The Climate Mobilization Act: What You Need to Know
Last April, the New York City Council passed the Climate Mobilization Act, a package of legislation aimed at reducing greenhouse gas emissions from NYC buildings and improving their energy efficiency. The goal of the new law is to reduce overall carbon emissions 40 percent by 2030 and 80 percent by 2050. There are several compliance deadlines along that timeline, the first being 2024. Between now and then, owners of buildings larger than 25,000 square feet need to begin planning for possible retrofits and energy efficiency upgrades.
This Special Issue, which is excerpted from the 2020 edition of the Apartment Management Checklist, explains how NYC building owners must comply with all the state and city energy conservation requirements—including the Climate Mobilization Act. We’ll explain who is affected, what the laws require, how to comply, what fees to expect, what deadlines to meet, what penalties you could face for failing to comply, and what forms are required.
WHO IS AFFECTED
Owners who file new building and alteration applications with the Dept. of Buildings (DOB) on or after July 1, 2010, must comply with the NYC Energy Conservation Code (NYCECC). NYCECC doesn’t require alteration of existing buildings or building systems, and historic buildings need not comply.
Owners of either large existing buildings exceeding 50,000 gross square feet, combined buildings on the same tax lot that together exceed 100,000 gross square feet, two or more buildings owned as condominiums by the same board of managers that together exceed 100,000 gross square feet, and new buildings must comply with energy audit measures, which provide surveys and analyses of energy use, as well as retro-commissioning, which is the process of ensuring correct equipment installation and performance, in order to complete required Energy Efficiency Reports (EERs).
Owners of all buildings larger than 25,000 square feet are required to meet ambitious carbon reduction targets set by the city’s Climate Mobilization Act of 2019.
WHAT THE LAW REQUIRES
During the past decade, energy conservation measures have been pursued aggressively through legislation enacted by both NYS and NYC. Following the enactment of state and city energy conservation codes, additional NYC laws focused initially on information in the form of audits, benchmarking, and grading. However, the NYC Climate Mobilization Act of 2019 now mandates energy performance and, in some cases, significant retrofits. The 2019 laws set emission caps on many types of buildings, with the goal of a 40 percent overall reduction in greenhouse gas emissions by 2030, and an 80 percent reduction by 2050.
Although the Climate Mobilization Act exempts many types of buildings from the caps, including apartment houses with rent-regulated units and other types of affordable housing, those buildings are required to carry out several energy-saving measures, such as insulating pipes. The Climate Mobilization Act also added provisions concerning “green” roofs, wind turbines, and Property-Assessed Clean Energy (PACE) financing to fund upgrades to building energy and water efficiency.
Energy Performance Standards
The NYS Energy Conservation Construction Code (ECCCNYS) sets standards for the energy performance of buildings throughout New York. New York City implemented its own Energy Conservation Code (NYCECC) with requirements exceeding those of NYS.
Local Law 32 of 2018 required DOB to propose amendments to bring the NYCECC up to date with the NYStretch Energy Code. The NYStretch Code was developed by the NYS Energy Research and Development Authority (NYSERDA) as a statewide model code to save more energy than the state’s minimum code and to be readily adopted as a more stringent local standard to the ECCCNYS. According to NYSERDA, NYStretch Energy Code-2020 (NYStretch) doesn’t contain changes that NYC may adopt for the 2020 NYCECC.
Local Law 97 of 2019, the cornerstone of the Climate Mobilization Act, commits NYC to achieving certain reductions in greenhouse gas emissions by calendar year 2050, and requires large and medium-sized buildings to reduce their greenhouse gas emissions significantly. Effective Nov. 15, 2019, LL97 creates an Office of Building Energy and Emissions Performance. The law requires, at minimum, a 40 percent reduction over 2005 levels in citywide emissions by calendar year 2030 and an 80 percent reduction in citywide emissions by 2050.
LL97 establishes targets for carbon-emissions intensity per square foot for buildings based on occupancy class. Multifamily buildings, office buildings, schools, and storage facilities will have different intensity targets. Mixed-use buildings will have their targets set based on a weighted average of their different spaces. Across all segments, these targets will get ratcheted down over time. Building on the type of data submitted as part of annual benchmarking, all tenant and owner energy used at a particular building will be converted to carbon intensity per square foot.
