Building energy disclosure ordinances have been popping up around the country lately as a way to entice property owners to benchmark their consumption and improve their efficiency, and now Portland, Ore., is the latest U.S. city to require energy disclosure from its building stock.
You can’t manage what you don’t measure, and disclosure is one way local governments are trying to help – ok, mandate – the private sector to take measure and take action. When done effectively, energy disclosure can empower property owners, investors, and tenants with valuable information to improve their assets and make informed business decisions. This is why Unico supported and hosted the bill signing for the City of Seattle’s Energy Benchmarking and Reporting Program in 2010 – but we did so with careful consideration.
Energy disclosure, if done without caution, can sabotage incentivizing energy efficiency because ENERGY STAR scores, which sit at the epicenter of disclosure laws, often don’t tell a building’s entire story. For example, a property owner may spend several million dollars upgrading a historic building’s energy performance and move its ENERGY STAR score from a 20 to a 50, which is a very respectable improvement. However to the general public, who likely has less perspective on the weight of that ENERGY STAR score, this building’s hard-fought ranking looks mediocre compared to those with scores in the 70s, 80s, and 90s. In other words, without context, the ENERGY STAR scores lose their impact.
We believe disclosure should be structured in a way that doesn’t inadvertently discredit the advancements of property owners who may have a taller order when it comes to improving the efficiency of their building. This can be done by regulating the way public agencies are permitted to display and rank individual buildings, and by requiring more than just the ENERGY STAR score to be disclosed to potential buyers and lessees. Communicating metrics like energy per square foot, cost per square foot, and percentage of energy saved under current ownership are all ways to more responsibly, and fairly, implement disclosure.