[Recording] Requirements of the June 1st deadline for California buildings to enter their energy information in Energy Star and benchmark their data with the state.
Tom: Hello everyone, and welcome to Gridium’s webinar on AB 802 benchmarking. We’re excited to cover this ahead of the June 1st deadline where many of our customers in California will have to enter their energy information and benchmark it with the state.
My name is Tom Arnold. I’m the CEO and Co-Founder of Gridium and I’m joined by Katy Martin, Senior Energy Analyst. Many of you know Katy—when she’s not chasing her daughters around robotics competitions, she’s using her MIT background to assist with all kinds of energy issues, including benchmarking.
For those of you that aren’t Gridium customers, we’ve been in business for 7 years. We’re not delivering our energy analytics software to over 1,000 buildings and we help with a variety of tasks that you need help with in terms of energy management, including benchmarking.
Katy: Hi everyone, this is Katy. It’s great to be here with you.
Tom: Katy, let’s start with the law here. Gridium has customers all over the country, but we do have a critical mass of customers in California. AB 802 is the assembly bill here. What did it actually do to customers and what changed? What’s the basis of the regulation?
Katy: AB 802 was passed in the fall of 2015 and the goal of it is to provide building owners with access to their building energy use data from utilities to help them track consumption in their buildings, so this is meant as something to help building owners.
Tom: And that’s particularly important as you’ve got multiple tenants in your building that are separately metered. The law provides you access to say, the Walgreen’s or the Joe & The Juice in your building; but it also has disclosure requirements as well, right?
Katy: It does. That is one part of it that every building over 50,000 sq. ft or with 17 or more utility accounts needs to report on a yearly basis.
Tom: And then those reports are made public by the state or the municipality that manages the benchmark.
Katy: Yes, anybody can access those databases and see building usage, Energy Star scores, and other information for your building.
Tom: And one question I get a lot from customers is, “Wait a second. This is a state law. Why do I have to file with the City of Los Angeles?” or San Jose or the City of San Francisco. How do the state regulations interface with the city regulations?
Katy: If you live in one of those cities—San Francisco, Berkeley, LA, San Jose—they have their own benchmarking requirements. If you fulfill those benchmarking requirements, you are also fulfilling the requirements for AB 802. Anybody who’s outside of those municipalities just needs to file the AB 802 benchmarking requirements. And they vary slightly from city to city, but all of them require benchmarking and some require energy audits for your building.
Tom: So, this has been going on for several years. Can you just give us an overview of how it’s done? How do we actually submit the data for an AB 802 benchmark?
Katy: To submit the data for AB 802 or any of the city benchmarking requirements, you need to have and Energy Star Portfolio Manager account set up for your building because that’s the tool you’re going to use to submit the report. This is a free tool provided by the EPA—everybody has access to it, so everybody should be able to submit these reports easily from Portfolio Manager.
Tom: So Katy, we’ve established how we do this—we put it in Portfolio Manager, into our accounts, plus the tenant accounts that are separately metered. Talk to us about the data. Obviously Gridium is a data company; we extract a lot of that data for our clients, but what are the data that you need to satisfy the benchmark requirements?
Katy: For the benchmark requirements you need whole building electric and gas usage information for your building—for all tenants, for everything in the building. These have to be entered into Energy Star. They can be entered by meter, you can do the whole building, but you need to have the usage information in Energy Star. You don’t need the costs—although Energy Star provides you with a place to put that in as well. And in addition, some cities—LA in particular—requires water usage information.
Tom: You might’ve noticed if you’re a Gridium customer that water has started to appear in your accounts. We’re now getting that data automatically in certain cities. How else do people get their water data?
Katy: Otherwise people who don’t have Gridium and access to it through that, you can get your water data from your utility from your bills. You are able to input that information directly into Portfolio Manager.
Tom: And obviously if you’re a Gridium customer on the energy cost tabs you can just download this and that’ll put all of the bills in a spreadsheet. How do I get from that spreadsheet to Portfolio Manager?
Katy: Within Portfolio Manager, there’s an action to download a spreadsheet. You can copy those values right into the spreadsheet that Portfolio Manager provides for you and just upload that so all of the billing information would go in all at once; you don’t have to enter bills individually.
