City Council Meeting: September 9th, 2025 Santa Monica, California ORDINANCE NUMBER ____(CCS)
(City Council Series)
AN ORDINANCE OF THE COUNCIL OF THE CITY OF SANTA MONICA AMENDING THE SANTA MONICA MUNICIPAL CODE BY ADDING CHAPTER 8.39 ENTITLED
BUILDING ENERGY BENCHMARKING AND BUILDING PERFORMANCE
STANDARDS
WHEREAS, scientific evidence has established that natural gas combustion, procurement and transportation produce significant greenhouse gas emissions that contribute to global warming and climate change; and
WHEREAS, existing buildings contribute to 34% of greenhouse gas emissions in the City of Santa Monica; and
WHEREAS, this Chapter is also reasonably necessary because of health and safety concerns as City residents suffer from asthma and other health conditions associated with poor indoor and outdoor air quality exacerbated by the combustion of natural gas; and
WHEREAS, as a coastal city, Santa Monica is vulnerable to sea level rise. Human activities releasing greenhouse gases into the atmosphere cause increases in worldwide average temperature, which contribute to melting of glaciers and thermal expansion of ocean water, resulting in rising sea levels; and
WHEREAS, low-income and communities of color are disproportionally impacted by the effects of climate change through increased urban heat island effect, stormwater flooding, and poor air quality; and
WHEREAS, consistent with the City’s Climate Action & Adaptation Plan, this Chapter establishes requirements for adopting Building Energy Benchmarking and a Carbon Reduction Ordinance for Existing Buildings (Building Performance Standards), which will reduce demands for local energy and resources, reduce regional pollution, and promote a lower contribution to greenhouse gases; and
WHEREAS, CA AB 802, the California Building Energy Benchmarking Program, was adopted in 2018, requiring owners of commercial and multi-family buildings larger than 50,000 square feet to annually submit energy usage data to the California Energy Commission; and
WHEREAS, based on City staff’s review, the Building Energy Benchmarking and Building Performance Standards Ordinance does not conflict with AB 306 (2025-2026) because the Building Energy Benchmarking and Building Performance Standards Ordinance does not amend, add, or repeal any provisions adopted pursuant to Health and Safety Code Section 17922 and published in the California Building Standards Code or the other regulations thereafter adopted pursuant to Section 17922 to amend, add, or repeal ordinances or regulations which impose the same requirements as are contained in the provisions adopted pursuant to Section 17922 and published in the California Building Standards Code; and
WHEREAS, using electric heating and cooling infrastructure in existing buildings fueled by less greenhouse gas intensive electricity is linked to significantly lower greenhouse gas emissions and is cost competitive because of the long-term cost savings associated with reduced utility bills; and
WHEREAS, energy efficient, all-electric building design benefits the health, welfare, and resiliency of Santa Monica and its residents; and WHEREAS, it is the intent of the City Council to eliminate natural gas emissions in existing buildings where all-electric, energy efficient infrastructure can be integrated, thereby reducing the environmental and health hazards produced by the consumption and transportation of natural gas; and
WHEREAS, the content and details of this ordinance were the subject of 6 stakeholder workshops conducted on September 7, 2023, October 19, 2023, November 16 2023, January 18, 2024, February 29, 2024 and April 6, 2024, and 3 public information meetings conducted on March 27th, 2025, May 8th, 2025 and June 12th, 2025 at which attendees included architects, energy modelers, designers, builders, developers and residents, climate organizations, and Covered Property Owners.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Santa Monica Municipal Code Chapter 8.39 is hereby added to read as follows:
Chapter 8.39 Building Energy Benchmarking and Building Performance Standards
8.39.010 Definitions.
For the purposes of this Chapter, the following words and phrases shall have the following meanings:
(a) “Administrative Regulations” means a comprehensive set of rules and regulations governing this Chapter.
(b) “Benchmarking” means measuring a covered building's energy and emissions performance using the ENERGY STAR portfolio manager tool or other platforms as the Department of Public Works may designate. (c) “Benchmarking Submission” means the data submitted each year via the ENERGY STAR portfolio manager tool, or other platforms, using a template and submission link to be distributed and publicized by the Department of Public Works. All information expressly denoted as mandatory by either ENERGY STAR portfolio manager or the Department of Public Works shall be included in the submission.
