Last week, the California Energy Commission (CEC) released its draft strategy for using benchmarking data to manage the state’s large buildings and achieve California’s goals to lower energy and greenhouse gas emissions. The strategy responds to Senate Bill 48 (SB48), legislation authored by Senator Josh Becker and signed into law in 2023.
This is an important milestone for California. Existing buildings account for more than 70% of the state’s electricity consumption, more than half of its methane gas use, and roughly one-quarter of California’s greenhouse gas emissions. Because California itself has so often served as a model for other states, this strategy has implications that extend well beyond the state’s borders.
Key takeaways
The report proposes building on California’s energy benchmarking and transparency law (AB802) to enact an enforceable statewide Building Performance Standard for large existing buildings.
Key takeaways at a glance
- Who’s covered: Commercial and multifamily buildings larger than 50,000 square feet, the same threshold used by California’s existing benchmarking law.
- The timeline: Long-term performance targets set for 2045, with interim compliance checkpoints every five years.
- The metrics: Site Energy Use Intensity (EUI) and onsite Greenhouse Gas Intensity (GHGI), with future demand-management metrics under exploration.
- Tenant protections: Built into the core policy framework, not treated as an optional add-on.
- Flexibility: Multiple alternative compliance pathways, including Building Performance Action Plans (BPAPs), for buildings with unique constraints.
- Who runs it: The report recommends the California Energy Commission (CEC) as the lead agency to create and administer the standard.
Strengthening benchmarking
As a first step, the strategy recommends strengthening enforcement of California’s benchmarking requirements. Current compliance is only around 50%, and improving participation through stronger enforcement and the addition of a third-party verification requirement are critical steps to building toward a BPS that balances ambition and feasibility. The California Energy Commission has recently begun this work with steps including refining its covered building list and notifying non-compliant building owners of benchmarking compliance obligations.
Building size and compliance approach
For the Building Performance Standard itself, the report recommends establishing a statewide performance requirement covering commercial and multifamily buildings larger than 50,000 square feet. This is the same size threshold used by the benchmarking law. The report recommends setting long-term performance targets for 2045 and using a trajectory-based approach, to set interim compliance targets every five years. This structure provides building owners with long-term certainty and also allows better performers to move along a flatter path to final compliance. This trajectory approach is one of the cornerstones of IMT’s Model BPS Law.
Performance metrics
The report recommends using two primary performance metrics: 1) the energy used by the building (site energy use intensity (EUI)) and 2) the greenhouse gas emissions emitted directly from the building (onsite greenhouse gas intensity (GHGI)). It also encourages regulators to explore future demand-management metrics, such as coincident peak demand, to better support electric grid reliability as California’s power system evolves. Widespread advanced metering, CEC’s data warehouse (which includes interval data from across the state), and leading electric demand flexibility initiatives make California uniquely well-equipped to be the first jurisdiction to put in place demand-management BPS metric(s). And, the fact that California leads other states in solar deployment as seen from the duck curve, means that California would benefit more than other states from a demand-management BPS metric.
California’s Existing Buildings, By the Numbers
70%+
of statewide electricity consumption
50%+
of the state’s methane gas use
~25%
of California’s greenhouse gas emissions
+50,000
sq. ft. — proposed minimum BPS threshold
~50%
current AB802 benchmarking compliance
2045
target year for long-term performance
Alternative compliance paths
Recognizing differences in building types and unique technical and financial constraints, the report recommends multiple options for alternative compliance pathways if the standards themselves cannot be met. Recommended pathways include portfolio compliance, timeline adjustments, baseline adjustments, and modifications to the targets themselves. The concept of a “Building Performance Action Plan” (BPAP) is also discussed; BPAPs are one of the best ways to provide both timeline and target adjustments in a way that supports strategic capital planning for decarbonization. These types of flexibility mechanisms in the policy are crucial for ensuring that all buildings are able to move towards long-term compliance in a way that reflects their circumstances. This is particularly important for affordable housing and other under-resourced building types.
