Community Maintenance Uncategorized

A Crash Course in Energy Management and BEPS Compliance

 

The term “going green” has been meaningful for most of our professional lives. It was something building managers did to take advantage of incentives or demonstrate civic values. Today, the climate crisis paradigm is shifting to a more urgent tenor. With this shift, jurisdictions are increasingly moving in the direction of adding sticks to their environmental regulations.

One of the best examples of this transition can be found right here in Washington with the DC Office of Energy and Environment’s (DOEE) Building Energy Performance Standards (BEPS). BEPS represent minimum levels of energy efficiency. Those under the minimum threshold will be required to decrease their energy consumption or face steep civil compliance fees.

BEPS is expected to serve as a blueprint for other states and municipalities. Montgomery County, Maryland is expected to adopt similar measures this year, while New York City, St. Louis, and Washington State already have. Having a solid understanding of these regulations is vital to those within these jurisdictions and offer valuable foresight to what may be coming down the pike to everyone else. Branch Chief Katie Bergfeld of DOEE’s Building Performance and Enforcement Branch, characterizes the program’s importance as such: “Building energy consumption accounts for 74% of the District’s Greenhouse Gas Emissions. BEPS is one of our key policy tools to help the District meet the energy and climate goals of the Mayor’s Sustainable DC 2.0 plan.”

This article will provide both a broad understanding of managing your building’s energy consumption as well as presenting key features of the BEPS program.

Benchmarking is the reporting of energy and water data to the city, county, or state government having jurisdiction. The purpose is to serve as a tool for identifying and diagnosing energy inefficient buildings. This is a critical step in creating a clean energy economy.

In addition to giving your local government a tool, energy benchmarking also provides your association with a tool to identify weak spots in your building’s performance and to proactively manage it while reducing your energy expenses. Simply measuring and creating awareness of your building’s energy use can lead to significant reductions in energy consumption. That’s an immediate win.

In DC, buildings above 50,000 sq ft have been required to submit their Benchmark Reports to the District by April 1st of every year. Starting in 2022, all buildings above 25,000 sq ft will be required to benchmark, and by 2025, all buildings over 10,000 sq ft will be required to benchmark. The penalty for non-compliance is $100 per day.

In Maryland, only Montgomery County requires benchmarking, and it only applies to Nonresidential buildings, or groups of buildings that have the same tax ID, that are above 50,000 sq ft. These properties must submit their annual Benchmarking Reports by June 1st. The penalty for non-compliance in Montgomery County is $500 for an initial violation and $750 for repeated violations.

In Virginia, there is currently only a mandate for municipal buildings, similar to DC’s initial requirements. If it continues to follow the path of DC, this mandate could soon expand to cover additional properties, though no bills or regulations have been proposed to do so at this time.

So, what are the nuts and bolts of reporting? All data must be entered through Energy Star Portfolio Manager (ESPM), which is facilitated through the U.S. Environmental Protection Agency. This software requires you to identify various aspects of your property, including:

  • Property type;
  • Gross floor area;
  • Number of workers/residents;
  • Appliance Information;
  • Hours of Operation; and
  • Other attributes depending on the property type.

The ESPM platform then interfaces with utilities to download data each month. It converts all energy sources (typically electricity, natural gas, and heating oil) into thousands of British Thermal Units (kBtus) to determine total energy consumption. It then divides energy consumption by Gross Floor Area (GFA) to determine a property’s Energy Usage Intensity or EUI. Thus, EUI is measured in units of kBtu/sqft/year and typically range between 75 in non-conditioned warehouses and up to 500 for medical and industrial facilities. The lower the EUI, the more efficient the building, everything else held equal.

ESPM then uses the property’s EUI and building characteristics to determine the property’s ENERGY STAR Score. This is a relative score between 1 and 100 and shows how the building’s efficiency compares to similar building’s nationwide. For example, a score of 10 would indicate that your property is on the bottom 10% of efficiency compared to similar buildings nationwide, whereas a score of 90 would mean it’s one of the top 10% of energy efficient nationwide.

BEPS are based on the median ENERGY STAR scores. Here are examples of those standards for DC’s current compliance cycle:

Property Type Energy Star Score EUI (kBtu/sqft)
Hotel 54 184
Hospital 50 427
K-12 School 36 139
Multi-Unit Residential 66 111
Non-Refri. Warehouse 19 104
Office 71 154
Retail Store 64 401
Strip Mall NA 229

Note that an average office in DC has a score of 71, meaning DC offices are generally more efficient than the rest of the nation, which would have a median score of 50. In contrast, DC warehouses are less efficient than 81% of warehouses nationwide. It would be interesting to see how this figure changed after cannabis was decriminalized in 2014, given that marijuana cultivation is very energy intensive. Unfortunately, benchmarking data was not collected on a widespread basis before this year.

It’s also interesting to note that the median energy star score for retail stores and multi-unit residential (MURs) buildings are almost the same, yet the Energy Usage Intensity (EUI) for retails stores is nearly four times greater than MURs. This reflects that Energy Star Scores are a relative metric, while EUI is an absolute metric.

ESPM also distinguishes between “Site EUI” and “Source EUI”. Site EUI can be thought of as the total amount of energy being used at the site of the building. Source EUI considers the source of energy produced and the energy used in transmission to supply the building. So, switching from grid-based electricity to solar energy would reduce a building’s Source EUI because it does not emit carbon and incurs less line loss in the transmission process. Solar PV systems however do not impact Site EUI as it does not actually reduce the amount of energy being consumed by the building. Thankfully, solar helps increase Energy Star scores as well.

