ENERGY STAR status a cross-border worry

ENERGY STAR is somewhat insulated against ill winds blowing from the executive branch of the United States government, making the program resistant to a sudden takedown, but still vulnerable to coordinated efforts through legislative channels. The entity that encompasses a range of widely embraced labelling, certification and benchmarking products, in both the U.S. and Canada, is referenced in the U.S. Energy Policy Act and can’t simply be dismantled via a presidential edict.

As well, Canadian registrants in ENERGY STAR Portfolio Manager — the benchmarking tool that underpins in-house energy management, voluntary certification programs and mandatory reporting exercises — have the assurance their data is separate and secure in a digital repository that Natural Resources Canada (NRCan) manages in this country.

“Natural Resources Canada collaborates closely with the U.S. Environmental Protection Agency (EPA) to deliver and maintain the ENERGY STAR Portfolio Manager tool and its associated web services in Canada,” an NRCan spokesperson confirms. “The EPA does not have access to Canadian data. NRCan maintains oversight of this environment to ensure continued protection and privacy of Canadian information.”

Nevertheless, the U.S. White House has clearly indicated its intent to reset energy and environmental priorities. The President’s preliminary budget recommendations to the U.S. Congress for the 2026 fiscal year urge extensive cuts at both the Environmental Protection Agency, which oversees ENERGY STAR, and the Department of Energy’s (DOE) energy efficiency and renewable energy division.

Both the EPA and DOE have discretionary budgets, meaning that Congress must annually approve spending allocations. The White House wish list, issued May 2, specifically targets ENERGY STAR through its recommended elimination of the EPA’s Atmospheric Protection Program, which would yield a USD $100-million operational cost saving within the context of an envisioned USD $4.2-billion reduction across all the Agency’s programming envelopes. The recommendations also suggest slashing more than USD $2.5 billion from the DOE’s energy efficiency and clean energy programs as part of a larger USD $20-billion departmental decrease.

Thus far, the U.S. administration’s aim seems largely focused on easing equipment and appliance performance standards that it perceives as hindrances for manufacturers and consumers. However, a collateral hit to ENERGY STAR Portfolio Manager (ESPM) would significantly undermine ability to track energy/water use and calculate greenhouse gas (GHG) emissions in the buildings sector.

More than 35,000 commercial, institutional and multifamily buildings in Canada are currently registered for the program. This likewise makes them eligible for ENERGY STAR certification, which is awarded to buildings that score at least 75 on the 1-to-100 scale, placing them in the top quartile of performers.

Portfolio Manager is also:

• the reporting platform for Ontario’s mandatory energy and water reporting and benchmarking (EWRB) initiative and the City of Toronto’s equivalent bylaw for buildings larger than 50,000 square feet;
• the official yardstick tied to prerequisites and credits in the LEED and BOMA BEST certification programs; and
• a recognized option for North American participants to report asset-level data to the GRESB global assessment and benchmark for commercial real estate portfolios.

“ENERGY STAR Portfolio Manager is valued because it is free and it allows comparison against a massive pool of consistent, anonymized data. It can be leveraged for government and private programs with very low friction,” observes Eric Chisholm, co-founder and principal of the engineering and sustainability consultancy, Purpose Building Inc. “There is nothing like it. The alternatives that exist don’t accomplish all of those things.”

Enabling energy/water use and emissions tracking

Portfolio Manager was launched in the U.S. in 2000 and became available in Canada in 2013 through a Canada-U.S. government agreement. Since then, there has been steadily growing uptake of a program that provides the means to monitor energy/water use and emissions output from building-to-building and year-to-year across a portfolio.

Within a portfolio, it can assist in spotting the best candidates for retrofit investment, and tracking and verifying the results of such work, all while building a historical chronicle of performance. At a national scale, both NRCan and the U.S. EPA pull statistics for average, best and worst performance in various different building types from the larger database so owners/managers can compare their buildings to those thresholds.

As a platform for mandatory reporting exercises like EWRB, it gives administrators both easy access to, and comparative capabilities for, a large number of obliged participants. A Portfolio Manager shutdown would likely disrupt or derail various reporting and performance standards initiatives in jurisdictions across Canada and the United States, including the building emissions performance standards (BEPS) now in development stages in Toronto.

“The City is going to need to look at backup plans or different scenarios for what might happen in the U.S.,” reflects Bryan Purcell, vice president, policy and programs, with The Atmospheric Fund (TAF), a regional agency that supports climate-related programs in the Greater Toronto and Hamilton Area. “It would be a big effort to transition to new tools, not just for private industry that uses it in their buildings, but also for the broader ecosystem. The governments and institutions that do the training and awareness-building would have to really get to work to enable the industry to transition to a new approach.”

