Are You Ready? Building Energy Performance Standards Deadlines Loom in D.C.

In accordance with its directives under the Title III of the Clean Energy Omnibus Amendment Act of 2018 (CEDC Act), the District of Columbia's Department of Energy and Environment (DOEE) established its Building Energy Performance Standards (BEPS) Program in 2021 in an effort to increase energy performance in existing buildings in furtherance of the District's goal of reducing greenhouse gas emissions and energy consumption by 50 percent by 2032. To accomplish this goal, the CEDC Act directed DOEE to establish property types and corresponding BEPS for each property type to set a minimum threshold for energy performance.

The BEPS Program is currently in its first compliance cycle. This means that any privately owned buildings of at least 50,000 square feet and any District-owned buildings that do not meet the DOEE-established BEPS energy standard (BEPS Standard) for their property type must take certain steps to achieve compliance. This Holland & Knight alert provides an overview of the steps that property owners should take in the near future to ensure adherence to the BEPS Program.

Overview of BEPS Compliance

The BEPS Program currently requires all buildings of at least 25,000 square feet to benchmark their energy usage and submit annual benchmarking reports to DOEE by April 1 of each year. DOEE uses this benchmarking data to determine the BEPS Standard for buildings by property type. Depending on the property type, benchmarking data may be calculated by Energy Star score, site energy usage (Site EUI) or other applicable criteria. The BEPS Standard for buildings subject to this compliance cycle (i.e., privately owned buildings of at least 50,000 square feet and District-owned or District instrumentality-owned buildings with at least 10,000 square feet) were established by DOEE using 2019 benchmarking data.

Beginning in January 2021, all buildings subject to the first compliance cycle that did not meet or exceed the BEPS Standard for their property type entered into the six-year compliance cycle, which includes a one-year compliance delay due to the COVID-19 pandemic. Throughout the compliance cycle, building owners must fulfill certain DOEE regulatory requirements, including selecting and adhering to a compliance pathway and complying with certain reporting/verification requirements for the selected pathway. DOEE evaluation and enforcement for buildings covered by this compliance cycle will begin in 2027.

For buildings that meet or exceed the BEPS Standard established for its property type, there are no further requirements during the compliance cycle, aside from continuing to submit annual benchmarking data by April 1 of each year. DOEE will reestablish new BEPS Standards every six years and re-evaluate buildings for compliance with the new standard for their property type.

Property owners can visit the Open Data D.C. online portal to determine whether their building meets the current BEPS Standard or whether they may be subject to the compliance cycle for failure to meet the BEPS.

Selecting a Compliance Pathway

For those buildings that are not in compliance with the applicable BEPS Standard, owners must select a compliance pathway by April 3, 2023. DOEE has developed four different pathways for building owners to choose from to bring their buildings into compliance with BEPS:

• Performance Pathway
• Standard Target Pathway
• Prescriptive Pathway
• Alternative Compliance Pathway

Selecting a pathway by the April 3, 2023, deadline is crucial. Failure to do so will result in fines assessed by DOEE and, in addition, DOEE will assign pathways to all building owners that do not meet the selection deadline. Below is an overview of each of the four compliance pathways.

Performance Pathway

The performance pathway offers the most flexibility to the building owner. Under this pathway, the owner will not be seeking to meet the BEPS Standard, but rather, must reduce overall Site EUI by 20 percent from its 2019 benchmarking data. Compliance with this pathway will be evaluated in 2027 based on the building's 2026 Site EUI data. Under this pathway, building owners must also submit a Completed Actions Report to DOEE by April 1, 2027.

Standard Target Pathway

The standard target pathway is only available to property type groups whose energy usage falls above the national median. Under this pathway, building owners will seek to reach the DOEE BEPS Standard for their property type by 2026. DOEE's evaluation of compliance with this pathway will be based on the building's Energy Star score in 2026. Under this pathway, building owners must also submit a Completed Actions Report to DOEE by April 1, 2027.

Prescriptive Pathway

The prescriptive pathway allows building owners to implement a set of cost-effective efficiency measures to reduce energy usage. Under this pathway, building owners will be required to submit routine documentation to DOEE to ensure compliance with efficiency requirements. This documentation includes an energy audit, which must be submitted to DOEE along with the initial pathway selection by April 3, 2023, as well as an action plan and other implementation documentation. Notably, the energy audit must comply with DOEE's Energy Audit Report Template. DOEE will not approve a prescriptive pathway selection without a proper energy audit. Under this pathway, building owners must also submit an Evaluation, Monitoring and Verification Report to DOEE by April 1, 2027.

Alternative Compliance Pathway

The alternative compliance pathway was designed by DOEE for circumstances in which a building owner may need to follow a compliance pathway with special criteria. This option may include properties with deep energy retrofits, new construction or change in property types, or other building-specific barriers. Under this pathway, building owners must work with DOEE to develop a proposal that fits their building type, and the pathway will be set forth in a formal agreement between the owner and DOEE.

Choosing a Pathway

Once a building owner determines which pathway will best suit its property and compliance goals, the pathway must be officially selected on DOEE's website by completing the Pathway Selection form.

Building owners can also request a change in compliance pathway after their initial selection by completing DOEE's Pathway Change Application. While property owners can request a pathway change, DOEE has indicated that there is no guarantee that a change request will be approved by the agency. Therefore, building owners should be mindful and thorough in their initial pathway selection.

Considerations and Next Steps

D.C. property owners whose buildings are subject to this first BEPS compliance cycle (privately owned buildings of at least 50,000 square feet) should review Open Data D.C. to determine whether their building meets or exceeds the applicable BEPS Standard. If the building does not meet the BEPS Standard, owners must select a BEPS compliance pathway by the April 3, 2023, deadline to avoid penalties and DOEE unilaterally selecting a pathway on their behalf.

Holland & Knight's environmental attorneys can assist building owners with reviewing the BEPS pathways and compliance requirements, and determining which pathway will be best suited for their building and property type. For more information, contact the authors or another member of the Environment Team.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.