Energy-Use Reporting Mandated in California

By Nadav Malin

A law requiring annual energy-use reporting for all California’s nonresidential buildings takes effect in January 2009, and the state Department of General Services has been working closely with utilities to streamline the reporting process. Beginning in 2010 owners of commercial buildings must disclose their energy usage and Energy Star rating to potential buyers, leasers, and financiers. The legislation, which is similar to a European Union (EU) requirement that took effect in 2006–7, was signed into law in October 2007.

While this law does not directly require public disclosure of the energy performance of individual buildings, as mandated by Washington, D.C.’s new Clean and Affordable Energy Act, real-estate listing services are likely to include it. “My expectation is that for most buildings it will actually be made public,” reported Douglas Mahone, principal of the consulting firm Heschong Mahone Group.

Mahone manages a joint State and utilities working group that is creating systems for transferring energy-use data directly from the utility companies to the U.S. Environmental Protection Agency’s Portfolio Manager database, which California selected as the repository for this data. They are testing the system using state-owned facilities because reporting requirements for those buildings were previously mandated by a 2004 executive order from Governor Arnold Schwarzenegger.

The working group has run up against several obstacles, including the fact that Portfolio Manager provides ratings for just 15 building types. “If yours is not one of those building types, you can’t get a score,” noted Mahone, adding: “That could affect as many as 50% of commercial buildings.” There are also confidentiality concerns, especially in multi-tenant buildings with triple-net leases, in which tenants pay their own utility bills. “We can’t benchmark a multitenant building unless all tenants are cooperative,” Mahone said. The group is also working to clarify requirements that are vague in the law, such as whether or not the energy use intensity (EUI) reported for buildings should be adjusted based on weather patterns.

The California regulation differs from the EU law because it looks only at actual energy use, while the EU also requires a computer-modeling estimate of projected use based on the efficiency of the building’s systems, which gives potential buyers more data to work with. Researchers at the Lawrence Berkeley National Laboratory and elsewhere are exploring the potential of a more robust benchmarking system that would provide guidance on energy use by specific systems within the building, which would help identify conservation opportunities. Even without that additional detail, however, just having to publicly report energy performance numbers should encourage facility managers to pay closer attention to their bills because real estate valuation has the potential to magnify the effect of higher energy costs.

This article was produced by BuildingGreen, LLC.- www.buildinggreen.com