Energy Benchmarking: What It Is and Why Landlords (and Cities) Ask for It
Energy benchmarking means tracking a building's energy use intensity — energy consumed per square foot per year — and comparing it against similar buildings, most commonly using the free ENERGY STAR Portfolio Manager tool from the EPA. Commercial landlords often ask tenants for usage data to calculate a whole building's benchmark score, and a growing number of cities, including New York City and Chicago, legally require larger commercial buildings to benchmark and sometimes publicly disclose their energy performance — though this varies a lot by city and is far from universal.
What benchmarking actually measures
Raw energy usage on its own doesn't tell you much — a 200,000-square-foot office building will obviously use more electricity than a 2,000-square-foot retail shop. Benchmarking normalizes for that by calculating energy use intensity (EUI), typically expressed as energy consumed per square foot per year, and comparing it to a national median or a peer group of similar buildings by type, size, and climate. A building scoring well relative to its peers is performing efficiently for its category; one scoring poorly may have equipment, insulation, or operational issues worth investigating.
ENERGY STAR Portfolio Manager is the standard tool
The EPA's ENERGY STAR Portfolio Manager is the tool most commonly used for this in the United States — it's free, and building owners feed it basic building information along with monthly utility bill data to generate an energy use intensity score and, for eligible building types, a 1–100 ENERGY STAR score compared against similar buildings nationally. It's also the tool most city benchmarking ordinances require or reference directly, so a building already benchmarking voluntarily is typically already positioned to comply with a local mandate if one applies.
Why a landlord asks tenants for usage data
In a multi-tenant commercial building, the landlord typically only has full visibility into common-area and building-wide energy use — individual tenant suites are often billed separately, directly by the utility. To calculate an accurate whole-building benchmark score (whether for their own management purposes, a lender or investor requirement, or a city mandate), the landlord needs each tenant's usage data added to the total. This is why commercial leases increasingly include a clause requiring tenants to share utility usage data or authorize the utility to share it directly with the landlord or its benchmarking platform.
City benchmarking and disclosure ordinances vary a lot
A growing number of U.S. cities have adopted building energy benchmarking ordinances that require large commercial (and often multifamily) buildings above a specific square-footage threshold to report their energy use annually, and in many cases to publicly disclose the results. New York City's Local Law 84 requires covered buildings — generally those of a defined minimum square footage — to benchmark annually using Portfolio Manager, and Chicago's Energy Benchmarking Ordinance similarly covers the city's largest municipal, commercial, and residential buildings and publicly discloses their performance after an initial grace period. These are two well-documented examples, but the specific size thresholds, reporting deadlines, penalties, and whether results are made public differ significantly by city — some cities have no such requirement at all — so whether a mandate applies to a given building depends entirely on its specific location.
What this means for a business
Whether you're a landlord managing a multi-tenant building or a tenant being asked to share usage data, benchmarking is generally a low-cost, low-risk exercise — it doesn't change your rate or contract, and it can surface real efficiency opportunities (an unusually high EUI relative to peers is often the first sign of aging equipment or an operational issue worth fixing). If your business owns or manages a building in a city with a benchmarking ordinance, checking your specific compliance requirements — threshold, deadline, and disclosure rules — with your local building department is worth doing well before the reporting deadline, since these mandates typically carry penalties for late or missing filings.
Frequently asked questions
What is energy benchmarking for a commercial building?
Energy benchmarking is the practice of tracking a building's energy use intensity — energy consumed per square foot over a year — and comparing it against similar buildings, most commonly using the free ENERGY STAR Portfolio Manager tool. It lets an owner or tenant see whether a building is performing well or poorly relative to comparable properties, rather than just looking at raw usage in isolation.
Why does my landlord want copies of my business's utility bills?
In a multi-tenant building, a landlord often needs each tenant's usage data to calculate the whole building's total energy performance for benchmarking, especially where the landlord is subject to a city energy disclosure ordinance or simply wants to track building performance for its own operating and leasing purposes.
Do all cities require commercial building energy benchmarking?
No — benchmarking and disclosure ordinances exist in a growing number of cities, including New York City and Chicago, but they are not universal and typically apply only to buildings above a specific size threshold. Requirements vary significantly by city, so whether your building is covered depends on your specific location.
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