Tuesday, July 19, 2016

FEEDBACK REQUESTED: California AB 802 Benchmarking Draft Regulations

BOMA San Francisco Members:

Please click here to review the draft regulations for the AB 802 Benchmarking Program that were released recently.

On Friday, July 22nd, there is a workshop to discuss these regulations and any feedback/concerns/suggestions, you can provide by that time would be very much appreciated. Our BOMA California representative plans on attending the meeting so please feel free to send me any thoughts and comments you may have regarding the proposed regulations from full blown analysis to minor comments - they want them all - and will synthesize it into formal and verbal feedback.

This will be of interest to anyone that is responsible for benchmarking, energy, and potentially escrow, so please pass along to anyone that may care.

As you may know, BOMA California (via the California Business Properties Association) has been working with the California Energy Commission (CEC) on this regulation and have been generally supportive of the direction it has been heading. BOMA supported the repeal of AB 1103 and its replacement with AB 802, a much more flexible statute that addresses many of the issues with the prior program. Even so,  implementation may not be perfect so please send any comments you may have. The earlier BOMA expresses concern and points out issues that may not work in the real world, the easier it is for CEC staff to address them.

Please send all comments to Matthew Hargrove at mhargrove@cbpa.com

Below is a piece  that compares/contrasts the prior statute with the current statute for your reference


Benchmarking Regulations Continue to Move in Positive Manner

As many of you know, the mandatory California Benchmarking law 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 (referred to as 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.

Here is what has changed statutorily moving from the now 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.

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