2014_Class-B-Report_CSA

2014 THINK TANK REPORT—CLASS B & C — 2
EXECUTIVE SUMMARY
ThisreportistheoutcomeoftheExistingBuildingsThinkTankRoundtableheldonMay28,2014attheCity
ClubindowntownLosAngeles.Over70participantsrepresentingbuildingownersandmanagers,engineers,
utilities,government,tradeassociations,andotherindustryprofessionalswereinattendancetodiscussideasand
emergingtrendsrelatedtotheoperationandperformanceofexistingbuildings. Thediscussionwasorganized
aroundchallengesandopportunitiesrelatedtoclimatechange,energyandwaterefficiency,and key
sustainabilitytrends.
TheagendafortheeventcoveredtopicsofparticularrelevancetoownersandmanagersofClassBandC
buildings. TheThinkTankRoundtablewasusedtosharebestpractices,lessonslearned,resources,and
challengeswithbuildingownersandmanagersaswellas utilities,tenants,brokers,government,andbuilding
professionalsfromallsectors. Thisreporthighlightskeyoutcomesoftheroundtablediscussionsandintegrates
feedbackfrominterviewswithClassBbuildingownersandmanagersduringthemonthsfollowingtheevent.
Thekeyobjectivesofthis reportareto:
 Helputilitiesunderstandhowtoimprovetheirregulatoryandincentiveprogramsbyprovidingfeedbackabout
howtheycanbestservethesecriticalyetoftenunder-representedcustomers.
 EncourageownersandmanagersofClassBandCpropertiestoimproveportfolio-wideenergyandwater
efficiencyandimplementgreenbuildingpractices.
 Inspireaction todeepenenvironmentalgoals intheexistingbuildingsectorbydefiningcriticalchallengesand
potentialsolutions,andbyinvitingkeystakeholderstoengageinthediscussion.
 Provideresourcesandeducationtoserviceprovidersthatareinapositiontohelpbuildingownersdesignand
implementenergyandwaterconservationstrategies.
 DisseminateinformationgatheredfromtheThinkTank Roundtablebysharingthefindingsfromthismeeting
throughanumberofvenues,includingmakingthisreportpubliclyavailableandholdinganopenmeetingto
discussthereportandanynewdevelopments.
EXECUTIVE SUMMARY
THINK TANK:
A body of experts providing
advice and ideas on specific
political or [and] economic
[environmental] problems.

TABLE OF CONTENTS
INTRODUCTION 02
Executive Summary
Table of Contents
Goals and Objectives
Green Building Snapshot
INDUSTRY UPDATES 07
Technical Support from USGBC-LA
Climate Leadership Through Collaboration
Making the Business Case for Sustainability
Financing Green Building Projects
State Energy Policy
ENERGY EFFICIENCY 17
Strategy: No and Low-Cost Measures
Best Practices and Action Items
Conclusion and Resources
CODES & STANDARDS 13
Title 24: Part 6 Energy Efficiency Standards
Title 24: Part 11 Green Building Standards
Assembly Bill 1103: Building Energy
FINANCE 25
Valuation and Tangible Benefits
WATER EFFICIENCY 21
Current Conditions
Strategy: No and Low-Cost Measures
CLOSING REMARKS & APPENDIX 28
Observations and Recommendations
Closing Remarks
Event Attendees
2014THINK TANK ROUNDTABLE
CLASS B&CREPORT

The Think Tank Roundtable event and report was made possible as part of a larger initiative in
collaboration with the California Sustainability Alliance (CSA), a Southern California Gas (SoCalGas)
program , the USGBC-LA Existing Buildings Committee, and Verdani Partners who was responsible for
putting the event and report together.
About the California Sustainability Alliance:
The California Sustainability Alliance (the Alliance) is designed to help meet the State’s aggressive energy,
climate, and other resource and environmental goals by increasing and accelerating energy efficiency in
combination with complementary green measures and strategies. The underlying premise of the Alliance
is that we can make a lot more progress with what we have to invest, if we first align the goals, objectives,
and interests of key stakeholders needed to attain "success" in each targeted sector. It is not easy—it
takes a lot of work to find those potential points of alignment, and then to develop and implement the
portfolio of programs and services needed to precipitate market transformation.
About USGBC-LA Existing Buildings Committee:
The mission of the USGBC-LA Existing Buildings Committee is to increase implementation of sustainable
building operations by advancing industry awareness and providing resources to facilitate community
understanding of the significant life-cycle cost benefits of green building operation and maintenance best
practices.
About Verdani Partners:
Verdani Partners is a full-service sustainability consulting firm. Our mission is to empower organizations
with cost-effective strategies to create sustainable buildings and communities. We maintains a high level
of knowledge in real estate, building operations, energy analysis, financing, and green building
certifications. We are experts in greening large portfolios of existing buildings from managing
certifications to corporate sustainability programs.
PARTNERS FOR A RESILIENT FUTURE
INTRODUCTION
Prepared for the California Sustainability
Alliance and the United States Green Building
Council, Los Angeles Chapter (USGBC-LA),
Existing Buildings (EB) Committee by:
Tanya Goyette, Lead Author
Daniele Horton, Contributor
Hanna Grene, Contributor
Megan Moscol, Contributor
Paulynn Cue, Graphic Designer
For the purpose of this report, the following building
class definitions were used to describe Class A, B, and
C buildings.
Class A: Most prestigious buildings competing for
premier office users with rents above average for the
area. Buildings have high quality standard finishes,
state of the art systems, exceptional accessibility and
a definite market presence.
Class B: Buildings competing for a wide range of users
with rents in the average range for the area. Building
finishes are fair to good for the area. Building finishes
are fair to good for the area and systems are
adequate, but the building does not compete with
Class A at the same price.
Class C: Buildings competing fortenantsrequiring
functional spaceat rents belowtheaverageforthe area.
Source: BOMA International Building Class Definitions

