Building Energy Benchmarking Ordinance – Philadelphia

Location: Region, country

Population: Pennsylvania, United States

Climate: humid subtropical climate zone

Duration: 2012-2015

Sector: Buildings

Funding sources: Public

City networks: N/A

Savings: From 2013 to 2018, Philadelphia’s benchmarked buildings demonstrated a 5% reduction in overall energy use and over half of all buildings reported every year had achieved energy savings [source].

Solutions: The city implemented a benchmarking and disclosure programme from Philadelphia, supporting its goal to become “the greenest city in America” by 2015.

Multiple benefits: Energy and water consumption reduction; GHG emission reduction; green job creation; spill-over effects on buildings not covered by the program.

Objective – To increase transparency in the commercial marketplace regarding energy efficiency; advance energy-efficient building practices, and reduce energy-related expenditures for owners and tenants alike.

Solutions – In June of 2012, the City Council enacted the Building Energy Benchmarking Ordinance, which amends the Energy Conservation Code, mandates benchmarking, reporting and public disclosure of energy and water efficiency for non-residential buildings. Owners of covered buildings are required to submit data through the free U.S. EPA’s ENERGY STARR Portfolio ManagerR tool by June 30 each year. Starting from 2014, the information reported by building owners to the City are publicly disclosed.

The Ordinance covers:

• Any commercial building with indoor floor space of 4645 m² or more.
• All commercial portions of any mixed-use building where a total of 4645 m² or more of indoor floor space is devoted to any commercial use.

The responsibility of compliance falls on building owners, who must obtain energy and water consumption data even when a utility supplier separately meters tenants. Once requested by the building owner, a tenant is required by the ordinance to provide information so that the owner can fulfil the benchmarking requirement. Because most of the covered buildings are served by ‘master’ energy and water meters, obtaining tenant data has not been a major barrier to compliance.

In cases of non-compliance, the building owner can be fined US$ 300 for the first 30 days, and US$ 100 each day after that. Based on a compliance rate of 86% in year one, the Mayor’s Office of Sustainability (MOS) did not pursue fines for non-compliant buildings. With year two reporting now substantially complete, MOS has observed slightly higher compliance rates in the second year. However, the final 10-12% of covered buildings prove virtually impossible to reach.

Since the beginning of the program, the compliance rate has remained high even as the list of buildings required to report has grown with the expansion of multifamily properties and the growth of new construction in Philadelphia. For 2018 benchmarking data, there was an 85 per cent compliance rate for the number of buildings required to report. Since the last benchmarking report was released with 2014 data, the compliance rate has slightly fallen. This is because over 900 multifamily buildings have been added to the compliance list and changes in building ownership.

Funding – The city did not have a specific budget for implementing and monitoring the ordinance. When the program was launched in 2014-2015, the city used approximately US$ 50,000 of grant funds to support advertising and public outreach activities and spent another US$ 75,000 on outreach programmes, mailing building owners and website development in efforts to boost compliance rates. It also relied on federal funding for technical assistance to design the benchmarking programme from academic partners [source].

Innovation – Using benchmarking, public disclosure, and compliance fines to motivate energy efficiency actions by commercial building owners and multifamily buildings.

Success factors – 1) strong technical assistance from national academic partners funded by federal government initiatives; 2) effective dissemination; 3) building on existing reporting platforms; 4) clear compliance rules and effective enforcement.

Significant outcomes

• From 2013 to 2018, there have been at least a 12% reduction in total greenhouse gas emissions from buildings participating in the program.
• From 2013 to 2018, Philadelphia’s benchmarked buildings demonstrated a 5% reduction in overall energy use and over half of all buildings reported have achieved energy savings every year.
• The average building in Philadelphia is performing slightly better than the national median with an ENERGY STAR score of 55; however, thousands of buildings fall below this score, demonstrating the opportunity to improve energy efficiency in the city’s building stock.

Synergies with local policies:

• Philadelphia set a goal to become “the greenest city in America” by 2015 and had multiple policies for energy efficiency improvement [source].

Political alignment:

• The program is aligned with the multiple policies and programs on energy efficiency improvement [source]
• It is also aligned with the increasing awareness and interests in energy efficiency improvement by the private sector and civil society in the U.S. [source]

Marketability:

Moderate to high. In normal conditions, when commercial buildings have stable revenue from rent and the returns of energy efficiency retrofit are economically viable, enacting a building efficiency code can be a good instrument for motivating energy efficiency. This policy requires the participation of both the building owners and the tenants. It can be difficult to implement during periods of operation disruptions (e.g. due to the COVID restrictions) or in cities where the awareness or return of energy efficiency investment is low.