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News Room: National Headlines

Energy Reporting: Its the Law

Wednesday, August 22, 2012   (0 Comments)
Posted by: Julie Herman
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Reprinted from

By Nadav Malin and Tristan Roberts

Laws mandating energy use disclosure are gaining steam in the U.S. as more cities and states seek to leverage these transparency requirements to drive energy savings and job creation. Instead of heavy-handed requirements that existing buildings get system upgrades or improve operations, local governments are attracted to policies with a much lighter touch: exposing energy performance to the light of day. They hope that just disclosing energy use patterns will lead to changes in behavior, and there’s reason to believe that they may be right.

Benefits of Benchmarking and Disclosure

Energy reporting mandates pick up where codes leave off. While energy codes mandate increasingly stringent levels of energy efficiency in new buildings and major renovations, they don’t address existing buildings that are not otherwise being renovated, they don’t ensure that the properties are managed for efficiency, and they don’t encourage performance beyond the code minimum. Disclosure laws in the U.S. either require regular reporting to the government or make energy performance data available when a property is sold or leased. Most government reporting programs include a provision for that information to be made public at some point—and it is these public disclosure mandates that really get the attention of property owners and managers.

Fear of a scarlet letter

That disclosure can bring a lot of benefits to high-performing buildings that win bragging rights, but owners and managers of other buildings might not appreciate them. The public disclosure component of the new energy reporting law in Philadelphia passed over the objection of the Building Owners and Managers Association (BOMA) of Philadelphia, whose president testified that a building could be unfairly branded with a "scarlet letter” due to the actions of an energy-intensive tenant, according to a report in the Philadelphia Inquirer. In the age of Facebook, that "scarlet letter” fear might not be too far off the mark. Although data like these in the past might have been buried in a file cabinet somewhere, websites like are making data public and easy to find (see "No More Secrets—‘Facebook’ for Buildings Tells All,” EBN July 2012). As data gets released from New York City this fall, and from other cities in years ahead, we can expect to learn that a lot of prominent buildings—some of them new, "green” buildings—use a lot of energy. Concerned that the Energy Star benchmarking algorithm doesn’t account for certain high-energy demands in a building, a number of New York owners lobbied to have certain buildings excluded from the scoring entirely. New York’s Local Law 84, which mandates benchmarking and disclosure, exempts buildings that have at least 10% of their floorspace devoted to data centers, trading floors, or broadcast studios from receiving an Energy Star score. These "high-intensity buildings” will still have their energy use intensity (EUI) disclosed publicly, but they won’t have the embarrassment of a low Energy Star score derived by comparing them to standard office buildings.

Empowering the real estate market

Benchmarking Policy Impact Projections

These projections estimate the impact of commercial benchmarking mandates based on the size of the market, the nature of the mandate, and which types of buildings are included.

Advocates of disclosure laws, such as the Institute for Market Transformation (IMT), emphasize the financial benefits for the real estate market. Cliff Majersik, director of IMT, points out that energy efficiency has historically been undervalued in real estate transactions because appraisers have not been well equipped to assess it or understand its impact. IMT recently published a report with the Appraisal Institute describing how appraisers can use energy data when assessing comparable properties. The new laws also have the potential to bring the benefits of green building to a wider group of owners. Chris Cayten, managing director for CodeGreen, an energy consulting firm in New York City, argues that while the Energy Star program has long been available as a voluntary label (with particular appeal to high-performing buildings), reporting mandates have "brought the idea of energy efficiency and Energy Star scores into classes of buildings that were not historically looking at these issues.” Programs like LEED and Energy Star have given some owners goals to stretch for, but to cut fossil fuel use and carbon emissions for the entire building stock, we need more tools to raise the bar for all buildings. It’s too soon to tell just how effective public disclosure laws will be at driving energy savings, but in New York City they have already done a lot to raise awareness of energy use, according to energy consultant Adam Hinge. "There are many senior managers and owners who are now aware of their Energy Star scores and EUIs that didn’t know about them before,” Hinge reports. Hinge has noticed that the pre-dawn skyline in New York is noticeably darker than it used to be, suggesting that building managers are starting to take steps to save energy. Hinge is also seeing "a new level of cooperation between landlords and tenants,” who share a concern about the potential for bad publicity if their building is exposed as being an energy hog. These are all indications that the disclosure mandate is having a real impact. Go here for rest of article

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