Benchmark Energy Performance

Benchmark to Identify Baseline Energy Performance

by John Klein, Sharon Levin, and Deborah Cloutier

The following excerpts are from IREM's Key Report, A Practical Guide to Energy Management (IREM copyright 2005):

In the case of energy performance, benchmarking is a process of establishing a baseline measure of current performance and then comparing future performance against that baseline over time. If you are interested in comparing energy costs only, two annual industry publications are resources for such data - Income/Expense Analysis� reports published by the Institute of Real Estate Management (IREM�) and Experience Exchange Report published by the Building Owners and Managers Association (BOMA) International.

Even though it is simple to track monthly energy consumption and costs over time, this would not provide a comprehensive benchmark for comparing energy performance. One obvious variable that dramatically affects energy performance is heating and cooling degree-days. Buildings in different geographic areas that experience different weather patterns will have substantially different heating, cooling, and lighting requirements. Likewise, occupant density and operating hours of individual buildings will affect the heating, cooling, and lighting loads.

The U.S. Environmental Protection Agency (EPA) in collaboration with the U.S. Department of Energy (DOE) created an energy performance rating system to benchmark buildings called Portfolio Manager. Since this "benchmarking tool" is part of a government-backed program, it is unbiased and not linked to membership in any organization or association. In addition, all resources, tools, and guidance are free to both individual and organizational consumers of energy.

Portfolio Manager is a web-based analytical tool that normalizes building variables such as weather, occupant density, operational hours, and plug load so that you can compare the energy performance of your building to any building in any location in the United States. Portfolio Manager is one of many tools and resources that can be found at www.energystar.gov/benchmark.

Portfolio Manager assigns an energy performance rating between 1 and 100, with 100 being the best rating. Buildings with ratings between 75 and 100 are among the top performers in the nation. Managers of these buildings should continue to work toward even higher energy performance through operations and maintenance (O&M) procedures. Eligible buildings with energy performance ratings of 75 or better may qualify for the ENERGY STARR� label awarded by the EPA. Earning the ENERGY STAR label is an excellent way to demonstrate your environmental stewardship, financial acumen, and overall business management.

The process of traching performance over time can be as simple or complex as you desire. A simple approach is to record the monthly energy performance in a table with four columns. Another approach is to graph the monthly energy performance rating. Graphing provides an easy-to-see representation of quantitative data. As more months are presented, you will begin to see a trend over time.

Buildings with energy performance ratings between 50 and 75 are above average but have room for improvement - again, through a greater emphasis on O&M. While O&M procedures should be the first line of defense, replacing old or inefficient equipment could yield greater improvements in the rating.

Buildings with ratings below 50 are below average in comparison to other U.S. office buildings and may need capital improvements. However, before investing capital, owners, property managers, and engineers should review the currently practiced O&M procedures to see where improvement is needed. Two critical considerations when assessing O&M are:

1. Do the current operational procedures need to be updated to reflect current conditions? and
2. Are people following the procedures as outlined?

Often operational procedures were written when the building was commissioned or when a new engineer was hired, but these procedures were not updated as the seasons passed or the tenant mix changed. Also, the operational procedures are only as good as the people who follow through. The chief engineer cannot be present around the clock, so others must be depended upon to follow the procedures set in place.

If it is determined that the energy performance of these lower-scoring buildings cannot be improved through O&M, then the owners should consider capital investments. Keep in mind that investing in poor performers provides the largest opportunity to potentially increase NOI and asset value.

Another important application of the energy performance rating is that it can be used for making various decisions regarding buying, selling, leasing, appraising, insuring, and financing commercial real estate. Just as we demand to know the miles per gallon of an automobile when making vehicle purchasing decisions, we also need to know similar information for buildings. The energy performance rating for buildings is comparable to the �mpg� of an automobile, and is documented via a Statement of Energy Performance issued by the EPA. This document can be generated for all benchmarked buildings and provides a wealth of information, such as indoor environmental criteria, site and source energy intensity, and environmental emissions. If a building achieves an energy performance rating between 75 and 100, and applies for an ENERGY STAR label, the Statement of Energy Performance must be verified by a Professional Engineer (PE). The typical cost for the PE can range from approximately $500 up to $1,500 or more, depending on the size and complexity of the building and the individual�s level of experience.

In addition to using the energy performance rating and associated Statement of Energy Performance for making real estate decisions, you can also use the rating to verify upgrade efforts. For example, if you invest in a lighting retrofit for which the vendor guarantees a 10% energy savings, you can track the energy performance rating over time to see if, in fact, the rating does improve to reflect a 10% reduction in consumption.

More sophisticated data analysis can be provided by some Energy Management Systems. Regardless of the tracking system you choose, it should be easy to create, use, and maintain. If the system is too sophisticated or difficult to understand, users will find it cumbersome and the tracking system will be difficult to sustain. Likewise, the tracking system should provide information that will be used. The depth and breadth of the information to be provided should be considered when creating the tracking system. Too often systems are developed in such a way that the information and reports they generate are too detailed or difficult for the user to understand.