Greenandenergy-efficientbuildingsdemandhigherrent,increasetenantproductivity,reduceoperatingcosts,
andhavehigheroccupancyrates.Theupfrontcostofgreenbuildingimprovementsisadeterrentcommonly
citedbybuildingowners.However,datashowthatgreenretrofitsandincreasedenergyandwaterefficiency
increasepropertyvaluesandmanyupgradescandeliverattractive,short-termreturns.Industryleadersfrom
theGreaterLosAngelesareaidentifiedbestpractices,newopportunities,andexistingresourcesineachofthe
followingtopicareastohelpbuildingownersandmanagerstakechargeoftheirbuildingperformance:
IndustryUpdates:LosAngelesispoisedtoleadthestateinresourceefficiencyandclimateresilience.Toreach
theseambitiousgoals,thepublicandprivatesectorsmustworktogethertofacilitateimprovedenergy
managementandwaterconservation.Industryleaderssharedinformationaboutno-costresourcesand
programstohelpClassBandCbuildingownersimprovebuildingperformance.
CodesandStandards: Updated2013Californiaenergycodesapplystricterstandardstomorebuildingand
renovationprojects.Inadditiontomorecomprehensiveconstructioncodes,AssemblyBill1103requires
energyreportingatthetimeofawhole-buildingleaseorsale.Propertyownersandmanagerswillbenefitfrom
learningaboutenergybenchmarkingandreportingrequirementswellinadvanceofthesetransactions.
EnergyEfficiency:ClassBandCbuildingownerscanreduceoperatingcostsbydevelopinganenergy
managementplanthatstartswithnoandlow-costefficiencymeasures.Bystartingwithtrackingenergyuse
andequipmentadjustments,buildingownerscanimmediatelyreducetheirenergybillsandbetterplanfor
largeequipmentupgradesandbuildingretrofitsinthefuture.
WaterEfficiency:Withwatersuppliesareatanalltimelow,waterconservationisextremelyimportantforall
sectorsdespiterelativelysteadywaterrates.LosAngeleswaterutilitiesareinvestinginwaterreduction
programsandprovideincentivesforefficientequipment.
Finance:Financeexpertsattheroundtablesuggestedthatbuildingownershighlightthepositivechangesthey
havemadetothebuildinginrecentyearswhenapplyingforaloantofinanceanefficiencyproject.By
demonstratingthatanupgradeispartofarobustenergymanagementplanandthatlowandno-costmeasures
havealreadybeenimplementedattheproperty,lendersaremorelikelytohavemoreconfidenceinthe
paybackandofferbetterrates.
INTRODUCTION
High-performance buildings
reduce operating costs, command
higher rents, marketability and
increase shareholder value.
Efficient building operations are
key to staying competitive in
today’s market.
-Daniele Horton, Founder & Co-Chair
USGBC-LA Existing Buildings Committee
INTRODUCTION

GREEN BUILDING STATISTICS
Structures that are already built or near completion represent
99% of US building stock
Most of the US building stock is over 20years old and
75% is ripe for a retrofit
By 2050, CA aims to reduce carbon emissions
80% below 1990 levels
Buildings are responsible for
39% CO2 emissions
The average commercial building wastes an average of
30% energy it consumes
Energy use reductions of 10% are possible with
Little or no cost
Commercial and institutional building electricity use accounts for
60% building energy use
GREEN BUILDING STATISTICS

INDUSTRY UPDATES
Industry expertsfromtheGreaterLosAngelesarea kickedoff
the2014 Think TankRoundtablewith sector updatesandinformation
about emergingtrendsin sustainability andrealestate.

DominiqueSmith,theInterimExecutiveDirectoroftheUSGBC-LAChapter,discussedtwoprogramsthe
USGBC-LAchapteriscurrentlyspearheadingandsupporting,includingtheEnergyandWaterAmbassadors
ProgramandtheGreenJanitorEducationProgram.
TheUSGBC-LA’sEnergyandWaterAmbassadorProgramconnectsClassBandCbuildingownersand
managerswithanambassadortohelpthemidentifyenergyandwatersavingsopportunitiesintheirbuildingsand
thefinancing,rebates,andincentivesrequiredtomovefromanalysistoinvestment.
Throughtheprogram,aUSGBC-LAstaffmembermeetsonsitewiththeownerormanagementteamtoidentify
building-specificenergyandwaterconservationmeasures.Theambassadoridentifieswhichrebatesandtax
creditsareavailableforthebuilding,advisesonpotentialutilitybillsavings,andassessesLEEDcertification
opportunities.
TheGreenJanitorEducationProgramstartedasanideatooffertrainingingreencleaning,safety,increasing
energyefficiency,andwaterconservationtojanitorsnationwide.Thisprogramiscurrentlybeingpilotedatseven
buildingsinLosAngelesandhasalreadygraduated20greenjanitorsasofMaywiththegoalof150graduatesby
theendofsummer.
More information and resources available at:
USGBC-LA
View Event Interview
TECHNICAL SUPPORT FROM USGBC-LA
INDUSTRY UPDATES
As ambassadors, we meet with
building owners of all types, sizes,
and markets to identify ways they
can run their operations in a more
cost-effective way, be sustainable,
and also save money.
- Dominique Smith

