(d)2 ENERGY AND WATER
BUILDING PERFORMANCE
ORDINANCE STATUS REPORT
Transportation & Environment Committee
August 10, 2026
Presenters:
Lori Mitchell, Director, Energy Department (ED)
Julie Benabente, Deputy Director, ED
Jenna Neustaetter, Environmental Services Specialist, ED • Background
• Compliance Process
• Data Analysis
• Planned Improvements
• Future Considerations
• Questions
AGENDA
2 • Buildings account for 29% of communitywide greenhouse gas emissions
• 2018 - City Council adopted the Building Performance
Ordinance (BPO)
• Supersedes statewide benchmarking requirement (2015)
• ~1,800 “Covered Buildings” include:
• City-owned buildings with a gross floor area (GFA) of 15,000+ square feet
• Privately-owned commercial and multifamily buildings
with a GFA of 20,000+ square feet
BACKGROUND
3 • $150 annual fee applied to City implementation costs:
• 1.0 FTE Energy Dept., plus Energy and Finance Dept. support staff • Customer management software and online map, mailing/ outreach • For data transparency, have published:
• Interactive San José Building Performance Ordinance Public Disclosure Map • Data set to the City’s Open Data Portal
BACKGROUND (CONT’D)
4 Two separate requirements:
COMPLIANCE PROCESS
Applies annually
(starting in 2019) to all
Covered Buildings
Report 1 year energy
and water usage to the
City using Energy Star
Portfolio Manager®
online platform
Annual
Benchmarking
Reports* Applies every five years
(starting in 2023) to a
subset of Covered Buildings
Meet energy/water
efficiency metrics
(Performance Pathway) OR
choose an eligible action to
take (Improvement
Pathway)
Beyond
Benchmarking
5 *Annual energy benchmarking is already required under Assembly Bill 802 ...and so on
2023:
First subset
(~220)
chooses
pathway
2024:
Second
subset
(~380)
chooses
pathway
2025:
Third subset
(~380)
chooses
pathway
2026:
Fourth
subset
(~350)
chooses
pathway
2027:
Fifth
subset
(~350)
chooses
pathway
2028:
First subset
goes again
(five-year
cycle)
COMPLIANCE PROCESS (CONT’D)
6 Beyond Benchmarking Timeline
In the last 3 reporting years (2023-2025):
• 87% average benchmarking compliance rate
• 71% average Beyond Benchmarking compliance
rate
• ~7% annual benchmarking report exemption rate
• ~13% Beyond Benchmarking exemption rate
DATA ANALYSIS – OVERALL COMPLIANCE RATES
7 8
DATA ANALYSIS - BEYOND BENCHMARKING
Of all Beyond Benchmarking submittals between 2023 - 2025:
• 50% were exclusively the Performance Pathway
(showing energy and water efficiency)
• 26% were exclusively the Improvement Pathway
(audit, retro-commissioning, or efficiency improvement measures) • 24% were a mix of both pathways (one for water, one for energy) Of those that did the Improvement Pathway:
• 89% chose to do a utility audit
• 10% chose to implement efficiency improvement measures • 1% chose to do a retro-commissioning report
9 DATA ANALYSIS - ENERGY AND WATER
Based on the submitted data, there has been a:
• 12% reduction in median energy use intensity (EUI) (kBtu/ sq.ft.) • 9% reduction in median water use intensity (WUI) (gallons/ sq.ft.) • 10% increase in median Energy Star® Scores (ESS) (score of 0-100, 100 being most efficient)
Based on the data above, Covered Buildings have reduced energy consumption by an average of 2.4 percent annually – in line with other benchmarking program data across the U.S.
10 DATA ANALYSIS - GREENHOUSE GAS EMISSIONS
Since calendar year 2019:
• Median greenhouse gas emissions per
building have decreased by 35%
• Total greenhouse gas emissions per
square foot across all reporting covered
buildings have decreased by 38%
Likely multiple causes contributed to this
reduction.
11 The following are planned for implementation in Fiscal Year 2026-2027:
1. Survey of building owners on Beyond Benchmarking impact, planned upgrades, and how the City could provide further assistance
2. Update Ordinance to add more options and flexibility to the list of efficiency improvement measures
3. Create Covered Building case studies to facilitate information sharing among building owners
4. Facilitate Covered Building action by connecting to incentive programs
5. Increase coordination with San José Clean Energy (SJCE) outreach
PLANNED IMPROVEMENTS
12 OPTIONS FOR FUTURE CONSIDERATION
Over the next fiscal year staff will evaluate a variety of options including:
1. Evaluate best practices from other cities
2. Streamline and/or reduce the cost of compliance:
• Allow virtual audits
• Conduct a procurement process to provide lower cost virtual audit option(s)
• Remove water and/or third-party data verification from Beyond Benchmarking requirements
• Evaluate how businesses with onsite solar can simplify reporting • Evaluate the use of AI to aid Ordinance implementation 13 OPTIONS FOR FUTURE CONSIDERATION (CONT’D)
3. Update ordinance to: Add reduction in onsite greenhouse gas emissions as a Performance Pathway option
4. Require emission reductions and increased energy efficiency over time via a Building Performance Standards Policy (replacing current ordinance)
5. Support upgrade option in Improvement Pathway: Develop a SJCE pilot program for commercial customers around smart thermostat incentive(s)
6. Analyze submitted Beyond Benchmarking audits to evaluate projects identified, energy and cost savings potential, and where the City can focus efforts to support energy-saving projects 14 COORDINATED WORK
15 • As part of the development of standards for data centers and large energy customers, staff will review the Building Performance Ordinance and determine any additional
recommendations to the Ordinance
• The standards are scheduled for City Council
in December 2026
• Any recommendations will be discussed at that time