The California Energy Commission just published the report ordered by the legislature three years ago under SB 48. The CEC recommends a statewide Building Performance Standard covering every commercial and large residential building over 50,000 square feet. That’s roughly 50,000 buildings and 60 percent of the floor area in California.
If you own or operate large buildings, here is what you need to know.
The CEC report is a recommendation, not a rule
A statewide BPS requires new legislation, then a full rulemaking. Given California climate goals and the proportion of emissions resting in buildings, many policy watchers assume a statewide BPS is going to happen, and this report provides the research, structure and guidance for legislative action.
The policy would follow the existing AB 802 benchmarking program building for building, and benchmarking’s carve-outs carry over: buildings with more than half their floor area used for labs, manufacturing, or industrial purposes stay exempt.
Realistically, no building faces a statewide binding target before 2030. But the architecture proposed here will shape every conversation between now and then, including the local BPS programs already moving in San Francisco, Los Angeles, and San Diego.
Both Gas and Electric
Some in the building decarbonization community have argued that electric use doesn’t matter, especially in a 100% renewable future. The CEC disagrees and is proposing a dual metric BPS that takes electric energy efficiency into account.
Every covered building must meet two targets in each five-year cycle: site greenhouse gas intensity (GHGI) and site energy use intensity (EUI). Site GHGI counts only what you combust onsite (e.g., natural gas). Electricity counts as zero on the GHG metric no matter where it comes from; there is no value provided for optional renewable purchases. The EUI metric is there to make sure buildings don’t electrify wastefully. One capital plan has to satisfy both numbers.
Both metrics will be measured in five-year cycles matched to capital planning.
The structure is genuinely owner-friendly
The CEC studied a decade of BPS programs in other states and appears to have learned from the stumbles. Many jurisdictions set aggressive early goals that weren’t politically feasible. CEC recommends final targets land in 2045, one of the most patient timelines of any BPS in the country.
There’s portfolio-level compliance for multi-building owners, plus adjustment pathways for financial hardship, historic buildings, and technical infeasibility. Gridium serves many large building owners and the report thankfully names high-rise electrification challenges and utility grid capacity explicitly.
Penalties would be recycled into compliance assistance instead of the general fund. Liens and public shaming penalties that have turned the policy into a political football elsewhere were considered and rejected. Whatever grumbling there’s been about the three-year wait is offset by the obvious stakeholder outreach, including the Real Estate Roundtable.
But you can’t pay your way out. Unlike Boston, Maryland, or Seattle, the draft includes no alternative compliance fee. You cannot write a check instead of performing.
Benchmarking is suddenly high stakes
The CEC recommends setting each building’s starting point from a multi-year average of benchmarking data, most likely calendar years 2025 through 2028. The AB 802 benchmarking report your buildings submitted last month will likely define their regulatory trajectory for the next two decades.
Statewide benchmarking compliance sits around 50 percent today, and the CEC says it will start enforcing, with penalty authority of up to $2,000 per day. Buildings that don’t report don’t escape; they get assigned a baseline from the median of their property type, which the report itself admits may not fit their operations. And the CEC plans to cross-check submissions against the utility billing data it already collects from PG&E, SCE, SDG&E, SMUD, LADWP, and SoCalGas.
The practical takeaway: treat benchmarking like the regulatory filing it just became. Verify your gross floor area, confirm every meter is captured, get whole-building tenant data from your utility, and document anything anomalous about occupancy. Denver’s BPS program logged target-adjustment requests from a quarter of its covered buildings, mostly to fix bad floor area and energy data. Clean data now is cheaper than an adjustment application later.
Stay active
The CEC holds a remote workshop on July 29, and written comments are due August 21 in docket 24-BPS-01. The details still open (steam and DER treatment, penalty amounts, early-action credit) are exactly the ones worth commenting on. For buildings with district steam, cogeneration, or fuel cells, that matters, because the draft says almost nothing about how those systems will be treated. Onsite generation reads as onsite combustion under a site GHGI metric. Owners with those assets should be paying close attention to the comment process. Building owners showed up for this docket over the past two years and it shows in the draft. Worth showing up once more.
