“For B&B Urban, expert routine and systematic maintenance is most important to ensure long-term efficient operations.”
Bright Power: What energy-related design techniques or technologies are you looking to explore as you think about future developments?
Alan: I am excited about efficient, economical battery storage. To me, batteries are the next frontier that will pair well with solar—making solar an even bigger no-brainer. Passive House could be a real opportunity as contractors become more familiar with constructability methods. I think if the city supports Passive House with more subsidies, it would help offset some of the higher first costs (I think these additional costs are woefully understated by government officials).
VRF (Variable Refrigerant Flow) systems are also on my radar. I’ve been watching VRF system costs come down over the past 10 years. Combined with more vendors, I think the VRF industry is heading in the right direction. VRFs are the future. They don’t puncture the envelope of the building like with PTACs (Packaged Terminal Air Conditioner) and air-conditioners which results in a much tighter envelope. One problem with VRFs is diagnosing where refrigerant lines rupture. But you don’t run into issues of busted pipes or damaged flooring that you incur with hot water baseboard systems or PTACs.
I’m also a committed IRMA (Inverted Roof Membrane Assembly) roof person. I think it’s better thermally, for the long-term, and easier to diagnose leaks because they are right at the deck below the insulation. That’s a big change we’ve made where we’ve seen positive results. It’s a great advance that’s happened to make buildings more sustainable and energy efficient.
Bright Power: What role do you think the New York City and New York State housing agencies should play in facilitating the development of highly efficient buildings? What do you think would have the biggest impact?
Alan: It would be helpful if the city and state agencies had more data on the value of Passive House. I think we need more tangible comparisons of energy costs from a non-Passive House with a Passive House to really quantify the results. Developing a database will create the track record passive house needs to become widely adapted and ensure that costs are properly underwritten into operating and maintenance budgets.
There’s a natural tendency for the city and the state to minimize the subsidy amount for each deal in order to finance as many units as possible each year. That means all of our deals are underwritten with a limited tolerance for mistake and error. With affordable and supportive housing, if anything goes wrong—a tenant lease-up doesn’t go well, rental subsidy payments are delayed, or you have some tenant non-payments—it hits your bottom line in a big way. We need a reliable database of operating costs to give the industry enough building data to be confident in energy savings. It’s a direction the city and state should encourage. Anything that helps to lower long-term operating costs, such as Passive House, would be great—along with being better for the city and the environment. That’s a triple win.
Bright Power: How do you measure success and what are the biggest lessons that you have learned?
Alan: Success is building high-quality, attractive housing that lasts long-term, has stable operating budgets, is energy efficient, includes solar, and has useful amenities—like a library. For example, with help from Reading is Fundamental, we build libraries in our buildings for children and young adults. Another lesson I’ve learned over the years is to ensure my new developments are contextual, fitting into the neighborhood where they are located. It’s important to have support from the neighbors and community boards. So making compromises to ensure that they are heard is key to integrating into a community successfully.
Bright Power: What do you think is the most important thing a developer can do to help ensure that a building will perform as expected after it has been handed over the property management and operations teams?
Alan: That is the $64,000 question, as they used to say. For B&B Urban, expert routine and systematic maintenance is most important to ensure long-term efficient operations. Property management is the key. You want to ensure that the building is set up to run effectively with operations and property management teams. I think nonprofits need more proactive property management firms or internal professionals with the necessary expertise to run their buildings and new efficient systems. Maybe SHNNY (The Supportive Housing Network of New York) could help non-profits improve their building management skills and help them hire people with the necessary expertise.
It takes a lot of hard work and there is always room for improvement when it comes to routine maintenance and operations. Everything that looks great on ribbon-cutting day doesn’t necessarily look the same 10 years later. We can always look to improve. For instance, the last few buildings we have developed have been joint ventures with L+M Development Partners since they have strong and skilled management operations. It’s hard to find that.
You are right to put your finger on this issue. Ongoing checks and systematic maintenance are critical for successful long-term operations. It’s an area that needs lots of attention.
“For me, there’s no ambiguity about reducing energy costs with solar or efficiency. It’s good for everyone—the environment, the city, as well as long and short-term operating costs.”
