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The Podium

Boston needs the building energy disclosure ordinance

The City of Boston’s proposed building energy disclosure ordinance will help Boston remain economically competitive with cities like New York, San Francisco, Philadelphia, and Chicago that have already taken action to require building owners to track and report their energy use data. The ordinance will give property owners, tenants, utility companies, and the city an enhanced ability to both measure and manage energy use. This will lead to greater energy savings for businesses and more effective energy efficiency practices and incentives; you can’t manage what you don’t measure.

Climate change directly threatens the economy, infrastructure, and quality of life in Boston. This threat is real and incontrovertible and requires focused and sustained action by all sectors of society to reduce greenhouse gas emissions. We cannot sit idly by while increasingly powerful storms threaten to flood land and property along our coastline and inland low-lying areas. The commercial sector is responsible for more than 50 percent of Boston’s community emissions and many in the city’s business community have aggressively pursued energy efficiency and renewable energy opportunities that both improve their bottom lines while reducing their carbon footprint. Much of this success is due to our nation leading energy efficiency programs provided by our utilities. These programs will continue to invest billions of dollars in efficiency programs over the next three years. While these efforts are laudable, they are not enough.

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The proposed ordinance is a critical component of engaging the broader Boston business community in the important work of fulfilling the city’s climate action plan. The city cannot effectively achieve its climate goals unless it can measure current commercial-sector emissions and then monitor ongoing progress. This ordinance is about reporting, not regulating.

To ensure the development of an ordinance that met the needs of the city while at the same time understood the complexity and needs of the property owners, A Better City and the Boston Green Ribbon Commission led a stake holder engagement process that included focus groups and meetings with large and small commercial property owners and managers to help shape the ordinance. We are pleased that many of the concerns raised during these sessions were addressed, including various exemptions for buildings that do not or may be unable to achieve an Energy Star score of 75. As well, the city has included flexibility within the proposed ordinance to allow for the use of new technologies in building energy assessments that can greatly reduce the cost of performing an audit, while still providing valuable information on opportunities to improve the buildings energy performance.

The implementation of the Boston energy reporting and disclosure ordinance over the course of the next 18 months will present a unique opportunity to engage a significant proportion of the city’s commercial building owners and property managers. While any new regulation is likely to be met with skepticism by the wider commercial real estate community, the city may be able to effectively mitigate some building owner opposition by offering resources that will help reduce barriers to energy efficiency investment and ensure compliance with the ordinance. This could include free trainings on the use of EPA’s Portfolio Manager; a hotline for assistance; ongoing communication with building owners; and increased efforts to connect the sector to utility energy efficiency programs.

Research shows that there is a direct economic benefit to owners and tenants of energy efficient buildings. According to CoStar data, Energy Star labeled buildings in Boston have a rental premium of 15.5 percent, a sales price premium of 5.8 percent, and an occupancy premium of 2.5 percent. At the same time, tenants report increased levels of productivity.

While the ordinance and accompanying regulations may need refining to assure property owners are not unduly burdened, the fact is that environmental sustainability is a critical factor in corporate siting decisions, and Boston needs to remain competitive nationally and globally as a destination for employers and talented workers.

Michael A. Cantalupa is the chairman of A Better City.
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