New Electricity Efficiency PEER Certification Program Offered for Commercial Real Estate | Practical Law

New Electricity Efficiency PEER Certification Program Offered for Commercial Real Estate | Practical Law

The US Green Building Council (USGBC) introduced the Performance Excellence in Electricity Renewal (PEER) program to improve sustainable energy for commercial real estate. PEER is a voluntary program that establishes metrics and regulations to modernize electrical grids for efficiency and reliability.

New Electricity Efficiency PEER Certification Program Offered for Commercial Real Estate

by Practical Law Real Estate
Published on 26 Jul 2016 • USA (National/Federal)
The US Green Building Council (USGBC) introduced the Performance Excellence in Electricity Renewal (PEER) program to improve sustainable energy for commercial real estate. PEER is a voluntary program that establishes metrics and regulations to modernize electrical grids for efficiency and reliability.
The US Green Building Council (USGBC) introduced the Performance Excellence in Electricity Renewal (PEER) program in 2015 to establish standards and goals to improve the efficiency, reliability, and sustainability of electrical grids. The PEER program is closely modeled on the Leadership in Energy and Environmental Design (LEED) rating system and is administered by Green Business Certification Inc. (GBCI).
The US energy distribution infrastructure is outdated to the point that nearly 50% of the electricity created is lost due to conversion and waste. These inefficiencies double the cost of electricity for commercial real estate owners and tenants, who pay an additional $200 billion a year due to ineffective electrical systems. Aging power stations and transmission lines are also at an increased risk for failure and interruption, which reduces reliability and results in lost productivity and higher operating costs.

PEER Goals

The PEER program has several goals that will benefit commercial real estate owners and tenants:
  • Reduce Costs. Real estate owners and tenants will benefit from reduced operational costs as electricity costs decrease. Cost savings will likely be the driving force for recruiting volunteers into the PEER program.
  • Improve Reliability. Unreliable electrical sources can have devastating effects on businesses. In an office context, hours of employee productivity can be lost if the electricity goes out. In the retail industry, credit card sales cannot be processed and perishable items can be wasted if cooling systems fail.
  • Reduce Vulnerability. As our electrical generation facilities and distribution grids age, commercial real estate becomes more susceptible to interruptions and failures. The PEER program endeavors to modernize electrical grids to reduce vulnerabilities and prevent service interruptions and failures by identifying systems that need to be updated or replaced.
  • Improve Efficiency. Electrical generation currently wastes about half of the energy that goes into its creation. The PEER program seeks to limit the amount of energy lost through conversion and waste. PEER also aims to obtain additional efficiencies by finding ways to reroute electricity during peak usage times to prevent interruptions.
  • Create Partnerships. PEER seeks to create partnerships amongst stakeholders, electricity suppliers, and utilities to help foster communication, share information, and identify problem areas. These partnerships can help quickly solve interruptions and may help unlock hidden cost savings.
  • Eliminate Waste. Waste occurs through the conversion of energy used to create electricity and through the loss of electricity as it is distributed throughout the grid. Modernization of the grid, distribution lines, and generation facilities can help prevent waste.
  • Benefit the Environment. The overarching benefit of the PEER program is the benefit to the environment. Modernizing US electrical systems will decrease carbon emissions and the use of natural resources. The PEER program also encourages the use of renewable energy credits and the adoption of clean and efficient energy.

Practical Implications

The PEER program is an important initiative for commercial real estate owners because it could significantly reduce energy costs, while protecting the environment. In return, this reduces the operational costs for commercial tenants, which further drives demand for leases at certified green buildings.
For more information on green buildings, see Practice Notes, Green Buildings: Laws and Practice and Owning and Leasing Green Real Estate.