Category: Energy

Incoming Trump Administration Prepares Energy Policy Shift

Posted on by Abigail Grenadier

This week’s confirmation hearings shed light on the Trump Administration’s ambitious energy agenda, including plans to expand American energy production, streamline project approvals, and explore a carbon tariff on imports. (PoliticoPro, Jan. 16)

“All of the Above” Energy Policy

  • President-elect Trump has prioritized “drill, baby, drill” as a cornerstone of his agenda, emphasizing energy independence and dominance through increased domestic oil and gas production.
  • Chris Wright, the Energy Secretary nominee, told the Senate Energy Committee on Wednesday that he would use the role to “unleash American energy at home and abroad” if confirmed. (Reuters, Jan. 15)
  • Wright said in his opening statement that he would focus on three objectives: removing barriers for energy projects, accelerating innovation by the national laboratories, and advancing U.S. energy domestically and abroad. (Roll Call, Jan. 16)
  • North Dakota Governor Doug Burgum, the Interior Secretary nominee, said at his Thursday confirmation hearing that the U.S. must expand domestic energy production and electricity generation to meet growing demand, particularly from AI technologies. (Politico, Jan. 16 | Roll Call, Jan. 16 )
  • Burgum supports an “all-of-the-above” approach that would utilize renewables and fossil fuels.  Trump has also tapped Burgum to lead a White House-based energy council that would coordinate policy across the federal government. (Politico, Jan. 9)
  • Former Representative Lee Zeldin, the nominee for EPA Administrator, said at his Thursday hearing he would work in a bipartisan manner with career staff to fulfill the agency’s mission. (PoliticoPro, Jan. 16 | The Hill, Jan. 16)
  • Zeldin vowed to address climate change without “suffocating the economy,” and committed to private sector collaboration to “promote common sense, smart regulation.” (NBC News, Jan. 16 | Washington Post, Jan. 16)

Carbon Tariff Proposal

  • During his Thursday confirmation hearing, Treasury Secretary nominee Scott Bessent (see Policy Landscape story above) expressed interest in a carbon tariff on imports, suggesting it could be part of a broader Trump administration strategy to raise revenue, counter unfair trade practices, and boost negotiating leverage.
  • Bessent indicated the potential for such measures to align with the administration’s broader trade and economic goals. (PoliticoPro, Jan. 16)
  • Recently, Sen. Bill Cassidy (R-LA) proposed a bill, the “Foreign Pollution Fee Act” that would impose a “foreign pollution fee” on imported carbon-intensive products – including construction materials. (E&E News, Dec. 12)
  • The bill’s co-sponsor, Sen. Lindsey Graham (R-SC), spoke about the bill at Bessent’s hearing. “If you want to clean up the environment, a carbon fee seems to be a good way to do it, to punish China and India for bad carbon practices,” Graham said. (Politico, Jan. 16)
  • The Roundtable submitted comments today on the Foreign Pollution Fee Act. The letter raises concerns regarding the impact of a carbon tariff on affordable housing constriction, rebuilding after natural disasters, and technical issues on calculating “indirect emissions” associated with product manufacturing.

Other Energy News This Week

  • President Biden issues executive order to advance U.S. artificial intelligence (AI) infrastructure: President Biden issued an executive order directing agencies to lease federal land for “gigawatt-scale” to support new data center construction. (AP News, WH Press Release, Jan. 14)
  • 179D energy efficiency tax deduction: The Energy Department (DOE) launched the 179D Portal, offering tools for new commercial construction and retrofits to estimate energy savings and qualify for potential federal tax incentives. (DOE Press Release, Jan. 14)
  • California wild fires raise electricity costs: The Los Angeles wildfires, which caused over $250 billion in damages and severely impacted the region’s electrical infrastructure, have driven a nearly 50% increase in California’s residential electricity rates since 2019, raising concerns about the fairness of passing these wildfire-related costs onto customers. (Politico, Jan. 15)
  • Maryland building emissions standards lawsuit: A coalition of trade organizations filed a federal lawsuit arguing that the Maryland Building Energy Performance Standards (BEPS) is illegal because it is “pre-empted” due to its conflict with federal laws. The Maryland law mandates large buildings to reduce greenhouse gas emissions by 20% within five years and achieve net-zero emissions by 2040. The lawsuit claims the rules exacerbate the housing crisis, strain the power grid, and violate consumer choice. (Baltimore Banner, Jan. 14 | (Baltimore Sun, Jan. 16)