Tom: It’s really interesting. I know that some utilities provide automatic connections to Energy Star, but Katy you found some interesting things there are largely, when we’re doing this for clients, we still do it manually. Can you say more about that connection and why we don’t use it?
Katy: Occasionally, utilities will have software glitches and the usage values do not get entered correctly. So what we found with customers is it’s always best to verify that the electric usage and gas usage values are correct because we have seen errors. You also have to be careful because sometimes the values are estimated, and you want to make sure you have the actual usage values in there—not an estimated usage value. So, we found it’s always just best to check this manually, instead of relying on the utility to provide the data automatically.
Tom: Yeah, I think that’s a good point. I mean look, many of our clients have billion-dollar assets. This number is public; it’s going to be used in leasing conversations. Have a lot of hygiene around this number. Let’s talk a little bit about that. Like, once I’ve got the data uploaded or manually enter it into Energy Star, what kind of review of the building information do I need to do in Energy Star so that I can actually start to get a score and satisfy the requirement?
Katy: The first place to start in Energy Manager—either if you’re setting up Portfolio Manager for the first time or updating it for the 2018 reporting is you want to review the building information first. This is where you have the gross floor area, operating hours, number of workers on the main shift, number of computers. You really want to make sure that these numbers are correct, especially if something has changed—if occupancy has changed in your building, you want to make sure those values are in there correctly so that your Energy Star score reflects that change.
Tom: Got it.
Katy: So, that is the place to start. From there, you would go to the individual meters and verify that that usage data is correct. If somebody’s been inputting these for you on a monthly basis from the bills, you want to make sure that any estimated bills are correct. You want to make sure there haven’t been any typos if somebody’s keying this in. You just want to do a quick check and look to make sure that all of this looks correct.
Tom: And these numbers—just so everyone knows—these are the numbers that “normalize” your energy so that a building in San Francisco that’s at 50% occupancy is compared fairly to a building in Indianapolis that’s at 100% occupancy.
But they can affect your score quite a bit and if you flub the operating hours, for instance, you can see that that will change your score. One thing that I think that everybody knows is how important this score is now to tenants, especially as the numbers have gotten more stringent—and we’ll cover that in a second. If you’re at that bubble between being certified and not it can have a big impact on the leasing.
For instance, if you’re below 75, you cannot lease to Amazon, you cannot lease to Google, Facebook, any of the big tech companies; you can’t even lease to the General Services Administration, which is the biggest tenant in the United States. So, this is a high stakes game, so make sure that these numbers are right—especially if you’re in the kind of low 80s score, where small changes here make the difference between being certified or not.
Let’s talk more about that, for some of those customers in PG&E territory especially. There has been a glitch if you use the automated upload in PG&E—what’s the nature of that glitch and if I happen to use the automated system, how do I check that glitch if I have a building in Pacific Gas & Electric territory?
Katy: Yes, so if you’re in PG&E territory, you want to check the software replaced some of the 2017 and 2018 electric and gas use values with zero. So, if you go in and look; if you’ve been pulling that information directly from PG&E, you want to verify that you are not seeing zeros for the usage. And if you are, you’re going to need to update that. If you have Gridium, you should be able to pull those values directly from the software; otherwise, you’re going to have to go back to the bills and double check those values and input them manually.
Tom: So Katy, when you’re doing this for the Gridium customers, how are you interfacing with the software to get the electric and gas data and upload it? We’re showing a little snapshot here, but what’s your workflow when you’re getting stuff into Portfolio Manager?
Katy: For our customers, what we would do is we would select the meter that we want the usage data for and we would go to the cost tab. And it’s as simple as downloading the cost information for that meter; it gives you bill start and end dates, it gives you usage information, and it also gives you the actual cost information. And then it’s just a matter of copying and pasting it into the Portfolio Manager upload file and everything should upload with no problem.
Tom: So, for our Gridium clients with multiple metered buildings, you always do this on a per meter basis?
Katy: It depends on how they have structured the meters in Portfolio Manager. Some of our customers will create a totalized meter that shows all the usage together; others have it on a meter by meter basis. We can download that information in either format, so we just need to know how they’ve structured Portfolio Manager.
