How does New York City grade co-op and condo buildings for energy efficiency? How accurate are the grades?

Local Law 33 (LL33) requires that all buildings over 25,000 square feet post their energy efficiency scores near the building entrance. An energy efficiency score is the Energy Star rating that a building earns using the United States Environmental Protection Agency’s (EPA) online benchmarking tool, Energy Star Portfolio Manager, to compare building energy performance to similar buildings in similar climates.

The letter grade ranges are as follows:

A: Score of 85 or above

B: Score of 70–84

C: Score of 55–69

D: Score of 54 or below

F: Building did not meet benchmarking requirement deadline

N: Building is exempt from benchmarking requirement or is not covered by the Energy Star program 

More than half of NYC buildings have an energy efficiency score of D or F 

New York City’s four major energy laws require use of the Energy Star Portfolio Man­ager, a national database and tool that collects usage data. Utilities companies, including Con Edison, have developed automatic connections with Energy Star. With this arrangement, once an account for a building has been set up in Energy Star and properly connected to the utility, the building’s electricity usage can be continuously monitored.

Currently there is not a connection showing real-time monitoring of water or heating oil use. With oil being phased out, it is doubtful that an automatic connection with the oil suppliers will be established. For water usage, we anticipate that at some point the NYC Department of Environmental Protection will have a similar connection.One problem with the Energy Star Portfolio Man­ager is with the data being reported. The Folson Group’s analysis of the citywide benchmarking data indicates that many of those buildings with “A” ratings are not reporting accurate data. Fines for misreporting energy use, which most buildings do, even if unintentionally, are up to $90,000 per quarter.

Some of the likely discrepancies include:

Inaccurate square footage of the building. It is not unusual to see different square footage of buildings in different databases. Most buildings were measured when they were originally built, many decades ago. Since then, there have been changes to the standards of how to measure square footage.

• Incorrect number of bedrooms. It is not uncommon that the number of reported bedrooms equals the number of apartments.  The likelihood that every apartment is a studio or one-bedroom, with no two bedrooms, or combined units, is slim.  While this may not seem important, it makes a dramatic difference with regard to the Energy Star Score. 
• Incomplete energy use reported. Buildings are re­quired to report total energy usage, which includes the energy used in common areas, by residents in­side their apartments, and by all retail and com­mercial spaces, even if they are owned by an outside investor.

One example is a building that received an “A” grade. This building is heated with natural gas yet reports only 3 percent of its energy use from natural gas. Based on The Folson Group’s analysis of the citywide benchmarking data, heating typically accounts for 70 percent of a building’s total energy use, with cooking gas accounting for approximately 3 percent. If this building adds its additional heating gas account to their Energy Star portfolio, its grade will decline substantially. 

At the same time, residents hate seeing the “D” every time they enter their lobby. Many residents would do whatever it takes to have it replaced with an “A” or “B” or at least a “C.” This is where your board’s message to residents is key as their energy use inside their apartments is a large contributor to the building’s low Energy Star Rating and corresponding energy efficiency letter grade.