(d) “Baseline Performance” means, for any Performance Metric of any Covered Building, the value of the Performance Metric in the Baseline Year as established by the Department of Public Works.
(e) “Baseline Year” means a 12-month period, or multiple 12-month periods averaged out, established by the Department of Public Works for each Covered Property for each Performance Metric.
(f) “Building Performance Action Plan” means a binding agreement between an Owner and the Department of Public Works that provides additional flexibility to Owners facing exceptional challenges in meeting their designated interim or final performance standards.
(g) “California Building Energy Benchmarking Program” means California’s program requiring large buildings to annually report energy use to the California Energy Commission.
(h) “Covered Property” means any of the following with at least 20,000 square feet of Gross Floor Area:
i. A single building;
ii. Two or more buildings that are served by the same electric or gas meter or are served by the same heating or cooling system(s).
Covered Properties shall not mean the following:
i. A facility in which the majority of energy is consumed for manufacturing, for the generation of electric power or district thermal energy to be consumed off site, for communications infrastructure, or for other process loads. Process loads are energy consumed for purposes other than heating, cooling, ventilation, domestic hot water, cooking, lighting, appliances, office equipment, data centers, or other plug loads. ii. The property is owned by the federal government.
iii. Single-family residences.
iv. All-electric buildings.
v. Condominiums as defined in Section 9.54.010 (E).
vi. Other property types that do not meet the purpose of this law as determined by the Department of Public Works.
(i) “CO2e” means carbon dioxide equivalent which is expressed as the number of metric tons of CO2 emissions with the same global warming potential as one metric ton of another greenhouse gas.
(j) “ENERGY STAR Portfolio Manager” means the online tool created by the U.S. Environmental Protection Agency used to measure and track a building’s energy use, water consumption and greenhouse gas emissions. (k) “Existing Building Performance” means the energy efficiency and natural gas use of a Covered Property measured by Site Energy Use Intensity (EUI) or Greenhouse Gas Emissions Intensity (GHGI).
(l) “Final Performance Target” means the numeric value of a Performance Metric, which Covered Properties shall achieve by an established date in calendar year 2050.
(m) “Greenhouse Gas Emissions Intensity or GHGI” means a building’s greenhouse gas use expressed as metric tons of CO2e per square foot per year.
A building’s GHGI is calculated by dividing the total greenhouse gases produced by the building in one (1) year (measured in CO2e) by the total gross floor area of the building.
(n) “Gross Floor Area” means the total property square footage, measured between the principal exterior surfaces of the enclosing fixed walls of a building, as defined in the ENERGY STAR portfolio manager definitions. (o) “Interim Performance Target” means the numeric value of a Performance Metric, which Covered Properties shall achieve by a fixed date every five years from the effective date of the BPS.
(p) “Net Zero Carbon Emissions” means all remaining emissions released by buildings are counterbalanced by removing carbon from the atmosphere so that GHGI is equal to 0.
(q) “OSE” means the Santa Monica Office of Sustainability and the Environment.
(r) “Owner” means the person or entity having a legal or equitable interest in real property and its fixtures and appurtenances, which shall explicitly include but not be limited to a homeowner's association or authorized agent acting on behalf of the Owner.
(s) “Performance Metric” means each of the objectively verifiable numeric measures of building performance regulated by this ordinance: Site EUI and GHGI.
(t) “Phase One Property” means any Covered Property with a gross floor area greater than or equal to 50,000 square feet.
(u) “Phase Two Property” means any Covered Property with a gross floor are greater than or equal to 20,000 square feet.
(v) “Property Type(s)” means a category of Covered Properties subject to the same Interim and Final Performance Targets, as defined by the Department of Public Works. Covered Properties within each Property Type shall have shared characteristics that facilitate the implementation and enforcement of this law. The Department of Public Works may define one or more Property Types to be identical to ENERGY STAR property types.
(w) “Site Energy Use Intensity or EUI” means a building's weather-normalized site energy use expressed as energy per square foot per year as a function of its size, normalized for weather and other characteristics that are significant drivers of energy performance as feasible with the reporting platform used. A building's EUI is calculated by dividing the total energy consumed by the building in one (1) year (measured in kBtu) by the total gross floor area of the building. (x) “Social Cost of Carbon” (SCC) means a measure, in dollars, of the longterm damage done by a ton of carbon dioxide (CO2) emissions in a given year.
