“EDUCATING ENERGY CONSUMERS TOWARD ECONOMICAL ENERGY OPTIONS”

March 18, 2011

Ms. Deborah Taylor

Chief Sustainability Officer

Department of Buildings 280 FL 7 OFFICERS Columbia University NY 10007 Frank Martino, Co-President Levin Energy Advisors, LLC Daniel Levin, Co-President RE: LOCAL LAW 84: COMMENTS Cassidy Turley, Inc. Jack A Terranova, P.E., R.P.A., Vice President Corporation of Trinity Church Dear Ms. Taylor: Alec Salticov, BEP, CEM, CEA, LEED AP, Vice President Jones Lang LaSalle Tony Cartagine, Vice President Thank you for inviting me to offer comments on the draft rule Jones Lang LaSalle Matthew Duthie, Vice President released on February 28, 2011. At the outset of my remarks, let me Rockefeller Group Development Corp. remind you of some concerns I noted in my testimony when this law William Stoddard, Vice President Vornado Realty Trust was under consideration in June of 2009. I noted then that there are Anthony Campbell, Vice President many dimensions to benchmarking energy consumption, and I was ATCO Properties and Management, Inc. Avi Itzikowitz, Secretary concerned about the capacity of your department to oversee that Energy Spectrum process and ensure compliance. Despite nearly two years of effort Edward Strauss, Treasurer refining the law prior to its passage in December of 2009, it has still BOARD OF DIRECTORS 650 Fifth Avenue Company taken the Department of Buildings (DOB) more than fourteen Kathleen Murphy additional months to proffer this draft rule. I salute the DOB for the Beacon Capital Partners, LLC Michael W. McMahon comprehensive and thoughtful results of that effort, but I note that Cassidy Turley, Inc. there are still several significant areas where additional clarification is Thomas C. Waldron, Jr., P.E. Con Edison Solutions required. My comments will point to some of those areas, and I am Michael Forese confident that there are many additional areas where other parties Corporation of Trinity Church Al Amore will direct your attention. EnergyWatch Inc. Keena Hammond, LEED AP It seems unreasonable to expect the owners and/or managers of First New York Management 22,000 buildings to translate the 15-page law and a 15-page draft John Bowen Fisher Brothers rule into action within a mere two months – particularly if the draft Michele Kilcullen rule warrants significant revision. At the moment, failure to complete Great Forest, Inc. Drew Masters, LEED AP the benchmarking of a building’s calendar year 2010 energy L & L Holding Company st Henry Celestino consumption by May 1 , 2011 exposes each building in default to a st Lime Energy Co. $500 penalty immediately and every quarter thereafter (August 1 , Robert Meier, P.E. st st Monday Properties November 1 , and February 1 , 2012). Caroline M. Molloy, R.P.A., LEED AP NYU Langone Medical Center Accordingly, I would strongly urge DOB to postpone the initial May John Bartlik, P.E., CEM, CEP 1st deadline to give building owners and managers adequate time to Real Estate Board of NY Angela Sung comply with the final version of the rule. Since there is no obligation Silverstein Properties, Inc. for either the DOB or the Department of Finance to publish this data, Jason McCalla SourceOne there seems little reason for not delaying this deadline to increase Michael V. Byrnes, P.E., LEED AP the likelihood of significantly greater compliance. At a minimum, I Walter & Samuels, Inc. st Ernest Faraci would recommend delaying the May 1 compliance deadline by a full st INDUSTRY ADVISORY BOARD quarter to August 1 , 2011, and I would further urge a delay of an William J. Museler, Chairman additional quarter before imposition of any penalties. Perhaps DOB st CHAIRMEN EMERITUS could commit to sending warning notices out by September 1 , 2011 st ATCO Properties and Management, Inc. to any building that fails to comply by August 1 , 2011. Such a Peter L. DiCapua EnergyWatch Inc. warning notification should likely make a significant difference in Jay Raphaelson improving compliance.

EXECUTIVE DIRECTOR David F. Bomke 11 PENNSYLVANIA PLAZA – FLOOR 22 • NEW YORK NY 10001-2006 • PHONE 212 356 0030 • [email protected] • FAX 212 356 0063 “EDUCATING ENERGY CONSUMERS TOWARD ECONOMICAL ENERGY OPTIONS”

