Understanding State and Local Energy Benchmarking Ordinances

What is a Benchmarking Ordinance? 

Benchmarking and Disclosure Ordinances are policies that require building owners to measure, report, and disclose building energy use. Benchmarking is the most effective way to measure the energy performance of a building over time, and for commercial and large-scale residential buildings, it is an essential part of energy management. Simply put, benchmarking involves assessing and analyzing the energy and water use of a building and then comparing it to the building’s past performance, similar buildings, or modeled simulations of a reference building at a certain standard. Ranking buildings against peers allows building owners to show whether the building is low- or high-performing, helping to identify and prioritize cost-saving and emissions-reducing energy efficiency improvements, and assess the range of likely savings from these improvements. 

Many cities, states, and municipal governments across North America have passed utility benchmarking ordinances, requiring buildings to track and report their annual energy and water consumption. Mandatory benchmarking is becoming more common in an effort to address the lack of available information about building performance and energy use, which can reduce incentives for buildings to become energy efficient. Even if your city does not yet require benchmarking, it is still wise to participate, since your company can reap many benefits from energy benchmarking, and prepare for potential building performance standards (a separate regulation from benchmarking ordinances) that require existing buildings to achieve minimum levels of energy or climate performance targets by certain phased-in deadlines.

How Do Benchmarking Laws Relate to Building Performance Standards?

In contrast to benchmarking ordinances, Building Performance Standards are a relatively new policy tool that aims to regulate set targets for energy consumption and carbon emissions for buildings already in existence and promote retrofits. Benchmarking, on the other hand, is purely focused on the collection and disclosure of information, which may inadvertently get an owner to make upgrades or changes based on comparison to similar buildings, but these ordinances ultimately do not require that owners make any changes. When buildings are uniformly benchmarked—meaning their energy use is measured on a consistent basis—and that information is shared publicly, the real estate market is empowered to consider and recognize the value of energy efficiency. While BPS and benchmarking are distinct policies, they often work in tandem with many benchmarking requirements becoming the meaningful bedrock for municipalities enacting a BPS law or other efforts to improve energy performance whether voluntary or mandatory. 

Data Collection Involved for Benchmarking: 

Benchmarking requires an owner to enter basic building characteristics as well as their monthly energy use into tracking software. Most state and local jurisdictions use the Environmental Protection Agency’s (EPA) free ENERGY STAR Portfolio Manager tool to facilitate their benchmarking policies and reporting requirements. It is important to understand how to set up your Portfolio Manager account and properties, enter energy data, and report or share data within your jurisdiction. 

EPA’s Energy Star Portfolio Manager tool: Portfolio Manager is an interactive resource management tool that enables you to benchmark the energy use of any type of building, all in a secure online environment. Nearly 25% of U.S. commercial building space is already actively benchmarking in Portfolio Manager, making it the industry-leading tool.

The most commonly used metric for benchmarking buildings is energy use intensity (EUI), a measure of energy use (kBtu) per square foot. This can be converted to a rating or scale, such as ENERGY STAR Portfolio Manager’s 1-100 scale (50 represents median energy performance, 100 is the best).

The Benefits of Benchmarking: 

Owners that benchmark their buildings gain the following benefits…

1. Baseline understanding of their building’s energy use
2. Metrics to rank their building against others in their portfolio, allowing prioritization of energy efficiency investments
3. Better understanding of how their buildings’ energy performance compares to competitors
4. Basis of an energy management plan to drive continuous performance improvement
5. For high performers, evidence of their building’s additional value

How WatchWire can help with Benchmarking: 

WatchWire offers interval data monitoring and automated utility data integration so that you can get the latest performance data from your facilities. WatchWire then compiles the data in one place, ensures all data uses common definitions, and provides insight into how your properties are performing against each other by stack-ranking the most (and least) efficient facilities on a raw, square footage, or other KPI basis to prioritize improvement opportunities. In addition, WatchWire tracks numerous high-level buildings/asset characteristics through qualitative data that can be logged into the platform, allowing you to create Custom Groupings of similar buildings that provide further analyses among your portfolio.  WatchWire also has integrations with the US Department of Energy’s Building Performance Database, ENERGY STAR, and GRESB, providing more variations to benchmarking and meeting your organization’s compliance with benchmarking laws. Our expert customer success teams and sustainability analysts are also available to help you identify proper areas to benchmark.

More About WatchWire

WatchWire by Tango is a market-leading, energy and sustainability data management platform that uses cloud-based software to collect, automize, and analyze utility, energy, and sustainability data metrics. WatchWire streamlines, automates, and standardizes your sustainability reporting process by integrating directly and/or providing reporting exports to ENERGY STAR Portfolio Manager, LEED Arc, GRESB, CDP, SASB, GRI, and more. The platform provides customizable dashboards, which allow asset managers, sustainability managers, engineers, and more to monitor individual key performance indicators (KPIs) and create custom views for specific use cases.

To discover more about WatchWire and its capabilities, you can visit our website, blog, or resource library, request a demo, or follow us on LinkedIn, Instagram, or Twitter to keep up-to-date on the latest energy and sustainability insights, news, and resources.