Starting in 2024, buildings will be fined on an annual basis for carbon footprints that exceed their targets. As an alternative to this performance-based framework, rent-regulated multifamily buildings with at least one rent-stabilized apartment will be required to implement a prescriptive list of upgrades by 2024. These upgrades include indoor temperature sensors providing feedback to boilers and apartment thermostatic controls.
Residential buildings in NYC reportedly are the city’s largest source of greenhouse gas emissions. A greenhouse gas is a gas that absorbs infrared radiation and radiates heat in all directions. This increase in heat is called the “greenhouse” effect. Common examples of greenhouse gases include water vapor, carbon dioxide, methane, nitrous oxide, ozone, and any fluorocarbons.
To meet NYC’s goal of reducing greenhouse gas emissions by 40 percent by 2030, NYCECC sets energy efficiency standards for new construction and alterations to existing buildings. Small renovation projects are not exempt. Technical requirements for the ECCCNYS are not changed by NYCECC. DOB requires an Energy Analysis for all proposed work to show how it would comply with the NYCECC. Based on changes to the ECCNYS, the 2016 NYCECC was made effective Oct. 3, 2016, under Local Law 91 of 2016.
Local Law 97 of 2019, the cornerstone of the Climate Mobilization Act, expands existing retro-commissioning requirements to certain buildings over 25,000 square feet. Higher carbon intensity buildings will have to reduce their carbon footprint through deep energy retrofits by 2030 to avoid fines of $268 per ton of carbon emissions in excess of the building’s limit. To meet the 2030 target, older steam-heated multifamily buildings will have to implement certain upgrades to various building components, including lighting systems, exterior insulation, windows, air sealing, conversion to heat pumps for heat and hot water, and investments in carbon-free power.
Energy Efficiency Reports
Local Law 87 of 2009 mandates that buildings over 50,000 square feet undergo periodic energy audit and retro-commissioning measures, as part of NYC’s Greener, Greater Buildings Plan (GGBP). The purpose of the energy audit, as described by DOB, is to identify opportunities to reduce the amount of energy consumed without negatively affecting the building’s operations. DOB describes retro-commissioning as “the process of ensuring that the energy systems in an existing building are installed as per the design intentions, functionally tested, and capable of being operated and maintained, according to the owner’s operational needs.”
The process requires that owners determine whether a building needs to comply and what year compliance is due, conduct an energy audit and retro-commissioning of “base building systems” (including the building envelope, HVAC systems, conveying systems, domestic hot water systems, and electrical and lighting systems) and then complete an EER electronically, and submit an EER once every 10 years by Dec. 31. Beginning Jan. 1, 2013, EERs are due in the calendar year with a final digit that is the same as the last digit of the building’s tax block number. The building’s energy audit and retro-commissioning report must be completed prior to filing an EER. Owners may apply for an extension of time to file the EER, at a fee.
Exception: Base building systems don’t include systems or subsystems owned or leased by tenants (other than a net lessee for a term of 49 years or more), condominium unit owners, and cooperative unit shareholders, for which a tenant bears full maintenance responsibility and that are within the tenant’s leased space and/or exclusively serves such leased space, as well as industrial processes that occur within a covered building.
Under rules added in 2013, there are fees for the initial filing, extensions, and amendments to EERs, as well as for DOB energy code compliance reviews. In 2018, DOB added a covered building list online at www1.nyc.gov/html/gbee/html/plan/ll87_covered_buildings_list.shtml.
Energy Efficiency Benchmarking
Local Law 84 of 2009 requires owners of large buildings to benchmark their energy and water consumption annually in the U.S. Environmental Protection Agency’s (EPA) ENERGY STAR Portfolio Manager, an online tool that measures both utilities. After measuring and recording the data, property owners then submit usage data to the city by May 1 through Portfolio Manager. Building owners that don’t comply are penalized.
