Setting an energy standard
Madison’s once contentious energy benchmarking proposal is back as a voluntary program that has the support of the business community.
From the pages of In Business magazine.
Sustainability. Green energy. Carbon footprint. Energy efficiency.
These are all popular buzzwords, but as recently as last year they were also a bone of contention between the City of Madison and the local business community. That’s because the city was pushing an energy benchmarking ordinance as part of its overall sustainability plan, which would have mandated owners of commercial buildings larger than 25,000 square feet and apartments with more than 35 units — along with city buildings larger than 15,000 square feet — to publicly report their energy performance or face fines of up to $1,000 annually.
When last we left the energy benchmarking ordinance in early 2014, it had been “placed on file,” says Zach Brandon, president of the Greater Madison Chamber of Commerce, a leading opponent of the original proposal, which is a polite way of saying it didn’t have enough support.
What’s happened in the interim, however, is an exercise in just how much can be accomplished when local government and business leaders work in partnership to achieve a common goal.
From conflict to collaboration
Brandon says a big reason the business community balked at the original energy benchmarking proposal was because as it was initially written, it not only would have mandated that owners of buildings over a certain size and their tenants disclose their confidential utility information to the city (and ultimately then, the public), it also required an annual audit that had significant costs associated with it.
“Many businesses were already asking questions about how they could be more environmentally sustainable, while also maintaining profitability,” Brandon says. “They aren’t actually diametrically opposed to each other; there are ways to be both sustainable and profitable, but for anything to be sustainable, you have to have people wanting to do it rather than being told they have to do it.”
After the business community expressed its concerns about the proposal to the Madison Common Council, an ad hoc committee was formed to reset the discussion and tackle the issue from a place of collaboration rather than conflict.
“It was supposed to be a three-month process and turned out to be almost a year,” Brandon notes. “Through that, we interviewed other cities that had mandatory programs, we talked about voluntary programs, heard lots of testimony, and had a great, healthy debate. In the end, a supermajority of the group voted to recommend a voluntary program that would be based on a public-private partnership instead of a mandatory program as originally proposed.”
That voluntary program was approved by the city council at its Sept. 1, 2015 meeting. That resolution said the City of Madison Voluntary Energy Use Benchmarking Program, when combined with other efforts, will work to reduce overall building energy consumption by 50% by 2030 in public and private sector buildings. The program is to include an outreach/education plan, incentives for compliance and upgrades, and a third-party private entity that will collect and store the data.
The city assessor’s office will produce a report ranking all commercial buildings by total square footage, which didn’t previously exist. Meanwhile, the city engineer will develop a voluntary public/private energy benchmarking program by Jan. 1, 2016 that would include an annual report on benchmarking goals to be reviewed by the city’s Sustainable Madison Committee and presented to the common council.
To meet the program’s objectives of reducing energy consumption and related business costs, the Greater Madison Chamber of Commerce will also lend its support to the program through targeted promotion and education to the business community. The city agreed to assist with and develop incentives and resources where necessary.
The value of energy benchmarking
Benchmarking isn’t a new business concept. For years, businesses have collected and analyzed data about their operations to determine where they stood in the marketplace compared to their competitors.
“In just an hour every month, you can have access to some very compelling data about your building and what your competitors are doing.” — Zach Brandon, president, Greater Madison Chamber
What’s unique about energy benchmarking is it gives businesses an opportunity to help the environment while they boost bottom-line performance. That’s particularly important in today’s business climate, notes Brandon, because there’s an increasing desire among customers — whether that customer is a tenant or an actual consumer of your products or services — to be focused on sustainability.
“Companies from Wal-Mart on down to small, Main Street businesses are shifting their focus to sustainability, and it’s increasing as millennials are aging up and into a place of economic buying power,” Brandon explains. “Businesses are realizing they have to react to this new normal in order to acquire and maintain their customer base.
In addition, larger companies like American Family and Epic have made a conscious decision to be both profitable and sustainable, Brandon continues. “They know it helps them when they’re talking to their end users, whether it’s someone who’s purchasing insurance, buying software, or whatever. But it also can be down to the local business that puts the static cling sticker on their front door that says, ‘I buy wind power’ from MG&E or Alliant. Those are things that resonate with consumers.
