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State and Local Climate
and Energy Program
Benchmarking and Building Performance Standards Policy Toolkit
Section 2
Building Performance Standards:
Overview for State and Local Decision Makers
EPA's Benchmarking and Building Performance Standards
Policy Toolkit aims to inform and support state and local
government decision makers who are exploring policies to
reduce energy use and greenhouse gas (GHG) emissions
from existing commercial and multifamily buildings in
their communities. This section of the toolkit focuses on
building performance standard (BPS) policies. It provides
an overview of BPS requirements and offers information
on key decision points. The toolkit includes four sections—
each intended to build on the previous section—that focus
on different aspects of policy development, including
benchmarking and transparency ^Section 1), BPS
/'Section 2), state and local government coordination
/'Section 3], and data access /'Section 4). Each section lists
additional resources on the topic.
Table of Contents
Overview
1
Understanding the Value of a BPS
2
Stakeholder Engagement
2
Key Considerations for Policy Design
3
Equitv Considerations and Examples
11
Resources
14
Overview
Building Performance Standard (BPS) policies are an
emerging type of policy that establish specific
performance levels that buildings must achieve. A BPS
may be adopted by state or local governments and
applied to existing commercial and multifamily buildings.
As of October 2022, multiple state and local governments
have passed BPS policies, including Boston, MA; Chula
Vista, CA; Colorado; Denver, CO; Maryland; Montgomery
County, MD; New York City, NY; St. Louis, MO;
Washington State; and Washington, D.C. Several other
local and state governments are exploring such policies,
including the more than 30 that joined the National
A building performance standard is
a policy that requires building owners to meet
performance targets by actively improving their
buildings over time.
Building Performance Standards Coalition, launched by
the White House in 2022.' None of the laws have yet
completed a first compliance cycle.
BPS policies can be designed to improve performance for
a variety of building aspects—including energy use, water
use, and emissions—and send market signals to
encourage investments in energy efficiency and other
clean energy technologies and strategies, particularly
electrification, but also increased use of renewable
energy. State and local governments can work with a
broad coalition of stakeholders—including the private
sector, utilities, community representatives, and others—
to help building owners" achieve the standards over one
or more performance improvement cycles. Additionally,
state and local leaders and utilities can provide support,
funding, and technical assistance to building owners in
need of additional resources.
As policymakers establish climate commitments, reducing
emissions from buildings is critical for reaching
decarbonization goals. In the United States, commercial
and residential buildings account for nearly 40 percent of
energy consumed and over 30 percent of GHG emissions,
and can be a source of much higher emissions in cities.1" In
Washington, D.C., for example, emissions from the
buildings sector made up 73 percent of the District's total
emissions in 2018, representing a significant opportunity
for a BPS to reduce emissions.™ Many jurisdictions across
the country have comprehensive policies in place to
address new building construction, but whole-building
performance standards for existing buildings represent a
newer approach.
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BENCHMARKING AND BUILDING PERFORMANCE STANDARDS POLICYTOOLKIT
Requiring reductions from existing buildings such as
through BPS policies can go a long way toward achieving
decarbonization goals, considering that a majority of the
commercial and residential building stock that will be
standing in 2050 is already built/Additionally, a BPS may
indirectly influence new construction, given that new
buildings become subject to BPS policies once in place.
Policymakers are also recognizing that equity principles
must be incorporated when developing decarbonization
policies such as a BPS to promote equitable outcomes on
energy affordability, health, comfort, affordable housing
preservation while allowing people to stay in their homes.
See page 11 for a discussion of equity considerations in
the design and implementation of a BPS along with
several state and local examples.
Understanding the Value of Building
Performance Standards
Jurisdictions that have established a BPS identify it as a
key strategy to help achieve decarbonization goals.Vl
Although it is too soon to evaluate the effectiveness of
BPS policies, they have the potential to drive a range of
actions that reduce emissions, including energy efficiency
upgrades, building electrification, and increased use of
renewable energy. By requiring buildings to meet a
specified level of performance, a BPS can establish long-
term certainty,
Stakeholder Engagement Strategies
helping building owners plan for upgrades that improve
their buildings while stimulating the local economy and
creating jobs. For example, the BPS in New York City, NY,
is estimated to have the potential to create a $20 billion
retrofit market, which would make it the largest in the
country, and lead to the creation of more than
140,000 jobs by 2030.™
Clean energy upgrades can reduce power plant emissions,
leading to improvements in outdoor air quality and public
health in the surrounding community. They can also
improve the comfort and productivity of building
occupants. As building owners seek to better manage
indoor air quality, high-efficiency HVAC systems with
improved controls, adequate ventilation, and increased
filtration have become increasingly important. Clean
energy upgrades can also lead to EPA recognition, such as
ENERGY STAR® Tenant Space recognition for leased office
space and ENERGY STAR certification at the property
level.
Stakeholder Engagement
Stakeholder engagement is a critical element of designing
and implementing a BPS. Engaging and communicating at
all stages of policy development can help state and local
leaders align policy objectives with community priorities,
gather input from individuals directly affected by the
policy, and understand the needs of underserved groups.
State and local governments can consider a variety of
engagement strategies; see below.
Assemble a comprehensive list of internal
and external stakeholders who should be
involved in the process. Creating an open
process early on can facilitate information
sharing, establish a forum for feedback
on local circumstances, and provide a
contact list of interested stakeholders
to keep informed throughout the policy
development process. Reaching a wide
array of stakeholders, including building
owners, developers, utilities, community-
based organizations and organizations
representing residents' interests, can
lead to an inclusive engagement process
and facilitate access to data and financial
incentives.
Consider the resources and availability of
stakeholders when choosing a structure
for engaging the community. Allowing for
flexibility (e.g., holding in-person meetings
with virtual components, varying meeting
times to accommodate work schedules and
responsibilities, and sending meeting notes
to all interested stakeholders) and setting
more than one opportunity to engage
can increase participation. Generating a
contact list of interested stakeholders can
help streamline communication throughout
the policy development and rulemaking
process.1
Consider developing a working group or
board to help guide decision making and
tailor needs throughout the rulemaking and
implementation process. Creating a BPS
help desk to offer support and resources
to those required to comply can help
with continued relationship building and
information sharing with stakeholders.