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Portfolio Considerations. Second, I would note that the EPA’s Portfolio Manager program was originally developed primarily to support voluntary energy program implementation – not mandatory municipal benchmarking legislation, and there are inherent challenges as a result of the effort of modifying the program’s original intent to support the City’s needs. For example, Local Law (LL) 84 treats each building as a separate entity, even though many buildings may be owned, managed, and/or reported under varying portfolio jurisdictions. Although the draft rule exempts a building from complying with the benchmarking legislation when it experiences a change in ownership, there is no exemption if a building owner selects a different management firm and/or a different benchmarking agent from one year to the next. It would be very helpful if the rule clearly articulated a recommended process for transferring individual buildings’ historic benchmarking data when buildings change ownership, management, or benchmarking reporting responsibilities. In addition, the rule could be greatly improved by establishing a protocol with the EPA that would easily permit building owners and managers to assign buildings into multiple portfolios, such as BOMA/NY, NYECC, and REBNY, as well as by building ownership and/or management. Benchmarking Period. Section (f) specifies a requirement to enter data for the precise calendar year from January 1 through December 31 of each year. Since the bulk of most energy consumption is tracked by energy bills that rarely align exactly with a calendar year, I would strongly recommend that the rule simply specify the twelve-month period of each year to be benchmarked. I have long maintained a practice of assigning a utility bill to a nominal month based upon the month where the majority of days are reported. For example, a billing period from January 10th through February 9th would be considered a January bill. Some adjustment may be necessary when several bills run from the 15th day of one month to the 15th day of the following month, but the basic requirement would be for each building to report twelve consecutive months of data for each energy type for each reporting period. Multi-period bills would need to parsed accordingly. Otherwise, as currently specified in the rule, presumably each building would be required to reallocate twelve months of bills into 365 daily totals and then reassign those into twelve calendar months – a massive task that could lend itself to a multitude of errors. Simply “fixing” January and December data to align with January 1st and December 31st would create inaccurate reports for February and November unless all twelve months were manually recalculated. Default Energy Data. Recognizing that multiple tenant buildings with at least some consumption information not accessible by building owners, the rule spells out how a building owner (or agent) can use certain default values to estimate energy data for such space. Unfortunately, the tables provided do not address buildings with a mixture of centrally and tenanted metered heat and/or air conditioning. Of some 22,000 buildings required to benchmark their annual energy consumption, it is likely that there are dozens, if not more, variations on mechanical infrastructure and combinations of direct and master- “EDUCATING ENERGY CONSUMERS TOWARD ECONOMICAL ENERGY OPTIONS”

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metered buildings. The model rule does not begin to accommodate all of those variations. There is no provision for estimating thermal energy in tenant spaces where thermal energy is procured directly by tenants, for example. Other Tenant Energy Data. The rule currently requires owners to ask tenants who procure energy independently to share such energy consumption with owners to facilitate owners’ benchmarking requirements for their buildings. When such information is not available, owners are permitted to use default electricity consumption values, where appropriate defaults are available. As previously noted, there is no provision for default thermal energy load provided to quantify oil or natural gas consumption procured directly by tenants. Unfortunately, the rule does not identify the process whereby building owners should secure information on how energy is used within any tenant spaces. Portfolio Manager reasonably acknowledges that operating hours, staffing loads, personal computer use, and many other variables should be obtained in order to ensure maximum benchmarking accuracy. The rule should provide guidance in this critical area, and then building owners must be given sufficient time to acquire this information before they are held accountable for completing the benchmarking process. Campus Energy Consumption. Several owners of educational, medical, and/or commercial campuses where some or all of the energy is measured only at single locations and then distributed to individual buildings have expressed concern about the benchmarking process. Most of these campuses have already been benchmarking their buildings using EPA Portfolio Manager for several years and want to continue to track their campus-wide energy consumption. It appears that the model rule will require them to establish duplicate reporting protocols where they will now need to report each building independently, pro-rating each energy type for each building. These owners are concerned about the potential for double-booking their consumption with EPA, as they would now be reporting the same energy twice – once on a campus-wide basis and once on an individual building basis where the total energy is pro-rated for each individual building based on a square footage allocation. Auxiliary Energy Consumption. Several building owners have expressed concerns about the obligation of reporting energy consumption associated with non-core building operations. Examples range from cell towers to major radio and broadcast antennas, as well as energy-intensive signage, such as the world-famous marquees in . Some of this electricity consumption is directly metered by Con Edison; other consumption is tracked by sub- meters; some consumption is simply captured as part of a building’s overall energy consumption. How should such energy be reported for the purposes of LL 84 compliance? Submission to the City of New York. At present, there is some confusion about the process and potential for correcting data after submitting it. EPA Portfolio Manager allows building owners to revise data as often as necessary to ensure its completeness and accuracy, but there appears to be no comparable possibility for uploading corrected data to the Department of “EDUCATING ENERGY CONSUMERS TOWARD ECONOMICAL ENERGY OPTIONS”

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Finance (DOF). Also, since there is currently no process for reviewing the data after it has been submitted to DOF, owners are understandably cautious to ensure that their information is accurately handled within the DOF. The rule should provide unambiguous protocols for reviewing their performance after it has been submitted and for correcting errors identified during that review process. Additional Concerns. Owners of some buildings, particularly those that house complex and energy-intensive data centers are anxious to protect the privacy of such energy intensity to comply with homeland and industrial security concerns. Some commercial property owners own buildings entirely occupied by the City of New York. Is the City of New York responsible for benchmarking these buildings, or is the building owner responsible for the process? Conclusion. Despite the aggressive communication efforts of the Department of Buildings and multiple organizations whose memberships bear responsibility for LL 84 compliance, significant areas of confusion about the compliance process remain. We would hope that DOB can quickly address the concerns raised here and by other parties and incorporate answers into a revised rule by May 1st, 2011. Parties responsible for complying with LL 84 should then be afforded at least 90 days to digest and comply with the revised rules and at least an additional 90 days before they are held accountable for submitting their energy data to the City.

Thank you again for inviting comments on the model rule. If you have any questions about the concerns that I have identified here, please advise.

Regards,

David F. Bomke Executive Director

DFB/hs

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