New York Climate Policy Update and Impacts on LL97
Governor Kathy Hochul recently published an op-ed [linked here] proposing changes to New York’s landmark climate law, raising questions about how the state will meet its near-term goals. The Climate Leadership and Community Protection Act, or CLCPA, enacted in 2019, sets some of the most ambitious climate targets in the country, including requirements for 70 percent renewable electricity by 2030, 100 percent zero-emission electricity by 2040, and economy-wide net-zero greenhouse gas emissions by 2050.
While Hochul’s proposal would not formally change these targets, it would delay and restructure the regulations used to achieve them, effectively shifting the state’s primary compliance focus away from the 2030 benchmarks and toward 2040 and 2050 goals. As outlined in the op-ed, this approach is intended to provide more time to implement practical solutions while maintaining long term policy stability. It also raises important questions about how near term targets will be enforced and how those changes could ripple through related policies, including Local Law 97 (LL97).
While the above refers to statewide goals and legislation, New York City’s Local Law 97 is closely tied to how clean the state’s electric grid is and how that mix evolves over time. Given the ambition of the city’s targets, it has long been expected that LL97 rules would require adjustment over time. The New York City Department of Buildings (DOB) has consistently indicated that its primary objective is to ensure the law’s successful implementation.
As currently structured, many buildings are projected to face penalties for exceeding their emissions limits by 2030, when updated emissions coefficients take effect. If grid decarbonization proceeds more slowly than anticipated, those coefficients could become more stringent relative to actual conditions, making compliance even more difficult. Such an outcome would be misaligned with the DOB’s stated approach, suggesting that further adjustments to the law or its implementation may be necessary to maintain a viable path to compliance and the success of the law.
What This Means for LL97
As of today, there have been no changes to LL97, and none are actively under consideration. With the 2030 compliance period less than four years away, however, building owners cannot afford to wait for full alignment between state and city policy. We have long advised clients to approach decarbonization through gradual, strategic steps, an approach that remains especially relevant in light of Hochul’s comments, which underscore that the policy landscape can evolve.
Rather than overcommitting to long term assumptions, it is prudent to focus on the nearest compliance periods while maintaining flexibility. At the same time, technologies continue to advance and become more cost effective. Prioritizing lower cost, high return energy efficiency measures, such as boiler controls and envelope improvements, among others, can help position buildings for compliance while preserving optionality as regulations and market conditions develop.
Compliance deadlines are approaching. Annual LL84 benchmarking reports are due May 1, followed by LL97 compliance submissions on June 30.
Market Analysis
Natural Gas
The NYMEX settlement for April closed at $3.095 per MMBtu. Despite the conflict in Iran driving a surge in global oil prices, U.S. natural gas has remained relatively insulated from these effects. That’s because the U.S. market is largely supplied by domestic production, creating a buffer from global shocks. LNG export capacity and regional pipeline constraints also keep prices tied to local supply and demand rather than global disruptions. Total working gas in storage domestically is 5.2% higher than a year and 0.8% above the five-year average.
Electricity
NYISO Zone J prices in March followed a similar pattern to February, with brief cold snaps driving prices into the high single digits per kWh while otherwise holding in the mid-single digits. Average daily prices settled near $0.05 per kWh, more in line with seasonal norms, with warmer, lower-demand days dipping to around $0.03. As the market enters shoulder season, volatility is expected to remain muted amid softer demand.
Crude Oil
Crude oil prices surged sharply through March, with WTI climbing from the low-$70s early in the month to above $100 per barrel as escalating conflict involving Iran disrupted global supply expectations. Prices were highly volatile, briefly pulling back into the high-$80s on ceasefire hopes before rallying again to triple digits by month-end. The risk of prolonged disruptions in the Strait of Hormuz and broader Middle East instability drove a significant geopolitical premium into the market.
💡 Mitchell’s Tip: Contact Aurora for guidance on local laws. Compliance season is upon us!