Electric Grid Strain: CRE’s Role in Addressing Energy Challenges

Posted on by Abigail Grenadier

Demands for artificial intelligence (AI), advanced manufacturing, electric vehicles, and building electrification are straining the U.S. electric grid—creating challenges and opportunities for commercial real estate (CRE). (Deloitte, Dec. 9)

Why it Matters

  • The grid is at a “tipping point.” Heightened demands for power by consumers, businesses, and government are posing significant risks to energy reliability and driving data center construction to meet the needs. (PoliticoPro, Dec. 18)
  • The organization authorized by Congress to assess grid capacity highlighted last month the “critical reliability challenges” needed to satisfy “escalating energy growth,” as retiring power plants age-out of service. The report also noted the need to accelerate construction of transmission projects to bring electricity to the nation’s cities and suburbs. (N. American Electric Reliability Corp., 2024 Assessment.)
  • President Joe Biden is expected to issue an executive order as soon as today to boost the construction of data centers on federal land to support AI, while also aiming to increase geothermal and nuclear energy production to power them. (PoliticoPro, Jan. 9)
  • Data center construction is surging to meet demand with site selection largely driven by power availability. Microsoft and Meta recently announced billions of data center investments. (E&E News, Jan. 10 | CBRE, Aug. 2024)
  • The Department of Energy (DOE) estimates data centers could consume up to 12% of U.S. electricity by 2028, largely attributed to demand from cloud and AI providers. (DOE News Release, Dec. 20)
  • As The Roundtable’s Policy Guide on building performance standards states, the transition to a digital economy raises serious concerns about electricity availability. “AI could soon need as much electricity as an entire country” as “[v]ast swaths of the U.S. are at risk of running short of power.” (Roundtable Weekly, Oct. 11)

Bipartisan House Report on AI

  • Policymakers and industry leaders are focusing more than ever on solutions to expand power generation and modernize the grid.
  • The Bipartisan House Task Force on AI released a report last month finding that AI’s critical role in U.S. economic and national security interests hinges on a robust power grid. (House AI Report, December 2024).
  • Recommendations from the Bipartisan House AI Task Force report include:
    • Develop metrics and standards to measure energy use and efficiency.
    • Allocate infrastructure costs to customers who benefit most from upgrades.
    • Use AI to improve energy infrastructure, production, and efficiency.

EPA’s Energy Data Campaign

  • Looking ahead, utilities, policymakers, and data center operators must collaborate to balance priorities such as grid upgrades, renewable energy procurement, water resource management, and equitable cost allocation. (Deloitte, Dec. 9)
  • This week, EPA continued its building energy data campaign to assist real estate owners in coordinating with utilities to access tenant space energy data.
  • To aid both owners, operators, and utility representatives in understanding this issue and potential solutions, EPA has prepared a number of energy data resources that can be found here.

A resilient electric grid is critical to sustaining economic growth. These issues will be featured in discussions at The Roundtable’s State on the Industry meeting on Jan. 22-23.

Senate Hearings Focus on Clean Energy and Tax Policy, Climate Bank

Posted on by Trey Jackson

Senate Finance Committee Chairman Ron Wyden (D-OR)

Senate hearings this week indicate that clean energy financing and tax policies considered in the current Congress might significantly affect commercial real estate. (Tax Notes, April 29)

Senate Finance Focus

  • Senate Finance Committee Chairman Ron Wyden (D-OR), photo above, opened an April 27 hearing by noting how President Biden’s goal of cutting carbon emissions in half by 2030 is driving clean energy policy. Wyden stated, “The reality is, a debate on energy and transportation is largely a debate on tax policy. That puts this committee in the driver’s seat when it comes to job-creating legislation that addresses head-on the existential challenge of the climate crisis.”
  • Sen Wyden also remarked about legislation he introduced last week – the Clean Energy for America Act, which would revamp tax incentives directed at buildings, electricity and transportation. Among other things, the bill would reform the 179D deduction for energy efficient commercial and multifamily buildings – with the value of the incentive increasing as more energy is conserved. (Text of the legislation, one-page summary of the bill and a section-by-section summary.)
  • Committee Ranking Member Sen. Mike Crapo during his opening remarks noted draft legislation that he unveiled the day before with committee member Sheldon Whitehouse (D-RI) – the Energy Sector Innovation Credit (ESIC) Act. ESIC is an incentive that would “target tax credits for innovative clean energy technologies,” Crapo said. (SFC news release).

