Party Walls

The Clean Energy DC Omnibus Amendment Act of 2018 was signed into law in 2019, establishing minimum Building Energy Performance Standards (BEPS) for existing buildings. The law requires all private buildings over 50,000 SF to benchmark energy use and demonstrate energy performance above a median baseline beginning January 1, 2021. The law also lowers the threshold for buildings that need to benchmark; buildings between 25,000 and 49,999 SF will need to benchmark energy use beginning in 2021. Buildings between 10,000 and 24,999 square feet will need to benchmark energy use beginning in 2024.

If a building does not score above the median performance of Washington, DC buildings, it has five years to demonstrate improvement or face financial penalties. By definition, 50% of the buildings required to comply with BEPS will fall below the median—even those just a point or two under. (You can download a list of property types and their medians here.) Building owners can use this map from DOEE to check if their building meets the BEPS.

This month, DOEE released the final BEPS compliance rules. These rules cover the different compliance pathways and the documentation required for each pathway.

This blog post was originally published on September 11, 2019. It was updated on November 18, 2021 with new guidance in response to the DOEE’s final BEPS compliance rules. Click here to learn more.

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I’ll save the long-winded introduction and get straight to the facts. Based on New York City’s publicly available Local Law 84 (LL84) benchmarking data for 2015, hotels emit 32% more greenhouse gas (GHG) per square foot than the average for all buildings. I also want to qualify this by making a few statements about the data:

1. There are 13,973 buildings on the Department of Finance list; of which 2,353 did not comply with LL84 or are not required to comply.
2. We removed the outliers. Weather-normalized source energy use intensity (EUI) over 550 and under 100 (kBtu/ft2) typically indicates erroneous data. Most likely either the building’s benchmarking activities or report filed with NYC were completed incorrectly.
3. A significant portion of the list comprises the buildings with erroneous data: 4950. Seems a little crazy, no? Leaving us with a good topic for another day….
4. For clarity, that means we analyzed the remaining 6,654 buildings.

The good news – for the sake of this post – is that the hotel market had one of the higher rates of correctly reported compliance data. Out of 187 buildings, 143 reported with numbers that were in a normal range. The average for the sector however, reflects EUI and GHG emissions per square foot that are much higher than other similar building types. Multifamily buildings, for example, have an average of 42% lower GHG emissions/ft2 than hotels (see table below). (more…)

The Stamford 2030 District is an interdisciplinary collaborative of high-performance buildings in downtown Stamford committed to ambitious efficiency goals. Stamford 2030 District’s strategic plan outlines a series of interim sustainability goals guiding the city towards 50% reduction in energy use, water consumption, and CO2 emissions for existing buildings and infrastructure, and full carbon neutrality for all new construction by 2030. Watch the video to hear key program stakeholders discuss success measures, including SWA’s Gayathri Vijayakumar on the role of benchmarking, and Mayor David Martin on public-private-nonprofit community participation.

According to the Institute for Market Transformation, fourteen cities, two states, and one county in the U.S. now have energy benchmarking and transparency policies in place for large buildings. This means that continually more cities and jurisdictions will have an understanding of how their buildings perform. It also means that these policies and their outcomes can be compared against each other and ultimately improved.

 

With these improvements in the policy landscape impacting the built environment, the question was asked: How can the data be analyzed, and what impacts do the policies themselves have on building energy usage, greenhouse gas emissions, and the local economies?

At the end of May the Department of Energy (DOE) published the DOE Benchmarking & Transparency Policy and Program Impact Evaluation Handbook, which provides “cost-effective, standardized analytic methods for determining gross and net energy reduction, greenhouse gas (GHG) emissions mitigation, job creation and economic growth impacts” for jurisdictions that operate benchmarking policies.

Also released in May was the New York City Benchmarking and Transparency Policy Impact Evaluation Report which utilized real NYC data using the same methodologies.

SWA worked with the Navigant Consulting and DOE teams to review data from two jurisdictions and develop methodologies for analysis.

The general findings of the research team were: (more…)

 

Calendar year 2015 marks the start of the third year of mandatory Local Law 87 compliance in NYC. The Law—which requires buildings over 50,000 sq ft to conduct an energy audit and retro-commissioning study once a decade—has, to date, been characterized by market uncertainty and a somewhat hesitant response from the real estate community. These conditions stem largely from an unclear expectation as to what the future will hold, and what, if any, blow back there might be for being the owner of a poor-performing building.