HilaryFirestone,SeniorEnergyEfficiencyProjectManagerfortheCityofLosAngeles,providedanupdatefromthe
Mayor’sOfficeofSustainability,anewofficewhichwascreatedin2013tofacilitatecross-agencycollaborationon
sustainabilityissues.
TheCity’sfirstSustainabilityPlanlooksattheworkthat’salreadybeendonetoreduceemissionsandalsoexamines
strategiesforfurthermitigationandadaptation.ThePlan,describedas“the2.0ofsustainabilityplans,”looksatthe
traditionalareasoftransportation,air,water,greenhousegases,aswellasprovidesnewandinnovativestrategies.A
keythemeinthereportiscollaboration,withanemphasisontheimportanceofallsectorsworkingtogethertocut
emissions.
BuildingsandtransportationaretheprimarysourcesofcarbonemissionsinLosAngeleswith51%comingfrom
buildingsalone.In2013LosAngeleshadthemostENERGYSTAR®certifiedbuildingsinthecountry,butthe
majorityoftheCity’sbuildingstockhasasignificantopportunitytoimproveenergyandwaterefficiency.
“Itisgoingtobethebuildingowner’sresponsibilitytoinstallEVchargersontheirpropertiesandtheresponsibilityof
theCitytofacilitateimprovementstopublictransportation,”saidFirestone,providinganexampleofhowthepublic
andprivatesectorswillneedtoworktogethertoachievethecity’saggressiveemissionsreductionstarget.”
Anotherexampleofpublicandprivatepartnershipcomesintheformofincentiveprograms.TheLosAngeles
DepartmentofWaterandEnergyallocated$50milliontoenergyefficiencyforthe2012-2013fiscalyearand$101
millionfor2013-2014.Inadditiontoutilityandnonprofitprograms,thecityisworkingtohelpbuildingownersand
managersovercomethechallengesandbarriersthathavepreventedthemfrominvestinginenergyandwater
retrofitsinthepast.
Oneofthemainbarrierstocatalyzinginvestmentinenergyefficiencyisalackofinformationaboutenergyusein
buildings.“At thestatelevel,we’reworkingonatthestatelevelismakingiteasyforbuildingownerstogetaccessto
theirownenergydata,”saidFirestone.“Wearetryingtomakethatinformationeasierforbuildingownerstoaccess
andunderstandsoeveryoneisheldaccountableandresponsiblefortheirenergyconsumption–notjusttheowners
butthetenantsaswell..Everyonehasastakeintermsoftryingtoreduceourenergyuse.”
http://environmentla.org
CLIMATE LEADERSHIP THROUGH COLLABORATION
INDUSTRY UPDATES
The City will lead by example with
our own buildings. We are going
to start with benchmarking our
energy and water use and making
that information transparent.
– Hilary Firestone

CraigMcDonald,ManagingDirectorforNavigantConsultingandProgramDirectorfortheCalifornia
SustainabilityAlliance(CSA),sharedinformationaboutAlliancetoolkitstohelpbuildingowners,managers,and
tenantsenterintogreenleasesandcalculatethefinancialreturnonenergyretrofits.FundedbySoCalGas,the
Alliancefocusesonfourareas:localgovernments,greenbuildings,waterandenergy,andsustainable
communities.
GREENLEASESTOOLKIT
Thistoolkitlooksatthesplitincentiveproblemoftraditionalleasesandidentifiesagreenleasingprocessfor
ownersandtenantsthatstartswithanorganizationalcommitment.
CLASSBOFFICEIMPROVEMENTTOOLKIT
Releasedin2013,thisonlinetoolkitoffersastep-by-stepapproachforofficebuildingownerswhowantto
determinewheretostartwithwaterandenergyefficiencyupgrades.
CASESTUDIESFORDISTRIBUTEDRECYCLEDWATER
Theissuesaroundhealthandsafetycodesrestricttheuseofsomewater-savingtechnologies.TheAlliance
starteddevelopingcasestudieswithpolicyleadersinSacramentoandSanFranciscotofurtherexamineexisting
regulationsandremovebarrierstoimplementingdistributedwaterrecycling solutions.
ENERGYEFFICIENCYFINANCINGCALCULATOR
Thiscalculatorbridgesthegapbetweenauditsandfinancialreporting.BuiltforClassBbuildings,theEnergy
EfficiencyFinancingCalculatordevelopsacashflowanalysiswithlow,expected,andhighenergysavings
scenariosusinginformationfromanonsiteaudit.Thecalculatoralsogeneratesfinancialreportsthatcanbeused
assupportingdocumentationwhenapplyingforaloanforefficiencyprojects.
ADDITIONALTOOLS:
 GreenGeneralPlanToolkit
 GreenProcurementToolkit
 GreenTenantGuide
 RetrocomissioningToolkit
 WaterEnergyToolkit
CALIFORNIA SUSTAINABILITY ALLIANCE TOOLS
The California Sustainability
Alliance works with people to
identify what are the barriers to
adopting deep energy and water
efficiency strategies.
– Craig McDonald
INDUSTRY UPDATES
California Sustainability Alliance

James Finlay, Vice President Commercial Appraisal Manager for Wells Fargo, coaches Class B and C owners
tospeak the samelanguage as the lender and apply existing tools to finance buildingimprovements.
Oftentimes, sustainable project loans are for smaller sums than traditional loans and the banks have a
hard time making money from these transactions. Finlay offers a few ways to successfully navigate
through this process:
1. When submitting a proposal, include information about the borrower, not about the building. Banks
care about the people who pay the loan back, not the building.
2. Keep the proposal simple and focus on what you have done in the last three years at the property, not
what may happen in the future as a result of this financing.
Public to private partnerships and green banks offer alternative financing solutions. Standardizing energy
upgrades allows green banks and other institutions to pool smaller energy upgrade projects into
securities that are more attractive to investors than projects at a single location. “This idea of
standardized processes is one of the key checks to making high-speed loans and that’s what’s needed
with small commercial buildings,” said Finlay.
Big data is both a challenge and an opportunity for the financial industry with regards to energy
investments. Findlay predicts that cloud-based building management systems are going to improve the
energy performance of smaller buildings that have currently do not have sophisticated onsite energy
management. These technological solutions will provide more consistent and predictable energy savings,
two things appraisers like. The availability of energy data will encourage more investment, but that data
will need to be monitored and acted on. When reviewing a proposal for a solar PV system, Finlay wants to
know who is going to manage the system to ensure it is performing in alignment with projections. “The
data is a really key part of the investment risk,” said Finlay.
CSA, Energy Efficiency Financing
Risk Assessment Project
FINANCING GREEN BUILDING PROJECTS
One of the great things about
investing in your own building
as a building owner is capturing
all of the benefits of energy
efficiency upgrades that go
beyond cost savings like
reputation, and attracting and
retaining top-quality tenants.
– James Finlay
INDUSTRY UPDATES

