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Class is in session: Local Law 95 requires NYC buildings post letter grades

NYC has taken significant steps toward sustainability and other environmental goals. This is best exemplified by the Climate Mobilization Act, a landmark package of green legislation and regulations. The goal is to reduce building-generated emissions by 40% by 2030, and 80% by 2050.

Among the new measures was Local Law 95 of 2019, which amended Local Law 33 of 2018, requiring most mid-size and large buildings in NYC to post energy efficiency grades publicly.

Let's take a closer look at the law and what actions you may need to take to become compliant by October 2020.

What does the law require?

The main thrust of the law is that buildings will need to display energy efficiency grades similar to how restaurants must display public health ratings. It's an effort to increase transparency, but also to hold property owners and managers accountable for emissions and energy efficiency performance. Tenants may be less likely to rent in buildings with low grades, forcing low performers to improve and help the city reach its sustainability goals.

Local Law 33 of 2018 first established the standards for energy efficiency letter grades, declaring "energy efficiency scores and grades for [covered] buildings shall be obtained, assigned and disclosed."

It's important to understand the difference between "grade" and "score." The letter grade that must be displayed is based on a score that buildings receive from the EPA Energy Star benchmarking tool. A score is calculated on a 100-point scale using data like water and energy consumption, location and number of occupants.

Local Law 95 was passed to update ranges for letter grades:

  • An Energy Star score of 85 or above will be considered an "A"
  • 70-84 is a "B"
  • 55-69 is a "C"
  • 54 and below is a "D"
  • Noncompliance leads to an "F"
  • Exempted buildings and properties for which Energy Star cannot calculate a score will receive an "N"

20_June_Milrose Consultants_Energy Star Graph

Who does the law apply to?

All structures 25,000-square-feet and larger must comply with the law. However, exceptions are carved out for some multifamily and mixed-use buildings, as well as those with television studios or data centers that make up a certain percentage of floor space.

Importantly, property owners and managers who fail to submit a score will be fined, in addition to receiving a letter grade of "F" that must be posted.

What are the steps to compliance?

October 2020, when grades first need to be posted, is not that far away. As such, owners and managers will need to start preparing for Local Law 95 compliance.

Here are the steps to take:

  1. Submit benchmarking energy and water consumption data May 1 of every year. Important: The 2020 deadline for submitting 2019 data has been extended to August 1 because of COVID-19.
  2. Get your Building Energy Efficiency Rating Label on October 1, which you can access in the DOB NOW Public Portal.
  3. Print and display grade within 30 days.

The physical scorecard should include:

  • The letter grade
  • An illustration of the grading scale and where the building falls
  • The building's Energy Star score
  • The NYC average Energy Star score
  • An explanation of how the score is calculated
  • The building energy efficiency rating for the last two years
  • Building street address, borough, block and lot

In addition to complying with the rating system, buildings must meet new energy efficiency standards. Local Law 97 of 2019 is the backbone of the Climate Mobilization Act and it will enact some of the most ambitious and expansive carbon emission regulations in 2024. Buildings that are not retrofitted to reduce carbon emissions will be fined, as well as those that emit above their calculated limit.

What complications might exist?

A major hurdle that building owners and managers might encounter in 2020 is COVID-19. The pandemic has disrupted operations to an unprecedented degree, which could make benchmarking difficult to complete in time for October.

Adapting their buildings to the new normal, while simultaneously collecting and submitting benchmarking data, may put the pressure on owners and managers.

How can I prepare to meet NYC's upcoming  decarbonization mandates?

While the new regulations and grading system may be intimidating, it is clear that investing in energy efficiency measures now is necessary.

Looking for help with preparing to meet the upcoming requirements of NYC's Climate Mobilization Act?

Download our white paper that walks you through new benchmarks and energy efficiency considerations when achieving compliance. For project-specific energy code guidance, please contact Milrose's team of code and zoning analysts for assistance.

OneNYC benchmarks