This dollar figure also represents the value of damages avoided for a small emission reduction (i.e., the benefit of a CO2 reduction). The value of the SCC will be based on values adopted by the U.S Environmental Protection Agency, state, or regional government agency.
8.39.020 Applicability
The requirements of this Chapter shall apply to all “Covered Properties”.
8.39.030 Purpose.
The purpose of this Chapter is to improve performance, conserve energy, reduce carbon emissions and reduce operating costs of existing buildings in Santa Monica to meet the City’s Climate Action and Adaptation Plan goals. The Chapter’s purpose is to achieve this by establishing Building Energy Benchmarking and a Building Performance Standards program requiring Covered Property Owners to annually report and Benchmark building energy performance, and to make necessary physical or behavioral changes to meet building performance targets over time through energy efficiency or electrification. It is the intention of the City to provide flexibility to Owners in meeting performance targets. Where appropriate, the Department of Public Works will consider Building Performance Action Plan (BPAP) applications by Owners, which would provide additional flexibility to Owners facing exceptional challenges in meeting their designated Interim or Final Performance Targets.
8.39.40 Building Energy Benchmarking and Reporting.
1) Each Owner of a Covered Property must Benchmark the building’s energy use annually using the ENERGY STAR Portfolio Manager tool, or other platform as the Department of Public Works may designate, and by June 1st each year beginning in 2026, accurately submit energy Benchmarking data to the Department of Public Works for the previous calendar year. This shall apply to Phase One and Phase Two Properties.
2) Reported energy Benchmarking submissions required by Owners must include:
a) Basic information to track and ensure compliance with this chapter and California’s Building Energy Benchmarking Program (AB 802), as set forth in California Code of Regulations, Title 20, Article 9, including, but not limited to:
i) Property address
ii) Gross Floor Area
iii) Property Type
iv) Year Built
v) Number of stories
b) Necessary data for energy usage Benchmarking, including at a minimum, but not limited to:
i) Monthly energy billed amounts for both natural gas and electricity usage. ii) Annual maximum electric demand (in kW) and the corresponding date; and iii) Monthly maximum electric demand (in kW).
3) Owners shall self-certify and provide third-party data verification during compliance years designated in Administrative Regulations to verify and ensure that the Benchmarking Report components are complete and accurate. Self-certifications and third-party data verifications shall be submitted through the ENERGY STAR Portfolio Manager tool or other platform approved by the Department of Public Works as part of the Benchmarking Submission.
4) Building Owners shall consult Administrative Regulations for more information regarding components and submission of the Benchmarking Report.
8.39.050 Building Performance Standards.
1) BPS Targets.
a) Owners of Phase One Properties must meet Interim Performance Targets no later than June 1st, 2031. Owners of Phase Two Properties must meet Interim Performance Targets no later than June 1st, 2036. Interim Performance Target years shall be established on five-year intervals from the first Interim Performance Target year until the Final Performance Target. The Department of Public Works shall establish Interim Performance Targets for one or both Performance Metrics, Site EUI and/or GHGI, by drawing a straight line for each target from a Covered Building’s established Baseline Performance to a Final Performance Target of Net Zero Carbon Emissions by calendar year 2051 for each individual Covered Property.
2) Establishing Baseline Performance.
a) For Phase One Properties that reported Benchmarking data through the California Energy Benchmarking Program (California Code of Regulations, Title 20, Article 9) prior to the effective date of this ordinance, Baseline Performance shall be determined individually by the Property Owner as an average of [three] years of reported data if third-party data verification can be provided, or set as the Covered Property’s reported performance during the most recent reporting year.
b) For Phase Two Properties that have not reported Benchmarking data in previous years through the California Energy Benchmarking Program (California Code of Regulations, Title 20, Article 9), Administrative Regulations shall establish an appropriate process for setting reasonable Baseline Performance. Reasonable Baseline Performance for Covered Buildings that have not reported through the California Energy Benchmarking Program prior to the effective date of this ordinance may be established based on building type and a predicted site EUI and/or GHGI target.
