Friday, May 13, 2011

Death Knell for Energy Star Building Benchmarking or Another Opportunity for the Commercial Real Estate Industry?

On April 28, 2011, U.S. DOE’s Energy Information Agency (EIA) announced that due to budget cuts, work on the 2011 Commercial Buildings Energy Consumption Survey (CBECS) has been suspended. As if this was not bad enough for our industry, a short time later, they shocked the industry even more by saying that they will not be releasing the long-awaited results of the 2007 CBECS, apparently due to “statistical” problems.

As may of you know, the CBECS is a national sample survey that collects information on U.S. commercial buildings, their energy-related characteristics and energy consumption. The survey, which began in 1979, is conducted every four years. The most recently published data is based upon the survey conducted in 2003.

The specific reason given by EIA for not releasing the 2007 CBECS data is that it “has not yielded valid statistical estimates of building counts, energy characteristics, consumption, and expenditures.” In a paper I published in April of 2010, The Formidable Challenge of Building Energy Performance Benchmarking (see link at the end of this blog), I pointed out several shortcomings in the CBECS data and why many of us in the industry did not believe it represented a statistically valid building energy performance database for use in benchmarking, particularly when local regulation requires benchmarking results to be publicly disclosed. With the spiraling growth of city and state-initiated building energy performance disclosure legislation, there simply is too much at stake for building owners in the highly competitive commercial real estate industry to accept anything less than unquestionably reliable, statistically supportable benchmarking. As such, I have long advocated for EIA to expand significantly the number of buildings included in the 2011 CBECS. I also made this recommendation as a working group chair on DOE’s Zero Energy Commercial Building Consortium. Unfortunately, the 2011 CBECS is now a mute issue, and the data void will remain a growing challenge for the commercial real estate market.

The problem created by these announcements is even more complicated. The building benchmarking methodology EPA uses in its popular Energy Star program is based upon the CBECS data. As such, Energy Star’s benchmarking has been relying for years on the outdated 2003 CBECS data. This is one of the reasons why the commercial real estate industry was so very much looking forward to the release of the 2007 CBECS data. Moreover, many of the cities and states with existing and pending building energy performance disclosure legislation rely on Energy Star for benchmarking. It is clear now that they have been left in a lurch. What are they to do? (It is my opinion that they should eliminate the benchmarking requirement (using Energy Star) from their legislation and instead only require disclosure of the building’s energy use following ASTM E 2797-11, Standard Practice for Building Energy Performance Assessment (BEPA). Over time, cities and states on their own will accumulate a considerable building energy use database, confidently knowing that energy use information has been collected in a standardized and reliable manner. Eventually there will be sufficient data for all major building types such that statistically valid benchmarking will be possible. Only at that time, in my opinion, should benchmarking results be added to the public disclosure process. Notwithstanding, I am also absolutely confidant that as soon as only building energy use alone is required to be publicly disclosed, private industry will rise to the occasion, well before the government, to provide the public with an answer as to what the numbers being disclosed mean and provide a perspective.)

Since ASHRAE’s Building EQ and U.S. Green Building Council LEED building labeling initiatives rely on Energy Star benchmarking, these programs will clearly be adversely impacted by the effective demise of CBECS. This is also true of other building labeling programs that have incorporated Energy Star benchmarking, such as the Architecture 2030 Challenge and Capital Markets Partnership Green Value Score.

As with any new and emerging market, I strongly believe it will ultimately be those from within the industry that is impacted who will ultimately respond and coalesce around any new challenge to further evolution and innovation. Recognizing the need to have a standardized methodology for building energy use data collection and that this process must be consistent, transparent, practical and reasonable, the industry did respond by working with ASTM to develop such a standard. This was accomplished earlier in the year with the publication of the ASTM E 2797-11 BEPA Standard. There is now a need for the industry to again rise to the occasion and respond to the building benchmarking data void created by the loss of CBECS. This unquestionably represents a unique opportunity for entrepreneurs servicing the commercial real estate industry.