CY2024 Benchmarking Trends
With LL97 in full swing, benchmarking for LL84 has taken on heightened significance. This interplay between the two laws was discussed in great detail in our March newsletter, linked here. As New York City’s leading benchmarking firm, we like to think of ourselves as “energy investigators,” identifying key changes, anomalies, and trends in the data. Here, we will discuss this year’s most widespread trend affecting benchmarking data, LL95 energy grades, and LL97 carbon outlooks.
Which trend are we noticing this year?
Summer 2024 was one of the hottest on record in New York City. When temperatures rise, cooling demand follows, and cooling equipment is generally powered by electricity. Not surprisingly, the most common trend in our clients’ energy data is elevated electric consumption during the summer months. Depending on the magnitude of this impact on a particular building, this may be the most common reason an Energy Star score and letter grade declined year-over-year.
We broke it down further. A common setup is for buildings to have one or a small number of common area meters for the lobby, hallways, amenities, etc., while individual units are separately metered. In many instances, the common area meter usage remained roughly flat from 2023 to 2024, despite the high heat. This is likely because a building manager or superintendent is controlling thermostats and allowing indoor temperatures to sit higher—but still comfortable—to prevent a colossal utility bill. However, annual in-unit usage rose by 10 percent or more, with 30-percent increases during summer months. Only unit owners or renters have the ability to control their A/C consumption, and naturally, they will set it to maximize comfort.
Will my Energy Star score/letter grade go down every year NYC has a hot summer?
To answer this question, it is helpful to briefly explain how the scores are calculated. Each building is placed on a scale against other buildings nationwide that have the same primary use. Calculations are based on “source energy” per square foot, which is a measure of energy consumed, incorporating transmission, delivery, and production losses of the fuel sources and their generation inputs. Electricity generation still relies heavily on burning fossil fuels and long-distance transmission, which generally leads to greater losses and, therefore, higher source energy. The opposite tends to be more true with renewable power sources. As the grid continues to go green, electricity consumption will have less of a negative impact on the Energy Star score. At the same time, LL97 will incentivize buildings to eventually electrify. The convergence of these factors in New York will drive scores up in the long run.
Reminder about Local Law deadlines
Like in years past, benchmarking for LL84 is due on May 1. Though LL97 filing is technically due on May 1 as well, the Department of Buildings granted a penalty-free 60-day grace period. This effectively means the LL97 deadline is June 30. If Aurora is performing your benchmarking, it will be submitted on or before May 1, then shared in ample time with the Registered Design Professional handling the LL97 filing.
Market Analysis
Natural Gas
A colder-than-expected start to March, concerns over Trump’s tariff policies, and low natural gas storage levels sparked a run-up in the commodity as high as $4.65 per MMBtu by the second week of the month. As these concerns eased, pricing retreated and then hovered in the $4.00 range. Natural gas storage can start to be replenished during springtime, as heating and cooling demand are typically at lower levels during the shoulder season.
Electricity
After a bitterly cold January and February, the NYISO spiked to historically high levels, around $0.15 and $0.11 per kWh, respectively. By March, volatility lessened, and the daily average commodity retreated to the single digits on a permanent basis. By the second week of the month, it stabilized to seasonally normal levels around $0.05 per kWh. As we approach warmer weather, electric consumption from cooling demand will pick up.
Crude Oil
Crude oil futures generally experienced only mild swings through March. On the 3rd, oil prices fell about 2 percent to a 12-week low on reports that OPEC will increase production in April, as well as concerns over U.S. tariffs. Otherwise, price per barrel lingered in the mid to high-$60s for the entire month.
💡 Mitchell’s Tip: Engage Aurora for your LL84/LL97 filing!
