UPDATE: ASSEMBLY BILL NO. 802 REPEALS & REPLACES NONRESIDENTIAL ENERGY USE DISCLOSURE PROGRAM (ASSEMBLY BILL NO. 1103)

On Thursday, October 8, 2015, Governor Jerry Brown signed Assembly Bill No. 802 (“AB 802”), which repeals and replaces Assembly Bill No. 1103 (“AB 1103”) effective as of January 1, 2016.

AB 1103 was enacted in 2007 to promote energy conservation by establishing a standard framework which allows prospective tenants, purchasers and lenders to compare the energy efficiency and consumption of commercial buildings and motivates building operators to take actions to improve their building’s energy profile.

Before January 1, 2016, under AB 1103, owners and operators of certain types of commercial properties were required to disclose a building’s energy usage data to prospective tenants, purchaser’s or lenders before any sale, lease or financing affecting an entire building. In practice, this energy usage data has proven to be difficult for property owners to obtain, often requiring tenant approval and/or disclosures, leading to interference with the consummation of certain transactions.  Additionally, the regulations lacked any effective means of enforcement, and as a result, compliance with the existing legislation has been unsurprisingly low.

Effective as of January 1, 2016, AB 802 repealed the private disclosure requirement under AB 1103, which placed the burden of disclosure on the property owner or operator, and instead will require public disclosure by utility providers of certain energy usage data.  Under the new legislation, each California utility provider, rather than the individual owners or operators, must maintain and disclose energy usage data for all buildings served by such utility for at least the most recent twelve full calendar months. Utility providers must provide a building’s energy usage data to property owners and operators within four weeks after request therefor. Additionally, AB 802 extends to multifamily buildings which were previously exempt from the regulations under AB 1103.

Although AB 1103 was repealed effective January 1, 2016, the regulations for implementing AB 802 are not yet in effect. AB 802 charges the California Energy Commission to develop regulations to govern public disclosure of energy usage data. The California Energy Commission anticipates that regulations implementing AB 802 will go into effect in 2017.  Data gathered under AB 1103 will remain confidential and will not be disclosed under AB 802.

Please contact us if you would like more information regarding AB 802.