Tom: Now AB 802’s not just only about energy disclosure, getting the full building information and publishing that information; it’s also about auditing the building, and some of these are more stringent in terms of location. So, what exactly are the audit requirements?
Katy: The audit requirements vary from city to city. In most cases, it’s based on Energy Star certification. So, in San Francisco, you are required to have an energy efficiency audit every 5 years, unless you’ve been Energy Star certified for 3 of the past 5 years or LEED certified for all 5. In Berkeley, same thing; you need an energy assessment every 5 years, unless your Energy Star score is greater than 80. San Jose is starting energy audit requirements beginning in 2021, so I don’t know their requirements yet, but they will also be having audit requirements for their buildings.
Tom: And a lot of Gridium customers that go through an audit, your audit firm might also be using the software. That can help them speed the audit and lower the cost of the audit.
Let’s talk about the actual score.
Katy: Yes. Energy Star Portfolio Manager made some changes last year. Everything is based on a national median value, so they normally try to update these values every 4 years, but for office buildings they have not updated the values for 9 years. So, there’s been a lot of changes in efficiency in the grid. So one of the main factors that they use in calculating your Energy Star score, which is the site-to-source conversion factor, dropped a fair amount and that has impacted many buildings’ Energy Star scores. For office buildings in particular, the Energy Star scores dropped on average 12 points, which is significant if you are trying to get that Energy Star certification because your building could’ve been performing really well at about 85 and if you drop 12 points, you are no longer Energy Star certified.
So, that’s a big impact for office buildings.
Tom: It’s a very big impact. I call this kind of a Lake Wobegon effect where everyone thinks they’re better than they actually are.
One thing to stress is that Energy Star is a percentile ranking system, so that if you have a score of 90, that means that your efficiency is better than 90% of other office buildings. And so you can see what happened—this is straight out of Energy Star—but on this chart, at one point, 30% of buildings had a score of 90 and above, which of course… it can’t be true if it’s a percentile rating. And now you see that the red line is pretty close to what you would expect, which has each one of the 10-point score brackets covering about 10% of buildings.
Nevertheless, tenants and managers have gotten used to this Lake Wobegon effect or this grade-inflation effect. If your score drops a lot, what are the types of things that you should be thinking about in terms of improving that score?
Katy: Yeah, the gas usage has a large affect on the Energy Star score. For most buildings gas usage is about 30% of the KBTU. Even though your gas bill might not be large, that gas usage has a huge impact on your Energy Star score, so anything you can do to reduce that, will actually bring a large change in your Energy Star score—so that’s a good area to focus on.
Tom: Yeah. And of course, now we have gas data in Gridium. Some of you got very lucky and have hourly gas data in the tool, which you can literally see your morning warm ups, you can see your boiler resets, everything working on there. So, this is a bit of a mind mel for properties because gas is so cheap, it’s kind of easy to ignore—but again, it’s a huge portion of the component of this score. So, it makes sense to focus on it.
So Katy, we’ve covered a lot of ground. Obviously, if you’re a Gridium customer, we’ll help you out with filing the reports; just give us a call or hit the chat button in Gridium and someone will help you. If you’re not a Gridium customer or if you just want to sort of get your head around this a little bit more, what are some additional resources for folks on the webinar?
Katy: There are a lot of great resources out there. The place you could start is go to the Gridium website—we have some blog posts there and one of them deals with tips for the benchmarking deadline that’s coming up for complying with AB 802. There’s lots of links in there, lots more information. And again, if you have any questions, feel free to reach out to us.
Tom: That’s fantastic. Well Katy, this has been great. Just one more thing on the energy calendar, if you’re a Gridium customer—and hopefully you’ve learned a little bit about what this is and how to do it. It’s really not that hard and of course, if you need help, just give us a buzz.
We’ve got some upcoming webinars, so if you’re interested in this, we have a new webinar coming on Direct Access, which is a new expanded program for buying hopefully less expensive electricity from third parties. We’re also going to go deeper on water data and reverse flow, which are all those meters for our solar customers that sometimes spin backwards.
Thanks everyone. Please let us know any questions or comments, and enjoy your day!