New York City: Energy-Efficient Building Policy

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New York City (NYC) is one of a handful of cities in the U.S. that has taken the lead in creating building energy using benchmarking standards in urban planning efforts to address environmental concerns to help mitigate and adapt to a changing climate. With over one million buildings within city limits, PlaNYC is the most recent and comprehensive initiative aimed at building a “greener, greater New York.”

What is it? An all-inclusive plan issued by Mayor Bloomberg in 2007 that outlines ten ambitious goals, each addressing an aspect of the city’s environment, that culminates in a 5% reduction in greenhouse gas (GHG) emissions to help meet the goal of cutting total emissions by 30% by 2030. It will create nearly 18,000 jobs over 10 years and save about $7 billion (PlaNYC).

How are buildings addressed in the plan? A major component of PlaNYC is the Greener, Greater Buildings Plan which uses four pieces of legislation to increase the energy efficiency of large buildings in NYC. In addition to that initiative, PlaNYC:

• Aims to improve codes and regulations to promote sustainability through the creation of “The New York City Green Codes Task Force,”
• Addresses efficiency improvements in smaller buildings, and
• Will strive to make NYC a knowledge center for energy efficiency.

The Greener, Greater Buildings Plan

This plan focuses on making NYC’s 16,000 largest buildings more efficient and plays a crucial role in reaching the citywide 30% GHG reduction target. It does so through six major points that include initiatives to provide energy-aligned lease language, green workforce training and efficiency financing.
 

New York City Energy Code

By passing Local Law (LL) 85, The New York City Energy Conservation Code, Mayor Bloomberg closed a loophole that currently exists in the New York State Energy Conservation Construction Code, which states that an existing building must only meet current codes if more than 50% of the building is being renovated. Most renovations in NYC are done tenant by tenant and, therefore, rarely include half of the building; so even after renovations, those areas are often not up to the current code. LL 85 impacts all buildings, regardless of their size, and went into effect in July of 2010.

Benchmarking and Disclosure

The Greener, Greater Building Plan places a significant emphasis on collection of information and how transparency of that information can be used to enable building owners and tenants to be more energy efficient. LL 84, the Benchmarking law, requires owners of large buildings to annually log and disclose data on energy and water consumption using the EPA Energy Star Portfolio Manager tool. The law applies to all city buildings with an area of 10,000 square feet or greater and all other buildings 50,000 square feet or greater. About 2,370 city buildings have already been benchmarked. Commercial, mixed-use and residential buildings had an August 1, 2011 deadline for their first benchmarking.

Implementation and Enforcement

Since the benchmarking law has gone into effect, about 2,370 city buildings have been benchmarked and the data is publicly available on the Department of Finance website. Under the law, privately owned buildings were originally required to submit their benchmarking results by May 1, 2011, but the deadline was extended to Dec. 31, 2011, in an attempt by the city to “be reasonable.” Representatives of the city have stated that fines will be imposed on building owners who do not report numbers by then. The fine is $500 for missing the Dec. 31 deadline as of 2011, and then will increase quarterly.

Energy Audits and Retro-Commissioning

In order to ensure that owners are continually informed on how buildings use energy, LL 87 requires audits to be performed on 50,000+ square feet large building energy systems once every ten years and that they consequently receive a tune up as part of a “retro-commissioning” process. This process helps identify and update the performance of a building over time. The law applies to all large buildings that are 50,000+ square feet and have not demonstrated “superior efficiency,” meaning they have earned LEED certification or an EPA Energy Star rating for two to three years in a row. The first buildings’ audits will be conducted in 2013.

Lighting and Sub-Metering

In keeping with the goal of transparency and information, LL 88 stipulates that sub-meters, which inform individual tenants about their energy use, must be installed in all commercial space and all floors larger than 10,000 square feet by Jan. 1, 2025. In addition, lighting systems in these same buildings must be upgraded to meet the New York City Energy Code by that time. This law addresses the fact that lighting in NYC’s non-residential buildings is responsible for 18% of energy use and 18% of GHG emissions. Once sub-metering is installed, landowners must provide energy statements to all large tenants.

Energy Aligned Leasing

Leases that are “energy aligned,” contain language that attempts to solve the split-incentive problem between landlords and tenants. The newest part of PlaNYC’s Greener, Greater Buildings Plan includes resources on how landlords can include language in their lease on how much tenants will pay for energy. This language will now be easier to implement with the passage of laws requiring sub-metering. The first energy-aligned lease in NYC was signed in April of 2011 by law firm WinterHale at 7 World Trade Center.

Other entities are advocating for these types of leases, and providing resources on how to implement the lease language. For example, the Coalition for Better Buildings, which is made up of organizations and companies dedicated to advancing energy efficiency, has done work in New York City to enable energy-aligned leases.

Green Workforce Development Training

The energy savings that come from this initiative require an estimated 17,800 highly skilled construction-related jobs. NYC has created a program working group called Amalgamated Green, which brings together 30 stakeholders to fund career and technical training and provide additional information sessions for those looking to get into the field.

Green Building Financing

As part of the Greener, Greater Buildings Plan, NYC received stimulus funds to provide financing for energy efficiency projects. The nonprofit organization, New York City Energy Efficiency Corporation (NYCEEC) was created as a result of these funds and uses an insurance mechanism to make financing energy efficiency improvements less risky for the partner lenders. NYCEEC continues its programs through private donations from organizations like the Kresge Foundation, Natural Resources Defense Council (NRDC), the Rockefeller Foundation, etc.

New York City already had mechanisms for creative energy efficiency financing before the implementation of the Greener, Greater Buildings Plan. In 2011, the New York State legislature passed an on-bill financing law which allows buildings to borrow money from a utility for retrofits and pay back the loan via a charge on their energy bill.

More New York Energy Resources:

• New York City Local Law 84 Benchmarking Report August 2012
• The Greener, Greater Buildings Plan
• Energy-Aligned Leases
• Code Green Solutions - NYC Local Law Compliance
• Silverstein Properties Press Release: First NYC Energy Aligned Lease Signed
• Greener Greater Buildings Plan
• Energy Disclosure and the New Frontier for American Jobs by Andrew Burr of the Institute for Market Transformation

Alliance Policy Interns Ali Levine and Jen Richmond contributed to this report.