AB 1103 - Building Energy Usage Disclosure Coming to California

California Governor Arnold Schwarzenegger signed no less than 10 energy bills in October 2007, many of them specifically promoting usage of solar generating systems.  However, it was AB 1103, one the face of it one of the non-solar bills, that really caught my attention.  Effective Jan 1, 2009, AB 1003 promotes energy conservation by requiring electric and gas utilities to record energy consumption data of all nonresidential buildings in the state to which they provide service.  This data is to be uploaded in a format compatible with the US EPA’s Energy Star Portfolio Manager and preserve the confidentiality of the customer.  So far, so good.

The real impact on property owners will come after January 1, 2010.  With a year’s worth of data at its disposal, the EPA would have a significant database for benchmarking the performance and energy efficiency of any commercial building in the state.

What does this mean to building owners?  Well, it means that buildings owners and operators would have a data resource allowing them to compare their buildings’ energy performance relative to other buildings and to manage their energy costs.  However, the bill also requires building owners to make that data available to prospective tenants, buyers and lenders. Here’s where the so-called “green premium” comes into play. 

Energy ratings--on efficiency and sustainability--just became another tool in the building owner’s toolkit for attracting a new, higher-paying, socially-responsible tenant, premium pricing from a buyer and the best loan terms available from a lender.  Of course, all this pre-supposes that the building actually is energy efficient and ranks highly on the Energy Star database.

Building owners, property and asset managers in California have less than two years to prepare their buildings for this new reality.  You have to believe they are looking into every available renewable energy option and assessing if it will work for their existing property or planned development.   

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