According to Building Green, the suit was filed on behalf of mechanical systems designer Henry Gifford, owner of Gifford Fuel Saving. Among other allegations, the suit argues that USGBC is fraudulently misleading consumers and fraudulently misrepresenting energy performance of buildings certified under its LEED rating systems, and that LEED is harming the environment by leading consumers away from using proven energy-saving strategies.

Those are some very damning allegations, if they are true. The crux of Gifford’s allegations revolve around this:

The suit alleges that USGBC’s claim that it verifies efficient design and construction is “false and intended to mislead the consumer and monopolize the market for energy-efficient building design.” To support this allegation Gifford relies heavily on his critique of a 2008 study from New Buildings Institute (NBI) and USGBC that is, to date, the most comprehensive look at the actual energy performance of buildings certified under LEED for New Construction and Major Renovations (LEED-NC). While the NBI study makes the case that LEED buildings are, on average, 25%–30% more efficient than the national average, Gifford published his own analysis in 2008 concluding that LEED buildings are, on average, 29% less efficient.

USGBC hasn’t commented yet, obviously due to the pending litigation, but Gifford is certainly talking…

Gifford said, “I’m afraid that in a few years somebody really evil will publicize the fact that green buildings don’t save energy and argue that the only solution [to resource constraints] is more guns to shoot at the people who have oil underneath their sand.”

“Nobody hires me to fix their buildings,” he said. Though not an engineer, Gifford is respected in energy efficiency circles for his technical knowledge. He told EBN that he has lost out because owners are fixated on earning LEED points, and he doesn’t participate: “Unless you’re a LEED AP you’re not going to get work.” That’s unfair, he claims, because while USGBC says that its product saves energy, it doesn’t. Gifford says that his services actually save energy, and he’s prepared to prove it by sharing energy bills from buildings he has worked on.

What about in this economy?

Prior to the recession, LEED-certified buildings enjoyed noticeably faster lease-up times and lower vacancy rates in addition to commanding higher rental premiums compared with their non-green peers.

However, currently, vacancy rates have remained relatively high for Class A LEED-certified buildings, with a national average of 37.6% compared with 25.8% for all Class A office.

Why?

Many of the new Class A office buildings that started development before the recession and came online after the economy had begun to weaken were LEED certified buildings. As a result of the economy, many new office buildings have struggled to attract tenants and have higher than average vacancy rates.

Miller then analyzed two sets of office buildings: pre-recession new builds (completed 2000-2005) and post 2005 new builds.

Pre-recession completed Class A LEED office buildings average $28.50 per square foot in rent with an average vacancy rate of 6.5%, compared with $25.89 per square foot in average rent and an average vacancy of 10.7% for all Class A office stock. That’s a 10% rent premium!

In post 2005 completed buldings, the LEED certified buildings average $33.24 per square foot compared to $30.11 per square foot for all Class A office. Again, that’s over 10% rent premium!

However, the national vacancy rate for all Class A LEED office properties was 36.4% at the end of the first quarter of 2010, compared with 31.1% for all Class A multi-tenant office property. That makes it about a push in this economy, but as the economy strengthens that rental premium will pay big long-term dividends. Plus, annual operating expenses should be less in the LEED building, tilting the balance again to green.

Don’t forget that Green Squared promotes Green that makes cents! — (i) “green”, as in environmental sustainability, and (ii) “green”, as in cost savings. That’s Green²; that’s Green Squared!

USGBC’s certifications for LEED for Existing Buildings (LEED-EB) jumped sharply from less than 15% of all certifications in early 2008 to more than 35% in second-quarter 2010. At the same time, the proportion of LEED for New Construction (LEED-NC) awards has fallen from nearly 60% of all certifications in late 2008 to about 30% at midyear 2010.

I view that as a very positive sign in the green retrofit space, but it is also an indicator of the drastic slowdown in all new construction. It likely also has something to do with the rush in late 2008 to get grandfathered in under the “old” LEED NC rules, versus the new LEED NC 2009 rules.

The city of Houston announced a new initiative called the Green Office Challenge with the goal of getting property owners and managers across the city to reduce their energy consumption, water use and waste, as well as encourage more office tenants to do things like recycle, car pool and use eco-friendly products.

A key component of the initiative includes an energy-efficient loan program that would provide an incentive to those concerned about the costs of going green. Later this fall, the city plans to offer low-cost loans to property owners and tenants, providing the money goes to reducing their energy usage. This will be part of Houston’s answer to some of the issues surrounding PACE financing. (See earlier blog article titled, “Four Texas cities eye PACE program”)

“People like the idea of doing energy-efficiency improvements, but they still get nervous about that upfront capital,” said Laura Spanjian, the mayor’s director of sustainability.

The details of the program are not yet finalized but it sounds as though the city will have about $7 million to make energy-efficiency loans at less than 3%.

Other Houston Greening Facts:
No. 8 in the nation in the number of LEED-certified buildings with 89
No. 6 in the nation in the number of Energy Star-rated buildings with 133

For more Houston green facts, see our notes from the recent Clean Air Through Energy Efficiency where Spanjian spoke.

The conference was opened by Austin Mayor Lee Leffingwell, C. Donald Babers, Regional Administrator for Region VI, U.S. HUD and Texas Public Utility Commission Chairman Barry Smitherman.

