For owners of commercial buildings of 50,000 square feet or more in the city of Philadelphia, chances are the time has come to address the city's new energy and water use benchmarking law. Energy benchmarking refers to a process used to measure energy efficiencies of buildings, which provides a standard set of metrics to compare the energy use and performance of similar buildings. The law is intended to encourage more informed choices by property owners, tenants and prospective purchasers and applies to a "covered building" as defined under Philadelphia Code Section 9-3402.
A "covered building" includes either (i) any commercial building with indoor floor space of 50,000 square feet or more or (ii) all commercial portions of any mixed-use building where a total of at least 50,000 square feet of indoor floor space is devoted to any commercial use. Owners of a covered building must register information regarding the use of utilities for the building. They also must enter certain information concerning the building's energy use (i.e., water, electric and gas) on the United States Environmental Protection Agency's ENERGY STAR Portfolio Manager System, an online tool available at www.energystar.gov/buildings or through the city's website at http://www.phillybuildingbenchmarking.com/. The information must then be submitted through a Philadelphia Custom Reporting Template, which is available at http://www.phila.gov/benchmarking/. Philadelphia will then create a publicly available registry where people can research the energy benchmarking information for covered buildings.
Every owner of a covered building must benchmark such covered building for the previous calendar year by June 30 of each year, using Portfolio Manager. For calendar year 2012, however, this deadline is October 31, 2013. There are three exemptions to the benchmarking requirements in Philadelphia. More specifically, benchmarking shall not be required for a covered building where any of the following apply:
(i) In any calendar year, benchmarking shall not be required for that year where more than 50% of the indoor floor space is unoccupied for more than 180 days in total.(ii) The Mayor's Office of Sustainability finds, upon application by an owner, that benchmarking or disclosure would cause exceptional hardship or would not be in the public interest. An exemption under this subsection (3)(g)(ii) shall be for such period as the Mayor's Office of Sustainability establishes based on the evidence presented by the owner.(iii) Buildings primarily used 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" refers to energy used in the actual manufacturing, production, or processing of a good, commodity, or other material.
Owners of a covered building that do not comply with the benchmarking ordinance will be subject to a fine and penalties.
If you have any questions about this Alert, please contact George J. Kroculick, Michael J. McCalley, any of the attorneys in our Real Estate Practice Group or the attorney in the firm with whom you are regularly in contact.
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