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HomeMy WebLinkAboutMemo - Read Before Packet - 1/4/2022 - Memorandum From John Phelan And Kirk Longstein Re: Questions Regarding January 4, 2022 Consent Agenda Item #4 - Requirements For The Building Energy And Water Scoring ProgramUtilities electric · stormwater · wastewater · water 222 Laporte Ave. PO Box 580 Fort Collins, CO 80522-0580 970.212.2900 V/TDD: 711 utilities@fcgov.com fcgov.com/utilities DATE: TO: FROM: M E M O R A N D U M January 4, 202 Mayor Arndt and Councilmembers John Phelan, Energy Services Senior Manager Kirk Longstein, Energy Services Project Manager THROUGH: Kelly DiMartino, Interim City Manager Theresa Connor, Interim Utilities Executive Director Gretchen Stanford, Interim Deputy Director, Utilities Customer Connections RE:Questions regarding the January 4, 2022, consent agenda item #4 REQUIREMENTS FOR THE BUILDING ENERGY AND WATER SCORING PROGRAM The purpose of this memo is to respond to the following questions from a Councilmember related to the January 4, 2022, consent agenda item #4 to amend City Code sections related to the Building Energy and Water Scoring (BEWS) program. 1. How many buildings will be affected by this ordinance? 2. What is the cost to businesses to assemble this reporting? Is this information not already kept by Utilities? 3. Why was the prohibition for a required minimum Energy Star® score placed in the original Code? 4. If state is only requiring reporting for buildings over 50,000 sq. ft why are we requiring reporting for over 5000 sq. ft? 5. Are the Energy Board minutes for this discussion available? Background The BEWS program requires building owners to report energy and water performance information to the City which will subsequently be available through the City’s Open Data initiative and is managed by Utilities with a set of program rules as authorized in code, based upon Ordinance 2018-144 (adopted December 2018). The building sizes and types of the BEWS program were the result of an extensive 2-year engagement process with local stakeholders. The program aims to enhance consumer choices and access to information in the real estate market, providing simple access to information about energy and water use to aid in sales and lease decisions. Such information can be particularly important for low to moderate income households when comparing the utility costs between multifamily rental options. Similarly, comparing the energy and water performance of one building against another in the same sector allows real estate stakeholders to evaluate income potential, operating costs and to monitor performance in the marketplace. To establish market certainty through a critical mass of verifiable information each year, the program is mandatory rather than voluntary. In its first year of compliance 317 out of 347 buildings participated and building performance is posted to the City’s public website (www.fcgov.com/benchmarking-map). In the second year of the program’s phased implementation, 523 out of 853 buildings have voluntarily complied ahead of the March 1, 2022, reporting deadline. The Ordinance being considered in this agenda item amends City Code sections related to the BEWS program to align with new State of Colorado legislation and to improve the efficiency of administration. The ordinance does not add any new requirements for building owners. 1. How many buildings will be affected by this ordinance? The Agenda Item summary cites approx. 2,700 commercial and multifamily buildings in error. Starting June 1, 2022, approx. number is closer to ~1,600 covered buildings greater than 5,000 square feet (including multifamily and commercial) will be required to report data. Rowhouses and townhomes are administratively excluded from the program requirements. The covered buildings list represents 30 percent of the total square footage of buildings across the City’s built environment and 53 percent of the total electricity delivered by Fort Collins Utilities. The existing ordinance language highlights an initial phased implementation for buildings required to submit an annual report. The phased implementation assisted City staff in communicating with and educating all impacted stakeholders to operationalize the new requirements. The chart below highlights the total number of covered buildings impacted by the phased implementation: Sector/ Year 2020 2021 2022 2023 Commercial 347 765 1,198 1,223 Multifamily - 88 180 377 Total 347 853 1,378 1,600 Buildings reporting for the first time are provided an initial 12-month grace period from the reporting deadline which is highlighted by the program’s administrative rules and posted to the City’s website (www.fcgov.com/bews/admin-rules). 