Local Law 87: Choosing Quick & Cheap Energy Audits Can Be Disastrous

By: Associated Renewable

Published: Decmber 27, 2012

NYC Local Law 87 – Energy Audits of the City’s Building Stock

New York City’s Local Law 87, introduced by Mayor Bloomberg’s administration and the City Council in 2009, mandates energy audits and retro-commissioning for all large buildings. Owners and managers of buildings larger than 50,000 square feet, which constitute nearly half of the City’s total built square foot, are required to conduct an energy audit and make energy efficiency improvements with relatively short payback periods (1 to 4 years). The first set of energy audits is due in 2013.

Recent legislations, stricter energy codes and a growing awareness of climate change among lawmakers have pushed energy efficiency to the forefront of issues being tackled by the commercial and large residential real estate sector. Moreover, many corporate tenants are demanding improvements in the buildings’ energy performance standards as a prerequisite to lease renewals, which is further motivation for owners to invest in energy efficiency upgrades.

Energy audits are designed to ensure building owners understand the energy consumption behavior of their buildings and also get a comprehensive picture of the retrofit measures required to bring underperforming energy-using systems to their intended level of functioning.  Armed with this knowledge, owners can then apply for financial incentives (such as grants, rebates & tax credits) to implement energy efficiency measures as dictated by the retro-commissioning phase of the law. Even without the mandate, property owners have to realize that energy audits can offer immediate energy cost reduction in today’s market where energy costs on average account for more than 40% of buildings’ operating costs.

Choosing the Wrong Energy Auditing Company Can Prove Disastrous 

While Local Law 87 mandates energy audits and retro-commissioning of building systems, it also requires that these be conducted by an independent, certified expert that is not on the staff of the facility being audited. In other words, energy audits cannot be performed in-house.

Since buildings under the purview of Local Law 87 have large, diverse and complex energy consumption patterns, a poorly-performed or sub-standard technical study will warrant a do-over after inspection from the Department of Buildings, where the energy efficiency reports must be submitted. Further, opting for the cheap and quick solution will only result in minimal performance, with inexperienced auditors cutting corners and sub-contracting the work with little to no supervision.

Local Law 87 requires at the minimum an ASHRAE Level 2 audit, which focuses on identifying low-cost to no-cost energy conservation measures (ECMs). Although this level of energy analysis may appease many property managers, it does not furnish comprehensive financial analysis associated with implementation costs of retro-commissioning procedures, operating costs, attainable savings and payback analysis.  A unique advantage of a Level 3 audit is that it includes both engineering & economic analyses using information from data loggers (instruments recording energy use) and detailed cost estimates.

To that end, it is imperative to hire experts that have prior experience with Local Law 87 procedures, are able to demonstrate technical analysis of buildings with size and specs similar to yours, as well as have internal teams that are well-equipped to garner financial incentives for the proposed efficiency measures.

More recently, several companies have realized the huge capacity of the energy auditing industry.  While these companies may boast cheaper rates and fast returns, clients should be aware that some of these companies are not auditing or retro commissioning with the best interest of the client in mind.  In these rare and unfortunate situations, the customer is told that they have complied with Local Law 87, when in fact they have not. If a property management firms selects one of these less than reputable vendors and the report is not completed correctly (or even worse not completed at all!) the building will still be liable to heavy fines.

What Makes Associated Renewable Ideal for Local Law 87

Associated Renewable is an end-to-end full service energy consulting company that offers a comprehensive bundle of services for Local Law 87 compliance. With no affiliation to specific manufacturers or suppliers, the firm has complete authority over bundling products, equipment and services from the best possible solutions.

As a market partner in the Con Edison- Lockheed Martin incentive program, Associated Renewable has access to over $100 million in grants, rebates and incentives that can be used towards reducing the upfront costs of the audit and the retro-commissioning measures proposed.

Within New Jersey, Associated Renewable is an approved partner in the Pay for Performance (P4P) program offering energy audits to commercial, industrial and institutional customers for reducing energy consumption by at least 15% from previous existing levels. With performance-based incentives up to $2,000,000 per project available through P4P, Associated Renewable is able to expand its energy solutions to New Jersey’s existing buildings stock and all new building construction.

Grants & Incentives

The company has a dedicated team of grants specialists that assists customers in the application of funding for their energy projects right from due diligence on applicable incentives to the receipt of the incentive letter.  Associated Renewable prides itself in the high caliber of its professionals, engineers and technicians, and leverages the value of reputable partnerships in all projects undertaken.

Value of a Level 3 Audit Explained

After the completion of a level 2 audit, an upgrade to a level 3 can be done by building upon results of the level 2 audit to complete the level 3 without much replication of tasks already performed. This makes the Level 3 audit effortless and yet extremely valuable for properties that want higher recognition (e.g.  through LEED status).

For each Energy Conservation Measure identified in a Level 3 audit, Associated Renewable provides the dollar amount to be saved, the amount of energy (in Kilowatt hours, therms or gallons) to be saved, the implementation cost of each measure and the amount of time taken for the Energy Conservation Measure to pay for itself (payback period), in addition to the amount of applicable incentives the Grants Services team identifies. The end report provides realistic and verifiable savings opportunities with regard to baseline operating costs.

All levels of audits qualify for incentives under NYSERDA programs and relevant programs in other states. However, Con Edison requires a Level 3 energy audit for access to their incentive program.

Associated Renewable offers additional value in the form of free multi-year energy benchmarking to those properties that sign up for a Level 3 audit. As a result, the painful process of annual benchmarking is taken away from them in advance.

Pricing It Right

When it comes to the financials of an energy study, no one can compete on value added and pricing like that of Associated Renewable’s. No matter how you see it – the perceived value and the actual value of the services delivered are superior for Associated Renewable’s energy solutions bundle.


Contact the Energy Solutions team by phone at (212) 444-8215 or email info@local-law-87.com to learn about the value of all audit levels. It’s guaranteed to change your opinion of how customer-centric our business really is.