Regulatory Updates

Boston and Sacramento, Calif.—Boston is the eigth major city in the United States to require building owners to disclose the energy and water usage of their real estate assets. Boston joins New York; Seattle; Washington, D.C.; San Francisco; Austin, Texas; Minneapolis; and Philadelphia in prescribing rules for the benchmarking of utilities consumption.

Key facts about the new regulation are as follows:

• Multifamily residential buildings with 50 or more units or 50,000 gross square feet are covered by the regulation and must begin reporting by May 15, 2015;
• Residential buildings with 35 or more units or 35,000 gross square feet must begin reporting by May 15, 2017;
• The regulations prescribe fines for noncompliant building owners;

NWP’s UtilitySmart solution helps owners and operators optimize utility spend through automation, benchmarking analytics and extensive reporting technologies. NWP is the only multifamily billing services provider listed by ENERGY STAR with direct reporting to ENERGY STAR’s portfolio manager supplying 12 consecutive months of benchmarking data for more than 290 properties solidifying our commitment to ensuring our customers are in compliance with city ordinances and state and federal regulations as tracking of energy consumption and management becomes a requirement for various jurisdictions.

Additionally, Senate Bill 750 (SB750) passed the California Senate on Wednesday, May, 29th. The proposed legislation mandates the installation of water submeters on apartment buildings after January 1, 2014, as a requirement for new water service to a regulated property. The bill also requires that residents receive an accurate account of their water consumption, and any effect on a corresponding water bill. Current law requires that water meters be installed in every single-family dwelling in California. At this time, meters are not required for individual units at multihousing communities.

NWP’s advocates met with senate lawmakers to amend portions of the bill that would damage the apartment industry. NWP argued against and defeated a proposed mandate to force owners to bill residents on a bi-monthly basis. In a similar victory, NWP helped convince senate staff to amend the bill so that existing properties would not be forced to submeter for water-which would have prohibited ratio utility billing systems.

NWP is pleased that the senate made these amendments to the bill, however, more needs to be done in order to protect apartment owners’ and operators’ interests. As such, NWP cannot endorse the bill at this time.  Some of the most pressing issues that must be addressed are:

• The bill contains a $4.00 cap on fees, which may be raised in accordance with variations in the Consumer Price Index. However, NWP opposes any fee caps because such limitations are often artificial, negatively distort and impact the marketplace, and do not address the actual costs associated with billing. A better solution is to allow for individual parties to rental agreements to freely contract for the fees associated with the administration of a submetering program.

• The bill also contains a limitation on the amount an owner may charge for late fees. The limitation does not allow owners and operators the ability to recoup the full amount of damages they suffer as a result of nonpayment.

• The bill does not address the major problems associated with the approval of submeters by state inspectors and the corresponding limitation on supply. The current process is much too slow, and if submetering is mandated for new construction, projects will be delayed as a result of the cumbersome approval process and lack of meter supply in the state.