BEPS Standards and Draft BEPS Rules Released

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BEPS

On July 23, 2021, the DC Register published the second proposed rulemaking for the Building Energy Performance Standards. Additionally, DOEE released the Building Energy Performance Standards Compliance Guidebook, which provides specifics instructions and details on compliance. The rulemaking is open for public comment for 30 days and will close on August 23, 2021. The Guidebook is open for public comment for 60 days and will close on September 22, 2021.

On April 30, 2021, the 2021 BEPS Establishment Regulations (i.e. the median ENERGYSTAR scores by property type) were published as final.

On December 4, 2020, the DC Register published proposed, updated benchmarking rules. While the public comment period has closed those have not been finalized yet.

What was released?

The DC Department of Energy & Environment (DOEE) published the final Standards per property type, the second proposed rules for BEPS compliance, the BEPS Compliance Guidebook, and updates to the benchmarking requirements.

The Standards for the First Compliance Cycle of BEPS

The Standards (also referred to as the “BEPS Establishment Regulations”), the median levels of performance per property type, are effective as of January 1, 2021. This includes performance targets based on ENERGY STAR score (for buildings that received a score) and Source EUI (for buildings that did not receive an ENERGY STAR score).

For more information on how the Standards were calculated, DOEE released a guide with information on how the property type groups, metrics, and standards were developed.

The table below only shows the property types with the largest building counts in the District. For a full list of property types and their applicable standards, refer to the information in the DC Register. These standards apply to the first compliance cycle and will likely adjust during future compliance cycles.

2021 Building Energy Performance Standard
Property Type ENERGY STAR Score Source EUI
College/University Campuses N/A Custom per Campus
Hospital 50 426.9
Hotel 54 183.9
K-12 School 36 139
Multifamily Housing 66 110.7
Office 71 153.7

 

For buildings that can receive an ENERGY STAR score, a building will not meet the standards if, based on its 2019 energy benchmarking data, its score is less than the ENERGY STAR score standard listed for their property type.

Owners of buildings that do not meet the Standard for their property type and meet specific criteria may request to use their 2018 energy benchmarking data or adjust their standard by submitting a variance request to DOEE by January 1, 2022. Please see the DOEE website to see if you qualify for a variance.

Note that the BEPS Compliance Regulations—the rules related to compliance or enforcement of the program requirements—have not yet been finalized.

The Proposed BEPS Rules

The second proposed BEPS Compliance Regulations include:

  • A summary of public comments received on the first proposed BEPS Compliance Regulations and DOEE’s response and corresponding edits.
  • Specific instructions to owners and operators of privately-owned buildings on how to comply with the BEPS
  • Which buildings are subject to the BEPS rules
  • The performance and procedural requirements for buildings that are not in compliance with the BEPS

Edits to the proposed rules

  • Specific language addressing indoor environmental quality, which states that an owner may not improve building performance in such a way that threatens the health and safety of occupants.
  • Updates to the penalty structure which sets the maximum penalty to $10 per square foot of gross floor area, which reduces the maximum penalty amount for most buildings, and caps the maximum penalty at $7,500,000. For buildings that do not meet the Standard by the compliance deadline, the maximum penalty will still be reduced proportionally to the building’s demonstrated performance relative to its pathway target.
  • Provided a new penalty adjustment factor for buildings on the standard target pathway to credit their initial distance from the standard.
  • Adjusting reporting deadlines to April 1, to better align with existing Benchmarking reporting requirements.
  • Provisions that allow DOEE to use its discretion to select an appropriate pathway for any building owner that fails to select one.
  • Updates to the circumstances for which a compliance delay may be granted including a building being a historic or located in an historic district and for an owner who wishes to implement an innovative approach to energy efficiency.
  • A definition for “qualifying affordable housing buildings” that may receive a delay of compliance for longer than three (3) years.
  • Details for the Prescriptive and alternative compliance pathways, including deadlines and documentation and submission requirements.
  • Language clarifications and more detailed definitions.

The rules were updated to include feedback from the first round of public comment and to generally clarify language. Additionally, that feedback was taken into account and additional program details can be found in the BEPS Compliance Guidebook.

Sized-based timeframes. Buildings of the following sizes would enter into compliance cycles on the following timelines:

Date Building Size
January 1, 2021

 

All privately-owned buildings ≥ 50,000 sq. ft.

