Public Disclosure of Energy Usage

On Wednesday the Chicago city council passed a measure that requires large building owners to publicly disclose how much energy their buildings use.  The initiative is aimed at curbing energy usage in Chicago buildings. Disclosure of energy usage is the first step. The city believes in the old adage, “You can’t manage what you can’t measure.” Thus, tracking the energy usage of individual buildings is vital to the success of the program.

However, some businesses and building managers believe the program will result in “public shaming” that will harm struggling business owners in a competitive marketplace. The buildings that will be affected are in excess of 50,000 square feet, and represent less than one percent of the city’s buildings but 22% of buildings’ total energy consumption. Buildings will be required to disclose energy consumption data and information about building size, use, and occupancy levels into a software program provided by the U.S. Environmental Protection Agency (EPA).

The city will score buildings based on their efficiency, using a benchmarking tool called Energy Star Portfolio Manager. City officials hope the scorings will motivate business owners to improve their buildings through upgrades. Washington, D.C. has implemented similar measures over the past few years, and will require all buildings over 50,000 square feet to comply with disclosure requirements by 2014. We should state here that Elysian Energy provides benchmarking services to help business comply with the benchmarking requirements.

The question remains, are there negatives to disclosing energy usage amongst city buildings? We think any costs are extremely short-term. For example, the cost of setting up and using the software, or the costs of collecting information on the building itself (most buildings already track this information, but don’t disclose it). The long-term advantages far outweigh any short-term inconveniences:

• Benchmarked buildings allow building managers to make targeted improvements to increase efficiency and monitor savings after installation. Buildings can save as much as 30% in energy costs from improvements.
• Buildings who score in the top 25% of efficient buildings can receive an ENERGY STAR label. Properties with the ENERGY STAR label are shown to have greater market value.

We believe the benefits of benchmarking make it a no-brainer for most businesses. Our team is excited to see big cities like Chicago and Washington, D.C. adopting measures that improve energy efficiency and increase transparency.