2. What is the cost to businesses to assemble this reporting? The State of Colorado Statute requires a $100 fee for buildings greater than 50,000 SF. The City of Fort Collins does not require a reporting fee for the program. Building owners have expressed the largest cost of compliance being related to the time commitment need to complete the steps highlighted on the BEWS How to Guide. Free of charge, covered building owners may call, email, or schedule an appointment with a BEWS Help Center to assist with technical questions related to the reporting requirements (www.fcgov.com/BEWS-Help). During the high call volume, the Help Center may answer an average of 25 calls per day and approx. 2,500 emails per month. Through the Help Center, an owner may optionally choose to make a $800 direct payment to complete the required benchmarking and reporting outlined in §12-203 of the Code. The Help Center staff is available to support each step of the How to Guide to assist a covered building owner. The EPA estimates that setting up a building to benchmark using the Portfolio Manager takes four hours per building; and, on average, benchmarked buildings reduce their energy consumption by 2.4% annually. Several large building management companies (CBRE, Cushman Wakefield, JLL, etc) have adjusted their national operations to comply with local jurisdictions which require benchmarking. The industry is beginning to systematically recognize the value of ENERGY STAR and energy use index (EUI) as key performance indicators used to assess the investment potential prior to a building’s purchase. Similar policies around the country, and Colorado’s new Statute are creating an expectation in the market for this information (buildingrating.org). 3. Is this information not already kept by Utilities? No. Fort Collins Utilities only has access to customer usage data for electric and water usage. The BEWS program requires aggregated whole-building benchmarking data including the total energy consumption data for an entire building. This includes natural gas data provided by Xcel Energy and contract gas providers governed by the State of Colorado PUC Rule 3039. 4. Why was the prohibition for a required minimum Energy Star score placed in the original Code? The prohibition on a minimum score was initially placed in Code to emphasize the initial program focus on building performance information availability, credibility, and transparency. This prohibition was specific to non-City owned buildings and prior to HB 21-1286 considerations. This Code update restores part of the original intent by including building performance standards for City owned buildings as a way to lead by example. 5. If state is only requiring reporting for buildings over 50,000 sq. ft why are we requiring reporting for over 5000 sq. ft? As adopted in 2018, the BEWS program requires building greater than 5,000 square feet. The building sizes and types of the BEWS program were the result of an extensive 2-year engagement process with local stakeholders. The current covered buildings are also reflective of Fort Collins building stock with a predominance of smaller buildings. HB21-1286 does not supersede or preempt Fort Collins local benchmarking requirements. 6. Are the Energy Board minutes for this discussion available? Draft Energy Board minutes from December are attached. CC Cyril Vidergar, Assistant City Attorney Brian Tholl, Energy Services Supervisor Katherine Bailey, Program Specialist ENERGY BOARD REGULAR MEETING – DRAFT – ABRIDGED FOR BUILDING ENERGY WATER SCORING UPDATE December 9, 2021 – 5:30 pm Remote – Zoom ROLL CALL Board Members Present: Bill Becker, Jeremy Giovando, Alan Braslau, John Fassler Board Members Absent: Steve Tenbrink, Dan Gould, Marge Moore, OTHERS PRESENT Staff Members Present: Christie Fredrickson, Adam Bromley, Cyril Vidergar, Adelle McDaniel, Honore Depew, Kirk Longstein, Aaron Iverson, Courtney Geary, Melinda Dempsey, Drew Brooks, Brian Tholl, Councilmember Tricia Canonico Members of the Public: Devin Moore MEETING CALLED TO ORDER Chairperson Becker called the meeting to order at 5:33 pm BUILDING ENERGY WATER SCORING LANGUAGE UPDATE Kirk Longstein, Energy Services Project Manager (attachments available upon request) Building Energy and Water Scoring (BEWS) was adopted by City Council in December 2018. BEWS requires benchmarking and transparency using the Energy Star Portfolio Manager tool for both commercial and multifamily buildings greater than 5,000 square feet. The City’s code began with phased implementation starting with larger buildings and will continue downward toward smaller-sized buildings, which encompasses about 2,000 buildings in total. The first reports were submitted March 1, 2020 and allowed for a 12-month grace period (due to COVID-19). The City will be updating the Code language for this