“Also, if you’re a tenant in a building and you can say your building is one of the leading buildings in energy efficiency in the region, which reduces your potential energy costs, that has a bottom-line effect for the tenant.”
As part of the city’s benchmarking program, business owners will be encouraged to sign up with an online software system called Portfolio Manager (at portfoliomanager.energystar.gov), which was created by the Environmental Protection Agency. At this online portal, business owners can enter their building’s information — how big it is, how old it is, what the interior is like, what type of lights there are, how many computers, how many employees, etc. — and the software gets a sense of what the building is used for. It also provides an efficiency score that allows a business to compare itself to competitors locally and nationally.
To further see where they stand, building owners can participate in ENERGY STAR’s Battle of the Buildings, an annual competition that challenges building owners and managers to reduce energy and water use, and save money, over a one-year period. According to ENERGY STAR, in this sixth year of the competition, more than 6,500 buildings and 125 teams committed to battle the scale and each other as they compete to slim their energy and water “wastelines” with help from the EPA’s ENERGY STAR and WaterSense programs.
Organizations are even encouraged to host their own battles. Any private- or public-sector organization or association can run a competition. This includes trade associations, commercial businesses, manufacturing plants, utility companies, local and state governments, schools and congregations, and many other groups, according to ENERGY STAR.
Since Madison’s benchmarking program is voluntary and the Portfolio Manager software is public and free, anyone can benchmark their building or business, regardless of size. Brandon notes the Greater Madison Chamber of Commerce benchmarked its building early on just to determine whether the software is user- friendly and how much time it takes to input information.
“It’s not difficult to use,” Brandon says. “If you wanted to know how much energy your 1,800-square-foot retail store used and how it ranked locally and nationally, you could do it tomorrow without any participation from the city. In fact, we would encourage you to do it.”
The focus of the city and the chamber, at least to start, is to tackle the largest property owners first, whether that’s a single-tenant campus or a multitenant building.
“The way the voluntary program will work is that we’re going to offer significant encouragement from the business community side to say, ‘we really think you should do this, it’s in everyone’s best interest that you do this, and if we don’t do it, nothing precludes the city from coming back with a mandatory program,” states Brandon. “[As a business community] we need to prove to the public policy makers that Madison is different, and we can succeed without making this program mandatory.”
The amount of time invested in setting up and maintaining your businesses information in Portfolio Manager will obviously vary depending on the size and scope of the business. Brandon notes it takes roughly one hour to start the process of getting a company’s profile entered and something less than that on a regular basis to update the business’ utility information and how much energy it uses each month. “It’s conceivable that in just an hour or so every month, you can have access to some very compelling data about your building and what your competitors are doing,” he says.
“This is good for business,” Brandon adds. “It’s going to help your business be more sustainable, profitable, and get more customers.”
Ready to make some cool choices?
Businesses can set goals for improving sustainability, but they’ll only get as far as their employees are willing to take them.
“Engaging employees around sustainability is a smart way to increase engagement, while also promoting innovation and cost savings in your business,” says Kathy Kuntz, executive director for Cool Choices, a Madison nonprofit. “Recent surveys suggest that millennials, in particular, are willing to prioritize sustainable business practices over salary when selecting an employer. As businesses increasingly compete for the best talent, engaging employees in your business’ sustainability strategy becomes an important recruitment and retention tool.”
Recently, Green Madison, the City of Madison’s effort to reduce energy consumption in homes and buildings, began offering businesses a free opportunity to participate in the Cool Choices online employee engagement platform that promotes sustainable practices at work and home.
According to Green Madison, all of Madison is invited to race to complete the greatest number of sustainable actions.
The goal of the citywide Cool Choices game is to get individuals and businesses in Madison to have fun while making sustainable choices together. By logging sustainable actions in the online game, participants also help Madison reduce energy consumption and compete nationally for a $5 million energy prize to use toward the city’s future sustainability efforts.
Everyone who plays is eligible to win weekly prizes donated by Madison-area establishments.
Dozens of Madison organizations have already signed up to take part in the Cool Choices citywide sustainability game, including American Transmission Co., Baker Tilly, Edgewood College, Filament Games, Ken Saiki Design, Madison Water Utility, Union Cab, Yumbutter, and more.
Interested companies and individuals can check out and try the free citywide game Cool Choices (at www.coolchoices.com) using invite code: MADISON2015.
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