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California’s AB 802 aims to reduce consumption and increase energy efficiency with energy usage benchmarking, but are property owners ready for the new rules?

While light bulbs and smart appliances hog the limelight, commercial and residential buildings silently claim over 40% of the nation’s total energy use. Buildings spend over $400 billion a year on energy, making them the biggest energy consumer in the U.S. They are also the second-largest source of greenhouse gas emissions in the country. With the stakes so high, every watt counts.

The Power of Usage Data

In California, each watt of energy will soon be tracked and published thanks to the state’s new energy benchmark rule for commercial and residential properties. With the passage of California Assembly Bill 802 (AB 802), California joins a growing list of cities and states requiring benchmarking for commercial and residential properties. The intent is to use accurate data tracking and increased transparency to inspire building owners to step up their energy efficiency efforts.

In the simplest terms, building benchmarking measures a property’s energy use and compares it to averages for similar buildings. By comparing ESS scores, property owners can assess how their building measures up and identify opportunities to reduce energy consumption. According the US EPA, benchmarked buildings reduce energy use by 2.4% per year, with poor performers often racking up the most savings.

Better Information, Easier Access

Signed into law in 2015, AB 802 calls for comparative benchmarking of energy usage at large commercial and multifamily properties. Under the law, certain California property owners will be required to obtain an ENERGY STAR® Score (ESS) using the US EPA’s ENERGY STAR® Portfolio Manager® (ESPM). Comparative data analysis will rank properties based on their ESS. In addition, ENERGY STAR Scores for large commercial buildings (over 50,000-sqft) and residential properties (18 or more units) will be made publicly available.

While California has ratified similar benchmarking regulations in the past, AB 802 aims to make the process easier and more accurate. The state’s previous benchmarking laws obligated property owners to supply their own usage data when a property was sold, but this strategy proved ineffective. AB 802 requires utility companies to provide the last 12 months of energy consumption data to customers within 4 weeks of receiving a request. Property owners can then use this data for ESS compliance.

The new regulation is being finalized by the California Energy Commission and is anticipated to go into effect in 2017, the law applies to all commercial properties and multifamily buildings with 17 or more utility accounts. AB 802 repeals the state’s time-of-sale benchmarking requirement (AB 1103) in favor of annual reviews.

Compliance Made Easy

As the California Energy Commission finalizes regulations required by AB 802, many properties may be tempted to wait until the last minute to comply with the new benchmarks. While new laws always trigger some anxiety, California property owners can benefit from ready-to-implement technology resources. With Yardi® Utility Expense Management, AB 802 compliance can be easy, automated and accurate.

Yardi Utility Expense Management software is designed to work with the EPA’s ENERGY STAR software platform, from account set up to score calculations. In addition, Yardi can provide building owners and managers with ENERGY STAR certified meters and even setup whole building data connections with local utilities if necessary.

The data collected using Utility Expense Management software is seamlessly uploaded into a portfolio manager. Reporting templates can be accessed if needed and building characteristics can be updated as part of the Utility Expense Management service, local utility whole-building data connections, or both depending on the building.

With the passage of AB 802, California joins a growing list of cities and states already requiring energy use benchmarking. Yardi has worked with businesses in 25 major cities with similar regulations. By building on previous experience and success, Yardi’s Utility Expense Management software provides a one-stop solution for building owner and property managers looking to track and manage energy use.

The Benefits of Benchmarking

California will be the first state to make whole-building energy usage data available to the public. By requiring building owners to publish energy usage data, proponents of the law hope a competitive spirit will trigger more energy efficiency initiatives throughout the state.

“With ENERGY STAR scores available, tenants, appraisers, lenders and brokers will know exactly how each building ranks, encouraging building owners to keep their scores high,” explains Matt Eggers, VP of Energy Management at Yardi. “AB 802 will be a major driver for energy efficiency initiatives in California, and with the entire state participating there’s the potential for the impact of AB 802 to be felt nationwide.”

With energy efficiency savings in California calculated at over $65 billion to date, there are still opportunities for property owners and managers to actualize their own savings.

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