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Buildings that want to make LL97 retrofits should act sooner, rather than later, to save money.
AUTHORFred Rudd, President, Rudd Realty
We’ve been doing energy retrofits way before Local Law 97 came along. When we became managers of a building at 66th Street and Central Park West, one of our first focuses was to bring in a secondary energy supply in case there was a power failure. We put in a 200-kilowatt backup generator, and then we added a 7,500-gallon backup fuel tank to the system. That gave us the ability to run for 30 days in a potential blackout.
Then we decided to take it to the next step and energize the building differently. It had been running on oil, so we made a deal with Con Edison to bring in natural gas. Then we put in two brand new boilers which were 80% more efficient than the ones we replaced. We also put in a cogen system, which creates electricity and heat, as a secondary source of hot water for the building and installed two 300-gallon hot water tanks. The building is now so efficient that it received a 94 energy grade. We’re wrapping up the last pieces of the project now. The system will save about $30,000 a year in fuel costs, which means a payback period of seven to eight years. The payback for the boilers is about 10 years.
We’re also getting ahead of the game at other buildings. We were recently hired by an Upper East Side building on 79th Street that had a very antiquated system. It has the original chiller, which is over 45 years old. It doesn’t have a boiler system at all and runs on steam from Con Ed, which is the most expensive means of heating a building and creating hot water. We are putting in a cogen system that will make all the electricity and hot water for the building’s needs, including enough to run things if there’s a blackout. It’s going to save the building more than $30,000 a year. We’re also looking to replace the chiller with a combination boiler-chiller, which is far more efficient than separate units. That will save the building even more money, reduce its carbon footprint and make it compliant with the first Local Law 97 deadline in 2024.
Buildings that are thinking of installing cogen should know that companies selling the systems are able to offer financing. You take a loan from the manufacturer, who will then take the money back in savings. So if you save $30,000 a year in electricity, that savings would go to pay the cost of the installation instead of going to the building. Another option is a mortgage refinance. For example, at another one of our buildings where the mortgage is coming due, we’re thinking about adding $1 million to the mortgage and using it to pay for building wide improvements. In this case, the building needs new elevators, so about $500,000 would be spent for that and the rest for a cogen system.
The important thing for boards to recognize is that 2024 is literally right around the corner. The longer people wait to do this work, the more they’re going to pay. And if it takes three to six months for new energy equipment to be manufactured and brought to a building now, that’s only going to get worse. If you wait until 2023 to get a new boiler it may take a year, and you don’t have a year to waste.
In reality, the 2030 requirements are also very close to being right here. Ultimately, looking forward to 2050, when the city envisions all electric buildings, the cogen systems that we’re doing today will be almost obsolete at that point and will have to be replaced with something new, far more energy efficient and far more expensive. We’re already planning for 2050 because we have to.