3) Establishing Interim Performance Targets.
a) For all Covered Properties, the Department of Public Works shall calculate each Interim Performance Target using a straight-line trajectory from the Covered Property’s Baseline Performance for each or both Performance Metric(s) to the Final Performance Target such that a calculated Performance Metric shall improve in equal increments during each (five-year) compliance cycle. b) For Phase One Properties, the Department of Public Works will set required Interim Performance Targets prior to June 1st, 2026 pending the development of an appropriate Baseline Performance establishment process through Administrative Regulations.
c) For Phase Two Properties, the Department of Public Works will set required Interim Performance Targets prior to June 1st, 2031 pending the development of an appropriate Baseline Performance establishment process through Administrative Regulations.
4) Demonstrating compliance with Building Performance Standards. a) Owners of Covered Buildings shall use the ENERGY STAR Portfolio Manager tool, and report the following to the Department of Public Works:
i) In the Benchmarking Submission due on June 1st, 2031, a demonstration that the Phase One Property has met the Interim Performance Target; ii) In the Benchmarking Submission due on June 1st, 2036, a demonstration that the Phase Two Property has met the Interim Performance Target; iii) In the Benchmarking Submission due at the end of each five-year compliance cycle for both Phase One and Phase Two Properties, a demonstration that the Covered Property has met and maintained the Interim Performance Target for each compliance cycle. Interim Performance Target dates for Both Phase One and Phase Two Properties are as follows:
(1) Phase One Properties:
(a) First Interim Performance Target: June 1st 2031
(b) Second Interim Performance Target: June 1st, 2036
(c) Third Interim Performance Target: June 1st, 2041
(d) Fourth Interim Performance Target: June 1st, 2046
(2) Phase Two Properties:
(a) First Interim Performance Target: June 1st, 2036
(b) Second Interim Performance Target: June 1st, 2041
(c) Third Interim Performance Target: June 1st, 2046
iv) In the Benchmarking Submission due on June 1st, 2051, a demonstration that the Covered Property has met the Final Performance Target. b) Owners of all Covered Buildings must maintain the Interim Performance Targets each subsequent year and must maintain the Final Performance Target indefinitely.
c) The Administrative Regulations shall address Alternative Compliance Pathways that add flexibility for Covered Property Owners while executing the purpose of this Chapter. The Department of Public Works shall establish Administrative Regulations governing when Covered Property Owners may be eligible for Alternative Compliance Pathways. Alternative Compliance Pathways may include but are not limited to, a process to adjust timing for meeting Interim and Final Performance Target dates specified above, a process to adjust targets for each Covered Building, inclusion of prescriptive upgrade options where reasonable and Building Performance Action Plans.
5) Building Performance Action Plans
a) If, due to unusual circumstances, an Owner believes that a Covered Property cannot reasonably meet one or more of the applicable Interim or Final Performance Standards then the Owner may propose a Building Performance Action Plan (hereinafter, “BPAP”) to the Department of Public Works for approval using the Building Performance Action Plan Form. The BPAP shall include, at a minimum:
i) a description of unusual circumstances that prevent the building from reasonably complying with Interim or Final Performance Standards; ii) a physical description of the Covered Building;
iii) an inventory of all major energy- and water-using equipment including their age, efficiency, fuel type, designed performance, and capacity as indicated on the nameplate;
iv) recommendations, including engineering calculations, for proposed performance of the Covered Building; and
v) a timeline by which proposed improvements will be achieved. b) As part of a BPAP application, an Owner may propose additional services and benefits to the community; in consultation with the Community Accountability Board Working Group, the Department of Public Works shall consider the value of such proposals.
c) By June 1st, 2026, the Department of Public Works shall establish rules and deadlines governing BPAPs, including regarding whether the Department of Public Works shall publish some or all BPAPs and criteria for such publication decisions.
d) Once a BPAP for a Covered Property is approved by the Department of Public Works, then the Covered Property shall be in compliance with this ordinance so long as the terms of the BPAP are fulfilled on a timely basis. The BPAP may establish provisions to cure any noncompliance with the BPAP; if these are not included in the BPAP, then normal enforcement provisions of this ordinance shall apply. The BPAP constitutes a binding agreement between the Owner of the Covered Property and the Department of Public Works and shall be referenced in an attachment to the deed to the Covered Property at the City Clerk’s Office. e) When seeking to sell a property, the Owner of any Covered Property or any portion of a Covered Property subject to a BPAP, the Owner shall include a reference to the BPAP in any listings, notices, advertisements of sale, term sheets, or contracts of sale.
f) At least three weeks prior to selling a Covered Property or any portion of a Covered Building, the Owner shall apply to the Department of Public Works for a certification that the Covered Property is in compliance with this law and provide the certification to the buyer. The Department of Public Works shall include in any certification a reference to any BPAP to which the Covered Property is subject.
