The California Energy Commission (CEC) is the state agency charged with developing regulations and policies for advancing its energy reduction and efficiency initiatives in collaboration with state and federal agencies, utility companies and other interested parties.
In so doing, the CEC requires that certain building owners submit benchmarking data about the energy performance of their buildings in California to allow owners and renters to be better informed about their purchasing and leasing decisions.
The benchmarking data tracks, measures, and reports on energy use so that anyone can see how these buildings stack up to similar buildings in the state and throughout the country. The CEC has issued regulations explaining these disclosure requirements for anyone who owns a qualifying building in the state.
Certain California cities—specifically, San Francisco, Berkeley and Los Angeles–have adopted local benchmarking data tracking and disclosure requirements that allow building owners in these cities to report there instead of to the CEC.
A Brief History into California’s Energy Disclosure Requirements?
In about January 2014, California issued energy use disclosure requirements that imposed a responsibility on the part of owners of non-residential buildings in cases of a purchase, lease or financing. When and whether you were required to comply with these requirements depended on your building’s square footage.
Owners measured their building’s energy output by using the United States Environmental Protection Agency’s free online Energy Star Portfolio Manager. The Portfolio collects data on energy and water consumption, and greenhouse gas emissions.
It helps to determine how your building is performing when compared to other buildings in the state and in the country. The disclosure of this information was made to potential buyers, lessees and lenders.
What is California’s Building Energy Disclosure Requirements Currently?
The 2014 disclosure laws were repealed in 2015, citing difficulty in implementing the requirements in then current form. Those rules were replaced by the CEC’s 2018 new regulations.
Under the most current rules, owners with non-residential buildings of more than 50,000 square feet (there are some limited exceptions, including for mixed use buildings and buildings requiring controlled environments) were required to submit their 2017 disclosures by June 1, 2018. Disclosures are required annually to be made to the CEC on June 1st, and in 2019 the disclosure rules will be made applicable to both non-residential and residential buildings.
How Do Owners Report Under the New Rules?
Owners will continue to use the Energy Star Portfolio Manager. Owners will request that utility companies provide them with building data on energy (electricity, gas, steam, fuel oil) use by March 1st of each year.
That information will be reported each year by June 1st using the Portfolio Manager. The CEC will then receive the information provided through the Portfolio Manager and make disclosures to the public.
What are the Utilities Responsibilities?
The CEC rules state that a “utility” is an entity that provides energy (defined above) to a building. The Utility will identify, aggregate and provide all energy information in monthly intervals for the calendar year requested by the building owner.
The Utility has 14 calendar days from the receipt of a request to review the request to determine if the owner has provided all the information (including customer permission if applicable) needed to be able to respond to the request.
What Disclosures Will Be Made Public?
The old rules required the owners to disclose to lessees, tenants and lenders. Instead, the CEC now will disclose building data if available (and there has been no trade secret exemption granted) to the public by placing it on its website.
For buildings with no active residential utility accounts, the CEC will start publicly disclosing some building data beginning 2019. For all buildings, the CEC will start releasing the building data in 2020. The CEC’s data will disclose the building data which includes:
- Building address;
- Year built;
- Gross floor area;
- Property name or building name;
- Additional information about the building from building owners;
- Occupancy data;
- Energy Star score;
- Monthly or annual site energy use and type;
- Monthly or annual weather-normalized site and/or source energy use intensity;
- Monthly and/or annual peak electricity demand; and/or
- Total greenhouse gas emissions.
Is there a Penalty for Failing to Comply?
For failing to comply with these rules, the owner will be notified of the violation and provided 30 days to correct it. Examples of a violation includes:
- Knowingly submitting false information;
- Knowingly sharing false data with a building owner; and/or
- Failing to comply with the CEC’s disclosure requirements.
Should I Consult a Lawyer for Issues with California’s Energy Disclosure Rules?
If you are subject to these rules or are uncertain whether you are, consult with a California real estate attorney. An attorney can explain the disclosure requirements and help you satisfy them so you are in compliance. As well, an attorney can explain if there are additional penalties for failing to comply with these disclosure requirements.