What’s the pLAn? New Los Angeles Ordinance Imposes Sustainability Requirements on Building Owners

March 2017

In April 2015, Los Angeles Mayor Eric Garcetti released the Sustainable City pLAn, a comprehensive sustainability strategy for the City of Los Angeles designed to achieve a wide range of environmental and economic objectives by certain short-term and long-term deadlines. One long-term goal of the pLAn is to reduce greenhouse gas emissions to a level 60% below 1990 levels by the year 2035. Energy used in buildings is the largest source of greenhouse gas emissions in Los Angeles, so a major tenet of the pLAn is to increase the efficiency of the city’s buildings, with a long-term goal of reducing energy use by 30% per square foot for all building types by 2035. In an effort to achieve these goals, the Los Angeles’ City Council unanimously passed the Existing Buildings Energy & Water Efficiency ordinance (“EBEWE”) in December 2016. The EBEWE program is designed to reduce energy and water consumption in the city’s buildings by requiring building owners to conduct annual benchmark reports and perform 5-year energy audits and retro-commissioning of building systems.

Covered Buildings
The EBEWE applies to privately owned buildings that are 20,000 square feet or more in size, buildings owned by the City of Los Angeles that contain at least 7,500 square feet, and certain buildings over 20,000 square feet that are owned by local agencies of the State of California. The EBEWE does not apply to one- and two-family dwellings, or specific types of buildings, such as residential hotels, utility pumping stations, and structures used primarily for the production and post-production of motion pictures and television.

Requirements:
There are two components of the EBEWE:

1.     Annual Energy and Water Benchmarking and Reporting:
The owners of buildings covered by the EBEWE are required to submit an annual energy and water benchmark report to the Los Angeles Department of Building Safety. The report is developed through the Environmental Protection Agency’s ENERGY STAR® Portfolio Manager program (the “Portfolio Manager”), a free online system that allows building owners to input information that the Portfolio Manager uses to track and assess energy and water consumption and to create reports required by various environmental regulations. The annual benchmark report required under the EBEWE shows the total energy and water consumed by the entire building for the previous year and other relevant information, including descriptive information about the building, the indoor, outdoor, and total water use of the building, and the building’s ENERGY STAR® score, if applicable.

Owners of buildings covered by the EBEWE may be required to submit annual benchmark reports as early as July 1, 2017. The compliance schedule for these annual reports is:

  • July 1, 2017: Buildings owned by the City of Los Angeles with gross floor area of 7,500+ square feet, and privately owned buildings or buildings owned by a local agency of the State of California with gross floor area of 100,000+ square feet.
  • April 1, 2018: Privately owned buildings or buildings owned by a local agency of the State of California with gross floor area of 50,000 square feet or more but less than 100,000 square feet.
  • April 1, 2019: Privately owned buildings or buildings owned by a local agency of the State of California with gross floor area greater than 20,000 square feet but less than 50,000 square feet.

The EBEWE benchmark report must be submitted each year unless the building qualifies for certain limited exceptions (e.g., if the building does not receive energy or water services for the entire year required to be benchmarked). After the initial benchmark report has been submitted, subsequent reports are due no later than April 1 each year.

2.     Energy and Water Audit; Retro-Commissioning:
In addition to the annual benchmark report, the EBEWE requires building owners to undergo an energy and water audit and retro-commissioning of the base building systems every five years. The ordinance describes the retro-commissioning process as the identification and correction of deficiencies in the building’s systems in order to optimize the performance of those systems. If a building has received an ENERGY STAR® Certification from the EPA within approved time periods, or a building’s energy and/or consumption has been reduced by certain approved amounts, or specific energy efficient upgrades have been made to the building, then the building owner is not required to perform the 5 year energy and water audit and retro-commissioning.

The compliance schedule for the required energy and water audit and retro-commissioning is set forth below and is based on the last digit of the Los Angeles County Assessor’s Identification Number (AIN) assigned to the building:

Last digit of AIN First compliance due date Subsequent compliance
due dates
0 January – June
2019

Every 5 years thereafter

1 July – December
2019
2 January – June
2020
3 July – December
2020
4 January – June
2021
5 July – December
2021
6 January – June
2022
7 July – December
2022
8 January – June
2023
9 July – December
2023
Note: new buildings that have been occupied for less than 5 years from the building’s first compliance date (as determined by the building’s Temporary Certificate of Occupancy or Certificate of Occupancy) are exempt from the EBEWE’s energy and water audit and retro-commissioning requirements. The Los Angeles Department of Building and Safety determines whether a building qualifies for such an exemption, and the EBEWE implies that qualifying buildings would only be exempt from the requirements for as long as they are considered “new.”

Fees:
Under the Los Angeles Municipal Code, the City can impose a non-compliance fee of $202.00 for failing to comply with the EBEWE within 15 days after the specified due date for compliance.

pLAnning for Success:
Earlier this month, Mayor Garcetti released the annual progress report for the Sustainable City pLAn, which showed that two-thirds of the pLAn’s 2017 goals have already been met, including a 20% reduction in water use per capita. Mayor Garcetti also announced that the City is on track to achieve 90% of the pLAn’s 2017 goals. As early as July of this year, the EBEWE will become an important part of the success of the pLAn and achievement of additional short-term and long-term goals.  Building owners in Los Angeles must continue to monitor additional requirements and regulations as the City implements the pLAn and works toward becoming more sustainable and energy efficient.