The Rush to Regulate Performance of Existing Buildings: New York City vs. Washington State

By on July 29th, 2019 in Blog Posts

Hot on the heels of New York City’s (NYC’s) recent move to legislate greenhouse gas (GHG) emissions from existing buildings, Washington State (WA) has passed a law to regulate the energy efficiency of existing commercial buildings. Since I recently completed an analysis of the NYC legislation, a colleague of mine, Stefan Storey, suggested that I take a closer look at the WA legislation as well.

There are two major differences between the laws. First, the NYC law covers all types of buildings, while the WA law is only targeted at commercial buildings. The second major difference is that the NYC law directly limits GHG emissions while the WA law does not; instead, it regulates energy use intensity (EUI). The WA approach may or may not result in meaningful GHG reductions – it depends on the details, which are currently unspecified.

The problem is that the WA legislation only enables regulation; the actual rules will not be developed and adopted until November 1, 2020. The WA legislation references the ANSI/ASHRAE/IES-100 standard (ASHRAE 100) for energy efficiency in existing buildings, which provides energy use intensity limits for different occupancy types and climate zones. The WA legislation only states that “the department shall use ANSI/ASHRAE/IES Standard 100-2018 as an initial model for standard development”.

The correlation between EUIs and GHG emissions will depend, in part, on the specific form of EUIs adopted in the rules. If WA adopts the total building EUIs (which are fuel neutral), there is no direct way to correlate reductions in energy use with reductions in GHG emissions. For example, a commercial building could reduce electricity use to comply with a lower total building EUI limit (e.g., through an efficient lighting use upgrade), but this might have less impact on GHG emissions than measures that reduce natural gas consumption (depending on the GHG intensity of the electricity grid at the time). This is similar to BC’s Energy Step Code for New Buildings which only targets total energy use, and may not correlate with a reduction in GHG emissions (my colleagues have written about this issue with the BC Step Code here and here).

Alternatively, WA could adopt specific EUI limits for electricity and fossil fuels, which are also included in the ASHRAE 100 standard. These EUI limits would correlate more directly with GHG reductions, but the actual outcomes would also depend on upstream emission factors for electricity and natural gas. Until electricity in the state is carbon neutral, electricity use in commercial buildings will still contribute significantly to GHG emissions. It is also not clear how the standard would deal with low-carbon thermal systems or waste heat recovery since these receive no credit if WA adopts a site EUI (vs. a source EUI). 

It is also uncertain whether the EUI limits in the ASHRAE 100 standard will be adopted as written, or whether WA will use the standard as a starting point in developing their own EUI limits.

The table below provides a brief comparison of the NYC and WA legislation:

From the table above, it’s clear that the WA legislation has the potential to dramatically reduce GHG emissions in 2030 and beyond, but only because the state has also passed the accompanying Clean Energy Transformation Act (CETA) that will require the state’s electric utilities to be carbon neutral by 2030 and be 100% renewable by 2045. The CETA is a subject worthy of its own analysis, and you can read a great review of it here.

Since GHG limits are not directly specified in the ASHRAE 100 standard, in order to provide a comparison of GHG outcomes in NYC vs. WA, I have taken the fuel-specific EUI limits from the ASHRAE 100 standard and calculated an implied GHG Intensity (GHGI) limit, based on carbon neutral electricity in WA in 2030 and a natural gas emission factor of 180 kgCO2e/MWh (assuming no renewable fuel standard). This is the best-case scenario for GHG reductions achievable in WA under this standard, but it is by no means certain at this point.

Another key difference is the penalties imposed by the regulators for failing to comply with the law. In NYC, the penalty can be worked out to the dollar amount, based on the information available in the legislation, while in WA, the owner of a 50,000 ft2 building could be faced with fines anywhere between $0 and $55,000 USD per year! The latter does not send a very clear signal to building owners and will make it hard to make well-informed investment decisions. 

One similarity between the two laws is in what they leave out: At a national level, commercial buildings with floor areas greater than 50,000 ft2 make up about 50% of the total commercial floor area. Assuming the national average applies in WA, the state’s regulation would only cover about 50% of the commercial floor area (and only about 30% of the buildings will be regulated prior to 2028). Similarly, according to the One City Built to Last Technical Working Group Report, in NYC, buildings with over 50,000 ft2 of floor area account for approximately 50% of the total building floor area in the City. This further serves to highlight the importance of lowering the emission factors of the energy supplied to buildings, since directly regulating emissions from existing buildings becomes increasingly challenging for smaller and smaller buildings.

While it is great that WA has enacted this new law, it is really just the first step in the process of development actual limits. Unlike NYC, the law does not directly target GHG emissions, but energy outcomes that could correlate more or less with GHG reductions depending on the form of EUIs adopted in the final rules. The NYC law is broader in scope, specific in its requirements and more succinct. When it comes down to understanding what is required of them, the picture is much clearer for building owners in NYC than in WA. Hopefully we will see this legislation continue to evolve, and perhaps ANSI/ASHRAE/IES will consider adding a GHGI target in future editions, in case other legislators follow suit in choosing to adopt the ASHRAE 100 standard as the basis of regulation.

Sonja Wilson

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