Maryland’s Montgomery County Adopts New Building Energy Performance Standards | Insights

Emily Parkin

Montgomery County, Maryland, signed Bill 16-21 into law on May 2, 2022, as an amendment to the County’s Building Energy Use Benchmarking Law (Benchmarking Law), Article 6 of Chapter 18A of the Montgomery County Code. Bill 16-21 revised the Benchmarking Law to include certain Building Energy Performance Standards (BEPS), which establish minimum energy performance standards for existing buildings in the County. The stated purpose of the BEPS is to reduce overall greenhouse gas emissions and help the County achieve its climate action goal of zero greenhouse gas emissions by 2035. Bill 16-21 is scheduled to go into effect on July 31, 2022, and regulations will be issued no later than Dec. 31, 2023.

Buildings covered under the BEPS are grouped by property type and gross square footage. Bill 16-21 obligates the Montgomery County Department of Environmental Protection (DEP) to establish long-term final energy performance standards for each property type using the energy use data reported for each property type under the County’s Benchmarking Law as the basis for the performance standards. Bill 16-21 sets forth the deadlines for each property group to: 1) comply with the Benchmarking Law by reporting energy use data to the County DEP; and 2) comply with DEP’s established performance standards for that property type.

The property groups and corresponding deadlines covered by Bill 16-21 include:

 

Property Group

Covered Buildings

Benchmarking Deadline

BEPS Final Performance Standard Compliance Deadline

County-Owned

Any building owned by the County whose gross floor area equals or exceeds 25,000 square feet

June 1, 2015, for buildings whose gross floor area is greater than or equal to 50,000 square feet

June 1, 2023, for buildings whose gross floor area equals or exceeds 25,000 square feet but is less than 50,000 square feet

Dec. 31, 2033, for buildings greater than or equal to 50,000 square feet

Dec. 31, 2035, for buildings whose gross floor area equals or exceeds 25,000 square feet but is less than 50,000 square feet

Group 1

Privately owned nonresidential buildings whose gross floor area equals or exceeds 250,000 square feet

June 1, 2016

  Dec. 31, 2033

Group 2

Privately owned nonresidential buildings whose gross floor area equals or exceeds 50,000 square feet but is less than 250,000 square feet

June 1, 2017

  Dec. 31, 2033

Group 3

Privately owned nonresidential buildings whose gross floor area equals or exceeds 25,000 square feet but is less than 50,000 square feet, and privately owned nonresidential buildings 50,000 gross square feet and larger previously exempted by the Benchmarking Law

June 1, 2023

   Dec. 31, 2035

Group 4

Privately owned multifamily residential or mixed-use buildings whose gross floor area equals or exceeds 250,000 square feet

June 1, 2023

  Dec. 31, 2035

Group 5

Privately owned multifamily residential or mixed-use buildings whose gross floor area equals or exceeds 25,000 square feet but is less than 250,000 square feet

June 1, 2024

  Dec. 31, 2036

Meeting Compliance Deadlines

In addition to the final performance standard compliance deadlines listed above, covered buildings must demonstrate progress toward compliance with the final standards by complying with interim standards established by DEP five years prior to the final performance compliance deadline. Subsequent regulations addressing property type groupings and the interim and final performance standards for each property type will be issued by DEP. Covered buildings must demonstrate compliance with the interim and final performance standards by reporting their benchmarking data to the County DEP by June 1 of each year using EPA’s ENERGY STAR Portfolio Manager. The Department must determine each building’s compliance by comparing the covered building’s performance metric against the interim or final performance standards for the applicable property type.

Property owners who are unable to meet one or more of the performance standards issued for their building(s) due to economic infeasibility or other circumstances beyond their control may submit a proposed “Building Performance Improvement Plan” (BPIP or Plan) to DEP for review and approval. The Plan should set forth the reasons why the owners are unable to meet the standard by the established compliance deadline, a list of potential improvement measures for energy saving and a timeline for achieving energy improvements. The building is measured against its Normalized Site Energy Use Intensity (EUI), which favors electrification and onsite solar generation. If a target has not been met and a BPIP has not been accepted, the building owner may be cited for a Class A violation. A Class A violation is punishable, at the discretion of the enforcing agency, by either a criminal penalty of $1,000, imprisonment of up to six months or a civil penalty of $500.

Notably, Bill 16-21 does not apply to covered buildings for which more than 50 percent of the total gross floor area is used for: 1) public assembly in a building without walls; 2) industrial uses where the majority of energy is consumed for manufacturing, the generation of electric power or district thermal energy to be consumed offsite, or for other process loads; or 3) transportation, communications or utility infrastructure. Owners may also request a waiver from the benchmarking requirements for: 1) financial distress; 2) newly constructed buildings; or 3) buildings that have been demolished or received a demolition permit.

Considerations and Next Steps

Montgomery County covered property owners who are required to submit benchmarking data should review their information on the ENERGY STAR Portfolio Manager to ensure that all information (i.e., property type and use, and energy use) is accurate, as this data will serve as DEP’s basis for developing the interim and final performance standards. Holland & Knight’s environmental and real estate/land use attorneys can assist Montgomery County property owners in achieving compliance with the new requirements and/or obtaining grants or low-interest financing to come into compliance with these requirements.


Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.


https://www.hklaw.com/en/insights/publications/2022/05/marylands-montgomery-county-adopts-new-building-energy-performance

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