We’ll start with the Lighting Upgrade Law, which amends Chapter 3 of title 28 of the New York City administrative code (i.e. the Building Code) and adds articles 310 – Required Upgrade of Lighting Systems – and 311 – Installation of Electrical Submeters in Tenant Spaces.

Article 310 of the Lighting Upgrade Law requires owners of all buildings larger than 50,000 square feet to upgrade the building’s lighting systems to energy efficient systems that comply with the standards for new lighting systems set forth in Section 805 of the New York City Energy Conservation Code (“NYCECC“) by January 1, 2025. Section 805 is actually part of the part of the Energy Conservation Construction Code of New York, which sets standards for the energy performance of buildings throughout the State of New York. (NYCECC, which we will discuss in much more detail in a subsequent article here at GRELJ, incorporates the state energy code by reference). Section 805 covers lighting system controls, the connection of ballasts, the maximum lighting power for interior applications, and minimum acceptable lighting equipment for exterior applications, but specifically excludes lighting within residential buildings from its purview.

Required upgrades are accomplished pursuant to Article 310 by installing or modifying the lighting system to comply with NYCECC’s standards for new systems for the following lighting elements: (i) lighting controls (including interior lighting controls, light reduction controls, and automatic lighting shutoff); (ii) tandem wiring; (iii) exit signs; (iv) interior lighting power requirements; and (v) exterior lighting. Owners must file a report with the Department of Buildings prepared by either a registered design professional or licensed master or special electrician certifying that the upgrade has been completed and that the work is in compliance with the technical standards of the New York City electrical code.

Upgrades are not required for (i) an element of a lighting system that is already in compliance with NYCECC; (ii) lighting power densities in any space bounded by permanent floor-to-ceiling partitions and/or closable doors that are in compliance with NYCECC; (iii) lighting systems within low-rise residential units (R2 or R3) or spaces that serve such units, including, but not limited to, hallways, laundry rooms, or boiler rooms; and (iv) lighting systems within houses of worship.

In addition, Section 311 of the Lighting Upgrade Law requires that, by January 1, 2025, owners or lessors of commercial buildings that are larger than 50,000 square feet measure the electrical consumption of certain covered tenant spaces by installing submeters. “Covered tenant spaces” are (i) individual tenant spaces larger than 10,000 square feet on one or more floors; or (ii) a floor that is larger than 10,000 square feet which consists of individual tenant spaces that are let or sublet to 2 or more tenants. For the latter, each individual tenant space can have its own submeter, share a submeter with the other tenant spaces on the floor, or share one submeter that covers the entire floor.

From a green leasing perspective, although submeters must be installed as set forth in Section 311, the Lighting Upgrade Law does not require the landlord to apportion the cost of electricity among the building’s tenants or subtenants in any particular fashion. However, the landlord is required to provide each tenant or subtenant within a covered tenant space with a monthly statement showing the amount of electricity measured by the submeter for each tenant or subtenant during the month, and any amount charged to the tenant or subtenant for electricity. If the covered tenant space is a floor with multiple tenancies (as described above), and the tenant’s submeter covers other tenant spaces, the statement for that tenant must show the electrical consumption for the area covered by the submeter and the percentage of that area which is leased by the tenant. As Model Green Lease Task Force head Alan Whitson frequently observes, “what gets measured gets improved,” a mantra which is clearly the basis for this provision within Section 311.

Next we’ll take a look at NYECC and some interesting legal aspects of the legislation that are making some of Gotham’s building owners and facility managers nervous about what could be coming next from the City Council.

Although the costs of auditing were raised by opponents to the bills earlier this year, mandatory energy audits are now required every ten years, though buildings certified under LEED 2009 for Existing Buildings: Operations & Maintenance or which receive EPA’s Energy Star label are exempt. It’s this exemption that’s of particular interest to us here at GRELJ; here’s the pertinent text from the body of the bill:

No energy audit is required if the building complies with one of the following as certified by a registered design professional:

• The covered building has received an EPA Energy Star label for at least two of the three years preceding the filing of the building’s energy efficiency report.

• There is no EPA Energy Star rating for the building type and a registered design professional submits documentation, as specified in the rules of the department, that the building’s energy performance is 25 or more points better than the performance of an average building of its type over a two-year period within the three-year period prior to the filing of an energy efficiency report consistent with the methodology of the LEED 2009 rating system for Existing Buildings published by USGBC, or other rating system or methodology for existing buildings, as determined by the department.

• The covered building has received certification under the LEED 2009 rating system for Existing Buildings published by the USGBC or other rating system for existing buildings, as determined by the department, within four years prior to the filing of the building’s energy efficiency report.

Legislation which incorporates LEED into local-level legislation is something we’ve noted frequently here at GRELJ, and a couple of recurring issues immediately come to mind with Int. 967.

First, although the bill does allow buildings to earn certification under “other rating systems as determined by [DOB],” the bill does not provide any input on what those other systems might be, or how DOB will “determine” those that would qualify a building for the exemption. Does this language sufficiently address non-delegation doctrine concerns? (i.e., a private third-party organization is effectively determining whether an energy audit is unnecessary under Int. 967 by proxy).

Second, there is no language that allows the legislation to track changes in LEED; for example, if USGBC releases a next-generation LEED system subsequent to LEED 2009, what happens? We have noted this specific issue recurring in various types of legislation. For example, when we wrote about San Francisco’s decision to reconsider its LEED-driven green building ordinance, we pointed out that “LEED itself continues to be a moving target and policymakers must guide themselves accordingly when considering the merits of [LEED-driven] legislative activity.”

Finally, could design professionals balk at signing off on the energy audits given that LEED-EBOM is subject to the same Minimum Program Requirements which, if violated by the building owner, could result in a decertification proceeding, the consequences of which remain unclear?

These questions are obviously theoretical at this point and are designed to elicit your thoughts in the comments. However, I want to stress that the New York City legislation emphasizes the import of assessing and understanding LEED-related risks as the rating system continues to permeate into the private sector in a variety of legislative contexts.

Just as a side note for your reference, the other three bills that constitute the “Greener, Greater Buildings Plan” are:

• Int. 564: New York City Energy Conservation Code. Closes the “50 percent loophole” in the current New York City Energy Code, which does not require owners who renovate less than 50 percent of their building’s total space to comply with the most current – and energy-efficient- version of the Code.

• Int. 476: Benchmarking. Requires buildings to perform an annual assessment of their water and energy use using EPA’s Portfolio Manager tool for the purpose of comparing themselves with their peers, but exempts certain buildings for which public disclosure would be problematic (i.e. high energy users such as data centers).

• Int. 973, Lighting Retrofits and Submetering. Requires large tenants to be submetered and lighting systems to be upgraded during renovations (whether or not those renovations contemplate electrical work) or, at the latest, by 2025. Residential tenants are exempt. Renovations where construction costs are less than $50,000 are also exempt.

Other than the revisions to the Energy Conservation Code under Int. 564, the legislation applies to all New York City buildings larger than 50,000 square feet (or buildings that stand on the same tax lot and, together, are larger than 100,000 square feet).

• GGBP Passes City Council (Urban Green Council)