Energy Benchmarking and Transparency:
Thoughts from a one day workshop and preview of things to come
On December 4th I attended a workshop on Energy Benchmarking and Disclosure
Programs, sponsored by the Resources for the Future (RFF) (www.rff.org). They will
be releasing a summary of the workshop next year and I wanted to give a preview
of some of the topics discussed, the issues raised and provide some additional
information for those who want to know more.
The stated purpose of the workshop is outlined in the paragraph below, what I
heard and took away from a building owner’s perspective is summarized after.
“Ten US cities and one county have adopted energy benchmarking and disclosure (B&D)
ordinances for commercial buildings above a certain size and several more are considering
doing so. These programs are designed to bring more information about energy use and
energy performance to the attention of building owners, tenants and others involved in
commercial real estate markets. They are also intended to help energy efficiency program
managers at utilities or other organizations better target their energy efficiency efforts to
buildings with greater energy savings potential. Typically B&D programs are one of many
components of a local climate action plan that is intended to help the city reach a
particular emissions reduction goal. The purpose of this invitation-only workshop was
fourfold:
1. To identify common and distinguishing features of benchmarking and
disclosure ordinances and provide an initial assessment of implementation,
compliance, and experiences of those affected by the programs;
2. To assess what we are learning from the data that these programs are
producing;
3. To assess whether these programs are producing the information about
efficiency potential needed to best target our energy efficiency policies;
and
4. To figure out how best to evaluate the programs in their ability to generate
energy savings and CO2 emissions reduction
RFF Agenda for Energy Benchmarking and Disclosures.”
There were 4 panels the first was made up of representatives from cites who have
implemented benchmarking and what they are finding. Every jurisdiction is using
Energy Star (ES) Portfolio Manager for reporting. Compliance was found to be good
in most places but the definition of compliance makes a big difference in what the
cities are reporting. In fact some reported that some building operators needed to
By: David Borchardt, Principal DPRM LLC
January 2015
use city owned computers to enter data since computers were not available to
some of the people doing the reporting. Data quality seems to be one of the
bigger issues with a lack of understanding of what information is needed in Portfolio
Manager to ensure the reports are accurate. Cities are just beginning to evaluate
and understand what the data means and its validity. Others are creating report
cards for building owners that compare them to other local building how this
information is being used by building owners is unknown. Some cities are thinking of
reporting the data directly to tenants which raised many questions on implications
of bypassing the building owners.
The second panel was made up of utilities and there was a mixed bag of those
utilities which are more than willing to supply data to building owners and those
that want to charge for the information. One utility representative made the point
that the cost to build new infrastructure was one of the biggest drivers for them to
push for reducing peak demand rather than energy efficiency alone. They stated
that demand and energy use were different things. The impact of how each utility
works with the PUC impacts the value they see in benchmarking. Some were more
than will to work with jurisdictions but other would rather only work with the
customers directly.
The third panel was made up of government, building industry organizations, and
building information service providers each one stated what they saw as the value
of benchmarking to their goals for the either their organization or its members. One
thing of note is that the number of building benchmarking in ES is growing
exponentially and while benchmarking legislation might be one factor is it a very
small one in the growth that has been seen. One service provided noted that one
owner they were working with decided to certify their building under LEED EB when
they found out their ES score was so high it made it easy.
The final panel was made up of academic, research and industry organizations
that advocate for efficiency. They made it clear it was too early to use the data
being collected to come up with any clear conclusions since the data quality is still
an issue they did note that there are techniques cities can use to improve the data.
One thing of note was that while many REITs are only impacted in some locations
so far by benchmarking legislation they are taking upon themselves to benchmark
their entire portfolio.
What I took away was that benchmarking is in its infancy and that we will have
better data as more and more cites implement benchmarking. There is hope the
market will respond by focusing on energy efficiency but there is no conclusion that
might happen and the answer might take many years. Other thoughts are listed
below in no particular order.
By: David Borchardt, Principal DPRM LLC
January 2015








Until the banks, brokers, and customers (tenants) make benchmarking a
decision point or value the information it will not have a big market
impact. Owners will follow the mandate but might begin to resist if it seen as
adding little value and just becomes a burden.
One thing that was mentioned is that some cities require different reporting
requirements than that of Energy Star (ES) and that there are companies
creating two records in Portfolio Manager for one building. This could
impact the validity of the data in Portfolio Manager unless there is a way to
keep that data set out.
One fuel source that is hard to track is fuel oil usage since it is delivered to
the building periodically and is not metered by usage. I would be interesting
to see how many buildings impacted by benchmarking use fuel oil.
I kept hearing that the ES score average in many cites was near 70. This
would seem to indicate what the new CEBECS data set might lead to a
significant raising of the bar for commercial buildings when it comes to ES. If
an average building is near 70 it means that 70 might be the new 50 leading
one to think that unless your building is an 85 or better today you might not
be eligible to meet ES. ES is important to building owners since it is
recognized achievement and Costar tracks this information. This might
move the market more than any benchmarking legislation.
The cost of energy is probably a bigger driver than any benchmarking. In
some cities demand and time of day pricing are bigger drivers than overall
energy use and this impacts how an owner or tenant look at energy and
how much they spend
The cost of energy is probably only 10% of a buildings operating cost and
when a tenant and broker are looking at a building they want to see all the
operating costs not just energy.
City report cards need to be carefully thought-out they should be seen as
adding value to the real-estate community. They should be used to
educate tenants in working with the owner by reducing use in the space
they control.
One city representative brought up a good point that using the word
disclosure was a negative and it was better to use the word transparency.
Below are a table and a map outlining the current benchmarking legislation and
locations followed by some links to additional resources and readings.
By: David Borchardt, Principal DPRM LLC
January 2015
By: David Borchardt, Principal DPRM LLC
January 2015
Other resources or readings for reference:
 Building Rating (http://www.buildingrating.org/) The online hub for building
energy and water benchmarking policies.
 Global Building Performance Network (http://www.gbpn.org/) The Global
Buildings Performance Network (GBPN) organization mission is to provide
policy expertise and technical assistance to advance building energy
performance.
 Creating Value from Benchmarking: A Utility Perspective, a new paper by
IMT, examines benchmarking from the utility perspective
http://www.imt.org/uploads/resources/files/Creating_Value_From_Benchm
arking_IMT.pdf
 How Mandatory Disclosure of Building Energy Performance Affects Your
401(k)/Retirement http://www.nilskok.com/
By: David Borchardt, Principal DPRM LLC
January 2015