Our Industry and AB 1103

The aim of reducing California’s energy consumption has been a hot topic of conversation for decades. The talk around greenhouse gas emissions has led to world-wide events, new initiatives, sky scraping goals, and, our favorite, legislation. The EPA has been on the forefront of encouraging environmental change, and their infamous ENERGY STAR Portfolio Manager is the tool for bench-marking a buildings’ energy performance.

Commercial building operators, facility managers, real estate brokers, as well as owners and consultants need to become familiar with this new law and understand how it may effect them. AB 1103 was originally proposed to take effect in January 2011, but has experienced quite a bit of push-back. The CEC decided to postpone the launch until July 2013. The requirement for California commercial buildings to disclose, or benchmark, their energy use information is on the horizon and must be completed prior to the sale, refinancing, or leasing of the building.

Here are the current stipulations:

(a) On or after January 1, 2013, for a building with total floor area measuring more than 50,000 square feet.
(b) On or after July 1, 2013, for a building with a total floor area measuring more than 10,000 square feet and up to 50,000 square feet.
(c) On or after January 1, 2014, for a building with a total floor area measuring at least 5,000 square feet and up to 10,000 square feet.

Will the CEC stay firm on the July 1, 2013 date? This legislation, and many other aspects of the commercial real estate economy, are subject to change and will surely have unforeseen consequences in the near future. The growing pains of an environmentally friendly economy are upon us.