Looking Back to Look Ahead: Understanding Metered Benchmarking and the Importance of California’s new Assembly Bill No. 802 – BuildingIQ


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Looking Back to Look Ahead: Understanding Metered Benchmarking and the Importance of California’s new Assembly Bill No. 802

Scott McCormick, VP Sales & Business Development
October 28, 2015

California is well known for being a leader in energy efficiency policy. In just the last few years alone, the state has made great strides toward lowering energy consumption, increasing the use of renewable energy, and incentivizing the latest in efficient technologies. Last month, California continued this trend with Assembly Bill No. 802. While the news hasn’t gained as much attention as previous storage or solar initiatives, our team at BuildingIQ has certainly taken notice.

Benchmarking at the Meter: The “what” and the “way”

AB 802 addresses data transparency related to commercial and residential energy usage. The bill, which will roll out in phases over the next two years, intends to enhance energy efficiency by ensuring that building owners have access to usage information. In addition to setting forth legislation that will require utilities to disclose upon request whole-building data to building owners, the bill addresses benchmarking. Benchmarking is the process of comparing one set of performance metrics to another. Technically, California has had a benchmarking program since 2007, but it was never fully implemented. AB 802 intends to address some of the areas lacking in previous legislation.

For example, while there is an existing requirement to share ENERGY STAR Portfolio Manager benchmarking data and rating to a prospective buyer — or upon the sale of a building — the new bill goes further, calling for ratings to be shared publicly on an annual basis. Specifically, AB 802 enables the Energy Commission to enforce regular disclosure of this information and levy a fine for violation of submission requirements. By doing this, the legislature intends to create a program that will enable both commercial and multifamily building owners to better understand their consumption in relation to a standard set of metrics. This will allow for a more comprehensive look at energy use in cities and set the foundation for future goals as well as the budgets, incentives, and policies necessary to achieve them.

Creating a strong foundation for these future endeavors is the legislation’s directive requiring the California Public Utility Commission to develop new standards that will enforce measurement at the meter. While new requirements may not seem like exciting news, understanding meter-based performance can provide insight to building owners that is extremely valuable and influential.

Unlike deemed savings —which are application-specific, pre-determined estimates of energy savings developed by state or regional bodies— meter-based savings are necessary to accurately compare a building’s consumption past and present. Benchmarking on this level utilizes actual data-driven results —not fixed estimates — to show improvement across a wide range of variables or to compare a building to larger statewide or industry data. This provides building owners and managers with something very important: context. We tend to put much of our focus on quantifying data, but without context, that data has no meaning. Without it, we don’t know where we stand or if we’ve improved.

Benchmarking, especially at the metered consumption level, allows us to compare energy usage in buildings across different climate zones and account for differences in size, usage, utility rates and even building materials. With this information at their disposal, governments can more accurately measure the effectiveness of energy policies and make impactful changes based on empirical data. Without considering all the variables that influence our energy consumption, such as weather, occupancy patterns, utility rates, building size and structure, we’re left with little insight to make informed decisions moving forward.

California’s enforcement of metered reporting will require building owners to look to some of the latest in intelligent analytics-driven technologies for accurate, real-time reporting and analysis of performance outcomes.

For us at BuildingIQ, benchmarking and establishing context for our clients is a necessary part of the onboarding process. When a customer looks to deploy our energy management solution, it’s important for us to establish a baseline based on granular normalized metered consumption so we can demonstrate the value a customer is getting both in kWh reduction and dollars saved. This system of benchmarking serves as the basis for everything that follows, as well, in terms of charting long-term energy reductions and cost savings. It also paves the way for other areas of transparency within our system, such as our Measurement & Verification (M&V) features. These are used to accurately measure the savings obtained from the use of our technology, software and various service offerings.

M&V uses processes that are well documented and consistent with the industry-standard International Performance Measurement and Verification Protocol or IPMVP. To identify savings attributable to the application, evaluators or project stakeholders compare baseline conditions (derived from metered benchmarking) to current conditions resulting from the software. We then can present the results in real-time using online dashboards and reports. These dashboards enable users to visualize and compare their consumption data in a multitude of formats, ranging from monthly or weekly to daily and even hourly intervals. Moreover, the data takes into consideration external variables and their impact on savings over the designated period of time. We feel so strongly that this should be a requirement in any energy management system, that it is included within our standard offering.

By providing a more complete and consistent set of guidelines for benchmarking based on normalized metered consumption, this new bill will increase transparency in energy reporting and vastly improve California’s ability to address the needs of building owners and develop incentives and policies to meet those needs. After all, the effect of efficiency measures have to be seen at the meter and subsequently the utility bill to have value. This emphasis on granular metered M&V can be seen around the world.

Earlier this year, our M&V module was named an approved way to directly generate Energy Savings Certificates (ESCs) under the New South Wales Energy Savings Scheme (ESS) in Australia. Commercial buildings that can verify energy reductions can sell these ESCs to electricity retailers in order to create additional revenue. Most recently, BuildingIQ was named an approved supplier for M&V by the New South Wales Office of Environment & Heritage (OEH). As a result, the OEH is offering financial support to projects using approved technologies like ours that can verify savings at the meter. These programs and incentives are a powerful poof point demonstrating the effectiveness of our solution.

The importance of implementing a reliable, transparent M&V process has been demonstrated in other industries as well. The emission scandal playing out in the news is a prime example. Allegedly, since 2009, one of Europe’s largest auto makers was using techniques under laboratory testing to greatly improve the efficiency of its products. This went undetected for years, only to be discovered when an independent group reported on large discrepancies between laboratory calculations and actual data from real-road operations. This incident illustrates the value of measuring and verifying results under actual use conditions.

What does AB 802 mean for your building?

AB 802 means it’s time to start thinking about your building’s energy use and looking for the right tool to monitor, manage and actually improve it. Tools like our BuildingIQ Predictive Energy Optimization™ (PEO) software can be easily installed and are offered on a subscription basis. What’s more, because our PEO is combined with benchmarking features at the metered consumption level, building owners will see quantified and verified improvements immediately —savings in energy consumption that will far exceed the costs of installation. So while tracking energy use is good, BuildingIQ’s ability to track granular actual metered energy use and generate automatic savings can be viewed as the next step.