More Cities Push for Building Energy Transparency

August 22, 2011
New report highlights spread of policies, best practices for implementation

by Amanda Kolson Hurley, Institute for Market Transformation 

Monday, August 1, was a small but important milestone in the quest to make American cities both greener and more transparent. That day was the deadline for owners of 26,000 buildings in New York City to report - for the first time - how much energy their properties consume. Next year, after collecting and analyzing more of this data, the city will begin to post it on a public website so that consumers can learn the energy performance of buildings they might want to invest or lease in - a powerful market driver for energy efficiency.

New York is not alone in adopting this kind of policy regarding building energy use, which is known as a "rating and disclosure" policy. San Francisco, Seattle and Washington, D.C., have their own deadlines coming up this October.

Already entrenched in the European Union, rating and disclosure policies are gathering steam in the United States. In addition to the cities mentioned above, Austin, Texas, has requirements in place, and the states of California and Washington do as well.

Increasingly, city and state policy makers across the country see rating and disclosure as a market-based policy tool that allows consumers to identify buildings with lower energy costs and encourages building owners to make cost-effective energy improvements - both of which are important steps toward energy reduction.

Since buildings account for roughly 70 percent of U.S. electricity usage and nearly 40 percent of total carbon emissions, reducing the amount of energy used by buildings is crucial to the hope of making cities more sustainable, and as the nation strives to cut energy use in cities, skilled green jobs will be added to local economies.

Many building owners in New York City and San Francisco are working with energy management, auditing and heating and cooling experts to ensure that they're in compliance with the new rules and to explore energy efficient measures that go beyond compliance (such as a building retrofit). Those companies, in turn, are adding new clients to their books and hiring full-time employees to meet rising demand.

Rating and disclosure requirements "drive jobs, and they also drive skills," said venture capitalist Elton B. Sherwin, senior managing director of Ridgewood Capital, who emphasizes that successful energy management depends on (and fosters) skilled workers. "You end up with an infrastructure that's more competitive."

In late July, the Institute for Market Transformation (IMT), an energy efficiency think tank in Washington, D.C., released the first-ever major report on rating and disclosure policies in the United States. Building Energy Transparency offers a comprehensive review of current policies in five cities and two states, and a look at other jurisdictions that are considering rating and disclosure.

The report is available for free online athttp://www.buildingrating.org/Building_Energy_Transparency_Implementation_Report.

The report also delves into policy implementation. Authors Andrew Burr, Caroline Keicher and David Leipziger found that local and state officials often faced common challenges, such as the difficulty of accessing energy consumption data that is held by utilities. Building Energy Transparency offers strategies for meeting these challenges, as well as general best practices.

Building Energy Transparency grew out of a roundtable for policymakers that IMT convened in November 2010. Since that event, in which more than 10 senior policy makers took part, interest in rating and disclosure has grown.

Now, many more jurisdictions are considering policies. IMT will continue to work with local and state government officials on policy development and implementation.

As the policy trend gains ground, the result will be that thousands more buildings in cities around the country will be benchmarked and retrofitted - cutting their energy use, reducing operating expenses and driving job creation. It's not yet clear which jurisdictions will be the next to adopt rating and disclosure policies, but one thing is certain: Transparency for building energy use will bring significant cost savings, economic growth and environmental benefits to America's cities. 

Amanda Kolson Hurley is communications manager for the Institute for Market Transformation.