If your property in DC is subject to BEPS, you must choose a compliance pathway by April 1st, 2023, for properties over 50,000 square feet. Properties between 25,000 and 50,000 square feet will not be subject to BEPS until 2027.

While there are four pathways, the top two pathways will likely be selected by the vast majority of properties. Each property will have 5 years to comply (one additional year is offered to those properties who opt for the Covid-19 extension). Here’s the list:

  1. Standard Target Pathway: This pathway requires properties to meet or exceed the BEPS (the median Energy Star Score for the property type)
  2. Performance Pathways: Reduce the Site EUI by 20%
  3. Prescriptive Pathway: Adopt a certain number of ECMs as determined by DOEE
  4. Alternative Pathway: A custom plan developed with DOEE typically for special circumstances

Some may find these requirements daunting, but thankfully DOEE offers “partial credit”, meaning if you reach 75% of your goal, your penalty will only be 25% of the maximum. Maximum penalties are based on square footage, with the general formula equal to $10/sqft of GFA, rounded down to the nearest $100,000. Here are some examples of maximum fines for various GFAs:

Building Size (sqft) Maximum Penalty
742,459 $7,400,000
498,000 $4,900,000
229,628 $2,200,000
74,200 $700,000
32,191 $300,000
11,208 $100,000

 If you receive a notification that your property is subject to BEPS, the first step should be scheduling an ASHRAE Level II Energy Audit. Before this occurs, you are basically flying blind and could be operating on mistaken assumptions. What’s more, even if your property is not subject to BEPS, energy audits are a great idea as they often identify low to no cost ECMs.

The primary goal of an energy audit is to diagnose how efficiently your building consumes energy. Energy audits must be tailored to the unique aspects of each building. This can be achieved by taking a comprehensive look at the building space, utility data, equipment specifications, and building records. After a diagnosis, the auditing team can then prescribe projects with the quickest payback periods and best returns on investment.

An ASHRAE Level 1 audit is a walk-through inspection where the audit team collects data on site and analyzes utility usage data to provide a list of Energy Conservation Measures (ECM’s). The corresponding report provides a summary of findings and a prioritized list of ECM’s with the highest expected returns.

A level 2 audit combines the scope of a level 1 audit with additional data collection, diagnostic testing, energy system modeling, a more detailed energy projection, and financial pro forma. This audit approaches the building holistically and therefore provides a wider range of ECM’s and how they impact one another from a systemic perspective.

It’s important to reiterate that each energy audit is unique to its building, with some ECMs having significantly greater or lower returns on investment (ROI) in different buildings. That being said, the table below shows an example of what ECMs look like for one of our clients to use as a frame of reference.

ECM Investment Payback (Years) Energy Star Score Improvement
LED Lighting $11,717 2 9
Install Window Films $34,200 8 7
Water Conservation (Low Flow) $40,625 10 3
VRF HVAC System Replacement $960,000 14 44

While an energy audit will give you a general estimate as to the cost of each ECM, a competitive bidding process is generally recommended to ensure you are getting the best price from qualified contractors. Honeydew recommends getting three bids. More than three can lead to excessive deliberation and every month of delay is a month where your community is paying more than it should on utility bills.

There are two main methods of contracting complex facility upgrades. The first is where an independent engineering company is paid to prepare detailed specifications and scope of the work that it then submits to construction professionals who bid on the installation. This is referred to as the “spec and bid” model of infrastructure upgrade.

The alternative approach is to bid out the entire design build process, where companies offer bids to do both the engineering and construction of the ECM. This is referred to as the “design build” model of upgrading.

Neither of these approaches are fundamentally better than the other. If the energy audit report has fulsome detail, the design build model generally reduces cost as the contractor can offer a more competitive price based on scale of project. However, if budget certainty is more of a priority for your community, the spec and bid approach is less prone to cost overruns and change orders.

Finally, contractor certifications like Leadership in Energy and Environmental Design (LEED), Certified Energy Manager (CEM), and Certified Building Energy Professional (BEP) can also be good things to consider while choosing an energy efficiency contractor.

Whether your property is subject to BEPS or not, it’s never been more important to be conscientious of its energy efficiency. Environmental stewardship is becoming more front of mind when individuals are choosing which communities to be part of. Promoting a culture of conservation can increase social cohesion as residents become more invested in their neighborhoods. It also reduces long term expenses and helps avoid costly penalties coming down the road.

Abbreviation Glossary

ASHRAE:  American Society of Heating, Refrigerating and Air-Conditioning Engineers

BEP: Building Energy Professional

BEPS: Building Energy Performance Standards

CEM: Certified Energy Manager

DOEE: DC Department of Energy and Environment

ECM: Energy Conservation Measure

ESPM: Energy Star Portfolio Manager (web-based software)

EUI: Energy Usage Intensity

GFA: Gross Floor Area

kBTU: Thousands of British Thermal Unit, there are roughly 100 kBTUs in one therm of gas

kW: Kilowatts, a measure of power

kWh: Kilowatt hours, a measure of energy

LEED: Leadership in Energy and Environmental Design

PV: Solar PhotoVoltaics

ROI: Return on Investment


By Andrew Zimdahl

Andrew, or “AZ” to his friends, co-founded Honeydew Energy Advisors in 2016, and specializes in assisting multifamily and commercial buildings deploy solar, reduce their utility expenses, and comply with regulations like the Building Energy Performance Standards. AZ has published a textbook titled, “A Clear Guide to Solar PV Design and Installation,” and earned his Master’s in Public Administration from the University of Albany in 2007. In his free time, he enjoys long board games and bike rides through Rock Creek Park.