Energy Efficiency Letter Grades for Co-ops and Condos Are Almost Here

For many co-op and condo boards, the scariest thing about Halloween this year isn’t going to be the ghosts or the ghouls. It’s the fact that by Oct. 31 they must, for the first time, post the letter grade that ranks their building’s energy efficiency. 

After nearly two years of preparation, New York City’s Local Law 95 is becoming  a reality. Under this law, every building above 25,000 square feet, including housing cooperatives and condominiums, will be required to display its energy-efficiency grade. The grade will be based on a building’s Energy Star score, which is derived from energy data submitted in the annual benchmarking report. A score of 90 will merit a letter grade of A and indicate that the building’s energy efficiency is in the top 10% of similar buildings nationwide. The letter and percentage grading system is as follows: A (85-100); B (70-84); C (55-69); D (1-54); F is for failure to report; and N is for buildings not required to comply.

Here is a list of the most frequently asked questions from co-op and condo boards, management firms and real-estate professionals:

How do I know if my building needs to comply with Local Law 95?

Buildings that are required to comply can be found on the NYC Benchmarking Law Covered Buildings List for Calendar Year 2019.

Where do I find my letter grade, and when do I have to post it?

Letter grades are accessible through the DOB NOW Public Portal. Grades must be downloaded, printed, and placed in a conspicuous location near each public entrance no later than Oct. 31, 2020, and no later than Oct. 31 every year thereafter. Buildings with 20 or fewer units will not receive a letter grade.

What happens if I don’t post the grade?

Failure to post before the deadline will result in a Department of Buildings violation and an annual penalty of $1,250.

How long does the grade remain in effect?

Grades will remain fixed for 12 months. They will be updated each year based on the annual filing of the building’s Local Law 84 benchmarking report. 

What can I do to improve my building’s grade?

Three things. First, ensure that your Local Law 84 compliance has accurate figures for square footage, number of units and bedrooms. These small details should not be underestimated, as they are the key drivers of your grade. Before you commit to capital improvements, ensure that all submitted data is accurate.

Second, consider heating needs. If more than 80% of your building’s total energy consumption is related to heating, you may want to explore the causes as well as potential measures to manage and reduce heating.

And third, conduct an energy audit. Under Local Law 87, buildings are required to undertake an energy audit every 10 years. If you have recently completed this audit, consult the engineering firm that prepared the results for you. If you have not performed an audit for a while, it is wise to do so now.

If my residential building has commercial space(s), will they be factored into my grade?

Yes. Energy grades are representative of the entire building, including tenant usage (over which the board and management have no control) and commercial spaces.

How are amenity spaces handled?

Buildings with large amenity spaces that have high energy usage may receive lower grades. 

What grades will most buildings receive?

Approximately three quarters of all buildings are expected to receive Cs and Ds in their first year of compliance. That’s no accident. Local Law 95 was intentionally designed to spur corrective action from boards and managers who fear the repercussions of a poor grade.

Alex Zafran is a senior consultant and business development lead at Aurora Energy Advisors. He can be reached at azafran@aeadvisorsllc.com.