It seems to make sense that the higher the occupancy of a building (commercial or
residential), the higher the energy use. More people in a building means more activity.
Well, COVID taught us that this is not totally true. While office buildings were shut down
during pandemic lock-downs to near zero activity, building energy usage declined only
by 10-30%. In New York City, even when there was a partial return of activity
(commercial occupancy decline averaged 85%), electricity use was down only 20-40%.
Are electricity usage changes driven by tenant activities or common area requirements?
Studies indicate a little of both. Several buildings showed a reduction in electricity usage
in the upper 20’s to 40% in March and April 2020, compared to the year before, when
we had the virtual complete COVID lock-down. These buildings showed reductions in the
teens percent in October and November 2020 compared to one year before, as tenants
began to return to their offices.

Why? Because there are basic needs that use energy that must occur at all times, such
as heating and cooling. OK, without staff in an area, one can manipulate a thermostat to
a more beneficial setpoint, efficiency-wise. But not running one’s boiler or AC units is
not good for the building or business either. In the summer of 2020, I performed an
energy audit of an office building, and most offices were empty. One particular business
that was empty that I studied had turned off their cooling system totally to save costs. It
was a very hot day outside and the indoor temperature as I walked around was 86⁰F!
This is not good for the building or business. With humidity uncontrolled, this can cause
the growth and proliferation of mold and potentially damage equipment, adding to the
woes of the business when staff begin to return. While one can set a high summertime
setpoint to save on cooling if nobody is present. But you need some conditioning to
prevent these effects. Of course, all this becomes irrelevant if even one person returns
to the office. The thermostat must be set and equipment operated to keep that person
comfortable even if he/she is the only person in the office.

So, where do we go from here? This demonstrates that reduced activity does not result
in a similar reduction in energy usage and greenhouse gas emissions. While the first
year of the COVID pandemic led to a net decrease in greenhouse gas emissions, that
was short-lived. As we began to recover economically, “carbon” emissions grew greatly,
too. And it shows that neither landlord nor tenant is “at fault” on this matter. This shows
that site-specific smart planning for energy efficiency and tenant / landlord collaboration
can effectively reduce energy consumption and not just stopping an operation.
CCES has the experts to help your business create and implement smart, long-term
strategies to reduce your energy usage and costs that will stand the test of time.
Contact us today at karell@CCESworld.com or at 914-584-6720.

There has been lots of discussion and policy documents about Environment Social & Governance (ESG) disclosures made by public companies. While the U.S. Securities & Exchange Commission (SEC) has discussed the importance of accurate representations of ESG information to potential investors, one wondered how vigilant the SEC would enforce such requirements. On April 28, 2022, the SEC’s Climate and ESG Task Force brought its first action in the U.S. District Court for the Eastern District of New York against Vale S.A. (“Vale”), a large mining company, alleging violations of federal securities laws arising out of false and misleading statements in connection with the safety and stability of dams built to hold toxic waste produced in mining operations.

In January 2019, Vale’s Brumadinho Dam in Brazil collapsed and released millions of cubic tons of toxic waste, directly killing 270 people and contaminating a nearby river. Vale suffered significantly financially as a result. The SEC alleges that Vale knew that the dam did not meet internationally recognized dam safety standards, yet stated in its ESG disclosures that it adhered to the “strictest international practices” of dam safety and that 100% of its dams were certified to be in stable condition. Vale denies the charges and is challenging the action.

Vale manipulated dam safety audits, obtained fraudulent stability certificates, and regularly misled local governments, communities, and investors about the safety of the dam in its ESG disclosures, including sustainability reports. They found the ESG disclosures to be false and misleading by downplaying risks of disastrous financial consequences should any of its high-risk dams collapse.

This shows that the SEC is reading sustainability reports, as well as other ESG disclosures and is willing to use statements in such documents as bases for enforcement actions alleging misrepresentation. Companies should take note and review its own procedures to ensure accuracy and ability to defend and verify when preparing submissions, such as ESG-required disclosures.

