The Next Phase of Local Law 97 Starts Now
New York has always been known as the city that never sleeps. Now, thanks to LL97, neither do decarbonization and energy compliance. While the June 30 LL97 compliance deadline has passed, the work of reducing emissions, planning capital improvements, and preparing for next year's reporting season is already underway. For many buildings, however, this year's compliance work isn't over. Properties operating under an extension, as well as those that currently exceed their emissions limits, should continue taking action now to achieve compliance and minimize potential penalties.
The most time-sensitive priority for every building is understanding its emissions outlook. Some buildings need to act immediately to avoid penalties during the 2024 to 2029 compliance period. Others have more flexibility but still need a long-term roadmap and to start investing soon to prepare for the significantly stricter emissions limits that take effect in 2030.
The first step is determining whether a building is projected to exceed its emissions limit and, if so, by how much. Because emissions calculations can vary depending on the underlying data and methodology used, building owners should consult their energy advisor, benchmarking provider, or LL97 Registered Design Professional (RDP) rather than publicly available tools that may be based on outdated or incomplete information. Once an accurate baseline is established, the focus shifts to identifying the energy efficiency projects that will deliver the appropriate emissions reductions while providing the strongest financial return.
Fortunately, many buildings only need to reduce emissions by a relatively small percentage to achieve compliance. That does not mean no action is required. Rather, it means many owners can achieve compliance through targeted, cost-effective improvements instead of large-scale capital projects. Lower cost measures such as boiler control upgrades, pipe insulation, roof insulation, domestic hot water temperature optimization, boiler tuning, weather sealing, LED lighting upgrades, and other operational improvements may be enough to bring emissions below the applicable limit. Many of these improvements are also eligible for utility incentives and rebates, helping reduce project costs while improving the overall return on investment.
Certain properties with affordable housing units whose first LL97 filing has been deferred until 2027 (known as the CP1 compliance pathway) should be especially mindful of their projected emissions. Because compliance will be based on 2026 energy usage and much of 2026 has already passed, there is limited time remaining to influence this year's performance. Buildings that are close to or above their emissions limits should evaluate efficiency opportunities and move forward with appropriate projects as soon as practical.
Even buildings that are currently compliant have important planning to do. The goal is not simply remaining compliant today, but ensuring the building remains compliant as emissions limits become significantly more stringent beginning in 2030. While 2030 may seem years away, energy planning and capital investments should begin now.
Many buildings will require more than one round of efficiency improvements to achieve compliance with the stricter 2030 emissions limits. Since the effectiveness of a project can only be measured after a full year of operating data is available, waiting too long leaves little time to evaluate results and implement additional improvements if necessary. A thoughtful, phased approach allows building owners to make informed investment decisions, maximize available rebates and incentives, and enter the 2030 compliance period with confidence.
Other Compliance Deadlines to Keep on Your Radar
CP1 Pathway Gross Floor Area (GFA) Measurements
Buildings following the CP1 compliance pathway whose first LL97 filing is due in 2027 should begin planning now for their required Gross Floor Area (GFA) measurement, which serves as the basis for calculating a building's carbon emissions limit. The definition of GFA under LL97 is unique and often results in a larger measurement than those prepared for other purposes. Because a larger, accurately measured GFA can increase a building's allowable emissions, obtaining a measurement that complies with the specific requirements of LL97 may be one of the most cost-effective investments a building owner can make. It is strongly recommended that owners work with an experienced LL97 consultant or Registered Design Professional (RDP) to ensure the measurement is completed accurately.
LL87 Energy Audit
LL87 requires a comprehensive energy audit and retro-commissioning study once every ten years. Compliance deadlines are determined by the last digit of a building's tax block number. For example, buildings with a block ending in "6" are due by December 31, 2026.
Because the process includes an energy audit performed over both heating and cooling seasons, completion of required retro-commissioning measures, and preparation and filing of the engineer's report, the entire process typically takes well over a year. Buildings due in 2026 should already be underway, and even properties due in 2027 and 2028 should begin planning now. The LL87 study can also serve as an excellent opportunity to develop a long-term LL97 decarbonization strategy. Consult with your energy advisor or Registered Design Professional (RDP) to ensure you are maximizing the value of this compliance requirement.
LL84 Benchmarking
The 2026 LL84 benchmarking deadline passed on May 1. If your building has not yet been benchmarked, there is still time to file before the next quarterly violation deadline on August 1.
The next phase of LL97 starts now, and the buildings that plan ahead will have the greatest flexibility, the most project options, and the best opportunity to maximize available incentives. From evaluating your building's emissions outlook and identifying cost-effective energy efficiency projects to managing LL84, LL87, and ongoing LL97 compliance, Aurora Energy Advisors is your partner through every stage of New York City's evolving building compliance requirements.
Market Analysis
Natural Gas
The NYMEX settlement for July closed at $3.231 per MMBtu, right in line with the same period last year and the trailing 10-year average. Natural gas futures remained relatively stable throughout June as balanced market fundamentals kept prices in check. Temperatures across much of the country were generally near seasonal norms, limiting cooling demand and price volatility. Strong LNG exports continued to support the market, while steady domestic production and healthy storage levels maintained ample supply. Attention now turns to the heart of summer, when prolonged heat could increase demand and put upward pressure on prices.
Electricity
NYISO Zone J electricity prices remained relatively stable throughout June, with average daily commodity prices around 5 cents per kWh. The market experienced only one notable spike in mid June as temperatures exceeded 90 degrees and cooling demand increased. Looking ahead, attention will turn to New York City's ongoing heat wave, as well as the July 1 connection of the Champlain Hudson Power Express (CHPE) to New York City's electric grid. The transmission line is expected to supply up to 20% of the city's electricity needs, though time will tell how that additional supply affects electricity prices going forward.
Crude Oil
Crude oil prices declined sharply throughout June, beginning the month in the low $90s per barrel before falling to around $70 by month end. While isolated attacks on commercial vessels in the Strait of Hormuz briefly renewed supply concerns, the market ultimately viewed the disruptions as temporary. As confidence grew that global oil shipments would continue largely uninterrupted, much of the geopolitical risk premium built into crude prices faded.
💡 Mitchell’s Tip: Invest in energy efficiency projects.