The Future of Green Building was On Display at Greenbuild

Greenbuild 2015

The USGBC’s annual Greenbuild International Conference and Expo in Washington, DC wrapped up last Friday and the question I have most been asked about Greenbuild is, “what was the highlight?”

My response, Greenbuild is “the” target rich environment for green building people. The thousands of attendees represent more sustainability and green building business opportunities in a single place than will exist anywhere else on the planet this year. So, the highlight is the people.

Retiring USGBC CEO Rick Fedrizzi did not disappoint in the opening session when he returned to his political rant of years past attacking Republicans in Congress. It sounded to many like a job interview for an ambassadorship in a Hilary Clinton administration. But his data heavy diatribe also found support among real estate industry professionals when he said, “the green building industry has shown the world that sustainability is profitable and that profitability is sustainable.”

Many of the businesses profiting from green had their products on display on the Expo Floor. Arguably, that is where the action was. The Unity Home, a 1,650 square foot demonstration show house proposed to be LEED for Homes v4 Platinum, net zero energy when it is relocated to its permanent home in New Hampshire was very impressive.

Much of what was new was the rollout of GBCI’s “partner” relationships with GRESB, PEER, SITES, and WELL. It is clear that these models of acquisition and in other instances providing certification services represent a significant future growth path for USGBC.

Educational activities abounded. EPDs, including the potential liability arising from EPDs was a hot topic and the session, EPDs: State of the Art and Advancement by Industry, where one of the presenters was be Heather Dylla, Director of Sustainable Engineering for the National Asphalt Pavement Association, drilled down into the risks associated with disclosure.

Arguably among the more important substantive discussions of the conference was when USGBC’s Chief Product Officer Scot Horst and current COO, soon to be CEO, Mahesh Ramanujam took the stage Thursday morning to discuss the future of USGBC and GBCI.

I expect to write future blog posts about the announced expansive use (.. yes, even beyond LEED) of the LEED Dynamic Plaque

The World Green Building Trends 2016 survey by Dodge Data & Analytics, with funding from United Technologies, was released at the conference, reporting “green building continues to double every three years.” The study also found “across all regions studied, respondents increasingly projected that more than 60 percent of their projects would be green projects by 2018.” Building occupant demand was the biggest driver for green building (according to 40% of survey respondents), followed by environmental regulations (35%).

Market transformation and sector growth continue. At the USGBC Annual Meeting we were told that in 2015, for the second year, more than 1.85 million square feet is being LEED certified every day creating business opportunities for you.

And for those who will complain that this blog post is shameless pandering to USGBC, that may be true, but it is also correct that each year, Greenbuild has been the number one source of new clients for my sustainability and green building law practice.

Greenbuild 2016 in Los Angeles will be the target rich environment for green building people next year. I will see you in LA ..

Arbitration including Religious Arbitration in Green Building Contracts

Courts 000

There has been much recent discussion about mandatory arbitration since a series of New York Times articles earlier this month describing how, “.. clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court.”

The U.S Chamber of Commerce even responded, the “New York Times continued its deceptive caricature of arbitration” arguing arbitration works as well or better than litigation.

There is little question that a properly drafted provision in a contract requiring arbitration is enforceable. The Supreme Court, in American Express v. Italian Colors Restaurant decided in 2013, “the overarching principle that arbitration is a matter of contract. .. Courts must “rigorously enforce” arbitration agree­ments according to their terms.”

And while much of the recent discourse has been about contracts with consumers, alternative dispute resolution provisions, including those requiring arbitration are common in construction industry contracts. With over a million contract documents licensed on an annual basis, the AIA’s form construction documents are likely the most widely used contract documents in the industry. And while the AIA documents mandated arbitration as the exclusive form of binding dispute resolution for well over 100 years, the current form of documents including the new Sustainable Projects documents, contain a ‘check the box’ where the parties choose between arbitration, litigation or other agreed process.

Arbitration is particularly wide spread in green building and has had the impact of so few green building disputes ever reaching a courtroom. Even the LEED Green Building Certification Inc. Certification Agreement has a mandatory arbitration provision.