Consider creating a network to provide
assistance and resources on financing,
rebates, and other resources for building
owners, developers, builders, and designers
throughout the compliance period.2
xFor more detailed information on structuring stakeholder engagement, see the Institute for Market Transformation and Natural Resources Defense Council
(NRDC), Engaging the Community in Policy Development (City Energy Project of NRDC and IMT, December 2018), accessed February 2021, htt ps: //w w w. e ne rev.
gov/sites/prod/files/2019/02/f59/Citv Energy Project Resource Library Engaging The Community In Policy De....pdf.
2For example, see "High-Performance Building Hub," Department of Energy & Environment, Washington, D.C., accessed Feburary 2021, https://doee.dc.gov/
node/1445901.
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Key Considerations for Policy Design
Align and
Establish Goals
Determine
Covered
Properties
Consider
Compliance
Approaches
Provide Support
to Building
Owners
Establish
Reporting
Requirements
Key Considerations for Policy Design
State and local governments have several key decision
points to consider when designing a BPS. While existing
BPS policies vary considerably, there are core elements
that state and local leaders can consider in developing a
policy that aligns with jurisdiction goals and accounts for
the varied needs of stakeholders.
The remainder of this section provides an overview of the
decision points in designing a BPS,
Align and Establish Goals
Goal Alignment
Across the United States, states and local governments
have established long-term commitments to reduce GHG
emissions, with some goals focused on reducing emissions
by up to 90 percent by 2050 (see map, States and Cities
with GHG Emissions Reduction Goals). Many state and
local leaders have developed climate action plans that
describe objectives and strategies to achieve
decarbonization goals. These plans are often informed by
an inventory of GHG emissions to assess the amount of
emissions attributable to various sectors (see EPA's State
and Local GHG Inventory Tools). Aligning a BPS with
decarbonization objectives can help ensure that the
standards outlined for buildings produce the necessary
reductions to help meet a jurisdiction's climate goals.
In addition to aligning climate goals, relying on data from
an existing benchmarking policy offers decision makers
information on the energy performance of existing
buildings in their jurisdiction. Most BPS policies currently
enacted rely on benchmarking data to help set BPS goals
as the best-in-class resource for understanding the actual
performance of buildings within a jurisdiction. State and
local governments can couple benchmarking data with
other data and analysis to identify achievable
decarbonization pathways by building type, ground-
truthing whether their BPS goals are realistic for building
owners to achieve or if their policies need to be revised.
EPA's State and Local GHG Inventory Tools
EPA's GHG Inventory Tools are interactive spreadsheet
models designed to help state, local, and tribal
governments develop GHG emissions inventories,
and provide a streamlined way to update an existing
inventory or complete a new inventory. State and
local governments can use these tools to develop
GHG emissions inventories that assess the amount of
emissions attributable to various sectors and create a
simple forecast of emissions through 2050. The results
can help to inform policy goals, including establishing
building performance standards.1
1"State, Local and Tribal Inventory Tools," Energy Resources for
State and Local Governments, U.S. EPA, last updated October 31,
2022, https://www.epa.gov/statelocalenergy/state-local-and-
tribal-inventorv-tools.
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States and Cities with GHG Emissions Reduction Goals
Portland
Sacramento -
Oakland -
San Francisco
Fremont^
Riverside-
Legend
| Under 20% reduction by 2025
20-60% reduction by 2020-2035
| 70-95% reduction by 2035-2050
y^$\l Net-zero or zero emissions goal by 2030-2050
State does not have an emission target
Notes and sources: Baseline years of goals and policy type (i.e., legislation or executive order) vary. Some states and cities may also have interim
goals not shown. The 49 cities shown here are those of the largest 100 U.S. cities that have GHG reduction goals, according to "Pledges and Progress:
Steps toward Greenhouse Gas Emissions Reductions in the 100 Largest Cities across the United States," Brookings, Washington, D.C., October 2020,
accessed February 2021, https://www.brookings.edu/research/pledges-and-progress-steps-toward-greenhouse-gas-emissions-reductions-in-the-
100-largest-cities-across-the-united-states/. When data was available, city information was updated using, "State and Local Policy Database," ACEEE,
Washington, D.C., accessed October 2022, https://database.aceee.org/. The source for state policy goals is: "State Climate Policy Dashboard,"
ClimateXChange, Boston, Massachusetts, updated June 2022, accessed October 2022, https://climate-xchange.org/network/dashboard/.
Performance Metrics
One of the most critical elements of any BPS is the
selection of appropriate metrics on which to base
compliance. In general, these metrics fall into two broad
categories—energy metrics and GHG metrics71"—but
many possible variations exist within those categories.
Currently, no BPS regulates water use, but EPA is available
for advising interested jurisdictions on appropriate
metrics.
Ultimately, jurisdictions must choose the metric or
combination of metrics that best align with their key
strategies to achieve decarbonization goals. Selected
metrics should be easy to implement by the government
and easily understood and acted upon by building
owners. There are potential benefits and drawbacks to
consider for any metric or set of metrics codified in a BPS.
For this reason, EPA conducted an extensive analysis of
metrics that could be considered for use in a BPS.IX
Following the analysis, EPA organized a 2-day workshop to
discuss BPS metrics, and finally published
recommendations on BPS metrics and normalization
methods."
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EPA's Recommended Metrics and
Normalization Methods
EPA recommends that jurisdictions developing state or
local BPS policies adopt the following metrics:
• To reduce energy use: Site Energy Use Intensity
(EUI)
• To reduce onsite GHG and encourage
electrification: Direct GHG emissions or adopt a
fossil fuel phaseout schedule
EPA recommends against the use of net energy metrics
(subtract renewable energy from the total energy used
to operate a building) in BPS. The use of net energy
metrics could result in buildings bypassing efficiency
and achieving compliance while still using large
amounts of energy.
