Harnessing the Free Market to Improve Energy · PDF fileHarnessing the Free Market to Improve...

SEE Action Existing Commercial Buildings

Working Group

Harnessing the Free Market to Improve

Energy Efficiency:

State Benchmarking and Disclosure Policies Jim Gallagher, New York Independent System Operator

Marshall Duer-Balkind, Washington, DC District Department of the Environment

Bill Prindle, ICF International

June 12, 2012

This information was developed as a product of the State and Local Energy Efficiency Action Network (SEE Action), facilitated by

the U.S. Department of Energy/U.S. Environmental Protection Agency. Content does not imply an endorsement by individuals or

organizations that are part of SEE Action working groups, or reflect the views, policies, or otherwise of the federal government.

www.seeaction.energy.gov

• SEE Action Overview

• Priority Policies and Programs

• How to Get Involved

• State Experience with Benchmarking &

Disclosure Policy: Washington, DC

• Related DOE Initiatives

• Discussion

Agenda

SEE Action Overview

3


A state and local effort facilitated by the

federal government that helps states,

utilities, and other local stakeholders take

energy efficiency to scale and achieve all

cost-effective energy efficiency by 2020.

What is SEE Action?

For more information, visit:



• Executive Group of more

than 30 stakeholders

including state and local

governments, associations,

business leaders, non-

governmental organizations,

and others.

• Eight Working Groups help

SEE Action achieve its goal

of capturing all cost-effective

energy efficiency by 2020.

SEE Action Leadership

5


• The majority of office space that will be used in next decade has been built.

• Commercial buildings use:

– ~50% of U.S. building energy use.

– ~20% of total U.S. energy use and GHG emissions.

• Public buildings are ~25% more energy-intensive than private buildings.

• Commercial building owners/managers spend more than $2 per sq. ft. on energy.

• ~5 to 15 jobs created per $1M invested in energy efficiency.

• Energy-efficient buildings have higher occupancy levels, lease rates, and sales prices.

Commercial Working Group:

Motivation


• Drive Demand for Energy Efficiency

– Benchmarking, Rating, and Disclosure

– Retro-commissioning

– Ratepayer-funded Programs

– Public-Private Partnerships (Energy Challenges)

• Enable Efficiency Operations and Investment

– Strategic Energy Management

– High-Performance Leasing

– Financing Innovation

Commercial Energy Efficiency Policies and

Programs

• Build the Workforce

– Education & Training

– Materials

– Certification

• Move the Market

– High-Performance Procurement

– Emerging Technology Demonstration

Priority Policies and

Programs

8


• What is benchmarking, rating, and disclosure?

– Benchmarking: Measuring how efficiently a building uses energy relative to (1) itself over time, (2) similar buildings, or (3) a modeled baseline

– Rating: Assigning a numeric rating according to a pre-determined scale (e.g., 1-100)

– Disclosure: Sharing energy performance data to facilitate market transformation

• Why benchmarking, rating, and disclosure?

– Increase energy awareness and investment

– Stimulate local economy

– Strengthen local real estate markets

– Build public trust and confidence while saving taxpayer dollars

Benchmarking, Rating, and Disclosure:

Overview


California: Assembly Bill 1103

• Adopted: 2007 (updated 2009) / Effective: 2013

• Affected Property Types: Public and private buildings > 5,000 sq. ft.

• Key Requirements:

– Use of ENERGY STAR® Portfolio Manager

– Disclosure to California Energy Commission and potential buyers, tenants, and lenders upon sale, lease, or financing of a building

– Automated energy data transfer from utilities to affected building owners

– Phases in over 2 years based on building size


Key Examples


Massachusetts: Green Communities Act

• Adopted: 2008 / Effective: 2009

• Affected Property Types: All public buildings


– Use of state-specific benchmarking tool

(MassEnergyInsight) or Portfolio Manager

– Ties benchmarking and energy plan development to

state funding and “green community” designation


Key Examples


Minnesota: 2001 Minnesota Session Laws, Ch. 212,

Sec. 3 (part of the Buildings, Benchmarks, and

Beyond [B3] Project)


• Affected Property Types: Public buildings > 5,000 sq.

ft.