Many green building materials suppliers have provisions in their purchase contract requiring arbitration. A quick online review of 25 suppliers registered as exhibiters at Greenbuild 2015 (arbitrarily selected from a single aisle on the expo show floor) found 16 had contracts requiring arbitration.

Maybe more surprising are contracts requiring religious arbitration, like that required by bamboo floor supplier Higuera Hardwoods, that provides,

Arbitration shall be by a single arbitrator experienced in the matters at issue and selected by principal and agent in accordance with the Rules of Procedure for Christian Conciliation of the Institute for Christian Conciliation, a division of Peacemaker Ministries.

While it is a court enforcing an arbitration provision involving a Church of Scientology agreement that makes headlines and concern over a court enforcing an alternative dispute resolution applying sharia law is publicly debated, courts have been enforcing these provisions both under the edict of the Supreme Court in the American Express decision and out deference to the First Amendment rights of the religious group. Anecdotally, it appears most of these cases are Christion conciliation.

Arbitration can be useful in some matters of green building for a variety of reasons including that experienced green building construction arbitrators are better suited to rule on complex construction disputes rather than layperson judges and juries, and that arbitration is a faster and more cost effective dispute resolution process.

The take away from all of this may be to pay particular attention to and negotiate the dispute resolution provisions in contracts. And always consult your attorney before signing.

The annual Greenbuild International Conference and Expo is happening this week in Washington DC. As a reader of this blog, if you email me before Greenbuild, I will gladly buy you a drink or a cup of coffee at a DC watering hole. (I made a similar offer last year and had a great time meeting a lot of very fun people for coffee and beignet at Café Du Monde.) I hope to see you in DC this week.

Harvard Business Review Adds Environmental Performance to Ranking CEOs

Enviro Perform

It is significant when the Harvard Business Review alters its methodology in ranking the best performing CEOs in the world to now take into account a company’s environmental performance.

Increasingly CEOs are coming to appreciate it is okay to make a profit while saving the planet.

Harvard Business Review’s self described mission is “to improve the practice of management in a changing world.” The business journal is highly regarded and widely read by business leaders across the globe.

Yes, the publication is not the conservative Eastern business school tome it was when it began in 1922, but it is also certainly not Mother Jones magazine.

And while the Harvard Business Review is not where you would turn for legal advice on the fiduciary duty of management to maximize corporate profit and shareholder value, the U.S. Supreme Court opinion in the recent Hobby Lobby proffered “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”

With that instruction maybe we should not be surprised that for the first time this year the Harvard Business Review ranking of the best performing CEOs added to the calculation a company’s environmental, social and governance performance. In past years the ranking was based solely on market numbers. The publication had ranked “total shareholder return, as well as change in each company’s market capitalization.” Those financial metrics are now weighted at 80% and environmental, social and governance performance at 20%.

On the hard numbers alone, Amazon’s Jeff Bezos would apparently lead all other CEOs in the ranking, as he did in 2014. But Amazon’s low environmental, social and governance performance score drops Bezos down to #87 overall in 2015. Novo Nordisk’s Lars Sørensen ranked 6th in financial metrics alone, but when coupled with a good environmental, social and governance performance rating, catapulted him to this year’s top performing CEO.

The article in the November issue includes quotes from an interview with Sørensen, including, “Corporate social responsibility is nothing but maximizing the value of your company over a long period.” Sørensen goes on to say, “In the long term, social and environmental issues become financial issues.”

Closely related, in a recent blog post I described how in recent weeks this law firm has received more inquiries than at any time in recent years about environmental disclosures from public companies as they consider climate change.

Moreover, historically less than 5% of this law firm’s work had been corporate sustainability (with green building being the majority of our work), and today that work, both law and non law, is nearly 50% of our new business.

The tide is turning and environmental issues are not only being appreciated more broadly in terms of fiduciary duty, but also understood as related to maximizing company value.

The Harvard Business Review rated and ranked 907 CEOs from 896 companies. Those executives represented 46 nationalities and ran businesses based in 30 countries. The article is worthy of your read.

WELL at the Intersection of Human Health and Green Building


“This could be bigger than anything in real estate since the invention of the roof,” according to Paul Scialla, the founder and CEO of the International WELL Building Institute.

