Philadelphia Building Energy Performance Tune-Up Time

January 11, 2021
Brenda H. Gotanda, Esq.
MGKF Special Alert - Pennsylvania Forecast 2021

This year Philadelphia takes its next step toward improving energy efficiency and reducing the carbon footprint of large commercial buildings in the city through implementation and initial deadlines under the Building Energy Performance Policy (the Policy), also known as the Building Tune-Up Program. The Policy, passed by City Council a little over a year ago, creates a program that requires owners of large non-residential buildings to conduct a “tune-up” of their building’s energy and water systems and to certify building performance to the City of Philadelphia Office of Sustainability (OOS). Regulations were issued by the OOS in October 2020 to provide clarifying information on program implementation, exemptions, and deadlines. Philadelphia projects that the Policy will result in a reduction of carbon pollution in the city of nearly 200,000 metric tons and will help to achieve Mayor Kenney’s goal of reducing carbon emissions 25 percent by 2025.  

The Policy applies to all non-residential buildings with an indoor floor space of at least 50,000 square feet. This includes mixed-use buildings with areas of non-residential use greater than the threshold, industrial and manufacturing facilities, and buildings used for temporary lodging such as hotels, motels, and short-term rentals. However, it does not include residence halls, dormitories and other non-transient large lodging places or parking lots and garages. 

Owners of covered buildings must perform a “tune-up” on their base building systems that use energy or impact energy consumption (e.g., building envelope, HVAC, electrical lighting, conveying, and domestic hot water systems). The required tune-up consists of two components, an inspection supervised by an approved Qualified Tune-Up Specialist and corrective actions to increase energy efficiency. The Specialist must prepare a Tune-Up Report containing findings and recommendations regarding each of the required inspection elements and the report must be submitted to OOS by the Policy deadlines, which are based upon building size.

The first compliance deadline under the Policy is September 30, 2021 and applies to the largest buildings, namely those that are 200,000 square feet or larger. In light of COVID-19, however, the regulations provide that this first tune-up compliance deadline may be extended to March 30, 2022 for building owners who submit a request for deadline extension to OOS by April 5, 2021. The next tune-up compliance deadline is September 30, 2022 and is applicable to buildings between 100,000 and 200,000 square feet in size. Tune-up deadlines for smaller buildings (those from 70,000 to 100,000 sq. ft and from 50,000 to 70,000 sq. ft) will occur in 2023 and 2024, respectively. Large portfolio owners may apply to OOS for an alternative compliance schedule.

The Policy provides a number of exemptions to the tune-up requirement. These include, among others, exemptions for certain high-performing buildings that have met the requirements of the City’s building Benchmarking Policy for the prior two years and satisfy other applicable criteria. For example, buildings that have achieved an ENERGY STAR Score of at least 75 or achieved LEED Gold O&M v.4 or Net-Zero Energy Certification or better may qualify. Likewise, buildings may also qualify if they achieve certain levels of energy savings, have completed a retro-commissioning program or implemented certain measures following an energy audit. Specific criteria and timeframes for achieving the exemption criteria are set forth in the Policy. Building owners may request an extension of time to meet compliance deadlines applicable to exemptions, however, requests must be submitted in accordance with the specified timeframes.    

Large building owners in Philadelphia covered by the Policy should familiarize themselves with the applicable requirements, exemptions, and deadlines and begin to chart a path toward achieving their selected compliance option.