– Use of state-specific B3 benchmarking tool

– Links with other state programs as a screening tool

– Helps focus energy efficiency investments in buildings with

poor energy performance as part of larger energy

management plan


Key Examples


New York City: Local Law 84


• Affected Property Types: Public buildings > 10,000

sq. ft. and private buildings > 50,000


– Use of ENERGY STAR® Portfolio Manager

– Annual submission to the City

– Phased in public disclosure on City website

– Automated water data transfer from city to affected

building owners


Key Examples


• What is retro-commissioning?

– Systematic process for identifying and improving

energy performance in existing buildings

• Why retro-commissioning?

– Cost-effective investment

– Reliable energy and cost savings

– Minimize risk

– Build public trust and confidence while saving

taxpayer dollars

Retro-commissioning:

Overview

14


EPA’s ENERGY STAR

Guidelines for Energy

Management

• What is strategic energy management?

– Holistic approach to energy management that sets long-term goals and systematically monitors progress at building and organizational level

• Why strategic energy management?

– Increase energy savings and savings persistence

– Capture greater share of energy savings potential

Strategic Energy Management:

Overview

15


• What is high performance leasing?

– Strategies to overcome barriers between owners

and tenants that inhibit energy efficiency

improvements in existing commercial buildings

• Why high performance leasing?

– Address “split incentive” barrier between tenants and

property owners

– Transform leasing market towards more sustainable

practices

High Performance Leasing:

Overview

16

How to Get Involved

17


• Fact sheets: benchmarking, rating, and disclosure;

retro-commissioning; high-performance leasing;

strategic energy management programs

• Model policy design guides: benchmarking, rating,

and disclosure; retro-commissioning (under

development)

• Expert / peer support: guidance on adopting and

enhancing policy and program solutions

Commercial Working Group:

Resources

18

Have other ideas?

Please let us know.


• Download and share SEE Action resources.

– Visit http://www1.eere.energy.gov/seeaction/existing_commercial.html .

• Tell us your story.

– E-mail [email protected] and let us know what you’re doing to

promote energy efficiency in existing commercial buildings.

• Share your data.

– E-mail [email protected] to participate in the SEED platform or

asset rating pilots.

• Request assistance.

– E-mail [email protected] and let us know which policy/program

you are interested in learning more about.

How State Governments Can Get Involved

19

State Experience With

Benchmarking and

Disclosure Policy:

Washington, DC

20


A Familiar Concept…

21


…Applied to a new area

22


Buildings (75%)

Transportation (24%)

Waste Management (1%)

Buildings are

largest source of

DC’s Greenhouse

Gas Emissions:

Utilities are the

largest single

expense for

building owners:

32% - Utilities 22% - Repairs/Maintenance

21% - Admin

5% - Security

1% - Grounds

Source: BOMA

Source: DC 2006 GHG

Inventory

Why Benchmark?


Benchmarking Drives Investment

Survey of hundreds of facility managers. Audin, Lindsay. “Finding Your Best Energy Opportunity.” Building Operating Management. December, 2011.


25

Energy Efficiency & Property Value


District of Columbia Requirements

Clean and Affordable Energy Act of 2008:

• Public Building ENERGY STAR benchmarking

(>10,000 sq. ft.) and public reporting of scores,

beginning 2010.

• Private Building ENERGY STAR benchmarking

(>50,000 sq. ft.), phased in by building size, with

public reporting of scores beginning with second year

of data.

• First law of its kind in the country

• Implementing regulations still being finalized; expect

data later in 2012


Progress in Other Cities

• NYC, Seattle, San Francisco, & Austin all have similar

benchmarking programs

• NYC, Seattle, & San Francisco collected first data in

2011

• NYC law covers ~16,000 buildings > 50,000 sq. ft.

• Seattle law covers ~8,000 buildings >10,000 sq. ft.

• DC law covers ~1,800 buildings > 50,000 sq. ft.