Alan Bell, Principal of B&B Urban and a founding principal of The Hudson Companies, Inc., is a leader in New York affordable and supportive housing development. Alan has built over 6,600 units of new housing in 50 separate developments, including approximately 2,500 units of affordable housing, in his 40+ year career. He has worked with Bright Power for several years, integrating solar PV and energy efficiency into most of his new developments such as at Dumont Green, Gateway Estates, East 162nd Street Court, and the Kingsbridge Heights Apartments.
In this two-part interview, you’ll learn about Alan’s experience, his commitment to providing long-term affordable homes, and what drove him to become a proponent of solar and energy efficiency. We’ll post the second part next week.
Bright Power: With your decades of experience, what originally attracted you to the affordable housing development industry?
Alan: I’m urban-oriented and I believe that well-functioning, lively cities are vital to the democracy of America. I was attracted to affordable housing early on being born and raised in Philadelphia. I felt like I had seen the decline of Philly and thought I should do something about our neglected, failing, and collapsing cities.
I’ve been working in the affordable housing space for a long time. You could say 48 years. It all began when I was a student at Columbia in the summer of 1970. We organized residents living in the Manhattan Valley neighborhood to take over some vacant buildings. The 1970s were very different from today. It’s hard sitting in New York now to really appreciate what New York was like back then.
My first job out of college was with HDA—the forerunner of HPD—where I worked in the office of coop conversion. The city lent money to low-income tenants to purchase the buildings outright and then turn them into cooperatives. I later ran the city’s sweat equity program where tenants contributed their own labor to reduce project costs by partly renovating their building themselves.
From there, I went off to MIT [for a Masters in Urban Studies and Planning] before coming right back to New York. I worked for the City’s Office of Management and Budget and then the City’s Office of Economic Development.. I ended up running the city’s UDAG (Urban Development Action Grant)* program when Carter was president. We financed quite a number of things over those years—everything from The Studio Museum in Harlem to the Marriott Marquis Times Square Hotel to The Joyce Theater in Chelsea.
After a stint in finance on Wall Street at the firm DLJ, and later Bankers Trust, I got the opportunity to go into business with Nick Lembo and Bill Fowler in 1986 and together we created The Hudson Companies. Affordable housing kept us going through the early to late 90s when we started to do market rate projects as well. We consistently tried to balance doing both affordable and market-rate developments in 4 of the 5 boroughs of New York City (Staten Island seemed like foreign territory). And we also tried to balance both house and condo sale projects in order to provide cash flow and investment funds with rental developments to build up our balance sheet.
Affordable housing continued to be a part of my life even after I left Hudson Companies. Make no bones about it, I was very interested in seeing if I could do market rate luxury housing. We developed the luxury J Condominium, which, at the time, briefly, was the tallest residential market rate building in Brooklyn. And that was it. I proved it to myself that I could do luxury but, ultimately, that’s not where my interests lie.
*The Urban Development Action Grant program, run by the Department of Housing and Urban Development, provided $2.7 billion to eligible distressed metropolitan communities to assist them in alleviating physical and economic deterioration.
Bright Power: You’ve also added supportive housing to your focus. Tell us more.
Alan: At B&B Urban, my wife and I find it important to focus on providing supportive housing to families and youths. Historically in New York, there have been many programs to address the needs of individuals suffering from mental illness, HIV/AIDs, and substance abuse problems. But you have to look at the current shelter system to understand that it’s a family problem now. Kids are the innocent victims here and stable housing is an important determinant of mental health and academic progress. Proximity to jobs, public transit, retail, and other services can help resolve the geographic determinants of health and well-being. This is why we have tried so hard to move quickly to acquire the sites with these characteristics for our developments over the last seven years.
“…it’s about risk management. One of the things you can attempt to control are operating costs.”
Bright Power: For as long as we have been working together, you always prioritized incorporating solar PV and energy efficiency design features into your developments. What originally led you to this approach?
