Grace Period for Submitting Benchmarking Data Is Set to Expire

The physical condition of a building (its bricks) and the value of the apartments inside (its bucks) are about to come together in an unlikely place: the alphabet. That’s because, beginning on Oct. 1, 2020, New York City buildings larger than 25,000 square feet, including co-ops and condos, will receive a letter grade rating their energy efficiency. Similar to the sanitation letter grades in restaurant windows that guide the decisions of many diners, the energy-efficiency letter grades will be posted in lobbies and are expected to guide the decisions of many apartment buyers. Well-run buildings that use less energy, the thinking goes, will be more desirable and therefore more valuable. Inefficient buildings, less so.

With the Oct. 1 deadline looming, the Department of Buildings (DOB) has issued a terse reminder that another deadline is at hand. When the coronavirus pandemic led to the state-mandated shutdown of nonessential work in mid-March, the DOB gave co-op and condo boards and other building owners a reprieve. Normally, they’re required to submit their annual energy and water consumption levels by May 1 of the following year to the U.S. Environmental Protection Agency’s (EPA) online benchmarking tool, Energy Star Portfolio Manager. But in light of the shutdown, the DOB extended that filing deadline to Aug. 1, 2020 – this coming Saturday. And this time there will be no reprieve.

The DOB website states: “Building owners who were unable to submit a report by May 1, 2020, will not receive a violation if a fully compliant benchmarking report is submitted by Aug. 1, 2020. Applicants who do not submit a fully compliant report by Aug. 1, 2020 will be subject to violations for each quarter they have been non-compliant.”

When the letter grades go up on building walls, they’ll include a numerical grade that reflects the building’s Energy Star rating. The EPA computes these numbers by using a nationwide database to compare the energy uses of buildings that have comparable size, usage, occupancy, hours of operation, location, and other factors. An A grade will be awarded to buildings with an Energy Star score of 90 or above, meaning they’re as energy-efficient as at least 90 percent of comparable buildings nationwide. The grade of B will be awarded to buildings that score 50 to 89; a C for 20 to 49; a D for 0 to 19; and an F for buildings that are required to submit benchmarking information but fail to do so. There will also be an N grade for buildings that are exempted from Local Law 84 or are not covered by the Energy Star program. 

How do buildings get their report cards and what are they supposed to do with them? The DOB explains: “The grade and the score will be made available by the Department in the form of a Building Energy Efficiency Rating Label on Oct. 1 of each year. An owner must access the Building Energy Efficiency Rating Label through the DOB NOW Public Portal, download, print and display it annually by Oct. 30 in a conspicuous location near each public entrance to the building until Oct. 1 of the following year.” Failure to display the letter grade will result in a violation from the DOB and an annual fine of $1,250.

The letter-grade system has its critics. They point out that it’s unfair for the top 10% of buildings to get an A grade while the next 40% will get a B. And the Energy Star grades don’t take building density into account, while critics say more densely occupied buildings are more energy-efficient, and should be rewarded accordingly.

These objections aside, co-op and condo boards have until Saturday to submit their 2019 energy and water consumption data; and in a little over two months, they’ll be getting their buildings’ first letter grades.