This “may be the most marketable proposition in real estate short of a front lawn overlooking the Fountain of Youth,” was how a recent Bloomberg Business article began.

And then this month, Delos announced that it has completed an equity investment raise of $108 Million where Jeff Vinik and Cascade Investment, LLC (owned by Microsoft co-founder Bill Gates) were the lead investors.

Hyperbole? Or maybe we should all be paying attention.

The International WELL Building Institute “believes that buildings should be developed with health and wellness at the center of design.” The IWBI is a public benefit corporation whose mission is to improve human health and wellbeing through the built environment. To realize this vision, IWBI, a wholly owned subsidiary of Delos, administers the WELL Building Standard.

WELL is a performance based standard for measuring, certifying, and monitoring features of the built environment that impact human health and wellbeing, through air, water, nourishment, light, fitness, comfort, and mind.

WELL is “grounded in a body of medical research that explores the connection between the buildings in which we spend more than 90 percent of our time, and the health and wellness impacts on us as occupants.” WELL Certified spaces and WELL Core and Shell Compliant developments “can help create built environments that improve the nutrition, fitness, mood, sleep patterns, and performance of occupants.”

WELL exists where human health and wellness intersects with the built environment, addressing seven concepts (air, water, nourishment, light, fitness, comfort and mind) and through features focused on behavior, design and operations.

WELL is comprised of over one hundred Features that are applied to each building project, and each WELL Feature is designed to address issues that impact the health, comfort, or knowledge of occupants through design, operations and behavior.

The WELL Building Standard is designed to complement and work seamlessly with the U.S. Green Building Council’s LEED certification program. Delos has joined forces with the Green Business Certification Inc. GBCI is the USGBC controlled organization that provides third party certification for LEED projects. GBCI is now also providing third party certification for WELL.

The first office to be WELL Certified – Pilot Program, the CBRE Corporate Headquarters in Los Angeles is a 48,000 square feet project. CBRE built out the L.A. office with 50 wellness features, including ergonomic furniture, a juice station, ultraviolet lights to sterilize shared work-spaces, and non-porous countertops to discourage bacterial growth. CBRE says it invested an estimated $3.60 per square foot in construction costs, which was about 1.74% premium on the overall construction budget to implement WELL.

Within the year, IWBI plans to certify 1,500 accredited professionals to administer the Well Building Standard.

IWBI and the several related businesses that operate under the Delos parent company are headed by Paul Scialla, the founder and CEO, his twin brother Peter Scialla, the COO, both former Goldman Sachs partners, and their sister Crystal Scialla, the general counsel.

Operating at the juncture of the health and wellness and the real estate industries (two huge sectors), maybe we should all be paying attention to WELL.

Opportunities Shine in Community Solar

University Park Community Solar LLC, Maryland University Park Community Solar LLC, Maryland

People across the United States are seeking alternatives to conventional energy sources. Motivations vary from concerns over global warming to increasing energy independence, and hedging against rising fuel costs to because it is chic to be green.

Advances in solar technology have made photovoltaics a much sought after energy alternative.

But a 2008 study by the National Renewable Energy Laboratory found that less than 27% of residential rooftops are suitable for hosting an on site photovoltaic system, after taking into consideration structural, shading, and ownership issues.

Today, most states have laws that preclude “community solar” projects. That is, most consumers of electricity are not, today, permitted to aggregate their purchase of photovoltaic generated electricity with others, except through their electric power utility.

A recent federal government inventory found less than 81 megawatts of community solar projects in total (versus over 4,400 megawatts of installed residential rooftop solar in the U.S.). Today there are only a handful of community projects actually producing power in Arizona, Colorado, California and Maryland.

But community solar appears poised to shine brightly.

State legislatures and public service commissions are beginning to authorize community solar, although faced with opposition from dinosaur monopoly utilities, many are pilot programs of limited megawatt scope like the pilot authorized earlier this year by Maryland House Bill 1087.

There are many models for community solar and among those most discussed are: a utility sponsored model in which the regulated utility owns or operates a project that is open to voluntary ratepayer participation; a special purpose entity model in which individual investors join in a business enterprise to develop a community solar project; and a non-profit “buy a brick” model in which donors contribute to a community installation owned by a charitable non-profit corporation.

