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California Builds on Its Success with ENERGY STAR: California Becomes First State to Mandate Disclosure of Energy Use at Time of Building Transaction
U.S. EPA ENERGY STAR News
Spring 2008
California has long led the nation in energy efficiency and environmental protection. Now it is the first state to mandate disclosure of commercial buildings' energy use to prospective buyers, lessees, or lenders, and it is requiring building owners to use the ENERGY STAR online tool, Portfolio Manager, to get the job done. A new California law, Assembly Bill 1103, requires all commercial building owners or operators to disclose their buildings' benchmarking data and Portfolio Manager performance rating to prospective buyers, lessees of entire buildings, or lenders starting in 2010. The state also has broken new ground by requiring all state-owned buildings to be benchmarked with Portfolio Manager.
Having seen the impressive results that several private sector organizations experienced through benchmarking their energy use, the Governor of California issued Executive Order S-20-04 in December 2004. This executive order called for a number of green building and energy efficiency measures, and required benchmarking of all state-owned buildings by 2007. State officials worked with utilities to facilitate electronic transfer of energy data into Portfolio Manager. During this process, the state learned from the private sector's benchmarking success and engaged leaders from the Real Estate Industry Leadership Council, a group that includes several past ENERGY STAR Partner of the Year Award winners, such as Arden Realty, USAA Realty, and Hines.
The success of the governor's benchmarking initiative helped launch an ambitious statewide effort that culminated in the passage of the new bill. The actual legislation outlines a two-stage process. First, it mandates that, by 2009, utilities make energy data available by request to all commercial customers in a format compatible with Portfolio Manager. Then, by 2010, building owners must disclose Portfolio Manager benchmarking data and ratings to prospective buyers, lessees, or lenders. Pacific Gas and Electric, a 2008 ENERGY STAR Partner of the Year Award winner, helped the state put this legislation into action by helping to develop automated transfer of benchmarking data.
California's action is a significant step forward because it brings buildings' energy performance directly into decisions about buying, leasing, and financing, and increases the market's awareness of buildings' energy performance. The legislation also makes it easier for building owners and operators to compare their buildings' performance to that of similar facilities, and manage their buildings' energy costs over time. EPA will continue to work with California utilities and other stakeholders to help ensure the successful implementation of the new bill.
California's wide-ranging participation in the ENERGY STAR program also includes participation in the ENERGY STAR Challenge, a national call-to-action to improve the energy efficiency of America's commercial and industrial buildings by 10 percent or more. Nearly 8,000 California buildings have been benchmarked using Portfolio Manager, and approximately 1,000 buildings have earned the ENERGY STAR label. http://www.energystar.gov/index.cfm?c=business.bus_newsletter_spring2008
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