To normalize for business activity, EPA recommends
that jurisdictions first evaluate benchmarking data by
property type to determine if additional normalization
is needed. Where performance in a property type is
widely distributed, EPA recommends setting different
targets based on operating characteristics using either
a binning method or using the ENERGY STAR Score.
The BPS policies in place as of April 2022 use a variety of
metrics, for example:
• Washington, D.C. is using EPA's 1-100 ENERGY STAR
Score as a screen to identify which buildings need to
be improved, using Site Energy Use Intensity (Site EUI)
as the metric for measuring improvements/1
• Washington State and Denver, CO, are using Site EUI
as their metric, with requirements that buildings
achieve certain Site EUI performance levels/"
• St. Louis, MO, is using Site EUI as its metric both to
identify buildings that need to comply and to measure
improvements/1"
• Chula Vista, CA, screens for whether a building has
been ENERGY STAR or LEED for Existing Buildings:
Operations & Maintenance (LEED EBOM) certified or
has been assigned a score of 80 or higher. Building
owners must complete prescriptive requirements
and/or reduce the EUI of buildings that are not
certified.
• New York City, NY, and Boston, MA, are using total
GHG emissions as their metric to assign an emissions
limit to all buildings. The emissions limit is based on
an emissions rate per square foot multiplied by the
building's square footage.XIV
Choosing specific metrics for a BPS involves balancing
several considerations, such as:
Normalizing for business activity. Jurisdictions may want
to adopt metrics that account for significant differences in
building operations or activity. For example, the BPS
policy in Washington, D.C. uses the ENERGY STAR score,
which adjusts for key drivers of energy use by property
type. However, normalization for operational parameters
creates additional complexity that must be balanced
against the benefits it offers.
Recognizing differences in property type when setting
standards. All BPS policies passed to date have
differentiated performance levels by property type.
Certain property types tend to operate at a higher Site EUI
than others (e.g., a supermarket is expected to consume
more energy per square foot than a warehouse).
Jurisdictions should consider how their BPS will
differentiate performance levels by property type,
depending on which metrics or compliance paths they
adopt.
Setting a timeframe for compliance and interim
milestones. To date, state and local governments have
adopted BPS policies with interim standards defined by
compliance cycles (e.g., every five years) until the
ultimate, long-term performance standard is reached.
Depending on how they are established, these interim
standards can drive predictable improvements in building
performance and corresponding GHG emissions
reductions, while allowing for flexibility by enabling
building owners to defer improvements so that upgrades
can be aligned with capital planning within a longer
timeframe. Establishing long-term standards using set
metrics can provide building owners a clear sense of the
reductions they must achieve over time.
Ensuring that performance is measured and standards
are set based on high-quality data. An important
consideration in BPS design is including measures to
ensure that compliance data are high quality, such as
requiring building owners to verify the data they submit.
Such measures may increase confidence in the standards
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and the assessment of a building's performance relative
to them.
Changing standards based on local considerations. If a
BPS has more than a single standard and compliance
period, state and local governments could consider
changing how standards are set over time. This would
likely depend on several factors, such as changes in
building performance, the carbon intensity of the
electricity grid, technology developments, stakeholder
needs, and shifting priorities. One key way to accomplish
this would be to create flexibility in the legislation itself,
where policymakers would have an opportunity to
consider changing targets at defined points in time.
Determine Covered Properties
Property Types
State and local governments can apply a BPS metric to a
variety of building types, although most BPS policies to
date have covered existing commercial and multifamily
buildings.xv The process for determining specific covered
properties can be informed by several factors, including
the amount of energy savings and GHG reductions that
can be achieved, the degree of program outreach and
support that building owners will need, and stakeholder
input.
Large commercial and multifamily buildings have
potential for significant energy savings and emissions
reductions. Because owners of large commercial buildings
tend to have more resources and technical expertise in-
house they may need less support than owners of smaller
buildings. When considering buildings to be covered,
decision makers may want to plan for additional support
needs for certain property types and owners of smaller
buildings. Conducting stakeholder outreach will provide
state and local governments with a better understanding
of property owners' needs and inform equitable access to
available resources for compliance.
As is common practice, jurisdictions with existing
benchmarking policies can align their covered property
types with their covered properties under a BPS, relying
on the effort, outreach, and data collection already
established through a benchmarking policy.
Exemptions and Accommodations
Exemptions and accommodations for certain property
types are important to ensure that the design of a BPS
considers equity. Existing BPS policies consider factors
such as financial hardship, capacity constraints, building
usage, occupancy rates, major renovations, the condition
of a property, and change of ownership for determining
exemptions and accommodations. Jurisdictions with a
benchmarking policy in place can also consider matching
the property type exemptions under those requirements
with exemptions in their BPS policies.
State and local decision makers, in consultation with
stakeholders, can identify accommodations for additional
support and compliance flexibility that enable building
owners and tenants to realize the benefits from
compliance strategies and support policy goals. This is
particularly relevant for under-resourced buildings, such
as affordable housing. For example, in St. Louis, MO, the
BPS extends compliance for affordable housing and
houses of worship to six years relative to four years for
other propriety types. This helps balance the benefits of a
BPS for affordable housing and other under-resourced
market segments with the strain on their budgets and
staff required to comply with the standard.XVI
Determining allowable compliance pathways is an
opportunity for state and local governments to build in
flexibility, while aligning stakeholder needs with BPS
objectives.
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Washington, D.C.'s Compliance Pathways
Washington, D.C.'s Building Energy Performance
standard provides building owners with a variety of
paths to choose from to bring their buildings into
compliance. More details about these compliance
paths will be available once the rules and guidance
documents are finalized. Compliance pathways as of
February 2021 include:
• Performance: reduce site energy usage by 20%
• Prescriptive: implement cost-effective efficiency
measures
• Standard: reach the standard for the property
type; only available for property types that are
above the national median
• Alternative compliance: special circumstances
such as portfolios, deep retrofits, etc.1
1"BEPS [Building Energy Performance Standard] Frequently Asked
Questions," Department of Energy & Environment, Washington,
D.C., accessed February 2021.