Alan: I jumped on the solar bandwagon pretty early on. I made sure every single one of my projects had a solar array. Why? First, I know solar is where we are going as a country and globally. Second, for affordable housing and real estate in general, it’s about risk management. One of the things you can attempt to control are operating costs. The greatest threat to the long-term viability of affordable housing is the fact that operating costs can rise more than incomes. I see solar as an opportunity to reduce my risk and manage long-term operating costs.
Solar and energy efficiency go right to the bottom line and also can act as a cushion against unintended cost increases for labor or insurance. Not to mention that NYSERDA had a great incentive program and we could finance solar into project budgets.
Back in the day, the first deal I did you had to deduct the cost basis for the solar from the LIHTC calculation. But once that law changed, you just had to deduct 50% of the solar install from your LIHTC basis. And ever since then, I’ve been doing solar projects. I am nothing but happy about solar. And it’s gotten better. The panels and technology have improved and have become more efficient. I push for it all the time and think solar is worthy of a lot of attention.
Solar and efficiency just make sense to me. I have traditionally used the tilted plane and steel dunnage installations in order to minimize roof penetrations. I am warming up to the ballasted system, maybe not as efficient but less costly without all that steel, so it has its benefits. For me, there’s no ambiguity about reducing energy costs with solar or efficiency. It’s good for everyone—the environment, the city, as well as long and short-term operating costs.
Bright Power: When you think about sustainability and clean energy adoption across the entire real estate industry, why do you think the affordable housing sector is a leader?
Alan: For affordable housing, sustainability is very much a part of the risk profile. There’s a big difference in terms of risk with affordable housing than there is with market rate housing. A market rate landlord or condominium developer has to worry about renting or selling his development at numbers that work. With affordable housing in New York, where we have an infinite demand for units at affordable rents and future increases in rents are capped, it’s really the long-term costs of the building that are the largest risk element. So it’s natural for affordable owners to be the leader in energy efficiency.
The retail housing consumer may profess an interest in sustainability or clean energy but when it comes to dollars and cents they somewhat ignore it. You’d be amazed at people that buy condos and don’t ask questions about their HVAC systems or know how efficient their building is, but rather focus on fixtures and finishes. It would be like buying a car without knowing the mileage. For the biggest purchase of your life perhaps, you’d think people would be more focused on energy efficiency, at least on the condo side.
On the rental side, there are some—but not all—landlords who are very concerned about lowering their energy bill and operating costs like we are for affordable. It’s always the first cost problem. It’s very hard to make your numbers work from the beginning. You spend too much on the land, your construction costs are more than you thought they’d be, and then certain things suffer. So getting your project to come in on budget dominates over long-term costs.
Stay tuned for the second part of our interview with Alan Bell next week!
A month after the jump, prices are still high.
The Bottom Line
If you do not have a fixed rate natural gas contract, you could see an estimated 25% increase in your heating and electric bills this winter. Mid-November we saw a significant increase in natural gas prices. You can read more about it here, but the main takeaways: weather drove up demand, the natural gas supply is depleting, and financial speculation of the natural gas market compounded the issue.
Look at NYC multifamily pricing as an example. Over the last two months, gas prices have jumped $.06/therm and electricity prices $.011/kwhr for a 12-month fixed contract. That means a multifamily property that spends about $400,000 per year on electricity and natural gas will see a $24,000 cost increase per year!
If your property remains on ConEd utility rates this winter, the rates are expected to rise even higher. With the numbers we’re seeing (around $.095/kwhr and $.65/therm), this would amount to a cost increase of over $40,000 for heating and electric costs December through March.
We’re recommending a few options at this time:
- Short term (2-3 month) winter buys that lock in the high prices for only a short-term
- Variable price contracts that allow you to have flexibility for the longer term
- Longer-term (24-36 month) agreements that spread out the increased cost for this winter over a longer time period, and save budgets for this winter.
Not sure what’s right for you or your portfolio? Contact us today! We’ll help you weigh your options based on your risk tolerance.
Happy holidays and New Year to all of our trusted clients, partners, and friends! As 2018 comes to an end, we wanted to take a moment to reflect and celebrate. It’s not every day that we get to pause our busy lives and recognize our accomplishments together!
