INDUSTRY ALERT - YOUR SUPPORT IS NEEDED!
Critical Benchmarking Regs Trying To Be Undone
The mandatory California Benchmarking law (referred to as AB 1103) recently went through a significant change, in response to voluminous complaints from all sectors of the commercial real estate industry.
Your Sacramento staff has been working closely with the California Energy Commission to provide input on proposed regulations to implement the building energy use data access and public disclosure provisions of Assembly Bill 802 (Williams, Chapter 590, Statutes of 2015).
AB 802 completely repeals and replaces the older statute (AB 1103) the commercial real estate industry supports the state’s benchmarking law and supported the actions taken by the Legislature and the Governor to repeal AB 1103 – a law that was creating significant implementation issues – and replace it with AB 802.
A proponent of the repealed AB 1103, who benefitted directly from the requirements eliminated by AB 802, has begun an advocacy campaign targeting members within our industry in an attempt to halt industry advancements promoted by BOMA California and its partner the California Business Properties Association. If contacted by any AB 1103 advocate to oppose AB 802, we encourage you to consider what has changed moving from repealed AB 1103 to the new AB 802 law:
- AB 1103 mandated ALL buildings must be benchmarked regardless of size or use; AB 802 states that buildings 50K s.f. and above must be benchmarked and allows the Energy Commission some discretion to exempt certain building types and situations (i.e. the CEC could decide that long-term empty buildings or buildings scheduled for razing need not be benchmarked).
- AB 1103 was a transaction based program – benchmarking was triggered by a sale/lease of whole building/refinance. The transaction based approach had many unintended consequences such as requiring actively managed building to be benchmarked more often than buildings that are not; put an unnecessary technical process in the middle of a real estate transaction; and required benchmarking be provided to parties that were not making management decisions (i.e. lenders); AB 802 allows the CEC to determine the best trigger for benchmarking – that could be transaction based or time certain (i.e. once every two years).
- Under AB 1103 many building owners were unable to get tenant energy information from local utilities; AB 802 clarifies that utilities are required to provide information; in an aggregated format if there are privacy concerns in multi-tenant buildings.
- AB 1103 treated income producing properties separately by only focusing on commercial; AB 802 – with the support of the Apartment industry - includes certain multi-family housing properties.
- AB 1103 provisions will be suspended as of the end of this year (until otherwise notified we recommend you comply with the current provisions of AB 1103 until then). AB 802 provisions will become operative on January 1, 2017 – the CEC will write regs to implement in 2016.There will be no statewide energy use disclosure requirement in 2016. During this time, Energy Commission staff will engage in a public process to develop regulations and establish the reporting infrastructure for the new program. However, we recommend that you continue to benchmark buildings on a regular basis as it makes good business sense.
We appreciate the input our membership provided in guiding the amendments that lead to AB 802. With your continued support, the onerous and costly burdens of AB 1103 will be defeated.