Board Boldness: Adding Electric Into the Mix

As board member Howard Hassan describes it, the prognosis for the boiler system at 1170 Ocean Parkway back in 2018 was grim. The 153-unit, 13-story co-op in the Midwood section of Brooklyn was running on two dual-fuel boilers dating back to the building’s construction in the 1960s that were not only aging but antiquated. The system produced steam for the building’s hot water and heating, but it also made steam in the summer months to power the massive chiller that cooled water for the air conditioners — an inefficient process that essentially worked at cross purposes and consumed an enormous amount of gas. 

“It was a money pit, and the boilers were at the end of their useful lives,” Hassan says. “It was like a heart attack waiting to happen, and we didn’t want to wait.”

The six-member board faced a choice: Should the co-op upgrade to a gas boiler and gas chillers, which would modestly increase energy efficiency, or do a more radical retrofit and go partly electric? “Several people, including me, favored gas because it’s clean and it’s reliable even if there’s a blackout,” Hassan says. But the opinion wasn’t unanimous. 

The co-op turned to its management company’s energy division, FirstService Energy, whose engineers analyzed the boiler system and came up with an ambitious four-pronged plan. The first part was replacing the two dual-fuel boilers with three gas-powered condensing boilers, which would use less gas to produce the same amount of hot water solely for the building’s domestic needs and not for air conditioning. The second part was swapping out the massive chiller for 10 modular electric ones that could supply cooling for AC according to demand. The engineers also recommended replacing the existing water pumps with variable-frequency pumps that would similarly adjust the amount of hot or cooled water circulating through the building as needed, as well as installing more efficient water-cooling towers sized to match the new pumps and chillers.

“Simply upgrading the boilers and chiller to gas would not have been cost-effective or significantly reduce the building’s gas consumption,” says Peter Stopherd, the senior project manager at FirstService Project Management, who oversaw the Ocean Parkway overhaul. Stopherd was also looking ahead and aiming to get the co-op’s energy efficiency up to speed for the future. “We were having these conversations in 2018, before the Climate Mobilization Act and energy efficiency letter grades,” he says. “But our energy experts, who were in touch with the mayor’s office, knew that greenhouse gas emissions caps were going to be put on the table soon, and we wanted to design something that would take that into consideration.” 

Stopherd told the board that opting for gas chillers rather than electric ones would most likely mean the building wouldn’t stay under those emissions caps. That was enough to get the doubters, including Hassan, to buy into the project. “It wasn’t so much about money, since we didn’t know how much the new system actually would save us,” Hassan says. “It was reducing our carbon footprint that put it over the top for us.”

The price tag was well over $1 million. Thanks to a flip tax and regular 1% to 1.5% maintenance increases, the co-op’s reserves were healthy but not sufficient to cover the project’s cost. While the co-op would receive a $36,000 rebate from the gas service provider National Grid Metro NY, it also took advantage of low interest rates to refinance its mortgage, and when interest rates dropped further it did a second refi. The board did get hit with a prepayment penalty but calculated it would recoup the cost in two years and continue to save thousands of dollars in monthly payments after that.

The board would still have to raise maintenance by a hefty 10%, and it convened a meeting in the building’s lobby to break the bad news to shareholders. “Let’s just say it became a conversation, to put it mildly,” Hassan says. “People wanted to know why we had to do the project now, but we made it clear that there was no putting it off because the boilers were so old. We also told them that we realized it was a big increase, but the alternative would be to hit people with a huge assessment of about $10,000 for each apartment, which would be a lot worse.”

The project was done in phases. The condensing boilers were up and running in 2019, and the chillers and cooling tower in 2020. The entire installation took 16 months, but there was minimal disruption to residents. “We replaced one boiler at a time,” Stopherd days, “so aside from some sporadic interruptions of hot water, there was no interruption in heating or cooling.”

The new system is a model of energy efficiency. The building is equipped with a single dual-temperature pipe system that provides heating and cooling during respective seasons. In summer, the hot water loop is closed, injecting chilled water into the system; in winter, the cooling system is shut down and an automated valve injects hot water as needed into the heating loop until desired temperatures are reached. Variable speed pumps help regulate the amount of water being passed through the building. “Both the heating and cooling modular units are ‘smarter’ and produce desired temperatures as needed,” Stopherd explains.

Ocean Parkway has reduced its gas consumption by an impressive 40%. “I don’t think you could be more energy-efficient than we are now,” Hassan says. And despite their initial resistance, shareholders have gotten on board with the upgrade. “All of the board members have been re-elected,” he adds. “People understand that even when it involves tough decisions, boards have to do what’s best for their building.”