Better Buildings Act Brings Energy Efficiency Opportunities to Tenants

Bipartisan Bennet-Ayotte Legislation Aimed at Boosting Energy Efficiency in Commercial Buildings

U.S. Senators Michael Bennet (D-CO) and Kelly Ayotte (R-NH) today introduced a bill that aims to improve energy efficiency in commercial buildings. The Better Buildings Act encourages tenants of commercial buildings to implement cost-effective measures that will help reduce energy consumption and ultimately utility costs for businesses. The senators plan to file the legislation as an amendment to the Energy Savings and Industrial Competitiveness Act of 2013 (S. 761), introduced by Senators Jeanne Shaheen (D-NH) and Rob Portman (R-OH), should that legislation be considered on the Senate floor. 

As building owners across the country strive to distinguish their buildings with the voluntary ENERGY STAR label to help attract tenants and satisfy investors, this bill creates a new voluntary “Tenant Star” certification to reward and recognize tenants that design and construct high-performance leased spaces.

“If tenants design their offices with an eye toward reducing energy consumption they are going to save money and help they environment – this bill recognizes those substantial benefits,” Bennet said. “The measure encourages businesses to build upon the energy-efficient designs of their buildings, bringing down energy use for themselves, their building, and the grid. It’s a commonsense approach to reducing our energy consumption, cutting costs, and protecting our planet.”

“Our bipartisan legislation would provide a voluntary incentive for commercial tenants to pursue cost-effective ways to conserve energy,” said Ayotte, who is also cosponsoring S. 761.  “This is a common sense, no-cost measure that builds on efforts to promote greater energy efficiency in commercial buildings across the nation.”

To date, the focus has been on how real estate owners and developers may lower energy consumption at the “whole-building” level. However, office tenants like data centers, law firms, banks, trading floors, restaurants, and retail stores use a lot of energy – especially in areas experiencing large growth and development. The Better Buildings Act takes a holistic approach by considering office tenants’ impact on energy consumption and behaviors.

In addition to the “Tenant Star” designation, the bill asks the Department of Energy to study and learn from private sector “best practices” of how commercially-leased spaces are designed to achieve high performance and help reduce utility costs for businesses.

“Senators Bennet and Ayotte have championed innovative, transformative energy policy through their Better Buildings Act and its ‘Tenant Star’ provisions,” said Jeffrey D. DeBoer, President and CEO of The Real Estate Roundtable. “Tenants consume 50% or more of the energy used by commercial buildings, so they should be recognized for making smart choices in high-performance design and operations within leased spaces they control.  This bill is a major step forward to better align commercial landlords and tenants toward a common goal of lowering energy use in built environments across our nation.”

“In a typical office building, between 50-65% of all energy is consumed by tenants.   Decisions tenants make in building out their spaces make a huge impact as to the energy consumed on total U.S. energy consumption.  Our work at the Empire State Building and in the Center for Market Innovation’s High Performance Demonstration Project has documented that tenants can make economically rewarding steps to reduce energy consumption and want to be recognized for building energy efficient spaces,” said Anthony E. Malkin, President of Malkin Holdings which owns the Empire State Building.  “The Energy Star program is a widely recognized and sought after designation for building owners and for tenants choosing where to lease, but offers no recognition or direction to tenants who are the single biggest consumer of energy in buildings.  The ‘Tenant Star’  program in the bill introduced by Senators Bennet and Ayotte will motivate office tenants voluntarily to seek recognition for good work done in job creating, energy efficient tenant installations across the commercial real estate sector.”

“The Energy Star program has been a resounding success, giving consumers and businesses valuable information to use to save energy and money.  We can extend the success of Energy Star buildings by putting even better information in the hands of owners, tenants, and businesses.  We are grateful to both Senators Bennet and Ayotte for their leadership on this smart, bipartisan proposal – the Better Buildings Act – that will cut pollution and save businesses money,” said Franz Matzner, Natural Resources Defense Council.

“We thank Senators Bennet and Ayotte for introducing the Better Buildings Act of 2013,” said Michael Brune, Sierra Club Executive Director. “This commonsense bill will help building owners and their tenants get on the same page to save energy, save money and prioritize energy efficiency to help fight the climate crisis.”

Dozens of organizations from the real estate sector, construction industry and environmental advocacy, among others have endorsed the bill, including the American Institute of Architects, the National Association of Home Builders, the Natural Resources Defense Council, the Sierra Club, the Real Estate Roundtable, and the U.S. Green Building Council.