Compliance can be based on achieving a performance
standard, implementing a set of prescriptive measures, or
other pathways for special circumstances, with alternative
compliance fines for building owners who fail to comply.
State and local decision makers may want to primarily
direct building owners to a performance pathway because
it ensures a set level of savings; however, considering
additional pathways can allow for compliance flexibility.
For example, developing a set of cost-effective
prescriptive measures may help building owners with
resource constraints meet the standard and provide
certainty concerning compliance. In addition,
incorporating flexibility by extending compliance
timeframes can enable building owners to align building
upgrades with their capital planning, granted the long-
term standards are met.
State and local leaders can consider various compliance
pathways when selecting performance metrics for a BPS.
They can consider which technology investments will align
with the performance metrics used to set the BPS and
whether the investments are viable for building owners.
State and local governments and utilities can encourage
investment in building performance improvements by
providing incentives via early adoption programs (see
Washington State's Early Adopter Incentive Program), or
offering benefits or exceptions for buildings with ENERGY
STAR certification.xv" Regardless of the compliance
approach taken, a BPS will likely require some mechanism
to allow for alternative compliance pathways for some
buildings, such as those with highly energy-intensive
space uses or characteristics that make them
fundamentally different from most buildings and building
types.
Washington State's Early Adopter
Incentive Program
Washington State's BPS includes a program to
incentivize early compliance. The program was
expanded in 2022 and is administered by the
utility and the Washington State Department of
Commerce. Early adopters who bring their buildings
into full compliance with the standard can receive a
performance-based incentive totaling 85 cents per
square foot.1
1"Clean Buildings," Washington State Department of Commerce,
Olympia, WA, accessed February 2021, https://www.commerce.
wa.gov/growing-the-economv/energy/buildings/.
Enforcement for Noncompliance
While state and local governments can focus on educating
building owners and providing support to boost
compliance through performance improvements,
enforcement can help discourage noncompliance.
When determining fines for noncompliance, state and
local governments have considered a level that would
encourage compliance by setting an amount higher than
the estimated cost of compliance. Fines—also called
"alternative compliance payments" can connect to
building size (e.g., dollars per square foot), or can be on
an absolute energy or GHG basis, or can taper depending
on the level of improvement a building achieves by the
end of a performance period, or can correspond with the
property's assessed value. Fines could also be triggered if
the owner does not meet reporting requirements, or
takes measures that harm occupant health or safety, or
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¦S.
falsifies data. State and local governments can consider
the role of tenants in building performance by enabling
building owners to pass incentives and fines to their
tenants. This may create an opportunity for tenants to
support building performance improvements; however, it
is important to consider the effects this could have on
under-resourced buildings and underserved tenants, and
identify any necessary protections such as those to ensure
any pass-through of fines to tenants is proportional to
what they control. State and local governments may also
consider providing additional support and considerations
for owners of certain buildings or building types, including
affordable housing or other under-resourced buildings.
In addition, state and local governments can consider
distributing the fines collected to support those building
owners in need of financial support. As BPS policy
implementation gets under way in the coming years,
there will be opportunities to assess the effectiveness of
different enforcement approaches to inform future policy
development, including approaches that go beyond fines
such as the revocation of occupancy permits.
Provide Support to Building Owners
*93?
Technical Support
State and local governments are well-positioned to offer
technical support and education to building owners. This
can include providing education materials on planning
and implementing cost-effective performance
improvements, answering questions on reporting or
compliance requirements, and establishing a support
mechanism to assist underserved owners/tenants and
under-resourced buildings (see St. Louis, MO's Building
Energy Improvement Board).
Technical support needs will likely vary by building type.
For example, owners of large commercial buildings tend
to have more resources and technical expertise in-house,
whereas owners of other building types such as small
commercial and affordable housing may need more
support. State and local governments can consider
convening building owners and technical experts to plan
services similar to Washington, D.C.'s Building Innovation
Hub.xvl" This type of platform can offer coordinated
technical assistance, oversight, and outreach to help
building owners with compliance. In addition, state and
local governments might explore partnering with colleges
and universities to provide technical support with
students serving as support staff.
St. Louis' Building Energy Improvement Board
St. Louis, MO viewed equity as one of the most important
design decisions when constructing their BPS. Equity is also
a driving force behind the Building Energy Improvement
Board, a nine-member board appointed by the Mayor
to provide support to underserved people and under-
resourced buildings. The Board is responsible for the
following:
• Democratically approves equitable accommodations;
• Oversees establishing and approving standards by
property types in each compliance cycle;
• Reviews and recommends amendments to proposed
regulations;
• Meets on a quarterly basis to approve alternative
compliance plans (available on a case-by-case basis to
provide necessary expertise to building owners who
need it);
• Helps with creating suggested template compliance
plans, recommending complementary programs,
providing technical expertise, and connecting building
owners to utility incentives for affordable housing.1
^'Next-Generation Building Performance Policies: Maximizing Energy
Savings and Environmental Impacts," Better Buildings®, U.S. Department
of Energy, Washington, D.C., accessed February 2021, https://
betterbuildingssolutioncenter.energy.gov/webinars/next-generation-
building-performance-policies-maximizing-enerev-savings-and-
environmental.
EPA Support for BPS Design and
Implementation
EPA is available to support state and local governments
throughout all phases of BPS development, including
strategic advisory discussions, reviewing draft policies
and regulations, providing technical support on
implementation (including the use of ENERGY STAR
Portfolio Manager), and more. EPA seeks to serve as
a bridge between building owners and policymakers.
For a summary of EPA resources for BPS, please see
this webpage: Benchmarking Policies and Building
Performance Standards: EPA Resources.
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Funding Support
It is critical to ensure that funding is in place for a state or
local government to design and administer the BPS.