Smitherman provided some interesting Texas/ERCOT stats:

+ 1.7 million smart meters are installed as of July 31
+ 6 million will be installed by 2013
+ 9300 megawatts from wind in ERCOT footprint (900 MW more in Texas but out of ERCOT footprint)
+ 18,500 megawatts from wind in ERCOT planned by 2013 (that would be 20-25% of load)
+ There is a proposed rule for NON-WIND renewable target of 500 MW (most likely, solar)

From Dub Taylor of the State Energy Conservation Office, he provided this data of the fuel mix in Electricity in Texas for 2009:
+ Natural Gas 51%
+ Coal 34%
+ Nuclear 10%
+ Renewables (basically wind) 4%

One of the highlights of the conference, of which there were many, was the presentation by the new City of Houston Sustainablity Director, Laura Spanjian (we touched on Spanjian earlier this month on this blog here), summarizing the Houston’s achievements in sustainable growth. In March of this year the City of Houston was recognized for being ranked sixth on the U.S. Environmental Protection Agency’s 2009 list of cities with the most energy efficient buildings.

Ms. Spanjian woke the crowd up after lunch with an inspired delivery of City of Houston accomplishments.

Solar and Wind initiatives include: A 100KW solar system at George R. Brown Convention Center funded jointly by the Houston Endowment ($850k), BP ($100k) and CenterPoint ($50k) and the purchase of 2 billion kwh (50 MW of power) from Texas Wind Farms over the next 5 years. The EPA ranks the City of Houston as the #1 in terms of renewable energy purchased by a municipality.

Other energy efficiency initiatives include the LED traffic lights at 2,000 intersections which have a cost savings of $3.6M per year, the LED Streetlight Pilot Project which are up to 50% more energy efficient and 755 hybrid vehicles (the 3rd largest municipal fleet in the country). It should also be noted METRO is purchasing is purchasing 100 hybrid buses a year and will have 449 in total by 2011.

Houston is “LEED”ing the way for all new construction, as mandated in 2004, and the Looscan Library was the City’s first LEED Certified building with a LEED Gold on Central Permitting Center and Fire Station 90 not far behind. Add to all of this the Residential Program for kWh reductions, the Weatherization Program, improving air quality using MAAM and DIAL technologies and Houston is well on its way to leading the nation in energy strategies.

We applaud the new Mayor Parker and her selection of Laura Spanjian as Sustainability Director.

It was a great presentation!

By the way, the event was held at the AT&T Executive Education and Conference Center on UT’s campus. The facility is LEED Gold.

They acknowledge that they may not know why, including whether the premiums observed are due to the benefits of a better image, higher productivity or lower operating costs. In addition, observed premiums may reflect short-run imbalances in supply relative to demand. They only looked at 300 or so transactions.

Either way, I appreciate the effort.

The full Green Building Survey is here.

The Jetson Green blog about the survey is here.

If you aren’t going to read the full articles, here are the high points that I found most interesting:

1. The survey found that 92.3% agree that it is worth the time and effort to build green, while only 61.7% feel it is worth the time and effort to obtain LEED certification. This response shows an increasing gap in sentiment between building green and obtaining certification for the same.

By the way, Preston Koerner, the primary blogger, also re-hashed most of the LEED certification knocks in a solid piece here from August 2009.

2. The survey found that the top reason for building green was to save energy and other operating costs. The next best factor was to improve the environment, while factors such as achieving higher rents and improving tenant productivity were important, but not as important as other factors.

3. The survey found that 88% of respondents said they were more likely to incorporate energy saving elements going forward, representing a 14% increase of last year’s survey conducted by the same group.

Green Squared helps property owners all over the country help save money with their energy and water costs. And remember, any energy efficiency measure acts as a financial hedge against rising energy costs! How much did you budget in energy cost increases in 2010?

Great stuff from Preston! You can also follow him on Twitter at @jetsongreen.

Forty-two percent of the registrations (11,172/26,385) also occurred in 2009.

If the numbers hold, I expect 3,000 new LEED certifications in 2010. It will be interesting to see if that number holds up, given the state of the economy.

The 2009 numbers are through Dec. 5, 2009:

They are planning to open 30 total new stores in 2010. They have almost 1100 stores nationwide.

And even better, they are also remodeling 85 current portfolio stores in 2010. I wonder if any will be LEED EB?

They have 71 stores nationwide built according to a prototype that received LEED-precertification at the Silver level from the U.S. Green Building Council.

Kohl’s is also the #2 purchaser of green power in the US (1.367 billion kilowatt hours), second only to Intel. They are however, the largest purchaser that account for 100% of their electricity usage.

Kudos, Kohl’s!

Office Depot, who sells $14B of office supplies annually, should be commended for that commitment in their new build strategy.

An Austin green concept store opened in 2008 is LEED gold and uses about 14 percent less electricity per square foot than other Office Depot locations.

Key features of note:
Solar equating to 10% of the store’s electric needs
High efficient HVAC
T5 lighting and timers/sensors
Reflective roof
Skylights
Low flow toilets and urinals

Office Depot is listed as the #16 retail purchaser of green power in the US, according to the EPA. Ironically, their competitor, Staples is #5 on the same list — they purchase almost ten times as much green power.

I commend the effort from Office Depot, including their “Office Depot Green’ product line, but the press release shines the light on the real power of energy efficiency retrofits.

They plan to open 14 new stores in 2010, yet they have 1200 in the United States and Canada already. I’d love to hear their plans to retrofit their current portfolio. That is where the savings can be made!