We are proud of every one of our projects but want to highlight some from the past year.
RDC Development (MDG Design + Construction, LLC and Wavecrest Management) installed a 575 kW system across 20 buildings at Ocean Bay Apartments. Bowery Residents’ Committee (BRC) installed a 114 kW trellis pergola system at Apartments at Landing Road to ensure long-term affordability for the low-income housing complex. Delancey Street Associates (L+M Development Partners, BFC Partners, Taconic Investment Partners) installed a 31 kW post and rail array at The Goldin at Essex Crossing. Postgraduate Center for Mental Health installed a 70 kW trellis pergola system at Marion Avenue Apartments and a 66 kW ballasted and flush-mounted system 500 Gates Avenue Apartments. The Bridge installed a 33 kW trellis pergola system at Maple Street Residence. And, Acacia Network installed a 106 kW post and rail solar PV system at Acacia Gardens.
We installed community solar on The Grinnell’s rooftop. And, Bright Power is bringing a total of 4 MW of community solar to more than 100 New York City Housing Authority (NYCHA) buildings in the five boroughs.
Architects’ are using vertical solar to enhance the design of their buildings. Examples include Magnusson Architecture and Planning PC for the Association for New York Catholic Homes’ St. Augustine and Curtis + Ginsberg for Dunn Development Corp.’s The Meekerman.
Many of our clients are integrating resiliency strategies into retrofits or new developments to provide power security in addition to ongoing savings. Community Access’ new development in the Bronx will have a Bright Power Resilient Power Hub, which combines solar PV, battery storage, and cogeneration, as will Omni New York, LLC’s Archer Green in Queens.
HELP USA / SAGE and BFC Partners / SAGE each broke ground on the first senior living environments that promote diversity and safety for LGBT elders in the Bronx (Crotona Senior Residences) and Brooklyn (Ingersoll Senior Residences). BRP Companies and Hudson Companies broke ground on La Central. The Jericho Project and B&B Urban opened Walton House, the first supportive housing development to open under Mayor Bill de Blasio’s NYC 15/15 Initiative.
New developments that completed construction include Monadnock Construction’s 530 Exterior Street and 491 Gerard Avenue, B&B Urban’s 294 East 162nd Street, RiseBoro’s Our Lady of Lourdes, and Jonathan Rose Companies’ The Caesura.
Passive House and net-zero projects are growing across NYC. Bright Power has 16 active Passive House, net-zero, or near net-zero new development projects underway, including RiseBoro’s Harry T. Nance Apartments and Woodlawn Senior Living, Phipps Houses and Acacia Network’s 1675 Westchester, and Omni New York’s Morris II Apartments. We’re proud to be one of the solution-provider teams designing high-performance retrofit solutions as part of the New York State Energy Research and Development Authority’s (NYSERDA) RetrofitNY program.
Energy & Water Efficiency
Manhattan School of Music celebrated its 100th Anniversary with improvements across campus, including a new HVAC system and better temperature/humidity control (which is key to keeping all those pianos in tune!). Marymount Manhattan College committed to sustainability by partnering with Bright Power this year to reduce their campus’ carbon footprint. Both schools are working toward utilizing real-time energy management to help reduce operating costs, as well as develop long-term energy and capital improvement plans.
AvalonBay Communities is set to complete 4 whole-building retrofits in California this year. Equity Residential is on track to wrap up six California and six New York whole-building retrofit projects by the end of 2018. Bozzuto Management has continued to invest in sustainability by pursuing an annual 3% energy reduction portfolio-wide, a standard they achieved in 2017 that saved Bozzuto managed communities nearly $1 million (compared to 2016 data measured in EnergyScoreCards.)
With Affordable Community Energy Services (ACE), we started phase two of the Mercy Housing California retrofit project, upgrading over 80 properties. Energy Upgrade California Multifamily congratulated MG Properties Group’s Stonewood Gardens for taking advantage of their incentive program. Jonathan Rose Companies’ Casa Panorama is utilizing the LIWP program to install comprehensive upgrades and solar PV at the Southern California property.