Decision makers can develop new or feature existing
sources of funding to assist building owners with
compliance. For many building owners, compliance with a
BPS could require significant investment and financial
assistance.XK Some examples of possible funding sources
include the following: incentive program offerings from
local utilities targeted to covered building types**;
Property-Assessed Clean Energy (PACE) financing, a low
(or no) upfront cost loan that can be used to fund energy
efficiency and renewable energy projects and is repaid
through a building's property tax bill; green banks that
leverage public funding to attract private capital for
investments in clean energy projects (see Washington,
D.C.'s Green Bank); and federal tax credits and funding
opportunities for energy efficiency and clean energy
programs and projects.**'
Washington, D.C.'s Green Bank
Washington D.C.'s building energy performance
standard sets aside dedicated funding for the District's
new Green Bank. The DC Green Bank has partnered
with the Montgomery County Green Bank to offer
Montgomery County's Commercial Loan for Energy
Efficiency and Renewables (CLEER) Program for
commercial buildings in the District as well. D.C.'s
Green Bank is also matching their financing offerings
to rebates from the D.C. Sustainable Energy Utility and
supporting work with diverse contractors.1
American Council for an Energy-Efficient Economy. "Webinar:
Building Energy Performance Standards the Importance
of Financing to Fund Critical Upgrades." YouTube video,
1:32, September 17, 2020, https://www.voutube.com/
watch?reload=9&v=sDdxf5B9wFI&feature=voutu.be&ab
channel=ACEEEDC.
Establish Reporting Requirements
Regardless of the specific implementation details of a
state or local BPS, it is likely that EPA's ENERGY STAR
Portfolio Manager tool will play a role in the performance
reporting process. This is especially likely if the jurisdiction
has already required the use of Portfolio Manager
through a benchmarking and disclosure ordinance. (See
Section 1 of this toolkit for more information on
benchmarking policies.) State and local decision makers
may want to consider the following:
Reporting Mechanism
The most common reporting approach under existing
benchmarking requirements is for the state or local
government to set up a custom reporting template in
Portfolio Manager, and to publish this as a Data Request.
Building owners access the Data Request by clicking on a
dedicated URL. After clicking the link, respondents select
the properties for which they are reporting data and
release their report to the requesting state or local
government. The reported properties from all
respondents are combined in the reporting template, and
the requesting government downloads the data from
Portfolio Manager as one data set. The other reporting
approach available in Portfolio Manager is called Property
Sharing. Through this method, covered building owners
share read-only access with an account set up by the state
or local government for reporting. This approach allows
the state or local government to directly view the
respondent's property record in real time and extract the
necessary metrics for compliance and reporting. Some
local governments have used these methods in tandem,
helping them resolve data quality issues with respondents
more easily. These reporting approaches are described in
more detail in the Summary of Benchmarking Reporting
Approaches table on page 10.
Access to Historical Data
Because BPS policies may assess performance against a
historical baseline, it is critical to ensure the availability of
data going back an appropriate number of years.
Addressing this will require the establishment of clear
expectations for the historical whole-building data that
utilities should provide when supporting requests from
building owners. A BPS can also establish requirements
for providing historical property data to the new owner of
a property upon sale. This ensures that the new owner
will have access to any baseline data that may be required
as a part of BPS reporting and compliance, and will not
need to start the data-gathering process anew.™'
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BENCHMARKING AND BUILDING PERFORMANCE STANDARDS POLICYTOOLKIT
Changes to Metrics in Portfolio Manager
Generally speaking, the building-specific models
underlying EPA's ENERGY STAR 1-100 scores available in
Portfolio Manager are updated every four to five years as
new national data sets become available. At these times it
is common for a property's ENERGY STAR score to change
to reflect changes in the efficiency of the building
population. For all types of buildings, including those not
eligible for an ENERGY STAR score, EPA's regular updates
to site-to-source energy conversion factors—necessary as
the mix of fuels and renewable energy used to generate
electricity changes—may result in changes to metrics.
When changes occur, they are applied both going forward
and retroactively in Portfolio Manager. Policymakers may
want to consider whether or how any significant impacts
to performance due to these changes would be addressed
in assessing compliance against a BPS, given that the
impact of these changes are outside of the building
owner's control.
The ENERGY STAR Portfolio Manager
Building Emissions Calculator
EPA's ENERGY STAR Portfolio Manager calculates a
building's GHG emissions (including carbon dioxide,
methane, and nitrogen oxide) from on-site fuel
combustion and purchased electricity and district
heating and cooling, and enables tracking of avoided
emissions from any green power purchases. This
is done using emissions factors for the 26 eGRID
subregions.
In 2022, EPA released a new tool, the ENERGY STAR
Portfolio Manager Building Emissions Calculator. This
tool allows users to estimate past, current, and future
emissions, including application of custom factors and
allowing for market-based GHG inventorying. The tool
allows users to leverage their ENERGY STAR Portfolio
Manager data. In 2023, EPA will further enhance and
integrate the Building Emissions Calculator by allowing
the results to flow back into Portfolio Manager.
Summary of Benchmarking Reporting Approaches
Reporting Method
Characteristics
Pros and Cons
Data Request
Creates a "snapshot of
performance" based on
requested metrics and
time period
• Requires action from the building owner each reporting cycle that
may improve data quality and completeness.
• Defined metrics and time period ensure greater data privacy.
• Offers fewer insights into historical data and into building owner
inputs that could have errors.
Property Sharing
Provides "real-time" and
full view into all building
owner inputs and
corresponding metrics
• Allows state or local government to see rolling view of current and
historical inputs and metrics as building owner makes changes and
when EPA refreshes metrics such as 1-100 ENERGY STAR scores.
• Could create issues by not prompting the building owner to review
data quality and completeness.
• May raise data privacy concerns among building owners, requiring
transparent communication around what data points will be
retrieved, when, and for what purposes.
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/ \
Equity Considerations and Examples for BPS
Policymakers are recognizing that equity principles must be incorporated when developing decarbonization policies. This will
ensure that these policies result in reductions in energy use and carbon emissions while promoting equitable outcomes on
energy affordability, health, comfort, affordable housing preservation, and housing displacement. Policies that include under-
resourced buildings while offering managers and residents additional support rather than excluding them from requirements can
achieve stronger environmental results while providing the benefits of building upgrades to more people. When designed with
equity in mind, building benchmarking and BPS policies can be an enduring strategy for achieving progress for buildings,
communities, and the climate.