• 60% of all NYC benchmarking done by consultants

• Access to aggregate building energy data key to success

• US DoE has designed common data platform for all cities

http://www.nyc.gov/html/dob/html/sustainability/benchmarking.shtml

http://www.seattle.gov/dpd/GreenBuilding/OurProgram/EnergyBenchmarkingDisclosure/Overview/

http://www.sfenvironment.org/our_programs/interests.html?ssi=6&ti=14&ii=208

http://austinenergy.com/go/ecad

http://www.nyc.gov/

http://austinenergy.com/go/ecad

http://www.sfenvironment.org/

http://www.seattle.gov/


1. Benchmarking Tool

2. Building Classes

3. Size Threshold & Phase-In

4. Utility Data Access

5. Public vs. Transactional Disclosure

Key Decision Points

28


• Operational Rating

• Strong brand awareness (70%+)

• Track record (ESPM created 1999)

• Economies of scale; already widely

used among building owners

• Free, online, relatively easy to use

(and about to get easier)

• 1-100 score for many building types

• Delivers energy performance metrics

based on utility and space use

information

• Supported by the EPA:

– Trainings, materials, ABS

– Customized reporting forms for

jurisdictions with mandates

Why ENERGY STAR Portfolio Manager?

29

Over a ¼ million buildings

benchmarked with ESPM


• Start with public buildings — lead by example

• Large commercial buildings

– Higher adoption rate — especially so in DC

• Multifamily buildings

– Makes most sense in places with large stocks of

multifamily buildings

– Will make increased sense when/if EPA unveils

rating for multifamily in 2013

– DC didn’t initially intend to include multifamily, but

law does include them

Building Classes

30


Thresholds and Phase-In

Building

Size

(g.s.f.)

1st Utility

Year

Data

Original 1st

Reporting

Deadline

Projected 1st

Reporting

Deadline

% of

Covered

Buildings

% of Covered

Building

Area

200,000+ 2010 July 1, 2011* Fall 2012* 36% 66%

150,000+ 2011 April 1, 2012* Fall 2012* 47% 76%

100,000+ 2012 April 1, 2013 April 1, 2013 62% 86%

50,000+ 2013 April 1, 2014 April 1, 2014 100% 100%

* Deadlines for 2010 and 2011 data are in flux based on the ongoing

rulemaking process

Deadlines will be annually on April 1 following initial reporting

Economies of scale > 50,000 square feet:

9% of buildings, 73% of building area

Relatively Sophisticated Class of Owners


Solving the data access challenge?

• Owners can’t easily access all tenant data

• Utilities can provide solution: Aggregate Whole-Building

Data

• Critical to success in other cities: NYC, Seattle, Chicago

• Limited privacy concerns in large buildings

• BOMA, RER, IMT, USGBC form DATA Alliance to work with

utilities and regulators

• National Association of Regulatory Utility Commissioners

(NARUC) resolution passed in summer 2011 calling on state

commissions to provide better data access to commercial

owners www.energydataalliance.org

http://www.energydataalliance.org/


• In DC: Still no access to aggregate data

• States have power to compel utility companies to

provide aggregate data

• Aggregate data access should be required by

legislation well before first benchmarking reporting

deadline (as in SEE Action model policy)

• Not known in 2008, but DDOE is now working with

DC Council, PSC, and utility companies to enable

aggregate data services to DC

• Interim: Partial building reporting

Data Access: The State Advantage

33


Why Public Disclosure

Harness the

power of the

free market to

drive

efficiency!

Transactional

disclosure

provides less

leverage and

harder to

enforce; insets

state in private

transactions


What will be published

• Benchmark results will be made public in 2nd reporting

yr

• Results will be reported on the DDOE website

(www.ddoe.dc.gov)

• Whole vs. Partial building data will be distinguished

• Data stored in secure US DoE database

Address Year Built

Energy Performance Rating (1-

100)

Energy Intensity

Electricity Use Natural Gas Use

Water Use CO2 Emissions

Space Type Gross Building Area

http://www.ddoe.dc.gov


• Lack of dedicated funding source for implementation

• Shift to include residential sector

• More complex than initially anticipated

– Multiple buildings on a lot

– Retail tenants

– High energy intensity tenants

– IT needs: DoE’s SEED Platform offers help

• Data access challenges

• Trainings and Outreach

Stumbling blocks in implementation in DC

36


• Build support among larger, progressive real estate

stakeholders to help develop policy

• At state level, BOMA represents overwhelmingly

small to medium assets, so ambassadors needed

• Thresholds Critical

• State can provide the enabling environment for cities

to go further — the Washington State example:

• WA State law: benchmarking at time of transaction only,

only commercial, no disclosure to government

• Seattle, WA: yearly benchmarking, inclusion of multifamily,

disclosure to city

Thoughts on adoption at state level

37


• Mandatory benchmarking and disclosure is good for

building owners, but also for state policy and planning

• Opens up access to granular energy consumption

data that no policy makers have has access to before

• Increase fiscal responsibility and impact of incentive

programs by targeting areas of greater need

• SEE Action Policy Design Guide and Sample Policy

Language is a good starting place

Policy Opportunities

38

Related DOE Initiatives

39


• Includes database and data analysis tools to evaluate commercial and residential energy efficiency products and services using a common taxonomy

• Initial Tools:

– Energy Performance Forecasting Tool

– Financial Risk Management Tool

• Key Features:

– Contains empirical data that reflects actual building operations

– Establishes first national data taxonomy to facilitate building comparisons

– Includes rigorous QA/QC

Buildings Performance Database (BPD)

40

For more information, visit:

http://www.buildings.energy.gov/buildingsperformance/

http://www.buildings.energy.gov/buildingsperformance/


– Common taxonomy: a standardized “data model” to organize energy use and building characteristic data

– Data management: processes and tools to support the on-boarding and validation of data from multiple

sources

– Applications: web-enabled tools to forecast energy savings and related cash flows.

– 3rd party tool support: API allows 3rd parties to create new applications to use the data in the database

Buildings Performance Database Structure

1

2

3

4

Energy Performance Forecasting Tool

External Data Sources

Financial Risk Management Tool

Third Party Tools

Data Management Cleansing, Validation, and Ingestion Processes

2

3

4

3

API

1


Standard Energy Efficiency Data (SEED)

Platform

42

The Standard Energy Efficiency Data Platform (SEED)

is a software tool that allows state and local

governments to quickly and easily create their own

database using a standard building energy

performance taxonomy, and easily share selected data

with other parties as needed.


• Multiple jurisdictions publishing energy performance data in the same structure can help energy efficiency enter market decisions in a meaningful way

• This can affect:

– Investment in energy efficiency

– Incentives for building owners and managers

– Buildings across the entire market (not just the top performers)

Open Data Standards Can Spur

Innovation and Efficiency


Benchmarking & Disclosure Process with

Portfolio Manager and SEED

State creates a

reporting

“template” in

Portfolio Manager

State sends a link

for this template to

building owners,

along with building

ID numbers

State loads

municipal records

identifying all

known buildings

into SEED, which

assigns each

building a unique

ID number

State logs into

SEED and clicks

button to import

Portfolio Manager

data into SEED

State creates

report in SEED to

check buildings’

compliance

1 2 3 4 5 6 7 8 9

1

2 3

Building owner clicks the

link to log into Portfolio

Manager and accesses

reporting template

4

Building owner enters

data into Portfolio

Manager, including

unique building ID

number

5

Reporting template

auto-populates with

the data that

building owner has

entered

6

Building owner clicks

“submit” on the

state’s report to send

data to state

7

8

9

State Actions

Building Owner

Actions

State publishes

selected data in

SEED via API

10

10


SEED Progress to Date and the Way Ahead

45

Key Accomplishments

Extended DOE Buildings Performance Database taxonomy for SEED needs

Integrated connection to Portfolio Manager

Actively engaged with six cities/states (Seattle, San Francisco, Austin, NYC, DC, CA)

in design of SEED

Launched a beta of SEED (February 2012) with partner cities/states

DOE Work on SEED in Summer/Fall 2012

Partner cities/states load their data into SEED from Portfolio Manager and other

systems

Work with partners to shape data collection and data management for energy audit

data

Create API to allow public sharing of structured data

Work with data analysts to encourage creation of tools

Communicate value of a standard data taxonomy and SEED to larger audience

(utilities, states, cities, real estate)


• Complements Portfolio Manager providing a common

platform for:

– Evaluating the inherent energy performance of

buildings’ physical characteristics while controlling

for building operation and tenant behavior

– Identifying energy efficiency improvements

• Looking for pilot participants to test tool for select

building types (office, school unrefrigerated

warehouse, public assembly)

Commercial Building Asset Rating Program

46

For more information, visit: http://www.commercialbuildings.energy.gov/assetrating.html

Questions?

Jim Gallagher

[email protected]

47

Marshall Duer-Balkind

[email protected]

Cody Taylor

[email protected]

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