Benchmarking energy usage is the practice of measuring and quantifying energy performance in a single building over time through a formal data collection process, utilizing metrics such as gas, water, and electricity consumption. It then compares this energy efficiency to buildings of similar use and/or specific desired standards set out in a code, while tracking usage incrementally over time. Energy used for large commercial real estate buildings is one of the largest sources of core carbon emissions in a city. Benchmarking energy performance allows building owners, tenants, and cities to see how their buildings are using (and wasting) energy, which informs decision-making about lowering energy costs and sustainability initiatives. As a result, a growing number of US cities (and in a few cases, states) have enacted mandatory benchmarking and energy reporting laws. Denver is the latest to join the ranks via its Energize Denver program. You can keep track of up-to-date additions and changes on these policies here.
Energy benchmarking serves as a critical, simple first step towards developing a wider overall energy efficiency strategy. Whether you’re managing one property or a portfolio, start by measuring the energy performance of your building(s) using ENERGY STAR standards (the Portfolio Manager discussed below is a great tool for this), or by engaging an energy consultant to measure your building’s energy usage. ENERGY STAR certification brings numerous financial benefits to buildings, including lowering operation costs, marketability, lowering harmful greenhouse emissions into the environment, commanding higher rental rates, and by proxy, adding asset value to ownership portfolios. Even benchmarking energy use alone can reduce consumption an average of 2.4% per year.
In my last discussion on the topic of energy benchmarking in Denver, I introduced the compliance requirements timeline of the Energize Denver program for commercial and multifamily buildings. As a part of an overall effort to significantly improve Denver’s building energy efficiency by 2050, commercial and multifamily buildings over 25,000 square feet will be required to benchmark their energy usage score annually. The program will engage tenants in improving their energy usage and will provide resources to achieve those stated goals. The June 2017 compliance deadline has passed for buildings over 50,000 square feet, but the June 2018 deadline for buildings over 25,000 square feet is fast approaching. Are you ready?
Complying with the New Requirements
The benefits of efficiency programs such as Energize Denver are two-fold: not only do they curb greenhouse gas emissions from energy use (such as cooling and heating buildings), but also save tenants and owners money in the long run. The program will be enforced within the city limits of Denver, Colorado, and full compliance of all non-exempt multifamily and commercial buildings over 25,000 square feet must occur by June 1, 2018.
Building owners can either self-report energy performance using the free ENERGY STAR Portfolio Manager tool or hire an independent energy consultant to handle the process. The program has also established a help center for questions and clarifications. Exemptions to the benchmarking program include buildings that have been unoccupied in the past year, buildings scheduled for demolition, buildings that have undergone renovations which required building vacancy, among others. View the full list of exemptions here.
Just as with the June 1, 2017 deadline for properties over 50,000 square feet, this year’s deadline will also provide a 90-day grace period, with a $2,000 penalty for non-compliance thereafter.
How do I Prepare My Asset for the June 2018 Deadline?
The first steps for commercial property owners involve consulting the resources referenced above to construct a basic benchmarking plan. You may also consider engaging the professional services of an engineering due diligence consultant to ensure total compliance and efficiency for your asset. As a principal at Partner Engineering and Science, my Denver-based team and I are here to help you leverage the fundamental services and experience you would expect from an industry-leading energy and sustainability consulting firm.
Partner helps our clients maximize asset value and performance through energy efficiency and sustainable building, which includes cost, consumption and demand savings, and improved operational efficiencies and flexibility through careful building assessments. In addition to basic energy benchmarking and disclosure services, we help clients optimize their energy usage, offer LEED and sustainability consulting, and an assortment of renewable energy management and implementation solutions. This includes building engineering, MEP design, guiding clients through the intricacies of commercial building inspections (if necessary), and careful property condition assessments. In the long run, our services offer property owners and equity holders improved tenant satisfaction, attraction and retention, better management of future energy costs and volatility, the opportunity to embrace environmental and social responsible practices, and greater asset value.
Taking a step-by-step approach will help you to navigate the complexities of energy efficiency measures and implement a plan that makes sense for your property type and portfolio growth goals.