Addressing equity In buiiding performance policies is an evolving area of practice. This section first identifies common
overarching considerations or strategies that can support equity in the design of building performance policies. These strategies
are followed by implementation approaches with specific local and state policy examples. These examples are Illustrative; many
additional states and cities are finding other innovative ways to address equity concerns. While these examples focus on BPS
policies, many of the approaches could also be designed to apply to building benchmarking policies.
Overarching Considerations and Strategies
The underlying goal of a building performance policy is to maximize benefits while avoiding harm, especially for communities
with environmental justice concerns. Policymakers must determine what is appropriate to include in the BPS given its scope,
which is generally to regulate the performance of existing commercial and multifamily buildings. Some goals, such as workforce
development, preserving naturally occurring affordable housing (e.g., through rent stabilization), etc., may be more suited to
companion policies or programs, or a broader policy package where a BPS is one of many components. However, Incorporating
the following broad strategies in BPS policy development can help bolster equity:
• Engage with affected residents, tenants, owners, and managers of buildings serving disadvantaged populations1 throughout
policy development and implementation.
• Provide technical and/or financial support to under-resourced owners to assist in achieving compliance.
• Structure penalties progressively (i.e., fine amounts correlate with resource levels) to the extent possible.
• Consider alternative compliance paths/options/timeframes for under-resourced owners serving disadvantaged populations.
• Prevent negative outcomes for tenants of affordable multifamily buildings, including naturally occurring affordable housing,
by limiting pass through of compliance costs, and rent or utility increases.
Definitions of disadvantaged populations or disadvantaged communities vary. The White House Office of Management and
Budget guidance on defining disadvantaged communities for federal agencies is available at: https://www.whitehouse.gov/wp-
content/uploads/2021/07/M-21-28.pdf.
Key Resources:
1. Urban Sustainability Director's Network. Building Performance Standards: New Framework for Equitable Policies to
Address Existing Buildings. July 2021. https://www.usdn.org/proiects/building-performance-standards.html.
2. Institute for Market Transformation. Understanding the Housing Affordability Risk Posed by Building Performance
Standards. August 2020. https://www.imt.org/resources/understanding-the-housinR-affordabiiity-risk-posed-
by-building-performance-policies/.
3. National Housing Trust and ACEEE. Mandating Building Efficiency while Preserving Affordable Housing: Opportunities
and Challenges. August 2020. https://www.energyefficiencvforall.org/resources/mandating-building-efficiency-
while-preserving-affordable-housing/.
>¦
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BENCHMARKING AND BUILDING PERFORMANCE STANDARDS POLICYTOOLKIT
Equity Implementation Approaches and Examples
• Include Disadvantaged Communities in Stakeholder Engagement - Including under-resourced building owners, community-
based organizations, and tenant representatives in stakeholder engagement from the start and throughout the policy design
and implementation process helps to ensure policymakers listen to and understand the concerns of building owners and
communities who will be affected by the policy. Meaningful engagement2 ensures that communities have equal opportunity
to shape and benefit from the policies. St. Louis, MO, has a Building Energy Improvement Board that includes affordable
housing owners and tenants, as well as labor representatives, to provide input on implementation, compliance, and
complementary programs. Denver, CO, is working with community members and stakeholders to co-create services and
incentives that meet the needs of under-resourced building owners and occupants as they implement the Energize Denver
BPS ordinance.
• Compliance Flexibility - BPS policies require attention to under-resourced building owners who will need additional support,
including nonprofit organizations, houses of worship, small businesses, community centers, and affordable multifamily
housing. Structuring a policy to include under-resourced buildings with accommodations, rather than excluding them from
the requirements, provides an opportunity to realize multiple benefits from building upgrades. For example, a BPS could
include extended compliance timelines, a progressive penalty structure, or adjustments to targets for qualifying situations.
Montgomery County, Maryland's Building Energy Performance Standard (BEPS) groups buildings by type and sets standards
based on technical feasibility. A key feature of the BEPS is a Building Performance Improvement Plan (BPIP)3 to allow
flexibility for properties that cannot reasonably meet standards. BPIPs will be developed by owners and reviewed and
approved by a Building Performance Improvement Board. Under-resourced buildings may be eligible for timeline extensions
or alternative compliance paths. St Louis' Building Energy Performance Standard Targets gives affordable housing and
houses of worship six years to meet standards while other building types have four years. Boston, MA's Building Emissions
Reduction and Disclosure Ordinance includes a compliance path for buildings experiencing hardship.
• Consumer impacts and financial support-Throughout policy design and implementation, policymakers can consider impacts
that could arise for consumers. For example, if building owners pass the cost of BPS compliance to low-income tenants, this
could worsen household energy burdens or raise rents, increasing the risk of displacement. Low-income building occupants
may also have limited ability to mitigate or respond to any adverse conditions that arise during building improvements. To
address this, policymakers can build in measures to protect occupant's living conditions or offer funding and/or financing
programs to bring down the cost of compliance and help pay for energy audits, predevelopment expenses, and health and
safety measures. For example, the BPS in Washington, D.C. imposes the maximum fine on buildings that endanger occupant
health and safety. Alternative compliance penalties and other funding go into the District's Sustainable Energy Trust Fund,
which provides funding to multifamily affordable housing and owners of rent-controlled building so that they can improve
and comply.
• Technical support for implementation - Compliance with BPS policies can place additional burdens on staff for under-
resourced buildings. Robust and targeted technical assistance can facilitate compliance. Washington, D.C.'s Affordable
Flousing Retrofit Accelerator offers training and technical assistance to affordable housing buildings.
• Complementary programs and policies - Complementary policies and programs (including energy efficiency programs, green
banks, and clean energy policies) can play an important role in generating more successful and cost-effective BPS policies,
especially for under-resourced building owners. Policymakers can develop programs tailored to meet the needs of under-
resourced building owners and underserved areas to help reach compliance with BPS policies. Washington State's Early
Adopter Incentive Program, administered by utilities and funded by the state's public utility tax, includes an Equitable and
Inclusive Early Adopter Incentive Plan that reserves incentives for buildings located in rural areas or areas with
environmental health disparities, those with high energy use, or multifamily affordable housing.
