Submitted by: Paul Spiegel, P.E., LEED AP, President, Practical Energy Solutions

In 2012, the City of Philadelphia became the latest local government to pass an energy benchmarking and disclosure ordinance, which is intended to motivate commercial building owners to improve energy efficiency. And while legislative mandates may seem burdensome, property management firms and building owners with benchmarking experience report that energy efficiency programs reduce operating costs for tenants while adding marketable value to the portfolio.

Benchmarking is often the best first step in any efficiency program because, like an MPG rating for a car, it offers a quick and easy indication of how well your buildings are performing from an energy use and utility cost standpoint. Philadelphia’s energy benchmarking and disclosure law specifically requires owners of all non-residential buildings >50,000 square feet to benchmark 2012 energy (electricity, gas, oil, steam) and water use in the ENERGY STAR Portfolio Manager tool, and report the benchmark score to the city by October 31, 2013. This free, web-based software tool provides a whole-building energy performance rating ranging from 1-100, with 100 being the best score. It automatically adjusts the score to account for local weather conditions, number of people, occupied hours, and other variables. This “normalization” helps ensure that your building will be scored fairly in relation to other similar buildings across the country.

The City ordinance also requires building owners to disclose their benchmark scores to potential tenants or buyers. Since the energy cost for a tenant can be as much as 20% of the rental rate, disclosure will empower prospective tenants to factor operational expenses into their leasing decisions. This can be especially important in markets where tenants have multiple, similar options available to them. In public institutions, benchmarking also opens the door for stakeholder involvement in energy management, since energy consumption has significant economic and environmental impacts.

The new ordinance places substantial fines on noncompliance. Failure to report your score by November 30, 2013, results in a $300 fine, and the fine increases to $100 per day for each subsequent day of noncompliance. The 2012 scores will not be publicly disclosed by the City; however, the City will publish all benchmark scores on-line for all subsequent years. The 2013 performance reports are due October, 2014.

Interested in learning more about how we can help you? Contact Practical Energy Solutions at 215.525.2250, or by e-mail at benchmarking@practicalenergy.net. You can also register for one of our free seminars being held throughout the city