We’re keeping a close eye on the new Philly Benchmarking energy disclosure process since we provide consultative support to clients in relation to this new legislation (Bill #120428).
Philadelphia benchmarking basics:
The new law requires that all buildings in the City of Philadelphia greater than 50,000 square feet (excluding residential and most manufacturing) must be tracked and their energy usage patterns reported publicly on an annual basis. According to the law, buildings that failed to disclose their 2012 energy and water data by the November 25 deadline are subject to a $300 fine the first month their data is late, and a $100/day penalty following the initial 30 days.
Compliance goals versus reality:
According to Jeremy Kuhre, sustainable buildings & operations manager at Sustainable Solutions Corporation, only half of the owners of applicable buildings had submitted their energy data by the deadline. He based his comments on early reports from the Mayor’s Office of Sustainability during the USGBC’s 2013 GreenBuild conference as well as an interview CBS Philly conducted with Alex Dews, who is overseeing the effort. For reference, there are 320 million square feet of non-residential buildings in Philadelphia.
When I asked about the low compliance rate, Jeremy responded that a few businesses have taken a “come-and-take-it” attitude, but in his experience a lack of awareness is the larger issue. “We asked our clients to forward a copy of the compliance notification from the Mayor’s Office of Sustainability when it arrived, but none of our clients ever received the letter. This wasn’t due to a lack of effort on the City’s part. In fact, the City sent a few rounds of letters to each building. The problem was that the letter often didn’t make it to the right individuals.”
Risks of non-compliance:
According to Alex Dews of the Mayor’s Office of Sustainability, “If building owners haven’t complied, they’ll receive a warning notice of violation. At that point they’ll have an additional thirty days to comply with the law, and after that would be assessed the violation.”
Fines aren’t the only risk of non-compliance. Starting in 2014, building energy and water use data will be made public. Inaccurate or incomplete submissions will likely draw unwanted attention. Perhaps at even greater risk are buildings that are compliant, but have significantly above-average energy consumption. Kuhre is “recommending that building owners make energy upgrades now, so that they are not ‘outed’ as energy abusers next year.”
Outcomes of Energy Benchmarking:
A recent EPA study showed that commercial buildings using Portfolio Manager to benchmark their energy consumption consistently over three years experienced an average energy reduction of 2.4% each year without making any capital investments – a case of management purely through measurement. Based on my personal experiences with energy retrofitting more than 30 million square feet of Pennsylvania’s buildings, I’ve found that those making capital investments can cost effectively save up to 50% from their annual energy spend, with “cost effectively” defined as capturing an attractive Return On Investment (ROI) in the mind of the building owner. The average savings of a strong energy retrofit investment is usually between 15 and 20 percent.
Another possible outcome of benchmarking is receiving ENERGY STAR Certification. This is an increasingly important certification for Class A office buildings that want to attract energy-conscious tenants. According to Jeremy Kuhre, “Now that energy efficiency is becoming a priority for building owners, we expect more competition among energy efficient buildings.”
Surprisingly older buildings aren’t expected to be unduly penalized by the new compliance law. Energy disclosure data released in New York City in 2012 and 2013 indicates that many older buildings use less energy than modern buildings built to higher efficiency standards.