Building Energy Transparency

In a July 2011 report by the Institute for Marketing Transformation the City of Seattle and Washington State are featured among several national leaders in implementing new energy standards.

The report is the product of a first of its kind "Roundtable on Implementing Benchmarking and Disclosure Policy" held in November 2010 that brought together senior policymakers from 10 U.S. states and cities, national building energy efficiency experts, and leaders from the real estate industry.

According to the report "more than 50 national, regional and local governments, including world economic leaders such as the European Union, China, Australia and Brazil have policies requiring the new rating and disclosure of commercial building energy performance."

The premise is that "Rating and disclosure policies enable the flow of building energy performance information among real estate stakeholders, allowing property and financial markets to compare the energy performance of buildings during a transaction and appropriately value energy efficiency."

For example a potential tenant who is making a choice between leasing or renting space in building A or building B when armed with the efficiency profile of each building is more likely to lease or rent the space of the building with the greater efficiency (all other considerations being equal) because of the lower utility costs and the greater comfort level of the building with the greater efficiency.

Energy efficiency can be measured, and given a value in the market place. This is only possible when energy efficiency ratings for the built environment are available for review by the public.

As cities and states grapple with policy requirements and implementation the conclusion of the Round Table is that "best practices are rapidly emerging that can help policy implementers overcome barriers and effectively implement rating and disclosure policies."

The perspective of the Shoreline Green Business program is that State law for reducing climate pollution in the built environment and City of Seattle ordinances means business opportunities for companies that assist property owners who seek to comply with the new requirements, and the ability of commercial building owners to maximize the return on energy savings investments.

In Seattle "Benchmarking" (getting a baseline measurement of energy usage on a building then tracking changes on an annual basis) for non residential buildings of 10,000 square feet or more must be reported to Seattle Department of Planning and Development and upon request to transactional counterparties when conducting a sale, lease or financing. Seattle also requires benchmarking disclosure of multifamily units consisting of 5 + units per building.

In an effort to assist property owners with compliance the Seattle Department of Planning and Development is planning to launch a new website about the ordinance, partnering with the Northwest Energy Efficiency Alliance's BetterBricks program to administer the Portfolio Manager training workshops and has published a short and informative article about the ordinance on its public BuildingConnections blog.

Washington State in 2009 passed Senate Bill 5854 "Reducing climate pollution in the built environment." The law requires benchmarking and public disclosure for state-owned buildings and non-residential buildings of 10,000 square feet or greater. Compliance is being phased in from 2011 to 2012.

The Northwest Energy Alliance BetterBricks program offers training in Building Operator Certification and Energy Management Certification Program and customized training including Heating Ventilation Air Condition (HVAC) system maintenance, data logging and load calculations

There is also a free "Portfolio Manager" benchmarking tool available online under EPA's Energy Star Program.

The concept of transparency in labeling is not new. We see it in appliance energy labels. However, "Existing energy rating systems have never been applied through public policy and often require policy implementers to promulgate new rules and guidelines."

Obtaining accurate data can be a difficult in some localized situations. Benchmarking training programs help to increase data quality by reducing the potential for accidental benchmarking errors by stakeholders.

There are standards in place for new construction, but 40 percent of commercial building stock in the United States is at least 30 years old. Most older buildings were constructed at a time when energy efficiency and tracking energy usage was not considered.

Establishing a baseline of information for older buildings may require some assistance from local utilities. Beginning June 1, 2010 utilities providing service to buildings in Seattle are required to maintain customer energy consumption records in a format compatible with the EPA Portfolio Manager software. The State requires the same for all consumer or investor-owned electric and gas utilities providing customer service to more than 25,000 customers in Washington as of January 2, 2010. Avista Utilities, Puget Sound Energy and Seattle City Light have added this capability, "however as of July 2011, most qualifying Washington utilities are not in compliance with SB 5854."

Property owners who systematically assess their building energy performance have opportunities to improve energy efficiency and benefit from the improved energy rating of their building with higher than average occupancy rates.

Other cities/States examined were Austin Texas, New York City, San Francisco, District of Columbia and the State of California.

Commercial property owners and business leaders will benefit from reading the report and accessing the offered resources. City leaders across the state can also use the report as a resource to publicize to their local business community and to inform their policy making decisions.