Equity
From front to back, the report emphasizes the need for equity. SB48 mandated that the report center tenant protections and the report delivers. Tenant protections include preventing building owners from passing noncompliance penalties on to residential and small commercial tenants, reinvesting collected penalties into performance improvements for buildings serving low-income communities, and protecting tenants from displacement during retrofit projects.
Local vs state regulations
Equally important, the strategy recommends that the state policy defer to local regulations if those localities adopt stronger standards—both by allowing more ambitious performance targets and by recognizing more robust local tenant protections. That means tenant protections are not treated as an optional add-on; they are part of the core policy framework.
Financial and technical support
The report also rightly emphasizes that the BPS should be accompanied by financial and technical support. Recommended measures include incentive programs to reduce upgrade costs, coordination with existing state efficiency and electrification programs, and a centralized resource hub (USGBC California recently stood up the foundation of such a hub) that can provide guidance and technical assistance directly to owners.
Administration
Because SB48 required only the development of a strategy—not implementation authority—the report recommends authorizing the California Energy Commission to create and administer the BPS. CEC makes sense as the lead agency because it already administers statewide benchmarking and maintains the underlying energy data needed to implement a performance standard.
The road to SB 48
In many ways, the release of this strategy document is a culmination of IMT’s work in California. IMT has been working toward a statewide Building Performance Standard (BPS) in California for more than five years.
IMT’s Road to SB 48
In 2021, we began advising Senator Becker, who represents Silicon Valley, on options to reduce building energy use in line with state goals. Senator Becker had already established himself as an innovative climate legislation leader. IMT worked with his office to consult stakeholders across the state to understand the opportunities and challenges, and what policy approaches might help. What made this process especially rewarding was that the Senator’s office understood from the outset that equity and tenant protections couldn’t be an afterthought. They invited Strategic Actions for a Just Economy (SAJE) and the Public Health Law Center (PHLC) into the conversation early, recognizing that affordability and equity concerns had slowed previous decarbonization efforts in the state and that meaningful partnership would lead to stronger, more durable policy.
After Senator Becker successfully passed SB 48, many more stakeholders grew interested in BPS, and in how to decarbonize at scale while preserving affordability. In order to share what we had learned and their unique expertise with a broader audience, IMT supported SAJE and PHLC in writing Tenants at the Center.
Later, through a national initiative, Community Climate Shift, IMT supported a network of community-based organizations, including many in California, to develop recommendations for BPS policies that would benefit frontline communities. IMT built on SB48 by supporting additional community-based organizations and technical assistance partners to conduct analysis and develop recommendations for an equitable package of policies centering a BPS. CEC’s SB48 report cites several of those partners, reflecting the collaborative effort that shaped CEC’s vision for equitable building decarbonization.
Significantly, there is an entire section of the draft report dedicated to the “Spectrum of Community Engagement to Ownership”. This foundational tool was created by Facilitating Power, to support deeper collaboration between communities, advocates and policymakers. It is the keystone of IMT’s community engagement approach and served as the rubric for our work with the community-based partners in California. Reading this draft report, it’s clear that the voices and commitment of our partners mattered. This is the first time a report by a state agency has referenced this framework, and it speaks to the power of community involvement in the policymaking process.
Looking ahead
Reading this report is genuinely exciting. It demonstrates what can happen when research, advocacy, and strong collaborations among partners come together over many years. Our goal in facilitating debate and discussion across disciplines and audiences is to make building performance policies the product of the people who will be affected by them. It is incredibly rewarding to see this work explicitly reflected in a document with the potential to shape California’s building policies for years to come.
The draft is now open for public comment through August. IMT will reconvene with our partners to review the document together and submit recommendations. That’s exactly how good policy evolves: through continued collaboration, thoughtful feedback, and a willingness to improve.
CEC is holding a public virtual workshop on its draft SB48 report on July 29 at 10PT. We hope you’ll take some time to read the draft strategy, follow the public comment process, and stay tuned for more as this important work continues. And kudos to CEC for a well researched and reasoned document!
Further Reading
