Tenant Star: A New Program for Energy Efficiency—in Limbo

On January 20, 2015, by a vote of 94 to 5, the U.S. Senate authorized the Environmental Protection Agency to create a voluntary “Tenant Star” program whose mission is, with the use of market incentives and other considerations, to encourage tenants of leased space to work with the owners to design, build, and maintain new energy-efficient buildings, as well as retrofit old ones to that end.

The overarching idea is to use tenant demand to drive energy efficiency—a market solution, in other words, over yet another regulation—as well as to draw on tenant-driven initiatives to reduce energy usage and realize other efficiencies. That idea met with a friendly reception on the floor of the U.S. House of Representatives, which approved its own version of the bill a year ago, on March 5, 2014. The “better buildings” provision of HR 2126, the Energy Improvement Act of 2014, stipulates that the act

“establishes a voluntary, market-driven approach to aligning the interests of commercial building owners and their tenants to reduce energy consumption. It establishes a Tenant Star program—a voluntary certification and recognition program—within Energy Star to promote energy efficiency in separate spaces. [The Department of Energy] would also be required to complete a study on feasible approaches to improving the energy efficiency of tenant-occupied spaces in commercial buildings.”

Building on the established Energy Star framework, the act also requires the General Services Administration (GSA) to develop and publish a set of uniform guidelines establishing performance baselines and other standards so that all parties will know what goals to reach for. Moreover, the Senate bill would effectively amend the existing Energy Independence and Security Act of 2007 to mandate greatly improved standards of energy efficiency in commercial buildings, and it would require the Department of Energy to prepare and publish a report to Congress detailing energy efficiency in those buildings.

The House bill was introduced in 2013 by David B. McKinley (R-WV), an engineer with extensive experience working on government-funded construction and renovation projects, including rebuilding the historic Capitol Theatre in Wheeling. After clearing the Committee on Energy and Commerce, McKinley’s bill, which drew heavily on input from the U.S. Green Building Council, passed easily through the House. In the Senate, the lead sponsors were Rob Portman (R-OH) and Jeanne Shaheen (D-NH), building on legislation also introduced in the 113th Congress by Michael Bennet (D-CO) and Kelly Ayotte (R-NH).

It did not hurt matters that both the House bill and its Senate counterpart require no funding on the part of any authority beyond those agencies, and that the Tenant Star program is indeed voluntary, requiring no fee or cost on the part of anyone who participates. What now remains, assuming that it is signed into law, is for the program to spread into the marketplace.

Assuming that it is signed into law: There’s the rub. The Senate version of the Tenant Star program was part of a bundle of legislation that includes construction of the controversial Keystone XL pipeline, which met with a presidential veto on February 24. Deliberating on March 4, the Senate failed to override the veto, and the House has said that it will not take the matter up. For the moment, that leaves the Tenant Star program in limbo.