Construction project in your future? Remember 1.5% for green energy!

Ross Williamson

From our Spring 2015 e-newsletter

Is your public entity considering a new building, or the major renovation of an existing building? If so, you need to consider whether state law requires the inclusion of green energy technologies in your building project.

Oregon law requires public entities, including local government entities, to spend 1.5% of the total contract price of a public improvement contract for new construction or major renovation of a public building on green energy technology. This requirement was originally established in 2007, but was amended in both 2012 and 2013. The requirements are found in ORS 279C.527 – 279C.528 and administrative rules adopted by the Oregon Department of Energy.

So what is “green energy?” It is more than just solar panels. Green energy includes solar technologies (photovoltaic, solar hot water, passive solar and day lighting) and certain geothermal systems.

The requirement for adding green energy technology to a building applies to any new public building with construction costs of more than $1,000,000 and any building renovations with construction costs of more than $1,000,000 and 50% of the insured value of the building.

The law also includes reporting requirements. If you have a building project subject to the requirements, you must report the project to the Department of Energy. An electronic form is available on the Department’s website. You will need to make the report before construction of the green energy system begins.

Even if the construction project fits within the dollar values requiring the green technology, there are some exceptions. For example, a public body can consider whether green energy technology would be inappropriate for the building site. But the exceptions come with other requirements that the public entity must follow.

The 2015 Legislature is proposing small “tweaks” to the law, but no wholesale changes. HB 2987 would make some changes to the process used by governments if the government excludes a project from the green energy requirement. HB 3329 would make a change to the geothermal technologies that would qualify as “green energy.” As of this printing, both bills have received hearings, but neither bill has been adopted.

The take-away is this: If you have a construction project that is projected to cost over one million dollars in your future, please make sure you investigate the green energy requirements. These requirements have been in place for several years now, but we have found that many public entities are not familiar with all the requirements. Before you start a new project, you should contact your legal counsel or the Department of Energy to help you understand all the ins and outs of the green energy requirements.