Local Law 87 Compliance FAQs

What are the requirements that I must meet to comply with the new Local Laws?

The new laws require energy audits and retro-commissioning every ten years, starting in 2013. Lighting upgrades and the installation of sub-meters in tenant spaces of 10,000 square feet or more are required by 2025. Please note that each Local Law 87 is also subject to rulemaking—i.e. the process of creating and approving regulations which implement the law–as well as government agency interpretations of the law and regulations, and enforcement of compliance.

Let’s start with energy audits. What does an audit entail?

Rules were issued for Local Law 87 in September 2012. An energy audit must be performed in accordance with the standards set forth by ASHRAE for a “Level II” audit. It must be performed by an independent approved auditor. The audit must include a complete interior and exterior inspection of the building envelope along with the heating, air conditioning, lighting systems and water usage. The audit will also include a thorough review and analysis of all utility bills, plus a complete analysis and recommendations of potential energy conservation measures, with projected costs for such measures and payback calculations. Following the inspection and analysis, Local Law 87 & LL87 Extension requires that an audit report be filed. Note that there are certain exemptions from Local Law which can exclude a building from having to perform expensive energy audits. We can help navigate these exclusions to your advantage.

Do I need to retain an independent auditor? Can I perform an audit myself?

You cannot perform the audit yourself (i.e. “in house”). Local Law 87 mandates that energy audits be performed by an independent engineer who meets the qualifications to perform audits in accordance with Local Law requirements. Required credentials to perform the audits are quite stringent and specific.

Is Yadav Solutions properly certified to perform energy audits?

Yes. Yadav Solutions has on staff with a CEM (Certified Energy Managers) and CBCP (Certified Building Commissioning Professionals) which meets the requirements specified in the applicable Local Laws and the related Rules to conduct energy audits and retro-commissioning. We are also approved by the DOB to sign off on the energy and retrocommissioning reports for compliance.

What are the local law requirements with regard to retro-commissioning?

In addition to the energy audit, retro-commissioning of base building systems is also required by Local Law 87. Retro-Commissioning includes the identification and correction of any deficiencies, repairs of defects, cleaning, and adjustment of valves, sensors, and controls to optimize the energy efficiency of base building systems. The Rules for Local Law 87, issued in September 2012, are very specific with regards to retro-commissioning.

When should I have my building’s energy audit, retro-commissioning and benchmarking performed?

You can have the energy audit and retro-commissioning performed up to four years prior to the due date. Your building’s outside deadline for conducting and filing an energy audit depends on your tax block number. Contact us and we can walk you through your individual building’s deadlines and obligations under the new Local Laws.

The report must be filed each year before December 31st. If you missed a LL87 deadline & LL87 Extension filling, you will be subject to fines and violations ($5,000 to $10,000 for Local Law 87).

What are the advantages to having an audit and the retro-commissioning performed now?

By performing an energy audit as well as retro-commissioning up to four years prior to the due date, owners can both meet the new Local Law requirements and realize substantial cost savings because of the current availability of funding to offset a portion of audit and retro-commissioning costs. In addition, while the audit and retro-commissioning are separate and require filing of separate reports, Local Law 87 allows the reports to be combined. This is far more cost efficient in terms of fees, availability of funding, and the savings you can realize from the correction of inefficiencies through adjustment of sensors, controls and other building systems. By implementing energy saving measures sooner rather than later, additional savings are realized.

I’m seeing a lot of proposals from “green consultants” quoting a wide range of fees. How do I go about making the right choices?

It seems that new “green consultants” are sprouting up every day! Many firms and professionals are indeed qualified to perform the work necessary to comply with the new Local Laws. However, this is New York City, so buyers beware! Several firms are quoting extremely high fees and locking clients into long-term commitments and products or services that may not actually be necessary. Still others are quoting extremely low fees or even no-cost services to lure clients into buying things that may have nothing to do with the new Local Laws. In fact, an inherent conflict of interest may exist between a consultant’s desire to lock his or her client into buying what the consultant has to offer, and the professional duty to serve the client’s bests interests. For example, the client’s best interests may be best served by avoiding added costs and finding exemptions under local laws that will in fact spare the client from having to spend tens of thousands of dollars in unnecessary fees. Clients need and deserve solid, professional, ethical counseling when navigating compliance with the new local laws. At Green Partners, we pride ourselves in putting our clients’ interests first and in providing the utmost professional and ethical service. We also strive to spare our clients unnecessary fees while ensuring full compliance with the laws. We also help our clients take full advantage of potential cost savings, low-cost or no-cost energy conservation measures (“low hanging fruit”), and funding opportunities wherever necessary to help offset costs.

Are there any advantages to early compliance?

Yes, there are many advantages to early compliance. Presently, funding is available to help offset building owners’ costs in the form of government and utility rebates and cost-sharing programs. Additionally, early compliance will likely reveal energy savings that a building might realize by taking low-cost or no-cost energy conservation steps. Such energy savings, once realized, will save building operating costs by reducing the building’s utility bills. A building that complies early and takes a pro-active approach to becoming more “green” and energy efficient can realize higher rents and achieve potentially higher cap rates. Finally, a building that complies early and rates highly in terms of energy efficiency has a definite competitive advantage. Such a building can attract and retain better tenants, see fewer vacancies, and strengthen rent rolls or sales.

