Around 3,000 commercial and multi-family buildings in Denver would be asked to start providing information to city officials about their energy efficiency under an ordinance before Denver City Council. The information – described as similar to gas mileage stickers for motor vehicles – would help the city meet its Energize Denver climate goals.

Municipal, institutional, commercial and multifamily residential buildings of at least 25,000 square feet would be asked to track and report their energy usage annually, using the Environmental Protection Agency’s free online tool, ENERGY STAR® Portfolio Manager. Exemptions are available for building owners that claim they are unable to benchmark their building due to its condition and other factors.

A task force that helped draft the ordinance also recommended the city make the benchmarking process a requirement, with a $2,000 fine for noncompliance. However, the ordinance does not include a fine and the program is voluntary.

Elizabeth Babcock, manager of air, water and climate with the Denver Department of Environmental Health, told the City Council’s Safety, Housing, Education and Homelessness committee the program could be “pretty impactful.”

“We think Denver could see a $340 million private investment to save around $1.3 million in energy costs,” she said. “So for about every one dollar invested, there would be $4 in savings.”

She added the goal is to improve energy efficiency in the identified buildings by 15 percent. Babcock noted these types of buildings take up just 2 percent of the city’s land space, but produce 90 percent of the city’s carbon emissions annually.

“So we think we can do a lot with this program to help address climate change,” she said.

The Energize Denver program’s goal is to cut greenhouse gas emissions to 1990 levels by 2020 and by 80 percent by 2050. Within those goals, the target is to reduce the energy consumption of commercial and multifamily buildings by 3.8 million British Thermal Units by the end of 2020 (equal to ten percent of the energy used in 2012) and 7.6 million BTUs by the end of 2030.

Benchmarking: a best practice

According to information provided to City Council, buildings are responsible for 57 percent of carbon emissions in Denver, and a relatively small number of large buildings make up most of that consumption. And according to the EPA, an average of about 30 percent of energy consumed in buildings is wasted.

Benchmarking measures a building’s energy use and compares it to the average of similar buildings. By making more information available, it allows owners and occupants to understand their building’s performance and identify opportunities to cut energy waste.

The program will be phased in, with all municipal buildings of at least 25,000 square feet and owners of non-municipal buildings (institutional, commercial and multifamily residential) of at least 50,000 square feet asked to comply no later than June 1, 2017, then each June 1. All non-municipal buildings of at least 25,000 square feet should comply no later than June 1, 2018, then each June 1.

The information given to City Council said building owners and managers can lower their working cost, with studies finding that benchmarking can lead to annual energy savings of 2-3 percent. Policymakers and utilities can also better identify policies, programs and financial incentives to segments of the market wasting the most energy.

Citywide, there will be job creation, reduced pressure on the electricity grid, and improved air quality.Eighteen cities and counties have already passed benchmarking and transparency requirements for the largest buildings in their city, including Boulder; Portland, Oregon; San Francisco; Kansas City, Missouri; Chicago; Philadelphia and Atlanta.

Surprise, doubts expressed by Council members

Councilman Kevin Flynn said he was surprised 57 percent of the city’s carbon emissions come from these buildings and the gap between commercial and single-family home emissions was larger than expected as well.

Babcock said part of the reason is that nearly half of the homes in Denver do not have air conditioning, since many were built before such conveniences were commonplace.

Sonrisa Lucero in Mayor Michael Hancock’s Office of Sustainability said the Energize Denver goal for emissions reduction “can’t be reached without this program.”

“And we’ve learned that when these types of programs are made voluntary, there’s only about a 5 percent participation rate,” Lucero added. “So that’s why we may need to step up the effort” by making the program a requirement. However, she did not think the benchmarking program would be overly burdensome to any property owner.

Councilwoman Robin Kniech had doubts the program would reach its goal if it’s voluntary.

“The business community that wants voluntary programs from the city, this is their chance,” she said. “If the commercial sector can show they’re bringing their scores down without it being a requirement, that could show that this is enough. If not, I think it will be incumbent on this Council to act, because clean air and the environment is not just good for our lives and health, it’s critical to our economy.”

Babcock noted Xcel Energy plans to “decouple” its energy rates and energy costs in the coming year, which should “better incentivize energy efficiency, while not negatively impacting their revenues.”

That should encourage participation in the benchmarking program, she added.

Building owners with properties that should take part in the program will receive a notice from the city early next year, Babcock said.