Philadelphia Passes Mandatory Building Energy Efficiency Tune-Up Bill – Brad A. Molotsky, Esq., Duane Morris LLP

Philadelphia’s City Council unanimously passed a bill requiring owners of non-residential commercial buildings larger than 50,000 square feet to perform regular building tune-ups to improve their energy efficiency performance.

This policy marks Philadelphia’s first mandate regarding building energy performance improvements and is intended to help meet Mayor Jim Kenney’s clean energy goals to reduce citywide carbon emissions 80% by 2050.

The Bill requires small low- or no-cost adjustments to existing building energy systems and controls that improve their energy efficiency performance. According to the Institute for Market Transformation (“IMT”), these minor tweaks on average result in 10-15% annual energy savings, more comfortable tenants, and less equipment failure issues down the road.

Philadelphia’s new law builds upon its prior 2012 mandatory energy benchmarking policy and program. The 2012 benchmarking law requires building owners to measure and publicly report their yearly energy usage using Energy Star’s Portfolio Manager (a free tool available from the EPA).

Since making a building more energy efficient requires professionals to work directly in that building, energy efficiency jobs typically lead to higher local employment, as these jobs tend to be locally-based jobs that cannot really be outsourced.

Following Seattle, Philadelphia is the 2nd city in the U.S. to enact a building tune-up policy, and are several other key big cities have taken similar action through laws such as retro-commissioning or energy audit requirements, including Atlanta, Boston, and Los Angeles.

Per IMT, a few local jurisdictions are going even further by enacting building performance standards to reduce carbon emissions and waste. The New York City and Washington, DC policies that were passed earlier in 2019 are some of the most ambitious climate actions cities have taken to date, requiring building owners to achieve a certain level of performance that is set by the cities, with sizable fines for those who do not comply.

As cities account for a high percentage of nationwide greenhouse gas emissions, cutting the energy use from their buildings will meaningfully contribute to reducing our national carbon footprint.

To date, only a few cities have actually mandated building energy performance improvements. Philadelphia, has now taken this step forward.