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Chicago Creates an Energy Rating System

Ryan Freed's picture
Institute for Market Transformation (IMT)

The Institute for Market Transformation (IMT) is a Washington, DC-based nonprofit with national reach that works to unlock energy efficiency in buildings. For more than 20 years, we have...

  • Member since 2018
  • 19 items added with 14,791 views
  • Dec 7, 2017

On November 21, 2017, the Chicago City Council voted to create the Chicago Energy Rating System to increase the visibility of energy performance information for 3,500 large buildings across the city. Chicago is the first U.S. city to develop such a system, which will make energy information easier to understand and more transparent to local residents. Each building 50,000 square feet or greater will receive between zero and four stars in a rating system based on existing and publicly available energy data. The rating system will also reflect any recent energy improvements to buildings. Starting in 2019, building owners will be required to post their rating on their building in a prominent location, and to provide the rating when the building is listed for sale or lease.

Large buildings are one of the most significant contributors to greenhouse gases in Chicago, comprising 20 percent% of the city’s carbon emissions—more emissions than every car and truck on the road in Chicago—and spending over $650 million annually in energy costs. The new ordinance builds on the City’s existing Energy Benchmarking Ordinance, which requires buildings over 50,000 square feet to measure and report energy use once per year. Buildings that have complied for two or three consecutive years to date have saved an estimated $17.8 million in energy costs per year and have reduced weather normalized energy use by up to 4 percent.

The vast majority of the buildings currently required to report energy use under Chicago’s existing energy benchmarking policy receives a 1–100 ENERGY STAR score. These ENERGY STAR scores will be translated into the new four-star rating system, similar to how products or businesses are rated on various online platforms. Buildings that have improved their scores within the past two years will receive an additional star in their rating, providing an incentive to make improvements. The small minority of buildings that do not receive an ENERGY STAR score will be rated based on energy use per square foot as compared to national medians for their building type. Buildings out of compliance with the energy benchmarking ordinance that have not reported their energy use will receive zero out of four stars.

The ordinance also allows the City to share information on each building’s water use, based on information from the City’s Department of Water Management. Building owners will not need to report their water use, since the City already has access to this information, but will be provided an opportunity to opt out of having their water data shared publicly.

Finally, the ordinance does not impose any new costs or reporting requirements on building owners. In addition, buildings will not be required to make changes to improve energy efficiency but will be encouraged to do so under the new Rating System.

By Amy Jewel, City Energy Project City Advisor, City of Chicago

Photo Credit: Pedro Szekely via Flickr

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