Marc Karell will participate in a free webinar on the topic of using the various local laws to substantially reduce your energy costs on Tuesday, June 30 at 2:00 pm. See EE Reports (www.EEReports.com) to learn more about and to register for the free webinar.
Over the last few years, New York City government has put into effect several new laws affecting energy usage of large (>50,000 sq. ft.) buildings. Local Law (LL) 84 requires such buildings to enter their energy usage data (electricity, gas, oil) into a database for public view. The building does not have to reduce energy use; just enter data annually. LL 87 requires a building to perform a thorough energy audit and retro-commissioning study once per decade. Other municipalities have passed or are considering passing similar “benchmarking” and minimum energy standard rules.
Many owners/managers approach compliance to any law as “checking off the boxes”, and then ignore what comes from it. But that is not a good way to think about it in this case. Complying with laws like these also provides you with information about your building to pinpoint energy upgrades to maximize your financial benefits.
First, collecting energy usage data per NYC LL 84 provides you with information on how your building stands compared to similar ones. Are you using more or less energy than others to keep warm or cool, for lighting, etc.? If you are using less energy, then congratulations, and go out and publicize this unassailable fact to attract more tenants. If you use more energy than similar buildings, then you have the impetus to know that you can do better. Plus, the exercise creates the data to pinpoint the likely areas to get improvement and to get the most bang for the buck in reductions.
The energy audits of NYC LL 87 require developing a list of energy conservation measures (ECMs), site-specific strategies to reduce energy usage and demand. Each one will result in direct cost savings to more than make up for the initial investment. Utility and NY State incentives can pay you some of the upfront costs! But note that many of these programs in NY are scheduled to end in 2016. So do not wait too long. For those concerned about accepting such subsidies, remember, in NY, that these come from a fund financed by you, the user, in your SBC charge in your utility bill. So you are merely taking back money you put into the system for such projects!
If finding available funds for the upfront costs of an ECM is difficult, there are a number of entities (private and public) that will loan you this money, knowing the fine ROI of energy projects. Terms may be arranged so that you pay back the principal and interest from your energy savings, giving you positive cash flow at all times.
LL 87 retro-commissioning is composed of meeting 25 different standards for equipment operation, such as checking for leaks, clogged filters, broken lights, etc. All deficiencies found during site inspections must be addressed. They are normally low or no-cost fixes. The importance of this is the assurance that your energy systems are operating properly. After spending perhaps hundreds of thousands of dollars on your HVAC, lights, etc., isn’t it smart to make sure they are operating as they are supposed to? To make sure you get your money’s worth?
But remember that besides potential significant cost savings on your electricity, gas, and oil bills, performing energy upgrades has other strong financial benefits:
• New energy technologies generally last longer than those replaced. Therefore, you need to purchase and have on hand fewer replacements (another cost savings) and you need less space to store backup items. In addition, these new technologies need to be serviced less often, freeing up your O&M staff to do other projects for your tenants. In particular, for lights, this means fewer trips up and down the ladder or cherry picker, saving time and reducing risks of an accident.
• A more energy efficient building attracts more and potentially a better quality of tenant, giving you the upper hand to set rents and conditions. Energy efficient buildings have a better re-sale value, as well.
• Better lighting and improved comfort result in a more productive staff, which you and your tenants can appreciate, and a better shopping experience, which your retail tenants will appreciate. For example, modern LED lights have less glare than many fluorescents that are replaced, resulting in less eye strain, fewer breaks needed, and a more productive staff. Proper lighting and comfort lead to a better experience for the shopper, which a retail tenant strives for.
So don’t view the NYC Local Laws for energy as just another law you have to comply with, but instead as something to smartly take advantage of to seize the many benefits of reducing your energy usage and energy costs which will only rise in the future. Take the information you get about your building and use it to maximize your financial gains.
Marc Karell, P.E., CEM, EBCP, is a Principal of Climate Change & Environmental Services, LLC, a technical firm that helps building owners and managers perform energy studies and upgrades to maximize financial and productivity benefits. CCES has the experience to help you save significant energy costs. Contact us at 914-584-6720 or at karell@CCESworld.com.