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Montgomery County Announces Building Energy Performance Standards, With A Few Twists

Updated: Sep 13, 2023

Since the D.C. Department of Energy and the Environment established its Building Energy Performance Standard, or BEPS, law in 2018, many local and state governments have been hard at work establishing similar programs to help achieve their sustainability goals.

Now, Montgomery County has released its own regulations, and it is going about things a little differently. Instead of basing its BEPS program around Energy Star scores, the county will be using a “normalized net site energy use intensity" to measure performance. EUI is a building energy performance metric that rewards energy efficiency and usage of renewable energy. Similar to the D.C. program, Montgomery County buildings will use their demonstrated energy performance, as shown in their benchmarking data, to determine their target energy usage.

Boland’s energy and sustainability leader, Julie Wolfington, has been staying on top of these developments to help Boland clients prepare for the upcoming changes. She recently spoke with Bisnow to offer her take on the future of the program, and how building owners can start preparing for these changes now.

Bisnow: What do we know about Montgomery County’s BEPS regulations and what is yet to be finalized?

Wolfington: The new law expands the current benchmarking requirement by reducing the square footage of buildings that need to benchmark their energy usage from 50K SF to 25K SF, and adding multifamily buildings. It also establishes a minimum Building Energy Performance Standard, aka BEPS, that these buildings must meet. All of this is designed to help MoCo reach its goal of being carbon neutral by 2035.

Although the basic framework of the law is set, additional regulations will be introduced by Dec. 31, 2023, to help building owners better understand the target numbers they need to hit. While regulations aren’t defined yet, the BEPS Technical Report Executive Summary released by MoCo analyzed several different potential site EUI targets, ranging from an “Energy Efficiency Target” to a “Zero Net Carbon-Compatible” target. For office buildings, the proposed target EUI is 53, approximately a 16% reduction from the 2019 median EUI of 63.

Bisnow: How do buildings figure out their baseline?

Wolfington: The BEPS baselines average the two years with the highest site EUI out of the baseline period. This eliminates data years with abnormally low occupancy and therefore energy consumption. If a building can't hit its prescribed percent decrease because of financial or other reasons outside its control, it can develop a Building Performance Improvement Plan or BPIP. Although this isn't fully defined, it’s basically an alternative compliance path to help those that can’t meet their target.

Bisnow: How can building owners begin to prepare for these new regulations?

Wolfington: Since the regulations and targets aren’t defined yet, the best way for people to prepare is to start by figuring out how your building is performing now. If your EUI is average or higher, you’re going to have to reduce it. Next, understand your business’s short and long-term business and building goals. If you’re moving out of your building in a year or two, you probably don’t have to worry about BEPS.

However, if your company is working on a sustainability plan and sets a carbon neutrality goal, BEPS compliance will likely be a piece of cake. Think about your corporate goals along with the energy targets you need to hit and come up with a strategy that will help you achieve both.

For commercial buildings over 50K SF, BEPS begins Jan. 1, 2024, and they have five years until the first interim target and until 2033 to fully comply. For these buildings, their baseline years are 2018-2022.

For all building owners, keep abreast of news from the county regarding updates to the regulations, and look out for final targets to be established by December 2023.

Bisnow: What tools and systems are on the market that can help building owners potentially meet these goals once they know what they are?

Wolfington: MoCo has done a great job with their BEPS website, keeping everyone informed and posting resources such as webinars, summary one-pagers and technical reports to help us understand the law.

I assume that MoCo will do something similar to what D.C. has done to provide building owners with everything from training guides to financial tools like grants and incentives along with energy audit scopes and vendor selection tools to help them comply.

Building owners can also work with their trusted partners, like Boland, to help guide them throughout the process. We know our client’s buildings because we’re in them every day. We track and understand the legislation, as well as available grants, incentives and financial tools. Our job is to help our clients figure out how to get from Point A to Point B while meeting their goals and financial criteria.

Bisnow: Do you predict similar regulations will be drafted in more states across the country?

Wolfington: Absolutely. Maryland recently passed a law called the Climate Solutions Now Act of 2022 and Prince George’s County has a BEPS law in the works. These types of laws and regulations are spreading across the country, and building owners should consider preparing now to get ahead of the game. If they’re going to have to do it eventually, they might as well do it now to start reaping the benefits of the energy savings.

This article was produced in collaboration between Studio B and Boland. Bisnow news staff was not involved in the production of this content.


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