An Energy Star benchmarking tool helps apartment management teams focus on keeping energy consumption and costs under control.
At Tradition at Kierland, energy and water savings are a priority. But while the
community has made some low-cost investments in energy-saving products such as lighting and thermostats, the vast majority of operational savings have come from an unexpected source: benchmarking.
“Benchmarking has created a culture of awareness,” says Penny Marshall, a Phoenix-area Regional Property Manager for Lincoln Property Company, which manages the Scottsdale, Ariz., community. “Greener management has just become a part of our everyday job descriptions.”
As legislation has appeared in Seattle, New York City and Washington, D.C., requiring real estate owners and operators to benchmark, or measure and track, their properties’ energy and water consumption, benchmarking has become a much-discussed subject in the real estate industry.
Since the ability to benchmark multifamily buildings was added to the U.S. Environmental Protection Agency’s (EPA) Energy Star Portfolio Manager in February 2009, interest from the market has been steadily building. In my role as ENERGY STAR National Program Manager for Commercial Properties at the EPA, I’ve seen a considerable uptick in the number of organizations benchmarking their multifamily communities and partnering with ENERGY STAR.
Right now there are about 250 million square feet of multifamily space benchmarked in Portfolio Manager, with more than 70 percent of that entered to-date in 2010. We expect this figure to keep rising as more and more multifamily operators see the benefits of benchmarking.
Focusing on Consumption
One of those benefits, Marshall says, is that the process of creating a baseline and setting reduction targets continuously keeps property management teams aware of energy and water conservation.
“The idea of reducing energy and water use is not a new one,” she notes. “We have always strived to keep operating costs low, but benchmarking every month is a constant reminder to look for new and innovative ways to improve results.”
Those results have been impressive. At Tradition at Kierland, common area energy consumption has decreased by over 30 percent, reducing operating expenses by more than $50,000 annually. Portfolio Manager can help users identify spikes in energy consumption, which may be the result of operational changes at the property. For example, if a staff member overrides pre-determined temperature settings (such as nighttime setbacks), Portfolio Manager will help the community’s management quickly identify this spike in energy consumption. Additionally, Portfolio Manager can help users identify faulty meters or leaks that lead to increased consumption.
Portfolio Manager is an online, interactive energy management tool that allows building operators to measure and track energy and water consumption, identify investment priorities and verify results over time. Multifamily housing communities can also use Portfolio Manager to track weather-normalized energy-use intensity (energy per square foot), energy costs, greenhouse gas emissions and water use.
Portfolio Manager is a free tool. To get started, companies visit Portfolio Manager at www.energystar.gov/benchmark and set up an account; live or recorded benchmarking training sessions can instruct users on how to set up an account and enter data. The time necessary to set up an account will vary based on the number of meters and the amount of historical data the user chooses to enter when creating the account.
Once users have set up accounts and are familiar with the tool, it takes little time to keep the data current. Users enter just two data points (consumption and cost) per meter each billing period, so it takes less than a minute per meter to update a Portfolio Manager account. Additionally, a number of industry partners—typically third-party bill-pay companies—provide “automated benchmarking” services on behalf of their clients. The cost of this service is determined by the third party.
The Full Impact
The tracking features in Portfolio Manager can help companies quantify cost savings from energy efficiency initiatives that may not be immediately obvious because of fluctuating energy prices, says Yvonne Alva-Lens, a Property Manager for Legacy Residential in Denver.
“We replaced all of the incandescent lamps in our breezeways, stairwells and common areas with CFLs in 2008,” she says. “There was a small decrease in our monthly energy bill, but not what we had expected. Looking at your energy cost only tells half the story. After benchmarking with Portfolio Manager, we saw the real impact the new lamps had on our consumption—we were actually using 30 percent less energy than in 2007. Benchmarking allowed us to quantify the avoided costs that we would have paid without the retrofit.”
Benchmarking also can help multifamily operators who are contemplating sustainability investments in their portfolio decide where to start. By benchmarking across their portfolio, operators can compare similar buildings to see which are using the most energy per square foot or which have the highest annual common area energy costs. Armed with this information, the owner can better understand where energy efficiency investments will be most cost-effective and have the greatest impact.
Additionally, Portfolio Manager normalizes energy use intensity based on weather. A building in one climate can be accurately compared against a building from another climate, and a single building’s performance can be measured against itself over time, eliminating the effects of a particularly hot summer or cold winter.
Avoiding Cost Spikes
Even as more jurisdictions contemplate incentivizing or requiring benchmarking, some real estate companies already are seeing a business case. In addition to helping owners prioritize energy efficiency investments, benchmarking encourages property management teams to continuously think about energy and water use. This leads to enhanced operations, allowing for quicker identification and resolution of issues that would have otherwise led to spikes in consumption and cost.
TIAA-CREF Global Real Estate had a community in Los Angeles that saw a sudden jump in natural gas consumption one month, says Scott Anderson, Director of Asset Management. The property manager noticed the increase and quickly figured out that a new maintenance technician had turned up the pool temperature significantly upon a resident’s request.
“Without benchmarking we may not have caught this as quickly,” Anderson says. “Portfolio Manager has allowed us to be more responsive to issues and more proactive in identifying energy and water waste, leading directly to reduced operating costs. In this market we’ll take that outcome every time.”
Alyssa Quarforth is Program Manager for the U.S. EPA’s ENERGY STAR program, where she leads outreach and coordination efforts with commercial real estate and financial-services industry associations and organizations. She can be reached at quarforth.alyssa@epa.gov or 202/343-9604.