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Accurate building measurements can raise your energy letter grade and lower your carbon tax.
AUTHORMitchell Ingerman, Aurora Energy Advisors
New York City’s benchmarking deadline was moved to Aug. 1. Does that give buildings some breathing room?
They didn't exactly extend the deadline. What they said is, "We won't penalize you if you don't file until Aug. 1st." Prior to this change, if you didn’t file, you would get a $500 fine every quarter you were late. Now, if you didn’t file by May 1st, you won’t get a penalty if you haven’t filed by Aug. 1.
And that’s good, right?
The advantage is you can gather more precise information about the characteristics of their building and its energy usage. Letter grades are going to be based on this information so it’s a good time to tighten up the data gathering.
What do you mean by that?
You’ll want to get more accurate data about your building measurement -- the breakdown of residential space, ancillary space, garage, basement, retail, etc. Because when the city does its calculations for both the letter grade and eventual carbon tax, these measurements matter in the formula. It’s important not to understate or overstate the size of the building. It used to be that everyone just took what the Department of Finance stated on its website, whether it was right or not. Who cared? Now, it's going to matter.
Where do you turn for accurate measurements? Does a building have to hire someone to do this?
In addition to whoever is doing your benchmarking in 2024, you will have to have an engineer sign off that the information about building size and use is accurate. Right now these measurements are only affecting letter grades, but in the future you’ll want to know if you're facing a carbon tax. Some engineering firms are starting to offer this service, and many managers have these capabilities now.
If building measurements matter, should we be concerned about the data that Con Ed or National Grid provides?
For the first few years there were no automatic uploads of utility data from either Con Ed or National Grid, and then about three years ago they began to roll this out. What we found, though, was that the data was missing a lot of accounts. They had to work through that, and one year they did an extension because of that data problem. This year, when Con Ed released its uploads, it left off the last billing period or the last period of 2019. Meaning, in Con Ed's case, usage would be understated. Now, in a cute way, that's great. National Grid’s situation is the opposite. It combined gas, heat and cooking gas accounts, and in many cases it uploaded the heat account a couple of times. So it overstated energy usage.
In both cases the data is not accurate, and at some point you're going to be tripped up. And in 2024 you might be facing a carbon tax. We alerted both utilities and the city earlier this year about this situation. They didn't make an announcement to the industry saying: "Hey, don't use this data. We're working on a fix," but now, for the most part, it's fixed. Boards and managers may want to go back to their benchmarking consultants and ask them to take another look at the utility data.
There's lots of talk about what buildings should be doing to meet the 2030 requirements. Any advice?
Very good question. In 2030 the city has really upped the bar in terms of carbon reduction. And it's literally nine or 10 years away. So I wouldn't overreact. There are so many unknowns -- on the legislative side, the rule side, green energy markets that currently don't exist -- that may reduce or eliminate what you think is going to be your tax. That being said, when making capital improvements that relate to energy, be aware that the carbon tax is a cost to be considered.
So if by spending an extra $5,000 on a better boiler you’ll save money on usage, calculate whether it will lower your carbon tax. Because that's another savings, another benefit. Every improvement that you do now, make that a part of the payback.