Every Watt Counts

Benchmarking in the Big Apple

By Yardi Blog Staff on Apr 10, 2017 in News

On December 28, 2009, New York City Mayor Michael Bloomberg signed Local Law 84 (LL84), mandating annual energy reports for any privately owned buildings over 50,000 square feet. (In October 2016, the city expanded LL84 and LL88 to include buildings 25,000 Sq. Ft. and higher, though, this doesn’t officially go into effect until 2018.)

Enacted as part of the city’s Greener, Greater Buildings Plan (GGBP), LL84 was designed to help building owners not just measure energy use, but to develop actionable energy efficiency strategies based on that data. By the time the first benchmarking report was released in 2012, the city had gathered energy usage information from 1.8 million square feet of commercial and residential space, making it one of the largest accumulations of benchmarking data gathered for a single jurisdiction.

“Buildings account for 75 percent of all greenhouse gas emissions in New York City, yet many property owners and managers do not know they [can] be a part of the solution and save money by making their buildings more energy efficient,” said Mayor Bloomberg in a statement after the first benchmarking reports were released in 2012. “This benchmarking report will help us understand where we can act most quickly to significantly reduce GHG emissions and achieve our PlaNYC goals.”

Lights, Meters, Action

Often considered the low-hanging fruit of energy efficiency implementation, improving a building’s lighting system can dramatically reduce energy consumption. In New York City, roughly 18% of energy use in non-residential buildings can be attributed to lighting, which also accounts for 18% of the city’s carbon emissions. With the goal of reducing greenhouse gas emissions by 30% within the next 15 years, Local Law 88 (LL88) was designed to address the need to encourage lighting upgrades for improved energy efficiency and reduced consumption.

Specifically, LL88 requires landlords of commercial buildings over 50,000 square feet to submeter their tenant’s demised premises. Because tenants typically represent approximately 70 percent of a building’s electricity use, LL88 essentially gives tenants the power [no pun intended] to change their energy use behavior. Metering does so!

Under LL88, large non-residential buildings must use lighting installations compliant with New York City Energy Conservation Code standards. LL88 applies to interior lighting, tandem wiring, exit signs and exterior lighting. The required upgrades can be implemented gradually, but each improvement must meet current code requirements. To meet the sub-metering requirements, building owners must install one or more submeters for each non-residential tenant space of 10,000 gross square feet or more and provide monthly statements to each tenant. All told, these lighting upgrades must be completed prior to January 1, 2025.

Measurements for Management

It’s often said that data is power, and with benchmarking, that’s both literally and figuratively true. Collection and analysis of energy use provides much-needed insight into not how energy is being used, but how resources like time and money are allocated to meet demand and manage waste. Knowing where you stand changes one’s energy strategy from reactive to proactive.

LL84 established a four-step process for building benchmarking for energy consumption. First, property owners must check the city’s Covered Building List to see if they fall within LL84’s compliance parameters. If so, building owners must then collected complete building data from their utilities. The final step involves using U.S. Environmental Protection Agency’s (EPA) online tool, ENERGY STAR Portfolio Manager® to submit building consumption data to the City.

Greener, Greater Buildings

The LL84 benchmarking reports reveal energy usage patterns for individual buildings and allow comparison to the metrics of other properties. The report drills down into specifics, including the type, use, and location of each building. While a whole host of factors can affect energy consumption, developing average energy per square foot benchmarks allow building owners, utilities, and other stakeholders to identify opportunities for increased energy efficiency and to highlight areas where more progress is needed.

About 40 percent of all energy use in the US is consumed by buildings. Most experts estimate energy demand could be reduced by up to 40% through basic energy efficiency protocols and improved energy management. Benchmarking plays an integral role in identifying energy waste and compelling increased energy efficiency. In fact, according the US EPA, benchmarked buildings reduce energy use by 2.4% per year.

One-Stop Solution

As yet another May deadline looms, New York City property owners can benefit from ready-to-implement technology resources available through software designed to work with the EPA’s ENERGY STAR Portfolio Manager®. When choosing a provider, it’s important to prioritize automation and accuracy. For best results, energy management software should provide building owners with seamless data collection and portfolio management, including account set up, ESS calculations, and the option of integrating with ENERGY STAR certified meters for whole-building or individual data collection.

Energy is one of the largest controllable operating costs for property owners. Buildings spend over $400 billion a year on energy, making them the biggest energy consumer in the U.S. They are also the second-largest source of greenhouse gas emissions in the country. With the stakes so high, every watt counts. Benchmarking building use and pitting the final numbers against Energy Star standards casts a spotlight on what’s working, and what needs a little more TLC.

A Trend Takes Hold

At the end of last year, the California legislature passed California Assembly Bill 802 (AB 802), mandating energy benchmarking throughout the state. Following a path forged by New York City’s own benchmarking directives, California joins a growing list of regions already requiring energy use benchmarking. The California law adds an additional level of transparency by requiring public release of ESS scores, making it the first state to make whole-building energy usage data available to the public.

By making ENERGY STAR scores available, tenants, appraisers, lenders and brokers will know exactly how each building ranks, encouraging building owners to keep their scores high. Statutes like LL 84, LL88 and AB 802 will be a major driver for energy efficiency initiatives moving forward. With New York and California leading the way, there’s the potential for the impact of building benchmarking to become the standard nationwide.