How California's Unprecedented Law to Measure Building Energy Use Can Yield Even More Benefits for Customers

First in a Two-Part Series

When Governor Jerry Brown signed AB 802 in early October, California became the first state in the nation with a mandate to provide energy usage data to owners of commercial and multi-family properties so they can measure–or benchmark–the energy use of their buildings over time.

Although California has had a benchmarking law on the books for commercial buildings for over seven years, it has faced major implementation challenges, largely due to owners’ inability to access their buildings’ total energy consumption data. AB 802 not only addresses the previous law’s largest barrier (access to whole-building energy consumption information), it expands benchmarking to multi-family residential buildings.

Keep reading for the facts on what this new law means and why it’s good for Californians. This blog focuses on the law’s whole-building data sharing provisions. Part 2 will focus on new changes to California’s statewide public benchmarking program.

Why Was New Legislation Necessary?

Compliance with the previous benchmarking law had been exceedingly low because building owners that had separate meters for each of their tenants were unable to access their buildings’ total energy usage data. By requiring utilities to provide whole-building data to owners, the new legislation corrects this problem. It also gives utilities time to automate their data sharing processes. Previously, utilities could not easily determine the location of each customer’s utility meter (they only had information on the account number associated with each meter), which made providing a whole-building total difficult. With AB 802 signed, utilities are now in the process of mapping individual building meters to each building’s location, which will vastly expedite the process for owners.

When Will the New Data Provisions and Benchmarking Program Be Implemented?

The California Energy Commission (CEC) has already launched a rulemaking to address the law’s many details so that it can be put into practice no later than January 1, 2017. In the meantime, building owners can continue to benchmark properties on their own, or if required to do so by local ordinances–this is what would have occurred if AB 802 had not passed.

Providing Energy Usage Data to Owners Provides Significant Clean Energy Benefits Independent of Benchmarking Compliance

Many have focused on AB 802 for its statewide benchmarking provisions (which do offer great value for the building market). But enabling building owners to access their whole-building energy usage provides significant standalone benefits. For example, whole-building information enables:

• Assessment and Financing of Efficiency and Solar Investments. Owners require basic information on their buildings’ energy consumption to assess prospective investments in more efficient equipment or to properly size solar panels. This information also facilitates procuring financing to make these outlays, as banks need to understand the return on investment for prospective loans related to energy use. For owners with large portfolios, whole-building data enables them to target buildings most in need of upgrades.
• Participation in Grant and Incentive Programs, Especially for Affordable Building Owners. For affordable building owners and U.S. Department of Housing and Urban Development (HUD) properties, energy usage data is a prerequisite to participating in financing, grant, and incentive programs. The information also enables owners of affordable properties to make holistic weatherization investments for their tenants.
• Accurately Calculating Utility Allowances for Affordable Properties. Whole-building data enables affordable housing owners and government agencies to set accurate utility allowances to offset costs for subsidized housing residents. For this reason, the U.S. HUD secretary wrote an open letter urging utilities to improve access to aggregated usage information in order to save taxpayer funds and give owners more incentives to invest in efficiency repairs.
• Tracking and Verifying Energy Savings. With access to energy usage information over time, owners and efficiency program implementers can determine whether expected energy (and bill) savings have materialized. If the savings haven’t materialized, energy usage information will help them know where to look and how to address needed adjustments.
• Promoting Behavior Change. Consumers and building owners who have access to their energy consumption information can choose to use energy more efficiently. Some building owners and efficiency programs show consumers how their energy use compares with average users to motivate efficiency and conservation. Others may provide incentives or even competitions to further encourage behavior change. Tenant-specific information can also help building owners identify any units that may require individual upgrades or where equipment is malfunctioning.

The Specifics: What AB 802 Means for the Provision of Whole-Building Data to Owners

As of January 1, 2017, every utility in California will be required to provide a year’s worth of monthly energy consumption for an entire building to an owner (or owner’s agent) upon request, provided that building consists of three or more commercial utility accounts or five or more accounts, if any are residential. A utility will have four weeks to respond to a request and provide the information directly to the owner or upload it to the owner’s Energy Star Portfolio Manager account. Portfolio Manager is an EPA created online tool that enables owners to benchmark their properties in a secure online environment.

Because this information does not disclose information about any individual customer (or tenant), building owners may use it to better manage their properties. The legislation requires no further regulations on this provision, however the California Energy Commission may provide additional direction on the delivery mechanism (e.g. via Portfolio Manager or excel file) or level of automation (i.e. electronic as opposed to paper request forms).

Owners of buildings that don’t have three commercial or five accounts, if any are residential accounts, will need to obtain customer permission to obtain the whole building total just as if they were getting usage data for individual tenant units. The new legislation also provides the Commission authority to define a more efficient process for this.

Whole-building Data for Buildings That Fall Below the Aggregation Threshold

For buildings that don’t meet the account number threshold, owners will be required to obtain electronic or written consent from tenants to receive a monthly total (either for the whole-building or for individual tenant units). With the passage of AB 802, if utilities do not further expedite the process, the CEC now has the authority to issue regulations that require it.

Prior to AB 802 and in the absence of regulation, some utilities had provided information in PDF format, required numerous resubmittals of written tenant consent forms, and took months (or even over a year) before providing the data. Now the CEC can step in to require that utilities provide the information in Excel format or directly to EPA Portfolio Manager. This will enable owners to analyze the information or import it into other existing benchmarking tools that provide valuable analytical support and visually represent data in an engaging format, such as WeGoWise or Energy Scorecard.

The CEC could also require utilities to accept the consent provided in pre-approved rental agreements or utility service contracts.

Tenant-Specific Data for All Building Owners

Even prior to AB 802, a utility customer could always give a building owner (or any other party) permission to obtain his or her utility information. This tenant-specific information enables owners to identify new in-unit efficiency investments or malfunctioning equipment. It also enables them to adopt behavioral and awareness programs for their tenants.

However, as mentioned earlier, the process for receiving this information from the utility–even after tenant consent was procured–has been challenging, if not impossible, for owners. With AB 802, the CEC now has authority to issue regulations to standardize and expedite this process as well.

–

Thanks to AB 802, utilities and building owners will be better positioned to improve energy efficiency, and with better information, building owners can now take the lead in making their properties cleaner and healthier for their tenants. Next: the specifics on what California’s law means for its new, improved statewide public benchmarking program.