Local Law 84 of 2009 and Local Law 133 of 2016 currently require city-owned buildings exceeding 10,000 square feet and other buildings exceeding 25,000 square feet to submit annual energy and water consumption benchmark data. Based on data provided by owners, buildings are placed into one of 21 different groups according to a property’s primary use, and subsequently assigned a score by the Energy Star program corresponding to the building’s energy usage as compared to its nationwide peers. Local Law 133 delayed the benchmarking requirement for those newly affected mid-size buildings until utilities implement automatic upload of benchmarking data. The law also requires the city to provide benchmarking assistance and exempts owners from violations if they make a good faith effort to comply with the new rules and seek assistance at least 60 days before their data is due to the city.
Energy Efficiency Grading
Local Law 33 of 2018 expanded upon Local Law 84 of 2009 to require that, starting in 2020, city-owned buildings larger than 10,000 square feet as well as all other buildings exceeding 25,000 square feet are required to display their energy efficiency grade (including both a letter grade and energy efficiency score) near each public entrance. As part of the Climate Mobilization Act, Local Law 95 of 2019 amended the ranges for how energy efficiency grades are calculated.
Effective May 20, 2019, under LL95, the energy efficiency grades will be assigned as follows:
• If the Energy Star score of a building is equal to or greater than 85, the energy efficiency grade will be A;
• If the Energy Star score is equal to or greater than 70 but less than 85, the energy efficiency grade will be B;
• If the Energy Star score is equal to or greater than 50 but less than 70, the energy efficiency grade will be C;
• If the Energy Star score is less than 55, the energy efficiency grade will be D;
• If the owner fails to submit the benchmarking data and has had an opportunity to be heard concerning noncompliance, the energy efficiency grade will be F; and
• If it isn’t feasible to obtain an energy efficiency score for a building or if the building is subject to an exception, the energy efficiency grade will be N.
LL33 also provides that, on or before Dec. 31, 2021, an agency designated by the mayor shall electronically submit to the mayor and speaker of the City Council a report on the value of the energy asset score in predicting energy performance for buildings, including recommendations as to whether and what form and manner such scores should be disclosed.
A series of local laws included with the NYC Climate Mobilization Act of 2019 concern development of “green” roofs in new construction and for buildings undergoing certain major renovations through the addition of plants, solar panels, and/or small wind turbines, in order to filter pollutants, add agricultural space, encourage renewable energy generation, reduce air pollution, and generate heat and electric power in an environmentally conscious manner.
Local Laws 92 and 94 of 2019 require green roofs on certain new construction and renovation projects and require all buildings to reduce urban heat hazards. LL92, effective Nov. 15, 2019, amended the Building Code to require that roofs of buildings in occupancy groups B, I-4, M, or S-2 (as defined in BC §202) be covered in green roofs or solar photovoltaic electricity generating systems. However, LL92 also provides that for five years after the effective date of the law, buildings with five stories or fewer will be required to comply with green roof provisions only to the extent determined by HPD, based on considerations of affordability or financial viability. By Nov. 15, 2024, all such buildings will be required to comply with BC §1511.2.
Local Law 92 also requires HPD to study the potential impact of compliance with green roof provisions on affordability in connection with construction or renovations of:
1. Buildings operated as affordable housing under the private housing finance law, general municipal law, or RPTL §420-c;
2. Buildings subject to the alternative enforcement program; and
3. Buildings owned by HPD.
Local Law 92 further requires HPD to submit study reports to the mayor and City Council on or before Nov. 15, 2023, with specific recommendations for cost-effective pathways for these buildings and whether exemption should be continued to maintain affordability.
Local Law 93 of 2019, effective Nov. 15, 2019, calls for the Office of Alternative Energy to maintain a website with informational links concerning the installation of green roof systems.
In addition, NYC Resolution 66 calls upon the state to enact legislation that will increase the real property tax abatement based on the installation of a green roof to $15 per square foot.