6) Prohibition of unnecessary delays in improvement
a) The City of Santa Monica recognizes that there is both an environmental and economic value to achieving the standards in this ordinance sooner rather than later. BPAPs are therefore intended principally to give flexibility in the replacement of long-lived equipment such as air-conditioning and heating or long-lived envelope components such as windows and insulation. They are not intended to allow the unnecessary delay of improvements that can be done at the same cost at any time including changes in operations, maintenance and controls, lighting retrofits, and behavioral changes.
7) Extensions, adjustments and exemptions
a) The Department of Public Works may grant an extension, adjustment or exemption to one or more Interim or Final Performance Standards for a Covered Property whose Owner submits a request, together with documentation, in a form prescribed by the Department of Public Works, at least 180 prior to any submission deadline, if the Covered Property meets any of the following criteria:
i) A demolition permit was issued or demolition is planned that will prevent achievement of the next Interim Performance Standard;
ii) The Covered Property did not have a certificate of occupancy or temporary certificate of occupancy for all twelve months of the Baseline Year prior to the Interim Performance Standard compliance schedule;
iii) The Covered Property is in financial hardship, as defined by rules written by the Department of Public Works in consultation with the Community Accountability Working Group;
iv) The Department of Public Works determines that strict compliance with provisions of this law would cause financial hardship or would not be in the public interest.
8) Disclosure upon sale. Owners of all Covered Buildings shall disclose the building’s compliance status, including all Performance Targets, any approved Alternate Compliance Pathways, and any penalties assessed, to a prospective buyer prior to the sale of a building. The Owner shall disclose to all prospective buyers the Covered Building’s compliance status in all documentation or advertising concerning the sale of the Covered Property including, but not limited to, any listings, notices, advertisements of sale, term sheets, and contracts of sale.
8.39.060 Appeals
1) An Owner may appeal a determination that their building is subject to the Building Performance Standards described in Section 8.39.050. An appeal shall be submitted to the Director of Public Works at least 180 days before the submission deadline for any Interim or Final Performance Standard, as described in Section 8.39.050. An appeal must be made in writing and specify the reasons for appeal. The Director of Public Works shall issue a determination no later than 90 days from submission of the appeal. The Director of Public Works’ determination on the appeal shall be final.
8.39.070 Administrative Regulations.
1) The Director of Public Works may adopt Administrative Regulations to implement the provisions of this Chapter, including, but not limited to, Performance Metrics, Property Types, Baseline Performance, Interim and Final Performance Standards by Property Type, enforcement, exemptions, BPAPs, data verification requirements, reporting and compliance procedures. From time to time, the Department of Public Works shall issue such guidance and promulgate such rules as deemed in its discretion necessary to carry out the provisions of this ordinance.
8.39.080 Community Accountability Working Group
1) Within 60 days of the adoption of this ordinance, the Director of Public Works shall establish, and appoint no less than 10 members to, a Community Accountability Working Group (“Working Group”) composed of representatives of Covered Property Owners, disinvested communities, experts in areas related to racial and social inequity, affordable housing Owners/providers, and representatives from neighborhood groups or Community-Based Organizations. Working Group responsibilities may include:
a) Advise and guide the Department of Public Works on the adoption of sufficient Administrative Regulations to equitably implement the provisions of this chapter; b) Review the impact of the ordinance on disinvested communities and recommend actions to increase equitable outcomes;
c) Develop recommendations on how to allocate funds collected from noncompliance fines to improve the performance of Covered Properties and ensure that they benefit disinvested communities;
d) Evaluate the ordinance’s equity impacts and recommend strategies to improve the ordinance’s effect on Owners of Covered Properties; e) Advise on community priorities that could be advanced through additional BPAP requirements; review portions of proposed action plans as requested by the Department of Public Works.
