Thursday, March 4, 2010

ASTM Building Energy Performance Assessment & Disclosure Standard Begins Balloting Process

The ASTM Building Energy Performance Assessment & Disclosure Standard currently in ballot is the result of a year of intense effort involving thousands of hours on the part of more than 200 volunteer members. The results of this ballot will be discussed in St. Louis on April 22, 2010 at the next ASTM Building Energy Performance Task Group meeting to be held at the Renaissance St. Louis.

Some of the highlights of the standard are noted below.

(1) The practice was developed to standardize the process of collecting building energy use data, compiling and analyzing it, and then disclosing it. It is not a benchmarking standard or a building rating/labeling standard. As such, it does not conflict with any building benchmarking or labeling practice currently in the marketplace such as EPA’s ENERGY STAR, ASHRAE’s BuildingEQ, U.S. Green Building Council’s LEED program, CMP’s Green Value Score, among others. Rather, it complements them by standardizing the data collection process.

(2) The industry problem the standard sets out to resolve is to standardize the methodology to facilitate a consistent answer to the following question: What is the building’s energy consumption and cost? Unfortunately, today there is no universally accepted, standardized methodology to answer this question. For example, there is no standard period of time over which historical energy use data must be collected (the standard specifies 3 years, or to the last major renovation if less than 3 years, with a minimum of 1 year). There is also no standardized method to deal with unusual weather conditions that might have existed at the time the historical energy use data was collected, or an abnormally high vacancy rate at the building (which may have existed due to economic conditions), or recent major renovations, etc.

(3) Why is this question being asked more and more in real estate transactions? The answer is that there are both growing regulatory and business driving forces. The regulatory driving forces behind the need to collect building energy performance data and then disclose it include regulations passed in numerous states and municipalities such California (with AB 1103), Denver, CO, West Chester, PA, the District of Columbia, Austin, TX, New York City, Seattle, WA, and many more. The business drivers revolve around the fact that less energy efficient buildings are becoming less competitive in the marketplace with respect to attracting tenants (particularly since tenants typically pay for energy costs under their triple net leases), and less valuable with respect to their sell price in the marketplace (particularly as the “green building” trend continues to grow). Compounding the issue for existing buildings expected to undergo “major renovation” is the myriad of new enhanced building codes directed at energy efficiency. Compliance with some of these new codes will impact the capital needs identified in due diligence by a prospective purchaser.

(4) The methodology in the practice is referred to as a Building Energy Performance Assessment (BEPA). It is designed to standardize the collection of building energy use data and report it. It is anticipated that the BEPA will supplement an ASTM E 2018 Property Condition Assessment or an ASTM E 1527 Phase I used by prospective purchasers and lenders in their due diligence process. The BEPA consists of five components: a site visit, interviews, data collection-compilation, data review-analysis and reporting. Many of these components can be performed at the same time an ASTM E 2018 or ASTM E 1527 is conducted.

(6) The major deliverables in the BEPA include:

- the building’s historical annual energy use intensity for each 12-month period analyzed and over the entire period analyzed;
- the building’s historical annual energy cost for each 12-month period analyzed and over the entire period analyzed;
- the range of energy consumption for the building at the time of the real estate transaction, including a lower limit, the average, and an upper limit;
- the range of energy cost for the building at the time of the real estate transaction, including a lower limit, the average, and an upper limit, using current energy cost data;
- the pro forma building energy consumption (to determine pro forma building energy cost);
- the pro forma building energy cost (for the energy expense line item in the pro forma associated with financing of the building); and
- the building carbon footprint based upon combustion-related greenhouse gases.

(7) The practice standardizes the following important activities:

- how far back historical data needs to be collected;
- the definition of what constitutes a “major renovation;”
- how variables are analyzed to determine what constitutes average, upper limit and lower limit energy consumption conditions;
- the basis for determining pro forma building energy consumption, and therefore pro forma building energy cost; and
- how the information is reported or disclosed.

It is anticipated that there will be at least one more ballot later in the spring, and with a little luck, it may be possible to have a formally published ASTM standard as soon as the middle of the summer.

1 comment:

Sean said...

Hello Tony,

In the PNW region, we have adopted the EPS, Energy Performance Score. It too compliments other certification standards such as LEED-H and ENERGY STAR. The EPS reflects energy consumption and associated carbon emissions information allowing homebuyers to compare one home to another, and homeowners to upgrade their homes based on the recommendation report the EPS audit generates.

There is more information on the EPS on the site here:

We have offered up the EPS for national voting, the top 10 ideas get presented to the White House.

Thanks for a great blog.

Sean Penrith
Executive Director
Earth Advantage Institute