New Energy Disclosure Requirements for 2018, Take Two (Thousand Dollars)

June 2018

In 2013, California passed a new law requiring certain energy use disclosures by property owners seeking to sell, lease, or take out a loan on a building but that law was repealed in 2016. Now the legislature has passed a new law (Assembly Bill 802), in the same vein, which will require all owners of buildings over a certain size to report that energy use data, even if they aren’t selling, leasing, or taking out a loan on the building.

Beginning June 1, 2018, any commercial building containing 50,000 square feet or more will be required to establish an Energy Star Portfolio Manager account and report certain building characteristic information and energy use data to the California Energy Commission (CEC) using the Portfolio Manager by June 1 of each year. Any residential building over 50,000 square feet with 17 or more residential utility accounts will be required to do the same beginning next year on June 1, 2019.

There are a few exceptions to the disclosure requirements: any building in which 50% of the gross floor area is used for scientific experiments, manufacturing, or industrial purposes is exempt as well as any building scheduled for demolition within a year of June 1, 2018, and any building that does not possess a certificate of occupancy for over half of the year in which reporting is required. Further, any building that is currently complying with energy disclosure programs implemented by the local jurisdiction and approved by the CEC is also exempt.

For buildings that do not meet any of the above exemptions and have more than three active utility accounts, building owners must request energy use data for the building from the utility company servicing it, and upload the data into the Energy Star Portfolio Manager Account. Then, the building owner will need to complete the steps for reporting within the Energy Star Portfolio Manager interface.

For non-exempt buildings with less than three active utility accounts, building owners need to obtain permission of each of the utility account customers before uploading and reporting the building’s energy use data. This can be accomplished via a provision in a lease, or through other written means. Upon obtaining permission, the reporting process proceeds as it would for buildings with more than three active utility accounts. Should any of the utility account customers not provide the building owner with the requisite permission, the building owner must report the building’s energy use data using a modified process detailed within the Energy Star Portfolio Manager. The data reported in this modified process will not be publicly reported.

Each year, energy use data must be requested by March 1 and reported by June 1. These new regulations do not require any information to be reported to tenants, but some of the data will be publicly disclosed beginning in 2019 (for commercial buildings) and 2020 (for residential buildings). If a building owner fails to comply with these new regulations, the CEC must provide notice and the building owner then has 30 days to cure the violation. If the violation is not cured within 30 days, the building owner will be subject to a fine between $500 and $2,000 per day, for each category of data that the building owner did not provide or that was provided fraudulently.