Steve Veres, District 22 Director for California State Senator Kevin de Leon, gave an overview of state
energy policy.
About three years ago the senator’s office conducted several town hall meetings throughout the state of
California to determine what barriers stood in the way of financing energy efficiency projects. They heard
from Class B property owners who were being barraged with vendor and contractor solicitations and just
weren’t sure which proposals offered the best value for their money.
This began an ongoing conversation with building owners, manufacturing and industry representatives,
and residents from which Prop 39, the California Clean Energy Jobs Act, was born. Prop 39 changes the
corporate income tax code to fund energy efficiency projects starting with schools.
“Revenue-generating ballot initiatives generally fail in the state of California at a rate of 80%,” said Veres.
“To have this one pass with some of the largest margins we’ve ever seen was really exciting. The level of
investment ($2.5 billion) that’s being made on Prop 39 for schools will hopefully bring the cost of doing
business as an energy efficiency provider to the point where it can take advantage of the economies of
scale, at which point we’re hoping that the positive impact will translate into the private sector, business,
residential, etc.”
Veres expressed the hope that Prop 39 continues beyond its initial five years horizon.
CA Clean Energy Jobs Act (Prop 39)
STATE ENERGY POLICY
From Sacramento, over the past
few years, we have had
tremendous directional growth
in supporting energy efficiency
efforts of the state from Prop 39
to the debate on cap and trade.
– Steve Veres
INDUSTRY UPDATES

LEGISLATION & CODES SECTION DIVIDERSIDEBAR HEADER GOES HERE
LEGISLATION AND CODES
CODES & STANDARDS
ACCESS ANDREPORTING

California has been a leader in energy efficiency regulation since the 1970s and continues to pass
progressive codes and standards pertaining to energy use and greening existing buildings. The next
generation of building codes and energy transparency regulation went into effect this year as Title 24
2013 and Assembly Bill 1103. These requirements, while generally positive measures to improve energy
efficiency and reduce emissions, can prove difficult to navigate for even the most savvy building owners
and operators.
Information about state and local codes and regulation has traditionally been decentralized and many
building owners voiced a concern that it is difficult to navigate through them and understand the impacts
of new requirements on their buildings. The same dynamic holds true for incentive programs meant to help
catalyze investment in energy retrofits and technology upgrades. The roundtable discussion revealed that
owners, managers, operators, and service providers are aware that there are incentives available to assist
them and their clients with energy upgrades, but that finding the correct program, applying for incentives,
and understanding the requirements is time consuming and some of the requirements to qualify for these
incentives are complex and cumbersome. Some building owners mentioned that they had to walk away
from some incentives because the costs to comply with them sometimes outweigh the benefits. Attendees
also expressed the desire for a central hub where they can search for and find information about applicable
programs, incentives, rebates, and services to help them improve their energy performance and meet or
exceed local and state codes and requirements.
According to the Department of Energy, energy cost savings
resulting in updates to commercial energy codes for the state of
CA are estimated to be close to $680 million annually by 2030.
Title24: Part 6 Energy Efficiency Standards
Lighting controls, HVAC Equipment, Windows
Title24: Part 11 GreenBuilding Standards
New construction, additions, alterations
AB1103: BuildingEnergy Disclosure
10,000 SF and over, mandated to track usage in
ENERGY STAR Portfolio Manager
LEADING THE WAY IN ENERGY LEGISLATIONCODES AND STANDARDS
CODES AND STANDARDS

Any property owner planning to a new building, addition, or significant remodel should become familiar with the
2013 updates to Title 24, particularly Part 6 - Energy Efficiency Standards and Part 11 - Green Building
Standards.
Part6ofTitle24,California’sEnergyEfficiencyStandardsforResidentialandNonresidentialBuildings,setsabaseline
energyefficiencyrequirementforbuildingandsystemdesignandconstruction.Thestandardswereupdatedin2013
andwentintoeffectonJuly1,2014.ThemostnotablechangesinPart6fornon-residentialbuildingsrelatetolighting
controls,HVACequipment,andwindows.
Part 11, California’s Green Building Standard Code known as CALGreen, was updated in 2013 with new
standards that went into effect on January 1, 2014. CALGreen, the first statewide mandatory green building
code, sets minimum environmental standards for construction of new buildings, additions, and significant
building alterations.
CALIFORNIA CODE OF REGULATIONS (CCR) TITLE 24
CODES AND STANDARDS
CALIFORNIA ASSEMBLY BILL 1103
CALIFORNIA ASSEMBLY BILL 1103 – NON-RESIDENTIAL BUILDING ENERGY DISCLOSURE
StartingonJanuary1,2014non-residentialcommercialbuildings10,000squarefeetandlargerarerequiredto
trackenergyusedatausingtheEnvironmentalProtectionAgency’sENERGYSTARPortfolioManagertool.This
regulationwillgointoeffectforbuildingswith5,000to10,000squarefeetstartingonJuly1,2016.AB1103
requiresthatbuildingownersgenerateaStatementofEnergyPerformance,aDataChecklist,andaFacility
SummarythroughthePortfolioManagertoolshowingthelast12monthsofbuildingenergydataandprovide
thisinformationtolendersandprospectivebuyers,aswellastenantsoftheentirebuildingatthetimeofsale,
financing/re-financing,orwholebuildinglease.Ownersmustalsosubmitanelectroniccompliancereporttothe
CaliforniaEnergyCommission(CEC)uponcompletionoftheseactivities.
Asaresultofthislaw,potentialbuyers,whole-buildingtenants,andlenderswillbeabletousetheenergy
performanceofthebuildingasafactorinvaluingtheasset.Asthedemandforhighefficiencybuildingswithlower
operatingcostsincreases,lessefficientbuildingsmaybecomelesscompetitive. Anybuildingownerplanningto
sell,finance/re-finance,orleaseabuildingshouldfamiliarizethemselveswiththerequirementsofAB1103and
ENERGYSTARPortfolioManager.
 CA,AB1103,BuildingEnergyUsageDisclosure
 CA,Title24–Part11,Energyuseinbuilding
 CA,ExecutiveOrder#S-20-04
 CA,AB32,GlobalWarmingSolutionsAct
 CA,SB375,Linksland-useandentitlementtoGHGs
 CA,AB811,On-billenergyfinancing
 CA,AB758,EnergyEfficiencyPlanforExisting
Buildings
 CA,AB1180,GlobalWarmingSolutionsActof2006
 CA,AB2227,IntegratedEnergyPolicyReport
 CASB39,Adddescription
 ZeroNetEnergyActionPlan
 GovernmentPerformance&AccountabilityAct
 CALGreen
KEY CALIFORNIA REGULATIONS

