San Diego Business Journal

Law Soon to Shine Light On Buildings’ Energy Use

LAW: Bigger Landlords Ready; Data Come Up in Sales, Leases By Lou Hirsh Monday, June 17, 2013

Ready or not, California owners of commercial buildings larger than 50,000 square feet will need to begin complying this year with a state law requiring the disclosure of properties’ historical energy usage data to prospective buyers, renters and lenders.

Assembly Bill 1103 was signed into law in 2007, but its implementation has been delayed several times. At press time, it was officially slated to take effect July 1, but the California Energy Commission was considering postponing the start again, to August or September.

The law currently is scheduled to take effect in 2014 for smaller commercial buildings — Jan. 1 for properties 10,000 square feet up to 50,000; and July 1 for those at least 5,000 but less than 10,000 square feet.

Officials of Irvine Co., San Diego County’s largest office landlord, said the firm has long been preparing for the implementation of the new law, which impacts all of the Newport Beach company’s local office portfolio of 7 million square feet.

“We already have a well-established Energy Star reporting system in place, so there are no issues for us in terms of our compliance,” said Rich Bluth, vice president of energy management with Irvine Co., who was active in working groups that advised lawmakers prior to the passage of AB 1103.

Bluth said the state likely still needs to finalize mechanisms under which building information is registered by utility firms with the U.S. Environmental Protection Agency’s existing Energy Star database. Utilities report the data after individual property owners set up an Energy Star account with basic building data such as size, number of occupants and types of equipment used on the premises.

The compliance measure itself did not create extra costs for Irvine Co., which has been upgrading its buildings in recent years to remain competitive.

‘Happy to Disclose’

“We’re actually happy to disclose Energy Star data,” Bluth said. “We have a full portfolio that is in the top percentile for energy efficiency.”

The disclosure law currently does not apply to commercial buildings less than 5,000 square feet. However, state officials are considering measures to address those properties, as well as apartment and other residential buildings, as California aims for net-zero energy usage in new buildings over the next 20 years.

Local green-building experts said owners of large commercial buildings have already been active in improving efficiency during the past five years, largely because it helps cut their own overhead and because efficiency is increasingly demanded by budget- and eco-conscious tenants.

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