Please note that this article, containing legal information, was prepared by a non-attorney. Therefore, before making any decisions on these matters retain and utilize experienced legal counsel in this area. CCES has the technical experts to help your environmental program. Contact us today at 914-584-6720 or at karell@ccesworld.com.

5 Ways To Deal With High Energy Costs

You don’t need to be reminded. At the gasoline pump and with your utility bills, energy costs are going up at unprecedented rates, affecting your personal and company’s pocketbook. Most people get their energy bills (themselves or for business), curse a little, then shrug one’s shoulders and have Accounting pay it. But there are things you can do about high energy costs – and succeed. Energy costs won’t disappear, but you can do better – and get ahead of your competition.

1.  You do have some control over costs. Understand what your energy bill is made of. Most utilities are regulated by a government entity because they are monopolies when it comes to delivering electricity or natural gas. Con Edison, the largest utility in the nation, just requested a fee raise of 10-15%, if approved by its overseeing agency, beginning in 2023. You, as the public, can certainly let your local commission know your thoughts about any proposed high rate hike. But that’s just delivery. Supplying electricity and natural gas is a different item, and that has gone up about 40% in the last year.

You, the user, can pick your supplier. Yes, you can. In fact, if you don’t pick a supplier for electricity and natural gas, the utility will pick one for you – and it’s not likely to be the cheapest! Take time to research suppliers. Many utilities have links on their website. Compare prices, and there is a good chance you’ll find firms who will supply electricity and/or natural gas at a lower rate than what was assigned to you. Saving $0.02 / kWh, seems small, but is a substantial savings. If you’re a large user (lots of refrigeration or a factory), the potential savings is greater; it would be worth it to retain an energy supply broker, who can get bids from many suppliers who would slash their price to supply a large user like you so much electricity or natural gas. You can save substantially. And you may have the opportunity to lock in a low rate for price security.

2.  Are you being billed properly?  Take some time to review your utility bill. Your utility sends out thousands, maybe hundreds of thousands of bills monthly. Don’t you think some are in error? Review your latest bill. Are you classified correctly? Are the tariffs and other charges appropriate for you? It does not happen often, but utilities sometimes get it wrong. A religious institution was classified as a large industrial facility. Their office never noticed this and just paid the high bills for decades. When the error was brought to their attention, it was corrected for the future and they received a check from the utility for $78,000 for the historic overcharge. Now, that’s some donation!

3.  Are you being wasteful? We know it’s important to produce your product or service of high quality and reliably. But might your processes be wasteful? While redundancy is important in many industries, could operations be overdone? For example, a facility needing hot water for a process uses an appropriately-sized hot water tank, a backup tank, and a backup to the backup tank. It was calculated that they spend $50 / month to keep the water hot 24/7 in the backup to the backup tank. I suggested that they probably never use the hot water from the backup to the backup tank; the $50 / month was wasted. I suggested they turn off the heater for the backup to the backup and if it’s ever needed, then turn it back on for good. They did turn off the heater and never had to put it on again. Another example: lighting. We are concerned with dim areas; is there enough light to perform tasks well and safely. But might there be too much light in an area? This is not only wasteful, but may cause issues, such as glare and distractions. Remove lights from fixtures in overlit areas for a nice energy usage and cost savings.

4.  Renewable Energy.  Might you be a candidate for solar panels, geothermal, etc.? Get energy from a source that is free (the Sun, the stable temperature of air underground). There is an investment needed to set up and support the technology, but the source of power is free (unlike natural gas or oil), and thus, should be a useful way to reduce electricity or gas/oil usage in the future.

5.  Finally, an energy audit.  Simply stated, there has been a literal revolution in gains in energy efficiency in many products the last five years. If an energy audit has not been performed in that time, there will be opportunities. Gains in efficiency of space heating and cooling equipment; lighting; heat pumps; an electric fleet. Have an energy audit performed by an experienced professional. Look at the list of potential strategies and take them seriously. Yes, you’ll have to invest money upfront to procure and install the technology, but you will save handsomely and get your investment back and more. Remember, incentives probably exist from your utility or state government to possibly pay one-third, maybe half the cost for these energy-saving technologies (they want you to save, too). And low-cost loans exist if cash is not readily available. Banks will compete to lend you money because they know energy-saving projects are more reliable for them (the payback to you) than loans for other purposes.

