Most New Yorkers are familiar with the restaurant grade signs that have to be posted at the entry to every dining establishment. It's nice to see an A on display at your go-to spots... much less inviting to see a C or "grade pending." So what's the deal with the letter grades now being posted outside of some buildings? And do all buildings need one?
It's fair to be confused—these rules are fairly new, and don't apply to every building. As part of efforts to reduce emissions, two New York City local laws (LL33 and LL95) mandated that all buildings over 25,000 square feet post an energy efficiency grade based on the building's Energy Star score at each public entrance starting in 2020. These scores are based on annual sustainability benchmarking that is required of these buildings under additional local laws (LL84 and LL133). Let's break this all down.
Does this apply to my building?
To determine whether your building meets the requirements, the city publishes a "Covered Buildings List" or CBL every February with the list of properties that meet the requirement by 10-digit borough, block and lot number (BBL). You can find the CBL list here. A good rule of thumb? You might be on it if your building is over 25,000 square feet.
So my building is on the CBL. Now what?
To boil it down, this means that your building will have two annual energy requirements in order to be in compliance with the city.
The first is that building owners or management must file annual data on their water and energy usage by May 1st of the year. This data is filed with the ENERGY STAR® Portfolio Manager through the city, and in turn determines the building's Energy Star score.
The second is that every single year by October 31, building owners or management must retrieve their energy efficiency label displaying their score and grade, print the label, and place them in a conspicuous area near every single public entrance. They must be updated every year by the end of October with the latest grades. Yep, just like those restaurant grade signs.
How do I get my energy efficiency label?
What does the grade mean?
Your building's grade is determined based on the Energy Star score from your annual sustainability benchmarking data. Those translate into the following grading system:
A – score is equal to or greater than 85
B – score is equal to or greater than 70 but less than 85
C – score is equal to or greater than 55 but less than 70
D – score is less than 55
F – for buildings that didn’t submit required benchmarking information
N – for buildings exempted from benchmarking or not covered by the Energy Star program.
So we didn’t score well… are there penalties?
There are penalties for not filing your benchmarking information—or in other words, receiving an F grade—and for failure to display or update your energy efficiency label.
Buildings that receive an F receive a benchmarking violation, with a fee of $500 per violation. Buildings that do not display their energy efficiency score and grade on time are subject to an EGRADE violation, barring a heftier fee of $1,250 per violation.
But that’s not the full story. Starting in 2024, another local law (LL97) will levy much heavier penalties—as much as orders of magnitude greater than today’s fines. The city has plans to reduce emissions by its largest buildings 40% by 2030 and 80% by 2050. To get there, beginning 2024 (15 months from today!), CBL buildings will have limits on greenhouse gas emissions. And each year, those limits will continue to shrink in order to force buildings to improve their efficiency.
In 2024, penalties will be:
The reality is most buildings will have to invest significantly in ways to reduce their emissions. In 2021, 39% of buildings received a D grade, while a whopping 9% simply didn’t comply and received an F.
And of course, it’s just unsightly to see a failing grade day-in and day-out.
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