Is Mandatory Energy Benchmarking a Good Thing?
We provide tracking and benchmarking services to a lot of multifamily and commercial buildings throughout the US. As leaders in this space, we often get asked what we think of energy benchmarking and disclosure laws. Recently, this debate came to our backyard, with Boston's consideration of the Building Energy Reporting and Disclosure Ordinance (BERDO). The ordinance passed a vote of the Boston City Council vote only two weeks ago.
We support Boston's energy disclosure ordinance, and similar efforts throughout the country.
I was happy to testify in support of the ordinance, on behalf of WegoWise, because we believe these types of regulations can help our citizens, our environment, and our economy.
There is increasing momentum throughout the country for energy disclosure ordinances. In the hope of spurring further debate as new laws are considered, I am posting our full statement of support for Boston's ordinance (Docket #0340) here.
I would like to express my support, as a resident of the Greater Boston region, and a founder of WegoWise, Inc., for the proposed Building Energy Reporting and Disclosure Ordinance.
WegoWise was founded in Boston with the goal of making buildings more efficient. We provide utility analytics and benchmarking services for commercial and residential property owners; and our customers include developers of large commercial properties, municipal public housing agencies, and everyone in between. We’ve benchmarked over 1,200 buildings in the city, and every day I walk by buildings managed or owned by our customers.
We understand Boston’s building stock very well.
In addition, I currently rent an apartment in Cambridge, and for 4 years was a lessee in Boston. I’ve lived in brand new constructions and in buildings over 100 years old, and know personally how much money and energy is wasted in the winters when you have leaky windows and poor insulation.
We need to make our buildings more efficient, and benchmarking is an effective and necessary step to make that happen.
I support this ordinance for four key reasons:
This ordinance will provide building owners with greater transparency into how their buildings are performing, and this understanding will prompt people to act.
We have found that very often, the only thing stopping building owners from improving their properties is a lack of awareness. If we can provide more organizations with transparency about potential opportunities for energy savings, many will proactively retrofit their properties.
One of our nonprofit affordable housing customers based in Cambridge, Homeowners’ Rehab (HRI), is saving 15% ($218k/yr) through targeted retrofits, upgrades and renewables as a result of benchmarking their buildings. Another customer, John M. Corcoran & Co., which manages 12,000 units in and around Boston, reduced the water consumption in just one building by a million gallons per year. This raised the value of that property by $1M. The investment decisions are obvious once you see these numbers, but they needed to track and benchmark the data before they even knew the opportunities existed.
Buildings are hugely wasteful, and retrofitting inefficient buildings is one of the easiest ways to achieve significant environmental benefits.
Buildings are responsible for 39% of CO2 emissions in the US1. They are a bigger source of CO2 than vehicles or industrial emissions. And oftentimes the buildings that perform poorly, perform very poorly. The City of New York found out, through their benchmarking program, that bringing the worst performing buildings up to the median performance level could yield energy savings of approximately 18%2. Our own benchmarks over hundreds of Boston-area buildings shows that the situation is even more extreme here. For example, inefficient buildings consume 42% more natural gas than the median.
The value of this ordinance in Boston is even greater than in other cities that have adopted similar regulations.
Compared to most other parts of the country, Boston has particularly inefficient buildings. This is largely due to the fact that we have a much older building stock than most cities. We take pride, as we should, in our historic legacy, but we need to bring our infrastructure to more modern standards. In addition, the student-driven demand for apartment rentals in the city provides little incentive for property managers to improve their buildings’ energy performance. I pay the heating bills that result from the leaky windows in my building. If I don’t like it, another renter will easily rent my unit as-is in my place. So why would the building owner improve anything? As a renter it makes no financial sense for me to invest heavily in the building’s core infrastructure, so nothing gets done. Market forces are acting against the common good in this very common situation – which is exactly when regulation becomes appropriate.
Improving the efficiency of buildings will result in significant economic benefit and create high-quality jobs.
We need jobs in fields that provide fair wages for diverse populations and produce a net positive for society. Improving building performance fits these criteria exactly. I expect, as I described above, that this ordinance will result in property owners taking steps to improve the efficiency their buildings. This could create hundreds of stable jobs in incredibly valuable fields: energy services, contracting, information technology, and organizational support. WegoWise alone has created over a dozen new jobs in the Boston area. Reducing utility expenses for renters and property owners will translate directly to increased disposable income and greater economic activity.
We go out of our way to bring in movie productions and corporate offices in the hope that it will spur local spending. Why not create jobs for our citizens and save people money in a way we know will help the local economy?
In cities like New York, Washington D.C., Philadelphia, and San Francisco, WegoWise has helped property owners comply with disclosure and benchmarking laws. Of course, any regulation carries costs, and it is very important to examine and understand that cost. But, companies like ours help bring those costs down substantially. Our goal is to make sure that property owners don’t have to pay any penalties by making compliance easy and effective, and we’re getting better at this every day. We are very confident that we can help the city work with building owners to make the introduction of this ordinance go smoothly.
We are beginning to see results from energy disclosure laws in cities throughout the country. Boston is defined both by its history and its progressive modernization. With our aging buildings, and a capable work force, we have an incredible opportunity to massively reduce our city’s overall energy consumption. Let’s treat that opportunity as a responsibility and get to work.
Founder & CTO WegoWise, Inc.
1 Source: United States Green Building Council
2 Source: New York City Local Law 84 Benchmarking Report, City of NY