program to align better with a new state statute, HB 21-1286. The Code updates to the program include the following: Removing code language that prevents future City Councils from exploring minimum Energy Star score for non-City-owned buildings; establishes that the City manager will set BPS (Building Performance Standards) requirements by December 31, 2022 for its City-owned facilities in alignment with HB-1286; align reporting deadline to June 1; remove requirement phasing (all buildings must begin reporting June 1, 2022); and create administrative rules for local program alignment with the state statute. BPS sets final, long-term standards or target for each building type; each building type, such as office, retail, mix-use, etc., will have different targets and standards. Buildings have individual trajectories with interim standards to check progress. Every five years, properties are evaluated to see if they are meeting their interim targets. Mr. Longstein explained on May 17, the federal government issued an Executive Order directing all Federal Buildings to begin exploring BPS. On October 4, The White House Council on Environmental Quality extended a formal invitation to participate in a national coalition of mayors and governors to commit to adopting local building performance standards, with a goal of adopting BPS by Earth Day, April 22nd, 2024. Mayor Arndt has signaled interest in participating in the program. At the state level, HB 21-1286 commits to BPS for buildings greater than 50,000 square feet by 2026. The ENERGY BOARD REGULAR MEETING Colorado Energy Office has convened a task force to develop BPS recommendations to meet sector-wide greenhouse gas (GHG) reduction targets of 7% by 2026 and 20% by 2030 from a 2021 baseline. These targets align with the state’s Greenhouse Gas roadmap. Mr. Longstein is an appointed member of the task force, which is scheduled to convene through October 2022. Board member Fassler said his general philosophy is to get to the highest standard possible, as we know buildings in general, but especially commercial buildings, are huge source of greenhouse gas emissions. Mr. Longstein asked the Board to consider if the local programs size requirements (down to 5,000 square feet) is an appropriate size level. There are about 250 buildings that would fall into that threshold, so having community dialog around this would be helpful to staff. Chairperson Becker wondered if building owners will feel that this program is a burden. Mr. Longstein said it is an investment, all the efficiency measures that are currently incentivized would encourage these types of improvements in commercial buildings. Mr. Longstein added that this program really impacts building owners (rather than tenants) and addresses the split incentive within the commercial space. Ensuring that tenants have the utility bill information before leasing the space provides an additional decision point for them, it also helps them to plan better operations & maintenance budgets, rather than just base-rent costs. Board member Fassler wondered how a new building (shown on the map) could already be out of compliance. Mr. Longstein clarified that if a new building received a certificate of occupancy within the year that benchmarking is required, that building would be exempt from reporting. The building needs to have a year of occupancy before they can report. Mr. Tholl added out of compliance language on the map also indicates that they out of compliance with the ordinance (i.e., reporting), not necessarily poor performance. Chairperson Becker asked how the Board can provide guidance to staff for this program. Mr. Longstein said this group can help inform the broader alignment to the City’s emission-free climate goals through Our Climate Future, as well as feedback around if this is the right time and the right approach. He hopes he can check back in with the Board as new information is released and progress is made. Mr. Tholl asked the Board to consider if the City should accelerate beyond the state’s timeline and create something that is Fort Collins specific, or should the state pave the way. This could be an opportunity to lead, but there will also be places where staff could get tangled and tied up, so they would appreciate any feedback or thoughts as things are progressing. Board member Fassler said it seems like an opportunity to identify the City’s biggest users and the biggest priorities and wondered if there is a plan to identify the worst building in the City and heavily incentivize them to make the changes. Mr. Longstein said that is a good point, and other utilities seem to be catching up to that idea as well. The City has not had an opportunity to do that yet, but the program was never intended to be a public shaming either.