Demographics:

Under the covered buildings rubric published by the Department of Buildings following the completion of initial benchmarking 13,000 new buildings will be listed every 10 years, over the last full calendar year in which Local Law 87 has been in full effect Yadav Solutions in conjunction with qualified partners has been a part of over 500 completed audits and retro-commissioning processes of which a full 20% have been completed completely within house in that same time period. Yadav Solutions anticipates an extrapolated process completion percentage at twice that rate within the coming year due in large part to an established familiarity with the laws, their requirements, our clients and their needs.  The pie chart below shows the amount of projects Yadav Solutions and its partners have thus far completed and the total amount approximately completed within New York thus far as well as illustrate just how great the room for growth is within the field itself.

Will you help me quantify my potential costs and savings?

Yes. Yadav Solutions’ reports include energy saving recommendations with detailed cost and payback calculations. In addition, we have the expertise to source and quantify available funding for your projects to the fullest extent.

How do I make an informed decision regarding the requirements of the new local laws?

One of the ways that we have found to be most helpful to our clients is to have a briefing session to review what exactly the local laws require, what the client’s specific deadlines are (each building varies), what potential exemptions or extensions may exist, what funding sources may be available to offset costs, and how best to integrate the necessary compliance with the building’s overall capital programs, ongoing maintenance, and operations. In other words, it’s to the building owner’s best advantage to take a strategic approach to compliance and to weigh the costs and benefits as a whole.

What are the key factors to consider in making the “the near term or wait” decision regarding the required energy audits and retro-commissioning?

We recommend that you consider the financial impact of your decision as to whether to wait or to proceed now with the required energy audit and retro-commissioning. The financial impact includes both the estimated capital costs and operational benefits of early compliance, available funding as well as projected rental or sales revenues (plus or minus).

Let’s start with costs. What are the costs I should consider?

First, consider the costs of the audit. An audit that can be subsidized with up to fifty percent (50%) of the audit costs covered is clearly more cost effective than one which has zero subsidies.

Are there any other cost factors that should be considered?

Yes. An audit that is conducted now rather than later will likely reveal energy efficiency measures that could be implemented to reduce a building’s energy costs immediately. Such measures could include low-cost or even no-cost items that will save on your energy bills as soon as such measures are put into place.

How can I quantify the potential savings from energy efficiency measures?

While each building has a unique profile in terms of energy usage, BOMA (Building Owners and Managers Association) and Energy Star of the US Environmental Protection Agency have developed data on potential energy savings from building surveys they have each conducted over the years. A few examples of potential savings are:

  • Improved Operations & Maintenance – Savings of 7% to 28%.
  • Upgraded Lighting – Savings of 9.4% to 25%.
  • Calibration & Monitoring of Central Controls – Savings of 7.3% to 22.9%.
The potential energy savings covered above have large ranges. How do I quantify the energy savings for my building?

The best way to quantify your building’s potential energy savings is to perform an energy audit and to include in the audit report a detailed assessment of energy conservation measures that could be implemented, together with a qualified engineer’s projection of potential energy savings and “payback” (return on investment) over time. A Yadav Solutions audit report will include these items as part of our deliverables. You will then have the needed information to make informed decisions as to what energy saving retrofits are appropriate for your building.

How do my rental or sales revenues tie into my energy usage levels?

Rental and sales revenues for your building will likely be affected—positively or negatively. Surveys and experience in the real estate industry have shown that buildings which are ranked higher in terms of energy efficiency command higher rents and sales prices than buildings which rank poorly. Efficient buildings also tend to have higher occupancy rates and better tenant retention rates. Note that the new local laws specify that every building’s benchmarking score be published and made available on the City’s Web site, so of course, building owners, leasing agents, real estate brokers and representatives will compare building scores as a means of marketing high-scoring building scores and steering clients to the better-scored buildings.

Gross Savings:

Energy costs are rising and are not likely to drop. While new technologies and renewable energy sources are gaining in popularity, energy efficiency remains the easiest and single most cost-effective way to cut energy use. The most energy-efficient buildings in America expend 35 percent less energy than typical buildings, all without trade-offs in performance or comfort.

Research also shows that more efficient buildings have higher occupancy rates and increased asset value compared to typical buildings. Tenants want real estate with lower utility bills, and more and more organizations are implementing leasing policies mandating environmentally friendly space. What’s more, consumers and employees report a desire to affiliate with organizations they perceive to be environmentally responsible.

A recent study found that commercial buildings that regularly benchmarked their energy performance cut their energy bills by seven percent over three years (2.4 percent per year on average). That’s equal to:

For a 500,000-square-foot office building:

  • Cumulative cost savings of $120,000
  • Increase in asset value of over $1 million
For a medium-box retailer with 500 stores:
  • Cumulative cost savings of $2.5 million
  • Increase in sales of 0.89%
For a full-service hotel chain with 100 properties:
  • Cumulative cost savings of $4.1 million
  • Increase in revenue per available room of $1.41
For an 800,000-square-foot school district:
  • Cumulative cost savings of $140,000
  • Salary of 1.2 full-time teachers each year

he average cost for consultation, analysis, audit and retro-commissioning is between 10 and 14 cents per square foot. A 50,000 square foot building then is looking at between $5,000 and $7,000 in total depending on the current state of the building, number of systems that need analysis and length of site visit and/or consultation necessary.

How should I proceed from here?

Please contact Yadav Solutions for an initial consultation, which is free of charge. We can walk you through the Local Law requirements and outline for you our recommendations along with your options. We can also review funding currently available to you if you desire. If you decide to proceed to the next steps, then Green Partners will prepare a proposal with a schedule of deliverables and fees. Please call us at 1-917-338-6774 or contact us at info@yadavsolutions.com to schedule an appointment or initial discussion. We look forward to hearing from you.



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