Baseball legend Yogi Berra once said, “You’ve got to be very careful if you don't know where you are going because you might not get there.” He might not have said it perfectly, but dear old Yogi had the right idea. Without knowing where you want to go, you might not get there. To add to Yogi’s thoughts, if we may, with anything in life, it’s hard to know where you’re going when you don’t know where you’ve also been. Believe it or not, both thoughts can be applied to Boston’s recent energy benchmarking ordinance.

From the Big Apple to Beantown

First, let’s take a step back to where we’ve been. Picture it: 2006, New York City. Mayor Michael R. Bloomberg implements PlaNYC 2030, one of the most comprehensive urban planning directives in the nation. It included 10 goals over the next 25 years, including reducing global warming emissions by more than 30 percent. Part of the mayor’s initiative is the Greener, Greater Buildings Plan, which contained a number of legislative components focusing on the city’s private buildings of over 50,000 square feet. One of the requirements includes a benchmarking system so that buildings’ energy usages may be analyzed and compared. The result of all aspects of this plan is to achieve a 30 percent reduction in New York City's annual greenhouse gas emissions below 2005 levels by 2030.

The plan became a model for other towns and cities across the nation, which are beginning to follow suit. In May, 2013, the Boston City Council approved an ordinance requiring larger commercial and residential buildings to report annual energy and water usage to the city, which in turn will make this information available to the public. This effort was the result of recommendations made back in 2010 by Boston Mayor Tom Menino’s Climate Action Leadership Committee. It is reflective of a growing trend nationwide to increase transparency in building performance through the sector’s convergence with information technology. In addition to New York City, Boston joins six other major cities that have adopted similar ordinances including Washington, DC, San Francisco, Seattle, Austin, Minneapolis and Philadelphia.

Basically, the plan—which will affect about 1,600 buildings in Boston—calls for energy and water usage and greenhouse gas emissions to be reported for city buildings in 2013; commercial buildings greater than 50,000 square feet in 2014; residential buildings greater than 50,000 square feet or 50-plus units in 2015; non-residential buildings with 35,000 square feet in 2016; and residential buildings over 35,000 square feet, or with 35-plus units, in 2017.

Upfront Savings

Daniel Teague is director of business development at Wego Wise in Boston, a company that created a software program designed to help buildings compile their benchmarking data. He has been in the benchmarking business for about five years now and says, “Looking back, owners’ eyes glazed over when you talked about benchmarking and they didn’t even understand what the role was,” he says.

Teague says now they are benchmarking buildings all over the country and the owners see what savings it can offer them upfront. “Both before and after the law, owners have increasingly seen that benchmarking can lead them toward retrofits and point out which buildings are in need of energy efficiency,” he says.

While the Boston ordinance has some supporters, it also has its opponents for various reasons, especially financial. Teague says that benchmarking can cause a financial strain on a building. “If they have 10 or 20 condo buildings in the portfolio, the budget isn’t always there to audit every one,” he says.

For example, he says that for an ASHRAE Level 2 investment-grade energy audit of a 50-unit condo building, the cost ranges from approximately $6,000 to $50,000. “It can be expensive,” says Teague. “Instead, to identify which of the buildings has the higher energy intensity, we gather past bills, the square footage and utility data. Then we look within the owner portfolio and see what building is using the most energy. We have a data set of 13,000 buildings we can compare your building to, then you’ll see which has the most savings potential and what one you want to target for an audit.”

Benjamin Todd, principal at Strategic Energy Group in Portland, Maine, says that the ordinance compares various-sized apples to various-sized oranges. “A garden complex is completely different than a high-rise,” says Todd. “One has common areas, elevators and community space versus a garden complex has exterior grounds and some common areas of their own, but there are different uses of energy, and comparing them isn’t very accurate.”

In April, the Greater Boston Real Estate Board (GBREB) and the Building Owners and Managers Association International (BOMA) released the results of a report co-authored by Harvard University Environmental Economist Robert N. Stavins that examined the extent to which mandatory building energy labeling results in reduced energy use. The goal of the report was to answer the question of whether benchmarking was effective. Both organizations are committed to energy efficiency and other green measures, but both organizations are opposed to the policies that intervene with market forces, assign market value to buildings, stigmatize property or otherwise interfere with transactions.

