Complying with the law can be expensive – prohibitively so. Ask Uri Lev, the board president at Executive Plaza, a 445-unit condominium in midtown Manhattan. When the board set about shifting from No. 6 oil to natural gas to power its boilers, in compliance with a new city regulation, Con Ed quoted a staggering price to supply natural gas to the 22-story, prewar building: a little over $2 million.
“They said, ‘You want us to bring gas, it’s going to cost you,’” recalls Lev. That’s because the utility company would have had to dig up the street and bring in a valve and piping to get the volume of natural gas the massive building needed. “It wasn’t something we considered,” Lev says.
The board’s ordeal started in 2011, when the Bloomberg Administration banned No. 6 heating oil, the polluting fuel that powered Executive Plaza’s aging boilers. Building owners still using No. 6 were put on notice to switch to No. 4 oil or an equivalent cleaner fuel by 2015, or be in violation.
To comply with the law, the Executive Plaza board started drawing up plans for a cogeneration system – a natural-gas generator that creates electricity for the building while also directing the normally squandered “waste” heat of the machine’s engine to the building’s steam boilers and domestic hot water. But that idea was put on hold when Con Ed quoted that $2 million hookup price.
The board mulled the options of switching to No. 4 oil or an equivalent cleaner fuel. Three years passed without a change, however, and the property was nearing the deadline to make the switch. It was then that Con Ed contacted the board, reporting that it was going to extend gas service to the entire block, which brought the proposed price of getting natural gas way down. Now the building could get the needed infrastructure at an affordable cost.
But the board at Executive Plaza faced other challenges in making the switch. An initial plan drafted by the first engineer hired by the board included the wrong measurements for the pipes, among other faulty figures. “Everything was incorrect,” says resident manager Mark Richards. “We ended up terminating that contract, but we paid out the initial retainer and a payment or two. It cost the building.” It also led to another year’s delay.
Then there was the actual installation. The 7-by-12-foot cogenerator had to be constructed piece by piece in Executive Plaza’s sub-cellar, with new piping routed to the upper floors through an out-of-use elevator shaft. “It was a lengthy, tough process,” says Richards.
And it wasn’t cheap. Even with a $450,000 New York State Energy Research and Development Authority grant, the board had to come up with $1.15 million, which it raised by assessing the four elements of the building: 60 percent came from the condominium’s unit-owners; 30 percent came from the hotel that occupies the lower half of the building; and the remaining 10 percent from the building’s two restaurants.
The money, says Richards, was well spent. Since the cogen system went online last fall, the resident manager says it is producing energy for half of the building’s heat and hot water needs. And Lev believes the system will save about $180,000 a year in total energy costs, which means it will pay for itself in less than seven years. After that, the savings go directly into the condo’s coffers.
“I would enthusiastically approve this project again,” Lev says, “not only because of the savings, but because the building is green now.” After a pause, he adds, “If we’d had the space on our roof for panels, we would have gone solar.”