Green Partners
There is an under the radar Benchmarking requirement that may come as a surprise to many buildings. This involves buildings that have low Benchmarking scores that have been buried and unnoticed in data bases for years. These buried scores will soon be “prominently” posted at the front entrance of each and every building for all to see.
When Local Law 84 was first enacted back in 2009, the reasoning behind awarding Benchmarking scores was to rate the energy efficiency level of every building and to incentivize those buildings with low scores to improve their energy efficiency to keep up with like buildings. Benchmarking scores have been difficult to access and are unknown to the general public, so there has been no incentive to keep up with like buildings. However, that will soon change.
Starting in 2020, in compliance with Local Law 33, buildings must prominently post their Benchmarking scores by each building entrance, including their front entrance within 30 days of receipt. These Benchmarking scores, which are numerical, will each be converted to a letter grade.
The conversion table:
• Letter grade “A” for Benchmarking scores 90 and above.
• Letter grade “B” for Benchmarking scores of 50 to 89.
• Letter grade “C” for Benchmarking scores of 20 to 49.
• Letter grade “D” for Benchmarking scores of 19 and under.
• Letter grade “F” for non-compliance.
• Letter Grade “N” for exempt.
As soon as these letter grades are posted, managers should be prepared to answer a host of questions from their respective building residents.
First of all, expect questions regarding the Benchmarking grade itself. For the vast majority of buildings, it will be a grade B. Since most NYC residents are accustomed to letter grades of A for restaurants and other common building designations, such as an A rated building, a grade B for a Benchmarking score is sure to raise concerns. Expect the majority of these concerns to be about a negative impact on apartment values.
Accurate responses from managers to these questions regarding Benchmark scoring will be important, specifically with regard to the B rating. It is factually correct to say to building residents that literally every like building will also be receiving a letter grade of B. The Benchmarking score of an A will be virtually nonexistent and only awarded to a handful of buildings with high levels of energy saving technology. The “B” rating will be the citywide norm and should therefore have no negative implications.
With building residents walking past these Benchmarking grade signs every day, expect building resident to focus more on energy efficiency issues, as it relates to apartment valuations. The best approach to this new awareness of energy efficiency is to be able to say that your B rated building has taken or is planning to take steps to be as energy efficient as possible. These steps could include the installation of common area energy efficient LED lighting in conformance with Local Law 88 or even the installation of stand-alone domestic hot water production – both of which are recommended energy savings measures.
Moving on to buildings that receive grades of “C” or a “D,” these buildings are in the penalty box with their low Benchmarking scores. Low scores will have a negative impact on apartment valuations. Managers of these properties should take immediate remedial action. Recommendations include a common area lighting upgrade to LED and the installation of independent domestic hot water production, as covered above. These steps will improve the numerical Benchmarking scores. If the numerical increase is not sufficient to trigger a B rating, then a PE must be engaged to perform a targeted energy audit of the building’s heating system to further improve Benchmarking scores.
For those buildings that want to improve their Benchmarking scores for 2020, you will need to act now. Your 2020 Benchmarking score will be based on the amount of energy that is consumed by your building from the beginning of January 2019 through the end of December 2019. If you were to initiate a LED upgrade now, you would be able to start realizing savings in the early months of 2019, which would improve your Benchmarking score. Your 2020 Benchmarking score will be the score that determines the Benchmarking letter grade that must be posted by your front entrance.
George Crawford is the principal of Green Partners, New York, N.Y.
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