There are real opportunities in the Wild West business of community solar. Of course the allocation of costs and benefits will largely be driven by financial and tax considerations in this highly regulated area. And don’t forget the lawyers who in these mostly uncharted waters will have to offer advice about how the project structure addresses securities laws, utilities regulation, and the complexity of agreements between various project participants.

While there are LEED credits for on site and off site renewable energy (including that were achieved by 48% of LEED EBOM-2009 certified projects) those credits are not yet available for community solar. However, Baltimore City, one of the first jurisdictions in the nation to have a mandatory renewable energy requirement for all new construction does recognize community solar in its adoption of the IgCC.

The early winners in this new marketplace will likely be those that can balance the benefits and concerns related to the participation of electric companies, including investor-owned utilities, in community solar; can determine whether and how community solar or virtual net energy metering have a substantially different technical impact on the distribution system than traditional net energy metering; articulate and actually deliver on how community solar can help reduce the cost of compliance with state renewable energy portfolio standards; and ultimately resolve the impacts on energy costs, reliability, and cost allocation for ratepayers.

It is clear that there are opportunities in net metering aggregation, and it sells better to refer to this emergent marketplace innovation as community solar.

Vicki Worden on the New Green Globes and Her Commitment to the Mission

Vicki Worden

I had an opportunity some days ago to speak at length with Vicki Worden, the Executive Director of Green Building Initiative. Readers of this blog will be interested in what this thought leader in the green building movement has to say.

We spoke after the public comment period commenced on the GBI’s revision to its Green Building Assessment Protocol for Commercial Buildings that forms the basis for the current version of Green Globes for New Construction. The comment period runs through October 26, 2015.

You learn a lot about Worden when she explains the philosophy that has influenced her life. “Professionally, I learned early in my career from people who applied the concept of stewardship to everything they do – whether it’s volunteer leadership, politics, the environment or industry.” .. “Leave it in a better way than you found it.”

Which translates into her “desire to drive positive change in the sustainability arena,” throughout her “10 years of consulting around facilitating dialogue, education, and improved standards in green building, parking industry, mattress industry, and as a consultant to ICC in solar and rainwater harvesting, .. just to name a few.”

She is a long-time consultant to GBI and was part of the original launch team that brought Green Globes to the U.S. She served as Vice President of Commercial Programs for the organization from 2005 to 2010. All of which gives her street cred in the green building industrial complex.

While nearly a 1,000 buildings are Green Globes certified in the U.S. today, Worden talks candidly about the need to demonstrate ROI for all green building standards, codes and rating systems, .. “we have to deliver a return for the owner as well as for the environment.”

There are successes, like the acceptance of Green Globes by the federal government where 534 federal projects are Green Globes certified or have used GBI’s Guiding Principles assessment software, many of those Veterans Administration buildings.

But Worden also speaks about the reality that “there is a tremendous amount to be accomplished” when less than 1% of buildings in the U.S. are certified Green Globes, LEED or the Living Building Challenge. She talks freely about increased first costs, including articulating concerns about those costs as well as time and hassle, all contributing to “some reluctance to pursue” any third party green building certification. She believes the transparency and broad input in the process creating revised Green Globes New Construction standard will go a long way to driving growth in market share.

Which is why her ask of me was to encourage everyone to review and comment on the revised standard. The standard is now available on GBI’s website along with a public comment form at Worden committed that through the consensus body process, each person who comments will receive a response. But maybe more important, her organization is looking for substantive comments and more innovative ideas that may well find themselves in the final version of the revised standard.

When asked about what one Green Globes building you should see, Worden responded “the strength of Green Globes is that it can be applied to any building regardless of size, type or budget.” She went on to say, “I just love the quotes from the team that completed the Three Green Globes certified University of Sciences Integrated Professional Education Complex building in Pennsylvania,” including about how Green Globes support drove the team to a greener final product.

Having lived and worked in the Washington, DC area for almost 15 years she makes clear “I’m fortunate to say that now my home and office is in a place I chose to live in for quality of life reasons Camden, Maine.”