Local Law 98 of 2019, effective Nov. 15, 2019, amended restrictions on sound levels permitted by wind turbines, added new sections to the NYC Building Code concerning maintenance and removal of large wind turbines, and clarified DOB’s obligation to develop or support standards and technologies for wind energy generation and to authorize the installation of large wind energy turbines in appropriate locations.
This additional portion of the Climate Mobilization Act broadly applies to buildings 25,000 square feet and larger, or to two or more buildings on the same tax lot together exceeding 50,000 square feet. Excluded are houses of worship, buildings with one or more rent-regulated units, and other forms of affordable housing.
Local Law 96 of 2019, part of the Climate Mobilization Act, calls for the establishment of a sustainable energy loan program for the purposes of providing certain building owners with funding for the installation of renewable energy systems or energy efficiency improvements. Authorized by state legislation, PACE is a voluntary financing mechanism that enables energy efficiency and renewable energy projects to receive long-term financing for little or no money down. Debt service is generally limited to the amount of money saved through the resulting reductions in energy use. PACE financing is tied to a property rather than property owners, meaning that repayment obligations are transferrable when a property changes ownership.
HOW TO COMPLY
All new building and alteration applications filed on or after Dec. 28, 2010, must comply with the applicable edition of NYCECC. The version and edition of the NYCECC that was in effect at the time of filing applies throughout the project, as long as the application and permit remain active. Editions of the NYCECC were issued in 2011, 2014, and 2016. The next edition of the NYCECC is anticipated in 2020.
For further information on which version of the code applies to a particular project, including text of each code version, go to DOB’s website at: www1.nyc.gov/site/buildings/codes/energy-conservation-code.page.
The NYCECC provides for DOB examination of construction documents to determine whether they’re in compliance with the requirements of the energy code.
An owner, using an approved energy auditor, must ensure that an energy audit is performed on the base building systems of a covered building before filing an EER. An energy audit isn’t required for the first EER of a simple building where six out of seven of the following have been certified by a registered design professional: individual heating controls, common area and exterior lighting, low-flow faucets and shower heads, pipe insulation, domestic hot water, washing machines, and cool roof. Owners must maintain copies of energy audit reports and retro-commissioning reports for 11 years from the required submission date and make these reports available to DOB upon request.
Beginning in reporting year 2019, DOB will require the use of the U.S. Dept. of Energy’s Asset Score Audit Template as the energy audit data collection tool to be used under Local Law 87 of 2009, and will no longer accept a previously used Excel-based tool.
An owner, using an approved retro-commissioning agent, must ensure that retro-commissioning is performed on the base building systems of a covered building before filing an EER. Retro-commissioning is a systematic process for optimizing the energy efficiency of existing building systems through identification and correction of deficiencies, including repairs, cleaning, adjustments of valves, sensors, controls or programmed settings, and/or changes in operational practices.
The retro-commissioning agent must prepare and certify a report that includes information including the types of base building systems, testing protocol, master list of findings, and deficiencies corrected. Retro-commissioning must be completed no earlier than four years before the date on which a building’s EER is filed with DOB. Owners must maintain copies of retro-commissioning reports for 11 years from the required submission date and make these reports available to DOB upon request
An owner may combine energy audit and retro-commissioning reports. As of 2018, DOB continued to use an Excel-based Retro-Commissioning Data Collection Tool.
Energy Efficiency Reports
An owner must complete an EER electronically and submit the EER once every 10 years by Dec. 31. Beginning Jan. 1, 2013, EERs are due in the calendar year with a final digit that is the same as the last digit of the building’s tax block number. The building’s energy audit and retro-commissioning report must be completed prior to filing the EER. An EER must include the energy audit report and retro-commissioning report, or documentation that an exception applies to these requirements.
After submitting data, a building is given an ENERGY STAR score based on its energy efficiency. This score is a screening tool that helps building owners assess how buildings are performing and assists them in identifying whether a building needs improvement. The median score is 50, 75 is very good, and 100 is the top score.
Steps outlined by the city for annual benchmarking are the following:
• Check the Covered Buildings list for properties every year;
• Set up an account in ENERGY STAR Portfolio Manager® if not already done;
• Enter or review building characteristics and uses;
• Collect whole building energy data (and water data, if required) from utilities;
• Record energy and water usage in Portfolio Manager®;
• Confirm and enter BBL and BIN information;
• Check data for errors and completeness; and
• Submit usage data to the city by May 1 through Portfolio Manager®.
