New York City Local Law 95 – Energy Grades

“2019 has been a wake-up call for sustainable real estate. I imagine we will look back at 2019 as a defining year in which climate change took center stage globally. The industry is maturing rapidly, becoming more complex and very problematic. As the public and private sectors address GHG Emission limits, the stakes have risen and the connection between responsible real estate investment and long-term financial health has become of paramount importance.” – Jimmy Carchietta – CEO – The Cotocon Group

Real estate sustainability is constantly evolving. Just like the New York City Local Law 33 has been amended to New York City Local Law 95.

With the Grading Law in full effect this year, it is imperative that your building’s data submission is performed accurately and concisely with your filing due by May 1st of this year.

We have seen 8-13-point decreases in building scores, simply because it was not simulated correctly, or if information was missing. Be Advised – this will have a tremendous impact on your Energy Grade.

The New York City Local Law 95 will require all buildings over 25,000 sq. ft. to publicly post their letter grade annually starting in 2020. The first letter grades will be based on the 2019 calendar year ENERGY STAR Scores that are submitted to the Department of Buildings by May 1, 2020.

This is a yearly process. Buildings that are not eligible for a score will receive an “N” and may be required to post the building Energy Use Intensity (EUI).

The law is an extension and effort to showcase the data gathered through Local Law 84 and Local Law 133, which is also known as the Energy Benchmarking Law.

Who does it apply to?

The Local Law 95 applies to all commercial buildings over 25,000 sq ft. Any buildings that are subject to the Local Law 84 and Local Law 133 – will need to comply with Local Law 95 as well.

What is Local Law 95 all about?

 

Local Law 95 consists of the publication of values that measure the energy consumption and efficiency of a building. The value being the EPA ENERGY STAR Score measured on a scale of 1-100 and translated to an energy grade which is represented with a letter between A and F. The energy grade is a comparative measure meaning that a score of 50 represents median energy performance while a score of 75 or better is top performance indicator. Therefore, receiving an ‘A’ indicates that your building is amongst the top 15% in energy efficiency. Your building is compared in a national data set amongst buildings with similar primary use, rather than based on location or portfolio. These scores are assigned by US Environmental Protection Agency’s ENERGY STAR Portfolio Manager.

When is it due?

The expected roll out of the required publication of a building’s energy score and grade is mid-2020. However, it is important to note that an energy grade will represent the year prior so in 2020 we will be seeing grades based upon 2019 scores.

 

Where?

The grades must be posted in a conspicuous location at the building entrance visible to tenants and visitors.

 

What is the Purpose?

The purpose of showcasing the Energy Grades in public is to make the public aware about Energy Efficiency. The department aims to do that by showcasing the grades in a public place like the building entrance.

Potential tenants may be drawn to buildings with higher scores and away from lower performing buildings. The letter grade was also an intentional move in order to move away from a very technical description of the Energy Efficiency, but rather a much more digestible format. The focus of the law is primarily on the visibility and publicness of the grade so while owners will not be penalized for scoring poorly they can be penalized for not displaying their grades correctly or at all. It also means an increased property value for buildings with good Energy Grades.