Almost singularly focused these days in getting more and additional comments to make the draft standard as good as it can be for owners and for the environment, Worden is passionate that GBI is a small organization with a big commitment and that she was willing to follow in the big shoes of Jerry Yudelson, “because I absolutely believe in the mission.”

Will Proposed Change to LEED 2009 Kill the Goose that Laid the Golden Eggs?

LEED 2009 plaque

The U.S. Green Building Council is soliciting comments on its proposal to change the prerequisites of the current LEED 2009 rating system increasing the minimum energy performance thresholds.

Rick Fedrizzi, USGBC CEO and founding chair, announced on October 29, 2014 that users will be able to register projects under the LEED 2009 rating system until October 31, 2016. That extension from June 27, 2015, the original date LEED 2009 registration was to close, was occasioned by the delay in LEED v4. But now, USGC is proposing an “update” (i.e., a substantive change) to LEED 2009.

It is difficult to argue against the good intentions of establishing minimum levels of energy efficiency to reduce the environmental and economic impacts associated with excessive energy use. But the proposed actual change in the prerequisites for LEED approval, after an express commitment that LEED 2009 would remain open for registration, is dramatic.

Today, the Minimum Energy Performance prerequisite, using Option 1, Whole Building Energy Simulation, requires that the applicant,

Demonstrate a 10% improvement in the proposed building performance rating for new buildings, or a 5% improvement in the proposed building performance rating for major renovations to existing buildings, compared with the baseline building performance rating.

The proposal is,

For projects that register after XX/XX/XX and are subject to the four point mandatory minimum, demonstrate an 18% improvement in the proposed building performance rating for new buildings, or a 14% improvement in the proposed building performance rating for major renovations to existing buildings, compared with the baseline building performance rating.

The referenced energy standard and modeling requirements do not change and still require the applicant to calculate the baseline building performance rating according to the building performance rating method in Appendix G of ANSI/ASHRAE/IESNA Standard 90.1-2007 (with errata but without addenda 25) using a computer simulation model for the whole building project. That is, this is not a move to the newer 2010 version of the standard.

The effective date of this change will be 30 days after the ballot period, if approved. Thus, the change will apply to LEED 2009 projects registering during the period between 30 days post ballot and October 30, 2016 (the last day to register a LEED 2009 project).

Note, also new point thresholds are provided for different building types (e.g., health care) to align the effective percent increase in performance.

You can read the specific changes in the Rating system document.

Public comment is open to everyone, USGBC member or not and the comment period runs through November 13, 2015. Comments can be submitted in two ways, either at the LEED Credit Library or through the LEEDuser discussion forums.

Voter registration opens on November 30, for USGBC members who want to vote on the proposed update as consensus body members, with a winter 2015 balloting contemplated.

Again, it is difficult to argue against increasing energy efficiency, but will this change LEED 2009 kill the goose that laid the Golden eggs? Most certainly not, but many are suggesting the destabilizing effect of changing a rating system mid stream, with little advance notice, cuts against the certainty that the real estate industry craves (.. even in this instance when the window will only be for those projects registered with GBCI from mid January, 2016 through October 31, 2016). Given that most building projects are budgeted, programmed, planned and designed over a period of years, to propose a substantive change, that will have significant first cost impact, to be effective in a matter of weeks, will reverberate throughout the building industry and, no doubt, expose participants to increased liability for this not programmed change. Additionally, projects attempting to comply with governmental mandates or contractual obligations for LEED certification may create jeopardy.

You are urged to take advantage of the fact that USGBC is soliciting public comment. If you support the update make yourself heard. If that comment is negative and clear about the risk to the LEED brand and market share, maybe this proposal will never get as far as being balloted.

Everyone involved with LEED projects should carefully monitor this blog for more information on the proposed update and consider registering new projects before the (as yet unknown) effective date.

And all engaged in the green building industry should promptly review their contracts to determine the implications of the proposed LEED update and additionally what amendments to contracts may be necessary and proper.

FTC Warning about Green Certification Seals

Image Federal Trade Commission Image Federal Trade Commission

Three weeks ago the Federal Trade Commission sent warning letters to 5 providers of environmental certification seals and 32 businesses using those green seals, alerting them to the Agency’s concerns that the seals could be considered deceptive in violation of federal law.

