Salt Lake City residents and businesses spend nearly $400 million to power their buildings each year. In the average large building, however, roughly 30 percent of that energy is wasted due to building inefficiencies — taking a toll on the bottom line of both the city and building owners. It also compromises local air quality as fuel used to heat buildings produces emissions that turn into harmful winter pollution that helped earn Salt Lake City (along with Provo and Orem) the title of sixth most polluted city in the U.S. from the American Lung Association in 2016.
By 2050, Salt Lake City’s homes and businesses are predicted to replace vehicles as the primary cause of local pollution. However, Salt Lake City has an opportunity to not only reduce harmful pollution year-round and protect residents’ health, but also create local jobs and save money. How? By improving the energy efficiency of the community’s large buildings.
A critical first step in doing this is to consistently measure the energy used in large buildings and bring that data to the market. This step, often called benchmarking and transparency, gives building owners and tenants a better understanding of how their properties are using energy, as well as how that use compares to similar buildings. When energy benchmarking data is made publicly available, it enables market actors to make leasing, buying and other investment decisions based on actual information. It also generates demand for energy efficiency products and services, helping a city’s businesses.
Recognizing this, Salt Lake City Mayor Jackie Biskupski recently transmitted to the City Council an ordinance that requires large commercial building owners to annually report their energy consumption, and certain buildings to perform reasonable tune-ups to improve performance once every five years. My organization, the Institute for Market Transformation, is excited to have worked with Mayor Biskupski’s office on this new initiative through the City Energy Project, our joint initiative with the Natural Resources Defense Council, and through the city’s Project Skyline efforts. We strongly believe that passing this ordinance would be a boon to the city.
To date, 21 cities across the U.S., including Denver, Kansas City and Atlanta, have similar policies in place. As performance data is shared, tenants and buyers can use this information to assess whether they may be overpaying for energy and to seek out high-performing spaces that align with corporate sustainability goals. Companies that track and analyze their energy use have reported taking three times more energy efficiency actions than those that do not regularly track energy use. In addition, building owners may find an efficient building bolsters their competitive edge as energy-efficient properties have occupancy levels up to 10 percent higher than less-efficient properties, rental premiums over 10 percent higher than less-efficient properties, and sale prices up to 25 percent higher than less-efficient properties.
The health benefits of energy-efficient buildings are also important in the Salt Lake City region, especially during the winter inversion season. As documented by the American Council for an Energy-Efficient Economy and the Physicians for Social Responsibility, pollutants released by burning fossil fuels contribute to four of the leading causes of death in the U.S.: cancer, chronic lower respiratory diseases, heart disease and stroke. Salt Lake City’s ordinance is projected to eliminate over 98 tons of criteria pollutants from the air each year.
Salt Lake City’s market-based ordinance is an important step forward. In it, Mayor Biskupski and the city have created a thoughtful plan that will not only strengthen the city’s position as a leader in efficiency, but also intends to deliver results in dollars, energy savings and improved air — a win-win situation all around.
Cliff Majersik is executive director of the Institute for Market Transformation.