Author: Jon Braman
New York City Council is considering landmark legislation that would set strict limits on the carbon emissions of large buildings. As recent reports from the IPCC and the federal government have made clear, there is great urgency to accelerate large-scale action to reduce greenhouse gas emissions. Unlike anything else in the country, the bill, Int. 1253, was introduced by City Council Member Costa Constantinides and sets NYC buildings on a path to meet the City and State goals to reduce total carbon emissions 80% by 2050. If passed, the bill will require buildings larger than 25,000 square feet to meet new greenhouse gas (GHG) emissions targets or face significant fines. Without this bill or something like it, we may not meet the 80×50 goal.
Starting in 2022, buildings over 25,000 square feet will each have a maximum limit of carbon emissions (see below). Those limits will step down over time. The bill also creates an office within the NYC Department of Buildings to administer these rules as well as an expert advisory committee comprised of stakeholders like building owners, trade organizations, design professionals, academic research institutions, utilities, environmental organizations. The advisory committee will guide the development of the emissions limits and building performance metrics going forward.
New Emissions Limits
Emissions limits vary by occupancy groups.
If your building is above the limits listed above, then you will need to identify and install improvements (you may hear engineers or design professionals call them “energy conservation measures”) and make operational changes, and/or purchase or install renewable energy to bring your carbon emissions below the limit. Alternatively, if your building remains above the limit, there will be a fine.
Currently in the bill, buildings with any rent-regulated units are exempt from these limits.
What Does That Mean For A Typical Residential Building?
First of all, over 80% of large multifamily residential buildings are already in compliance with the 2022 limits, based on our analysis of the publicly disclosed energy usage data from Local Law 84. And multifamily buildings represent three-quarters of the large buildings in NYC. (The implications of the proposed bill for commercial buildings are more complex, given the large number of building types and uses.)
To begin visualizing how these requirements would play out, we’ve analyzed the impact of the bill on four real multifamily buildings. These buildings were selected from EnergyScoreCards, our energy and water management tool which includes a database of over 35,000 buildings’ energy and water consumption and costs. EnergyScoreCards uses a grading system to indicate how well a building is performing when compared to its true peers. Not to be confused with NYC’s energy efficiency building grades, EnergyScoreCards grades normalize for permanent features of a building like its type, size, geography, metering, apartment size and age.
Here’s what the four sample buildings look like today:
You may notice that buildings 1 and 2 are both pre-war mid-rise buildings that use gas for heating and hot water, but they perform very differently today. Building 1 is steam-heated but well maintained. A few years ago Building 1 underwent a set of comprehensive retrofits funded in part through NYSERDA’s Multifamily Performance Program (MPP), which cut energy use by over 30%. Building 2 is a high energy user – among the worst 25% of similar buildings in EnergyScoreCards – owing in part to significant overheating and poor control of the heating system.
Building 3 is a low-rise building that provides senior housing and was built in the early 80s. Building 4 is a recently constructed high-rise building with a number of high-performance design features including solar PV.
In 2022, assuming that these buildings are performing the same as they are today, all four are under the proposed GHG limit of 0.00701 tons CO2e/SF.
Fast forward two years to 2024 and the two top performers, Building 1 and Building 4, just need to maintain current performance to be in compliance, while the other two would require improvements. It is important to note that Building 1 and Building 4 were built almost 100 years apart, with very different systems and design, but are both already meeting the proposed 2024 limits.
Buildings 2 and 3 will need to make moderate or substantial upgrades to cut GHG emissions in order to meet the 2024 limits. Building 2, the overheated pre-war mid-rise, needs to make the most significant reductions, which likely would require a comprehensive scope with upgrades to lighting, appliances, heating and domestic hot water systems, building envelope and possibly onsite renewable energy.
Path to 2024 Emissions Compliance at Proposed Limit
For those more comfortable thinking in terms of units of energy, here is a useful rule of thumb for multifamily buildings to meet the 2024 emissions limit: a maximum annual usage of 5 kwh/sf and 0.5 therms/sf. Based on the range of performance we see among NYC buildings in EnergyScoreCards, these energy consumption numbers are achievable by well-tuned NYC multifamily buildings built in all eras and with a variety of building systems. Among NYC multifamily buildings receiving an “A” grade in EnergyScoreCards (meaning they are in the best quartile among peer buildings), a large majority already meet the 2024 standard proposed in the bill.
