Philadelphia Releases Energy Benchmarking and Disclosure Regulations for Large Commercial Buildings

by Cozen O'Connor
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On July 10, 2013, the Philadelphia Department of Licenses and Inspections (L&I) issued draft regulations filling in the compliance requirements of Philadelphia’s mandatory energy and water disclosure ordinance (the Disclosure Ordinance) that was enacted in June 2012. The draft regulations will become final on August 2, 2013. The regulations are available here.

To encourage commercial building owners to make investments in energy and water efficiency, the Disclosure Ordinance requires owners of commercial and mixed-use buildings with 50,000 square feet or more of indoor commercial floor space to measure the building’s energy and water usage (benchmark). The usage data must be disclosed to the city on an annual basis, and the data will be made publicly available. Additional information regarding the enactment of the ordinance is available here.

Within the next week, the Office of Sustainability is expected to send individual compliance letters to owners of buildings subject to the Disclosure Ordinance, and owners have until October 31, 2013 to comply. From 2014 on, benchmarking must be completed annually by June 30 of each year. Owners that fail to comply with the Disclosure Ordinance face a fine of $300 for the first 30 days, and $100 per day thereafter.

Which Buildings Are Subject to the Disclosure Ordinance?

According to the mayor’s Office of Sustainability, a little more than 2,000 buildings in Philadelphia are considered “covered buildings” subject to the Disclosure Ordinance, of which approximately 1,700 buildings are privately owned. Any commercial building with indoor floor space of 50,000 square feet or more and all commercial portions of any mixed-use building, where a total of at least 50,000 square feet of indoor floor space is devoted to any commercial use, are subject to the Disclosure Ordinance. If two or more buildings are served by one common energy meter without sub-metering, they are considered one building for the purpose of determining indoor square footage.

Commercial uses “relat[e] to or [are] associated with any activity, whether or not undertaken for a profit, involving any form of trade or commerce, or requiring consideration in exchange for any good, service, or privilege.”

Covered buildings do not include: (i) multifamily residential buildings or multifamily sections of mixed-use buildings; (ii) industrial properties with high “process” energy use; or (iii) buildings where more than 50 percent of the indoor floor space has been unoccupied for more than 180 days in a calendar year. The Office of Sustainability may also grant specific exemptions where it determines that “benchmarking or disclosure would cause exceptional hardship or would not be in the public interest.”

Owners of new or renovated buildings must begin benchmarking during the first full calendar year after which the building receives a certificate of occupancy for any portion of the building (including temporary certificates).

How Does Benchmarking Work?

To benchmark buildings in compliance with the Disclosure Ordinance and the regulations, building owners must input water and energy use data into a free online tool called “Portfolio Manager.”

Portfolio Manager was developed by a partnership between the Department of Energy and the Environmental Protection Agency. Portfolio Manager compares a particular building’s resource use against buildings of similar type, size, and use, and generates a 1-100 score and report. The intent of the score is to provide an “apples to apples” comparison among buildings.

The regulations require owners to report data using a customized Philadelphia reporting interface for Portfolio Manager, which will be available on the city’s official Benchmarking Program website when it is completed. If an owner learns that the data is inaccurate, the owner must amend the inaccurate data within 30 days. Owners must also retain documents related to benchmarking for three years following submission.

To facilitate compliance, the city has added a step-by-step compliance guide and additional information on using Portfolio Manager to its website.

Where Do I Get Energy and Water Usage Data?

The regulations provide several different methods for obtaining usage data. The preferred method is data loaded directly from the utility into Portfolio Manager. If “after a good faith effort” the owner cannot use direct utility reporting, the owner can input data obtained from the utility in a different format. If that is not possible, manual aggregation of data from tenants or “any other means” may be used.

The Disclosure Ordinance requires tenants to disclose usage data. Phila. Code § 9-3402(3)(a). If the tenant fails to comply, the building owner can report partial building data.

If a single tenant occupies an entire leased building, and the tenant is responsible for managing its energy and water usage, the owner and tenant may agree to delegate all benchmarking responsibilities to the tenant.

In the case of a building sale or transfer, the parties to the transaction must also ensure that all information necessary to benchmark is transferred from the seller to the buyer.

How Will the Benchmarking Data Be Used?

Results of the Benchmarking Program will be made public by the Office of Sustainability beginning with the 2013 results.

The city will maintain a website that will post the following information for each covered building: (1) address; (2) energy use intensity (as reported in Portfolio Manager); (3) water use per gross square foot; (4) greenhouse gas emissions from energy use; (5) Portfolio Manager EnergyStar rating; and (6) reported facility type under Portfolio Manager.

 

 

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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