As deadlines loom closer in markets like Denver, Colorado, and Washington, D.C., the urgency of complying with Building Performance Standards (BPS) heightens. Failure to meet these targets could mean significant financial setbacks, potentially costing your company tens of thousands of dollars per building annually. To safeguard your company’s reputation and financial future, it’s essential to familiarize yourself with regulations and take proactive steps to meet the established targets. By doing so, you can position your organization for success in an increasingly sustainability-focused marketplace.
What Are Building Performance Standards?
Building Performance Standards are laws designed to reduce carbon emissions from existing buildings. With buildings contributing up to 35% of energy-related emissions in the U.S., BPS is the backbone of state, city, and country-level climate plans and represents a significant opportunity for decarbonization.
These standards require buildings to meet specific performance targets, typically focused on reducing energy use or greenhouse gas (GHG) emissions by a determined time frame. Reduction targets progressively evolve over multiple cycles, demanding increasingly deeper reductions from buildings over time.
To monitor progress, companies are required to annually report whole building energy consumption data via the EPA’s ENERGY STAR Portfolio Manager tool, providing insights into their adherence to BPS objectives. This systematic reporting acts as a barometer for assessing buildings' sustainability efforts, ensuring alignment with broader environmental goals.
What Are the BPS Requirements in My Area?
As of June 2024, ENGIE Impact is currently tracking 16+ jurisdictions where Building Performance Standards are law, and another 29+ that will likely be passed in the next 2 years. Each jurisdiction has its own targets, deadlines, and penalty structure, and they can sometimes change, creating a significant challenge for companies trying to remain compliant. To illustrate some of the nuances, here are a few examples:
Denver: Energize Denver sets energy use intensity (EUI) targets that are specific to the building, and the first interim target is due at the end of 2024, with additional targets due in 2027 and 2030. Penalties for noncompliance in Denver vary significantly. As an example, a 50,000 square foot building with a target EUI of 46 kBTU and an actual EUI of 54.3 kBTU could be subject to $124,500 in fines per cycle.
Colorado: Overall, Colorado set a statewide GHG reduction goal of 7% by 2026 and 20% by 2030 from 2021 levels. To meet that goal, each individual building will select its own compliance pathway, based on either GHG reduction or EUI, which will result in a custom performance target. Penalties can reach up to $57,000 per year per building.
Washington, D.C.: D.C.’s Building Energy Performance Standards (BEPS) mandate that buildings meet a standard EUI or ENERGY STAR score according to the property type. Building owners have several compliance pathways to select from taking place over a series of performance cycles, with the first ending in 2026. Noncompliance can result in fines of up to $10 per square foot per cycle. Using the same example of a 50,000 sq ft building, this can add up to $500,000 per cycle
What Does This Mean for My Organization?
Meeting BPS standards isn’t just about ticking off a checklist—it requires a comprehensive strategy, roadmap, and multi-year capital planning. To achieve compliance, your company may need to embark on several initiatives. These may include:
1. Reporting energy and water data annually: Leveraging ENERGY STAR Portfolio Manager to disclose whole building consumption, assess energy performance, identify areas for improvement, and make informed decisions.
2. Adopting new operational best practices: Optimizing building systems and operational procedures to reduce consumption and meet reduction targets.
3. Investing in building updates: Including upgrading HVAC systems for greater efficiency, transitioning to electrification where feasible, and incorporating smart building technologies.
4. Increasing renewable energy use: Installing solar panels or sourcing renewable energy from offsite providers to lower carbon emissions associated with building operations, where allowed by the legislation.
How Should I Start Preparing?
Because each jurisdiction has its own unique mandates and timelines, access to BPS expertise and support is crucial to simplify this process. Furthermore, compliance with BPS demands a multi-year strategy, often involving substantial capital expenditures that require planning and budgeting.
With initial performance deadlines approaching, companies should begin taking these steps now to avoid fines:
1. Understand relevant BPS policies for your portfolio: Research the specific requirements and deadlines set for your jurisdiction and stay updated on any changes that may impact your portfolio.
2. Clarify your company’s responsibility: Review lease agreements and contracts to understand the roles and obligations of building owners, tenants, and other stakeholders within your company.
3. Review benchmarking reports in ENERGY STAR Portfolio Manager: Compare your building’s performance against industry benchmarks and standards to identify areas for improvement.
4. Develop a plan for annual energy data collection and submission: Determine protocols, frequency, and timelines for whole building data collection to ensure compliance with reporting requirements.
5. Create a portfolio-wide strategy and prioritize actions: Develop a comprehensive strategy that outlines specific priorities, timelines, and resources needed to achieve portfolio-wide compliance.
6. Collaborate with a qualified auditor for on-site energy audits: Partner with qualified energy auditors to identify energy efficiency opportunities, potential upgrades, and areas of non-compliance.
7. Develop site-level compliance plans based on audit results: Strategically implement measures to address deficiencies, secure potential cost savings, and ensure alignment with BPS regulations.
How ENGIE Impact Can Help
Navigating the complexities of BPS regulations requires a holistic approach to ensure compliance across your organization’s portfolio. ENGIE Impact offers expertise and support to help you effectively address these requirements while simultaneously maximizing the impact of sustainability initiatives.
Our team of experts understands the nuances of BPS regulations and stays abreast of the evolving landscape to provide up-to-date guidance. By partnering with us, your organization can benefit from our comprehensive services tailored to your specific needs and challenges. Start your compliance journey today to sidestep potential pitfalls and contribute to a more sustainable future.
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