Article 321: 1-year Return on the Cost of Compliance

Unlocking the “Good Faith” Exception to LL97 Compliance

Sat, 01 Jun 2024 00:53:48 GMT

Local Law 97 requires drastic reductions in energy consumed and carbon emissions by buildings in New York City.

Otherwise, they could face significant penalties. Due to building type or financial reasons, compliance is not always easy to achieve.

While new legislation represents a step toward a healthier future, many NYC real estate owners are falling behind on decarbonization requirements. If you find yourself in this situation, a lifeline may be available under the “good faith” exception. This exception allows a building additional time (until 2027) to implement projects and align the building’s energy consumption with the LL97 limits.

What is LL97’s “Good Faith” Exception?

The “good faith” exception under LL97 legally recognizes that commercial, multi-family residential, and industrial property owners may endure compliance challenges. This new rule was released in September of 2023 and allows building owners to mitigate fines through the end of 2029, or the first reporting period, as long as they made a “good faith” effort to decarbonize their properties.

Several benefits of the “good faith” exception under LL97 include:

Benefit 1. Fine mitigation: The entire point of this exception is to ease the financial burden of building owners, demonstrating a serious, concerted effort for compliance.

Benefit 2. Flexibility: NYC implemented a “good faith” exception since lawmakers recognize how complicated decarbonizing a city can be. This law gives owners more time to make the required changes.

Benefit 3. Incentivization: Instead of putting up barriers to participation, the city has taken steps to encourage early action and adoption, even if it is not wholly realistic.

While it does not absolve you of financial responsibility, it does help ease the burden of non-compliance as long as you can prove that you made a genuine effort to reduce your building’s emissions. You may wanter to consider this exception if you are experiencing significant delays in decarbonization projects, experiencing financial issues, or are making substantial efforts that require more time than allowed during this reporting period.

How to Show “Good Faith” Efforts

Complying with LL97 via the Good Faith track requires developing and submitting various documentation to demonstrate progress in the building. Typically, an experienced technical services company can assist with assembling the critical files and helping position the building in the best light. It takes time, resources, and experience to produce these documents, which demonstrate a sincere effort on your part.

The documentation package will typically include:

Previous year’s LL97 emissions report: This report establishes baseline emissions levels while outlining where your building has already made reductions.
Lighting upgrade attestations: These attestations must comply with LL88 , a related law that mandates lighting upgrades in an energy-efficient manner, thereby contributing to overall reductions.
Previous year’s benchmark data ( LL84 ): This data will offer the city context regarding your building’s overall energy performance compared to similar buildings. It also helps them track individual, neighborhood, borough, county, and city-wide progress.
The above-referenced list is a high-level overview of the actual requirements. You may need to provide additional information, data, and documentation to meet the program’s particular standards. This effort could include energy audits, financial statements, and project plans.

When and How to Submit the Good Faith Report/Request

You should submit the “good faith” and annual building emissions reports by May 1st of every year. New York City’s Department of Buildings (DOB) will review your submitted materials and decide whether you meet the “good faith” exception requirements. It could take them a few days to a few months before you hear about their decision.

Critical Timeline for Penalty Reductions

To potentially benefit from penalty reductions in 2025, it’s crucial to demonstrate reasonable faith efforts by the 2024 reporting deadline. Fines are calculated based on emissions levels in the previous calendar year, so acting early can have a significant financial impact.

Develop a Decarbonization Plan

The City of New York also wants to see more than documentation and reports. Additional evidence of your “good faith” efforts, including a decarbonization plan, is necessary.

Your decarbonization plan should include:

Energy audits
Mechanical system inventories
A description of past work that reduced emissions by 10 percent or more
A description of future work that meets net-zero emissions by 2050

Keeping all your paperwork well organized is a good idea. As LL97 emissions limits continue to reduce around every five years, you will also need evidence proving your building’s compliance, so retaining your documents over the years will make the process easier should a dispute arise.

RKB Group LLC Can Help You Achieve Compliance

RKB Group LLC provides energy master planning, owner’s rep services, and energy solutions with experience and knowledge of NYC building requirements. Our engineers will help manage the Good Faith exception for your building to reduce fines assessed for energy consumption over the 2024 limit. Contact RKB Group LLC today for help handling LL97 compliance.

Article 321: 1-year Return on the Cost of Compliance

Mon, 29 Apr 2024 11:04:43 GMT

Article 321: 1-year Return on the Cost of Compliance

Local Law 97’s Article 321 track applies to rent-regulated multifamily buildings and houses of worship. It requires that buildings either comply with the 2030 LL97 limit in 2024 or buildings sufficiently satisfy / implement 13 prescriptive energy measures.

These common energy measures include such items as ensuring heating systems are operating & controlled properly, heating piping and tanks are insulated, no system leaks exist, steam traps are sound, exhaust fans operate appropriately, and the building envelope is tight. Some of these measures require attestations by a (licensed) technical professional and others required detailed inspection reports which if completed accurately, serve as useful records for the building to track the condition and proactive maintenance needs of the building.

The process can be cumbersome for building owners, but with a sound approach to compliance, the benefits far outweigh the costs in the form of:

Uncovering of system deficiencies that can be wasting energy and operating cost, that may have otherwise been overlooked.
Identifying upgrade opportunities and projects that qualify for new Article 321-related incentives.
Increased energy efficiency from improvements to equipment controls and operations.
Avoiding the $10,000 penalty.
Improvement of building energy grade.

