NYC Carbon Emissions

Energy Efficiency Letter Grades Do Not Predict Fines for Carbon Emissions

True or False: Under Local Law 97 of the Climate Mobilization Act, co-ops and condos with energy efficiency ratings of A or B will not be subject to fines that go into effect in 2024 for structures that do not comply with carbon-emission caps.


An example is a 450-unit co-op in a 32-story prewar structure on the East Side of Manhattan that received a B letter grade for energy efficiency due to its ENERGY STAR score of 74 based on its water and energy usage. Despite this stellar rating, the co-op board will be subject to annual fines of $48,917 starting in 2024 and increasing to a startling $236,666 starting in 2030 if it does nothing to lower the building’s carbon emissions.

These figures come from Orsid New York, the co-management op’s firm, which has been collaborating with the consultant En-Power Group to offer hard statistics to its 200 co-op and condo clients. That information indicates a reality that many boards still elect to overlook.

According to Dennis DePaola, executive vice president and director of compliance at Orsid New York, “there isn’t a solid match between the letter grade and the penalty they’re facing.” “Penalties can still be imposed on buildings with good letter grades. Your reliance on letter grades is invalid. You must consider the steps you can take to avoid sanctions.

And not just real estate professionals like DePaola who notice a disparity between boards. A co-op board president on the Upper West Side recently asked William McCracken, a lawyer at the legal firm Ganfer Shore Leeds & Zauderer, to clarify the distinction between letter grades and carbon caps. I understand it, but I’m still worried about our letter grade, she replied, McCracken, recalls. She was worried about the reputation of the building, which is a reasonable concern as long as you know it has nothing to do with the building’s carbon emissions and any fines.

At Ecosystem Energy Services, senior project development engineer Ben Milbank observes some encouraging trends. He asserts that although “most boards don’t grasp what kind of fines they’re facing, I think people are becoming realizing Local Law 97 is genuine. One advantage is that the city’s electric grid will become greener, which will help reduce carbon emissions. He’s alluding to the upcoming arrival of electricity from renewable sources, such as Canadian hydroelectricity, wind and solar farms, and other sources.

His counsel? Boards should disregard their letter grades, in my opinion. Electric heat pumps are becoming more and more popular. You run a significant danger of receiving a fine if you continue to burn oil.

According to DePaola of Orchid, the hard data is causing changes. The low-hanging fruit has been picked by several boards, including insulating pipes, putting LED lighting in common areas, switching an oil-fired boiler to a natural gas one, and establishing a separate household hot water system so the boiler doesn’t operate all year round. Others are taking on more challenging tasks, like installing solar panels or cogen systems, or moving away from fossil fuel-fired boilers and toward electric heat pumps. A Yonkers co-op that is putting a 12-foot-tall, 10-foot-wide array of wind turbines on one of its three roofs were recently featured in a Habitat article. Such actions will lessen carbon emissions and any potential fines but have no impact on energy-efficiency letter grades.

What can your building do now to reduce energy waste, costs, and greenhouse gas emissions, and ultimately improve its score?
1. Take care of the tasks that your building may have been putting off that are free, inexpensive, or will yield a great return on

2. Create an investment strategy for your building that makes use of cutting-edge energy-saving technologies and tactics for reducing energy waste.

3. A qualified service provider should be chosen to do an energy audit of the structure and its mechanical systems and to develop an implementation strategy.

4. Utilize the incentive programs offered by Con Edison, National Grid, and PSE&G to help lower the initial costs of many wastes
reduction and energy efficiency initiatives in your facility.

5. Pay close attention to your vital systems, such as your domestic hot water, ventilation, heating, and air conditioning. These
systems might be your building’s biggest energy wasters.

6. Outside air and moisture intrusion can make it uncomfortable for building occupants and make your system work harder. Make sure to take care of these issues by inviting a specialist to your building to assess the situation and assist in developing a plan.