In This Issue:

• BILL INTRODUCTION DEADLINE – 2,622 NEW BILLS; OVER 470 IMPACT OUR INDUSTRY

• SO MANY GOOD AND GREEN IDEAS

• SOME INTERESTING MEASURES

• ELECTRICITY RATES JUMP UNEXPECTEDLY

• FEDERAL STIMULUS FUNDING

• STUDY SHOWS ENERGY EFFICIENCY

BILL INTRODUCTION DEADLINE – 2,622 NEW BILLS; OVER 470 IMPACT OUR INDUSTRY

Bill Introduction Deadline was last Friday in the California State Legislature. Since the start of the 2009-2010 session Our 120 State Legislators have collectively introduced 2,622 legislative measures.

Your fearless staff in Sacramento read all of this legislation to identify measures that have potential impact (good or bad) on the commercial, industrial, and retail real estate industry. After a first filter through all the bills we have already identified 472 such measures that will now be actively tracked.

SO MANY GOOD AND GREEN IDEAS

Of the 470 bills that we have identified that impact our industry, 150 are focused on greenhouse gases, energy efficiency, or green buildings, in one way or another. The word “green” currently appears in 42 separate pieces of legislation.

SOME INTERESTING MEASURES

AB 25 (Gilmore) Surface Water Storage
AB 49 (Feuer) Per Capita Water Usage Mandate
AB 109 (Feuer) Bans Electronic Outdoor Signs
AB 118 (Logue) Repeals the Global Warming Solutions Act of 2006 (AB 32)
AB 150 (Smyth) Tax Relief for Energy Proficient Products
AB 210 (Hayashi) Clarifies Local Entities can Adopt Green Building Standards
AB 212 (Saldana) Residential Zero Net Energy
AB 231 (Huffman) Greenhouse Gas Fees
AB 234 (Huffman) Distribution of Federal Stimulus Funding for Energy Efficiency
AB 531 (Saldana) Mandatory Benchmarking; Disclosure of Information
AB 732 (Jeffries) Land Use and Sustainable Community Strategies Fix
AB 759 (Skinner) Existing Building Energy Audit
AB 828 (Lieu) New Authority to State Agencies to write “Green” Building Codes
AB 1091 (Ruskin) Mandates Climate Change Predictions into all Relevant Planning Processes.
AB 1204 (Huber) Land Use CEQA Streamline
AB 1321 (Eng) Streamlined and Effective Mitigation of Infrastructure Projects
AB 1373 (Skinner) New Regulations on Refrigerants and HVAC Systems
SB 56 (Alquist) Universal Health Care
SB 104 (Oropeza) Adds More Gasses to AB 32 Regulations
SB 371 (Cogdill) Water Bond 2009
SB 476 (Correa) CEQA Reform
SB 488 (Pavley) Energy Efficiency Financing
SB 518 (Lowenthal) Reduces Parking Requirement to Encourage Transit-Oriented Development
SB 575 (Steinberg) Sustainable Community Strategy Reforms
SB 571 (Steinberg) Energy Efficiency Greenhouse Gases
SB 728 (Lowenthal) Employee Parking In Nonattainment Air Districts; Civil Penalties

Please contact us for more information on any of these bills, or point your browser to the following website to read full text.
 

ELECTRICITY RATES JUMP UNEXPECTEDLY

As of March 1, 2009 PG&E has raised its rates for electricity to its customers. The increase ranges from 3.0% to 11.8%. E-19 and E-20S rates have been raised 9.1%. It appears that these increases are the result of decisions handed down by the Federal Energy Regulatory Commission (FERC) and the California Public Utilities Commission (CPUC) that PG&E is responding to.

PG&E’s revenue requirements have been increased by $680 million dollars. $528 million of the gross amount reflect an order, “leveling payments to the Department of Water Resources.” This reflects an increase to E-19 customers of 5.3% (E-20S of 5.2%). In 2008 FERC approved a $112 million increase for transmission related costs. For E-19 and E20-S customers this reflects an increase of .9% in rates. In addition, the CPUC ordered a reallocation of the “Cost Responsibility Charge” (CRS) which have to do with the “overpayment made by non-core customers to the benefit of core customers.” This results in an increase of 2.9% to E-19 customers 3.0% for E-20S customers.

These are cost recovery increases and they are not related to the rate cases as they are pre-approved by Federal and State authorities. Although PG&E forecasts that the cost of natural gas should decrease in the near term, the increase in electrical rates will have a dramatic impact on the budgets of building owners and managers. And, this may not be the end of it. Informal conversations with PG&E personnel suggest that additional increases may be in the offing for January 2010.

BOMA California has a full time representative working with the CPUC on commercial building rates and who is monitoring the situation closely. We hope to staunch the increases and provide more lead time should the same happen in the other Investor Owned Utility areas in Los Angeles, Orange County, and San Diego.
 

FEDERAL STIMULUS FUNDING

Although all the distribution mechanisms have not been fully worked out, money from the American Recovery and Reinvestment Act of 2009 is soon to begin flowing and the old axiom that “money doesn’t just fall out of the sky,” may have to be reassessed. Billions upon billions of dollars will go to Transportation, Community Development and Housing, Energy and the Environment, Public Safety, Homeland Security, and Workforce Development.

“We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills,” said the President when he signed the bill. "In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines … and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain.”

$3.2 billion has been directed to the “Energy Efficiency and Conservation Block Grant Program,” which will generally be distributed to states on a per capital basis. Specific funding mechanisms for how the funds will be distributed in California are still to be determined.

More specifically, the following projects and research will be funded through this package: facility sustainment, restoration and modernization projects using energy efficient products, $4.2 billion; improve energy efficiency in aging public housing, $4 billion; energy retrofitting and investing in green projects in HUD-assisted housing, $250 million; increase energy efficiency using green technology in federal buildings, $4.5 billion; energy efficiency and conservation grants, $6.3 billion; energy efficiency and renewable energy research, $2.5 billion; new loan guarantees for renewable projects, including wind or solar projects and electricity transmission projects, $6 billion. brownfields $100 million.

The monies are expected to move very quickly as the preference is for “Quick-Start Activities,” and state must Use it or Lose it!
 

STUDY SHOWS ENERGY EFFICIENCY

NAIOP's recently released study on levels of achievable energy efficiency in standard office buildings takes an important step forward in presenting realistic economic data and practical information into what developers can do to increase efficiencies while maintaining a 10-year payback. The study was initiated to determine if commercial development could achieve reduction targets of 30-50 percent above the ASHRAE 90.1-2004 standard - the benchmark often cited in legislation and other calls for mandatory reductions.

Using a recently completed four-story, 95,000-square-foot, Class A office building as the prototype, the research modeled the prototype in three climate zones represented by Chicago, Ill.; Baltimore, Md.; and Newport Beach, Calif.

Findings show that although significant energy efficiencies can be achieved (varying by climate zone), reaching a 30 percent reduction above the ASHRAE standard is not feasible using common design approaches and would exceed a 10-year payback. The study concluded that achieving a 50 percent reduction above the standard is not currently reachable. Click here to read the full study and press coverage.