Hidden Costs: New York City’s Submetering and Lighting

In 2009, Local Law 88 was passed by New York City will little fanfare. Notwithstanding the lack of publicity, New York City building owners should be aware of the potentially time-consuming and costly submetering and lighting requirements under Local Law 88, which has a compliance deadline of January 1, 2025.

By January 1, 2025, Local Law 88 requires submeters to be installed in certain buildings with respect to (i) each non-residential tenant space of 10,000 gross square feet or more, on one or more floors, let or sublet to the same person, and (ii) each floor larger than 10,000 gross square feet consisting of tenant spaces let or sublet to two or more different persons. These requirements are applicable to:

  1. buildings that exceed 50,000 gross square feet,
  2. two or more buildings on the same tax lot that, in the aggregate, exceed 100,000 gross square feet, and
  3. two or more buildings held as a condominium that are governed by the same board of managers and, in the aggregate, exceed 100,000 gross square feet.

On or before January 1, 2025, each affected building owner is required to file a report with the Department of Buildings, prepared by a registered design professional or licensed master or special electrician, certifying that the submeters have been installed in all tenant spaces required pursuant to Local Law 88 (or are exempt because the required submeter (or meter) has been previously installed).

From and after January 1, 2025, these building owners are required to provide each tenant with monthly statements of the tenant’s electrical consumption, per its submeter, and the electrical charges billed to the tenant. If multiple tenants are covered by the same submeter, the monthly statement must provide both the electrical consumption for the area covered by the submeter and the percentage of that area which is leased to the tenant.

Local Law 88 also requires these same building owners to modify all lighting systems to meet the New York City Conservation Code by January 1, 2025, with some limited exceptions. In effect, the lighting systems must be upgraded to meet current new system standards for maximum interior lighting power allowances, lighting controls, tandem wiring, exit signs, and exterior lighting (such requirements are found in Section 805 of the New York City Energy Conservation Code). Similar to the reporting requirements in connection with the mandatory submeter installations above, on or before January 1, 2025, each affected building owner must file a report with the Department of Buildings, prepared by a registered design professional or a licensed master or special electrician, certifying that the lighting upgrade has been completed and that the work is in compliance with the technical standards of the New York City electrical code.

Local Law 88 is intended to reduce energy consumption, under the theory that tenants would reduce energy consumption if they were regularly updated on their electricity usage and cost. Building owners, if they have not submeter tenant spaces already, will be able to better monitor electrical usage by the various tenants and, accordingly, implement more targeted energy efficiency programs. Upgrading building lighting systems will also reduce energy consumption, as lighting systems have become more energy-efficient through technological improvements. Although compliance is not required until 2025, building owners would be well-served to plan these submetering and lighting upgrades when it is most efficient to perform the work (such as during periods of vacancy with respect to particular spaces), in order to avoid any additional costs and disruptions which would be incurred in performing the work necessary to be in compliance with Local Law 88.

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09.01.2017  |  PUBLICATION: E-Alert  |  TOPICS: Real Estate  |  INDUSTRIES: Real Estate

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