Custom Energy, a Spokane Valley-based energy solutions company specializing in Clean Buildings Act compliance, is on a path of continued growth after being added to Washington state's Energy Service Companies list in May. The new designation enables the company to build on their rapid expansion of employees and service areas since it was founded two years ago.

Since its inception in 2023, Custom Energy has grown from two employees to over 20 and has completed Clean Buildings Act-related benchmarking for about 25 million square feet of space across nearly 350 buildings statewide.

 

“We are now able to do public works for the state of Washington from their energy services contracting list,” she says of the designation. 

 

Custom Energy provides energy and sustainability services to owners of existing buildings, primarily helping them comply with Clean Buildings Act requirements. 

 

“We do everything from consulting to construction, with a little design in between,” James says. 

 

Custom Energy’s work includes performing benchmarking to determine whether a building is meeting the requirements of the Clean Buildings Performance Standards, then figuring out what needs to be done to become compliant. If a building is already compliant, or if it’s on an exempt list, Custom Energy will help building owners file the necessary paperwork with the state. 

 

“We’ll do lighting projects. We’ll replace boilers,” James says, adding that about 75% of the Custom Energy team are mechanical engineers. “We’ll do anything that would help bring the energy use in their building to a better place.”

 

She continues, “The majority of the work has been with Clean Buildings, which comes with a lot of complexity, because it is a new legislation.” 

 

The Clean Buildings Act, which was passed in 2019 and expanded in 2022, aims to reduce greenhouse gas emissions in Washington state by targeting buildings, which account for 27% of statewide emissions, according to the Washington State Department of Commerce.

The Washington Clean Buildings Performance Standards apply to Tier 1 buildings, which are commercial structures over 50,000 square feet in size, and have been expanded to include Tier 2 buildings of 20,000 square feet or more, including multifamily buildings.

Custom Energy will assess and determine which tier a building falls under, whether it’s on an exempt list, and then determine whether the building is passing or failing with regards to compliance. 

 

Compliance deadlines depend on the size of a building, but the earliest deadline is June 1, 2026, with additional deadlines coming in 2027 and 2028. 

 

“If you’re failing, then we would go down the path of figuring out why you’re failing, what things need to be done,” James says.  

  

Sometimes, there’s a low-cost solution to make existing pieces in a building work better to reduce energy consumption.  

  

“It might mean a project, but a lot of times it doesn’t,” she says. 

 

A primary goal of Custom Energy, James says, is to find the most cost-effective solutions for building owners. 

 

“A lot of building owners are just not in a place to take on a million-dollar project right now, especially in the private sector,” says James. 

 

She adds, “What we like to do is not sell them on what we want to do, but to meet them where they are and do the project that makes sense for their building.” 

 

Once the needed compliance work is identified, some building owners will opt to handle the work themselves, while others will bring Custom Energy on as the general contractor. Custom Energy also will subcontract work to other companies, James says. 

 

To bring a building into compliance, James says heating, ventilation, and air-conditioning systems and lighting are among the most commonly needed upgrades the company handles.

 

Custom Energy’s clients include Spokane Public Schools, Mead School District, the city of Spokane Valley, Cheney Public Schools, Deer Park School District, Spokane Colleges, Walla Walla Community College, Skagit County, Kiemle Hagood, Rockwood Retirement Communities, Fourth Memorial Church, and the Northwest Museum of Arts & Culture, among others. 

 

Although it’s less common, James says some building owners opt to take on the state’s fines rather than pay to complete the necessary improvements to meet the requirements of the Clean Buildings Performance Standards. 

 

For Tier 1 buildings, the maximum penalty is $5,000, plus an amount based on the duration of any continuing violation, according to Commerce’s website. The additional amount for a continuing violation may not exceed $1.50 per square foot. For Tier 2 buildings, the maximum penalty is $0.30 per square foot. 

 

Penalties are assessed for each 5-year compliance period. 

 

“For the most part, we’ve been able to help people get into compliance for less than the fines,” James says. 

 

While some projects can be costly, there are grants available, especially to the public sector. Custom Energy helps its clients with finding and applying for such grants. There are fewer grants available to the private sector, but they do exist. The state also offers incentives for early adopters of the Clean Building Performance Standards, James adds.

Custom Energy works closely with Commerce to ensure the correct information is applied to their clients' properties.

  

“There’s been a lot of changes inside of the back-and-forth with Commerce, and that creates a lot of complexity for navigating it,” says James. 

 

Part of being on the ESCO list — there are 10 other companies on the list statewide — means that Custom Energy has to guarantee savings for building owners’ projects, which presents some risk for the company. 

 

“We have to do a lot of work up front to make sure that we know this is how much money that project is going to save,” she says. 

 

The Department of Enterprise Services Energy Program contracts with these ESCO companies to deliver the best value for clients’ projects, according to the department’s website. 

 

Custom Energy is already working on some ESCO projects, James notes. 

 

“That’s going to add a whole other layer of hiring and growth,” she says. 

 

In addition to the expected ESCO-fueled growth, James expects to see demand increase as additional jurisdictions outside of Washington state implement legislation similar to the Clean Buildings Act. 

 

She points to Oregon, California, Colorado, and New York as examples of states with similar requirements already in place or being implemented. 

 

“Our hope is to expand into other regions,” James says. “We’ve got a potential couple projects in Colorado and in Oregon right now, so we’re just on the cusp of starting in another state.”