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The Clock is Ticking: San Jose Building Owners and Operators Have Until May 2020 to Comply with the Energy and Water Building Performance Ordinance

November 13, 2019

In November of 2019, on the eve of the 40th anniversary of the first world climate conference in Geneva, Switzerland in 1979, more than 11,000 scientists from over 150 nations have issued a joint statement in the journal BioScience warning that the planet Earth is unequivocally facing a climate crisis. To avoid dire consequences and create a path for a sustainable future, global societal transformations are needed in the way we live to avoid untold suffering and secure a sustainable future –cities like San Jose, California are heeding the warning by building stronger, healthier, and more resilient communities.

The city’s adoption of the Energy and Water Building Performance Ordinance (BPO) on December 11, 2018, illustrates some of the transformations required of building owners and operators as part of the comprehensive Climate Action Plan, which aims to reduce citywide greenhouse gas (GHG) emissions by 80 percent by 2050.

Under the BPO ordinance, building owners are required to track whole building energy and water usage, report on usage, and in some cases to undergo energy audits, retro-commissioning or efficiency upgrades. As an energy management practice, benchmarking involves tracking a building’s key performance indicators and comparing current performance against past performance or to the performance of other similar buildings. It is anticipated that San Jose’s energy and water benchmarking requirement will lower operational costs for building owners and operators while improving building performance and reducing emissions.

Which Buildings Are Covered By The Energy and Water Building Performance Ordinance

The BPO targets both public and privately-owned buildings that meet certain size requirements. Recognizing that buildings are the second largest source of GHG emissions for San Jose, compliance is required by all publicly owned buildings 15,000 square feet or larger and by all privately owned residential and non-residential buildings that are 20,000 square feet or greater. As with many benchmarking policies implemented nationwide, the benchmarking requirement for privately owned buildings is to be implemented in phases. The first phase, which targeted the city’s largest buildings, required privately owned buildings 50,000 square feet or greater to comply with the benchmarking requirement as of May 2019. The remainder of the buildings covered by the ordinance, those 20,000 square feet or larger, have until May of 2020 to comply. A list of buildings covered by the ordinance is published by the city.

What Does Compliance Entail?

There are four main steps that building owners and operators must follow in order to comply with the BPO. An additional step is required for underperforming buildings.

Step 1: Track Whole Building Energy and Water Usage

The first step in complying with the BPO requires the collection of whole building data on annual energy and water usage. In most cases, building owners can access aggregated whole building energy usage data directly from Pacific Gas & Electric (PG&E) directly from their Building Benchmarking Portal. Water usage data can also be requested directly from the relevant utility servicing your property. San Jose Water Company, San Jose Municipal Water, Great Oaks Water Company are the predominant water utilities in the area covered by the ordinance. Building owners should note that in some cases compiling whole building energy and water usage will require collecting the relevant data from their tenants. For this reason, it is advised to notify tenants early and to have a process in place to facilitate the transmission of information.

Step 2: Complete Benchmarking Report Using Energy Star Portfolio Manager

As of May 2020, all privately owned buildings 20,000 square feet or larger will be required to submit an annual energy and water benchmarking report to the San Jose Environmental Services Department. The annual report must be completed using the EPA’s Energy Star Portfolio Manager (ESPM), and must include:

  • Contact information;
  • Building address;
  • Property type;
  • Gross square footage (GSF);
  • Energy Use Intensity (EUI);
  • GHG emissions;
  • Indoor water use and water use intensity;
  • Outdoor water use (when available);
  • Energy Star Energy and Water Scores (if applicable);
  • Number of years the building has been Energy Star Certified (if applicable); and
  • The accessor’s parcel number or block/lot.

Exemptions may apply if the building is unoccupied, scheduled for demolition, or if financial hardship can be demonstrated. Applications to obtain an exemption must be submitted prior to April 1 of the year for which the exemption is requested.

A summary of benchmarking results and compliance status will be published by the city. Significantly, submitting a benchmarking report with the San Jose Environmental Services Department meets both the city and state’s energy benchmarking requirements.

Step 3: Verify Minimum Acceptable Performance Level

To ensure improved building performance and a decrease in emissions, the BPO additionally requires that building owners submit a verification report to the Environmental Services Department demonstrating that the building is either newly constructed through its Certificate of Occupancy or that the building meets certain performance standards. The verification report demonstrating that a building meets certain performance standards must be completed by a California licensed architect, engineer, or qualified Auditor or Retro-Commissioning professional.

Once every five years, buildings that cannot demonstrate a minimum acceptable performance level are must either (1) undergo an ASHRAE level 2 (or greater) audit, (2) perform retro commissioning of building systems, or (3) adopt efficiency improvement measures.

Step 4: Maintain Historical Records

Lastly, building owners are required to maintain historical records related to benchmarking, audits and retro-commissioning, and any efficiency improvements made to the property. All relevant records must be maintained for up to five years and be furnished to the new owner upon the sale of the property.

What to Expect If You Fail to Comply

San Jose building owners and operators can expect two penalties for failing to comply with the city’s energy and water benchmarking ordinance. First, under the transparency piece of the policy, non-compliant properties will be publicly identified as a mechanism to enforce compliance. Monetary fines will also be levied based on building size and the number of days that the property is out of compliance. Buildings under 50,000 square feet are subject to a maximum fine of $2,500 per year, while larger buildings can expect to pay up to $5,000 per year – the actual cost of non-compliance in the form of lost savings opportunities is likely much higher.

How Modern Energy Management Practices Can Improve Performance And Avoid The Need For Energy Audits

While energy audits are useful in identifying opportunities to improve building performance, the opportunities identified are also at risk of quickly becoming obsolete. This is due to the fact that energy audits are performed at a set point in time without the ability to anticipate future changes in building performance due to occupant behavior, extreme weather events, equipment failures, and more. Implementing modern energy management practices can help to avoid the need for energy audits by continuously identifying savings opportunities through real-time building systems analysis made possible through advanced submetering and the implementation of Energy Management Information Systems like BuildingOS.

Unlock Savings Opportunities With Our Building Energy Management Solution

There are many ways to reduce energy usage and carbon emissions to help comply with San Jose’s Energy and Water Building Performance Ordinance, but perhaps one of the most important step is fully understanding your current energy and water usage– and that’s where we come in. BuildingOS is a comprehensive software platform that centralizes all of your building systems and utility data, automates Energy Star reporting, and allows you to understand and act on real-time data to continuously improve operational efficiency and reduce energy consumption. Want to see how BuildingOS can help improve your building portfolio? Contact us today!