District-owned buildings ≥ 10,000 sq. ft.

January 1, 2027 All privately-owned buildings ≥ 25,000 sq. ft.
January 1, 2033 All privately-owned buildings ≥ 10,000 sq. ft.

 

Note: See updates to the benchmarking rules below, which include when buildings smaller than 50,000 sq. ft. would need to commence benchmarking their performance.

Compliance cycles. Compliance cycles are typically five years long. Each cycle is followed by what is effectively a “gap year” which allows DOEE time to review submitted benchmarking data and reset the standards for the next compliance cycle. COVID-19 pandemic, the rules include a delay of the end of the first compliance cycle by one year, making it six years long and ending on December 31, 2026.

Compliance pathways. An owner of a building that does not meet the BEPS shall implement one of the following compliance pathways to be considered compliant:

  • Performance pathway. Buildings must achieve greater than a 20% decrease in site EUI. To set their baseline with the COVID-19 delay, buildings must use an average site EUI taken from the two years preceding the first compliance cycle (2018 and 2019). To determine compliance, buildings must demonstrate the aforementioned decrease by using the site EUI of the last year of the compliance cycle (2026).
  • Standard target pathway. Buildings must meet the reported standard for their property type during the last year of the cycle (2026).
  • Prescriptive pathway. Building owners must meet reporting milestones across four phases and complete agreed-upon improvement measures outlined in the “final action plan agreement,” a plan signed by both DOEE and the building owner which would achieve energy savings comparable to the requirements in the performance pathway. Submission requirements include:
    • Phase 1. An energy audit.
    • Phase 2. A final list of energy efficiency measures selected for implementation and an operations and maintenance program.
    • Phase 3. An implementation report that includes permit drawings, permits, inspection reports, or other documentation pertaining to the implementation of selected energy efficiency measures.
    • Phase 4. An evaluation, monitoring, and verification report that includes a narrative describing the savings achieved and any corrective actions taken and an updated operations and maintenance program that reflects the energy efficiency measures implemented.
  • Alternative compliance pathway. A plan proposed by a building owner and approved by DOEE that is designed to achieve energy savings comparable to the requirements in the performance pathway.

Building owners whose buildings fall below the BEPS for the first compliance cycle will be required to select a compliance pathway no later than April 1, 2023.

Exemptions and delays. Also included is the process for building owners to apply for an exemption from or delay (up to three years) in meeting the required compliance criteria. This includes special references to affordable housing buildings, whose delay can be greater than three years. Any approved delay does not extend deadlines or negate the requirements associated with the next compliance cycle.

Compliance penalties.Failure to demonstrate compliance by the end of a compliance cycle would result in the following maximum penalties (referred to in the rules as “alternative compliance penalties”). The maximum penalties are set to $10 per square foot of gross floor area and are capped at $7,500,000. The penalty for noncompliance would be reduced proportionally to the building’s demonstrated performance relative to its pathway target as follows:

Compliance Pathway Adjustment Factor  Example
Performance Percent site EUI reduction actually achieved divided by 20%. Building A achieves a 10% reduction in site EUI. Its fine is reduced by 50%. (10/20 = 50%).
Standard target pathway The penalty will be adjusted at two points to calculate the final penalty.
1. A building approved for the Standard Target Pathway would require less than a 20% reduction in source EUI to meet the BEPS, and will receive an adjustment to its penalty for its initial performance relative to the BEPS.

 

1. Building B starts 10 points away from the BEPS at the beginning of the compliance cycle. All buildings of building B’s property type could meet the BEPS with at most a 20% reduction in source EUI if they started the Compliance Cycle at 15 points away from the BEPS.

(1-(10/15) = 33%)

2. Savings achieved at the end of the compliance cycle divided by savings required to meet BEPS. 2. Building B gains 4 points by the end of the compliance cycle but needs 10 total to meet the standard. Therefore, the adjusted penalty is then reduced again by forty 40%.

(4/10= 40%)

The final penalty is calculated by multiplying the percentages found at the two points. 3. The final penalty is reduced by 60%, and thus is 40% of the maximum alternative compliance penalty.

(1-33%)*(1-40%)) = 40%

Prescriptive pathway Number of prescriptive pathway points actually earned divided by total needed. Building C completes measures worth 15 points but needs 25 total. Its fine is reduced by 60%.

