On June 5th NAIOP submitted comments on the Maryland Department of Environment’s draft Building Energy Performance Standards urging the department to make changes to ensure building performance targets and Alternative Compliance Fees are technically feasible and financially realistic.
The 2022 Climate Solutions Now Act (CSNA) required that apartments, condominiums and tenant spaces in more than 9,000 buildings reduce net direct emissions 20% by 2030 and reach net zero emissions by 2040. The regulation expands the scope to include reductions in Energy Use Intensity (EUI), adds an interim deadline to reduce emissions 60% by 2035 and proposes fees and penalties for non-compliance.
From the NAIOP comment letter:
NAIOP has serious concerns about the regulation in its current form. The proposal presents an unreasonably short, technically narrow, financially severe compliance pathway.
The regulation includes new requirements such as the regulation of electricity use (EUI) that serves to reduce off-site utility sector emissions rather than direct building emissions, and a new interim emissions limit in 2035 that essentially brings forward the net zero requirement from 2040 to 2035. Both provisions are beyond the scope of authority granted by the Climate Solutions Now Act (CSNA).
The regulation does not include provisions that are required by the CSNA such as allowances for the use of biofuels, provisions for the very common situation when tenants control utility use and building mechanical equipment, nor does the regulation appear to set its emissions limits by comparing buildings of like construction instead doing so only by building use type.
The civil penalties for electricity use are punitive ($25,000/day) and the Alternative Compliance Fees ($360/ton) are unnecessarily high, setting the stage for building owners and occupants to pay ten times more than a public utility would pay in the RGGI market per ton of C02 emitted. The proposed $360/ton Alternative Compliance Fee is higher than the $190 central value proposed by EPA, the $127/ton fee adopted by New York State and three times the $100 fee used by MDE in modeling the program. There is no indication of how that money will be spent to benefit the fee-paying public.