JThe Institute for Market Transformation's Model BPS Ordinance includes sample language for a Building Performance
Action Plan.
2The Institute for Market Transformation's Model BPS Ordinance includes a Community Accountability Board concept
that provides an example of a structure through which governments and communities can work together.
3The Institute for Market Transformation's Model BPS Ordinance includes sample language for a Building Performance
Action Plan.
Section 2. Building Performance Standards: Overview for State and Local Decision Makers
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BENCHMARKING AND BUILDING PERFORMANCE STANDARDS POLICYTOOLKIT
EPA
Katy Hatcher, ENERGY STAR Commercial & Industrial,
hatcher.caterina@epa.gov
Brendan Hall, ENERGY STAR Commercial & Industrial,
hall.brendan@epa.gov
Cassandra Kubes, State and Local Climate and Energy
Program, kubes.cassandra@epa.gov
EPA Resources
EPA offers robust training materials and support to help
state and local decision makers understand how to
benchmark in Portfolio Manager, implement and finance
energy efficiency improvements, and quantify the
multiple benefits of clean energy:
ENERGY STAR Building Performance Policy Brief - This
brief provides the latest updates on building performance
policies and trends.
ENERGY STAR Resources for Benchmarking Policies and
Building Performance Standards - This webpage
highlights ENERGY STAR tools, resources, and support for
state and local governments designing and implementing
building performance policies.
ENERGY STAR: An Overview of Portfolio Manager—Guide
describing some of ENERGY STAR Portfolio Manager's
basic functions, such as how to navigate through the tool,
enter building data, and connect and share data with
others.
ENERGY STAR Portfolio Manager Technical Reference:
Greenhouse Gas Emissions—Overview of the GHG
emissions metrics used in Portfolio Manager and how to
calculate the emissions footprint associated with a
building's energy consumption.
ENERGY STAR for Existing Buildings—Explore a set of EPA
tools and resources to help commercial and institutional
building owners or managers save energy. Resources
include getting started, finding financing, earning
recognition, and communicating success.
State. Local, and Tribal GHG Inventory Tools—Interactive
spreadsheet models designed to help state, local, and
tribal governments develop GHG emissions inventories,
and provide a streamlined way to update an existing
inventory or complete a new inventory.
Tools for State. Local, and Tribal Governments—Overview
of the State and Local Climate and Energy Program's tools
to help state, local, and tribal governments quantify and
achieve their environmental, energy, and economic
objectives.
Local Action Framework: A Guide to Help Communities
Achieve Energy and Environmental Goals—State and Local
Climate and Energy Program's step-by-step guide to help
local and tribal governments plan, implement, and
evaluate new or existing energy or environmental
projects.
Clean Energy Finance: Green Banking Strategies for Local
Governments—This primer provides a basic explanation
of green banks, the benefits they offer, issues local
governments might consider when deciding whether to
create a green bank, and several case studies. It also
provides information on other green banking
opportunities for local governments.
Did Your Energy Efficiency Project Get Lost in Translation?
Financial Speak for Facility Managers—Highlights
alternative financing solutions specific to energy efficiency
that may offer a solution for facility managers in getting
approval for a project.
Additional Resources
American Council for an Energy-Efficient Economy-
Mandatory Building Performance Standards: A Key Policy
for Achieving Climate Goals—Summarizes current trends
and profiles 17 jurisdictions where BPS policies are being
successfully implemented, implementation is just
beginning, or adoption is being considered.
American Council for an Energy-Efficient Economy—How
Energy Efficiency Programs Can Support Building
Performance Standards—Discusses the role of energy
efficiency programs before and after BPS policies take
effect, including approaches to crediting energy savings
achieved.
Institute for Market Transformation (IMT)—Exploring
Building Performance Standards—Set of resources
focused on BPS policies for local governments, building
owners, and tenants.
Institute for Market Transformation—Summary of IMT's
Model Ordinance for a Building Performance Standard—
Overview of model ordinance for a building performance
Section 2. Building Performance Standards: Overview for State and Local Decision Makers
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BENCHMARKING AND BUILDING PERFORMANCE STANDARDS POLICYTOOLKIT
standard that incorporates lessons from four jurisdictions
that have adopted BPS policies.
National Housing Trust—Recommendations for
Implementing the District's Building Energy Performance
Standard in Affordable Multifamilv Housing—Overview of
recommendations to Washington, D.C.'s Department of
Energy and Environment for the Building Energy
Performance Standard as it relates to multifamily
affordable housing developers and owners in the District.
Urban Green—All About Local Law 97—Set of resources
focused on New York City, NY's BPS, enacted under Local
Law 97.
Urban Sustainability Directors Network and Cadmus—A
Guidebook on Equitable Clean Energy Program Design for
Local Governments and Partners—Guidebook supporting
local governments and their partners to intentionally
design clean energy programs that enable current and
emerging technologies to be accessed equitably.
' Other jurisdictions have adopted forms of performance
requirements for buildings, including San Jose and Brisbane, CA;
Boulder, CO; and Reno, NV. For the purposes of this document,
we refer to the types of BPS policies adopted in Washington,
D.C.; New York City, NY; St. Louis, MO; and Washington State.
" From this point forward, the term "building owner" is used to
indicate "building owner and/or operator," with the
understanding that many property owners rely on third-party
management companies to operate buildings on their behalf.
U.S. Energy Information Administration (EIA), Annual Energy
Outlook 2022 with Projections to 2050 (Washington, D.C.: EIA),
accessed February 2021, www.eia.gov/aeo; U.S. EPA, Inventory
of U.S. Greenhouse Gas Emissions and Sinks: 1990-2018, EPA
430-R-20-002 (Washington, D.C.: U.S. EPA, 2020), accessed
February 2021, https://www.epa.gov/ghgemissions/inventorv-
us-greenhouse-gas-emissions-and-sinks-1990-2018.
