NYC Benchmarking

The waves created by New York Mayor de Blasio’s announcement revealing new mandates of NYC’s 14,500 least efficient buildings on September 14, 2017 are still being felt throughout the energy industry.

The new rules will force building owners to drastically reduce greenhouse gas emissions through boiler, heat distribution, water heater, roof, and window upgrades, or they will face sharp financial penalties.

The announcement followed Mayor de Blasio’s pledge to adhere to the Paris Climate Agreement earlier this year at a local level if President Trump backs out at the national level.
The mandates apply to all buildings over 25,000 square feet, striving to reduce citywide greenhouse emissions by 7 percent by 2035.

Penalties for non-compliance will be issued annually starting in 2030 and will vary with building size and level of non-compliance.

Early predictions estimate penalties to average $2/square foot each year a building is operating over the fossil fuel use target. A 30,000 square foot building would face a bill of $60,000/year until they are compliant with their target.

Expect similar cities who voted to upload the Paris Climate Agreement, including Chicago and Baltimore to follow suit and issue mandates following benchmarking initiatives currently underway.

What does this mean for you? If you have facilities located in areas that have general benchmarking reporting requirements now, you will want to review the efficiency of your buildings NOW to make sure that they are operating most efficiently. Right now there are great ROIs and utility rebates to make these projects financially attractive without any city requirements.

By waiting, you risk being MANDATED to make these changes. This will likely mean higher contractor costs and lower utility incentives available when these projects are forced upon the market.

If you would like to review the efficiency of your building, call our office we can present both project and funding/financing options to both increase the efficiency of your building and save you money.

The Moving Target of Capacity: What Does It Mean for Your Budget?

Capacity has been a topic of conversation in the energy community for a while now but what exactly is capacity as it relates to your electricity, and how does it affect your business?

Imagine you have a garden hose, and when you turn on the water full blast, the total amount of water that can flow through the hose at one time is limited by the diameter of the hose. The only way to get more water from Point A to Point B is to use a wider hose or add more hoses.

Capacity works the same way. The amount of electricity that can flow through the transmission lines at any given time is limited. To ensure reliability of the power grid, power generators and transmission companies by law have to have the infrastructure in place to meet the needs of the grid when usage is at its maximum for all end users.

To make this possible, a capacity charge is passed through to consumers as part of their total energy cost.

While the cost of capacity has always varied based on metrics of supply and demand, since the Polar Vortex of 2014 and the continued retirement of coal-fired generation, capacity costs have grown substantially over the past three years. Capacity now makes up over 25% of your total supply costs, where it was previously only about 7-10%.

To combat these higher capacity costs, you can do two things:

  • Enroll in a “PLC Management” program that provides alerts on peak days of the summer when your capacity costs will be set for the following year.
  • Take energy efficiency measures such as LED lighting retrofits or HVAC upgrades that will reduce your energy usage and demand-based capacity costs.

Higher capacity costs likely are here to stay for the next few years. By acting now, you can help reduce this now significant component of your energy cost.