“We’ve been looking at the issue of energy scoring for a long time and it’s something that would stigmatize properties or interfere with the transaction or diminish the property values,” says Patricia Baumer, director of government affairs for the Greater Boston Real Estate Board.

The report states that there is no credible evidence to date that a regulatory approach is effective, and concluded that building labels could affect property values, with properties that receive a "green" score seeing appreciation in their market value and properties receiving a brown score experiencing depreciation. Although building labeling programs are in effect in select cities throughout the U.S. they vary in the quality and usefulness of the information developed and the requirements and costs imposed on property owners.

“We support environmental policy if it’s sound or meaningful,” says Baumer. “We support energy efficiency if it’s done voluntarily, but we have concerns about this. It’s like assigning a scarlet letter to your home. Is this even going to make a difference environmentally? Largely, it’s a symbolic measure and doesn’t do anything to reduce greenhouse gases or improve the environment.”

“It’s bad publicity for the condo building trying to sell a unit,” says Todd. “How does energy benchmarking take into account metered buildings now? It’s a hiccup.”

Fines and Penalties

If the benchmarking requirements aren’t fulfilled, the financial penalties are stiff and can be a detriment to the financial integrity of a building.

“For buildings that are 35,000 square feet, it’s $27,000 per year,” says Baumer. “For 50 or more units, it’s $73,000 per year. The city can compel the building and there can be financial penalties for that. There’s also a cost of paying consultants to do all of this. Most condo associations are professionally managed and require a capital expenditure to comply with this. Many buildings want to do the right thing and are trying to upgrade the property and invest in energy efficiency, but now there is government-mandated energy efficiency when they can’t afford it.”

Todd explains that for every new product he takes on, an energy benchmarking study is done. “We do it for large real estate portfolios now to identify energy waste and to show total energy use,” he says. “We might find a building’s total energy usage might be very small, but something else might be enormous, so where are you spending that money? Is it because of weather or are there toilet leaks? We do this to identify where to spend our efforts.”

Several companies are now offering benchmarking and energy auditing services to accommodate the new legislation. An energy benchmarking report also includes information on HVAC usage, domestic hot water systems, electrical load and so much more. “Typically you can do one day in the field and, depending on what level of reporting and analysis is done, it can generate five days to three weeks of office work,” says Todd.

Another argument against the benchmarking ordinance is the effect it will have on residents. According to GBREB, building owners are often prevented from obtaining utility usage information from individually-metered units within the building because of privacy concerns.

Determining energy usage in a building might sound invasive to residents, but Todd says that his company asks to see a sample of a unit first. “Once you see the same thing, we know what’s in there,” says Todd. “It’s not disruptive, we do the common areas in morning and the condo spaces in the afternoon. Typically, we do vacant units first, too.”

After the building study is done, Todd presents his financial findings to the board. “We translate the financial impact of the benchmarking report into dollars by saying, ‘make these changes and it will save you this much,’ ” he says.

In one such study, Todd worked as a consultant with a condo board that was in desperate need of a boiler replacement. Condo fees in this building were $500 per month. “We gave them three options and the hardest was removing the oil-fired boiler, which was difficult to manage, and provide individual gas cooking units and make the residents pay for them,” he says. “It reduced the condo fees to $150 per month and now someone can pay $70,000 more for the condo just by removing the $350 condo fees,” he says.

In another 225-unit privately-owned multifamily building, $180,000 in water costs was cut by 50% thanks to the study. “They were finding the waste,” says Todd. “You can dig even further and discover that this drove up the value of the building.”

The benchmarking report provides information on how much energy your building is saving or losing. The experts say that, as a result, you’ll see what changes you may need to make. How much a building saves will vary from building to building, the same way that the energy benchmarking reports will be different depending on the size and style of the building.

For example, following an ASHRAE Level II energy audit, buildings are required to file an Energy Efficiency Report (EER). In addition to reporting energy and water use, some buildings will also be required to conduct energy assessments or other evaluations every five years to identify opportunities for energy efficiency investments. Buildings in the top tier of energy performance, those that are already taking significant efficiency actions, or those that meet other exemption criteria will be exempt from this requirement.

There’s no doubt that experts on both sides of the issue will be eagerly watching for those reports, to see where Boston buildings stand on the energy-efficiency spectrum.

Lisa Iannucci is a freelance writer and a frequent contributor to New England Condominium.