California AB 1103 Will Reveal Buildings’ True (Energy) Colors

One MontgomeryCalifornia Assembly Bill 1103, which will require non-residential building owners to disclose their energy consumption information via the Energy Star Portfolio Manager, has been postponed for implementation until January 1, 2013, at the earliest.

What is Energy Star Portfolio Manager?
The Energy Star Portfolio Manager allows building owners to track and assess energy consumption and compare their own building’s performance against a national database of buildings with similar operating characteristics. The result is a rating on a scale of 0 to 100, with 100 being the most energy efficient building in its category.

A verified score of 75 or higher qualifies the building for Energy Star certification, which indicates that the building performs better than 75% of all similar buildings nationwide. A higher Energy Star score signifies lower operating costs and a potentially higher valuation.

How Does This Affect Owners?
Requiring each commercial building to obtain an Energy Star score will allow the public to view each building’s true (energy) colors: green, blue or otherwise. Most high performing buildings have already obtained Energy Star certification and will not be affected by the new legislation. However, building owners of underperforming non-residential buildings may now have a greater incentive to implement energy efficiency upgrades in order to improve their Energy Star score as this data will now be accessible to potential tenants, prospective buyers, and the public.

California AB 1103 is not just a question of compliance; it is a question of a building’s competitiveness. In a competitive commercial real estate marketplace, reduced energy costs provide an important differentiator.

Why Early Action is Important
While California AB 1103 will not go into effect until 2013, owners of low performing buildings should consider making necessary upgrades now to improve energy efficiency and increase their buildings’ Energy Star scores, which are based on the 12 previous months of energy data. An Energy Star score will not only provide building owners with a benchmark, it will help identify areas that have the highest potential for energy savings. By having exact energy consumption data at their fingertips, facility managers and building engineers will be able to tailor an energy efficiency strategy for their real estate portfolio based on performance and financial goals.

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