IV "Greenhouse Gas Inventories," Department of Energy &
Environment, Washington, D.C., accessed February 2021,
https://doee.dc.gov/service/greenhouse-gas-inventories.
v American Council for an Energy-Efficient Economy (ACEEE),
Halfway There: Energy Efficiency Can Cut Energy Use and
Greenhouse Gas Emissions in Half by 2050 (Washington, D.C.:
ACEEE, September 18, 2019), accessed February 2021,
http://www.aceee.org/research-report/ul907: ACEEE,
Mandatory Building Performance Standards: A Key Policy for
Achieving Climate Goals (Washington, D.C.: ACEEE, June 22,
2020), accessed February 2021, https://www.aceee.org/white-
paper/2020/06/mandatorv-building-performance-standards-
kev-policv-achieving-climate-goals.
vi "Climate Mobilization Act," New York City Council, City of New
York, NY, accessed February 2021,
https://council.nvc.gov/data/green/: "Clean Energy DC Act,"
Department of Energy & Environment, Washington, D.C.,
accessed February 2021, https://doee.dc.gov/service/clean-
energy-dc-act.
v" "Retrofit Market Analysis," Urban Green, City of New York, NY,
June 18, 2019, accessed February 2021,
https://www.urbangreencouncil.org/sites/default/files/urban g
reen retrofit market analvsis.pdf.
™ Energy metrics and GHG metrics include, but are not limited
to, Site Energy Use Intensity—the total amount of energy a
property consumes on-site, regardless of the source (electricity,
natural gas, or another fuel), divided by the property's gross
floor area; ENERGY STAR Score—the measure of how well a
property is performing relative to similar properties nationwide,
while normalizing for weather and business activity; Source
Energy Use Intensity—the total site energy required to operate
a property, adjusted to factor in the amount of energy required
to generate, transmit, and distribute the energy consumed by
the property, divided by the gross floor area; and GHG
Emissions Intensity—the amount of carbon dioxide equivalent
(COie) that is emitted as a result of the total energy used to
operate a property (either directly via on-site fossil fuels,
indirectly from grid-based generation, or a combination
thereof), divided by the gross floor area.
IX "White Paper: Understanding and Choosing Metrics for
Building Performance Standards." (U.S. EPA, July 2022)
https://www.energystar.gov/buildings/tools-and-
resources/white paper understanding and choosing metrics
building performance standards.
x "EPA Recommended Metrics and Normalization Methods for
Use in State and Local Building Performance Standards." (U.S.
EPA, May 2022, updated September 27, 2022)
https://www.energvstar.gov/buildings/tools-and-
resources/epa recommended metrics and normalization met
hods use state and local building.
Xl D.C. Law Library, D.C. Law 22-257, CleanEnergy DC Omnibus
Amendment Act of 2018 (Washington, D.C.: D.C. Law Library),
accessed February 2021,
https://code.dccouncil.gov/us/dc/council/laws/22-257.
x" State of Washington, Certification of Enrollment, Engrossed
Third Substitute House Bill 1257, Chapter 285, Laws of 2019,
66th Legislature, 2019 Regular Session, Energy Efficiency,
Effective Date: July 28, 2019 (State of Washington, Secretary of
Section 2. Building Performance Standards: Overview for State and Local Decision Makers
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State), accessed February 2021,
http://www.commerce.wa.gov/wp-
content/uploads/2019/06/H B1257.pdf.
Xl" City of St. Louis, MO, Ordinance 71132, Building Energy
Performance Standard (BEPS) (City of St. Louis, MO, Effective
June 4, 2020), accessed February 2021, https://www.stlouis-
mo.gov/government/citv-
laws/ordinances/ordinance.cfm?ord=71132.
XIV New York City, NY, Local Laws of the City of New York for the
Year 2019, No. 97 (New York City, NY), accessed February 2021,
https://wwwl.nvc.gov/assets/buildings/local Iaws/ll97of2019.
pdf.
xv Additional facility types can include public buildings and
manufacturing facilities, with special attention to performance
metrics considerations.
xvi "Building Energy Performance Standards," City of St. Louis,
MO, accessed February 2021,
https://www.stlbenchmarking.com/Building-Energy-
Performance-Standards.
xvii "ENERGY STAR Certification for Buildings," ENERGY STAR,
accessed February 2021,
https://www.energystar.gov/buildings/facilitv-owners-and-
managers/existing-buildings/earn-recognition/energy-star-
certification: "Energy-Saving Competitions," ENERGY STAR,
accessed February 2021,
https://www.energystar.gov/buildings/save energy commercia
I buildings/ways save/energy saving competitions.
xvi" "Connecting Ambition and Action in DC," Building Innovation
Hub, Washington, D.C., 2021, updated 2022, accessed February
2021, https://buildinginnovationhub.org/.
xix "Cash Flow Opportunity Calculator," ENERGY STAR, updated
March 7, 2018, accessed February 2021,
https://www.energystar.gov/cfocalculator: "Finding Money for
Your Energy Efficiency Projects," ENERGY STAR, updated August
12, 2019, accessed February 2021,
https://www.energystar.gov/buildings/tools-and-
resources/finding-monev-vour-energy-efficiencv-proiects.
xx "How Energy Efficiency Programs Can Support Building
Performance Standards," ACEEE, Washington, D.C., October,
2020, accessed February 2021, https://www.aceee.org/topic-
brief/2020/10/how-energv-efficiencv-programs-can-support-
building-performance-standards.
XXI Clean Energy Finance: Green Banking Strategies for Local
Governments, EPA-430F-18-004 (Washington, D.C.: U.S. EPA,
October 2018), updated November 15, 2022, accessed February
2021, https://www.epa.gov/statelocalenergv/clean-energy-
finance-green-banking-strategies-local-governments.
xx" Consider avoiding a reliance on baseline or performance
measurement in years with highly atypical business activity or
operations, including 2020 and 2021, due to impacts from the
COVID-19 pandemic.
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