Energy benchmarking is the process of measuring and tracking a building’s energy performance against industry standards. While it was once voluntary, it is now legally required and assesses real penalties. Missing deadlines means daily fines up to $100 in some jurisdictions, violations on building records, and potential complications in property transactions. Simple disclosure requirements now carry serious financial risk. Risk managers handling multiple properties must navigate overlapping federal, state, and local rules, each with different deadlines and fines.
The Regulatory Foundation
Guidance from the EPA establishes that measuring and assessing energy performance through benchmarking is a critical initial step in identifying efficiency improvements. This process takes a building’s energy use and measures it against past performance and the performance of similar buildings. Federal requirements operate under mandatory benchmarking established by Section 432 of the Energy Independence and Security Act (EISA), as outlined by the Department of Energy’s (DOE) Federal Energy Management Program. The EPA developed ENERGY STAR Portfolio Manager as the standardized benchmarking tool, which subsequently became the compliance platform for state and local mandatory policies.
How to Achieve Compliance
The ENERGY STAR Portfolio Manager establishes specific data requirements that facility managers must collect and maintain for regulatory compliance. All benchmarking requires monthly utility data.
Required utility data includes:
- Electricity consumption measured in kilowatt-hours (kWh), with separate tracking required for on-site solar or other renewable generation
- Natural gas consumption measured in therms, cubic feet, or kWh depending on utility billing practices
- District energy, including both district steam and district chilled water tracked separately and measured in kiloBritish thermal units (kBtu), kilopounds (kLbs), or megapounds (MLbs)
- For properties with on-site fuel storage, fuel oil, diesel, and propane consumption tracked in gallons or kBtu
- Water consumption is required for certain property types, measured in gallons or kilogallons (kGal)
Building characteristic data includes detailed specifications about the property’s physical attributes, operational systems, and usage patterns. Examples of specifications include the following:
- Gross Floor Area must be measured according to American National Standards Institute/Building Owners and Managers Association (ANSI/BOMA) standards. These standards ensure consistent measurement across different properties and jurisdictions.
- Property use types must be classified using EPA’s property type definitions, which cover more than 75 categories. This classification affects energy performance comparisons and compliance requirements.
- Year of original construction provides context for energy performance expectations and may influence compliance thresholds in some jurisdictions.
- The number of buildings must be reported for properties with multiple structures on one campus, as this affects total energy calculations and reporting requirements.
Beyond these basic data requirements, jurisdictions require additional operational details that reflect how buildings actually function. Property-specific operational metrics vary by building type because different properties have distinct energy uses and occupancy patterns that affect their performance baselines.
- Office buildings: weekly operating hours, number of workers on main shift, and percent of floor area cooled and heated
- K-12 schools: number of students, number of computers, presence of school cafeteria and gymnasium, and months school in use per year
- Hospitals: number of staffed beds, number of Magnetic Resonance Imaging (MRI) machines, presence of tertiary care, and number of surgical operating rooms
Buildings achieving an ENERGY STAR score of 75 or higher are eligible for ENERGY STAR certification, which requires third-party verification by a licensed Professional Engineer (PE) or Registered Architect (RA), the ENERGY STAR Certification Guide specifies. The verifying professional must independently verify accuracy and completeness of all data.
Compliance Requirements Across Major Jurisdictions
The universal compliance framework operates through Portfolio Manager, which the Environmental Protection Agency (EPA) confirms serves as “the free online software platform on which all state and local benchmarking and disclosure policies run.” This standardization eliminates jurisdictional variation in technical reporting mechanisms but creates complexity through divergent deadlines, thresholds, and enforcement approaches.
For example:
New York City’s Local Law 84 requires covered buildings to submit annual benchmarking data. The NYC Department of Buildings issued a service notice that the 2025 benchmarking compliance deadline for Calendar Year 2024 data has been extended from May 1, 2025 to June 30, 2025 due to new reporting portal implementation. Violations are issued for non-compliance and become part of building records, potentially affecting property financing and transactions.
Seattle’s Municipal Code 22.920 covers buildings greater than 20,000 square feet for both non-residential and multifamily properties, information provided by the Seattle Office of Sustainability & Environment reveals. The reporting deadline falls on July 1 annually for the previous year’s data. The program covers more than 3,700 of Seattle’s largest properties representing over 330 million square feet. Compliance requirements include:
- Maintaining an active Portfolio Manager account shared with the City of Seattle
- Complete 12-month energy consumption data
- Error-free utility consumption data for all active meters
Philadelphia’s Section 9-3402 requires benchmarking for commercial buildings and multifamily buildings 50,000 square feet and larger, as documented in the 2019 Report. Requirements include annual reporting of energy and water use, with data entered into EPA ENERGY STAR Portfolio Manager and shared with the city.