How Can You Meet These Limits?
Every building is unique, especially in New York, so there’s not a one-size-fits-all answer. To understand what your building truly needs, you must have an experienced energy engineer conduct an energy audit that looks at both capital and operational improvements to reduce greenhouse gases. Some buildings may have problems like overheating or leaks that can be solved without capital investment and lead to large reductions. Others will require substantial upgrades to heating, hot water, appliances, lighting and building insulation and air-sealing.
With a detailed study of the building, you’ll have the full context of how your building currently performs and what measures will have the greatest impact on your property. There are a variety of improvements – from simple to moderate to significant measures – to reduce energy use and greenhouse gas emissions that should be on your radar – if they’re not already.
The Turning Data Into Action report by Building Energy Exchange, Bright Power, and Sustainable Energy Partnerships analyzed a massive dataset of NYC multifamily buildings to help building owners understand their improvement options. We recommend taking a look at the tearsheets to see more examples of buildings, potential impactful improvements, and their associated GHG and monetary savings.
The good news is this new bill will do more than fight climate change. The improvements that you install will provide ongoing savings, improve your building’s performance, reduce your operations costs, and make your residents more comfortable. With increasing public concern about climate change, your residents may also be glad to know their buildings are taking a strong step toward reducing GHGs at home.
If you’re concerned about how to pay for this, the City Council also introduced a bill, Int. 1252, to create a new form of low-cost financing called PACE to ease the upfront cost of making energy-saving improvements
What We’d Like to See in the Bill
Bright Power was one of many industry players to offer feedback to City Council on the proposed bill in a hearing on December 4. We support bold action to curb emissions, but we believe the law would be much more effective with some key changes:
- More steady, long-term decline in emissions caps for buildings to achieve 40×30 and 80×50, rather than a steep drop in 2024 as seen in the current draft.
- Better definition of renewable energy options to allow buildings to use sources like community solar to meet emissions limits.
- More nuanced building categories and limits that take into account building characteristics, occupancy, etc.
- Better alignment of the limits with the NYC energy efficiency building grades. Rather than basing these new grades on ENERGY STAR Scores, which are not directly driven by GHG emissions, we believe it’s time to create an NYC tailored energy and carbon performance metric.
2022 is not far away. Now is the time to start identifying ways you can reduce your building’s GHG emissions. In addition to the Data Into Action report noted above, the Building Energy Exchange has extensive resources to guide building owners and managers in their decision making, including a playbook on upgrading steam heating systems and numerous case studies of successful projects that identify both the positive outcomes and challenges encountered during the process. You can access those resources here.
The Community Preservation Corporation (CPC) and Bright Power recently launched CPC VeriFi, which allows owners to quickly explore utility savings and financing options for simple, moderate, and significant energy efficiency improvements.
In assessing what your building needs, it is critical to find the right partner. They should be able to not only identify opportunities for improvement, but they should also:
- Understand your building’s current performance.
- Identify a set of practical and impactful options for reducing energy use and GHGs.
- Explain which package of improvements will yield enough of a reduction in GHG and energy use intensity.
- Provide the expected annual dollar and carbon savings.
- Identify and procure rebates and incentives to help pay for the improvements.
- Install the improvements.
And the most important indicator of a good partner is that they can measure and track your success to ensure you’ll meet the emissions limits when 2022 rolls around.
Remember, going green will get you some green. If you need to install improvements to meet these new limits, your building will be higher performing and better off in the long run. That’s a win for you, a win for your residents, a win for the city, and a win for the environment.
Still unsure of what this means for you? Contact us and we’ll answer all of your energy and water questions!
Another version of this post can be found on Building Energy Exchange’s blog.
Energy and water benchmarking is a simple concept that can mean very different things to different people. For some, the phrase conjures a burdensome and impractical requirement – especially the collection of resident utility data where providers don’t make it easy. For others, benchmarking seems like an almost magical catalyst that can unleash a future of high performance, low-carbon buildings. The reality includes both. But whatever your perspective, it’s safe to say that in the last decade benchmarking has gone from “cutting edge” to a mainstream practice of the multifamily real estate world. Still, we’re just getting started.
