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What’s Ahead for Mandatory Benchmarking?

Dec. 1, 2014

How to prepare for reporting requirements in your area.

Building benchmarking laws have spread slowly across the U.S. since California enacted its version in 2007. But cities across the country continue to follow suite, implying policies may be picking up momentum.

Energy benchmarking laws are gradually gaining ground
across the U.S. Take action now so you’re prepared
for future disclosure requirements.

“Cities know remarkably little about their buildings. In many cases, they don’t have a very good sense of how many buildings they have and how big they are,” notes Cliff Majersik, Executive Director of the Institute for Market Transformation, which promotes energy efficiency and green buildings. “Even utilities don’t have the best idea – they know how much energy flows through their meters, but not how efficiently that energy is being used. Benchmarking data helps guide policies – city leaders think about the results as they design programs and incentives.”

Your jurisdiction may not impose mandatory benchmarking yet, but it’s not too early to incorporate the practice at your own organization – it’s a smart idea regardless of what happens with your local legislators. Lay the groundwork by familiarizing yourself with existing policies.

Benchmarking Tools

All of the benchmarking laws launched so far rely on the EPA’s Portfolio Manager tool to track and report energy consumption. This program controls for occupancy, building type, and other factors to develop a fair assessment of how efficiently the building operates.

While square-footage requirements vary – some policies only impact buildings over 50,000 square feet, while others start as low as 20,000 – the aim is the same in every municipality.

“If you’re going to implement ambitious goals to fight climate change, you need to think about what to do about existing buildings. You can’t just focus on new construction,” explains Majersik. “Energy efficiency policies are the only ones that can really move the needle without breaking the bank. They’re relatively inexpensive because they just provide information to the market, so you can implement them without billions of dollars in expenses.”

Some places, such as Boston and Minneapolis, also require water use tracking, so take a look at your existing water monitoring. It may be worth your while to invest in metering that can give you a clearer picture – you may even find an unexpected source of water waste.

3 Ways to Get Ready for Benchmarking Laws

Think your city may soon adopt a similar disclosure policy? Consider these efficiency tips to get your building ready.

1) Start using Portfolio Manager: If you haven’t already enrolled your building with this free tool, it can’t hurt to start. Once you’ve entered the necessary information, you can see how your building compares to similar structures in your area. A score above 75 qualifies your building for an ENERGY STAR certification, adding an extra feather to your cap even if your city isn’t requiring you to benchmark yet.

2) Review your data sources: Which meters can you access to gather information? A building with one meter for the entire facility is easy, but one with multiple tenants metered separately could be a challenge. Majersik recommends starting with the utility and working backward if necessary.

“In some jurisdictions, you can just go to the utility and ask for an aggregated summary,” says Majersik. “Others will require the building owner to obtain account numbers or tenant signatures on a form, which can be time-consuming. When future tenants move in, it’s a good idea to include utility information in the stack of forms they have to fill out so that you’re authorized to get the data later.”

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3) Implement efficiency improvements: There’s no point in waiting until benchmarking laws are looming in your jurisdiction before taking on energy efficiency initiatives. The sooner you get started, the sooner you can reap the savings regardless of your area’s requirements (or lack thereof). If your city or state eventually adopts benchmarking requirements, you’ll be ahead of the game and won’t have to worry about the public disclosure stipulations that some existing benchmarking laws include.

If you have tenants, go a step further and incentivize each organization to partner with you on improvements. Traditional gross leases base energy costs on square footage, giving tenants no incentive to save energy. Net leases pass the operating expenses on to tenants, so the building owner gets no reward for investing in whole-building improvements.

To combat this phenomenon, consider implementing a green lease, Majersik recommends. This strategy structures leases so that energy costs and efficiency benefits are shared by owners and tenants, thus encouraging both to save energy. You can even obtain Green Lease Leader certification for your organization, adding some extra prestige on top of the operational savings. 

“Reach out to your tenants and make the case to them. Ask them to sign a side agreement that would augment their lease instead of reopening it,” says Majersik. “This is a great opportunity for FMs. Working jointly with your tenants to achieve increased efficiency is an important goal.”

Janelle Penny [email protected] is Senior Editor of BUILDINGS.

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About the Author

Janelle Penny | Editor-in-Chief at BUILDINGS

Janelle Penny has been with BUILDINGS since 2010. She is a two-time FOLIO: Eddie award winner who aims to deliver practical, actionable content for building owners and facilities professionals.

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