Keeping up with which local or state entity has passed energy reporting laws is challenging for many organizations. Last week’s release from the White House signals that that challenge will continue to grow in 2022.
Here is a link to the full press release, but in short, the statement details a partnership between 33 state and local governments and the federal government to facilitate and implement building performance standards at the state and local levels.
This is a necessary step in reducing the impact of the built environment, but it will pose challenges, especially for those with large portfolios. As of this article’s writing, 43 cities have passed energy benchmarking reporting laws, and 6 local jurisdictions (New York City, DC, St. Louis, Boston, Denver, and Montgomery County, MD and the States of Colorado and Washington have passed building performance laws.
This latest release signals that a large number of these benchmark reporting standards will be potentially converting to building performance standards in the coming year, specifically:
Ann Arbor (MI)
Atlanta (GA)
Cambridge (MA)
Chicago (IL)
Chula Vista (CA)
Columbus (OH)
Evanston (IL)
Fort Collins (CO)
Kansas City (MO)
Los Angeles (CA)
Orlando (FL)
Philadelphia (PA)
Pittsburgh (PA)
Portland (OR)
San Francisco (CA)
Seattle (WA)
They are part of the 33 local governments that have committed to implementing building performance standards.
In addition to those jurisdictions potentially expanding their reporting laws, some new jurisdictions also make up part of that coalition; I would anticipate reporting laws coming soon out of these jurisdictions as well:
Annapolis (MD)
Aspen (CO)
Grand Rapids (MI)
Ithica (NY)
Milwaukee (WI)
Prince George’s County (MD)
Sacramento (CA)
Savannah (GA)
One excellent resource to keep up with this ever-changing landscape of regulations is our Benchmarking Compliance Page, which lists each jurisdiction with reporting ordinances and links to those ordinances. We also provide a service that pulls your data and ensures our annual submission is submitted, so you have one less thing to worry about.
One thing to note, however, a Building Performance Standard is much harder to comply with than a simple benchmark reporting ordinance. The reporting regulation just means reporting what you did - a building performance standard requires that you actually meet a certain level of performance. In other words, don’t just say what you did - do something about it.
To ensure you meet the requirements of a building performance standard, you will need to track your energy consumption and then track that consumption against the jurisdiction’s performance goal. Each law is a bit nuanced; some will state that you must receive a specific ENERGY STAR score by a certain year, while others will lay out a baseline that you must perform above (either against your own baseline or against a jurisdiction-wide baseline). But one thing most of them have in common is serious fines for non-compliance. If you look at the District of Columbia’s BEPS law or New York City’s Local Law 97, the penalty can be seven figures for ignoring compliance. This is not something you want to disregard.
The good news is compliance isn’t necessarily complicated. As noted above, the first step is obtaining your energy consumption data and continuing to obtain it on an ongoing basis.
You will want to benchmark your performance or compare it against itself (year over year) or other buildings to determine if the performance is acceptable. This is kind of determining what is normal and then comparing your building against what is normal usage.
Once you have tracked the performance of your building and identified which buildings are not performing as well, you will want to initiate onsite energy audits to those buildings to determine what energy efficiency measures can be implemented to reduce energy consumption. We always hear real estate is local - and it holds true here as well. Two buildings built at the same time, buy the same builder, on the same street may have different issues as to why their energy use is higher than expected. It requires an engineer conducting an onsite audit to understand what can be done to be effective.
With an Energy Audit in hand, you can prioritize specific measures to reduce the impact of your building and improve building energy performance.
Once the measures are taken to reduce energy consumption, it is important to continue tracking the performance. Not only is it essential internally to understand the ROI, but it is critical to understand if the measures were effective in improving the building’s energy consumption performance.
This 5 step process is a time-proven approach to improving efficiency, which is the first step in compliance with a building performance ordinance or law. While this is a continual process, after the efficiency measures have been largely addressed, it may be necessary to further reduce the impact of the building. This is particularly true of ordinances and laws tied to carbon reduction. In these cases, a second step is reducing the impact of energy generation.
Our buildings will always use energy, and it makes sense to not waste that energy which is the point of the initial approach - essentially eliminating waste. But that energy that is consumed efficiently also has a carbon impact which is why the next step is examining the source of the energy.
Addressing the energy source may include onsite renewable energy generation such as solar or wind. It may also be addressed through off-site renewable energy generation such as community solar or if your building is located in a deregulated electricity market through the procurement of renewable energy instead of non-renewable energy. Conservice has solutions for both community solar, and if your building is located in a deregulated market, we can help with locating cleaner energy sources as well.
Energy source can also be addressed by electrification of the property, which I will dive into deeper next week.
Finally, after your property is completely efficient and your fuel sources are clean renewable in origin, if you still need to reduce your carbon impact, this is where RECs can play a role. Think of them as the icing on the cake. Not the first tool to leverage, but the final instrument. Similar to electrification, this can be a deep topic, so I will dive deeper in another article.
Just to recap, regulations are increasing, and compliance is not only getting more complicated, it is also getting more challenging to comply. However, following the five-step process outlined can get your portfolio on the right track to compliance.
You can help reduce the impact of the built environment by sharing this blog with your peers. Together we can impact the 39% of greenhouse gasses attributed to the built environment. It starts with awareness, and we succeed with teamwork.
Stay well!
Chris Laughman is the ThirtyNine Blog author, a blog dedicated to reducing the impact of the built environment. When not blogging, Chris is helping the real estate industry minimize energy and water impact as the Vice President of Sustainability for Conservice, the Utility Experts. Whether Multifamily, Single Family, Student Housing, Commercial, or Military, we simplify utility billing and expense management by doing it for you. Our insight into your utility consumption provides an opportunity to identify risks. Leveraging innovation and experience, we ignite solutions with tangible impacts and track performance to ensure the trendline stays laser-focused on the goal. At Conservice, we have developed a true bill-to-boardroom solution to help truly make a difference. We have before us a tremendous opportunity. Standing shoulder to shoulder, we will get this done. Contact me at claughman@conservice.com for more information.
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