We also partnered with Building Energy Exchange and Sustainable Energy Partnerships to release the Turning Data Into Action report that gives owners access to tearsheets containing energy upgrade opportunities matched to key points in a building’s financial life-cycle. Community Preservation Corporation (CPC) and Bright Power launched CPC VeriFi, a new tool that leverages data collected from our EnergyScoreCards platform to calculate customized opportunities for building owners and developers to cut costs using energy and water upgrades.
Fannie Mae selected Bright Power to provide energy and water measurement and verification for Fannie Mae’s Multifamily Green Financing programs. We will provide services to Borrowers and Lenders to make it easy for them to gather, analyze, and report on energy and water usage and savings.
Bright Power Milestones & Accomplishments
Bright Power was again listed as an Inc. 5000 fastest growing company, making 2018 the third year we have received this honor.
We also were spotlighted as a fastest growing energy company by Business View Magazine.
Our President & Founder, Jeffrey Perlman, was included in Crain’s NY 40 Under 40.
Director of New Construction, Andrea Mancino, and Project Manager for On-Site Generation, Husna Anwar, were both included in NYREJ’s 2018 Women in Real Estate & Construction Services. Andrea also shared the benefits of commissioning in a two-part series article in NYREJ.
Vice President of Energy Markets, Dan Levin, received an NYECC Energy New York Award (ENYA) for Leadership based on his role as a founding member of NYECC, board member, and Co-President for over 7 years.
Technical Director, Michael Brusic received a Service Award from Urban Green Council recognizing his work on the “It’s Electrifying” event series that helped illuminate how electrifying building systems will help NYC meet its 80×50 goal.
Account Manager, Jamie Bemis, received the prestigious McCloy Fellowship to study housing and urban development in Germany this spring. She presented her findings to a small group of partners, clients, and the Bright Power team to share what she learned. You can read more about her studies here.
Account Manager, Sam Biele-Fisher, served on the programming committee for the BuildingEnergy NYC 2018 conference, where he both curated and moderated the Net Zero Retrofit Solutions for New York’s Multifamily Buildings: RetrofitNY panel.
Cheers to Luis Aragon, Ayse Moxam, and Eric VanderMaas who each received Passive House Institute – US (PHIUS) Verifier certifications, Marion Ligneau who received her Passive House Institute (PHI) certification, and Yao Wang and David Lane who both received their North American Board of Certified Energy Practitioners (NABCEP) certifications in solar PV.
And, we welcomed a few new additions to the Bright Power family this year! Jon Braman and his family welcomed baby boy Avi. Bret Heilig and his family welcomed baby boy Faraday. Karl Haviland and his wife welcomed baby girl Kennedy. Punit Shah and his wife welcomed baby girl Navya.
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.
Prices are still high and it’s only November.
The Bottom Line
If you do not have a fixed rate natural gas contract, you could see an estimated 30% increase in your heating and electric bills this winter. Mid-November we saw a significant increase in natural gas prices. Why? You can read more about it here, but the main takeaways: weather drove up demand, the natural gas supply is depleting, and financial speculation of the natural gas market compounded the issue. You should consider short-term winter buys or variable products which may perform better than long-term fixed rates. But you don’t have to go it alone – we can help make those options clear and explain the benefits and risks.
Some of you will be more vulnerable to this price hike than others. Contact us as soon as possible if you:
- Do not have fixed rate natural gas contracts
- Are on the utility rate
- Are on a fixed rate contract set to expire before June 2019
We will work with you to determine the best course of action based on your current rates, risk tolerance, and budgets.
What to Know About 2018
November has been one of the coldest on record since 1950, and as a result buildings across the country are using more natural gas than predicted. This is further depleting a supply that is already significantly lower than this time last year. Unsure how to proceed? Our energy markets experts are here to help and provide clear recommendations.
We’re proud of the intelligent, passionate, and hardworking people that make up the Bright Power team. Each month, you’ll get a chance to meet one of them, understand how they contribute to the organization, and what makes them excited to come to work every day.
What are some of the things you like most about working at Bright Power?
