This past summer, Washington State property owners began receiving letters from the Department of Commerce regarding Washington’s new Clean Buildings Performance Standard (CBPS) program. Although first created in 2019, the CBPS program has a graduated implementation schedule and is not yet widely known in the state. As a result, these letters left many unsure of what is required and when. The information below outlines what the program is, the compliance requirements, when they take effect, and key next steps that building owners can take now.
Clean Buildings Performance Standard Program
The CBPS was established in 2019 as part of Washington State’s broader effort to reduce greenhouse gas emissions and improve energy efficiency. The program was created through the passage of House Bill 1257, which directed the Department of Commerce to develop mandatory energy performance standards for existing large commercial buildings, long seen as one of the largest sources of carbon emissions in urban areas. In 2022, the legislature expanded the law through Senate Bill 5722, which expanded compliance requirements to smaller commercial and multifamily buildings. The stated goal of the program is to encourage commercial building owners to implement energy efficiency and improvements to their buildings in order to, more generally, realize cost savings and reduce carbon emissions.
The program utilizes a two-tier system based on building size and type. Commercial buildings 50,000 square feet or larger (including office buildings and hotels) are classified as Tier 1. Commercial buildings containing between 20,000 and 50,000 square feet and multifamily buildings containing at least 20,000 square feet are classified as Tier 2. Compliance requirements and reporting deadlines under the program vary depending on which tier a building falls under.
Tier 1 Buildings
For Tier 1 buildings, owners are required to (i) measure and track building energy use over time, (ii) implement an operations and maintenance program that complies with CBPS standards, (iii) create and implement a broader energy maintenance plan, and (iv) either meet an energy use intensity (EUI) target, or perform an energy audit and implement certain cost-effective efficiency measures based on the audit results.
The CBPS program has staggered compliance deadlines for Tier 1 buildings, depending on building size. Buildings containing over 220,000 square feet must comply by June 1, 2026; buildings containing between 90,000 square feet and 220,000 square feet must comply by June 1, 2027, and buildings containing between 50,000 and 90,000 square feet must comply by June 1, 2028.
Tier 2 Buildings
For Tier 2 buildings, owners are required to (i) measure and track building energy use over time, (ii) implement an operations and maintenance program that complies with CBPS standards, and (iii) create and implement a broader energy maintenance plan.
All Tier 2 buildings are required to comply with these requirements by July 1, 2027.
Penalties and Enforcement
If a building owner fails to demonstrate compliance with CBPS requirements by the scheduled deadline, the Department of Commerce may issue progressive notices and administrative penalties.
The enforcement process begins with a Notice of Violation and Opportunity to Correct, functioning as a formal warning with a seven-day cure period. If no response is received, the Department of Commerce may issue a Notice of Violation and Intent to Assess Penalties and begin assessing administrative fines. At that point, owners must submit an exemption application, file a noncompliance mitigation plan (which may reduce penalties), request a hearing in the event of mitigating circumstances, or simply agree to pay any fees due.
Penalties are not insignificant: up to $5,000 per building, plus $1.50 per square foot per year for Tier 1 buildings, and $.30 per square foot per year for Tier 2 buildings. For owners who submit a mitigation plan and show progress toward compliance, fines may be reduced to 30% of the base penalty and $0.20 per square foot per year. But ignoring the notices or failing to meet the next compliance deadline can result in full penalties, and will likely cause the state to pursue collection, interest, and additional late fees.
Exemptions
Building owners may qualify for an exemption from CBPS requirements if they satisfy one or more of the following criteria:
- Lack of a certificate of occupancy for 12 consecutive months in the two years prior to the compliance date;
- Less than 50% physical occupancy in the year before compliance;
- Small conditioned space (less than 50,000 sq ft of conditioned/semi-conditioned space);
- Industrial or manufacturing use (over 50% of floor area);
- Use as an agricultural structure;
- Pending demolition; or
- Certain types of financial hardship, such as foreclosure, receivership, or recent deed-in-lieu transfers.
Building owners must apply for an exemption no earlier than three years, and no later than 180 days before the applicable compliance deadline. Additionally, even if an exemption is granted, an owner must re-certify that the building still qualifies for the underlying exemption within six months of the compliance date.
Early Adopters
Washington hopes to encourage early engagement with and adoption of the CBPS program through financial incentives to help offset building owners’ compliance costs. Completely voluntary, the Early Adopter Incentive Program offers up to $2.00 per square foot, plus $.05 per kBtu of energy saved over 15 energy use intensity for Tier 1 buildings, and $.30 per square foot for Tier 2 buildings for owners that can demonstrate full compliance with the program before the applicable above-mentioned deadline. Interested building owners must submit an application to obtain such funds, and applicable buildings must be served by a utility provider participating in the early adopter program. Funding is available on a first-come, first-served basis, and total available funds are capped at $75 million for Tier 1 buildings and $150 million for Tier 2 buildings.
Next Steps
If you own, manage, or oversee a building potentially subject to CBPS, the recommended next steps are as follows:
- Assess whether the building is a Tier 1 or Tier 2 property.
- Review the applicable compliance deadlines.
- Engage technical experts early (energy auditors, engineers, or specialized firms to implement benchmark, audit, and energy saving measures).
- Begin drafting EMP and O&M protocols now so they can be implemented ahead of reporting deadlines.
- Consult legal counsel for structuring responsibilities, guidance on incentive applications, and managing risk.
- Monitor rulemaking and program updates, as the state may refine regulations, metrics, or administrative interpretations over time.
Please reach out to Carl Rubinstein for more information on any of the above information or the Clean Buildings Performance Standard more generally. Additional information on the program can be found on the Department of Commerce CBPS website.
