A building owner has warning signs of BPS programs being implemented. For a typical jurisdiction, the process looks something like this:

• Benchmarking Ordinance: All building owners in the jurisdiction are now required to report their building’s energy consumption or emissions.
• Commit to BPS: A jurisdiction publicly commits to passing a policy in the future that sets specific maximum energy usage or emissions targets for a specific subset of buildings. The subset of buildings is likely defined, so a building owner will know if they will be required to comply or not.
• Implement BPS: The policy is passed, and with that, the targets are solidified, and fine amounts and associated timelines are set in stone.

Buildings are now required to report their consumption/emissions yearly, and this reported number is compared with their target. If they are above their target when a fine year comes, they are liable for fines.

Reporting refers to the process of sharing measured energy usage data with a state or city entity. This is often mandated under a “benchmarking” policy, ordinance, standard, or law. Reporting is a key piece of any BPS program, as the jurisdiction needs to have a single source of truth for the metrics that determine a building’s compliance state.

The jurisdiction sets standards and requirements for the reporting process, which typically include:

• A centralized platform where the energy usage data is uploaded and tracked. This is typically EnergyStar Portfolio Manager (ESPM).
• Publicly accessible list of covered buildings. This typically includes a unique ID for each building. This ID often needs to be linked to a building in the centralized platform for ease of tracking.
• Guidelines for what constitutes the “submission” process. This typically includes sharing “view access” to the ESPM property with the applicable jurisdiction.
• Guidelines for calculating emissions using energy usage data, sometimes including assumptions for how the emissions factor of the electric grid will change over time.
• Guidelines on how third parties can complete this process for a building owner.
• Guidelines on how to engage utility companies to set up an ESPM account to automatically receive usage data as it is billed.
• A signed attestation of accuracy for whoever completes the process.

Depending on the utility companies in the area, the program details, and the building type, this process can range from taking 1 hour per year to 20+ and can often be confusing for building owners. Thus, it is typically given to someone with energy expertise, often to a third-party company if energy expertise doesn’t exist in the building owner company.

BPS programs often offer several pathways to compliance. The selection of the best pathway often requires a certain amount of data about the building and energy expertise. In some cases, the selection of a pathway must be shared with the municipality or state entity. Afterwards, compliance state can be checked.

1. Determine the best pathway:

   Example - Colorado. Four pathways exist:

   • Percentage reduction from an energy baseline
   • Percentage reduction from an emissions baseline
   • Meet a prescriptive energy target
   • Meet a prescriptive emissions target

   Example - Washington State.

   • Complete an energy audit and the measures that pan out economically
   • Meet a prescriptive energy target

   The target that requires the least amount of effort will be the best target. That varies depending on the building and its current state. Understanding the best pathway often requires detailed calculations that can save a client a lot of effort.

2. Determine exceptions and submit pathway selection:

   In some cases, programs require that pathways be specified in advance for a given building. Sometimes they don’t. If a building owner has hired a third party for this effort, the specification of a pathway will also be under the scope of work of that third party.

   As part of this process, it is often required to apply for certain target reductions or even exemptions.

   Programs offer exceptions for cases like vacant buildings or recently constructed buildings. Applications for exemptions entail correspondence with the program authority, data review, and certification of truth.

   Programs offer target reductions for things like parking garages, process loads, or changes to the municipality’s understanding of the building, such as square footage. Applications for target reductions typically entail correspondence with the program authority, data review, and certification of truth.

3. Determine compliance:

   The chosen pathway will determine which targets a building needs to hit, when, and what the structure of penalties will be for not being in compliance. Determining compliance of a given building requires several steps of calculations to be completed, and influences key client decisions moving forward.

   • Finalizing target determination for each compliance year.
   • Gathering reported energy usage and forecasting future energy usage.
   • Considering a company’s acceptable risk profile in projecting whether or not a building’s reporting usage may exceed the target in each compliance year.

In cases where a building is not compliant with a BPS program for the foreseeable future, a plan must be made to gain compliance or face potential fines. Fine magnitude varies widely, resulting in scenarios where taking a fine is the most profitable option and in scenarios where fines should be avoided at nearly all costs.

• Determine which strategies are in scope. Depending on the program, certain strategies may count towards the target, while others may not. Yet others might only count partially towards the target (e.g., Efficiency, Rooftop solar, Renewable energy credits, Carbon reduction credits).
• Calculate reduction strategy impact. For each strategy that might be available, likely mostly energy efficiency opportunities, the impact of each strategy towards the target must be determined. The economics of each strategy must also be calculated, taking into account any available rebates, annual savings, and the lifetime savings of a technology. If an organization has additional sustainability goals, such as emissions reduction targets, that should be considered too.
• Choose compliance or non-compliance. Based on the cost of the optimal compliance strategy and the risk profile of the client, it can be determined whether compliance should be achieved, or the fines should be taken.
• Implement. If it is chosen to gain compliance, then the client must take action to install efficient equipment, build renewable energy onsite, or purchase credits. The timeline required for these actions will be determined by the timeline of the fines.