San Francisco Building Ordinance: Nuts and Bolts of Compliance

This is the second in a three part series that explores San Francisco’s Existing Commercial Building Energy Ordinance. In the first post, we went over why the legislation was passed, and here we will talk about how to comply if you own a building. Next we will talk about how owners can make the most of this new requirement. This post is pretty long to include everything you need to know; if you are a more causal reader, feel free to skim, checking for key ideas in bold.

If you own a building in San Francisco, you may have recently received a letter from the San Francisco Department of the Environment letting you know that an audit is due for your building by next month. You may even have gotten a notice telling you that your benchmarking statement for 2012 is overdue. Because this is the first time around, the powers that be are going pretty easy on owners, but getting it right this time will help in years to come, so here is a step-by-step guide to make sure you are playing by the rules.

1. Audits
The word “audit” rarely brings up good connotations for anyone and energy audits, sadly, are not much of an exception. We at Carbon Lighthouse prefer to use the term “really awesome way to learn a lot about your building and find tons of free cash laying around,” but it hasn’t caught on with the legislative community.

The Ordinance requires that existing commercial buildings between 10,000 and 50,000 square feet get an ASHRAE level I audit and buildings above 50,000 square feet get an ASHRAE level II audit every 5 years. Audits have to be completed by a “Qualified Energy Efficiency Auditor.” Retrocommissioning (a process of systematically going through each system in the building to test if it is operating as designed) can also be used in place of the ASHRAE Level II Audit.

Great. So what does any of that mean?

ASHRAE is the American Society of Heating, Refrigeration, and Air-conditioning Engineers. They create handbooks and standards that are the basis for many building codes. One of their standards defines the tasks and procedures involved in three different levels energy audits.

A Level I Audit is the easiest and is basically just a visual inspection or “walk-through” audit. A qualified professional (we will get to this in a bit) will talk with the building maintenance staff, review energy bills, and visually inspect the equipment and operations of the building. The end result is identification of any glaring problems and an informed guess at what energy efficiency measures could be worthwhile to pursue. This should take less than a full day onsite and minimal time for report preparation.

A Level II Audit goes further than a Level I and includes a thorough look at any efficiency opportunities in the building envelope, lighting, HVAC, domestic hot water, plug loads and any process equipment. It should include an assessment of seasonal variation and temporal changes in building loads and some level of modeling of building performance that allows the auditor to test out the effects of different efficiency opportunities. This may take two to four visits to site and up to a few weeks for report preparation. If this sounds like a lot more work than a Level I Audit, then you are reading correctly. It also tends to be substantially more useful, but more on that in the next post.

For the sake of completeness, we will explain a Level III audit as well, even though it isn’t required. A Level III should have investment-grade results – meaning that you can take the outcome of a Level III audit and go directly to bidding and construction of efficiency measures, knowing the exact savings and costs expected. This can require a fair amount of time onsite gathering data about how your building works. Depending on the systems being studied, this can take a few weeks to several months. There should be no surprise that these can be pricey, but also produce results that you can trust.

As a side note, Carbon Lighthouse’s assessments are a hybrid of Level II and III audits, where we do a thorough review of all opportunities on site and then selectively gather detailed data on only the opportunities deemed to be the most promising. This keeps costs down while providing investment-grade results where they matter the most.

So who can perform one of these audits for you? Can it be your in-house staff or HVAC contractor? The answer, frustratingly, is maybe. As part of the rule making for the legislation, the San Francisco Department of the Environment defined what qualifications make someone a “Qualified Energy Efficiency Auditor.” The chart is provided here for your convenience. We are proud to say that Carbon Lighthouse is a Qualified Energy Efficiency Auditor, according to the Department of the Environment. To the best of our knowledge, there is no list specifically about approved auditors, but SF Environment has created this list of benchmarking firms, many of whom can provide audits. PG&E has also been circulating hard copies, and your account representative will likely provide a list of firms for you upon request.

Finding an auditor you trust and going through the audit is the hard part. The actual compliance portion for the audit is quite easy. Your auditor will fill out an online form that includes some basic information about the building and what energy efficiency measures were found onsite. This report will be reviewed for completeness and any glaring abnormalities and then either approved or you may be asked to clarify. Then you are set for five years. You are not required to do anything with your audit, however that is basically treating this exercise as a tax on building owners and we will talk about why that might not be a great decision in the next post.

As with benchmarking, there are a few ways that you can get out of having to do audits. Exemptions include: having done an appropriate level audit or retrocommissioning since 2008 (only works for the first compliance period), maintaining an Energy Star Certification for 3 of the 5 years previous to your audit requirement, achieving LEED certification within the past 5 years, having a building less than 5 years old, having a building that has been unoccupied in the previous calendar year, or having a building in the nebulous category of “financial distress” (examples of which can be found towards the end of this document)

There are financial penalties for not complying of $100 per day, up to $2,500 for buildings over 25,000 square feet and $50 per day up to $1,500 for buildings between 10,000 and 25,000 square feet (though for the first year, any building making a good-faith effort to obtain an audit will likely go un-penalized). Based on those total dollar amounts – which are likely to be less than the cost of the audit in many cases, we can all agree that the larger reason to comply is for the public image and that no one really wants to break the law. Also, as we will see in our next post, if you make the effort to go with a good engineering firm and take the recommendations seriously, you could be saving a whole lot of money, not to mention doing something good for the world. Stay tuned!

2. Benchmarking
Benchmarking can mean a number of things, but for the San Francisco Existing Commercial Building Energy Ordinance (say that 10 times fast), it means entering all of the energy consumption data for your building into EPA’s Portfolio Manager Program and generating a specific custom report for the San Francisco Department of the Environment. Starting in 2013, this is required for all commercial buildings over 10,000 square feet every year from now on and the reports are due on April 1st for the previous calendar year. Note that 2012 reports are only due for buildings over 25,000 square feet, so if your building is smaller than that, you are off the hook this year.

Benchmarking is something that you can either do in-house or work with an energy firm to do it for you. The San Francisco Department of the Environment has a nice 6-step process for benchmarking that can be deceptively simple. The tough part is that in order to comply with the benchmarking requirement, you must get data from all meters in your building, including tenants with separate accounts. You will also need operating hours, the number of full time employees and number of computers for each space. You also need to include your building’s Assessor Parcel Number (which you can look up here), which should be used as the building’s unique identification number in the profile.

Once you have created a building profile, including the square footage and usage type of all of your spaces, you can in theory set up an automatic benchmarking service from PG&E. This will transfer utility data every month to your profile and it means that you only would have to bug your tenants once to get permission to access their utility history. Our experience is that PG&E’s group that manages this is very friendly but pretty understaffed, so it can take a lot of effort to get it up and running. They have, however, put together very detailed instructions that should hopefully help.

When all of the information about your building is uploaded to Portfolio Manager, you can follow this link and use your log-in information to generate the required report. When you generate the report, there is a “release data” button that will automatically transfer your information to the San Francisco Department of the Environment. They will get back to you within 2 days to say whether your report was sufficient or if you need to make any changes.

There are a few ways that you can get an exemption from benchmarking. The first is if the building was vacant for some significant (although undefined) period of time or there was a change in utility accounts (often a new tenant or owner) within the calendar year that makes it impossible to get a full 12 months of data. The other way is if the building is less than 2 years old, based on the certificate of occupancy. Instructions for getting an exemption are here (towards the bottom).

Piece of cake, right? The useful part of this exercise for you, the owner, is getting to see how much energy your building is using year after year and getting an Energy Star Score. We will talk more about what Energy Star Scores mean in the next post.

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