Mandatory Benchmarking Not Worth the Cost, Study Says

Boston’s Mayor Thomas Menino wants large commercial buildings in the city to benchmark their energy usage, but a report studying the effects of benchmarking finds that the costs outweigh the benefits.

The report, commissioned by the Greater Boston Real Estate Board and authored by Robert Stavins, an environmental economist at Harvard University, studied experiences in other cities with similar programs and found that any energy savings are likely to be negligible, according to the Boston Globe.

The study was conducted in conjunction with Analysis Group, a Boston consulting firm, and paid for by the Greater Boston Real Estate Board and The Building Owners and Managers Association. Both groups oppose mandatory monitoring and benchmarking.

Following the trend of several large cities, Menino announced the filing of the Building Energy Reporting and Disclosure Ordinance with the Boston City Council in February. As a component of the city’s climate action plan to meet Mayor Menino’s greenhouse gas reduction goals, this ordinance would require all large and medium sized-buildings to report their annual energy and water use to the City of Boston. The ordinance requires passage by the Boston City Council.

Seattle has energy benchmarking data going back to 2011 on more than 87 percent of commercial and multifamily buildings 50,000 square feet or larger. Some Seattle companies offer testimonials about the amount of energy they’ve saved after they used the data to make energy efficiency upgrades.

Obviously, benchmarking, monitoring and reporting don’t save energy in themselves. They simply provide the data to base decisions.

The study conducted for Boston, which examined national, state, and municipal energy efficiency policies that target commercial and residential buildings, found that information about their effectiveness and costs to property owners is incomplete, according to the Boston Globe.

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19 thoughts on “Mandatory Benchmarking Not Worth the Cost, Study Says

  1. A link to the study would be great. It all comes down to the famous saying “you can’t manage what you don’t measure”. This applies from a governing standpoint with regard to developing additional regulations and for building owners who can identify lower performing buildings in their portfolio. Looking forward to reading the report none the less.

    Follow ME @LukeFerland

  2. One question is: How much does it cost a building owner to use Energy Star Portfolio Manager to benchmark energy? I’m trying to get the report…not sure if BOMA Boston is going to publish it.

  3. It should cost a few hundred dollars to benchmark using Portfolio Manager. Requires a couple of years of energy bills and a modest amount of data about the building.

  4. This is absolutely shocking 🙂

    The same knee-jerk reaction occured in previous cities now benchmarking. Vested stakeholders writing up “studies” claiming doom and devestation. I suspect that that the study claimed jobs will be “lost” too. 😕

  5. Benchmarks are low resolution tools to highlight outliers.

    They show mean performance, but do not indicate whether given existing resoucres a building is being operated effectively.

    A benchmark is most meaningful as an asset evaluation and political embarassment tool – not as an audit function which requires far greater sophistication

  6. ENERGY STAR Portfolio Manager is a free tool administered by the EPA and DOE, so there is no cost to open an account or benchmark a building. There is a time commitment for the property manager to benchmark a building but that time commitment is fairly minimal.

  7. This is very disappointing to me. “So let’s not do anything different because it’s not going to work” attitude is one of the most annoying “skills” they teach in business school and makes my job as a consultant that helps companies analyze and take a hard look at their operations and structure…you are correct sir. It won’t work and it doesn’t matter if everyone doesn’t work as a team and just goes through the motions. Should is be mandatory? I don’t necessarily agree but the claims made in this report are suspect and and frustrating for those of us who actually work in the industry of benchmarking and I can definitely tell you, it matters.

  8. Monitoring also finds the leaks, the wasted energy. THIS is the energy reduction that is capital-free! Typical results are 10% or more. This is what the testimonials prove.
    Kristen has it right, having been through the same experience of fear of change, or worse, recognition of just how much cash has been lost due to NOT doing anything. I sometimes wonder if this is the reason for not doing anything, the realization and accompanying embarrassment of just how much money has been wasted, lost money spent on energy inefficiency due to ignorance, fear or just plain old stupidity!

  9. The issue is not whether or not building performance benchmarking is a good idea that can help motivated building owners spot potential problems and save energy/money. It is valuable when done right. Our EnergyCAP software users see the value every day. The question is whether mandating benchmarking and reporting is a valid function of government, and whether the often shoddy reporting that unmotivated and disinterested building owners perform as a result is of net value. It will be interesting in several years, after early adopter cities have had a few years of experience with this type of legislation, if the rate of adoption increases or dies. It has to have proven value far beyond the cost, and the jury is still out on that point.

  10. All that benchmarking defines is where any structure falls in the pile of all buildings in the area.
    It does NOT define any useful energy savings opportunities or beneficial actions. It just tells the players where they stand.
    When done as part of a corporate action, it does at least tell the company WHERE to start first to generate the highest level of savings for the buck invested but, again, all it does is to aid in defining a starting point, not to define any actions that will have meaningful value.
    Realistically, for a corporate system the BEST choice is to look at the utility costs for all of the corporate sites and then start energy savings analysis and savings actions at the most expensive site. Such an action will also yield the highest “bang for the buck” relative to corporate utility costs.

  11. Ignorance is bliss! Let’s not have a benchmark but stubble around in the dark. And when we invest in buildings conservation projects just pour it into some politican’s brother contracting firm without assurance the building has the highest R.O.I.

    Why do people think there is some silver bullet with a piece of paper. The paper is the guidepost , the compass point to where the problem is. But again for politicans – ignorance is bliss and with no paper trail than who can blame mis-spending tax payers monies on wax paper insulation and Ben Franklin Boilers.

  12. “These tires and wheels are useless!”

    No kidding numbskull, you have to build the rest of the car too.

    “This car is useless!” Yeah dummy, remember you threw out the wheels and tires!?

    Fortunately lack of vision and big picture thinking aren’t completely absent, as show by comments by Kristen and others.

    The question is, should we bother having discussions with those who fervently believe the earth is flat? Do you really believe “stupid” is fixable?

  13. The referenced study refers to much more than benchmarking. The conclusion says that mandatory programs should be shown to justify the cost. The paper doesn’t provide any estimate for what the costs might be in a benchmarking only situation.

  14. This article presents the bombastic thesis and then goes on to note that the data used to develop the ‘conclusions’ is incomplete. And is data ‘going back to 2011’ really ‘going back’??? Give me a break! What will move the needle? If it is mandatory to collect and report the data and make the results available to anyone looking to lease space in the reporting buildings, then tenants may start making decisions about where they lease based on real data. And if that makes people shy away from ‘dog’ buildings, those landlords will start losing money … and that will make them upgrade their building’s performance.

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