Will these moves reduce your energy costs to zero? No, they won’t. Reduce them by 50% or more? Probably not. But they can definitely take the edge off the big increases in energy costs most are enduring and put you in a more competitive situation.

CCES has the experts to help you navigate through all of these ways to save energy costs as a hedge to inflation. We can work with you and find significant savings. Contact us today at 914-584-6720 or at karell@CCESworld.com.

New York City’s onerous Local Law 97 is believed to be the first law in the country requiring building owners to meet stringent greenhouse gas emission limits or else face major fines. Six-figure fines are likely – for many buildings!  LL 97 goes into effect in 2024 and is definitely being watched by other governments who may duplicate it.

When initially promulgated in 2019, most building owners ignored it. Its provisions were 5 years away. Now that we are less than 2 years away and, it seems, many building owners seem to be panicking. I was in a Zoom meeting where attorneys were discussing how to modify leases to require the tenants to pay part of any LL 97-caused fines, since tenant energy usage is part of the equation. OK. But wouldn’t it make more sense to spend time first seeing where your building fits in? Is it a likely candidate for non-compliance in 2024 based on current energy usage? Or is the building on safer ground? LL 97 was designed by NYC such that – they believed – 80% of existing buildings would not have to make modifications (or only minor ones) to comply in 2024. Even if that assessment was wrong, it is probable that your building is one of the majority that will comply with the 2024 GHG emission standards. Determine that.

How? Take the total energy usage of the building for last year; that is, total electricity (common areas and tenants), natural gas (boiler and kitchens), oil, and purchased steam. Note what they were in total in 2021. Convert them to GHG emissions, divide by the square footage and compare it to the rate appropriate for your building (there are 10 unique building categories). If your actual 2021 GHG emissions per square foot exceeds the 2024 standard, you have a potential problem. Even if that value meets the 2024 standard, but barely, you have a potential problem, too. What if 2024 has a very hot summer or cold winter and you have to use more energy for comfort? What if your tenant stock changes between the years and they need more energy? So you not only want to meet your 2024 standard, but meet it with a nice buffer for these contingencies.

For each building that appears to not be in compliance by 2024 or does not have much of a buffer, you need to do something now. Not in a few weeks or a month. But act now! The things you may have to do to comply or lower potential fines can take a year or more to have in place and may not be ready by the beginning of 2024 (you know, supply chain issues).

So, what should you do if you have to do something for LL 97? Don’t deny the issue and don’t delay. Have an energy audit performed by an experienced professional to determine smart and site-specific strategies to reduce energy usage. Look through the report; study the options. Then don’t sit on it. Take action (!) on one or more options to get your energy usage down to acceptable levels. Yes, you can start with “low hanging fruit”, but don’t delay bigger projects because of the time it may take for equipment to be procured, assembled, and installed. For example, building envelope upgrades are not “sexy”, like shiny new equipment and may be expensive upfront. But such upgrades will reduce energy use (i.e., lose less heat that you burn fuel to make) significantly and, with that, GHG emissions.

Also, when working with a contractor or energy engineer, don’t forget to take advantage of rebates and other incentives (typically 30 – 50% of the cost) available from your utility or State government for the upgrades. They want it done, too. And if you do not have money upfront, PACE financing offers competitive rates and easy payback terms specifically for energy upgrade projects.

OK, New York City building owner or property manager: you have been warned. LL 97 is coming very soon and the time to assess where you stand and act, if you need to, is NOW!

CCES has the experts to help you assess where your buildings stand vis-à-vis LL 97 and to project manager any series of energy upgrades to comply or lessen fines. Contact us today at karell@ccesworld.com or at 914-584-6720.