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New Philadelphia Ordinance Requires Reporting Commercial Energy and Water Use

 

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By Lauren M. Balsamo | balsamol@pepperlaw.com

On June 21, 2012, Philadelphia City Council unanimously passed Bill No. 120428-A, amending Chapter 9-3400 of the Philadelphia Code to require commercial and certain mixed-use buildings to report their energy usage to the City for ultimate public disclosure.

The City's Office of Sustainability has been charged with implementation of the ordinance as well as promulgating regulations, if deemed necessary in connection with the ordinance. The ordinance applies to "Covered Buildings," which includes any commercial building containing 50,000 or more square feet of indoor floor space, and the commercial portion(s) of mixed-use buildings with 50,000 or more square feet devoted to commercial use.

Under the ordinance, Covered Building owners must annually report their building's energy usage (electric, gas, steam and oil), water usage, and building characteristics to the City through a "Benchmarking Application" (initially the U.S. Environmental Protection Agency's Internet-based system, "Portfolio Manager"). Where available, Covered Building owners may arrange for their utility/energy supplier to submit the water and energy data directly to the Benchmarking Application, but not building characteristics. Building characteristics include a Covered Building's age, use(s), and operating hours, and may also include the number of computers and/or refrigerator/freezer units in use in the building and the portion of the building that is heated and air conditioned, among other information. Tenants in Covered Buildings do not have separate reporting requirements per se. However, where a leased unit is separately metered for utilities, the ordinance requires time-sensitive tenant disclosures to the owner, if requested, so that the owner may comply with its own reporting deadline.

Failure to comply with the reporting requirements within 30 days of a compliance deadline subjects the violator to a $300 fine, plus $100 each day thereafter that the violation remains uncured.

Most controversial is the ordinance's disclosure provision. Not only is a Covered Building's energy performance information to be made available upon request by Covered Building owners to potential buyers or lessees, but the ordinance also contemplates making the reported information available online to the general public in the future. Although some property owners feel the disclosure requirements will unfairly blacklist some buildings with particular uses or tenants with unique energy needs, proponents of the disclosure believe it will force Covered Building owners to make their buildings more energy efficient as consumers become more readily informed.

Copyright © 2012 Pepper Hamilton LLP.  Reprinted with permission.  All other rights reserved. This article should not be construed as legal advice or legal opinions on specific facts.