Legislationandcodesarenowrequiringahigherleveloftransparencyanddisclosurefrombuildingownersand
tenants,whichismeanttocatalyzemoreinvestmentsinenergyefficiencyprojects.
InaThinkTanksurvey,manyBandCbuildingownerscitedlimitedtimeasthereasontheyarenotmoreawareof
newregulations.Mostownerssurveyedwerenotplanningtosellapropertyorleaseawholebuildingtoasingle
tenantandthereforethenewAB1103requirementsdonothaveanimmediateimpactontheiroperations.The
additionaldocumentationandenergydatatrackinginPortfolioManagerrequiredbyAB1103werenot
perceivedasapressingissuetomostbuildingownersparticipatingintheroundtableand,ininterviews,some
ownersindicatedthattheydidnotfullyunderstandthenewrequirements.
Lastyearatthe2013ThinkTankRoundtable,participantsidentifiedtheneedforacentrallocationtoholdand
disseminateinformationaboutstate,local,andfederalcodes,regulations,andincentives.Thisyear,participants
citedDSIREwebsiteasagooddatabaseoflocalandnationalincentiveprograms.Theyalsomentionedthe
EnergyCodeAce.comasahelpfulresourcetohelpthembetterunderstandandlocateinformationregardingTitle
24,Part6triggers.
ApollofroundtableparticipantsrevealedthatthereisalackofunderstandingofTitle24andAB1103
requirementsandadditionaltrainingandeducationprogramstohelpthemnavigatethroughitwillbebeneficial.
Ininterviews,ClassBbuildingownersindicatedthattheyhadheardofthenewregulationsthroughtheir
contractorsandserviceproviderswiththemessagethatthenewprovisionsofTitle24willincreasetenant
improvementcostsandmakebuildingupgradescostprohibitiveforsomeowners.
CONCLUSIONRESOURCES
CODES AND STANDARDS
Title24
 AB1103
ENERGYSTARPortfolioManager
DSIRE
EnergyCodeAce.com

RENEWABLE
HYDRO GEOTHERMAL
WIND SOLAR
BIO-DIESEL BIO-MASS
EFFICIENCY
CO-GENERATION
EFFICIENT APPLIANCES EFFICIENT LIGHTING
EFFICIENT VEHICLES EFFICIENT BUILDINGS
INTELLIGENT POWER NETWORKS DECENTRALIZED GRIDS
CONSERVATION
GREY WATER RECYCLING ALTERNATIVE TRANSPORTATION
ENERGY EFFICIENCY
NO ANDLOW COSTMEASURES

A successful energy management strategy involves working with an interdisciplinary team of
representatives from owner, manager, and operator groups, setting goals, implementing cost-effective
strategies, measuring and tracking savings, and tenant engagement.
Once a team has been established, understanding how the building, or portfolio of buildings, is using
energy is the first step towards improving energy efficiency. ENERGY STAR Portfolio Manager, the same
tool required for AB 1103 compliance, is the industry-leading benchmarking tool that is used to track 40
percent of the U.S. commercial building space. Once energy data and building information has been added
in the tool, building owners, managers, and operators can create reports to better understand trends and
take steps to reduce wasted energy.
For buildings starting to implement an energy measurement strategy, no and low-cost measures are the
first step to improved energy performance, before investing in retrofits of new equipment. It is important
to take the right steps in the right order and start with energy tracking, equipment tune up and
adjustments, and load reduction.
Recommended steps for deep retrofits:
 Meter & tune up
 Lighting upgrades
 Load reduction projects
 Fan and motor systems
 Plant upgrades
Owners can also call their utility to discuss options for reducing their bills and to learn how they can start
saving energy.
Operations and Maintenance:
 Check that equipment is functioning as designed
 Calibrate thermostats
 Adjust dampers
 Adjust cleaning schedules (e.g. team cleaning or
day cleaning)
Lighting:
 Change incandescent lights to CFL and HID
 Convert T12 to T8 and T5
 De-lamp and disconnect unused ballasts
 Verify performance of full floor lighting sweeps
 Install occupancy sensors
 Use high efficiency LED exit signs
 Install timer controls of photocells for exterior
lights
Controls:
 Adjust temperature to what you actually need
 Set for lowest amount of dehumidification when
the building is unoccupied and raise the indoor
thermostat setting during the cooling season
 Evaluate after hours usage
 Adjust ventilation to reduce exhaust and outdoor-
air ventilation rates within code
 Optimize start-up time and equipment
sequencing
 Coast the last hour of operations
STRATEGY: NO AND LOW-COST MEASURES
ENERGY EFFICIENCY
ENERGY SAVING BEST PRACTICES

Class B and C buildings can reduce their operating
costs with no and low-cost operation and energy
efficiency strategies and apply the savings to
upgrades with shorter payback periods, such as:
 Installing occupancy sensors to control interior
lighting
 Installing daylight sensors to control exterior
lighting
 Installing aerating, low-flow faucets and
showerheads
 Insulate hot-water storage tank according to
manufacturer’s recommendations
 Insulate the first six feet of cold and hot water pipes
connected to the water heater
 Upgrading to efficient ENERGY STAR qualified
lighting
 Upgrading to LED exit signs
Source: Rocky Mountain Institute www.rmi.org 
ENERGY EFFICIENCY
Utilities represent an average of 21% of total building expenses.
– 2012 BOMA Experience Exchange Report
COMMERCIAL BUILDING CATEGORY EXPENSES BY BUILDING TYPE
ACTION ITEMS

