May 22, 2013

Why A New York Law Requires A Building Performance Analysis

Posted on September 13th, 2011 by Ben Lack

Allie Walker, CEO of The Lighting Quotent, discusses the impact of a new New York law that requires buildings with a footprint of 50,000 sq.ft. to calculate their energy use with the ENERGY STAR Portfolio Manager.

Full Transcript:

Ben Lack:	As of August 1^st, the State of New York has passed a law that requires owners of commercial properties that have a footprint of 50,000 square feet or more to report their energy performance using the ENERGY STAR Portfolio Manager, which is a benchmarking tool that EPA has created for free. I’m curious to get your thoughts on why the state passed this law.
Allison Shemitz Walker:	I’m really thrilled that the law has been passed because it’s extremely important to reduce the carbon emissions in New York City, particularly. The carbon emissions are largely produced by the largest commercial building. Seventy-five percent of New York City’s carbon emission comes from energy that’s used in building, and if they start this benchmarking, you’re going to see the energy usage of commercial buildings go down dramatically. There are a number of reasons why that’s true. Not the least of which is that, according to Bill Warren of the Illuminating Engineering Society, tenants who are just aware of what the energy usage is in their particular portion of the building by metering, are much more likely to voluntarily reduce the use of energy. But, in general, the reduction of energy that will be caused by the benchmarking law, in combination with the laws on energy audits and retro-commissioning and lighting upgrade and sub-metering, together have the possibility of bringing the CO2 of down as much as 7-.5%. Probably in the very near term, with just the 16,000 buildings that have been targeted as the city’s largest properties, we can get an immediate reduction of about 5% on the total carbon emissions.
Ben Lack:	I would imagine that it probably removes some of the hassle for folks that have triple net leases that don’t really control their electric bill because that’s managed by the landlord. That this will force the landlord to really perform these actions on their behalf. Would you agree?
Allison Shemitz Walker:	You are absolutely right. In fact, there was a consortium of large real estate developers and engineers and building managers that were brought together under plaNYC to talk about what changes could be made in traditional leases, so that both the tenants and the landlords or the property managers benefit. I want you to know that what you are addressing is extremely important because why would landlords who have tenants that pay their own electric bills, for example, be incented to enter into these energy savings measures when the tenant is already paying for those? Conversely, it’s hard to control the tenants’ usage just in kilowatt hours and usage during peak times whether the tenants are being charged or not as inclusion in their rent. One of the things that most people don’t know about is the city has worked with this group of people to develop a model energy aligned lease provision. So, as to split the benefit of energy savings between tenants and landlords. If you’re to get some quick payback energy retrofits; for example, in lighting, which is, of course, our specialty and expertise, you can really incentivize both the tenants and the landlords to participate in these retrofit projects. The only place where it would be not practical is where you didn’t have the sub-metering. The sub-metering is extremely important to know which building and which tenant are the most egregious, with respect to their uses of electric energy. The benchmarking is the first step to finding out who are the most egregious users of electrical energy in all of the city, and it is an immediate and urgent requirement of the nonresidential building owners and managers to get their benchmarking data in. In fact, there is a penalty of $500 that will accrue to any building that was not in compliance, as of the August 1^stdate.
Ben Lack:	The requirement to use the benchmarking tool is great because it essentially makes public to a certain extent what the energy performance is of the building, but it does not necessarily require these buildings to do anything about their score even if the score is high or poor. Do you sense that the state has enough backing from the people that live there, to say ‘all right companies, you need to lower energy’? For some of these folks, it might be in their business operations that they cannot be as energy-efficient as others might be.
Allison Shemitz Walker:	This is true. Let me tell you that I believe that part of the benefit of benchmarking is really going to be a competitive story, meaning that property owners and managers who are competing for the largest tenants and the longest leases and those tenants who are trying to track the best and the brightest employees to their operation are going to be interested in participating in these green programs. People of today, the young employee generation, care very deeply about working for corporations that are doing their part to contribute to greener and greater buildings codes. So, I believe that the negative threat of those bad actors who are ignoring the mandates to retrofit their buildings and have energy audits and do positive deeds for getting their carbon footprints down, I think that they will be competitively disadvantaged.Remember, also, that benchmarking, which is the local law 84 is being put into action along side of a New York City energy code, which is law 85, which establishes a New York City energy code requiring all renovations to existing buildings and building systems to comply with current standards. Local law 87, which is the energy audit and retro-commissioning, which requires the large, private buildings in New York City to conduct these energy audits and most importantly, of course, to us but really to the world, is the local law 88, which requires these lighting upgrades and sub-metering any building larger than 50,000 square feet will be required to bring their lighting levels to code and that is particularly important because the amount of electricity that’s used for lighting is about 40% of the electricity used to manage commercial buildings. Lighting is also a derivative energy user, meaning unlike heating where you take a fossil fuel like oil or gas and convert that into heat, lighting is a derivative meaning it is a double energy user because you have to take that energy and convert it into electricity before that electricity can be used to use for lighting. Does that make sense?
Ben Lack:	Yes.
Allison Shemitz Walker:	So, it’s a double process. That’s why they call lighting a particularly important part of the puzzle because it’s a second derivative. There are two processes, both of which reduce the efficiency, or the amount of electricity that you’re going to get and the amount of lighting you get because it is a second derivative. You’re burning fossil fuel to create electricity and then electricity to create lighting, as opposed to just burning fossil fuel for heat or energy.
