In 2014 Seattle pushed the envelope and set the stage for innovative energy programs to encourage a smaller energy footprint for our region.
With the 2012 Seattle Energy Code (SEC) that came into effect December 2013, building owners in Seattle were given the opportunity to push energy performance in their buildings by using an innovative provision called the ”target performance path.”
Also in 2014, Seattle City Light, one of the city’s two electric utilities, concluded a new pilot program called Pay for Performance that gives owners incentives for meeting their stated design goals.
Most recently, the first commercial application of MEETS (Metered Energy Efficiency Transaction Structure) in the Bullitt Center, a net zero office building, established a landmark methodology to monetize the value from energy efficiency and convert it into a tradable commodity similar to Renewable Energy Certificates (RECs).
Target Based Performance
All new construction submitting for permits after December 27, 2013 fall under the new code. The standard prescriptive path in this new version of the Seattle Energy Code is 10-14% more efficient than ASHRAE 90.1-2010, the energy standard published by ASHRAE in a three-year cycle. Among the advanced measures in the Seattle code are:
- The requirement for improved insulation
- Ensuring air leakage control via envelope commissioning
- Provision of lighting controls that respond to daylight and occupants
- Putting in place automatic plug load controls for controlling general-purpose electrical outlets during non-use hours
- Installing a sub metering system for each end use and pairing that with a real time graphic display dashboard or meter
- Mandatory commissioning of all new equipment
- Ensuring rooftops are ready for future solar panel installation
Owners that do not want to be restricted by the prescriptive option can choose the Target Performance Path that allows the owner to create the most suitable suite of energy efficiency strategies for the project.
In addition to the design component for energy efficiency, a measurement and verification component is required to verify that the building continues to perform at 10-20% better than code one year after occupancy.
The energy code specifies a financial penalty if post occupancy energy consumption exceeds the target. Up to 50% of the financial penalty may be made available to the owner to install upgrades that will bring the building back to the planned level of energy efficiency.
The list below shows the target energy use that buildings need to meet using the performance path. While performance paths have been around for some time both in ASRHAE 90.1 and in the IECC standards, SEC’s path is unique in that buildings have to demonstrate the energy savings claim predicted during the design phase.
- B-occupancy office: 40 kBTU/ ft2 /yr
- B-occupancy medical office: 50 kBTU/ ft2 /yr
- R-2 occupancy multi-family: 35 kBTU/ ft2/yr
- S-1 & S-2 occupancy warehouse: 25 kBTU/ ft2/yr
- E-occupancy school: 45 kBTU/ ft2/yr
- M-occupancy retail: 60 kBTU/ ft2/yr
- I-2 occupancy hospital: 150 kBTU/ ft2/yr
- Parking garages, including unconditioned and conditioned spaces, within the above occupancies shall be calculated separately at: 10 kBTU/ ft2/yr for enclosed garages
Source: Seattle Energy Code 2012, C402.1.5.2 Energy use targets.
Pay for Performance Program
Seattle City Light ran a pay for performance incentive pilot in 2012 linked to the target performance path. A paper describing the success and challenges of the program was published in the American Council for Energy-Efficient Economy Summer Study proceedings (ACEEE) this year.
The program offered financial incentives for projects that demonstrate energy efficiency during the operation phase beyond code. It is aimed at supporting the performance based code compliance pathway discussed in the section above.
The program provides support for the capital upfront cost required to cover improved efficiency HVAC, or lighting, insulation etc. The incentive is structured in two-parts. The first portion of the incentive is made available at the conclusion of construction and the second payment is made based on the verified energy savings at the end of a 12-month monitoring period.
The overall incentive rate offered was in the range of $0.375 / kWh. This translates to approximately 30 cents/SF for a 10% energy savings beyond code for a multifamily building.
It is not clear if SCL is exploring the rollout of this program to accompany the recently adopted 2012 version of Seattle energy code. However, the proof of concept shows that the availability of this kind of program would serve as an incentive to further the adaptation of the target based performance path by building owners.
Metered Energy Efficiency
Traditionally, the payback for investments in energy efficiency is achieved solely through the reduction in energy cost paid to the utility. Metered energy efficiency transactions (MEETS) is a new financial structure that allows building owners to receive payments from the utility company for amount of energy saved compared to a pre-determined baseline energy consumption.
The Bullitt center is the first to pilot a MEETS agreement entering into a 20-year power purchase agreement with Seattle City Light whereby a smart meter will measure the savings compared to a baseline energy performance. The Center will receive monthly payments for energy savings achieved.
With the MEETS financing model, the value from energy efficiency is literally two-fold. Not only is there a reduction in energy bills, but the owner/ investor gets paid a pre-decided fixed monthly return from the utility partner for continued energy performance over a long-term period.
This reliable return on investment will open the door for more third-party investors to participate and invest in energy efficiency programs.
Utilities in California, New York and other cities are now looking at MEETS to support their carbon and energy reduction goals. Data driven energy performance has become largely possible due to the advances in data monitoring devices and data analytics that allow real time feedback systems.
While rigorous code regulation requires owners to up their game on energy efficiency, innovative financing models like MEETS and pay-by-performance programs incentivize owners to keep their buildings performing at peak efficiency.
Overall, it’s very exciting time in Seattle. The pull-push partnership created by cutting edge regulation and bold utility financing structures that prompt investment opportunity in energy efficiency promises an era of great success for implementing innovative energy programs.
Thulasi Narayan is a manager and LEED® AP at Paladino Seattle.