Should the U.S. EPA cease to offer the program, he speculates that non-governmental organizations serving the sustainable buildings sector might be able to take it over, or NRCan might continue operating it Canada. There are some for-profit, private sector providers of similar services, but none are clear leaders in the market and there would be more likelihood of inconsistent data with the introduction of multiple players into Portfolio Manager’s void. LEED and BOMA BEST would also require adjustments.

“They would need to reestablish some other point-based system. Before adopting ENERGY STAR, each of them had a different way of awarding points and then came to the conclusion that ENERGY STAR was a better way,” Chisholm recalls. “So, this would mean moving back in time for those programs.”

The spectre of more fragmentation conflicts with the efforts of the global organization, Open Standards Consortium for Real Estate (OSCRE), to develop and promote environmental data standards to guide consistent collection, management, interpretation and reporting of sustainability-related data. That’s become increasingly necessary to meet regulatory and investor demand for reliable information for gauging asset value and risk exposure, and to train the artificial intelligence (AI) models expected to open up new predictive and analytic capabilities.

“If ESPM were removed from the market, certainly having global standards for how to do benchmarking and tracking and defining variables is really helpful,” Purcell says. “The emissions tracking piece is more complicated, which is what makes it important to have a common approach for the sake of comparability. There is only one method of tracking your electricity or your gas use; it’s more-or-less straightforward how many kilowatt-hours or cubic metres you’re using. Emissions require more calculations; there are different factors that can be applied, especially around electricity. So if we were to fracture into multiple, smaller platforms, there’s a risk they’d all be calculating emissions differently and it would be tough to compare performance across different owners and geographies.”

Sudden shutdown unlikely, but possible disruptions foreseen

None of those prospective dilemmas appear to rank as a concern for the U.S. administration. To justify its proposal to eliminate the Atmospheric Protection Program it states: “The Atmospheric Protection Program is an overreach of Government authority that imposes unnecessary and radical climate change regulations on businesses and stifles economic growth.”

Conversely, supporters like the U.S. Green Building Council note that the entire ENERGY STAR program costs about USD $32 million annually, while enforcing performance standards and encouraging consumer choices that engender billions of dollars of annual energy cost savings across the U.S. economy.

“Thousands of product manufacturers, utilities, real estate companies and local governments rely on the program to create value, adopt energy efficiency practices and manage energy use,” maintains Elizabeth Beardsley, a senior policy counsel at USGBC. “Shuttering it would only cause confusion and raise costs.”

Meanwhile, legal practitioners advise that it would take more manoeuvring than unleashing the Department of Government Efficiency (DOGE) to accomplish that outcome. Scott Segal, a partner and specialist in energy, environment and natural resources law with Bracewell LLP, based in Washington D.C., parsed out some of the divisions between presidential (executive), congressional (legislative) and judicial (courts) powers during a recent webinar sponsored by the U.S. Air-conditioning, Heating and Refrigeration Institute (AHRI). The White House has appealed to Congress to eliminate funding for ENERGY STAR because Congress holds the authority in this case, and it would need to amend legislation before the program could be definitively dismantled.

“The Energy Policy Act references it, sets it up, authorizes it,” Segal said. “It is clear to me that ENERGY STAR is established by statute, and what’s established by statute cannot be eliminated by executive order or administrative reorganization.”

There is leeway to meddle, though. He hypothesizes the White House is attempting to marginalize ENERGY STAR through the authority it does have to reorganize the EPA. Thus far, that’s been aimed at the EPA’s Office of Air and Radiation, which houses the Atmospheric Protection Program and ENERGY STAR.

“They are reducing some programs, expanding other programs,” Segal said. “Even if they didn’t try to reorganize it out of existence, they can always slow it down.”

Canadian registrants are promised forewarning of potential upheaval. They may also want to consider downloading their data as an extra precaution.

“Should there ever be any anticipated changes to the operation or availability of ENERGY STAR Portfolio Manager, NRCan would communicate proactively with Canadian stakeholders, including building owners and utilities, to provide timely and transparent updates,” the NRCan spokesperson reiterates. “NRCan backs up Canadian user data on a quarterly basis in secure Canadian locations. While the system is designed with strong safeguards, NRCan also recommends that users periodically back up their data for additional assurance.”

Purcell suggests the Canadian government should be exploring further possibilities.

“Could there be ways to take over the ESPM and grow it within Canada if the U.S. does follow through on withdrawing its support?” he asks. “I’m not sure how feasible that is, but it would be good to know that the federal government is taking this seriously and looking at contingency plans because many of our national energy efficiency efforts are also tied to ENERGY STAR.”

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