Behind-the-scenes: Indy’s Benchmarking Ordinance

July 22, 2021
Headshot of Morgan
Morgan Mickelson

On July 12, the Benchmarking and Transparency Ordinance, Proposal 185, was added to the City-County code governing Indianapolis and Marion County. IMT’s City Solutions Manager Tara Brown has worked closely with Indianapolis leading up to this moment. She interviewed Morgan Mickelson, Director of the city’s Office of Sustainability, to get a behind-the-scenes understanding of what this means. Mickelson stepped into the director position in the spring of 2021 after serving the office since 2019 as a climate policy advisor through the Bloomberg Philanthropies American Cities Climate Challenge.

Why do you think benchmarking is important?

Prior to being the city’s climate advisor, I was an environmental analyst for Mercy Housing and I did benchmarking for their properties nationwide, including in cities like Chicago and Los Angeles where there were already benchmarking ordinances in place. The benchmarking ordinances necessitated our organization to prioritize energy use and billing review. In that process, I would notice billing errors and or find leaks and could sometimes save thousands of dollars for properties. This was particularly rewarding working in the affordable housing sector where every dollar counts. I witnessed first-hand the value this ordinance can provide to organizations. I’m really excited to help scale up savings even more for everyone in Indianapolis while also helping the city meet its climate goals.

What does this ordinance do?

Proposal 185 will encourage energy efficiency and unlock benefits for community and building owners. It will require buildings 50,000 square feet and larger to disclose energy and water consumption to the city using Portfolio Manager. It also applies to city-owned buildings of at least 25,000 square feet. In 2026, the data will be made public, enabling the transparency we’re looking to provide to the real estate community and to everyone in the city.

Why was this ordinance important to pass?

Benchmarking is one of the action items as part of the city’s Thrive Indianapolis sustainability master plan, to fulfill the promises made to our community to create a more resilient Indianapolis by 2030. It will allow us to set a literal benchmark that will help us begin to reduce emissions.

I will say that we often hear from community members representing larger buildings that they already do benchmarking. The purpose of the ordinance is to make benchmarking accessible and transparent to everyone; like the Chicago and Atlanta ordinances did for Mercy Housing. Its passage is spurring the utility to invest in customer-centered solutions like providing energy data in an easy to use format.

Such investment by the utility has benefits to organizations in our community, beyond just the immediate goal of simplifying the act of obtaining utility data for benchmarking.

In a lot of buildings, there are disincentives to investing in efficiency because either the owner pays the bills and the tenants don’t have a reason to conserve energy or the tenants pay the bills and don’t have the ability to pay for large building improvements.

With benchmarking, we aim to make the energy data available to building owners so they will understand building energy use regardless of who pays the bills. In many cases, the amount set aside for utilities is actually just an estimate. With accurate data, it’s easier to see the costs of energy waste and push for improvements so the money that would have gone to utility expenses can be invested elsewhere.  

Who benefits?

Ultimately everyone benefits. Benchmarking helps us understand and reduce energy, which has a number of positive impacts. This GreenLink Analytics report demonstrates the benefits that our building owners and community could see by 2030. We also expect the ordinance to generate 1,400 jobs directly and indirectly related to energy efficiency and could save building owners $194 million in utility bills costs.

Additionally, benchmarking helps our city be more resilient and more equitable. The same analysis revealed that we can expect a carbon emissions reduction of 26 percent within the built environment. Since we’ll be using so much less energy, we’ll also be greatly reducing pollution, and that means we provide our communities better air quality. By 2030, we expect a cumulative savings of $77 million in health care related benefits,, not to mention improving the quality of life for our residents who might otherwise suffer from asthma and other pollution-related conditions. This is really important because the negative effects of pollution tend to fall unequally on community members who can’t afford to move to better housing, further from highways or power plants, and who often already struggle with challenges related to racism and inequity. By using less energy and water, we are making our community better for everyone.

How did feedback from local stakeholders shape the ordinance?

We included stakeholders from the beginning. People asked what the ordinance was going to be and we said, “Well, you’re helping develop the policy.”  The initial discussions helped us refine choices, such as leaving out third-party data audits due their costs and complexity. Another piece of the ordinance that was directly influenced by stakeholders was the timeline. Since we were doing this during a pandemic, we recognized that the real estate community was facing unusual uncertainty and we chose a longer implementation timeline. Additionally, the municipal buildings will start first so the city and community can benefit from lessons learned as the program expands. Our educational outreach component has developed in parallel with the ordinance.

What are your next steps?

We are committed to hitting the ground running with implementation. That means standing up a voluntary program to accept data from building owners that are already collecting data while also reporting on data from all municipal buildings. It’s daunting, but a lot of other cities have done this, and we are learning from them. The Institute for Market Transformation (IMT) and the Bloomberg Philanthropies American Cities Climate Challenge have been really helpful. IMT representatives attended all our advisory groups was incredibly valuable to have an expert in the room. Additionally, IMT has helped connect us with peer cities and to learn from policy successes and challenges. It’s been a great partnership and IMT has been instrumental in helping us both think about the big picture and then collaborating on actual implementation. Together we can make this work.

Program Area(s):

Want to get regular updates from IMT?