Expert Blog

Mayor Emanuel Proposes Ordinance to Drive New Investment to Save Energy in Chicago Buildings

Yesterday, President Obama recommitted his administration and the nation to the job of combating climate change, and made energy efficiency one of the three major strategies to achieve that end.  In doing so he noted that, “The good news is simple [energy efficiency] upgrades don’t just cut that pollution; they put people to work -- manufacturing and installing smarter lights and windows and sensors and appliances.  And the savings show up in our electricity bills every month -- forever.” 

In Chicago, we know that sustainability is vital to our city’s economic vitality and its future.  If we can capture the benefits of energy efficiency in our buildings by investing in energy saving measures, we will reduce the cost to run those buildings forever, put people to work, and create a modern, sustainable destination that will attract business and families over the coming decades. 

Today we applaud Mayor Emanuel on the introduction of a new ordinance that will help unleash the power of efficiency in large commercial and residential buildings throughout the city.  If this ordinance becomes law, Chicago will join New York, Minneapolis, Boston, San Francisco, Philadelphia and Washington, DC in requiring that large buildings “benchmark” their energy performance, receive and energy intensity rating, and make that rating publicly available to the marketplace.  More than 80 businesses and organizations have expressed their support for the ordinance, including real estate companies like U.S. Equities, Jones Lang LaSalle and CBRE as well as many engineering and architectural firms.  We urge the City Council to pass the ordinance as expeditiously as possible.

See below for information on the need for and benefits of the ordinance.  Also, check out these links for additional information on Retrofit Chicago’s Commercial Buildings Initiative and on the City Energy Project, a joint project of NRDC and the Institute for Market Transformation.

Why Benchmarking is Needed

Locked up in commercial buildings is an enormous well of potential for saving money, creating jobs and reducing pollution through cost-effective energy efficiency improvements.  Unleashing this potential could be worth billions of dollars in benefits in Chicago alone – but it’s not an easy task. 

  • Often, building owners themselves have insufficient understanding how their building systems are performing compared to similar buildings, what measures they can use to eliminate wasteful energy use, and what the financial costs and benefits of making those changes would be.
  • The absence of this information in the marketplace means that prospective building tenants cannot make leasing decisions based on a full understanding of what their energy costs and environmental impact will be over the course of the lease agreement.
  • The absence of good, consistent data on building performance makes it difficult for energy efficiency programs to target rebates and incentives to buildings where there is the most potential for savings.

What does “Benchmarking” Mean?

At the foundation of any successful effort to tap the energy efficiency potential of Chicago’s large buildings must be solid information about how buildings are performing, derived using measurement tools that are applied consistently across all major buildings, and made available to all of the relevant actors in the marketplace, including building owners and managers, prospective tenants, and energy efficiency program administrators. 

  • U.S. EPA’s Portfolio Manager tool is simple to use, is free of charge, and provides standardized and easily understood data by which building performance can be compared.
  • Although Portfolio Manager is relatively new, there is strong evidence that it helps drive energy efficiency improvements.  Specifically, for the 35,000 buildings that used the tool to benchmark energy performance from 2008-2011, average energy use declined by 7 percent.

Benefits of Benchmarking and Disclosure:

  • Reduce energy costs – Buildings often discover that they can cut energy use by 20-30 percent with very short payback periods.  Across the 3,500 buildings that would be subject to the ordinance, this level of energy savings means big money and big impact to our economy and environment.
  • Create jobs – Benchmarking and disclosure creates jobs in several ways.  First, by lowering building energy demand, building owners and tenants save money that can be used to hire workers, or pumped back into the economy.  Second, the certification of benchmarking scores as well as the installation of efficiency measures create jobs for engineers, auditors and contractors. 
  • Position Chicago to attract new businesses and succeed in the global marketplace.  A large proportion of our current building stock will be around for decades in the future, and increasingly businesses and families are choosing to locate in cities that are leading on sustainability, efficiency and clean technology.
  • Reduce harmful pollution resulting from wasteful energy consumption.  Energy used to power buildings is responsible for more greenhouse gas emission than any other part of our economy in Chicago.  Achieving meaningful energy efficiency improvements in Chicago’s large commercial building sector is a top priority strategy for addressing climate change.