According to the EPA, an average of 30 cents of every dollar spent on energy use in commercial buildings
is wasted through inefficiencies. Benchmarking energy performance and developing a plan are the first
steps in managing energy use with no capital investment needed. Energy management is an ongoing
process. It is okay to start small and make continuous improvements over time. Implementing an energy
management plan that starts with no and low-cost measures gives building owners the immediate benefit
of reduced operating costs and allows for better planning of larger equipment upgrades and building
retrofits in the future. For example, the City National Plaza building in Los Angeles was able to replace its
12 ton chiller with an 8 ton chiller as a result of load reductions from energy efficiency retrofits.
Roundtable attendees discussed the important role that contractors play in helping to identify energy
efficiency projects. Many Class B and C property owners do not have access to a sustainability team or an
energy manager so they rely on contractors to recognize and pitch sustainable building upgrade
opportunities. One place to start is for owners to call their utility to discuss options for reducing energy
and saving money.
ENERGY UPGRADE CALIFORNIA
The ENERGY STAR guide for small businesses
provides cost-effective ways to increase efficiency
and manage energy use through the retrofit process.
OFFICE BUILDING IMPROVEMENT TOOLKIT
Designed specifically for mid-size owners, this toolkit
offers practical steps to implementing a sustainability
plan and reducing operating costs.
ENERGY-EFFICIENCY CALCULATED
INCENTIVE PROGRAM A Southern California Gas
incentive program for qualified energy efficiency
projects such as equipment replacements,
improvements of existing processes, and new
equipment, processes, or construction.
BEDES: BUILDING ENERGY DATA EXCHANGE
SPECIFICATION A database of terms, definitions,
and field formats which was created by the Office of
Energy Efficiency & Renewable Energy to help
facilitate the exchange of information on building
characteristics and energy use.
LA GHG ASSESSMENT
Los Angeles County Building Energy Use and GHG
Baseline Assessment
CONCLUSIONRESOURCES
ENERGY EFFICIENCY

WATER EFFICIENCY SECTION DIVIDERSIDEBAR HEADER GOES HERE
WATER EFFICIENCY
1900
1940
2010
2015
2050
Colorado River
Annual Average
River Flow
NO ANDLOW COSTMEASURES

Source: U.S. Drought Monitor (http://droughtmonitor.unl.edu)
The current extreme drought in California has exposed vulnerabilities in the state’s water storage and
delivery systems. Outdated infrastructure, over pumping of ground water supplies, pollution of ground
water supplies by fracking and other activities, conflicting municipal and community policies, climate
change, increased demand, and limited access to alternative water sources contribute to increasing water
stress. While Los Angeles has maintained level water use per capita for the past forty years, a result of
successful metering programs, population growth has pushed water supplies to the limit. Climate change
has also greatly affected the snow pack water supplies and the underground water reserves are been
tapped at an unprecedented rate. The state is facing one of its worst droughts in history and a massive
effort will be needed to find solutions to meet its water demand needs.
In response to current conditions, Los Angeles Mayor Eric Garcetti signed an Executive Directive on
October 14, 2014 to reduce potable water use 20% by 2017. This includes removing turf landscaping at
city buildings and replacing it with native and drought-resistant plants. The directive also mandates the
Los Angeles Department of Water and Power (LADWP) to reduce water imports 50% by 2024.
It was also discussed that the cost of water is still quite low which makes the business case for making
water efficiency upgrades more challenging. Some attendees mentioned that a price signal would
incentivize water efficiency and lower water usage. The LADWP representative explained that because
they are a public entity, they cannot charge for the water. They can only charge to transport the water
and any rate increases need to be approved by the voters which makes the process for increasing the fees
for water very challenging.
CURRENT CONDITIONS
WATER EFFICIENCY
LOS ANGELES WATER SUPPLY
51%
Purchased from
Metropolitan
Water District
37%
LA Aqueduct
11%
Groundwater
1%
Recycled Water

LADWP provides extensive prescriptive and menu-based programs as well as more flexible technical
assistance programs to incentivize water use reductions. The technical assistance programs require more
upfront involvement from property managers but also cover a larger variety of costs associated with pre-
approved water conservation measures, including consulting fees. In recent years, technical assistance
programs have increased in popularity and have surpassed the traditional menu-based programs. These
ratepayer-funded programs are offered at no additional cost to residential and commercial customers. By
the end of 2014, LADWP will have invested$60 million dollars in water conservation incentive programs.
133 GALLONS/DAY/PERSON
Daily water use (LADWP) all customers. Second
lowest in the nation for cities over 1 million
people. NY beats LA.
WATER EFFICIENCY
Source: California Department of Water Resources 