Launching EnergyScoreCards platform in 2009, Bright Power has been a leader in multifamily benchmarking for some time, continuing to work with visionary real estate companies, publish research and share best practices ever since. In this post, I draw on that experience to shed light on this rapidly evolving real estate practice and answer common questions.
Who is Benchmarking?
By summer 2017, 18 cities and one state now require multifamily buildings over a certain size to benchmark, and sometimes publicly disclose energy and often water consumption (Source: http://www.buildingrating.org). That’s big, and between California’s requirement taking effect next year, the expansion of the NYC law to include buildings 25k – 50k SF and HUD’s new benchmarking rule in development, the number of properties benchmarking annually is set to increase dramatically in the next year. To give a sense of scale, in terms of square footage and CO2 emissions, covered multifamily buildings in NYC alone represent 1.5 Billion square feet and 7.5 million megatons emitted annually CO2. In Chicago it’s 260 million square feet, emitting 1.9 million megatons of CO2, Seattle has 100 million square feet of benchmarking multifamily buildings, Boston 66 million, Philly 5.4 million square feet – and the list goes on.
These numbers, understate the total multifamily properties that benchmark their energy and water consumption, since many do it voluntarily – including the 112 of the 345 partner organizations (that is portfolios, not buildings) that have signed up for the Better Buildings Challenge, or a number of 250 members of the Global ESG Benchmark for Real Estate (GRESB), an investor-led sustainability reporting framework, which includes some of the country’s largest multifamily owners and managers. In other cases, lenders like Fannie Mae, Freddie Mac or housing agencies like NYC Department of Housing Preservation and Development (NYCHPD) or the Pennsylvania Housing Finance Agency (PHFA) require that borrowers, or at least those accessing green programs, benchmark their energy consumption, adding to the number of participating owners.
While benchmarking policies undoubtedly include some owners who have been reluctant and may do as little as possible to avoid a fine, the success of voluntary programs shows that leading multifamily owners are now doing it on their own accord; they’ve reached the conclusion that benchmarking provides real business benefits and is necessary to proactively manage their properties and stay competitive.
How Does It Work and Where Do I Start?
Utility bill-based benchmarking rarely requires any new hardware to be installed to collect consumption data, but that doesn’t mean it’s simple. While even just getting owner-paid data for a large portfolio can require collecting at least 12 months of historical data for hundreds or thousands of utility accounts, the real elephant in the room for multifamily properties is tenant data, which is needed in one form or another to assess whole building consumption and spending, usually required for compliance with local laws. Some utilities have made it easier by providing aggregate whole building data and integrating with ENERGY STAR Portfolio Manager, meaning owners may comply with the laws without having to manually type in utility data, or pay a service provider to retrieve and transfer it.
For other utilities, however, getting tenant data requires the laborious process of getting individual authorizations from residents and then collecting data from the utility, often extrapolating a whole building estimate from a (hopefully) representative sample. Even when working with utilities that integrate with Portfolio Manager and provide whole building data, a building owner still must set up the connection to Portfolio Manager (which often involves some amount of troubleshooting), and collect and enter property information (including square footage, units, bedrooms, information on commercial spaces, etc.). Fortunately, the EPA posts a searchable list of the utilities that offer automatic data integration, HUD has created a helpful benchmarking toolkit, and many cities with benchmarking requirements also provide a benchmarking hotline or other resources to help with compliance.
While some building owners have the time and interest to take on benchmarking DIY, most prefer to seek assistance from specialized software or service providers to collect, curate, clean and analyze the data. The good news is there are now several options for getting help, including:
- Signing up for a multifamily benchmarking service such as Bright Power’s EnergyScoreCards service (which for full disclosure I helped create and oversee) or WegoWise.
- Utilizing a bill aggregator or bill-pay service to transfer data to Portfolio Manager such as Ecova, AUM, NWP, Conservice; or others.
- Using a more broadly-focused sustainability reporting services like Goby or Measurabl, which may include integration with Portfolio Manager.
