Client Alert: State of Maryland and Montgomery County(MD) Adopt New Build Energy Performance Standards

Summary

The Montgomery County Council (MD) recently unanimously approved the County’s Building Energy Performance Standard (BEPS) law. In addition, Maryland’s Climate Solutions Now Act has become law.

The sweeping Maryland law addresses buildings and many other aspects of Maryland’s economy. It commits the State to reducing greenhouse gas emissions by 60% below 2006 levels by 2031 (up from the 40% reduction already in law). It also sets a goal of achieving carbon neutrality by 2045.

Montgomery County’s Bill 16-21 includes certain Building Energy Performance Standards (BEPS). The legislation becomes effective July 31, 2022. 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 under the County's Benchmarking Law as the basis for the standards. 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.

Background

Buildings covered under Bill 16-21 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.

In addition, 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.

The new law expands the number of buildings covered by the County’s existing Benchmarking Law to include additional County-owned, commercial and multifamily buildings and establish long-term standards for those buildings and require the use of less energy.

This new BEPS law will expand the number of buildings covered to include commercial and multifamily buildings that are 25,000 gross square feet and greater. Montgomery County currently has more than 5,000 commercial and multifamily properties that cover more than 288 million square feet of rentable building area. The County’s commercial building stock is primarily made up of office, multifamily and retail buildings. Commercial buildings account for 26 percent of community-wide greenhouse gas emissions in the County.

Montgomery County is among the first local jurisdictions in the nation to embark on this type of ambitious, game-changing legislation.