As water efficiency regulations become more stringent and water rates continue to rise, property owners
and operators can reap immediate benefits from low-cost measures such as the installation of aerators
and quickly recoup investments in upgrading indoor water fixtures.
Building managers can reduce water use by installing low-flow or ultra low-flow fixtures, fittings, and
equipment, such as toilets and urinalsthat exceed currentcoderequirements per recommendations below:
 Water closets, max 1.6 gallons/flush
 Urinals, max 0.125 to 0.5 gallon/flush
 Shower Heads, max 1.8 gallons/minute
 Faucets, max 1.0 gallons/minute
 Replacement aerators, max 0.5 gallons/minute
 Metering faucets, max 0.25 gallons/cycle
To help meet the City’s aggressive water conservation goals, building owners will be encouraged to move
beyond upgrades to efficient indoor water fixtures for deeper savings. Cooling towers and outdoor water
use account for an average of 70% of building water consumption, making them the target of increased
water conservation efforts.
Reclaimed water is currently restricted to limited areas. There are plans to further develop water
reclamation projects for Los Angeles, however, its use is limited by state health requirements and the
high cost of pumping plants and distribution facilities to deliver water from the reclamation plants to the
customers. Robert Estrada of LADWP reports that the cost is an estimated million dollars per mile of
purple pipe. However, if Assembly Bill 2282 passes, all new residential and commercial construction with
access to reclaimed water will be required to incorporate it into approved uses, such as landscaping, and
reclaimed water infrastructure would necessarily expand.
The state’s water supplies are at all times low, underground water supplies are rapidly diminishing and
demand for water continues to grow. Solutions to solve our water supply needs will involve many
different solutions from efficiency programs to lower demand, a price signal and a search for new water
sources, and importing water and desalinization plants.
LOS ANGELES DWP
Since 1990, LA Department of Water and Power has
spent about $280 million on conservation programs.
METROPOLITAN WATER DISTRICT
Metropolitan provides rebates on water efficient
fixtures, financial assistance for water reduction
projects, and incentives programs.
MAYOR’S DIRECTIVE TO CUT WATER USE
(LA Times article) LA Mayor Eric Garcetti signed an
executive directive to further cut potable water use.
20X2020 WATER CONSERVATION PLAN
Statewide plan enacted in 2010 to reduce water
consumption by 20% by 2020.
SENATE BILL SB X7-7 2009
This Senate bill requires all water suppliers to
increase water efficiency.
WATERSENSE
A recognized seal of approval for water efficiency
similar to ENERGY STAR.
DOE WATER EFFICIENCY BMP'S
Water Efficiency Best Management Practices from
the US Department of Energy.
CONCLUSIONRESOURCES
WATER EFFICIENCY

FINANCE SECTION DIVIDERSIDEBAR HEADER GOES HERE
FINANCE
FINANCE
VALUATIONAND TANGIBLEBENEFITS

Despite the benefits of high-performance buildings – increased occupancy, reduced operating expenses,
higher rent – there are still barriers to financing building upgrades. A number of financing mechanisms
exist to help building owners and managers overcome barriers to improving building performance
through major retrofits and upgrading to more efficient equipment.
Traditional financing, loans, and bond programs are available, although some building owners struggle to
find a bank that understands the benefits of efficiency projects and will offer favorable terms. When
applying for a bank loan for an efficiency project, finance experts at the roundtable suggested that
building owners highlight the positive changes they have made to the building in recent years and
emphasize what is happening at the property at the time of the request, not three years into the future.
One way to encourage decision-makers to allocate funding to efficiency projects is to show that energy
retrofits do more than reduce operating expenses – they have a positive impact on property values and
intangible benefits such as market differentiation and reputation. Owners can work with a professional
real estate appraiser at the project-planning phase to ensure that their energy and green building
investments are accounted for in the valuation of their property.
PACE programs, energy service agreements, on-bill
financing, incentives, and rebates are additional tools in
the building owner or manager’s financing toolbox.
STRONG PAYBACK RESULTS
 Average payback of 1.4 years
ROI of 73% in the first year
 All 25 projects demonstrated
strong positive returns across geographies
and across levels of LEED certification
GREEN PREMIUMS
 Properties with green certifications demonstrate
rental rate premiums ranging from 3.7-6%
 Premium values for energy-efficient real estate
are supported by strong occupant demand
 Green rentals: supply of green buildings
perceived to be sub-optimal relative to demand
BUSINESS BENEFITS
 Energy cost savings
 Decrease in operating costs
 Increase in ROI
 Increase in overall occupancy
 Rent increase
Source: Urban Land Institute, 2010, Retrofitting Office Buildings to
be Green and Energy-Efficient: Optimizing Building Performance,
Tenant Satisfaction, and Financial Return
VALUATION & TANGIBLE BENEFITSFINANCIAL RETURNS FROM
GREENING EXISTING BUILDINGS
FINANCE

FINANCE
The first step in any retrofit project is to have a clear understanding of the asset, how the building
performs, and where there are opportunities for improvement. By demonstrating that an upgrade is part
of a robust energy management plan and that low and no-cost measures have already been implemented
at the property, owners can secure more favorable terms from lenders.
When it comes to financing, every project and every borrower’s situation is unique. The most common
performance contracts are still financed by energy service companies (ESCOs) although PACE, On-Bill
Financing, and Energy Service Agreements are on the rise.
CLASS B BUILDING ENERGY EFFICIENCY
FINANCING CALCULATOR
Built for Class B buildings. Develops a cash flow
analysis with low, expected, and high energy savings
scenarios using information from an onsite audit.
APPRAISAL INSTITUTE’S GREEN ADDENDUM
Thefirstresidentialgreenandenergyefficientaddendum
reportdevelopedbytheAppraisalInstitute.
PACE
Report from the American Council for an Energy-
Efficient Economy to foster improved energy
efficiency finance programs.
ON-BILL FINANCE
Zero Percent On-Bill Financing eligibility
requirements from SoCalGas website.
ZERO-INTEREST LOANS
SoCalGas offers zero-interest, unsecured loans of
$5,000 to $100,000 per meter to customers who
participate in their incentive and rebate programs.
GREEN BUILDING AND PROPERTY VALUE
Resource guide for owners and developers
distributed by the Appraisal Institute and the Institute
for Market Transformation.
VALUE BEYOND COST SAVINGS
How to Underwrite Sustainable Properties: Free
downloadable book by the Green Building Finance
Consortium offers guidance on how to integrate value
and risk when making capital improvement decisions.
CONCLUSIONRESOURCES
Assess Performance
+
Implement No and Low Cost
Measures
+
Upgrades as part of
energy management plan
=
Favorable terms from lenders

