About NWP Founded in 1995 - NWP has focused on building the most secure, legally compliant and diverse utility management platform in 50 states Largest and most experienced legal team in utility billing and energy management in multifamily Serve property owners and managers of all types and sizes Learn more at www.nwpsc.comwww.nwpsc.com
About Prometheus Our mission is, very simply, to revolutionize the apartment industry Founded in 1965, Prometheus has a growing portfolio of over 18,000 units in the Bay Area, Seattle, Portland and Los Angeles Metropolitan areas Specialize in the acquisition, development and management of high quality residential and commercial properties Property Management Firm of the Year Award for 3 years in a row
Utility Benchmarking What do I need to worry about? What is it? Why is it important?
Utility Benchmarking Multifamily owners / operators must comply with local or state regulations – EPA EnergyStar Portfolio Manager – Varying deadlines – Varying penalties for non- compliance
Utility Benchmarking Seattle: – Failure to accurately disclose $150 for the first violation. If not remedied within 15 days, $150 per day for the next 10 days and $500 per day for each subsequent day. – Failure to disclose to a tenant, prospective tenant, buyer, or lender $150 for first violation, $500 for each subsequent violation.
Utility Benchmarking Washington, D.C. – $100 per day for any non-compliance after a 30 day period to cure deficiencies
Utility Benchmarking – Varying duties for owners due to audit findings: Austin: Retrofit electric, heating and cooling systems for buildings that do not meet targets
Utility Benchmarking EnergyStar Portfolio Manager integration – All jurisdictions using Portfolio Manager – Utility Expense Management partner should have data and expertise Required in the following jurisdictions in chronological order
Washington, D.C. Law - Clean & Affordable Energy Act Disclosure - Public website, Government Enacted – July 2008Building Type – Public Buildings > 10,000 sq. ft.; Commercial & Multifamily buildings > 50,000 sq. ft. Implementation – 2010 - 2014Rating Type - Operational Rating Tool – Portfolio Manager; Target Finder
Austin Law Energy Conservation Audit & Disclosure (ECAD) Ordinance Disclosure - Buyers, Government Enacted – November 2008Building Type – All public and non residential buildings Implementation – June 2011Rating Type - Operational Rating Tool – Portfolio Manager, ACLARA Note – audit based for Apartment buildings 10 years or older
New York City Law - Local Law 84Disclosure - Public Website, Government Enacted – December 2009Building Type – Public Buildings > 10,000 sq. ft. ; Commercial & Multifamily Buildings > 50,000 sq. ft. Implementation – 2010 - 2013Rating Type - Operational Rating Tool – Portfolio ManagerNote – audit required every 10 years on buildings > 50,000 sq. ft. -Multifamily begins filing in Sept 2013 -Form required to be filled out
Seattle Law - Council Bill 116731Disclosure - Government, Tenants Enacted – January 2010Building Type – Public Buildings > 10,000 sq. ft.; Private non residential buildings and Multifamily > 50,000 sq. ft. Implementation – 2011 - 2013Rating Type - Operational Rating Tool – Portfolio Manager
Boston Law - Building Energy Reporting and Disclosure Ordinance Disclosure Enacted – May 2013Building Type – Multifamily buildings > 50,000 sq. ft. or 50 units; Multifamily building > 35,000 sq. ft. or 35 units Implementation – May 2015 and May 2017 Rating Type - Operational Rating Tool – Portfolio Manager
Pending Legislation in other Jurisdictions Portland, Oregon: POLICY NOT YET ENACTED – Will require all commercial and multifamily buildings 20,000 square feet and larger to benchmark and disclose their energy performance using Portfolio Manager. Massachusetts: POLICY NOT YET ENACTED – Will require all public, commercial and multifamily buildings 10,000 square feet and larger to benchmark and disclose their energy performance.
Pending Legislation in other Jurisdictions Chicago, Illinois: POLICY NOT YET ENACTED – Will require all commercial and multifamily buildings 50,000 square feet and larger to benchmark and disclose their energy performance using Portfolio Manager. New twist – an engineer must examine data every 3 years. (2015 Target)
Utility Benchmarking Understanding what the system is telling us and will tell residents, prospective residents, lenders and buyers. Early adoption provides a great opportunity provide input in other jurisdictions to shape the duties imposed on owners.
Utility Benchmarking What benefits come with utility benchmarking? – Compliance to local and state regs – You can only manage what you measure – Identify properties that are underperformers in utility consumption (might be working, but not cost effective) – Marketing opportunities
Submetering Benefits Conserve between 18-36% compared to in-rent billing Resident fairness (they prefer it) Why is it important? What is it? What do I need to worry about?
Submetering Examples of jurisdictions that mandate for new construction: – Texas (property must have a plumbing configuration that allows for meters in each unit) – Georgia – San Diego Issues in pending legislation – Costs Recovery mechanisms for billing Late fees and recovery – Rates that residents will be charged
Submetering California Senate Bill 750 – Passed Senate. In Assembly. Democratic supermajorities in both houses – Would mandate that all properties that apply for a connection from the local utility on or after 1/1/14 be submetered and can only bill residents using a metered methodology – Allows for administrative cost recovery of $4.00 per month and a 5% late fee Administrative fee increases beginning 1/1/17 tied to CPI increase – Penalties for non-compliance include 3x any overcharge, one month’s rent, attorney’s fees and costs (matches TX language) Can be enforced by any City, County, or State agency
Submetering CA Weights and Measures – Bill in 2012 to divest W&M from jurisdiction passed Assembly and Senate but vetoed by Governor due to pressure from unions The existing bill must deal with civil/criminal liability and test bench issues Owner/Developer issues
RUBS (Ratio Utility Billing Service) What do I need to worry about? What is it? Why is it important?
RUBS (Ratio Utility Billing Service) Mandates and plumbing code changes will eventually dictate that there are fewer and fewer RUBS properties. Some jurisdictions neither specifically allow or prohibit RUBS. Some local jurisdictions are more restrictive than state level.
RUBS (Ratio Utility Billing Service) Best practices – Lease language is the first line of defense and creates a contract. Carefully disclose method, any fees and billing – Common area deductions Resident equity Good utility billing providers will give guidance for CAD% if not specified by law/regulation
RUBS (Ratio Utility Billing Service) Lawsuits – In “unregulated” jurisdictions, Plaintiffs use consumer protection remedies to shift burden to owner and biller to prove “fairness” of billing Global conservation v. individual conservation – Plaintiffs allege that CAD% is not adequate
Lease Language First line of defense – Disclose method, fees, billing procedures, dispute resolution information, etc. Escalation – when you should escalate to the provider Communication is better than silence with residents
Lease Language If Landlord-Tenant Code allows, preference to include term that modifications to billing program and fees can be made with notice to residents – Not allowed in Texas – Benefits
Closing Thoughts Mandated Energy Benchmarking and Submetering – This is important for development and risk mitigation – stay on top of it. Take advantage of the opportunities which come with mandates – rebates, marketing, savings, building commission