E-QUIP Accelerated Depreciation

HVAC equipment

  • Separately, a broad coalition of environmental, manufacturing, and real estate groups led by The Roundtable supports the E-QUIP Act (H.R. 2346), which proposes “accelerated depreciation” for high-performance equipment installed in commercial and multifamily buildings. The coalition is urging policymakers to include this measure as part of any “green tax” package that may be folded into larger infrastructure spending legislation. (Roundtable Weekly, April 2)
  • Roundtable President and CEO Jeffrey DeBoer emphasized an important distinction between the energy incentives affecting CRE. “All building owners are intensely focused on operations and technologies to reduce energy consumption. Yet the policy discussions in Washington frequently don’t reflect the reality of these efforts to make commercial real estate properties more sustainable. It is retrofitting the existing building stock, not new construction, where energy savings and policy incentives are most challenging.” DeBoer said.
  • He added, “The 179D incentive fails to reflect the diverse vintage and tenant base in buildings. The E-QUIP incentive accommodates existing buildings by targeting the addition of high-performance, energy saving components. Combining the two incentives would make most sense.” 

National Climate Bank

Senator Chris Val Hollen (D-MD)

  • The Senate Environment and Public Works Climate Subcommittee on April 27 held a “Legislative Hearing on S.283, National Climate Bank Act” focused on how a national climate bank, also known as an “energy accelerator,” would invest in renewable energy technology.
  • Sen. Chris Van Hollen (D-MD), photo above, co-author of S. 283 with Subcommittee Chairman Sen. Ed Markey (D-MA), testified at the hearing, “… we need a National Clean Energy Accelerator … so we can turbocharge private investment, fortify our energy grid, and create millions of clean energy jobs – including in those communities where fossil fuel plants have closed.”
  • Van Hollen’s legislation is supported conceptually by President Biden’s American Jobs Plan, which recommends a $27 billion “accelerator” financing platform to mobilize private investment into building retrofits and other clean energy projects.

  • White House National Economic Council Director Brian Deese recently discussed the creation of a climate bank in an interview with Roundtable President and CEO, Jeffrey DeBoer for The Roundtable’s April 20 Spring Meeting. (Roundtable Weekly, April 23).

Additionally, the White House on April 27 announced policy actions to advance the expansion and modernization of the energy grid. National Climate Advisor Gina McCarthy noted, “After the Texas transmission debacle this winter, no one can doubt the need to invest in our electric grid. The steps that the Departments of Energy and Transportation are taking today, when combined with the grid investments outlined in the American Jobs Plan, will turbocharge the building of major new electricity transmission lines that will generate new jobs and power our economy for years to come.”

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Senate Finance Committee Task Force Proposes Making Tax Deduction for Energy Efficient Buildings (sec. 179D) Permanent

Posted on by Trey Jackson

A bipartisan group of Senate Finance Committee policymakers this week recommended the tax deduction for energy efficient commercial buildings (section 179D) should become a permanent provision in the federal tax code.  Section 179D expired at the end of 2017.  ( BloombergTax , Aug. 13) 

Senate Finance Chairman Chuck Grassley (R-IA), right, and Ranking Member Ron Wyden (D-OR), left, set up five bipartisan task forces in May to consider long-term solutions for more than 40 temporary provisions in the federal tax code that repeatedly expire and come up for renewal.
  • Senate Finance Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) set up five bipartisan task forces in May to consider long-term solutions for more than 40 temporary provisions in the federal tax code that repeatedly expire and come up for renewal.   
  • Three of the task forces released reports on Wednesday, addressing the areas of cost recovery (e.g., sec. 179D) and energy (e.g., sec. 45L credit for energy-efficient new homes).   In addition to recommending permanency for section 179D, the Cost Recovery Temporary Tax Policy Task Force led by Senators Mike Crapo (R-ID) and Ben Cardin (D-MD) noted that further improvements to the provision would accelerate its positive impact.
  • The reports refer to extensive comments from stakeholders, including The Real Estate Roundtable and industry coalitions.  The committee also posted further information about the temporary tax policies that the task forces examined.  
  • The task forces’ “thorough and bipartisan approach will form the foundation of the committee’s work to provide more certainty to temporary tax policy,” Grassley said. “The next step will be to put together a legislative package based on the proposals that the taskforces received, the areas of consensus among the taskforce members and continued bipartisan discussions.” (SFC news release, Aug. 13) 
  • In the House, the Ways and Means Committee on June 20 passed legislation to extend a host of expired and expiring tax credits through 2020, including section 179D.  (Markup of House Tax Legislation and Roundtable Weekly, June 21)  The Taxpayer Certainty and Disaster Tax Relief Act of 2019 (H.R. 3301) includes other provisions affecting real estate:  

