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Rules Requiring Commercial Buildings to Report Energy Use Spreading Across U.S.

More commercial buildings are being required to disclose their energy usage

For residential and business tenants of commercial buildings, being able to find out how energy efficient a new apartment or office space will be is getting easier.

Cities and states across the country are beginning this year to require that commercial buildings measure and disclose their energy use so that current and prospective tenants can make informed decisions about leasing based on a space’s estimated energy cost.

The new rules, which typically exempt small businesses, are designed to encourage commercial building owners to install energy efficiency upgrades so they can effectively compete for tenants who are looking to save money on monthly utility bills. Efficiency upgrades implemented because of the rules are expected to save energy and create jobs.

The new consumer information rules for commercial buildings are like nutrition labels on food, ENERGY STAR labels on appliances and consumer electronics, and gas mileage stickers on vehicles. The information for commercial buildings won’t specify costs but will communicate a building’s relative energy efficiency, which will be measured in energy use per square foot.

Advocates and Critics Disagree Over Mandatory vs. Voluntary Reporting

Proponents of the new rules include Andrew Burr of the Institute for Market Transformation, a non-profit organization that promotes energy efficiency, and Roger Platt of the U.S. Green Building Council, a non-profit organization that promotes sustainable building design and construction.

Platt said that it is hard to overstate the significance of the new energy-use reporting rules, adding that the rules force building owners to confront energy consumption issues. "It's like a 12-step program,” Platt said. “You first have to admit you have a problem.”

Burr, who authored a report on the new rules, said that they were simply meant to better inform consumers. “They give consumers — tenants and investors — access to information they've not had previously,” Burr said.

While advocates of new rules regulating the disclosure of energy efficiency ratings for commercial buildings applaud the move toward informing consumers, Austin Perez of the National Association of Realtors said that the “fear factor approach” of the rules stigmatizes less efficient properties and lowers their values. Perez said that a better way to encourage building owners to upgrade is voluntarily, using loan guarantees and tax credits.

However, Jayson Antonoff, an energy adviser for Seattle, Wash., opted for mandatory reporting when he said it became clear that voluntary upgrade programs weren’t helping the city meet its goal of reducing energy use by 20 percent by 2020.

July marked a deadline for 16,000 buildings in New York City, representing half of the city’s interior space, to report energy use over the past year or face a $500 fine every quarter that energy use isn’t reported.

Similar requirements went into effect in Washington state in January and will go into effect for Seattle, San Francisco and Washington, D.C. in October. By next year, cities throughout California are expected to adopt similar regulations and Austin, Texas will implement its energy use reporting rules in June, 2012. A half dozen other states are also considering similar energy efficiency reporting rules for commercial buildings.


U.S. Cities, States Require Large Buildings Cite Energy Use,” USA Today, July 31, 2011.

8/22/2011 8:14:00 AM
in Industry News