Proponents say Assembly Bill 802, the quieter companion to a controversial climate change bill, will force building owners to compete for tenants on energy efficiency.
How do you make building owners cut back on energy usage? Show their tenants how efficient their buildings are.
That’s the path many cities across the country have taken — San Francisco, Minneapolis and New York among them. But energy efficiency advocates last week noted what they see as a major step forward for the idea of whole-building energy usage benchmarking: California became the first state to pass such a law.
California’s Assembly Bill 802 cleared both houses of the Legislature Sept. 11 with minimal opposition. The bill, according to proponents, adds firepower to energy efficiency requirements for buildings by opening up access to data about energy use. The law applies to buildings larger than 50,000 square feet, which means the owners and operators of apartment buildings, office buildings, malls and other structures should have easy access to benchmark statistics on their energy usage.
Even with previous California law, Assembly Bill 1103, in place, that data has been tough to access, according to Institute for Market Transformation (IMT) Executive Director Cliff Majersik.
“You had a situation where the utilities would provide data to the account holder, but you had to get every tenant in the building to sign a waiver in order to get data for a whole building,” Majersik said.
Though at press time Democratic Gov. Jerry Brown had not yet signed AB 802, proponents of the legislation say it has Brown’s support.
Having the information for an entire building is useful for many reasons, Majersik said — not least of which is a direct contribution to the building owner’s profits. Energy Star, which collects energy usage statistics for the Environmental Protection Agency, published a paper in 2012 showing that buildings that consistently benchmarked their efficiency from 2008 to 2011 saw a 7 percent increase in energy savings during that time frame. A group of five studies IMT highlights on its website show that buildings certified through Energy Star or the U.S. Green Building Council (USGBC) tend to have higher rents, pricier sale tags and higher occupancy rates.
That’s because prospective tenants, investors and buyers will look at energy usage statistics of buildings if they’re available and work that into their decision-making, Majersik said.
“It empowers tenants to shop around for buildings that are more energy efficient,” he said. “Since they’re the ones paying for the energy bills anyway, they’d like to lease space that’s more efficient.”
In turn, the availability of energy efficiency data leads to competition between building owners, he said. In order to compete for tenants, those owners and operators will put money toward energy efficiency projects.
The idea isn’t exactly new — some of the nation’s largest cities have similar programs in place — but advocates say that bringing the open data approach to whole-building energy benchmarking to the state level is significant. According to Rebecca Baker, the energy benchmarking program manager for Seattle’s Office of Sustainability and Environment, Washington’s adoption of a statewide law in 2009 helped spur the Emerald City to create its own policies.
“The state law really provided the momentum needed for the city to develop its own mandate,” Baker said. “And our mandate was actually, in some ways, more progressive — requiring even more than the state does.”
California’s law also gives leeway for municipalities to adopt their own, possibly stricter, set of regulations for energy benchmarking. But it’s helpful, Baker said, to have statewide reporting standards. Those standards bring consistency to the way utilities report energy usage data, allowing for easy access.
The law might also spark interest in the concept of public access to building-specific energy data outside California. Baker said her office plans to take a proposal to Seattle’s city council this fall to open up energy data to the public.
The state might follow suit. The Washington Legislature considered a proposal this year, House Bill 1278, which would have made energy benchmarking data public information.
“States like Washington specifically do pay attention to what’s going on in other states,” said Dennis Murphy, founding chair of USGBC California.
On top of the competition that whole-building energy benchmarking creates, Murphy said the bill also adds teeth to the state’s efforts to curb greenhouse gas emissions. USGBC California, along with a coalition of lobbyists including the Natural Resources Defense Council and IMT, supported AB 802 alongside two other bills calling for tougher energy consumption reduction measures. One was Senate Bill 350, which passed with provisions that would double the state’s energy efficiency standards for all buildings.
Without energy benchmarking, the state wouldn’t have been able to tell whether buildings were meeting those goals, Murphy said.
“If you didn’t have [AB 802] in place, forget about SB 350 goals,” he said. “You’re not going have a chance to do it.”
While California’s law still needs the governor’s signature, as well as a set of rules from state regulators, Majersik and Murphy are already optimistic that AB 802 will spark interest in similar measures across the country.
“As goes California, so eventually goes the nation,” Murphy said.