DOB Releases Proposed Local Law 97 Compliance Regulations

October 25, 2022

Owners get more climate protection law details ahead of 2024 deadline.

 

The DOB recently issued draft regulations to implement Local Law 97 of 2019 (LL97). In 2019, the City Council passed LL97 with ambitious goals to tackle climate change by putting carbon caps on the city’s buildings, the biggest source of greenhouse gas emissions. Since the passage of the law, however, there has been little guidance until now on how owners could achieve the aggressive targets set in the law.

Compliance deadlines for LL97 are approaching. Most building owners the law applies to must comply with the law starting in 2024, and the limited emissions targets owners must meet for their buildings drop down in 2030 and 2050. If these emissions limits aren’t met, owners could face fines of $268 for every ton of emissions above the limit. The DOB’s draft rules offer some clarity to owners on how to comply with the law.

LL97 Basics

In May 2019, under Mayor Bill de Blasio, New York City enacted the Climate Mobilization Act as part of the mayor’s New York City Green New Deal, which was a landmark package of new and aggressive mandates to limit greenhouse gas (GHG) emissions by 2050. LL97 was a part of the package, and it established permissible greenhouse gas emissions limits on most New York City buildings over 25,000 square feet. In conjunction with the recent release of DOB’s LL97 rules, DOB has also published the first Local Law 97 Covered Buildings List, which will include all buildings in the city that will be subject to the 2025 compliance deadline. The list can be found at https://www1.nyc.gov/assets/buildings/pdf/LL97_CBL.pdf.

Greenhouse gas emissions caps. The goal of LL97 is to reduce the emissions produced by the city’s largest buildings by 40 percent by 2030 and 80 percent by 2050. To achieve these goals, most properties larger than 25,000 square feet must limit emissions based on the building type and size or pay hefty fines of $268 per metric ton of emissions over the limits imposed. The limits are based on calendar year and occupancy group and are calculated by multiplying emissions intensity limits and corresponding gross floor area in square feet. The city estimates that about 20 to 25 percent of buildings will exceed their emissions limits in 2024, if they take no action to improve their building’s performance. And in 2030, if owners take no action to make improvements, approximately 75 to 80 percent of buildings won’t comply with their emission limits.

Report filing requirements. According to the current law, beginning May 1, 2025, and every subsequent May 1 thereafter, covered building owners must file a report with the DOB detailing their annual greenhouse gas emissions and including a statement, certified by a registered design professional, that either the building has complied with the emissions limit or gone over it.

Rent-regulated units. Covered buildings that include rent-regulated housing are not exempt, but are treated differently under the law. If a covered building has more than 35 percent of units subject to rent regulation, the building, by 2024, must demonstrate that emissions are below the applicable 2030 limits or show that applicable “prescriptive energy conservation measures” have been fully implemented. These buildings will file a one-time report by May 2025. According to NYC Administrative Code 28-321.2.2, implementing prescriptive energy conservation measures means, by Dec. 31, 2024, the owner of a covered building ensures that the following energy conservation measures have been implemented where applicable:

  • Adjusting temperature set points for heat and hot water to reflect appropriate space occupancy and facility requirements;
  • Repairing all heating system leaks;
  • Maintaining the heating system, including but not limited to ensuring that system component parts are clean and in good operating condition;
  • Installing individual temperature controls or insulated radiator enclosures with temperature controls on all radiators;
  • Insulating all pipes for heating and/or hot water;
  • Insulating the steam system condensate tank or water tank;
  • Installing indoor and outdoor heating system sensors and boiler controls to allow for proper set-points;
  • Replacing or repairing all steam traps such that all are in working order;
  • Installing or upgrading steam system master venting at the ends of mains, large horizontal pipes, and tops of risers and vertical pipes branching off a main;
  • Upgrading lighting to comply with the standards for new systems set forth in Section 805 of the NYC energy conservation code and/or applicable standards referenced in the energy code on or before Dec. 31, 2024;
  • Weatherizing and air sealing where appropriate, including windows and ductwork, with focus on whole-building insulation;
  • Installing timers on exhaust fans; and
  • Installing radiant barriers behind all radiators.

If a covered building has at least one rent-regulated unit and no more than 35 percent of units are rent regulated, the legislation says these applicable buildings must meet GHG emission limits starting in 2026, and the first annual compliance report for these buildings is due on May 1, 2027.

DOB’s Proposed Rules

DOB’s proposed rules provide additional clarity on LL97 as owners continue energy efficiency retrofits on their buildings. You can find a copy of the proposed rules at https://www1.nyc.gov/assets/buildings/pdf/proposed_greenhouse_gas.pdf. Here are some clarifications included in the proposed rules.

Building emissions calculations. A building’s emissions are generally calculated by multiplying the amount of energy (electricity and fuel) used in the building by the GHG coefficient assigned to each energy source. LL97 established GHG coefficients for only the first compliance period (2024–2029). The proposed DOB rule sets forth the GHG coefficients for utility electricity and fuel for the second compliance period (2030–2034), as well as GHG coefficients for numerous types of fuel consumed on the premises such as gasoline, kerosene, etc.

Building types. The proposed DOB rule also refines the calculations used for setting emission limits for each building covered by the law. A building’s emissions limit is calculated by multiplying the square footage of each occupancy group within the building by the GHG coefficient assigned to those occupancy groups.

The proposed DOB regulations would use the ENERGY STAR Portfolio Manager property types instead of the occupancy groups identified in the NYC Building Code. This change is intended to capture the differences in energy usage among narrower subsets of property types than those identified in the NYC Building Code.

Allowable deductions. The proposed DOB rule clarifies the scope of allowable deductions from building emissions. The proposed rule limits the application of renewable energy credits (RECs) by allowing building owners to use RECs to offset only utility-supplied electricity, not on-site fuel consumption. This restriction is likely to impact residential buildings most, as they tend to consume more fuel and less electricity than do commercial buildings.

The proposed DOB rule also provides details on the deduction for clean distributed energy resources, which include electricity generation and storage systems. For example, for solar energy systems located at the building and that export electricity to the grid, the amount of exported electricity can be deducted from the total utility electricity consumed by the covered building in the reporting year.

Submitting comments. These proposed rules will be open to public comment during an online hearing, which will be held on Nov. 14, 2022, at 11 a.m. Anyone can comment on the proposed rules by:

  • Website. You can submit comments to the DOB through the NYC rules website at http://rules.cityofnewyork.us.
  • Email. You can email comments to dobrules@buildings.nyc.gov.
  • Mail. You can mail comments to the NYC Department of Buildings, Office of the General Counsel, 280 Broadway, 7th floor, New York, NY 10007.
  • Speaking at the hearing. Anyone who wants to comment on the proposed rule at the public hearing must sign up to speak. You can sign up by emailing dobrules@buildings.nyc.gov by Nov. 7.

The final adopted rules are expected to be published later in the year.

NYC Accelerator Program

To help owners meet their emission targets, the city offers a program of the Mayor’s Office of Climate and Environmental Justice that provides resources, training, and one-on-one expert guidance to improve energy efficiency and reduce carbon emissions from buildings in NYC. The program can be found at https://accelerator.nyc/. In addition to personalized guidance on building retrofit projects, NYC Accelerator can assist owners in applying for low-interest financing and available incentive programs.

Also, Kinetic Communities Consulting Corporation (KC3), an affiliate of the NYC Accelerator, can provide free technical assistance to covered building owners of rent-regulated units to understand LL97, develop an appropriate work scope, identify incentives, and assemble a team to implement the work. You can contact KC3 at https://calendly.com/affordablenyca.

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