McKee seizes veto pen to block building energy use reporting bills

In a shocking move for environmentalists, Gov. Dan McKee is exercising his veto power to block legislation requiring large buildings to report their energy use.

The companion bills by Rep. Rebecca Kislak, a Providence Democrat, and Sen. Meghan Kallman, a Pawtucket Democrat, call for a statewide benchmarking program in which large commercial and multifamily buildings would have to track and report their energy use to state regulators, with information compiled in an annual report submitted to lawmakers and put online. The goal is to develop a set of performance standards limiting building energy use by type and size to help meet the state’s mandatory decarbonization goals.

The six-page bill, passed by a 48-15 vote in the House and 33-5 in the Senate and sent to McKee’s desk on June 18, bears no mention of any energy use standards or penalties.

Yet McKee cited potential penalties for property owners, and the administrative burden on the Rhode Island Office of Energy Resources to impose them, as reasons why he pulled out the veto pen — the first and only time from the 234 bills sent to his desk this year. 

“The Act imposes new reporting and compliance obligations on private property owners without providing technical assistance or financial support to facilitate compliance,” McKee wrote in a set of near-identical letters Wednesday to Senate President Valarie Lawson and House Speaker Christopher Blazejewski. “At a time when Rhode Island continues to face housing affordability challenges and businesses are managing rising costs, the Act would create new administrative burdens and potential penalties without the resources necessary to support compliance.” 

The governor’s singular use of his veto power this year has already drawn outrage from environmental advocates and lawmakers.

“This is low-hanging fruit, easy stuff,” Kallman said. “The governor is looking for every excuse to justify doing something that is inexcusable and unjustifiable.”

She continued, “I think it demonstrates a rather shocking lack of awareness about the moment we’re in.”

Lawson and Blazejewski remained noncommittal on a potential veto override vote — requiring a three-fifths majority in both chambers — awaiting discussion with their colleagues, spokespeople Greg Paré and Larry Berman said in an email Thursday.

McKee referenced conflict between the bill and a more limited benchmarking proposal he put forward in January, which was included in the fiscal 2027 budget also approved by the Rhode Island General Assembly. The vetoed legislation required owners of commercial and multi-family buildings that are 25,000 square feet or larger to report annual energy use, while McKee proposed — and lawmakers agreed to — limiting energy reporting to state-owned buildings over 25,000 square feet. His policy has a March 31, 2029, start date, while legislators called for a May 15, 2028, start date for buildings 50,000 square feet or larger, with buildings 25,000 square feet and up starting May 15, 2030. 

“The framework enacted through the FY 2027 budget represents a more practical and sustainable path forward and does not place any burden on residential and commercial properties,” McKee wrote in the letters to legislative leaders. “Further, the State can build the expertise, systems, and data infrastructure necessary for long-term success while leading by example.

Taking notes from the capital city 

Eight states, including Massachusetts, already require certain large buildings to report energy use — some are limited to public-owned properties while others extend to commercial and residential buildings, and a few also come with energy use limits. 

Providence authorized its own energy tracking program for large buildings in city limits in 2023. The capital city’s program began with less than one full-time staffer and a $28,000 budget, Priscilla de la Cruz, city sustainability director, said. In its first full year of mandated reporting for buildings over 50,000 square feet, more than 40% of the 853 buildings complied — double the national average, de le Cruz wrote in a March 11 letter to lawmakers. The city has also set up an online software program that pulls data from already available online resources to develop a list of eligible properties and energy use, cross-checked against automated billing information from Rhode Island Energy, de la Cruz said.

Advocates envision the same technology and partnerships could be easily extended to the 4,000 properties encompassed in the legislation with little to no extra cost. 

However, the Rhode Island Office of Energy Resources in a February report put a $1.4 million annual price tag to record and report energy use for 4,000 large buildings statewide on a benchmarking program. Limiting the program to large municipal and state-owned buildings, as McKee suggested, would cost $480,000, the report stated. The report also highlighted data collection and outreach concerns with building owners, who may not understand or may resist mandates.

Those concerns were echoed in written letters to lawmakers submitted by RI Business Leaders Alliance, the National Federation of Independent Business, the Rhode Island League of Cities and Towns, and even RIHousing.

“We are concerned that OER does not currently have the staffing or infrastructure to identify, educate, train and communicate with all of the property owners that would be subject to this requirement,” Carol Ventura, executive director for RIHousing, wrote in a March 11 letter to lawmakers.

Ventura was not immediately available to provide more detail on how the quasi-public state agency’s affordable housing and development programs would be negatively affected.

Kislak acknowledged that adding energy use reporting requirements to housing projects that rehabilitate older buildings, versus new construction, must add some extra upfront cost and time.

But the future savings would easily make up for it, she said.

Tracking building energy use — responsible for 30% of the state’s annual greenhouse gas emissions — is a top priority for policy leaders looking to meet the state’s incremental decarbonization mandates under the Act on Climate law. But it also helps home and business owners, landlords and renters by identifying ways to save on their energy bills through modest energy efficiency upgrades.

“Tracking building energy use is really just a standard building practice that can help improve health and safety and lower costs,” Tina Munter, Rhode Island policy advocate for Green Energy Consumers Alliance, said. “Greater transparency is, I think, a precursor to energy affordability.” 

Surprised? Or not. 

Despite the pushback from business groups and state and local agencies during initial committee hearings earlier this session, Munter was not expecting a veto from McKee. The bill has already been stripped of the more onerous provisions around energy limits and penalties that characterized iterations from prior years. And McKee signed the 2021 Act on Climate law that sets the state on a path toward zero net emissions by 2050.

“From a policy standpoint, to meet the current laws we have in place, it’s pretty disharmonious or not aligned in my view for him to veto this,” Munter said.

Yet Kislak saw the writing on the wall when McKee sought to dismantle key energy efficiency and renewable energy programs in his initial fiscal 2027 budget proposal. Lawmakers eliminated McKee’s controversial proposals to cut energy efficiency program funds and delay renewable electricity deadlines from the final fiscal 2027 budget, although they preserved his idea for a state benchmarking program for large public buildings. 

“At this point, I am not surprised,” Kislak said. “I’m hugely disappointed, but this is in line with his budget article.”

Climate Action Rhode Island accused McKee of conflating his administrative duties with his reelection campaign, noting that he vetoed the legislation after the environmental group endorsed his Democratic gubernatorial rival, Helena Buonanno Foulkes.

“While we cannot know the Governor’s motivation for issuing this veto, it is difficult not to question whether politics played a role,” the climate group said in a press release Wednesday night.

Jeff Migneault, executive director for Climate Action Rhode Island, said the group’s statement was only intended to raise a question.

“The will of Rhode Islanders, as expressed through their representatives, was clear,” Migneault said. “Opposing them going into a democratic primary doesn’t sound like a winning strategy.”

Olivia DaRocha, a spokesperson for McKee’s office, disputed Climate Action’s suggestion of political motives.

“That’s simply not supported by the facts,” DaRocha said in an emailed response Thursday. “The Administration has been on the record for years, through written testimony, opposing and raising concerns about this policy.”

Kallman and Kislak both vowed that the measure would be revived, either through a veto override or reintroduced at the start of the 2027 session.

“The misguided choice of a veto here is not the nail in the coffin for climate resilience,” Kallman said.