Here’s what you need to know about the new package of rules for Local Law 97.
Originally published September 2023
Updated January 2024
On December 18, 2023, the NYC Department of Buildings published the final version of the newest package of rules for Local Law 97. These rules come after a 3 month public comment and review period on the set of proposed rules released by DOB on September 12. With 2024 compliance just around the corner, these rules cover many details that the agency is required to issue as a part of the law. Read the press release from DOB here.
Here are the big takeaways from the December 2023 rulemaking:
1. A definition for the “good faith” standard that DOB will use to determine if non-compliant buildings are eligible for mitigated penalties
Local Law 97 tasks DOB with defining a set of criteria by which it can determine whether an owner has made a “good faith effort” to comply with the law’s 2024 carbon limits. Before being considered for good faith exemptions, buildings first have to demonstrate full compliance with:
- Benchmarking (Local Law 84);
- Lighting upgrades and submetering requirements (Local Law 88);
- Submitting the Local Law 97 annual building emissions report and maintaining compliance with any adjustment DOB has granted.
If all of the above criteria are met, a building could qualify for good faith exemptions through mediated resolution with DOB by meeting one of the following six criteria by May 1, 2025:
- Permits have been approved by DOB for retrofit work sufficient to meet the property’s 2024 limit, and/or service provider contracts are in place for work that does not require a permit, but it is not completed yet.
- Contracts are in place with Con Edison for electric service and panel upgrades that are capable of supporting building-wide electrification.
- Submit a decarbonization plan for net zero carbon emissions by 2050, with thee following criteria:
- This option relieves owners of penalties until 2026 but, in exchange, prohibits the use of RECs in the first compliance period.
- Plans must include an energy audit, inventory of equipment, and demonstrate concrete timelines, financing, and expected emissions reductions from planned alterations to reach net zero emissions by 2050.
- This option also requires work to meet the building’s 2024 emissions limit to be finished within 24 months. By 2028, owners must have work applications approved by DOB for work that reduces emissions in line with their 2030 carbon limit. Penalties can be issued retroactively for 2024 and 2025 if criteria are not met by the specified dates.
- Demonstrate the building was under its emissions limit in a prior year. This option cannot be used in 2024.
- The building is a critical facility, such as a hospital whose critical services would be significantly impacted by the penalties.
- The owner shows that they have applied for or been granted a financial hardship adjustment pursuant to section 28-320.7 of the Administrative Code.
2. Clarity on what’s required of Article 321 buildings that must follow the law’s prescriptive path
Over 8,000 residential buildings and other property types—like houses of worship—are eligible to comply with Local Law 97 by completing the law’s Article 321 prescriptive path requirements. The rules specify which prescriptive energy conservation measures they must perform, how to document them, penalties for non-compliance, and guidance for those struggling to meet the requirements. Half of all multifamily buildings and one-third of all covered properties fall into this category.
“These regulations provide a practical pathway to steer compliance towards the carbon savings we so urgently need in this growing climate crisis. Local Law 97 is working and stands at the forefront of global climate policy.”John Mandyck
CEO, Urban Green Council
3. A new credit that rewards beneficial electrification before 2030, with incentives to act even earlier
The rules offer a new beneficial electrification credit for properties that install and use electric heating, cooling, and domestic hot water equipment that meet specific minimum efficiency requirements.
The rules allow buildings that electrify those systems to apply a negative emissions coefficient to the electricity consumed by qualifying equipment that’s installed before 2030, with an even more favorable coefficient for systems installed before 2027. The credit can be applied to mitigate penalties up until 2036, and buildings that install equipment earlier will have greater flexibility to apply the credit. The rules specify criteria to calculate annual electricity use by the system based on either a metered or deemed electric use approach.
The incentive is available to all covered buildings and will help motivate early electrification in buildings that otherwise don’t have to take action until the 2030 compliance period.
4. Addresses other details for compliance
The new rulemaking specifies a number of other compliance details, including:
- All distributed energy resources must be separately metered or sub-metered in a way that produces data for the reporting year.
- Penalties for exceeding annual emissions limits set at $268/ton, and penalties for delays in filing annual building emissions reports in accordance with the law at $0.50 per square foot per month.
- Technical standards for definitions of energy audits in buildings above and below 50,000 square feet, and that the definition of gross floor area includes cellar space.
5. Guidance on Local Law 88 lighting and sub-metering requirements
The package also includes a new rule with long-awaited guidance for meeting Local Law 88 of 2009: lighting upgrades and submetering requirements. That law requires buildings over 25,000 square feet to upgrade lighting in line with the NYC Energy Conservation Code by 2025 in all commercial buildings and in the common areas of residential buildings. It also requires that submeters be installed in commercial tenant spaces larger than 5,000 square feet by that same time. This rule includes reporting details and penalties for both sets of requirements.
Alongside this rulemaking, Mayor Eric Adams also released a plan to mobilize buildings covered by Local Law 97. Among other things, the strategy includes a new LL97 Mobilization Council with three working groups to provide additional implementation support for 1) the workforce and building retrofitters, 2) building owners and managers, and 3) financing organizations.
This new rulemaking builds upon a prior set of rules that DOB released at the end of 2022, which you can read about here.
On September 18, 2023, Urban Green Council hosted a webinar with the NYC Department of Buildings to unpack what was, at the time, a proposed rules package. Watch it below.
Note: Some minor details in the final published rules in December 2023 may not be reflected in this webinar.
Join us on September 21 for a special webinar with the NYC DOB on the new proposed rules for Local Law 97.
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