Tier 2 is a mandatory state regulation targeting energy efficiency in smaller commercial facilities and multifamily properties. Covered building owners are required to implement a formal Operations and Maintenance (O&M) program, develop a structured Energy Management Plan (EMP), and continuously benchmark their utility data using the Clean Buildings Portal and Energy Star Portfolio Manager (ESPM) to demonstrate compliance.

The Tier 2 mandate explicitly covers commercial buildings and public school district structures measuring between 20,000 and 50,000 square feet, as well as any multifamily building over 20,000 square feet.

Building owners must fully implement their energy management protocols and submit their initial compliance documentation to the Washington State Department of Commerce by July 1, 2027.

Washington State has allocated $150 million in incentive funds to encourage early compliance ahead of the mandatory deadlines. Financial payouts are distributed based on building type:

• Multifamily Buildings: Eligible multifamily residential properties over 20,000 square feet can capture an enhanced incentive payout of up to $0.75 per square foot.
• Commercial & Other Covered Buildings: Eligible commercial buildings between 20,000 and 50,000 square feet qualify for a base incentive payout of $0.30 per square foot.

To secure these utility-administered state funds, property owners must establish their benchmarking profiles, fully implement their energy management plans, and submit verified documentation to the state portal before the program window closes or funding caps are reached

The Washington State Department of Commerce is legally obligated to assess administrative penalties if a covered building fails to submit an approved compliance application, an exemption, or an official extension by the mandatory deadline.

While Tier 1 buildings face heavy ongoing fines, penalties for Tier 2 covered buildings are assessed as a flat fee capped at a maximum of $0.30 per square foot for the five-year compliance cycle.

Example: A 35,000 sq. ft. Non-Compliant Tier 2 Property

Total Potential Penalty = Gross Square Footage x $0.30

35,000 sq. ft. x $0.30 = $10,500

A Qualified Energy Manager (QEM) is the designated professional authorized to administer a building’s Tier 2 compliance data. The regulation allows facility managers, building operators, and owners to serve as their own QEM. To achieve this status, individuals must complete the official state-approved Clean Buildings Tier 2 training program and possess at least two years of professional or educational experience in commercial building operations or energy management. The QEM is responsible for implementing the necessary Operations and Maintenance (O&M) protocols, establishing the Energy Management Plan (EMP), and officially signing off on all final portal documentation submitted to the Department of Commerce.