Tuesday, May 14, 2013

Should you waste energy worrying about AB 1103?

I provide Location Advice to owners and occupants of industrial buildings in Southern California. Today's post explains, in layman's terms, AB 1103, The Energy Star Benchmarking requirement that will take effect July 1, 2013 for commercial buildings in California.

Today's discussion is general. Should your desire be for a more thorough discussion, please contact Elizabeth Watson, partner, Greenberg Glusker or Marika Erdely, CEO, Green EconoMe.

Purpose of the law? The law's purpose is to provide a national reporting benchmark for a commercial building's energy consumption and energy efficiency.

What buildings are affected? Any commercial building (office, retail, industrial, service commercial, hospital, school, etc.) 5000 or greater square feet that is leased, sold, or financed from a contract created July 1, 2013 or after.

Are all commercial buildings over 5000 square feet affected? Ultimately, yes. There are "phase in" provisions for the law...buildings over 50,000 sf on July 1, 2013, Buildings between 10,000 and 50,000 sf on January 1, 2014 and buildings 5000 sf and larger on July 1, 2014.

What will be required of a building owner? If your building meets the criteria above, you will be required to disclose the Statement of Energy Performance to any prospective tenant, buyer, or lender before sign a lease, a purchase and sale agreement or loan documents.

What will be required of a building occupant (tenant)? Your building's owner, property manager or facility manager may require you to disclose your utility bills to them (which are the data that comprise the Statement of Energy Performance). New leases may contain provisions or forms for the disclosure of these energy bills (electric and gas...water not currently included) to the property owner.

What happens if I don't comply? The disclosure is a California State Law but penalties haven't been established as of this post. The best service is to comply and avoid any potential backlash.

How do I make the disclosure? The disclosure must be made within a 30 day window prior to executing a lease, PSA or loan documents on energy data from the prior year.

The general steps are:

Open a Energy Star Portfolio Manager account (ESPM), and input space usage information
Select a service provider, allows access to account
Upload the Energy Usage Data to Energy Portfolio Manager
Access the CEC website (California energy Commission)
Download the Disclosure Summary Sheet
Owner uses link from CEC website to access ESPM
Owner submits Compliance Verification Report within ESPM
Owner generates ESPM standard forms to use for disclosure
Owner presents four documents at or prior to transaction: Disclosure Summary Sheet, Statement of Energy Performance, Data Checklist, and Facility summary

As a building owner, what should I do today?


Figure out if your building meets the size parameters and decide if your building will be leased, sold or re-financed after July 1, 2013.

If so, Create a means of collecting utility bills...easy if you are the occupant...more difficult if you are a landlord.

Create an Energy Star Portfolio Manager account

Seek counsel to include the disclosure and utility bill access in your agreements.