SF Requires Energy Audits, Benchmarking for Commercial Buildings

SAN FRANCISCO, CA — The city of San Francisco will require owners of commercial buildings of at least 10,000 square feet to conduct an energy audit every five years and benchmark the energy performance annually under an ordinance adopted this week.

The 11 members of the San Francisco's Board of Supervisors unanimously approved the measure Tuesday in the latest effort to ramp up energy efficiency in the city.

"San Francisco needs to increase the energy and resource efficiency of existing buildings if we are going to meet our aggressive greenhouse gas reduction targets," Mayor Edwin Lee said in a statement.

The city's Climate Action Plan (pdf) calls for reducing greenhouse gas emissions 20 percent below 1990 levels by 2012 and lays out key action areas: energy efficiency, renewable energy, solid waste management and transportation. Buildings, which consume about 70 percent of the electricity used in the U.S., present a ripe target for energy efficiency and carbon reduction initiatives. And the greatest opportunity for reductions is among existing structures, which far out-number new buildings.

San Francisco's Existing Commercial Buildings Energy Performance Ordinance offers a solution for "dramatically accelerating energy efficiency," said Barry Hooper of the Private Sector Green Building Program in city's Department of the Environment. That was the challenge posed by former Mayor Gavin Newsom when he convened a task force on existing commercial buildings in 2009. The ordinance, which amends San Francisco's Environment Code, stems from the group's recommendations.

The commercial stock among non-residential buildings in San Francisco amounts to about 196 million square feet, and the ordinance applies to roughly 3,000 commercial buildings (the existing commercial structures that are 10,000 square feet or larger), encompassing more than 160 million square feet, Hooper told GreenerBuildings.com.

Under the measure, starting in October, owners of commercial properties that are larger than 50,000 square feet must file an annual report summarizing the energy performance of their buildings. Using the EPA online tool, Energy Star Portfolio Manager, owners are to benchmark their properties and annually disclose to the city information that includes the energy intensity of their buildings (kBTU per square foot per year) and carbon dioxide equivalent emissions due to energy use. During the first year of the program, information from the initial summary would be confidential, but data in subsequent summaries are to be made public.

Similar reporting requirements for commercial buildings ranging from 10,000 square feet to just under 50,000 square feet roll out through 2013.

In addition, starting next year, energy audits are to be conducted for existing commercial buildings every five years. Owners are required to disclose to the city when the audits were conducted; affirm that the audits were conducted properly; detail all retro-commissioning and retrofit measures that are available to the owner and have a payback period of three years or less; list the estimated costs and savings of the measures; and indicate which have been implemented. The auditing requirement will be phased in over a three-year period that runs to spring 2014. But unlike the energy performance summaries, only information about compliance with the audit requirement will be made public.

Next Page: Fines as high as $100 per day possible for violating ordinance.

Violation of the ordinance could result in fines of as much as $50 a day for buildings that are 49,999 square feet or less and as much as $100 a day for buildings that are 50,000 square feet or more.

While the new law mandates energy benchmarking, auditing and reporting of those  assessments, it does not specifically require owners to make energy efficiency improvements.

However, Hooper said the city's work with businesses on energy efficiency for the past 10 years has shown that as many as 70 percent of owners who conduct audits take action after being presented with recommendations, information about incentives and potential savings.

By introducing the public disclosure factor to the equation, the ordinance uses "transparency to motivate change in the existing commercial building stock," Hooper said. "There's plenty of room for change to be made on a voluntary basis."

According to the ordinance, "cost-effective investments in energy efficiency are anticipated to reduce citywide carbon dioxide emissions by more than 70,800 tons over the first five years after adoption, with a net present value to the private sector exceeding $600 million dollars."

In a statement, Environment Department Director Melanie Nutter said implementation of the ordinance could result in "a 50 percent reduction in commercial building energy use within 20 years."

In a blog post on GreenerBuildings.com in support of the ordinance, the director of engineering for the InterContinental San Francisco said the hotel has saved $200,000 on energy bills in a year after making simple, low-cost improvements that came to light while benchmarking the property. "We would not have known where to begin or understand the full potential for energy savings if we hadn't started regularly measuring and rating the hotel's energy use," Harry Hobbs wrote.

Hooper noted that San Francisco's ordinance complements state law, which requires commercial building owners to disclose energy use information -- such as a property's Energy Star Portfolio Manager rating and other data -- to parties involved in the sale, lease or financing of a structure at the time of the transaction.

New York City requires auditing, retro-commissioning and benchmarking. A 2009 law mandates energy audits and retro-commissioning every 10 years for privately owned buildings that are larger than 50,000 square feet, under a program whose reporting requirements take effect in 2013. The owners of such buildings also are required to annually that benchmark energy and water use starting this year.

Seattle and Washington State are among the cities and states that also have benchmarking regulations.