Current Disclosure Requirements for Building Owners and Tenants Repealed

A complicated energy reporting requirement for owners and tenants of commercial and multifamily buildings is ending under a new law that takes effect Jan. 1. AB 802, authored by Assemblymember Das Williams (D-Carpinteria), was signed by Gov. Jerry Brown on Oct. 8. The law’s purpose is to encourage enhanced energy efficiency strategies and investments by providing owners and tenants with easier access to total energy usage data for their buildings.

The new law abolishes the existing energy use disclosure program for nonresidential buildings. The program requires owners of large commercial buildings to disclose energy consumption data to prospective buyers, tenants of the entire building, or lenders prior to entering into a purchase agreement, lease or loan. This program, commonly known as the “AB 1103 Program,” ends Dec. 31. Many in the commercial real estate industry view it as problematic because of the extensive and confusing reporting requirements and difficult data retrieval process.

In its place, a new statewide “benchmarking” and public disclosure program will be developed by the California Energy Commission. The program will apply to commercial and multifamily buildings with more than 50,000 square feet of gross floor area. During 2016, the Commission will develop the applicable regulations, which are expected to take effect Jan. 1, 2017.

Benchmarking compares the energy consumption per square foot of floor space for comparable classes of buildings to help owners and tenants evaluate energy usage and identify efficient projects. The new law appears to shift the reporting burden from private property holders to utilities.

Under the new law, electric and gas utilities must maintain records of the energy consumption data of all buildings to which they provide service for at least the most recent 12 complete months. Beginning no later than Jan. 1, 2017, these utilities must – at the request and authorization of a building owner or tenant – provide aggregated energy usage data for “covered” buildings to the owner, owner’s agent, or tenant, or to the owner’s account in the U.S. Environmental Protection Agency’s computer-based “ENERGY STAR Portfolio Manager.”

These new provisions, contained in section 25402.10 of the Public Resources Code, require utilities to provide the benchmark data to a building owner or tenant within four weeks of request.