Here’s what you need to know about the new package of proposed rules for Local Law 97.
Published September 12, 2023
On September 12, the NYC Department of Buildings (DOB) issued a new set of proposed rules on the implementation of Local Law 97. 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. The proposed rules are open for public comment until a public hearing on October 24. Read the press release from DOB here.
We’ll be hosting a webinar with DOB on September 21 to unpack these new rules in detail—register now to save your spot! In the meantime, here are the big takeaways from the 2023 proposed rules:
“These proposed 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
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 other building energy laws, including:
- Benchmarking (Local Law 84);
- Audits and retrocommissioning (Local Law 87); and
- Lighting upgrades and submetering requirements (Local Law 88).
If all of the above criteria are met, a building could qualify for good faith exemptions by meeting one of the following six criteria:
- Permits have been approved by DOB for retrofit work sufficient to meet the property’s 2024 limit, 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 plan for net zero carbon emissions by 2050. This option relieves owners of penalties until 2026, but in exchange prohibits the use of RECs in the first compliance period. Plans must demonstrate concrete timelines, financing, and expected emissions reductions from planned alterations, and work for the 2024 emissions limit must 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. If the above criteria are not met, penalties can be issued retroactively.
- 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.
- Have applied for an adjustment based upon financial hardship. The owner must show that they have applied for or been granted an 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 proposed 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.
3. A new credit that rewards beneficial electrification before 2030, with incentives to act even earlier
The proposed 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 would 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 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. Guidance on Local Law 88 lighting and sub-metering requirements
The announcement also includes a new proposed 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, and a hearing for this rule will take place on October 26, separate from the Local Law 97 proposed rules hearing.
Alongside the proposed rules, 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.