CLOSING REMARKS SECTION DIVIDERSIDEBAR HEADER GOES HERE
CLOSING REMARKS
CLOSING REMARKS & APPENDIX

OBSERVATIONS AND RECOMMENDATIONS
1. Theadoption ofsmart metertechnology presentsa great opportunityforutilities
toanalyzeenergy usedatatoimproveenergy efficiency programsand further
engage customers.Customers canusetheirenergy usedatato monitorbuilding
performanceandidentify cost-effective upgradeopportunities.
2. Building ownerscan benefit from customizedrecommendations ontheirmonthly
bill based onenergy and/orwaterusage.
3. Utilitiescan create simplifieddecisionchartsforBandCbuildingsthat help them
prioritizeupgradesbasedonenergy andwater usage.
4. Contractors are the operations and maintenance staff for B and C buildings.
Provide them with the tools and skills they need to green the existing building
stock in the most cost-effective way possible.
5. Streamlinetheincentivesandrebateapplicationprocess sothat ownersand
managerscanimplement andcompleteincentivedocumentationin under10
minuteswithout professional consultation (labtest results,etc.).
According to a 2014 report released by ACEEE , energy efficiency programs aimed at reducing energy
waste cost utilities only about three cents per kilowatt hour, while producing that same amount of
electricity costs two to three times more. All in all, utilities who want to provide cheap, clean electricity
should turn to energy efficiency first and foremost.

The most prevalent topics of discussion atthe 2014 Existing Buildings Think Tank Roundtable were about :
1. How to further engage owners of Class B & C buildings that do not have many resources attheir disposal
2. How to icrease participation inunderutilized programs
3. How to share and accessinformation about changes to codes andstandards
SoCalGas efficiency programs would benefit from engaging deeply with asmall,selectgroup of B and C
owners who will participatein an energysavings casestudy. Each building owner or manager would be
assigned an“energy coordinator” or consultant who will walk them through energy management plan
development, energy tracking, savings analysis, and monitoringthe progressfromstartto finish.This will allow
SoCalGastoseewhathappenswhenatypicaluserappliestheirtoolkitsandwherethegapslie,what’sworking,
andwhat’snotworking.Thisfreeprogramforparticipantownerswillbesupportedthroughpartnershipswith
organizationslikeLABBC,USGBC-LA,theCityEnergyProject,etc.TheUSGBC-LAAmbassadorsProgram,for
instance,canprovidecustomenergy-savingrecommendationsbyreviewingutilitybills.LABBChasalistof
preferredcontractorsandoffersreducedratesonequipmentinstallationfromthosevendors.
This program would spanthe courseof eight months to a year. The firstinitiative would be toidentify Class B
and C champions to participateinthe program and assign them an energycoordinator. The first month would
be dedicatedto assembling ateam, settinggoals, and entering atleast two yearsof energy and water datain
ENERGY STAR Portfolio Manager. Monitoring energy use and identifying andimplementing no andlow cost
measures, such as occupant engagement, wouldtake placeinmonths 2-6. Afull audit wouldthen take place
and the application period for cost-effective upgrades would begin.Theconsultant will walkthe owner
throughthe entire process andinvolve partnersfromthenetwork as needed.The end result would be a case
study for SoCalGas to use for resource/program development and marketing purposes.
With thelaunch ofseveral exciting programsinthe last year—LA2030 District, USGBC-LAEnergy and Water
Ambassadors, the California Sustainability Alliance Class B Toolkit, and numerous SoCalGas energy-efficiency
rebates– there are more tools and resources available to improve building performancethan ever before.
Roundtable attendees expressed hope thatthis work will unify theindustry and empower stakeholderstotake
the next step in owning, managing, andoperating more sustainable buildingsthat benefit investors, tenants,
and their communities.
ENERGY SAVINGS CASE STUDY
Identify Class B & C champions
Assign energy coordinators
Assemble program team and set goals
Document 2+ years of energy and water
data in ENERGY STAR Portfolio Mgr
Monitor energy and water use
Identify and implement
no and low-cost strategies
Full audit
Cost-effective upgrades application
Case study for SoCalGas for resource/
program development and marketing
CLOSING REMARKS
Month1|Months2-6|Months7-8/12|

PARTNERS & SPONSORS
The Think Tank Roundtable was made possible with
the support and partnership of the following
organizations:
CALIFORNIA SUSTAINABILITY ALLIANCE
sustainca.org
USGBC-LA EXISTING BUILDINGS COMMITTEE
usgbc-la.org/branches-commities
VERDANI PARTNERS
www.verdani.com
COMMONWEALTH PARTNERS
www.commonwealth-partners.com
LEADING EDGE
www.leconsultants.net
EVENT ATTENDEES
Daniele Horton
Doug Avery
Cecila Jackson
Chikezie Nzewi
Sara Hickman
Mark Fulton
Joe Sullivon
Marc Costa
Blair Seibert
Sara Neff
Jon Barton
Dennis Thurman
Craig McDonald
James Tosh
Kevin Devine
Alex Brown
Robert Estrada
Karen Hutchens
Zachary Andrews
Sharla Shimono
Jim Wilson
Vickere Murphy
Frank Gaugler
Devin Saylor
Aida Cardenas
Robert Ciani
Kyle Wacyra
T.J. Tutay
Seth Strongin
Michelle Newman Pario
Hilary Firestone
Annette Davis
Martha Cox-Nitikman
Drew Shula
Carla Gavina
William Lowery
Jocelyn Carrillo
Kiana Henry
Mike Taylor
Shobhit Baadkar
Michael Napoli
Kevin Norris
Joan S. Marshall
Rhina Ovalle
Cecilia Jackson
Kasha Bali
Jacqueline Mezquita
Nick Kiefer
James Finlay
Dave Hodgins
Lisa Colicchio
Warren Hill
Danny Leung
Maya Henderson
Steve Veres
Shieva Taat
Malica Johnts
Mark Klein
Juan Ovalle
Flora Nguy
Cing Chang
Tanya Goyette
Will Wright

2014_Class-B-Report_CSA

Recommended

Recommended

More Related Content

Similar to 2014_Class-B-Report_CSA

Similar to 2014_Class-B-Report_CSA (20)

2014_Class-B-Report_CSA