    •  Credit for construction of new energy efficient homes (sec. 45L)

    •  Credit for energy efficient improvements to existing homes (sec. 25C)

    •  Exclusion of mortgage debt forgiveness (sec. 108(a)(1)(E))

    •  Deductibility of mortgage insurance premiums (sec. 163(h)(3)(E))

    •  New markets tax credit (sec. 45D)  

    •  Empowerment zone tax incentives (sec. 1391-97)

      Building Owners and Managers Association (BOMA) International President and Chief Operating Officer, Henry Chamberlain, testified before Ways and Means last year to support Section 179D’s permanence.  ( BOMA testimony -March 14, 2018)
    • Building Owners and Managers Association (BOMA) International President and Chief Operating Officer, Henry Chamberlain, testified before Ways and Means last year to support Section 179D’s permanence.  (BOMA testimony, March 14, 2018) 
    • On a separate track from extenders and 179D is an energy efficiency tax proposal urged by The Roundtable and a broad coalition of real estate and environmental organizations.  The groups urge House and Senate tax writers to establish an accelerated depreciation schedule for a new category of Energy Efficient Qualified Improvement Property installed in buildings – or “E-QUIP” – with a 10-year cost recovery period (Coalition E-QUIP Letter, May 8) 
    • Roundtable President and CEO Jeffrey DeBoer stated, “The purpose of establishing a new E-QUIP category in the tax code is to stimulate productive, capital investment on a national level that modernizes our nation’s building infrastructure while helping to lower greenhouse gas emissions.”  (Roundtable Weekly, May 10) 

    When Congress returns on September 9 from summer recess, additional changes to the Ways and Means extenders bill may be made as it moves to the House floor, and then to the Senate.  However, passage of spending bills to fund the government beyond September 30 are considered must-pass legislation.  Whether an extenders bill can be attached to an FY’20 appropriations bill is uncertain at this time.    

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    ULI Reports on Climate Risks; NYC Sets Aggressive GHG Targets on Buildings

    Posted on by Trey Jackson

    A recent report from the Urban Land Institute (ULI) and Heitman LLC explores current methods for assessing and mitigating climate risk in real estate. 

    Climate Risk and Real Estate Investment Decision-Making explores current methods for assessing and mitigating climate risk in real estate.

    • Climate Risk and Real Estate Investment Decision-Making  concludes, “An eventual downward repricing of higher-risk assets will be the market’s way of redirecting capital to locations and individual assets where it is expected to be better insulated from these particular risks. This process will be painful for investors who are caught off guard, but those who are prepared have the potential to outperform.”  (CNBC, April 9 and ULI news release, Feb. 5 )
    • The New York City Council this week approved a set of bills that set greenhouse gas (GHG) emission caps for many different types of buildings, along with fines for those who do not meet the caps. (New York Times, April 17 and Politico Pro, April 18)
    • Real Estate Board of New York (REBNY) President John Banks responded that the organization is fully supportive of the City’s carbon emission goals, but the Council is leading New York in the wrong direction.  “The legislation is not an energy efficiency measure. With so many exemptions and carve-outs, we will be confronted with the fact that our city is off-track from meeting its ambitious 40 percent carbon reduction goal by 2030,” Banks said.  (REBNY, April 16 and April 18)
    • Commercial building owners and operators, including several members of The Real Estate Roundtable, were recognized last week at the annual ENERGY STAR Awards for demonstrating national leadership in cost-saving energy efficient solutions.  The U.S. Environmental Protection Agency and the U.S. Department of Energy awarded 183 ENERGY STAR partners for their outstanding contributions to public health and the environment.  The award winners also include Fortune 500 companies, schools, retailers, manufacturers and home builders.  (EPA news release, April 9)
    • The Roundtable and its Sustainability Policy Advisory Committee (SPAC) continue to work with lawmakers on sound policy issues that promote energy efficiency – not only to achieve better building performance, but to spur innovation, create construction jobs that cannot be exported, and enhance the country’s energy security through a more resilient building stock.  (The Roundtable’s 2019 Policy Agenda Energy Section) 

