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Phone: (714) 730-5397

Policy Info: Energy Benchmarking (AB 1103)

The California Nonresidential Building Energy Use Disclosure Program (AB 1103) requires commercial building owners to complete an energy benchmark for their buildings prior to their sale, lease, or financing.  Building owners must employ the U.S. Environmental Protection Agency’s (EPA) Energy Star Portfolio Manager to benchmark and disclose energy consumption.  These new regulations represent another hurdle in the business of real estate transactions.  The Reynolds Group can help prepare AB 1103 disclosures.

Why Energy Benchmarking?

AB 1103 seeks to promote energy efficiency by establishing a system where commercial buildings may be compared based on their relative efficiency.  Since increased energy efficiency lowers operating expenses, AB 1103 helps prospective buyers frame a portion of building life cycle costs.

Who is affected?


If you answer “yes” to the following questions, you must disclose your buildings energy use prior to completing a transaction.

  1. Is it a non-residential building?
  2. Is the gross square footage of the non-residential building at least 10,000 squre feet for transactions occurring on or after January 1, 2015 or 5,000 square feet for transactions according on or after July 1, 2014?
  3. Is the non-residential building one of the following types:
    • Assembly (A)
    • Business (B)
    • Educational (E)
    • Institutional – Assisted Living (I-1, R-1)
    • Institutional – Non-ambulatory (I-2)
    • Mercantile (M)
    • Residential – Transient (R-1) (i.e. hotel)
    • Storage (S)
    • Utility – Parking Garage (U)
  4. Is the building being sold, leased, or financed?

Who is exempt? [2]

The following building types are not subject to AB 1103 disclosure requirements:

  • Factory and Industrial (F-1, F-2)
  • High Hazard (H-1, H-2, H-3, H-4, H-5)
  • Institutional (I-3, I-4)
  • Residential (R-2, R-2.1, R-3, R-4)
  • Laboratory (L)

What happens in the case of non-compliance? [3]

The Energy Commission’s enforcement actions may include:

  • Investigating noncompliance allegations (which can involve issuing subpoenas, compelling testimony, and convening investigative hearings).
  • Initiating administrative proceedings before the full Energy Commission for an order of compelling compliance.
  • Initiating a civil judicial proceeding to enforce an Energy Commission order.
  • Initiating a civil judicial proceeding to obtain injunctive relief.
  • Settling enforcement actions through negotiated settlements that impose reasonable and appropriate requirements, including possible payment of penalties.

[1] http://www.energy.ca.gov/ab1103/documents/AB-1103_FAQ_2014-01-28.pdf

[2] Ibid.

[3] Ibid.