These steps are found online at www1.nyc.gov/html/gbee/html/plan/ll84.shtml.
Building owners are subject to a penalty if usage data is not submitted by May 1 every year.
Reducing Greenhouse Gas Emissions
While LL97 of 2019 establishes guidelines for limiting NYC’s building emissions, many of the specifics have yet to be ironed out. While the law includes guidelines for greenhouse gas coefficients during the initial compliance period, subsequent standards will be set through rulemaking. In addition, the emissions limits are subject to change and lack specific guidelines for 2035 onward. LL97 does allow for reported greenhouse gas emissions to be reduced each year through the purchase of clean electricity or greenhouse gas offsets.
A potential alternative compliance pathway for LL97 compliance is through carbon offsets. During the first compliance period, up to 10 percent of a building’s annual emissions limit can be deducted with the purchase of greenhouse gas offsets, also known as carbon offsets. Offsets are credits generated in response to greenhouse gas reductions by a given party that can then be purchased by or exchanged with other parties to compensate for emissions in excess of defined emissions limits. NYC’s specific rules surrounding offset purchases will be determined through rulemaking. The role of offsets in subsequent compliance periods has yet to be determined.
Renewable Energy Credits
In addition to carbon offsets, building owners also have the option under LL97 of purchasing unlimited renewable energy credits (RECs), also known as renewable energy certificates, to be deducted from their reported annual building emissions for electricity consumption. RECs are generated through the production of energy by renewable sources, per LL97, and by convention denominated in megawatt hours (MWh). The bill requires that RECs represent energy that’s deliverable to the NYC area and generated in the same year as the building emissions for which they’re compensating. LL97 also mandates that RECs must be used for compliance with LL97 only and can’t be used in connection with other compliance mandates.
Carbon trading represents another potential alternative compliance pathway for LL97, which mandates that NYC study the development of a citywide emissions trading scheme (ET) focused on greenhouse gas emissions from buildings by 2021. Emissions trading, also known as cap and trade, allows for building owners to balance their emissions with credits purchased from other parties whose building emissions fall under the emissions threshold.
Buildings facing financial difficulties, defined by the application of tax liens or partial tax exemptions, may be temporarily exempt from LL97.
Emissions Limit Adjustment
A building facing mandated emission reductions in excess of 40 percent of its overall emissions may receive an emissions limit reduction equivalent to 70 percent of the building’s emissions limits in the 2018 calendar year.
Alteration applications filed on or after Oct. 3, 2016, are subject to the 2016 NYCECC. Complete applications, that include a complete energy analysis, filed on or before Oct. 2, 2016, are subject to the 2014 NYCECC. Incomplete applications filed on or before Oct. 2, 2016, may be subject to the 2016 NYCECC.
The years that a building’s first EER is due correlate to the last digit of tax block numbers and are, for respective years: 2013 (3), 2014 (4), 2015 (5), 2016 (6), 2017 (7), 2018 (8), 2019 (9), 2020 (0), 2021 (1), and 2022 (2). An EER could be submitted between Jan. 1, 2006, and Dec. 31, 2013, in order to achieve early compliance. The next required EER for a building is then due in the tenth calendar year after the first assigned due date for the report. For example, if the due date for the EER was 2015 and the owner filed the EER early in 2013, the next report will be due in 2025.
LL97 of 2019 requires, at minimum, a 40 percent reduction over 2005 levels in citywide emissions by calendar year 2030, and an 80 percent reduction in citywide emissions by 2050.
The fees for EERs are as follows: $375 for initial filing; $155 for an extension request for filing the report; and $145 for filing amendments to the report.
The fee for energy code compliance review is $220.
PENALTY FOR FAILURE TO COMPLY
Failure to submit an EER is a Major (Class 2) violation that may result in penalties of $3,000 (first year) and $5,000 for each additional year.