I like how Bright Power continues to adapt and innovate our business to meet the constantly changing client needs and incentive program requirements. Combined with working with an intelligent and collaborative team has allowed me to grow my skills quickly. It has given me the opportunity to effectively audit portfolios of properties and implement measures like steam heating controls and occupancy sensor thermostats.
What are some projects and accomplishments you’re most proud of?
I’m proud that I’m one of the few to design and install heat pump water heating systems in the U.S. for multifamily applications. We have now installed a total of 9 systems in 7 different properties – with more to come! I’m helping to install a 150kW solar PV system in Sacramento. I also installed over 40 water heater plants in 2017.
What’s something people might not know about you and your role at Bright Power?
Since starting in the West Coast office, I feel my role is constantly changing which has allowed me to learn and develop a holistic view of the business. I’m often required to put on different hats. I’ve been able to use a range of my skills like Auditing, Energy Modeling, Retrofit Installation, and Engineering Design. All while ensuring each project meets the requirements of half a dozen incentive programs across California.
Who are some of the clients and partners you’ve worked with?
I’ve worked with some incredible clients. That picture of me is from my heat pump water heater work on a Mercy Housing retrofit. I’ve also worked with Equity Residential, AvalonBay Communities, AIG, National Church Residences, LivCor, Bayside Communities, MidPen Housing, Sares-Regis, and MG Properties Group.
What’s the one service offering we have that you think is the most beneficial to clients and why?
Providing turnkey design-build retrofits to clients are most beneficial because they result in actual energy and water savings. Our ability to audit, analyze, and execute seamlessly provides a client with a high chance of success in reaching their sustainability goals. It’s also very easy on their end.
You’ve worked with innovative technologies like heat pump water heaters on the West Coast. What do you think would help more building owners get excited about using a technology like heat pump water heaters or other new technologies?
I think the largest benefit of implementing heat pump water heaters is the ability to electrify your entire property. If you tie in solar PV and energy storage it could lead minimal emissions to net zero emissions for the property. With California’s goal to be 100% renewable by 2045, owners can look to incentive programs to reduce any financial hurdles in transitioning to these technologies.
Yesterday there was an 18% increase in natural gas prices! If you do not have a fixed rate natural gas contract, you could see an estimated 30% increase in your heating and electric bills this winter.
What Caused the Price Spike?
Two factors regularly impact natural gas pricing: the weather (demand) and the amount of stored natural gas (supply).
Weather Drives Up Demand: November is predicted to be one of the coldest on record since 1950, and as a result buildings across the country are using more natural gas than predicted.
Supply is Depleting: Normally, a strain on storage would not cause this unprecedented price reaction. But, if you saw our market update last month, you know that the U.S.’s stored natural gas supply is 15% lower than this time last year and 16% lower than the 5-year average – the lowest since 2003.
Price volatility in winter months is not unusual, but financial speculation of the natural gas market is compounding the issue, resulting in a 49% increase in just two weeks (see chart below).
Some of you will be more vulnerable to this price hike than others. Contact us as soon as possible if you:
- Do not have fixed rate natural gas contracts
- Are on the utility rate
- Are on a fixed rate contract set to expire before June 2019
We will work with you to determine the best course of action based on your current rates, risk tolerance, and budgets.
Real estate owners and managers are often spooked by energy and water investment projects for a variety of reasons. Maybe they’re haunted by unsuccessful past projects or maybe the results are just ghosting them. Whatever the reason may be, success lies in the approach. Below are some of our top tricks that will help you reap the treats of an intelligence-driven approach to energy and water management.
Don’t be Caught by Surprise
There’s nothing like an unsuspected scream or menacing shadow to scare the bejeezus out of you. However, scary situations are often avoidable with careful planning and awareness of your surroundings. For example, locking into a fixed-rate energy procurement contract is a proactive way to manage the cost of energy supply against volatile (and sometimes terrifying) market prices. This is a particularly useful strategy to consider in a mild autumn when prices are stable. If you’d like to learn more about this winter’s energy market predictions, check out our blogs on the state of the energy markets here.
