Some condo boards in Ontario are looking for loopholes to the coming requirement to annually report the overall energy and water use of large buildings, but there are none to be found for those captured by the new regulation under the Green Energy Act.
Owners of multi-residential buildings that house more than 10 units and span more than 100,000 square feet will be obligated to file their first report by July 1, 2019, for the 2018 calendar year. Owners of multi-residential buildings that span more than 50,000 square feet will be obligated to file their first report by July 1, 2020, for the 2019 calendar year.
Nancy Houle, partner at Davidson Allen Houle, sympathized with condo boards and managers who have to add this to their to-do list, pointing out that they are wading through a sea of change ushered in by recent condo law reforms, which introduced some annual reporting requirements of their own.
“While it’s [the requirement to report energy and water use] good for the environment, it’s an additional burden on condo boards and managers who are just trying to get done everything that they have to,” she said. “The theme of the questions is really: Is there any way our condo doesn’t have to report?”
The short answer, from the Ottawa-based condo law firm, is no. The requirement for large building owners to annually report their overall energy and water use is just that — a requirement, said David Lu, an articling student at Davidson Allen Houle.
“Although the regulations don’t include enforcement mechanisms at this time, this does not mean that condominium corporations can pick and choose as to whether to comply,” he said.
Lu explained that ignoring legal obligations could constitute a breach of condo board directors’ duty to perform their role diligently, honestly and prudently. What’s more, he said, an owner could force them to comply by taking them to court — and it may be relatively easy to find out whether a particular condo corporation has been filing.
The Ministry of Energy said in an email that ‘non-filers’ could be named and prevented from accessing money set aside to offset the upfront costs faced by building owners who undertake utility bill-lowering projects.
“Buildings that fail to report may be listed publicly on Ontario’s Open Data catalogue as a non-filer,” said the ministry. “Non-filers may be ineligible for energy efficiency incentives in the future.”
Ontario’s Open Data catalogue will also house information about the buildings whose owners have fulfilled the requirement to report their energy and water use, including their address and measures of their energy performance. The data that building owners report in their first year of filing will remain private as they establish their baseline results.
Mandatory energy and water use reporting will give owners a sense of how their building is performing compared to other buildings of the same type as data is publicly shared. This visibility may also motivate poor performers in particular to take steps to improve their building’s operations.
“By identifying and benchmarking a condominium’s energy and water use, condominium corporations can identity cost effective opportunities to reduce energy costs which can benefit all condominium owners,” said the ministry.
Ontario is following the example set by jurisdictions including Chicago and New York. The provincial government introduced energy and water use reporting requirements to public sector buildings first and will now roll out the requirement to large commercial, industrial and residential buildings over the next three years. Owners of the largest commercial and industrial buildings will be the first private sector group to face the filing obligation this year, and the requirement will ultimately apply to around 18,000 buildings.
Rob Detta Colli, manager of energy and sustainability with Crossbridge Condominium Services, said the vast majority of the buildings in his employer’s portfolio, which are concentrated in the GTA, will likely face the filing obligation in 2019. He said condo corporations can get a rough idea of whether their buildings are considered large for the purposes of mandatory energy and water use reporting by using 50 units as a yardstick for the 50,000-square-foot threshold and 100 units for the 100,000-square-foot threshold.
Whether a quick way to calculate gross floor area will be made available to condo corporations is one of the logistical considerations that have yet to be worked out, as is the process for obtaining energy and water use data from utility companies, who will be legally obligated to supply this information. In the meantime, Detta Colli said he is advising condo corporations to wait for commercial and industrial building owners go through their first reporting period this year and details like these to get ironed out.
What does appear to be clear at this point is that, while condo corporations may instinctively look to their condo managers to fulfill this requirement on their behalf, managers likely lack the technical expertise to do so. Detta Colli explained that this is an area where, much like condo corporations engage lawyers in legal issues, they will likely need to engage consultants with the know-how to help them report the overall energy and water use of their buildings. He said it’s not as simple as looking at utility bills and using a tape measure — the data must be input using ENERGY STAR Portfolio Manager, an industry standard software tool developed by the U.S. Environmental Protection Agency specifically for benchmarking.
Ankush Randhawa, new product development manager at Enercare, said that whomever condo corporations work with, it’s important to leave time for building data to be collected and verified to avoid a last-minute scramble to meet the filing deadline.
“The opportunity here is not just to be compliant, but also to use this exercise for better understanding your building’s energy use,” Randhawa added. “Apart from the compliance and the environmental concerns, the financial benefits of energy management can be quite attractive.”
Energy and water use represent major costs for condo corporations, generally accounting for around half of maintenance fees, Detta Colli observed. It follows that the public sharing of consumption data could have a positive impact on property values in high-performing buildings, which are likely to be more attractive to prospective buyers not just from an environmental perspective but also from a financial perspective.
More broadly, he said mandatory energy and water use reporting could shift the focus of condo corporations from replacing equipment to running equipment more efficiently, noting that incentives that have long prioritized retrofits, leaving operations-oriented energy-saving opportunities untapped.
“The analogy is the efficient car,” Detta Colli explained. “If you’re not an efficient driver, then your car won’t be as efficient as it was designed to be.”
Michelle Ervin is the editor of CondoBusiness.