Are You Complying With the New Energy Disclosure Law?

The California Energy Commission officially replaced AB 1103 with AB 802, shifting the requirements for energy consumption disclosure. As of June 1, 2018, owners of properties larger than 50,000 square feet are required to disclose energy consumption annually by requesting a report from their utility company. We sat down with Emily Murray, a partner at Allen Matkins, and Alyssa Engstrom, an associate at Allen Matkins, for an exclusive interview to find out more about the requirements under AB 802 and what property owners need to know.

GlobeSt.com: Tell me about AB 802 and what it requires in terms of energy reporting?

Emily Murray: AB 802 requires annual energy consumption reports to be submitted by June 1st, 2018 by owners of commercial buildings containing more than 50,000 square feet. Building owners must authorize their utility provider to record and upload their building’s energy data to EPA’s Portfolio Manager, a free reporting tool provided by the United States EPA that allows building owners to compare their building’s energy efficiency with similar buildings.

GlobeSt.com: Are there different requirements for each asset class?

Alyssa Engstrom: Under AB 802, the primary difference between the two asset classes, commercial buildings over 50,000 square feet and residential buildings with 17 or more utility accounts, is the different reporting deadlines. For disclosable buildings with no residential utility accounts, reporting is due by June 1, 2018, and annually thereafter. For disclosable buildings with 17 or more residential utility accounts, reporting is due by June 1, 2019, and annually thereafter.  However, the procedure for reporting is identical.

It should be noted that there are a few asset classes and categories of buildings that are exempt from reporting under AB 802.  These include: condominium projects; buildings that did not have a certificate of occupancy or temporary certificate of occupancy for more than half of the calendar year for which reporting to the Energy Commission is required; buildings that are scheduled to be demolished within one year of the reporting data; buildings covered by an approved local building energy use benchmarking program; and buildings that have more than half of the gross floor area used for scientific experiments requiring a controlled environment, manufacturing or industrial purposes.

GlobeSt.com: What should building owners who have not reported their energy performance do, and what is the process?

Engstrom: There are five general steps for building owners to report their energy performance. First, open an account in ENERGY STAR Portfolio Manager. Second, enter each disclosable building into your account. Third, enter your energy use data.

Next, click the appropriate reporting link on the Energy Commission’s benchmarking page, (energy.ca.gov/benchmarking) which will direct you to log into Portfolio Manager. Finally, submit your report from within Portfolio Manager. The Energy Commission’s benchmarking page includes step-by-step guides, training materials with videos, and frequently asked questions.

GlobeSt.com: What is the penalty for non-compliance with this new requirement?

Engstrom: AB 802 provides for the Energy Commission to impose civil penalties on building owners who do not comply (as well as those who submit incorrect or incomplete data).  Under Public Resources Code Section 25321(a)(1), the civil penalty shall not be less than $500 nor more than $2,000 for each category of data the person did not provide and for each day the violation has existed and continues to exist.  The CEC will notify the offending party of the violation and provide 30-days to correct the violation.  There are several ways to violate AB 802, including, but not limited to, failing to report by the deadline, knowingly submitting incorrect information to the Energy Commission, or knowingly sharing false data with a building owner.  It remains unclear exactly how the Energy  Commission is going to enforce these violations and whether they will impose multiple violations concurrently.  That is unlikely, but ultimately it is too early to know.

GlobeSt.com: Has there been a significant amount of non-compliance or unawareness of the requirement, and if so, why?

Murray: It’s still too early to tell if there has been non-compliance with this bill, given that the first reporting deadline was June 1, 2018 for commercial buildings, and not until June 1, 2019 for residential buildings with 17 or more utility accounts. However, there appears to be substantial confusion in the business community regarding who is subject to the regulations of AB 802 and when the various compliance deadlines are.  This confusion likely stems from the repeal of AB 1103 and subsequent passage of AB 802.  Therefore, it’ s crucial for businesses to be aware of these regulations and compliance deadlines because, given the June 1, 2018 deadline, many businesses might already be in non-compliance with AB 802 and not even know about it.