Energy and Water Benchmarking to Begin Soon in Private Buildings in the District of Columbia

On October 21, 2011, the District Department of the Environment (DDOE) released its proposed rule for conducting energy and water benchmarking of private buildings. This rule is being issued to implement the benchmarking requirements contained in the Green Building Act of 2006 (GBA) and the Clean and Affordable Energy Act of 2008 (CAEA). The requirements will initially apply to buildings that are larger than 200,000 square feet in size, but will quickly apply to smaller buildings as well. Property owners and their tenants need to be aware of these requirements, as both may be subject to penalties and fines for non-compliance. A public hearing will be held on the proposed rule on November 9, 2011, and written comments are due by November 21, 2011.

Background

The GBA and the CAEA require that: (1) owners of private buildings of a certain size annually benchmark the energy usage in their buildings using the U.S. Environmental Protection Agency’s (EPA’s) ENERGY STAR® Portfolio Manager benchmarking tool (Portfolio Manager); (2) owners submit the energy performance data for each regulated building to DDOE; and (3) the DDOE make the results available to the public beginning in the second year in which the data are reported.

The new rules are part of the District’s effort to implement green building measures across the city to reduce energy use in public and private buildings.
A citywide Inventory of Greenhouse Gas Emissions found that the District has a $79 million annual energy utility budget, and that buildings are responsible for 74 percent of greenhouse gas emissions in the District. While both the public sector and private parties could face significant costs in collecting this data and dealing with its implications, the stated long-term goals are to help building owners reduce their utility operating costs and improve the environment.

The Proposed Rule

The proposed rule, Energy Performance Benchmarking of Privately-Owned Buildings,¹ will initially apply to all private buildings² in the District that have gross square footage exceeding 200,000 square feet. Under the GBA and its amendments, building owners are required to begin benchmarking their buildings, using the Portfolio Manager tool, according to the following timeline:

• Buildings over 200,000 square feet were required under the Act to report their data by July 1, 2011³; this deadline is now likely to be late January 2012, after the proposed rule has been finalized
• Buildings over 150,000 square feet must report by April 1, 2012⁴
• Buildings over 100,000 square feet must report by April 1, 2013
  
• Buildings over 50,000 square feet must report by April 1, 2014

In other words, by 2014, owners of all buildings containing more than 50,000 square feet will be required to report their energy and water usage to DDOE. DDOE recommends that building owners start collecting information for their buildings for the previous year by February of the year in which they are required to report. After the first year of reporting, the compliance date for release of data to DDOE will be April 1.

Section 3513.3 of the proposed rule outlines the steps building owners should follow to fulfill District-based benchmark requirements. The District’s benchmarking requirements go beyond the standard Portfolio Manager in many ways, and include mandatory reporting of water data and most space use attributes that the Portfolio Manager tool identifies as “optional.” The proposed rule also mandates record-keeping by property owners. See § 3513.11. Building owners must preserve benchmark results and supporting records for a period of at least three years and make these records available for inspection and audit by DDOE. Id. Under the proposed rule, failure to comply with the benchmarking requirements can subject a building owner to fines of up to $100 per day. See §3513.12.

The proposed rule also addresses benchmarking requirements for building tenants. Non-residential tenants are required to provide energy, water and space use information to building owners, including information on sub-leased space. Tenants failing to comply with these requirements are subject to fines of up to $100 per day. See §§ 3513.5, 3513.12. The proposed rule identifies an alternate reporting method for building owners who have made a reasonable effort to obtain non-residential tenant information but have been unable to obtain that information. In those instances, owners may use partial-building reporting within established parameters as articulated in § 3513.9 of the proposed rule.

Finally, District law requires DDOE to make the benchmarking data available to the public after the second year of reporting. Results will be reported on the DDOE website. Building owners and building addresses will also be reported, but no personal contact information and no financial information will be made available to the public.

If possible, DDOE intends to finalize the proposed rule by December of 2011. This timeframe includes the 30-day comment period on the proposed rule, time to make changes based on public feedback, and the 45-day D.C. Council review period.

The public has the opportunity to provide input either by attending a public meeting that has been scheduled at noon on November 9, 2011 (1200 First Street, N.E., 10th Floor) or by submitting formal comments on the draft rule, labeled “Energy Star Regulations,” to the attention of Jennifer Todd (jennifer.todd@dc.gov) by November 21, 2011. Property owners may wish to comment in particular about the inclusion of multi-family residential under the rule, the requirement to collect water usage data, the partial building reporting alternative when non-residential tenants have not provided required information and the “staleness” of the data being included in the Energy Star program by the U.S. Department of Energy.

DDOE also released several draft guidance documents in conjunction with its release of the proposed rule. This guidance includes proposed form letters for collecting necessary information from non-residential and residential tenants, worksheets, and questions and answers.

Considerations for Owners and Tenants

Square Footage

Several questions have arisen regarding how the square footage is to be calculated for purposes of determining when a building owner must report. The square footage entered into Portfolio Manager is the gross floor area, meaning the total floor area for the building. For purposes of determining whether a building meets the size thresholds of § 3513.1, the total square footage must include all supporting functions such as lobbies, stairways, restrooms, storage areas, elevator shafts, etc. Secondary spaces such as parking garages are not used to calculate gross square footage; however, for benchmarking purposes, these secondary spaces must be taken into consideration and accounted for in Portfolio Manager. See § 3513.2.

Non-Residential Tenant Requirements

Non-residential tenants are required to provide information about their energy, water and space usage to building owners, and may be subject to fines if they fail to do so. Both owners and tenants should address how this issue will be addressed in new and renewal leases.

Alternate Reporting Path

If reasonable efforts have been made to collect the necessary information from non-residential and residential tenants, DDOE is considering alternative ways to allow for reporting of necessary information. For non-residential tenants, the owner may elect to use partial building reporting. See § 3513.9. Residential building owners may either extrapolate the information they have based upon 10 percent of the tenant units and common facilities, or use a partial building method that is based only on common areas and common utility information.

Conclusion

Now that the proposed rule has been issued, whether you are a building owner, property manager and non-residential tenant, you need to determine whether you wish to comment on the proposed rule before it is finalized. You also need to begin gathering the energy, water and space usage information required by the proposed rule and inputting it into the Portfolio Manager tool, and be prepared to report historic information for buildings larger than 150,000 square feet by April of 2012 (if not sooner). In addition, you need to examine new and existing leases to determine how to handle the collection of non-residential tenant utility information. And you need to begin developing plans regarding how you want to respond to the Portfolio Manager results. Holland & Knight continues to monitor these developments closely and is prepared to assist you in complying with these quickly evolving requirements.

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1 58 D.C. Reg. 009057 (Oct. 21, 2011); proposed 20 DCMR § 3513.

2 Public buildings are already subject to the benchmarking requirements.

3 The deadline for reporting of 2010 benchmark information has been extended pending finalization of the Energy Benchmarking rule.

4 Property owners should already be collecting 2011 data in anticipation of initial reporting in April 2012.