On May 11, the city of Seattle launched a commercial benchmarking program for commercial buildings, joining Washington, D.C., New York City, San Francisco, Austin, and the states of California and Washington in requiring building owners to track and disclose their energy bills to prospective buyers and renters. The program will go into effect for non-residential buildings of 50,000 SF or larger in the fall and then extended to non-residential and multi-family residential buildings of 10,000 SF or larger in April 2012.
Commercial benchmarking is seen as one of the keys to unlocking energy efficiency in the private sector. It aims to bring the same mindset that leads prospective car buyers to compare mpg ratings before buying a car to the building sector by presenting the customer with energy bills that tell them how expensive it will be to operate a particular building or rented space.
While energy efficiency is healthy in the public sector thanks to energy performance contracting, building owners in the private sector have been reluctant to invest in efficiency measures with paybacks over four years. Commercial benchmarking creates a market-based incentive to improve efficiency because it allows efficiency to become a market differentiator for private companies and organizations. Not only does it drive interest in energy efficiency on the customer side, but it also encourages building owners to improve the efficiency of their buildings in order to attract and retain tenants.
Since I last wrote about commercial benchmarking, San Francisco launched a similar program in January of this year. Beyond the four cities and two states with commercial benchmarking legislation in place, there remain ten states (Oregon, Colorado, New Mexico, Illinois, Tennessee, Maryland, Connecticut, Massachusetts, Vermont, Maine, and one city, Portland) that are in the process of developing similar legislation. Although Seattle passed the ordinance last year, it moved to the implementation stage last week by sending letters to over 800 large commercial property owners and managers informing them of the program. When these programs are realized, most of America’s major metropolitan centers will be covered by commercial benchmarking.
In the absence of strict energy codes and retrofit mandates in the United States, commercial benchmarking represents one of the key areas of innovation in increasing the efficiency of private buildings. Although commercial benchmarking may not push the energy efficiency frontier forward as quickly as mandates would, it represents a much more politically viable near-term policy tool that will bring efficiency to the front of the minds of building owners, buyers, and tenants.
Article by Eric Bloom, appearing courtesy the Matter Network