Philadelphia Joins the Growing List of Cities Mandating the Benchmarking and Reporting of Building Water and Energy Usage

July 23, 2012
MGKF News Flash

by Bryan P. Franey and Lauren Kramer

On June 21, 2012, the Philadelphia City Council unanimously passed a bill, which requires owners of buildings with 50,000 square feet or more devoted to commercial use to annually benchmark and report energy and water usage data. Under the bill, affected commercial building owners must annually upload their buildings' (1) energy usage; (2) water usage; and (3) characteristics and use attributes (including street address, year built, type of use, gross floor area, operating hours, and use-specific information such as percent of building area heated or cooled, number of computers, number of refrigerators, etc.) into the EPA's online "Portfolio Manager" database. The first submission deadline is June 30, 2013 and then every June 30 thereafter.

To meet the annual reporting deadlines, anytime during February of each year, affected commercial building owners must request that their tenants provide all energy and water usage information from the previous calendar year. Tenants are required to respond by March 15. If a tenant does not respond to the request for energy and water usage data, the commercial building owner must still input building information into Portfolio Manager using available information.

In addition to the annual benchmarking requirement, the bill requires affected commercial building owners to disclose a "Statement of Energy Performance" to prospective purchasers or lessees upon request. The Statement of Energy Performance is a report generated by Portfolio Manager, which summarizes a building's energy performance in a short, easy-to-use format. The bill also directs the Mayor's Office of Sustainability to establish an online program that compiles Citywide benchmarking data, allowing the general public the ability to view and compare energy and water usage among city buildings.

Commercial building owners that fail to report their benchmarking data within 30 days of the June 30 deadline may be subject to a $300 fine plus additional fines of $100 per day for each day that the violation continues after that period. The Office of Sustainability is responsible for carrying out the terms outlined in the new bill. Philadelphia’s benchmarking bill follows the trend of several other cities with similar initiatives, including Austin, TX; New York, NY; San Francisco, CA; Seattle, WA; and the District of Columbia.

Proponents of the bill maintain that such measures will provide an incentive to building owners to identify opportunities to improve energy performance and realize energy savings through targeted retrofits. Building retrofitting might also serve to increase local spending and employment for workers performing the necessary energy changes.

Some potential issues with the implementation have been noted as well, including the difficulty that some building owners may have accessing tenants' utility data, the allocation between owner and tenant of savings from energy-efficiency measures, and the return on investment period for savings from energy retrofits. There is also a concern among some building owners about the impacts on energy benchmarking attributable to tenants with energy-intensive operations.

For more information on energy benchmarking or the legislation, contact Brenda Gotanda (bgotanda@mgkflaw.com; 484-430-2327) or Bryan Franey (bfraney@mgkflaw.com; 484-430-2308).