Indianapolis grapples with low compliance on energy benchmarking requirement for large buildings

Emissions from buildings make up about two-thirds of the greenhouse gas footprint of Indianapolis. So when the city committed to slash emissions, in its 2019 climate action plan and then as part of the Bloomberg American Cities Climate Challenge in 2020, leaders knew where they had to start.

A 2021 ordinance requires all buildings over 50,000 square feet and publicly-owned buildings over 25,000 square feet to do energy benchmarking and report results to the city, to be made publicly available by 2026. 

The deadline to comply was July 1, 2024. But at year’s end, only about 20% of the 1,500 buildings covered had complied — even though the process can be done in a matter of hours using EPA’s ENERGYSTAR Portfolio manager software. The city also hosted workshops to help walk building managers through the process.

Now the city’s challenge is to boost benchmarking compliance. The penalties for failing to comply are low: fines of $100 the first year and $250 yearly after that. Chicago’s 2013 benchmarking ordinance, by comparison, includes fines of $100 for the first day of a violation and up to $25 each day thereafter, with a maximum fine of $9,200 per year – and the city has a much higher compliance rate.

Lindsay Trameri, community engagement manager for the Indianapolis Office of Sustainability, said the office is continuing outreach, including sending postcards to all relevant building managers and owners. 

“We’re not assessing fines yet, but we’re making sure they’re aware this isn’t a city program that’s going away, it is indeed local law,” Trameri said. “And there are benefits to be gleaned from participating. It might cost hundreds of dollars not to participate, but you could save thousands if you participate and take it seriously.”

Trameri said 27 publicly-owned buildings in the consolidated city and county government must be benchmarked, and the city is planning to use about $800,000 worth of federal Department of Energy funding to hire an energy manager “who will be solely focused on looking at city-owned buildings and how to make them more energy efficient.” 

In Indiana, reducing buildings’ electricity use is particularly urgent since the state got about 45% of its power from coal in 2023. The benchmarking mandate doesn’t require buildings to take any action based on their energy results, but benchmarking often motivates building owners and municipalities to invest in savings, experts say. 

Cities participating in the Bloomberg program “saw 3 to 8 percent energy reductions and millions in savings, with nearly 400 million square feet now covered by benchmarking policies and over 37,000 energy audits completed,” said Bloomberg Philanthropies spokesperson Marshall Cohen. 

Success stories

Though overall compliance is low, some major public and private entities have completed benchmarking in Indianapolis, including the airport, convention center, the Indianapolis Museum of Art, Target and JC Penney. 

Phil Day, facilities director for the museum, noted that it’s crucial for museums to keep consistent levels of humidity and temperature. That means high energy use, and also vulnerability to blackouts or energy price spikes. Benchmarking has helped him develop plans for reducing natural gas and electricity use with smaller boilers and heat pumps distributed throughout the facilities, a possible geothermal chilling system, and better insulation. These innovations should save money and make the museum more resilient to energy disruptions.

“Museums aren’t typically known as an energy efficient facility, but it is always high on my priority list in everything we program or replace,” Day said.

The firm Cenergistic has done benchmarking since 2017 for Indianapolis Public Schools, and identified more than $1 million in wasteful energy costs that could be cut across 71 schools. Under Cenergistic’s contract, it is paid half of the energy savings it secures. Seventeen school buildings have obtained EPA Energy Star status based on their energy efficiency improvements, Cenergistic CEO Dennis Harris said. 

“Benchmarking provided a clear starting point by identifying high-energy-consuming facilities and systems,” Harris said. “Cenergistic energy specialists track energy consumption at all campuses with the company’s software platform, identifying waste and driving conservation. By consistently reviewing this data, Cenergistic continues to work with IPS to make data-driven decisions, set measurable goals, and continually refine its strategy for maximum impact.” 

Trameri said the schools’ success is “a great message to point to. If they can do it, we can do it. Of course, we want those millions to go back into classrooms and teachers and students versus out the door for utility costs.”

Learning by example

Trameri said in developing its benchmarking program and ordinance, Indianapolis has relied on guidance and lessons from other cities including Columbus, Ohio and Chicago, both fellow participants in the Bloomberg challenge. 

In Chicago, about 85% of the 3,700 buildings covered by the ordinance are in compliance, said Amy Jewel, vice president of programs at Elevate, the organization that oversees Chicago’s program. She said nine out of 10 buildings complied even right after the ordinance took effect, thanks to years of organizing by city leaders and NGOs like the Natural Resources Defense Council.

“A large number of building owners recognized this was coming. They engaged in the process, and saw their fingerprints within the ordinance,” said Lindy Wordlaw, director of climate and environmental justice initiatives for the city of Chicago. 

Chicago passed an additional ordinance creating an energy rating program, where buildings receive a score of 0 to 4 based on their energy benchmarking results. An 11-by-17-inch placard with the score and explanation must be publicly posted, “similar to a food safety rating for a restaurant,” Wordlaw said.

In 2021, Chicago reported that median energy use per square foot had dropped by 7% over the past three years, and greenhouse gas emissions had dropped 37% since 2016 in buildings subject to the ordinance. City public housing and buildings owned by the Archdiocese were among those to do early benchmarking and investments.

Along with Philadelphia, New York and Washington D.C., Chicago was among the nation’s first major cities to institute benchmarking. Jewel said they hope to keep sharing lessons learned.

For example, “it’s actually pretty hard to come up with the covered buildings list,” Jewel noted, since there is no central list of all buildings in a city but rather various records “all used for slightly different purposes — the property tax database, different sources tracking violations. It took a bit of time to get that list together, and it takes time to maintain it as buildings are constructed or demolished.”

In Indianapolis, Trameri said they are hopeful more buildings will get with the program as awareness grows about the requirement.

“There has always been evidence that you can’t manage what you don’t measure,” said Trameri. “It’s a market-based strategy. Truly once a facilities owner or manager is able to look at their energy usage over a month, 12 months, or multiple years and make evidence-based decisions based on that data, it will affect your bottom line, and those savings you can reinvest into whatever your organization’s mission is.”