The FTC enforces the Federal Trade Commission Act, 15 U.S.C. § 45, which prohibits deceptive advertising. In 2012, the FTC issued updated Green Guides for the Use of Environmental Marketing Claims, 16 C.F.R. Part 260. The Green Guides provide businesses with detailed information about how to make non-deceptive environmental marketing claims, including through environmental certifications and seals of approval.

The Green Guides caution that unqualified general environmental benefit claims likely convey a wide range of meanings, including that a product has specific and far-reaching environmental benefits and that an item has no negative environmental impact. Section 260.4(b). The Guides go on to say, “because it is highly unlikely that marketers can substantiate all reasonable interpretations of these claims, marketers should not make unqualified general environmental benefit claims.”

To that end, the Green Guides state that environmental certifications or seals of approval may imply a general environmental benefit claim. Specifically, the “use of an environmental certification or seal of approval likely conveys that the product offers a general environmental benefit if the certification or seal does not convey the basis for the certification or seal .. ” Section 260.6(d).

The Green Guides advise that marketers may prevent deception by accompanying the seal with “clear and prominent qualifying language that clearly conveys that the certification or seal refers only to specific and limited benefits.” Section 260.6(e).

Moreover, the Green Guides offer several examples, including,

Example 5:  A marketer’s industry sales brochure for overhead lighting features a seal with the text “EcoFriendly Building Association” to show that the marketer is a member of that organization. Although the lighting manufacturer is, in fact, a member, this association has not evaluated the environmental attributes of the marketer’s product. This advertisement would be deceptive  …  The use of the seal would not be deceptive if the manufacturer accompanies it with clear and prominent qualifying language: (1) indicating that the seal refers to the company’s membership only and that the association did not evaluate the product’s environmental attributes; and (2) limiting the general environmental benefit representations, both express and implied, to the particular product attributes for which the marketer has substantiation. For example, the marketer could state: “Although we are a member of the EcoFriendly Building Association, it has not evaluated this product. Our lighting is made from 100 percent recycled metal and uses energy efficient LED technology.”

The FTC’s new business blog post, Performing Seals, further articulates how certification seals and logos can comply with the Green Guides. It includes two sample certification seals (see above) to illustrate dos and don’ts.

I have written a series of blog posts about FTC enforcement actions in this area, including Do Not Sell the RECs and Claim the Building Uses Renewable Energy.

At this time, no law enforcement actions are being taken, and the FTC is not disclosing the names of the companies it sent the letters.

In response to a request for comment, the owner of one of the most widely recognized environmental certification seals, who was not a recipient of one of the FTC letters, said,

The U.S. Green Building Council supports the FTC’s efforts to ensure that green certification seals accurately convey information to consumers, and not make claims that could be misleading. …

Third party certification is important here because it holds businesses accountable for what they say is true, and it signals to consumers that the certified item meets certain standards so that they can make educated decisions about what to buy. Third-party seals of approval can communicate other things as well, such as the values of the company or the class of the product. At USGBC of course, we stand for accountability, and we translate that accountability through the LEED third-party certification process.

The immediate practical impact of announcing the letters have been sent has been broad and swift with many businesses evaluating seals and logos on their websites and marketing materials, many of which connote membership in an environmental organization.

This law firm regularly assists businesses with green claims that can be made with certainty. If you have questions do not hesitate to contact Stuart Kaplow.

EPA Issues Significant Revisions to Underground Storage Tank Regulation

EPA has issued significant revisions to the existing 1988 underground storage tank regulation that will impact most, if not all, businesses with USTs.

EPA regulates over 571,000 USTs, down from a high of 2.1 million USTs in 1984.

As of January 1, 2015, more than 525,000 UST releases (e.g., leaks) had been reported since 1988, many contaminating soil and drinking water.

Photo U.S. EPA

Photo U.S. EPA

An UST is one or more tanks and any underground piping connected to the tanks that have at least 10% of their combined volume underground. The federal UST regulation applies to USTs storing petroleum and certain hazardous substances (i.e., less than 10,000 tanks have hazardous contents).