    In this session of the U.S. Congress, climate-related policy is expected to play a role in any major tax, infrastructure, energy, or disaster-relief legislation, as the political parties seek to stake out their respective positions before the 2020 election. (Stanford News, April 17)

    Roundtable Submits Recommendations to Improve ENERGY STAR Scoring Models; EPA Seeks Additional Feedback from Building Owners

    Posted on by Trey Jackson

    The Real Estate Roundtable on Nov. 26 sent recommendations to the U.S. Environmental Protection Agency (EPA) to improve the agency’s ENERGY STAR scoring methods, which rate a building’s energy efficiency performance.  (Roundtable Letter and Recommendations)

    The  Real Estate Roundtable on Nov. 26 sent recommendations to the U.S. Environmental Protection Agency (EPA) to improve the agency’s ENERGY STAR scoring methods, which rate a building’s energy efficiency performance.  (Roundtable Letter and  Recommendations)

    • Nearly 35,000 buildings and plants – representing more than 5 billion square feet of commercial space – have earned EPA’s ENERGY STAR.  Pension funds and other institutional investors frequently rely on the label as a market signal for well-managed assets with smaller carbon footprints.  Business tenants also seek to locate in ENERGY STAR-certified buildings to lower their utility expenses.
    • Last August, EPA announced the first updates to its ENERGY STAR scoring models in over a decade.  Initial analyses by The Roundtable’s Sustainability Policy Advisory Committee (SPAC) and other stakeholders indicated that EPA’s new models produced arbitrary scoring results.  Offices over 500,000 square feet in size, and buildings located in colder climates requiring more heating throughout the year, appear to have sustained the most significant ENERGY STAR score declines.
    • Roundtable President and CEO Jeffrey DeBoer in October told the Wall Street Journal, “Revisions to ENERGY STAR are much needed and very important.  However, to be truly effective the data sources and projections relied upon in the revision must be transparent and reflect industry leading practices.” (Wall Street Journal, Oct. 9)
    • The Roundtable’s Nov. 26 summary and  recommended changes to EPA’s scoring methods seek to ensure a level-playing field for the ENERGY STAR label – so that buildings of all sizes located in varying climate zones across the country are rated fairly.  
    • EPA has requested additional data from owners and managers to test its methods on specific buildings and portfolios.  Stakeholders interested in working with the agency to assess how particular properties have fared since new ENERGY STAR scores were released last August should consult EPA’s website, “How to Respond to Data Requests in Portfolio Manager.” 

    EPA plans to wrap-up its review period and resume issuing ENERGY STAR building labels by next spring.

    EPA to Commence Review Period of New ENERGY STAR Building Scores; Office, Industrial Certifications Temporarily Suspended Pending Further Analysis

    Posted on by Trey Jackson

    Last month the Environmental Protection Agency (EPA) announced the first updates to its ENERGY STAR scoring models in over a decade, as the agency moved from 2003 to 2012 data for its foundation to rate buildings.  (See Roundtable Weekly, Aug. 17.)  EPA announced yesterday that it will commence a “review period” to solicit stakeholder feedback on these recent ENERGY STAR score updates.  Certifications for office, industrial, and certain other building categories will be temporarily suspended during this review period.

    EPA announced yesterday that it will commence a “review period” to solicit stakeholder feedback on recent ENERGY STAR score updates.  Certifications for office, industrial, and certain other building categories will be temporarily suspended during this review period.

