In December 2009, New York City (NYC) passed what experts regard as the most sweeping commercial building energy-efficiency legislation in the country.
Significantly, the Greener, Greater Buildings Plan obligates most facilities to undergo energy audits every 10 years and requires all commercial buildings with more than 50,000 square feet to annually benchmark and publicly report energy and water use. It also toughens energy-efficiency requirements for renovations and forces buildings to update lighting systems to more efficient technology.
NYC isn’t the first jurisdiction to require buildings to benchmark energy use. California started the race in 2007, requiring benchmarking and limited disclosure beginning Jan. 1, 2010. But California only requires the information for the parties involved in a sale or lease of a facility. Washington, D.C. went further in 2008 by requiring phased-in public disclosure of energy use starting this year. NYC’s 2009 legislation took another big step, mandating full compliance years ahead of the D.C. legislation for a far greater swath of building types.
Other jurisdictions are considering doing the same. On the heels of the NYC measure, Seattle passed its own energy-use benchmarking and disclosure law in January. As Seattle developed its benchmarking legislation, city officials kept tabs on what other jurisdictions were doing and collaborated with about 10 other jurisdictions that were also hashing out their own benchmarking initiatives, says Jayson Antonoff, sustainable infrastructure and green building policy advisor for the City of Seattle department of planning and development.
"Everyone should have it on their radar," Antonoff says. "I definitely see it becoming a national trend."
The NYC law could give a powerful impetus to that trend. With more than a million buildings spread across five boroughs, and a concentration of commercial high-rises unrivalled anywhere in the country, the city’s action catalyzes energy benchmarking in the nation’s largest real-estate market.
Benchmarking Law
The benchmarking and disclosure mandate has its roots in PlanNYC, an ambitious initiative that Mayor Bloomberg announced in 2007 to address all aspects of the city’s aging infrastructure. Under PlanNYC, the city set a target of reducing greenhouse gas emissions 30% by 2030, from 2005 levels. The Greener, Greater Buildings Plan is an outgrowth of PlanNYC.
Under NYC’s benchmarking law, Benchmarking Energy and Water Use, facilities have to disclose their energy utilization index (BTUs per year per square foot), water use per gross square foot, the Energy Star rating, and a year-to-year comparison of this data. For city-owned buildings larger than 10,000 square feet, annual benchmarking began May 1, 2010. Commercial facilities over 50,000 square feet must begin benchmarking May 1, 2011.
Benchmarked data will be submitted to the city via the U.S. EPA’s Star Portfolio Manager tool, a free online benchmarking program. Fines will be imposed for those that fail to upload benchmarked data into Portfolio Manager. Data for commercial buildings will be available to the public on the tax assessment roll website and searchable by address starting Sept. 1, 2012 – one year after data on city-owned buildings is due to be posted.
Many NYC buildings voluntarily benchmark energy use – the number rose 120% from 2007-2009, but about two-thirds of buildings larger than 50,000 square feet didn’t participate. That’s why NYC decided to mandate benchmarking and reporting.
Public disclosure of energy use has a two-fold rationale, says Rohit Aggarwala, director of the NYC Office of Long Term Planning and Sustainability. First, putting the energy benchmarking score on the tax roll makes energy efficiency an immediately visible asset to a prospective tenant or buyer. The Energy Star score should be "one of the first things that a potential tenant or purchaser looks at or thinks about," says Aggarwala. "And that makes energy efficiency a valuable component to a building in the market."
The second rationale is to drive performance through competition: "We will rely on the fact that real estate managers will be looking over each other’s shoulders and the competitive nature of the real estate community will compel some people to tell their building staff, The other guy in a very similar building is doing much better than you are, so get your act together,’" says Aggarwala.
The city will annually review the aggregate data giving it added oversight and accountability. If there’s an indication the data isn’t being reported accurately, the city will evaluate whether further steps – like training or more enforcement, says Aggarwala.
Other Aspects to the Greener, Greater Buildings Plan
In addition to benchmarking, the law includes:
NYC Energy Conservation Code: closes a loophole for renovations in the NY State energy code. The state energy code only applies if at least 50% of a system or subsystem is being renovated. NYC’s code will apply no matter the size of the renovation, but only to the parts of the system involved. For example, if a building has windows replaced on one floor, those windows would have to meet code standards, but the remaining untouched windows could stay as is. The law takes effect July 1, 2010.
Required Upgrade of Lighting Systems: by Jan. 1, 2025, buildings greater than 50,000 gross square feet must upgrade lighting systems to meet the NYC Energy Conservation Code. After that date, buildings will also have to submeter tenant space of more than 10,000 square feet.
Audits and Retro-commissioning of Base Building Systems: privately-owned buildings have to conduct energy audits every 10 years and implement renovations recommended by the audit. The building’s benchmarked score is part of the audit. Buildings can avoid having to do the audit if they meet either of two criteria:
- Earn an Energy Star Label, indicating the building is more efficient than 75% of comparable buildings, for two of the three previous years, or
- Earn a LEED for Existing Buildings/ Operations and Maintenance 2009 rating within four years of the deadline for filing an audit.
In addition to completing the audit, city-owned buildings are required to complete retrofits that have a simple payback of seven years or less. The New York State Energy Research and Development Authority (NYSERDA) will pay for half the audit as part of a statewide initiative.
Going Nationwide
The NYC legislation may accelerate the move to voluntary benchmarking nationwide. Many organizations with facilities in NYC also have national portfolios. Those organizations will have to devote someone on the team to learn how to benchmark. Once they have mastered that skill, they are in a position to benchmark the rest of the portfolio, says Michael Bobker, director of the CUNY Building Performance Lab, which helped NYC schools benchmark their energy use.
Increasingly, benchmarking is also seen as good public policy. It addresses a central challenge of national efforts to reduce energy use: the need to improve the efficiency of existing buildings. "Existing buildings have to be addressed," says Antonoff. "Unless we’re dealing with the existing buildings, we can’t address energy efficiency and greenhouse gas reductions."
In NYC, existing buildings of over 50,000 square feet account for 45% of the city’s energy consumption; 85% of buildings that will be in use in 2030 already exist.
What’s more, in the context of the national debate about the costs of reducing greenhouse gas emissions, benchmarking is an inexpensive approach to improving energy performance that could be fairly easily adopted in other jurisdictions.
"Speaking broadly, there is huge competition among municipalities to be the greenest and do the most," says Cliff Majersik, director of the Institute for Market Transformation, which advocates for energy efficiency and green measures. "It’s particularly attractive in the current budget crisis. This is something even cash-strapped municipalities can do to address the market failures holding back their cities."
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This article is adapted from NYC to FMs: Show Us Your Energy Use, Building Operating Management magazine.
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