Survey the Whole Scene (or don’t just grab the first pumpkin that you see)
When you hit the pumpkin patch, you need to survey your options before landing on the perfectly shaped, sized, and inspirational gourd. That’s how we recommend implementing energy projects too, especially across a large portfolio.
Don’t be on the Losing End of Dramatic Irony
If only you could explain to the horror movie lead that answering the door is a poor choice because you know what is lurking on the other side. Alas, they can’t see the whole picture. Buildings are complicated environments with sprawling, interrelated systems and you want someone who can think holistically across all of them in order to effectively manage energy and water. Just because there is a heating problem doesn’t mean that the solution is in the boiler room. In fact, sometimes the source of the problem isn’t related to the equipment at all. In multifamily buildings, residents are as important a factor as any to consider when diagnosing any problem. This is why we recommend whole-building audits and continuous energy management services. Having our engineers go inside a building, speak with residents, and examine all of the systems’ functionality is crucial in diagnosing the root of an issue and presenting an informed solution. Providing continuous expertise and energy management lets us help you anticipate problems and recommend how to avoid them. Otherwise, you’re liable to be frightened purely because you’re operating with incomplete information.
Don’t Jump to (Scary) Conclusions
As any parent can attest, some of the scariest things are the things that we don’t understand. And the only way to combat that is to probe a bit deeper and to figure out what is actually going on. It’s like in the Wizard of Oz when they finally peek behind the curtain…or those big, spooky Halloween displays that make your five-year-old scream and cry until you show him that it is just a toy (with an on-off switch), not a real skeleton coming to life.
For example, one of our clients always found water on the floor of their boiler room. Noticing that it appeared to be leaking from the bottom of their water-tube steam boiler, they called the manufacturer’s representative to come out, drain, and inspect the boiler. When he opened it up and saw corrosion on the tubes, the rep said: “it’s all gotta go.” Our client was looking at frightening repair costs, to the tune of hundreds of thousands of dollars.
Before rushing into anything, we helped our client select a nondestructive testing (NDT) company and supervised a more thorough ultrasonic testing of the boiler tubes. When the results came back, they were surprising. The corrosion had looked bad, but there was actually minimal loss of tube wall thickness. When we leak-tested the boiler, there were just two pinhole leaks and a leaking joint. The root cause was likely that this boiler had run much more than the standby boiler, and therefore experienced many more heat up and cool down cycles. The rep replaced the two leaking tubes, we fixed the control logic so that the lead boiler would rotate weekly, and together we filled, started, and tested the boiler – just in time for heating season.
There is so much to gain from strategic energy and water management. From avoided capital costs to utility bill savings and resident retention, the list of benefits is hard to pass up. But in order to get the treats, it’s important to bear in mind these tricks.
This blog was originally posted October 31, 2016. It was updated October 30, 2018, to highlight different incentive programs.
Winter is coming. Higher prices are here and they may stay.
The Bottom Line
Natural gas price volatility continues, and with it comes higher rates. In the last month, there has been a price jump that amounts to $.04/therm increase on a 12-month natural gas fixed rate. It’s not a great time to lock in. And you should try to avoid the high utility default rates. What does that mean? You should consider short-term winter buys or variable products which may perform better than long-term fixed rates. But you don’t have to go it alone – we can help make those options clear and explain the benefits and risks.
What to Know About 2018
What’s the cause of this volatile market? Low amounts of natural gas in supply. The US maintains storage of gas that ensures we have enough gas for winter heating. But compared to this time last year, there is now 16% less gas available. Although production has increased and will continue to pick up, we’re likely to continue to see a volatile natural gas market due to low gas storage. While we don’t recommend having accounts return to utility rates and receive default pricing, it may be beneficial to explore other pricing options before locking in for multiple years at high rates. Unsure how to proceed? Our energy markets experts are here to help and provide clear recommendations.
Temperature Probability Maps
This fall and winter are forecasted to have warmer than usual temperatures. The orange/red in the maps below indicate heat increases from normal. A mild fall that doesn’t require much heating in the North East would improve gas storage conditions and bring down prices. An average cold East Coast and Plains winter would reduce stored gas levels further and raise prices through all of 2019.