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Like restaurant grades, new energy ratings to be prominently displayed

By Felix Feliz, PE, CEM, Collado Engineering

Come 2020, owners of New York City buildings over 25,000 square feet will have to know—and publicly display—their energy grade. Analogous to the Health Department’s “A, B, C, D” restaurant grades, the new energy efficiency rating system for buildings is a way for residents and prospective buyers to judge a building’s green quotient at a glance.

The mandate comes from the recently passed Local Law 33 of 2018 (LL33), a follow-up to 2009’s Local Law 84 (LL84), that ups the ante on the city’s Greener Greater Buildings Plan to curtail greenhouse gas emissions and boost the energy efficiency of large and mid-sized buildings. Under LL84 and its subsequent 2016 amendment, “covered buildings,” i.e., city-owned buildings over 10,000 square feet and all other buildings over 25,000 square feet, are required to report energy and water consumption benchmark data annually. Utilizing the data and sorting by the property’s primary use, the building is given a U.S. EPA ENERGY STAR score indicating how it is performing against national peers.

Starting in 2020 when LL33 takes effect, the city will assign letter grades for each building based on its ENERGY STAR percentile score, determined as follows:

  • If the score is greater than or equal to 90, the grade shall be “A”
  • If the score is greater than or equal to 50 but less than 90, the grade shall be “B”
  • If the score is greater than or equal to 20 but less than 50, the grade shall be “C”
  • If such score is less than 20, the energy efficiency grade shall be “D”

Owners failing to submit the benchmarking data will receive an F. Some buildings, such as those with data centers, trading floors or TV studios that comprise more than 10% floor space, may be exempt, and assigned a grade of “N”.

“Covered buildings” will have to display their energy efficiency grade near each public entrance within 30 days of obtaining their annual benchmarking score—a national first.  While other jurisdictions have required buildings to make energy consumption information available to prospective residents, none have called for a public display of the information.

Posted in such a conspicuous place, the energy grade will represent a very public account of a building’s energy profile. In today’s real estate market where developers and owners are constantly seeking a competitive advantage, this may provide a key distinguishing feature. Social and environmentally conscious tenants concerned about their carbon footprint will be interested in living and working in grade “A” buildings. For example, just imagine an environmental agency operating out of a grade “C” building… not likely.

Further, the energy grade is not a mere cosmetic adornment on the main entrance of the building, but a reflection of a continued effort toward providing an energy efficient living or working environment, and that translates to lower maintenance and operational costs—a key concern of residents and prospective renters and buyers. It will also represent savings on gas and electricity bills that can be shared with occupants, leading to lower turnover among other benefits.

Help With Necessary Improvements

For owners seeking to improve their energy profiles, and score well in the upcoming required rating system, help is at hand. Working in conjunction with utilities to obtain the most up-to-date usage data, engineering firms can perform the required LL84 benchmarking analyses, assessing the current energy use of the building and generating its benchmarking score. An experienced MEP engineering firm with qualified professionals, including Certified Energy Auditors and Certified Energy Managers, can then audit your building’s systems and determine the best route to Grade “A”.

A word to the wise: The time to raise scores is now, before the rush begins. Many property owners will be looking to boost the efficiency of their buildings ahead of 2020, and increased demand will affect the cost of implementing the improvements—particularly in view of today’s tight construction industry market. Owners should be aware, too, that financial incentives from utilities and government organizations may apply to certain upgrades, reducing some of the capital improvement costs.

Consumer awareness and support for the new rating system will no doubt drive developers towards more demanding energy efficiency goals. Improving a building’s energy efficiency has always been good practice; new disclosure requirements under LL33 render it both a necessity and a valuable marketing tool for owners to compete in the marketplace.


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