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.