Philadelphia's Office of Sustainability Proposed Water and Energy Reporting Regulations Expand Reach of Benchmarking Ordinance

by Matthew N. McClure and Richard J. Slavin, Ballard Spahr LLP

The Mayor’s Office of Sustainability issued proposed regulations on July 10, 2013, to implement Ordinance No. 120428-A – the City of Philadelphia’s recently enacted energy and water reporting or “benchmarking” ordinance. Although City Council limited the ordinance’s reach to buildings with 50,000 square feet or more of indoor commercial space, the proposed regulations define “commercial” very broadly.

Any building space “relating to any activity, whether or not undertaken for a profit, involving any form of trade of commerce, or requiring consideration in exchange for any good, service, or privilege” is “commercial” space under the proposed regulations. Additionally, the proposed regulations provide that if two or more buildings are served by one common energy meter without sub-metering, those buildings shall be treated as a single building for purposes of the ordinance.

Under the ordinance, any building with 50,000 square feet or more of “commercial” space must register with the U.S. Environmental Protection Agency’s online Portfolio Manager system, which tracks and assesses a building’s energy and water use. The system (and the ordinance) also requires the completion of 100 fields of information covering other property attributes, such as area, operating hours, computer usage, and heating and air conditioning information.

A representative of the Mayor’s Office of Sustainability clarified that the ordinance also applies to universities, hospitals, warehousing facilities, and most non-manufacturing industrial uses if the particular building exceeds 50,000 square feet of indoor building space. Even though the proposed regulations broadly define commercial space, the Office of Sustainability maintains that the ordinance does not cover any residential spaces such as multifamily buildings and dormitories.

Additionally, the proposed regulations provide the following exemptions from the benchmarking ordinance:

·   A building is exempt if more than 50 percent of the indoor floor space is unoccupied for more than 180 days in the given calendar year.

·   A building is exempt if the Office of Sustainability finds that compliance would cause exceptional hardship or not be in the public interest.

·   A building is exempt if it is used primarily for manufacturing or other industrial purposes for which benchmarking results would not meaningfully reflect building energy use characteristics due to the “intensive use of process energy.” “Process energy” is energy used for the “manufacturing, production, or processing of a good, commodity, or other material.”

The regulations do not specify procedures for establishing an exemption.

As expected, the proposed regulations also push back the benchmarking ordinance’s implementation to October 31, 2013. As detailed on the City’s new benchmarking website, the Benchmarking Application will be available through the EPA’s online Portfolio Manager system. There will also be a Philadelphia Custom Reporting Template for use with this system.

The proposed regulations are not yet final. They were filed with the Department of Records on July 3, 2013, and will become final on August 2, 2013, unless a formal hearing is requested to provide comment. In the coming weeks, we expect the Office of Sustainability to publish FAQs to clarify the reach of the ordinance, the reporting requirements, and the breadth of public disclosure of the reported information for specific buildings.

For further information about the ordinance and the proposed regulations, please contact Thomas R. Eshelman at 215.864.8710 or eshelman@ballardspahr.com, David M. Gest at 215.864.8143 or gestd@ballardspahr.com, Tina R. Makoulian at 215.864.8713 or makoulian@ballardspahr.com, Matthew N. McClure at 215.864.8771 or mcclure@ballardspahr.com, Joanne Phillips at 215.864.8702 or phillipsj@ballardspahr.com, Eileen Quigley at 215.864.8720 or quigleye@ballardspahr.com, Michael Sklaroff at 215.864.8700 or sklaroff@ballardspahr.com, Neil Sklaroff at 215.864.8514 or sklaroffn@ballardspahr.com, or Richard J. Slavin at 215.864.8876 or slavinr@ballardspahr.com.

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