    • ENERGY STAR is the key federal label that rates and compares U.S. buildings’ energy performance.  Currently, EPA lists 34,625 buildings and plants, representing more than 5 billion square feet of commercial space across the country, as ENERGY STAR certified.  Through initial analyses of Sustainability Policy Advisory Committee (SPAC) membership, The Roundtable  learned that the application of the new 2012 data appears to result in materially different outcomes on scores depending upon building size, geography, and source of heating, and these outcomes were inconsistent.  RER on behalf of the industry highlighted the issues to the EPA, and the EPA responded with the announced review period.
    •  “The review period will help us ensure that the models are working as intended to deliver energy performance metrics that empower … the business case for owning and operating energy-efficient buildings,” the agency stated.  During the review period, EPA and real estate stakeholders will have the opportunity to assess variables such as a building’s size, location, and fuel mix, to fully consider if these and other factors have had an indiscriminate impact on the new scoring models.
    • “We commend EPA in taking this step toward transparent decision making so our industry can recommend any necessary, data-driven changes to ENERGY STAR’s updated scoring models ,” said Roundtable President and CEO, Jeffrey D. DeBoer.  “The Roundtable and our Sustainability Policy Advisory Committee look forward to partnering with EPA during its review period.”
    • Other federal agencies, state and local governments, and non-governmental organizations frequently rely on ENERGY STAR’s tools and rating system for their own programs related to building energy efficiency.  EPA advised it will “coordinate with program implementers and policymakers that leverage the ENERGY STAR score on the appropriate use of the new metrics during the review period.”

    The review period and temporary suspension of ENERGY STAR building certifications do not apply to multifamily, data center, hospital, senior care communities, and manufacturing facilities, according to EPA.

     

    EPA Gathers Feedback from Building Owners During “Review Period” for New ENERGY STAR Scoring Models

    Posted on by Trey Jackson

    The Environmental Protection Agency continues the temporary suspension of ENERGY STAR building certifications, after assessing feedback from a number of building owners and stakeholders. Last month, the EPA announced it would commence a “review period” to solicit building owners feedback on recent ENERGY STAR scoring models, in response to the new model announced in August, which would unfairly downgrade some already certified ENERGY STAR buildings. (Roundtable Weekly, September 14)

    The EPA continues the temporary suspension of ENERGY STAR building certifications, after assessing feedback from a number of building owners and stakeholders.

    • ENERGY STAR is the key federal label that rates and compares U.S. buildings’ energy performance.  Currently, EPA lists 34,625 buildings and plants, representing more than 5 billion square feet of commercial space across the country, as ENERGY STAR certified.  Through initial analyses of Sustainability Policy Advisory Committee (SPAC) membership, The Roundtable learned that the application of the new 2012 data appears to result in materially different outcomes on scores depending upon building size, geography, and source of heating, and these outcomes were inconsistent.  RER on behalf of the industry highlighted the issues to the EPA, and the EPA responded with the announced review period.
    • “Revisions to ENERGY STAR are much needed and very important,” said Roundtable President and CEO, Jeffrey DeBoer. “However, to be truly effective the data sources and projections relied upon in the revision must be transparent and reflect industry leading practices. (Wall Street Journal, Oct. 9)
    • During the review period, EPA and real estate stakeholders have the opportunity to assess variables such as a building’s size, location, and fuel mix, to fully consider if these and other factors have had an indiscriminate impact on the new scoring models.  “EPA is looking into concerns raised by industry that score changes for some buildings are different than expected,” said an EPA spokeswoman. (Wall Street Journal, Oct. 9)

    “We commend EPA in taking this step toward transparent decision making, and are focused intently on assisting during this review period,” said DeBoer. The Roundtable’s Sustainability Policy Advisory Committee will continue working with the EPA during the remainder of the review period.

    New ENERGY STAR Building Scores Available August 27

    Posted on by Trey Jackson

    The Environmental Protection Agency (EPA) announced this week that long-anticipated, updated ENERGY STAR scores that rate and compare U.S. buildings’ energy performance will be available on Monday, August 27.  [EPA website]

    The EPA currently lists 34,226 commercial buildings and plants located in all 50 states as ENERGY STAR-labeled – representing 4.95 trillion square feet of space.

    • EPA currently lists 34,226 commercial buildings and plants located in all 50 states as ENERGY STAR-labeled – representing 4.95 billion square feet of space.  This number of “top of class” assets is expected to decrease, as average building “scores” will drop in light of updates to metrics in ENERGY STAR’s Portfolio Manager energy usage benchmarking tool.   
    • For most types of buildings, an ENERGY STAR score (registered on a scale of 1 to 100) is based on the Commercial Buildings Energy Consumption Survey (CBECS), conducted periodically by the U.S. Department of Energy. The latest CBECS data, which forms the base for the new EPA scores, became available in 2016.  Prior to the update, for years ENERGY STAR scores have reflected data collected in 2003. 
    • EPA’s move to update its building scores has been in the works for several years and has been a continual focus of The Roundtable’s Sustainability Policy Advisory Committee (SPAC).  Many Roundtable member companies own and/or operate ENERGY STAR properties, and market their ratings to attract an increasingly Millennial-dominated workforce.  Pension funds and other institutional investors also rely on the label as a signal for well-managed assets with smaller carbon footprints.   