If you need to or want to benchmark and you don’t want to go it alone, there are many companies now ready to assist, some of which have now been running for years, gaining in experience and capability, offering better service and value. Given a range of different offerings, getting an apples-to-apples comparison between providers is critical.
What Can I Do With Benchmarking Data?
Too many conversations about benchmarking begin and end with talking about data. Insight and action are the goals – not just data collection. No one ever saved a kWh or made a building better just by staring at numbers on a screen – no matter how quickly they arrived there or how engagingly they were presented. Translating data into insight and action can be done in dozens of ways, from peer comparisons to identifying candidates for building upgrades, to watching trends and tracking progress toward goals, to measuring the impact of specific energy and water saving projects. Unfortunately, benchmarking laws, and even some benchmarking data services, seem to trust that once building owners collect the data, getting value from it will just happen automatically.
At Bright Power, we’ve seen that while a few owners are adept at translating data into action, most need help from an expert. There are a dizzying number of possible ways to slice and dice and crunch utility data, so performing the right analysis to answer your questions, and then knowing what to do with the answers is difficult. Even simply comparing energy usage between two properties to see which is more efficient is not a simple task: Given differences in geographies, building and equipment types, ages, different metering configurations and other factors, a reasonable expectation for consumption varies from property to property. Buildings are complicated and a meaningful peer comparison is a complex and evolving field (see our recent blogs and whitepaper on the EnergyScoreCards grading model). Providing analysis and insights from data is really the driver of success for real estate companies.
Insight and action are the goals – not just data collection. No one ever saved a kWh or made a building better just by staring at numbers on a screen.
There are no one-size-fits-all answers on how to use energy and water data, but one long-term Bright Power client may spark ideas for how to use benchmarking in your own portfolio. This client, a large portfolio spanning 23 states, began benchmarking several years ago as the key to satisfy GRESB reporting requirements and show their investors they take sustainability seriously. In the last few years, our Energy Analyst and Account Management teams used property spending and consumption data from EnergyScoreCards to identify the sites with the greatest potential for energy and water savings, and target those that could benefit from specific technologies like lighting upgrades or combined heat and power.
We then overlaid project feasibility and savings potential with eligibility for utility and state incentive programs across the country, and identified sites that could receive the largest subsidies for new equipment or more detailed energy audits. Using this strategic, data-driven approach, our engineering and installation teams completed 19 energy audits and over 30 installation projects ranging from common area LED lighting retrofits, to comprehensive whole-building energy and water upgrades, to combined heat and power (CHP) installations. Where work has already been completed, we are tracking month-to-month consumption to ensure expected savings materialize, and the owner can rest assured that we are ready to troubleshoot if things don’t go as planned.
In 2007, Bright Power collected data the old-fashioned way and performed a lot of our analysis using spreadsheets. There were no benchmarking disclosure laws and no national multifamily score from ENERGY STAR. There were bill processing companies but few if any who had meaningful analytics for multifamily. Multifamily benchmarking has come a long way in the last 10 years. If current trends continue, we can count on benchmarking to grow as a practice among real estate owners, and the process continuing to get easier, as more utilities provide whole building data and more service providers hone their methods for capturing, storing and analyzing the data. More owners will also successfully follow their own version of the process described above, moving beyond data collection to use the information to drive significant portfolio-wide projects to save energy and water, cut operating costs, improve resident comfort, access millions of dollars in incentives and improve the value and longevity of their properties.
The next big frontier in multifamily energy and water data may dive deeper into the data, looking at interval or “real-time” information that tracks consumption on a daily, hourly, or even 15-minute basis, allowing owners to more quickly catch problems and enabling a much deeper level of analysis than possible from monthly utility bills.
Many companies are working on devices and platforms to capture and analyze this type of data, although most remain rather expensive for the typical multifamily building. This more granular data may already make sense for applications like catching leaks, monitoring large HVAC systems, or participating in demand response programs with onsite generation technologies like CHP and batteries. Sometimes, this data is already available from new utility smart meters; in others, it will require installation of new hardware, but the costs appear to keep coming down and capabilities expanding. Really, if you’re interested in understanding how multifamily buildings use energy and water – things are just getting interesting.
Thanks to Apollo Engineering for featuring Jon’s article in their Summer 2017 Watts Hot Newsletter.