Streamlining Regulatory Compliance for Diverse Building Portfolios

Wendy Merz , Director of Sustainability Services — Chester, MD

Kim Ayotte , Managing Consultant — Denver, CO

In recent years, local and state regulations designed to improve building energy efficiency to meet state and municipal climate commitments have grown increasingly varied and complex. For large enterprises with diverse building types and geographic locations, navigating the regulatory landscape can pose significant operational challenges, brand and investment risks and CAPEX/OPEX capital planning issues.

The U.S. Department of Energy’s (DOE) Building Energy Codes Program (BECP) offers technical assistance to jurisdictions seeking to reduce carbon emissions from the built environment by implementing Building Performance Standards (BPS). BPS require building owners to improve energy performance over time by establishing energy and/or greenhouse gas emissions (GHG) targets.

A few of the current Building Performance Standards across the U.S. include:

·????? If In October 2023, Colorado’s Air Quality Commission passed the Building Benchmarking and Performance Standards, which require buildings with a gross floor area of 50,000 square feet or larger to establish energy consumption and GHG emissions targets. Energy efficiency measures will be evaluated through benchmarking reports submitted to the Colorado Energy Office annually.

·????? In Washington state, similar standards entitled the Clean Buildings Performance Standard and subsequent Clean Buildings Expansion Bill were announced in 2019 and 2022, respectively. These BPS establish energy use intensity targets and include energy performance requirements for Tier 1 buildings (commercial buildings greater than 50,000 square feet) starting in 2026 and benchmarking and energy management plan requirements for Tier 2 buildings (buildings greater than 20,000 square feet) starting in 2027.

·????? In 2019, New York City passed Local Law 97, which requires buildings over 25,000 square feet to meet specified energy efficiency standards and GHG emissions limits. The first compliance period spans from 2024 to 2029 and subject facilities are required to submit the first annual compliance reports by May 1, 2025, representing emissions from calendar year 2024.

The DOE Office of Energy Efficiency and Renewable Energy tracks the local and state standards that require building owners to improve energy performance over time and provides a series of infographics to help companies and the general public better understand energy codes across the country (see Figure 1).

Four Steps to Achieve Building Energy Performance Goals

A four-step approach can help guide complex portfolio companies toward more efficient, effective compliance of BPS.

Step 1: Assess Existing Compliance Needs

Building energy performance improvement “standards” are developing throughout the U.S. in a very non-standard way, with states and cities adopting a variety of building performance standards specific to their locale. Not only do the standards differ in their energy/emissions performance improvement expectations, but also in building function applicability, timeframes and options of compliance.

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