Some tanks are excluded from federal regulation including tanks storing heating oil used on the premises where it is stored, tanks on or above the floor of underground areas, such as basements or tunnels, etc.

Note, many states have a state program approval from EPA. In these states, the state’s UST regulation is followed in lieu of the federal regulation and states have 3 years to come into compliance with this new federal edict. Click for a list of states with state program approval.

This 2015 regulation changes certain portions of the 1988 UST technical regulation published in 40 CFR part 280. Nearly all businesses with USTs will be impacted by these new regulations and will in many instances have 3 years to come into compliance with the changes that include:

  • Adding secondary containment requirements for new and replaced tanks and piping
  • Adding operator training requirements
  • Adding periodic operation and maintenance requirements for UST systems
  • Adding requirements to ensure UST system compatibility before storing certain biofuel blends, and
  • Removing past deferrals for emergency generator tanks, airport hydrant systems, and field-constructed tanks.

Although not a change, comments to the draft regulation noted that many UST owners apparently do not maintain the $500,000 per occurrence insurance coverage required of UST owners that handle less than 10,000 gallons per month.

Click here for an EPA issued comparison of the 1988 UST versus new 2015 UST regulations.

While the number of releases has gone down significantly since 1988, releases of petroleum from USTs into the environment are still a significant concern today. USTs are a crucial part of our country’s energy infrastructure. A properly installed and managed UST should not threaten the environment. These updated regulations are a move in that direction that will require capital investment and changes in operations, but should not overburden business; and, we would expect the same of the 38 states that will overhaul state delegated programs in the coming years.

Utility Incentives Tied to LEED are Growing Geometrically

Last week Louisville Gas and Electric Company and Kentucky Utilities Company announced rebates from $2,000 to $10,000 tied to achieving certain LEED credits.

Electric utility based incentives that support energy efficiency, including LEED certification, are increasing in number across the U.S. at all but geometric rates, while at the same time new government incentives have stalled. electricmeter

Since September 1, new utility based incentives were announced, not only in Kentucky, but also in Ohio, South Carolina, New Hampshire, Missouri, Colorado, and Georgia.

Utilities offer incentives for energy efficiency, which might at first glance seem counterintuitive given that the utilities make money selling electricity, despite that most are funded by rate payers, .. for several reasons, including that some are required by state regulators (in at least 29 states), others have capacity constraints that encourage conservation (it is very costly to build a new power plant), and in a small number of utility markets there has been a regulatory decoupling of revenue and profits.

Many credit Pacific Gas and Electric as the first utility to offer a modern energy rebate program. Today, while incentives vary, most are crafted by a small group of consultants that serve the utility industry and enable very similar programs across the country.

It is worthy of note that there are at least 55 existing energy incentives across Kentucky.

The new electric utility incentive is available for construction of a new commercial facility that is LEED certified from between $2,000 and $10,000. The new construction may be under any of several LEED ratings systems: Commercial Interiors, Core and Shell Development, Healthcare, Retail: New Construction, Schools: New Construction, or Retail: Commercial Interiors; for work completed after the November 14, 2014 retroactive start date.

Rebates are based on points awarded on a sliding scale under LEED Energy & Atmosphere, Credit 1 – Optimize Energy Performance credit. A less than 25,000 square foot building that earns up to 5 points under that Optimize Energy Performance credit earns a rebate of $2,000, while a building that is larger than 25,000 and earns 16 points under that credit is eligible for a rebate of $10,000.

Some have criticized this and other utility based incentives as simply being too modest to be worth expending time, effort and dollars to apply for. And such may be a fair criticism of these programs that can be worth pennies on the dollar when compared to a local government multi year property tax credit that can easily have a value of hundreds of thousands of dollars.

Some utility incentives arguably have greater efficacy and offer more dollars. A regulatory required program in Maryland, available through BGE and other utilities, encourages energy savings pursued through the LEED credit for implementing Enhanced Commission Services. Funding is available for up to 50% of the cost of achieving the Enhanced Commissioning LEED credit, up to $20,000 per project.

This law firm maintains a national database of green building associated incentives, to be able to advise our clients about first costs of projects. It is clear from our new data that electric utility based incentives tied to LEED certification and earning specific LEED credits are increasing at all but geometric rates.