Focus on Energy Use, Verification and Public Disclosure
On September 11, 2013, the Chicago City Council passed an ordinance proposed by Mayor Rahm Emanuel that will require owners of all non-industrial buildings over 50,000 square feet to collect and disclose to the City, among other data, each building’s energy use, energy efficiency and greenhouse gas emissions. Building owners will be required to “benchmark” their buildings, which means to track and record a building’s energy consumption data and other relevant building information for 12 consecutive months to quantify the building’s energy use. Other major cities such as New York, Washington, DC and San Francisco have already passed similar laws. Each building’s benchmarking data can be disclosed by the City to the public (with certain exceptions).
The Ordinance, entitled Building Energy Use Benchmarking, has three main components: (1) benchmarking, (2) data verification and (3) disclosure. Benchmarking information collected by building owners must, the first year and every three years thereafter, be certified by a licensed professional, such as an engineer or an architect, and submitted to the City’s Commissioner of Business Affairs and Consumer Protection using the ENERGY STAR Portfolio Manager online benchmarking tool (available for free on the ENERGY STAR website).
A summary of key elements of the Ordinance is listed below:
Who will the Ordinance impact?
Subject to certain exceptions, including for industrial buildings and parking garages, the Ordinance will impact building owners and tenants of any building or group of buildings on the same tax lot containing 50,000 or more gross square feet.
What does the Ordinance require of building owners?
Annual benchmark reporting requirements will commence on June 1, 2014 (for buildings containing 250,000 or more square feet) and June 1, 2015 (for buildings containing at least 50,000 but less than 250,000 square feet).
- The commencement of reporting requirements for covered buildings with 10% or more residential occupancy will be delayed by one year.
- Annually, building owners must submit benchmarking information to the city through the free ENERGY STAR Portfolio Manager online benchmarking tool.
Initially and every three years, building owners must submit benchmarking information for the previous year that has been certified by a licensed professional such as an engineer or an architect.
- The benchmarking information will be used for annual reports prepared for the Mayor and City Council to evaluate energy efficiency in covered buildings.
- After an initial year for each building, the Commissioner of Business Affairs and Consumer Protection is authorized to make individually-reported benchmarking information readily available to the public.
What does the Ordinance require of tenants?
Within 30 days of a request by the building owner, each tenant of a covered building must provide the building owner with all required energy information that cannot otherwise be acquired by such building owner, including, for example, monthly energy data for a tenant’s separately metered building unit.
How will this Ordinance be enforced?
A tenant’s non-compliance with the Ordinance creates a rebuttable presumption that the owner, tenant or both have not complied with the Ordinance.
- If a tenant fails to provide all of the required energy information to a building owner, such building owner can demonstrate compliance under the Ordinance by (1) proving that such building owner requested the necessary information from such non-compliant tenant and (2) benchmarking the subject building using all otherwise available information.
- Non-compliant building owners and tenants will be subject to a fine of up to $100 for the first violation and an additional fine of up to $25 for each day that the violation continues.
How can building owners and tenants prepare for Ordinance implementation from a legal perspective?
Building owners and tenants should review their leases and other occupancy agreements (including building rules) and (1) confirm what responsibilities and obligations each may have to the other under such agreements regarding compliance with the Ordinance and (2) consider what revised policies and procedures can be adopted to encourage and facilitate such compliance.
The Ordinance became fully effective on September 21, 2013.