LL84 & LL97 Process
New York City’s carbon emission law, Local Law 97 (“LL97”), was introduced in 2019. After years of updates and partial clarifications from the Department of Buildings (“DOB”), the first compliance period for most properties will begin in 2025. To ensure compliance, you will have to take some critical steps. Before diving into an action plan, let’s briefly discuss the process behind annual LL97 compliance reporting.
Historically, Local Law 84 (“LL84”) benchmarking was mostly a “check the box” compliance task, which required the annual submission of your property’s total energy consumption and square footage to the DOB. Now, it is the foundation for LL97. This energy data will flow directly into the DOB’s new reporting platform and be used to calculate your property’s annual carbon allowance and emissions. To maximize carbon allowances and minimize exposure to potential fines, it is important to work with quality service providers who will go above and beyond to ensure data integrity.
As New York City’s largest benchmarking firm, Aurora Energy Advisors has more than a decade of experience with LL84. As the energy advisor to thousands of buildings in the city, we have also developed an expertise in understanding billing data, identifying errors or outliers, and working with the appropriate counterparties to ensure accuracy.
We will cross-reference your energy usage data with utility bills (where possible), building systems, and historical consumption patterns to identify discrepancies or anomalies that may affect your carbon emissions calculation. This ensures that all data is complete and correctly reflects actual energy use. We will also verify that the reported square footage matches your building’s official records, including any discrepancies in tenant-occupied space, common areas, and mechanical rooms. This will be dependent on having previously completed professional square footage measurements.
Once Aurora or your benchmarking provider completes their part of the process, the data is handed over to a Registered Design Professional (“RDP”). The RDP will conduct their own quality control checks, then certify and submit your property’s LL97 report to the DOB. If a property encompasses multiple buildings or lots, additional work may be required. Aurora works very closely with best-in-class RDPs to offer a complete LL84/LL97 compliance package.
Engaging service providers for this suite of responsibilities is vital. The penalty for failed compliance is $0.50 per square foot per month. For example, a 50,000-square-foot property that misses the compliance deadline would face a monthly fine of $25,000. If you do not have a plan for LL97 filing, contact Aurora, and we will work with you to assess your options.
Market Analysis
Natural Gas
After a brutally cold January provoked the NYMEX to rise as high as $4.25 per MMBtu mid-month, a brief “warm up” sunk the commodity back down to the $3 range to start February. Well, cold temperatures again swept over much of the country throughout February. By the end of the month, the weather-driven volatility resulted in the prompt month, March, settling at $3.91 per MMBtu.
Electricity
As explained in our last newsletter (linked here), bitter cold temperatures can cause natural gas prices to skyrocket. Natural gas is the primary generation input for electricity in New York’s grid, so the two commodities tend to fluctuate in tandem. After the January NYISO average soared to $0.1453 per kWh, February is on track to average $0.11, which would be the highest for that month since 2015.
Crude Oil
Crude oil futures gradually declined throughout the month from $74 to approximately $70 per barrel. President Trump’s attempt at diplomacy in the Russia-Ukraine conflict prompted a sharp decline. Then, concerning economic data showing worsening consumer confidence sunk futures another 2 percent this week.
💡 Mitchell’s Tip: Engage Aurora for your LL84/LL97 filing!