      EPA’s annual Top Cities list shows which metro areas were home to the  most ENERGY STAR certified buildings  in the previous year.

    • “We have to face the facts: ENERGY STAR building certification will likely be much harder to achieve,” said Tony Malkin, Chairman and CEO of Empire State Realty Trust, and chairman of The Roundtable’s SPAC.  “The U.S. commercial real estate industry has made huge strides, and those strides are reflected in the new data set about to be deployed by the EPA.  ENERGY STAR has always been a mark of highest achievement.  With more efficient buildings in the data set, there will be a reduction in the number of buildings which qualify on a relative basis.”  
    • “There are new technologies and practices, as well as inducements, such as ENERGY STAR for Tenants on which RER worked hard to put in place, which justify capital investments in buildings to reach even higher levels of performance, encourage greater collaboration between commercial landlords and tenants, and create thousands of well-paying retrofit construction jobs that cannot be exported,” Malkin continued.  (See Roundtable Weekly, June 15, 2018.)      
    • EPA reports that Portfolio Manager will be down on Sunday, August 26. New ENERGY STAR building scores, with updated Portfolio Manager metrics, will be available on Monday, August 27.  EPA encourages ENERGY STAR users to documents their current scores now – and their new scores starting August 27.  

    EPA’s recommendations for how to prepare for the upcoming changes and webinars about the new metrics are available online.

     

    EPA Recognizes Roundtable Members with “ENERGY STAR for Tenants” Award for High Performance Office Spaces

    Posted on by Trey Jackson

    The Environmental Protection Agency (EPA) on June 12 announced the first-ever federal government awards for energy efficiency in leased office spaces. Many Roundtable members and their tenants are recognized among the award’s inaugural winners.  (EPA list of tenants and landlords) 

    SPAC Chairman Tony Malkin (Chairman and CEO,  Empire State Realty Trust ) stated, “This is a great example of the Roundtable at work. We took best industry practice, formulated policy around it, and worked with staff and members of Congress to develop legislation for the good of the economy, our industry and the environment.”

    • Originally envisioned by The Roundtable’s Sustainability Policy Advisory Committee (SPAC), EPA’s ENERGY STAR for Tenants program has been long-supported by the industry.  After the enactment of the 2015 “Tenant Star” law, EPA was tasked with piloting the branding program for energy-efficient tenant spaces that met certain design criteria.  (Roundtable Weekly, June 30, 2017) 
    • SPAC Chairman Tony Malkin (Chairman and CEO, Empire State Realty Trust) stated, “This is a great example of the Roundtable at work.  We took best industry practice, formulated policy around it, and worked with staff and members of Congress to develop legislation for the good of the economy, our industry and the environment.  At the same time, our Sustainability committee worked with the Department of Energy and the EPA within their structures, rules, and regulations for years to create a new label for energy efficient tenant spaces, to complement existing programs that award whole-building efficiency.  This voluntary program will lead to a significant increase in cost-saving leased spaces as companies vie for EPA’s tenant label in the future.” 
    • Roundtable President and CEO Jeffrey DeBoer noted the national value of the new federal recognition program. “Without any tax credit or subsidy, EPA’s new seal of approval can motivate tenants and landlords across the country to demonstrate their commitment to energy efficiency in leased commercial building space.  As EPA’s new office space program expands, CRE leaders  will have more opportunities to distinguish their buildings for investors, tenants, and the Millennial workforce who place a premium on sustainable assets.”  
    • To earn the label, applicants must verify how they drive energy efficiency in five key areas in the design and construction of high performance leased spaces.     (EPA Documents and Tools for Tenants) 
    • As funding for the federal ENERGY STAR program also affects the new EPA Charter Tenant program, a Senate Appropriations subcommittee on Tuesday affirmed the Trump Administration’s recommendation to continue ENERGY STAR program funding for FY2019 (starting October 1, 2018).  For the agency’s programs overall, the Senate panel recommended that appropriations be maintained at the status quo for the next fiscal year.  (The Hill, June 12) 

    The 2018 ENERGY STAR Charter Tenants program was a focus during today’s SPAC’s meeting in Washington, which included presentations from EPA and other key federal agency officials.