This lack of clarity has created a wide diversity in the approach that owners opt to take in complying with Local Law 87. A notable pool of building owners, for example, have viewed the law as a burden enacted by NYC, and have opted to take the cheapest available, low-bidder approach to compliance. A large number of newly formed energy consulting firms have popped up to provide “cheapest-in-class” services, this despite the fact that many of these startup firms lack the qualifications and experience necessary to actually perform a compliant Local Law 87 project. As is almost always the case, you get what you pay for. On the other hand, a different set of building owners have viewed the law as an opportunity to improve the performance of their buildings by engaging the service of discerning engineering service providers. These owners see the value in having a 3rd party vet the operation of their buildings, as they realize that operational cost savings drop straight to the bottom line, driving improved NOI, increased asset value, while guarding against the risk of future volatility in the commodity markets.

The real estate community has, by and large, accepted Local Law 87 as a fact of life, but the lack of a clearly demonstrated vision of future goals has created a deeply fragmented understanding of how the Local Law 87 process can and will impact a building’s operation. Signs, though, are pointing toward a clarification of what this process will require into the future, and there is reason to believe that the lay of the land will be quite different in years to come. For starters, the DeBlasio administration, in the fall of 2014, issued their One City Built to Last plan. This ambitious plan provides a policy framework for achieving 80% emissions reductions in NYC by 2050—no small task, to be sure. The aggressive nature of the plan requires that the city dig deep into the performance of the built environment in order to achieve these reduction targets, as buildings account for about 70% of NYC emissions. The DeBlasio administration has taken a “carrots and sticks” approach toward compelling change and ensuring adherence to their agenda: state and local incentives have been dangled in front of the real estate community to encourage proactive adoption of energy conservation practices by building owners, while the not-so-thinly-veiled threat of future mandates loom on the horizon for those actors that fail to take appropriate action. As DeBlasio was quoted in a September Real Estate Weekly article, “For private buildings, we’ll set ambitious targets for voluntary reductions, but if steady progress is not made, we will issue clear mandates,ˮ said deBlasio, adding, “Our long-term goal is bolder still — charting a path to a full transition from fossil fuels.” Again…not so thinly veiled.

Notable carrots include limited time incentive programs, such as the Demand Management Program offered jointly by NYSERDA and ConEd, and the forthcoming establishment of a retrofit accelerator program, which will scrub Local Law 84 (benchmarking) and 87 data to facilitate engagement between key stakeholders as the City attempts to play matchmaker in a Love Connection style game of emission reduction through market transformation. Many in the real estate and sustainability arenas see great promise and opportunity in these models.

Love it or hate it, the real estate community and others need to acknowledge that the landscape is changing, and the vision of the future—at least as how Mayor DeBlasio sees it—is taking shape.
Early adopters of emissions reduction practices—e.g., buildings that participate in voluntary programs such as the Mayor’s Carbon Challenge and those that take a more rigorous approach to the Local Law 87 process—stand a better chance of avoiding the “heavy hand of government” that DeBlasio so publicly campaigned on. And they might even get to munch on a few carrots along the way.

Measurement enables Management; Transparency enables Accountability… The quintessential concepts driving adaptation of mandatory energy benchmarking legislation.

Mandatory energy benchmarking represents a pivotal step towards reforming energy usage in American cities, as it galvanizes populations through collective reduction. Like any immature “innovation”, the practice faces barriers and static hindering widespread adaptation and dissemination into the mainstream.

What factors influence proliferation?

Unique building stock and varied regulatory needs necessitate city-specific reporting plans. Until there is a scaleable model of best-practices, development will continue to be resource and time intensive for administration.

Complexity in execution threatens data integrity and program usefulness. Unintentional errors, difficulty in obtaining information, and unfamiliarity with ENERGY STAR’s Portfolio Manager all weaken database strength. The remedy lies in educating elected reporters. Program handlers must be well versed with the operations and techniques necessary to perform their role effectively.

Stakeholder push-back during implementation deters participation and damages program reputation. Greater visibility of post-retrofit results will dispel doubts of program usefulness, while increased availability of financial incentives will quiet claims of marginalization [under-performers stigmatized as poor living options] and unfair penalization [fining of historic buildings or financially underserved properties].