DC’s Clean Energy Law Requires Buildings to Become More Efficient. How Will They Adapt?

Nine months ago, the DC Council passed one of the most ambitious clean energy laws in the country that mandates, among other things, that buildings become more energy efficient. Some experts and building owners are apprehensive about the task of adapting to the new regulations, but DC officials say they will facilitate the process.

The DC Council’s task force to create the specific energy standards and compliance fees doesn’t exist yet, but it should be established by the end of the year. That will allow building owners to plan how to meet the new building energy performance standards (BEPS). Larger buildings will start being penalized for not meeting the standards starting in 2021, and smaller buildings will be phased in after that.

“We will do a lot of engagement with the building owners,” DC Department of Energy and Environment Director Tommy Wells said. “We are going to work very collaboratively with them so they understand what we’re doing and why. The first they hear about this should not be a fine.”

Within the District, the majority of energy usage comes from buildings, according to Ward 3 Councilmember Mary Cheh, who spearheaded the bill.

“It turns out that in the District of Columbia, about 75% of the energy that we use comes from buildings and energy use by buildings,” Cheh said. “In this bill, we decided what we would do is focus on buildings and focus on ways to make renewable energy more likely to achieve.”

What does this legislation do exactly?

The Clean Energy DC Omnibus Act of 2018 officially went effect on March 22, after first being introduced into the DC Council in July 2018. The new law mandates that buildings at or below the EnergyStar median line must increase their energy productivity 20% by 2026, among other changes.

Starting in 2021, DOEE will begin conducting energy performance assessments every five years. The new BEPS will be measured by the EnergyStar median, but specific benchmarks have not yet been released. DOEE expects to create its task force by the end of the year, 90 days after the official budget was released on October 1, and will release a draft of the official BEPS and compliance fees in January 2021, Wells confirmed.

“We believe the formal establishment of the task force will more than likely much sooner than that, with a tentative launch date mid-November,” Wells said.

DC-owned buildings of at least 10,000 square feet and private buildings of at least 50,000 square feet will face a compliance fee if they do not meet new standards by 2021. The square footage threshold decreases slowly throughout a five-year period, affecting buildings of at least 25,000 square feet in 2023 and 10,000 square feet in 2026, according to the DC Climate Coalition.

Through all of these new energy performance guidelines, the city also hopes to transition into creating more Net Zero Energy buildings, or buildings that only use as much energy as is produced on-site. In order to help low-income residents and local businesses adapt, the DC Council also created financing resources amid the new regulations, including the Green Bank and the Sustainable Energy Trust Fund.

“The bill also includes a slight increase in the fee that’s applied to your electric and gas bills, and it’s creating this fund,” Cheh said. “From this fund, we will be able to provide energy relief to low-income residents, work-force development initiative, we’ll be able to fund the building energy performance standards requirements.”

Getting the word out about the new standards

Marta Shantz, Senior Vice President of the Urban Land Institute (ULI) Greenprint Center for Building Performance, is worried that many local building owners don’t know about the regulations yet, and aren’t making moves to adapt to them.

“A lot of the building owners who are going to be affected by the building energy performance standard are not aware that these regulations are coming, that they’ll be required to hit certain performance improvement percentages, or that they even will need to budget to make these improvements,” Shantz said.

The responsibility to educate and provide resources is spread across the DC agencies like DOEE, business improvement districts (BIDs), and business owners themselves, Wells said. He says DOEE plans to help building owners understand the process well before the new regulations go into effect.

For its part, the DowntownDC BID has worked with ULI to educate staff members and plans to release ULI’s formal report on the subject sometime this month. It will also hire a sustainability expert to create and manage an outreach and educational program for the BIDs members, according to Gerry Widdicombe, Director of Economic Development for the DowntownDC BID. (Disclosure: Widdicombe is on GGWash’s Board of Directors.) With their vast reach—the DowntownDC BID alone encompassed 87.5 million square feet in 2018—BIDs are well-equipped to get the word out.

How will buildings adapt?

Buildings that are at or below the median line must increase their energy productivity by 20% before 2026, but this level of productivity is often more difficult for buildings that fall not far below the standard, according to Shantz.

“If it’s a really inefficient building, if they haven’t done any improvements at all, hitting 20% energy improvement wouldn’t be that hard, necessarily,” Shantz said. “But, for one of those buildings that’s just below that median value, it’s going to be a lot harder to squeeze out 20% from that building.”

The new regulations can result in older buildings needing to raise their prices to afford renovation, Widdicombe says. “Every building is unique. The older buildings are going to have bigger issues, because [retrofitting] is really expensive, because they’re going to need to get higher rents. But, how much demand is there at those higher rents?”

Jessica Carroll, Public Affairs Specialist at The Office of the Deputy Mayor for Planning and Economic Development, believes the updates are feasible for older buildings.

“As we’ve seen for decades in the District, most changes to improve energy performance and/or reduce energy use can be done in a manner consistent with building character (e.g. adding insulation, improving ventilation, repairing or replacing windows and doors, installing more efficient HVAC systems),” Carroll wrote in an email to Greater Greater Washington.

The current legislation is not intended to negatively impact historic areas nor the supply of affordable housing, according to Wells. He says DOEE is committed to helping building owners navigate the new regulations.

“Our data shows that there’s not a significant correlation between building age and performance, and we certainly see some of our historic buildings having an advantage over some of the more modern buildings,” Wells said. “I think that one of the greatest challenges is how to work with multi-family buildings for affordable housing with building owners that do not have a lot of sources to generate new revenue for the capital investment needed to retrofit their buildings. We don’t want to lose any more affordable housing in Washington, DC.”


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