2) Within 90 days of the adoption of this Ordinance, the Director of Public Works shall, in consultation with the Working Group, establish a Technical Committee composed of no Owners of Covered Buildings, experts in areas related to sustainable design and green building, architects, engineers, utility representatives, individuals representing trade groups such as builders, contractors, electricians, HVAC technicians and others, and environmental/climate advocacy organizations.
Technical committee responsibilities may include:
a) Establish technical elements of Administrative Regulations such as:
i) Interim Performance Standards by Property Type
ii) Baseline Performance
iii) Additional BPAP requirements
iv) Non-compliance fines
b) As requested by the Department of Public Works, review submitted Building Performance Action Plans and make recommendations for changes, approval or denial by the Department of Public Works.
8.39.090 Transparency
1) The Department of Public Works may publish Benchmarking data for each Covered Property, as reported by Owners, on the City’s website, pursuant to State Law (Public Resources Code section 25402.10).
2) The Department of Public Works shall publish each building’s Interim and Final Performance Target and its performance against those standards across every Performance Metric on an annual basis beginning 3 years after the initial Interim Performance Targets are determined.
8.39.100 Maintenance of Records
1) Owners shall maintain records as the Department determines necessary for effective enforcement of this Chapter, including, but not limited to, energy bills and reports or forms received from tenants and/or utilities, BPAPs, and records demonstrating compliance with Interim or Final Performance Standards. Such records shall be preserved for a period of five years. At the request of the Department, such records shall be made available for inspection and audit by the Department. When a Covered Property is sold, the records shall be given to the new Owner.
8.39.110 Compliance Obligation
1) Owners of Covered Properties shall demonstrate compliance with all applicable Interim and Final Performance Targets at the applicable compliance dates published by the Department of Public works at the appropriate compliance date. Responsibility to comply shall not be affected by changes in ownership, Owner/tenant lease language or changes thereto.
2) No action shall be taken to cause a Covered Property and one or more additional real properties to newly share energy, heating, or cooling without submeter(s) to allow separate measurement of each property’s energy consumption or prior written permission from the Department of Public Works. No building over 1,000 gross square feet shall be constructed to share energy or water with another building over 1,000 gross square feet without submeter(s) to allow separate measurement of each building’s energy and water consumption or prior written permission from the Department of Public Works. No modifications shall be made to cause two or more buildings over 500 gross square feet that had previously been separately metered to newly share one or more utility meters or heating, cooling or water heating systems without submeter(s) to allow separate measurement of each building’s energy and water consumption and for the buildings to be separately subject to this ordinance or prior written permission from the Department of Public Works.
8.39.120 Enforcement and Fines
1) Any person who intentionally violates any of the provisions of this Chapter shall be guilty of a misdemeanor. The provisions of this Chapter may also be enforced through the issuance of administrative citations and the imposition of administrative fines pursuant to Chapter 1.09 of this Code.
2) A Property Owner who fails to comply with annual Benchmarking requirements as described in Section 8.39.040 may be subject to fines as specified in the Administrative Regulations.
3) A Property Owner whose Covered Property fails to perform to the level of an Interim or Final Performance Target by the applicable compliance date, as described in Section 8.39.050, may be required to pay a fine as specified in the Administrative Regulations.
4) The Department of Public Works shall include in its Administrative Regulations criteria to determine required fines for Covered Properties however, fines shall proportionally reflect:
a) The total number of Interim or Final Performance Targets which a Covered Property has failed to achieve.
b) The magnitude of non-compliance under each Performance Metric. 5) A non-lapsing fund called the BPS Fund shall be established, which shall be used solely for the purposes stated in this ordinance and the Administrative Regulations. 6) All funds collected from payment of fines shall be deposited into the BPS Fund. 7) All funds deposited into the BPS Fund, and any interest earned on the funds, shall not revert to the unrestricted fund balance of the General Fund at the end of a fiscal year, or at any other time, but shall be continually available for the uses and purposes set forth in this law without regard to fiscal year limitation.
APPROVED AS TO FORM:
_________________________
Heidi von Tongeln, Interim City Attorney