(15/25 = 60%).

Alternative compliance pathway Reductions will be outlined in the alternative compliance pathway agreement (prepared by DOEE and signed by owner) and shall be no less stringent than penalties for other pathways.  N/A

 

A building owner may be assessed the maximum penalty, regardless of the building’s performance relative to its pathway target, in addition to any other applicable fines, if the building owner:

  • Knowingly withholds information
  • Submits inaccurate information;
  • Fails to submit a complete and accurate benchmarking report at the end of the compliance cycle
  • Implements a measure that poses a threat to the health and safety, including the reduction of indoor environmental quality, of a building occupant.

In addition to penalties for noncompliance at the end of the compliance cycle, an owner may be levied fines for violating reporting requirements or deadlines during the compliance cycle.

Submitting documentation. The rules include a reference to an “Online BEPS Portal,” a web-based application created by DOEE for a building owner to submit required reporting and verification documents pertaining to BEPS. This portal is not available at present time.

The guidebook

The Building Energy Performance Standards Compliance Guidebook includes commentary, additional details into the specific requirements of each compliance pathway, how to request exemptions and delays of compliance; and compliance reporting procedures.

Accompanying documents

DOEE also released an accompanying report generated by the BEPS Task Force, a group of diverse stakeholder representatives from the local building industry who provided input throughout the rulemaking process. The report aims to help the public better understand why the rules are the way they are, as well as explain the decisions that went into the task force’s recommendations.

Updates to the benchmarking rules

The updates to the benchmarking rules include information relevant to the BEPS rules, such as how the building size thresholds lower over time and information about the data verification requirement.

Size thresholds. Buildings of the following sizes would be required to commence benchmarking their performance as follows:

Start Date Building Size Due
(Current)

 

All privately-owned buildings ≥ 50,000 sq. ft.

District-owned buildings ≥ 10,000 sq. ft.

April 1 each year
January 1, 2021 All privately-owned buildings ≥ 25,000 sq. ft. April 1, 2022
January 1, 2024 All privately-owned buildings ≥ 10,000 sq. ft. April 1, 2025

 

Third-party data verification requirements. Building owners are required to obtain third-party data verification of benchmarking data from an approved verifier beginning in 2024 for data submitted for calendar year 2023. Verification is required every three years thereafter and would be submitted as part of the District Benchmark Results and Compliance Report.

An approved verifier must possess one of the following licenses, credentials, or certifications:

  • Professional Engineer (PE)
  • Licensed Architect
  • Certified Energy Manager (CEM)
  • Building Energy Assessment Professional
  • Any other additional data verifier license or training program credentials recognized by DOEE and posted to its website
  • A building owner may also use a current ENERGY STAR certification, which includes third-party data verification, to meet the third-party verification requirements.

An approved verifier may not be an employee of the building owner or of the building owner’s designee who prepares or submits benchmarking information.

The verifier is not required to conduct a site visit to meet this requirement.

Other updates. Additionally, the proposed rules include:

  • The use of aggregated, whole-building utility data.
  • Clarifying that sellers must provide buyers with the information needed to benchmark during the year a transfer occurs.
  • Clarifying that properties are no longer exempt from reporting due to a sale.
  • Addressing changes in Portfolio Manager and their applicability to DC.
  • A requirement that the District Benchmark Results and Compliance Report must include:
    • Complete and accurate values, meaning that no default, estimated, or temporary values can be used unless a reasonable explanation is provided.
    • A DC Real Property Unique Identifier.
    • The name and contact information for the building owner/operator.
    • Confirmation that a building owner has run all automated data quality checker functions within Property Manager prior to submission.
  • The amendments also clarify that a building owner is not required to request any data from individual residential residents.
  • Certain space exemptions.
  • Clarification to violations and the enforcement process.

Want to learn more?

All proposed and final documents are posted to the DOEE BEPS Program Rulemaking and Public Comments page.

DOEE presented a public briefing on the proposed BEPS rules, as well as monthly updates on the framework, rules process, and timeline. Recordings of these events can be found here.

The BEPS Task Force meets regularly to advise DOEE on how to implement the BEPS program. Task Force meetings are open to the public. Past meeting recordings and future meeting agendas and call-in information can be found on the Task Force page.

The Hub will provide additional news and a more comprehensive digest of the rules and compliance pathways when the additional documentation is released.

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