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  • Writer's pictureCaleb Kline

Ann Arbor begins benchmarking for commercial and multifamily buildings

Updated: Oct 17, 2022

As of June 1, 2022, the City of Ann Arbor requires commercial and multifamily buildings over 100,000 square feet to track their energy and water use and report the results to the city. This initiative is part of the City's Department of Sustainability and Innovations' A2Zero carbon neutrality plan. The threshold building size that is required to report will drop every year. Commercial and multifamily buildings larger than 50,000 square feet start reporting June 1, 2023, and those larger than 20,000 square feet starts June 1, 2024.

A building benchmarking process compares a building's annual energy used per square foot to a survey of buildings nationwide with a similar primary use. This gives the building operator a benchmark to compare how energy efficient their building is. When an operator manages multiple buildings, benchmarking data highlights which buildings most need investments in energy efficiency. Following this data over multiple years can display trends and demonstrate whether an energy strategy is working. It can also highlight needed repairs. For instance if the water usage suddenly spikes, the cooling tower drain valve may be stuck open.

The city's strategy for commercial buildings starts with drawing the owner's attention to their building's energy performance. Benchmarking proponents suggest that paying attention to energy usage leads building operators to make more energy efficient decisions. The second prong of the city's strategy is transparency. Publicly displaying the benchmarking results gives more information to tenants, investors, and potential buyers. This in turn increases the pressure on building operators to improve their buildings' performance. Ann Arbor is currently encouraging voluntary public reporting, but will mandate it starting in 2026. This delay gives building owners a few years to get accustomed to benchmarking and to make improvements. A possible future third step would be for the city to mandate building energy performance standards. This means that buildings would be required to meet a set energy target or face penalties.

The city will be using the EPA's ENERGY STAR Portfolio Manager tool to record and report annual water and energy use. Building owners create a profile of their building and then upload utility and water bill consumption data. The program divides the annual energy used from electricity and natural gas by the square foot size of the building to get the Site Energy Use Intensity (EUI). The building's EUI is then compared to buildings nationwide that have a similar primary use. The EUI has units of thousand British thermal units per square foot (kBtu/SF). The median office building EUI on ENERGY STAR is 52.9 kBtu/SF. This is roughly equivalent to a standard 100 SF personal office with three 60 watt incandescent bulbs left on all year. ENERGY STAR Portfolio Manager also calculates a Source EUI, which includes energy losses from the production, transmission, and delivery of electricity and natural gas.

Energy Star Portfolio Manager Screen Shot

To make the benchmarking process more relatable to the public each building is given an ENERGY STAR score from 1 to100. A score of 50 represents the median energy performance and a score above 75 is considered a top performer. There is a wide gap between the best and worse performing buildings. The scores do not correspond linearly to the building's EUI. A change in ENERGY STAR score from 40 to 55 represents more annual energy savings than a change from 75 to 90. Buildings with scores below 60 make great candidates for energy efficiency improvements since the improvements can have attractive returns on investment.

Ann Arbor's Department of Sustainability and Innovations provides lots of resources on how to get started with benchmarking. Another good resource is the Ann Arbor 2030 District, a nonprofit dedicated to building sustainability. The District provides free benchmarking to its members and there is no cost for property owners and managers to join.


Inclination Engineering provides retrocommissioning and HVAC replacement planning services. If you have questions about how to improve your building's energy performance please reach out.

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