California’s Assembly Bill 802 establishes a statewide program covering commercial buildings greater than 50,000 square feet with annual reporting requirements and public transparency provisions, the DOE Commercial Building Benchmarking Policies database indicates.
Colorado’s Building Performance Colorado imposes two critical 2025 deadlines for building owners, as stated by the Colorado Energy Office:
- June 1, 2025 for 2024 Benchmarking report and fee payment
- July 1, 2025 as the deadline to select compliance pathway
Washington, D.C. implements tiered requirements with a significant 2025 expansion. Currently, private buildings over 50,000 gross square feet require annual benchmarking, while District government buildings over 10,000 gross square feet must comply. Starting calendar year 2025, all privately-owned buildings over 10,000 square feet must benchmark, with the first report due May 1, 2026. The District enforces compliance through daily fines up to $100 for non-compliance.
Financial Penalties and Risk Management
The regulatory framework establishes penalty structures that create escalating financial exposure for non-compliance. A critical compliance risk emerges in multi-tenant buildings. Landlords face liability when tenants fail to provide required energy use information.
Some jurisdictions classify benchmarking non-compliance as a “Class A violation” with maximum penalties of $750, data from NEEP’s tracker highlights. Other jurisdictions employ different penalty structures:
- Chicago: up to $100 for first violation plus $25 per day for continued non-compliance
- Washington, D.C.: daily fines up to $100
- Philadelphia: $300 for first 30 days, $100 per day thereafter
- Boston: $35-$200/day (limit $3,000 annually)
- Variation in penalty structures across jurisdictions creates portfolio-level compliance complexity
Beyond direct financial penalties, enforcement creates cascading risk exposure. The NYC Department of Buildings may issue a Notice of Violation (NOV) to properties on the Covered Buildings List that fail to submit fully compliant benchmarking reports. These NOVs become part of building records, potentially impacting property financing, transactions, and valuations. The Energy Commission has issued warning letters to non-compliant building owners, demonstrating active enforcement beyond passive monitoring.
NYC rules create overlapping compliance risks. The NYC DOB administers benchmarking (Local Laws 84/133) alongside carbon emissions limits (Local Law 97) and energy efficiency grading requirements (Local Law 33). Local Law 33 requires buildings above 25,000 square feet to post energy efficiency grades at public entrances, transforming compliance failures into public reputational risks visible to tenants and investors.
Building Performance Standards
A fundamental regulatory shift is underway from transparency-focused benchmarking to performance-driven compliance frameworks. The DOE/PNNL report published in January 2025 documents the evolution from “report and disclose” benchmarking to “report and improve” Building Performance Standards.
Building Performance Standards include:
- Performance metrics based on Energy Use Intensity or greenhouse gas emissions
- Performance targets that evolve over time
- Integration with building energy codes
- Compliance pathways including renewable energy credits
- Methodologies such as Performance Cost Index (PCI) and Building Performance Factor (BPF)
Cities once required benchmarking for transparency. Now they use that data to mandate building improvements through new performance standards. ASHRAE Standard 100-2024 establishes energy benchmarks and emissions targets for existing buildings. This focus on existing buildings makes sense—HVAC systems alone account for 61% of commercial building energy use.
Federal requirements follow the same approach. DOE guidelines require buildings to achieve an ENERGY STAR score of 75 or higher, with focus on reducing on-site fossil fuel-generated energy consumption. For federal buildings, 10 CFR 433 establishes standards under EISA requiring new construction and major renovations to achieve reduced on-site fossil fuel-generated energy consumption compared to the Fiscal Year (FY) 2003 baseline.
Benchmarking Data and Continuous Management
Benchmarking is no longer a one-time compliance task. Cities now use this data to set ongoing performance targets that get stricter over time. This requires continuous data management and improvement planning built into operations and capital budgets. Managing compliance across multiple jurisdictions takes specialized expertise. Contact Rimkus for help in developing strategies that protect your portfolio while meeting performance requirements.
This article aims to offer insights into the prevailing industry practices. Nonetheless, it should not be construed as legal or professional advice in any form.