The Impact of New Standards on California Building Owners

How grey buildings become green!

Three new standards are sweeping across the local and international stages influencing energy management for non-residential buildings. ISO 50001, BEPA E2797-11, and AB 1103 are changing thinking regarding energy management and efficiency and are allowing owners and buyers across California greater understanding of properties.

What are these three new standards and how do they influence public and commercial building owners in California?

ISO 50001 is an international voluntary standard that focuses on energy management rather than on implementing new, energy-efficient technologies. This standard provides a framework that allows companies to use data to understand their own energy use, create plans to increase energy-efficiency, and to review the efficiency of these plans. It is important to note that this standard focuses on improving energy management rather than improving standards for technology. The idea behind this is that owners will learn how to most effectively use the technologies that they already have, and find areas, if necessary, where technology upgrades would be most beneficial. Improving energy management efficiency could result in reduced organizational costs and risks, and improve environmental performance. One of the most appealing aspects of this standard is that is easily applicable to all types and sizes of organizations.

The second standard is the BEPA E2797-011. This applies to the assessment of buildings involved in a real estate transaction including buying, leasing, and refinancing and is related to AB 1103. Concerns of potential buyers regarding the energy use and costs of a building have been growing but little technology existed that allowed for an accurate compilation of data. BEPA E2797-11 creates a standard that allows owners and buyers to have much more information regarding a property and its energy use. Because the energy analysis of a building will be standardized, it will increase the confidence of owners of prospective buyers/lessees in the effectiveness and the reliability of the analysis. This standard allows prospective buyers/lessees to learn about the energy use and cost of the building and how it compares to other similar buildings, and also gives them insight into potential new energy-efficiency opportunities. This standard also benefits the owner in many ways. By showing the building’s energy use especially in comparison to similar buildings, it shows the owner ways to improve their energy use. A more energy-efficient building means lower operating costs, higher net operating income, and a higher value for tenants and potential buyers.

The third and final new implementation is Assembly Bill 1103 (AB 1103). This bill states that an owner or operator of a non-residential building must present at least 12 months of energy consumption data when presenting a sales contract to prospective buyer, a lease for the whole building to prospective lessee, and a loan application to prospective lender. This will allow for the formation of a compilation of energy consumption data for buildings across California, which will, in turn, allow for an accurate comparison of energy use among similar buildings (when normalizing for variables such as climate, hours of operation, and number of people using the building). A higher comparison rating means lower occupancy and energy costs, and a potentially increased valuation of the building. This comparison will also show owners opportunities for improvement which can lead to lower energy costs. According to recent publications, buildings with Energy Star rating generally use 35% less energy and save 50 cents per square foot in energy costs. The benefits of this bill are clear for both owners and potential buyers.

Benefits for building owners

While initially these new standards seem like a lot more work for building owners, the benefits accumulated from a little bit of extra work are astounding. The new standards for compiling energy consumption data will allow each company to accurately assess how competitive their building is compared with other like buildings and will clearly highlight areas in which owners can improve their energy-efficiency. One of the best aspects of these standards is that they do not require owners to buy new technology, but rather they give owners tools to learn how to most efficiently and effectively use the technologies that they already have.  California building owners and operators should begin implementing these standards as soon as possible to create a more competitive building and to fully reap the rewards allowed by these new standards.

This entry was posted in AB 1103, Buildings, Compliance, Energy Efficiency, Energy Performance Benchmarking, Green Building and tagged , , , , , , . Bookmark the permalink.

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