Energy Efficiency, GHG Emissions  -  July 12, 2019 - By Cliff Majersik, IMT

Washington Blazes a Trail for State Action on Energy Efficiency

Washington State recently became the first state to adopt an existing building performance standard, putting it at the forefront of all states in addressing energy efficiency in buildings. This blazes a trail that other states are likely to follow. Here’s what you need to know.

Signed by Governor Jay Inslee on May 7, the Clean Buildings Act is the first time that a state is requiring tangible investment in the energy efficiency of a broad swath of its existing private buildings. This may sound familiar since Washington, D.C., and New York City recently adopted local-level building performance standards.

The Clean Buildings Act is a centerpiece of a bold and comprehensive climate package that addresses electricity, transportation and buildings. The state projects that the package will cut greenhouse gas emissions equivalent to taking three million cars of the road. By requiring action on buildings, the Act will drive owners to improve their buildings’ energy use and reap the associated benefits including billions of dollars in energy savings and increased property value. In the process, it will create new jobs and business opportunities for construction workers and service providers.

There is Hard Work Ahead.
Similar to the District of Columbia and New York’s building performance standards, the Act leaves many important details to rulemaking by Washington’s Commerce Department and requires the Department to “seek to maximize reductions of greenhouse gas emissions from the building sector.” The Department will use a consensus technical standard as a starting point for rulemaking. Among the Department’s tasks are:

• Set a state energy performance standard target for each building type by 2020. The idea is to have buildings that must comply reduce their energy use to meet the target (or go further below it). The targets will be measured in site energy consumed per square foot of the building (otherwise known as site energy use intensity or EUI). Purchases of offsite renewables will not impact buildings’ EUIs. (Recognizing that bold progress on both efficiency and renewables is needed to achieve its climate goals and maximize job creation and air quality benefits, Washington addresses grid decarbonization through a separate 100% renewable portfolio standard.) The EUI targets must be updated in 2029 and every five years thereafter.
• Develop “conditional compliance methods” including for building owners to 1) adopt an implementation plan to meet each building’s EUI target or 2) commission an energy audit and implement all energy-saving measures predicted to save more money than they will cost. Covered buildings will be required to achieve their EUI targets or to comply with the Act conditionally. Buildings over 220,000 square feet of commercial space will have to do so by 2026; buildings over 50,000 square feet of commercial space will have until 2028. 

To prime the pump on compliance, the Act rewards building owners who improve the energy efficiency of their buildings early. Starting July 1, 2021 through a year before their buildings are subject to their BEPS, building owners may apply for a utility rebate of $0.85 per square foot of conditioned floor area to comply early with the Energy Standard. The Act authorizes a total of $75 million for these rebates.

Washington State is in Uncharted Territory.
As the first state to adopt an existing building performance standard, Washington must overcome challenges not faced by cities. For starters, the state will need to build capacity and regulatory relationships to implement the Act because unlike cities, the state does not have zoning and building departments that typically regulate construction and renovations and have established relationships with building owners. The state also lacks property tax rolls, so the Act requires county assessors to share property data with the state.

The best way to make quick progress with building performance standards may be for a state and its cities to work as a team. Utilities and state utility regulators could lead on-grid decarbonization and grid flexibility, with the state providing rules, resources, assistance, and infrastructure to enable cities to adopt, implement and enforce standards. Washington’s Act does not preempt performance standards adopted at the city level. So, if some cities adopt performance standards stronger than the state’s, then state leaders are likely to work with those cities so that building owners filing compliance paperwork at the city level don’t have to refile at the state level. For example, California accepts compliance with benchmarking and transparency laws in San Francisco, Los Angeles, and other cities as complying with the state’s benchmarking law.

What This Means for the Rest of the Country.
Due to Washington’s relatively mild climate and low carbon electricity, its buildings account for just 27% of the state’s greenhouse gas emissions. However, buildings’ share is growing more quickly than any other sector. In adopting the Act, Washington wisely chose to make addressing building energy use a centerpiece of its climate strategy. Nationally, buildings account for more than a third of U.S. greenhouse gasses, so the case for putting buildings at the center of climate policy is even stronger in other jurisdictions.

The good news is that IMT is here to help. Contact IMT if you’d like to help your jurisdiction explore or implement an existing building performance standard, or if you are a building owner or tenant looking to get a jump on potential legislation by adopting best practices that will lower energy costs, improve tenant retention, increase property values, and insulate against risks.

Cliff Majersik is the executive director of the Institute for Market Transformation (IMT), a national nonprofit organization that is laser-focused on increasing energy efficiency in buildings to save money, drive economic growth, reduce harmful pollution, and tackle climate change. Under his guidance, IMT is a trailblazer in the energy efficiency field, recognized across the globe for accelerating investment in energy-efficient buildings through hands-on guidance, technical and market research, policy and program development, and promotion of best practices.

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