The RKB team has been hard at work walking buildings, recording data on the systems and presenting findings to ownership, and registering buildings’ Article 321 reports. What we continue to see with this compliance track is that the overall cost savings realized from the efforts, easily outweighs the cost of the compliance report within 1 year.

There is an optimal way to address or implement each of the measures and as is often the case, choosing the right provider can significantly affect the overall result of this required compliance work.

Useful link - Covered Buildings Lists: https://www.nyc.gov/site/buildings/codes/sustainability.page

Colombia to New York City - Local Law 97

Sat, 30 Mar 2024 13:30:56 GMT

The tools available to building owners for implementing capital improvements are as strong as ever.

As an Engineer with experience in Energy Management & Intelligence Consulting for Real Estate companies across Colombia, it has been intriguing to dive into the world of Local Law 97 and building decarbonization in New York City.

Whereas private organizations in South America implement sustainability practices for the primary objective of energy cost savings, as seems to be the tradition throughout the US, New York City looks to have many more tools and resources at their disposal. The opportunities for buildings to get a competitive edge in quality and operation are better than ever.

Past projects I have worked on that have reduced operating costs, include optimizing a 29-MW cogeneration plant, implementation of variable-speed controls for process pumps, and load shifting from gas boilers to heat pump system for a hospital campus. These projects provided the owners with GHG reductions of over 200 tCO2/year. In the Northeast U.S., these projects seem like they would also be attractive capital improvements on the basis of energy cost savings alone.

In my short time in NYC, I’ve supported the design and implementation of HVAC system optimizations, steam trap & heating system improvements, and lighting projects in my short time in NYC to date.

These projects have become especially viable in 2024 when you stack the benefits of:

Cost savings from upgrades to offset rising energy costs .
Avoided Local Law 97 penalties and/or Beneficial Electrification credit.
Accurate quantification of maintenance improvements from reduced loads or run hours.
Incorporating all available utility incentives and grants .
Optimizing equipment selections for Demand Response which has growing enrollment rates.
Utilizing 0% financing programs currently available to owners.

It seems like the challenges for buildings in NYC are no longer as much about about how to make the projects viable, but which to prioritize to get the strongest benefits.

I’m thrilled to be able to bring another perspective to real estate owners in NYC and help them leverage all the tools available to make otherwise overlooked projects, viable.

-Arnold Merino

Elevating Commercial Real Estate: The Role of Energy Efficiency

Sat, 09 Mar 2024 15:37:27 GMT

Elevating Commercial Real Estate: The Role of Energy Efficiency

In today’s commercial real estate landscape, the emphasis on sustainability and operational efficiency is more pronounced than ever. Energy efficiency, a critical component of this shift, stands at the intersection of environmental stewardship and economic savings. This blog post addresses frequently asked questions about the importance of energy efficiency in commercial buildings, shedding light on its benefits, incentives, and implementation strategies.

Understanding Energy Efficiency vs. Energy Conservation

What's the distinction between energy efficiency and energy conservation?

While both concepts aim to reduce energy use, energy efficiency focuses on using technology to perform tasks using less energy. For example, LED lighting uses less energy than traditional bulbs for the same level of brightness. Energy conservation involves behavioral changes to save energy, like turning off lights when not in use. Both strategies are vital for reducing a building's energy footprint.

The Financial Impact of Energy Efficiency

How significant are the savings from energy efficiency in commercial buildings?

Savings from energy efficiency can be substantial, often reaching up to 30% reduction in utility bills. The actual savings for a commercial building depend on various factors, including the building's size, location, and the specific energy efficiency measures implemented. Investing in energy efficiency not only reduces operational costs but also enhances the building's value.

Incentives for Energy-Efficient Upgrades

Are there incentives for making energy-efficient improvements?

Yes, numerous incentives exist for commercial buildings to adopt energy-efficient technologies. These can include tax credits, rebates, and grants available at federal, state, or local levels. Such incentives aim to encourage building owners to invest in energy-efficient upgrades by offsetting some of the initial costs, making it financially attractive to enhance a building's energy performance.

Energy Efficiency and Indoor Air Quality

How does energy efficiency contribute to better indoor air quality?

Energy-efficient buildings often have improved ventilation and air sealing, which can significantly enhance indoor air quality. By controlling the influx of outdoor pollutants and maintaining optimal humidity levels, energy-efficient measures help create a healthier and more comfortable indoor environment, crucial for occupant well-being and productivity.

The Importance of Energy Audits

Why is an energy audit critical for commercial buildings?

An energy audit offers a detailed examination of a building's energy flow and identifies opportunities for improvement. It's a crucial first step in any energy efficiency strategy, providing a roadmap for prioritizing investments in energy-saving measures. By understanding where energy is being wasted, building owners can make targeted upgrades that offer the best return on investment, both financially and environmentally.

The Path Forward

Energy efficiency in commercial buildings is not just a trend but a fundamental shift towards more sustainable and economically viable real estate practices. It offers a win-win scenario: reducing environmental impact while saving on operational costs. For building owners and managers, now is the time to embrace energy efficiency as a core component of their property strategy.

RKB Group is here to guide you through the complexities of implementing energy-efficient solutions in your commercial properties. From conducting detailed energy audits to navigating incentives and executing upgrades, our team is equipped to help you achieve your energy and sustainability goals. Contact us today for a consultation, and let’s work together to transform your commercial real estate into a model of efficiency and sustainability.