Ben Lack:	Totally understand. Allie, what’s the low-hanging fruit? Hypothetically, I’m a building owner who owns a commercial property and I’ve now realized that I have a fairly poor score because I’ve sent my information through the Portfolio Manager and I’m looking for the strongest return on investment because I don’t have a whole lot of capital that I can really spend on retrofitting my building, but I realize that I need to spend some money because a) it will save me some money fairly quickly due to a good payback, but it will also b) lower my score or make me potentially offer a better offering for potential tenants to come in and use my real estate. What do I do first?
Allison Shemitz Walker:	There are a number of things that can be done. You pointed out in one of your previous articles that the Empire State Building achieved a very positive citation, simply by changing the windows and, in fact, they had the radiators up against the windows, which allowed further heat to be literally flying out the window, or energy flying out the window. Any one of the major building systems, heating and cooling, water system and lighting system are the three that qualify for the EPAct tax incentive. What I would say for starters is that I would look at where the incentives are and there are two major incentives: 1) Under the American Recovery and Reinvestment Act and that is rule 179, which allows accelerated depreciation for assets put into place for energy retrofit purposes. Any upgrades in FF&E, which is Furniture and Furnishings, qualify. Lighting that is attached to the furniture, task-ambient lighting, extremely energy-efficient lighting, qualifies for rule 179. In addition, EPAct, the energy act tax incentive by the IRS, which is literally coincidentally 179D, is specific to energy upgrade, and it allows for a literal tax deduction of a $1.80 per square foot for any of the reductions by 50% in the three major building systems that we talked about: heating and cooling and water and lighting. You can get a full 60 cents per square foot deduction in your taxes before 2013 by taking your lighting systems down to 50% of what is called the ASHRAE 90.1 2001 standard. It’s been very broadly published, and there is an awful lot of professionals in the marketplace who can help you achieve that reduction and it’s really not that hard. By the judicious use of a task-ambient lighting in commercial spaces and LED lighting, which has such a dramatic performance boost over traditional incandescent, fluorescent, Tungsten and other sources of lighting, you can very quickly get into a situation where you are well within those guidelines. In addition, I’ll just point out that controls are going to be key to success and are very easy to implement, particularly now because there are wireless controls for personal dimming, daylight load shedding, which means that as the light is brighter from the outside during the day, that automatically lighting fixtures can be dimmed to maintain a very lovely and pleasant level lighting, but without putting strain on the users or user satisfaction, and then you have vacancy and occupancy sensors, so that when people are not using spaces in the building, how many spaces in New York do you see where you drive down any one of the major thoroughfares and see buildings just aglow at night because of the housekeepers. Rather than following or leading the maintenance people or the small pockets of 24-hour workers the controls to really add to the energy savings and is a very quick fix.
Ben Lack:	Do you know of any studies by any chance that talk about increased worker productivity or retention or recruitment from better working conditions? I would assume that if you have energy-efficient lighting and the energy-efficient lighting that’s in the facility also better lighting than what was there to begin with, that folks are more apt to want to stay at their desk and work and be more productive.
Allison Shemitz Walker:	It is a phenomenal question and a question that has been addressed by the Pacific Northwest National Laboratory. One of the laboratories in the United States that has a mandate to study lighting and its effect. There is a woman whose name is Carol Jones, and she has concluded a 10-year study, the results of which are that lighting solutions exist that benefit individuals and their employers in the environment, that energy-efficient lighting can be high-quality lighting, and that the best lighting is work station specific, specific direct and indirect luminaires, with individual control. Also, people report much higher worker satisfaction if they have any exterior views, so another trend that we are seeing that helps both energy efficiency and worker satisfaction is rather than putting the individual offices in conference rooms around the perimeters of floor plan and putting all of the open office employees into the dark, internal caves at the center of the footprint, that what many architects and designers have already adopted as best practices is by putting all of the open spaces to the exterior or the perimeter, which allow because of low panels or no panels in those collaborative spaces, allow the sunlight to pass through the entire footprint, for example, of a commercial tower. There has been quite a bit of study to demonstrate that there are health and satisfaction outcomes and a direct link to worker productivity, and I would direct you to the Pacific Northwest National Laboratory and particularly the studies of Jones and Veitch.
Ben Lack:	Allie, why are you in the business? And why does this industry interest you?
Allison Shemitz Walker:	Oh, I am so lucky for starters to have ended up in the business. I am a third generation lighting person in my family. My father inherited a small electrical supply business in the 40s, became fascinated with lighting himself and was a lighting designer under Sylvan R. Shemitz Associates and did some incredible projects like the Jefferson Memorial, Arlington Cemetery, and the Tomb of the Unknown Soldiers, and headquarters for Atlantic Richfield and IBM. We’ve done work on the Grand Central Terminal. When you drive up Park Avenue South in New York City and you see Grand Central illuminated at night, that’s our work. It’s hard not to fall in love with this industry when there’s so much that’s changing so quickly and the opportunity to make a huge difference in the environment are right in front of us. We have rededicated all of our efforts to producing highly efficient energy savings, luminaires for particularly commercial and institutional, meaning a lot of galleries and other public spaces, airports and schools, etc., because it’s a win/win for everybody. There’s a way to make beautiful architectural spaces with light. In fact, our lighting has just been unveiled at the Martin Luther King exhibit in Washington D.C. and it called up real beauty in the park where it’s installed, highlighting Martin Luther King’s speeches, but at the same time we have a very critical eye to using less fixtures, to being less intrusive on the surrounding environment, and it’s just a great time to be in the lighting industry. As I said earlier, it’s a fast-paced industry now. We used to see a lamp improvement. For example, maybe there was a slight reduction in the mercury content of a fluorescent lamp and you would have iteration every year or two. Well, with LED lighting, we are seeing major improvements on a quarterly and semi-annual basis and sometimes even faster, so the rate of pace of innovation that’s required to keep up is very, very high and I love that kind of energy.

Related Posts:

Tags: energy audit, energy efficiency, energy star, Energy Star Portfolio Manager, lighting, Lighting Quotient, New York

>