California.
On March 1, 2018, the California Energy Commission (CEC) implemented regulations governing compliance with California Public Resources Code Section 25402.10 (see 20 C.C.R. §§ 1680-1685) (Energy Benchmarking Regulations), that require owners of certain commercial properties to disclose energy usage information by June 1, 2018, and annually thereafter. Owners of certain multi-family properties are subject to the disclosure requirements beginning in 2019.

Properties Subject to Disclosures

The Energy Benchmarking Regulations apply to structures that contain at least 50,000 square feet of Gross Floor Area, and are either used solely for commercial purposes or contain at least 17 active residential utility accounts of any one type (for example, natural gas or electricity) (20 C.C.R. § 1681(d) and see 20 C.C.R. § 1683(b)).
Gross Floor Area is measured by accounting for all area within the structure, including:
  • Common areas.
  • Stairwells.
  • Storage rooms.
  • Elevator shafts.
  • Lobbies.
  • Tenant areas.
  • Meeting rooms.
  • Break rooms.
  • The base level of any atrium.
  • Mechanical equipment areas.
  • Basements.
(20 C.C.R. § 1681(g).)
Certain structures are excluded from the disclosure requirements, even if they meet the foregoing standards, including:

Mechanics of Disclosure

The owner of a covered building (see Properties Subject to Disclosures), or the owner's authorized representative, must:
  • Establish an ENERGY STAR Portfolio Account and complete all information required by the Portfolio Account website (20 C.C.R. § 1683(b)(1)(A)).
  • By March 1 of each year, request energy usage data from each utility serving the building in writing or through the utility's electronic portal (20 C.C.R. § 1683(b)(1)(B)). The request must include the following information:
    • the building address;
    • proof that the requesting party has authority to receive the data;
    • whether an active utility account served multiple postal addresses within the building, and the addresses served by that account;
    • written permission from utility customers within the building secured by the owner or its representative; and
    • if the building contains fewer than three utility accounts, a statement as to whether the request is being made to comply with 20 California Code of Regulations Section 1683.
      (20 C.C.R. § 1682(a)(1)(B).)
  • For buildings with three or more utility accounts, or fewer than three utility accounts where all customers have consented to public disclosure of their usage data (see 20 C.C.R. § 1682(b)(4)(B)), the owner or owner's representative must:
    • upload the use data for the previous calendar year to its ENERGY STAR Portfolio Manager account, if the data was not transferred directly to the account by the utility;
    • run the data check software offered by ENERGY STAR and address any errors;
    • by June 1 of each year, report the collected energy data through the reporting link provided on the CEC's Building Energy Benchmarking Program webpage.
    (20 C.C.R. § 1683(b)(2).)
  • For buildings with fewer than three utility accounts where one of the customers is the owner, and the other customer has consented to data disclosure, the owner must either:
    • disclose the data through the appropriate portal on the CEC's Building Energy Benchmarking Program webpage after uploading the data to its ENERGY STAR Portfolio Manager account and running the appropriate data check software; or
    • file a request with the CEC's executive director for a determination that the owner is not obligated to provide the data due to a trade secret exemption.
    (20 C.C.R. § 1683(b)(4).)
  • For buildings with fewer than three utility accounts where a customer has not consented to disclosure of its usage data, follow the appropriate link on the CEC's Building Energy Benchmarking Program webpage and submit the requested information (20 C.C.R. § 1683(b)(3)).
Owners of commercial properties (properties with no residential utility accounts) must comply with these requirements for calendar year 2017 by June 1, 2018, and annually thereafter. Owners of multifamily properties are not required to comply with these requirements until 2019.

Practical Implications

The Energy Benchmarking Regulations require property owners and managers to act swiftly on an annual basis to collect and report the appropriate data to the CEC. Reporting in 2018 will likely be problematic as the regulations became effective on the deadline for requesting data from utility companies. As a result, Property owners and managers should consult with counsel familiar with CEC regulations prior to the June 1 filing deadline to ensure compliance and to potentially address any shortcomings caused by a lack of timely disclosure by utilities.