BOMA Special Report: Will Energy Star Survive ’25?
The budget zeroes out the office that administers Portfolio Manager, but advocates say there’s more to the story.
Whether Energy Star will still be around next year is a hot topic for property owners, managers and industry associations. This week, the buzz drew a packed house to a panel discussion at BOMA International’s annual conference and expo in Boston.
The speakers argued that the disappearance of Energy Star Portfolio Manager would hit the industry hard. “The reason Energy Star is so important is that it’s free, it’s fair and it’s data that’s been put into a program so you can compare your building to other buildings,” noted David Ray, director of sustainability at NV5.
Focus on the issue intensified in May when the administration released the document informally called the skinny budget, which outlines the annual proposal. The budget would eliminate the Environmental Protection Agency’s Office of Atmospheric Protection, which administers Energy Star Portfolio.
That has prompted real estate organizations and other supporters to step up their outreach to lawmakers. “We’re doing a lot, we’re doing what we need to do, but we can’t take our foot off the gas,” reported John Boling, BOMA International’s vice president for advocacy and building codes.
Energy Star’s impact
Under a 2009 memorandum of understanding, EPA and the Department of Energy jointly administer the program. DOE oversees appliance rating for the program, while EPA’s responsibilities feature the administration of Portfolio Manager and property rating.
Since its introduction in 2000, Portfolio Manager has been adopted as the benchmark energy performance program by a wide range of stakeholders. As noted by Wayne Talbot, a Boston-based director of operations with JLL, those include the U.S. Green Building Council, BOMA International, and many local jurisdictions.
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Among the major cities relying on Portfolio Manager is Boston, host of the current BOMA International event. This year, the city’s Building Energy Reduction and Disclosure Ordinance takes full effect. Portfolio Manager is also used in Canada to assess building performance.
The potential demise of Energy Star Portfolio is raising concerns among those who rely on it, especially considering the severe cutbacks to many other federal agencies. One worried local official told Talbot, “We need a single source of truth.”
Chances of survival
Yet several factors suggest that Portfolio Manager has better-than-even odds of being around in 2026. “The death of Energy Star is greatly exaggerated,” said Duane Desiderio, senior vice president & counsel at The Real Estate Roundtable, in an echo of Mark Twain’s famous quip.
Energy Star isn’t specifically zeroed out in the budget, and according to Desiderio, the latest word from the administration is that no decision has been made about its fate. A major factor in Energy Star’s favor is that the program is established by federal law and is mentioned more than three dozen times in the U.S. code. As a result, “It can’t just be changed willy-nilly without a change in federal statute,” Desiderio noted. Getting rid of Energy Star would require an act of Congress.
In making the case for Energy Star and Portfolio Manager to Republican lawmakers, advocates are focusing on its economic benefits, rather than on its environmental impact. At a cost of less than $40 million per year, Portfolio Manager yields $40 billion in annual energy savings. “We think that message is resonating on the Hill,” Desiderio said.
Another strategy that’s helping build support in Congress, said Desiderio, is being fuel-agnostic and not favoring renewable energy ahead of other sources. As Desiderio put it, that’s because “we need as much power as we can get as quickly as we can get it.”
Even if Energy Star isn’t zeroed out, EPA could hypothetically redirect its funding to other purposes. In that case, Desiderio said, the challenge would be to ensure that staffing is sufficient to continue the program.
Desiderio named four potential outcomes:
- The program continues in its present form
- DOE takes EPA’s part of the program
- Portfolio Manager becomes fee-based
- The program is privatized
As a practical measure to cover the bases in an uncertain time, Ray recommended this practical step: “Keep your data while you have the data, and make sure you have access to it.”
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