California Energy Commission Implements New Energy Use Requirements


After several delays in implementation and enforcement by the California Energy Commission, California’s new energy use disclosure requirement commenced on January 1, 2014, for all non-residential buildings with a total gross floor area measuring more than 10,000 square feet. Beginning on July 1, 2014, owners of non-residential buildings larger than 5,000 square feet will also have to make the disclosures.

Section 25402.10 of the Public Resources Code requires owners or operators of non-residential buildings to disclose the building’s past energy use data to prospective buyers, lessees or lenders of the building prior to the sale, lease, financing or refinancing of the property. This applies to buildings with uses (as shown on the building’s occupancy permit) classified as assembly (A), business (B), education (E), institutional-assisted living (I-1, I-2), mercantile – retail (M), residential – transient (R-1, hotels/motels), storage (S) and utility – parking garage (U). It does not apply to residential buildings (R) or factory/industrial buildings (F). This disclosure must be made no later than 24 hours prior to the execution of the sales contract, lease or submittal of the loan application. In order to make the disclosure, a building owner must cause the building’s energy usage data to be uploaded to the US Environmental Protection Agency’s ENERGY STAR Portfolio Manager website by setting up an account on the website and authorizing the utility company to upload the energy usage data (utility companies are already storing the data for upload). The regulations require that this account be opened or updated at least 30 days before a disclosure is to be made.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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