A form to be used to challenge a violation received for failure to submit an EER can be found on DOB’s website at: www1.nyc.gov/site/buildings/business/energy-efficiency-report-forms.page.
Higher carbon intensity buildings will have to reduce their carbon footprint through deep energy retrofits by 2030 to avoid fines of $268 per ton of carbon emissions in excess of the building’s limit.
Only New York’s Secretary of State can provide waivers from energy code compliance. For a variance application, contact the DOS at (518) 474-4073 or firstname.lastname@example.org.
Energy Efficiency Report Forms, as well as Energy Auditor registration forms and extension application forms can be found on DOB’s website at: www1.nyc.gov/site/buildings/business/energy-efficiency-report-forms.page.
These forms include:
• EER1 Application to Defer Filing an Energy Efficiency Report (10/13);
• EER2 Application for Extension of Time to File Energy Efficiency Report (9/13);
• EERC1 Professional Certification: Energy Auditor and Owner Statements (7/14); and
• EERC2 Professional Certification: Retro-commissioning Agent and Owner Statements (7/14).
Instructions for How to File an Energy Efficiency Report Guide (10/7/13) are found on DOB’s website at: www1.nyc.gov/assets/buildings/pdf/how_to_file_energy_efficenicy_report.pdf.
Editor’s Note: The editors are grateful to Eileen O’Toole, Esq., contributing editor of the Apartment Management Checklist, from which this Special Issue has been excerpted. The 2020 edition of the Checklist will be published in January 2020 by The Habitat Group. For more information or to reserve a copy, please go to https://www.thehabitatgroup.com/page/pre-publication-reservation-form-2020-nyc-apartment-management-checklist.
FOR FURTHER INFORMATION
For general questions, contact Energycode@buildings.nyc.gov, or the local borough office of DOB.
For information about:
> Clarifying when additions, alterations, or repairs to lighting/electrical power, HVAC and/or water heating systems, and building envelopes may not be required for NYCECC compliance, see DOB Buildings Bulletins 2017-004, 2017-005, and 2017-006 at: www1.nyc.gov/site/buildings/codes/energy-conservation-code.page.
> NYCECC, visit DOB’s webpage at: www1.nyc.gov/site/buildings/codes/energy-conservation-code.page.
> Goals, structure, and process of the city’s 2019 NYCECC revision effort, see DOB’s 2018 Energy Code Revision Handbook, found at: www1.nyc.gov/assets/buildings/pdf/energy_code_revision_handbook_2018.pdf.
> NYC Energy Audit Data Collection tool, go to DOB’s LL87/09 webpage at: www.nyc.gov/html/gbee/html/plan/ll87_about.shtml.
> NYC Energy Audits and Retro-Commissioning, see DOB’s webpage at: www1.nyc.gov/site/buildings/industry/sustainability-energy-audits.page.
> NYStretch Energy Code–2020, go to: www.nyserda.ny.gov/All-Programs/Programs/Energy-Code-Training/NYStretch-Energy-Code-2020.
> Updates on the 2020 NYCECC, go to: www1.nyc.gov/site/buildings/codes/energy-conservation-code.page.
> Deep retrofitting, go to: https://rmi.org/our-work/buildings/deep-retrofit-tools-resources/deep-retrofit-case-studies.
> For information on estimates that, as of 2019, approximately 20 percent of buildings exceed the 2024–29 emission reduction targets, while approximately 75 percent of buildings exceed the 2030–34 targets, see NYC Council press release at: https://council.nyc.gov/press/2019/04/18/1730/.
> NYC Retrofit Accelerator, which offers free, personalized advisory services that streamline the process of making energy efficiency improvements to buildings, can be found at: https://retrofitaccelerator.cityofnewyork.us.
> Deep energy retrofits, go to: https://rmi.org/our-work/buildings/deep-retrofit-tools-resources/deep-retrofit-case-studies.
> Retrofits for steam-heated multifamily building upgrades, go to: www.energyefficiencyforall.org/resources/clanging-pipes-and-open-windows-upgrading-nyc-steam-systems-for-the-21st-century/.