Purpose and Scope
This article describes what a decarbonization plan for a building covered by Local Law 97 (LL97) contains, what affects the cost of preparing one, and how an owner, board, or managing agent can assess a plan they have received. It is written for readers who will use a plan to make capital decisions.
The term "decarbonization plan" is used loosely in the market. It can describe anything from a short list of recommended measures to a multi-year capital program tied to each compliance period. The Department of Buildings (DOB) has given the term a specific meaning in one context, and that definition is a practical starting point.
The Reference Point: DOB's Rule
DOB's LL97 rule, 1 RCNY §103-14, allowed owners of buildings over their 2024 limits to demonstrate good faith efforts, and potentially receive a mitigated penalty, by submitting a decarbonization plan no later than May 1, 2025. That filing window has closed. The content the rule required is still the most detailed public description of what DOB expects a plan to contain.
Under the rule, a filed plan had to be certified by a registered design professional and include:
- An energy audit prepared by a qualified energy auditor no earlier than four years before submission.
- An equipment inventory covering HVAC, domestic hot water, electrical, lighting, and conveyance equipment, with installation dates.
- A description of prior work completed since January 1, 2013 that reduced the building's emissions by at least 10%.
- A list of alterations and operational changes that would meet the LL97 limits and reach net zero emissions in 2050. Each item needed a timeline, a capital plan including financing and incentives, and an estimate of the resulting emissions reduction. Compliance strategies could not include the removal of a tenant.
Owners on that pathway also had to complete the work needed for the 2024 limit within 24 months of submitting the plan, and show by May 1, 2028 that DOB had approved an application for the work needed to meet the 2030 limit. They could not claim deductions for renewable energy credits for the 2024–2029 period.
In the rulemaking, DOB stated that good faith efforts for later compliance periods would be defined by future rules and would differ from the 2024–2029 definition. It also stated that compliance with the 2030 limits will require owners to begin well before 2030, including buildings that comply today.
The rule's content list is a reasonable checklist for any plan, whether or not it will be filed with DOB.
The Components of a Useful Plan
1. A verified baseline
Every projection in a plan starts from the building's benchmarking record: gross floor area, property use types, and twelve months of energy data by fuel. If the record contains errors, the plan inherits them. A plan should state which year's data it uses and confirm that the record has been reviewed. Our article on benchmarking data errors describes the most common issues.
2. An equipment inventory with remaining life
The inventory serves two purposes. It identifies what consumes energy, and it shows when major equipment is due for replacement. A boiler with several years of remaining life and one near the end of its service life lead to different schedules, even if the end state is the same. A plan that ignores replacement timing can recommend replacing equipment early, or miss the opportunity to change systems when replacement is already due.
3. An emissions projection for each compliance period
The plan should show the building's projected emissions against its limit for 2024–2029, 2030–2034, and later periods. The projection depends on the emissions coefficients DOB applies to each fuel, and those coefficients change between periods.
Annual Penalty = (Annual Emissions − Emissions Limit) × $268 per tCO₂e
For grid electricity, DOB's coefficient is 0.000288962 tCO₂e per kWh for 2024–2029 and 0.000145 tCO₂e per kWh for 2030–2034. For utility natural gas, the coefficient is 0.00005311 tCO₂e per kBtu in both periods. A plan should apply the correct coefficients to each period. The following illustration uses hypothetical consumption for a building that uses both fuels.
| Item (hypothetical consumption) | 2024–2029 | 2030–2034 |
|---|---|---|
| Grid electricity, 1,000,000 kWh | 289 tCO₂e | 145 tCO₂e |
| Natural gas, 20,000,000 kBtu | 1,062 tCO₂e | 1,062 tCO₂e |
| Total emissions | 1,351 tCO₂e | 1,207 tCO₂e |
The building's emissions fall by about 11% with no change in consumption, while its emissions limit also falls in 2030. Whether the building's position improves or worsens depends on the size of the reduction in its limit, which varies by property type. A plan that projects 2030 emissions using 2024 coefficients will understate the benefit of electrification measures in the later period and misstate the gap that remains.
4. A list of measures with estimated reductions
Each measure should have its own estimated emissions reduction, cost, and basis for the estimate. Measures typically fall into three groups: operational changes and controls, envelope and distribution improvements that reduce load, and system changes such as electrification of heating or hot water. Load reduction usually comes before system changes because it reduces the size, and cost, of the replacement equipment.
5. A schedule tied to the compliance periods
The schedule should show when each measure is designed, permitted, installed, and reflected in a full year of energy data. Work completed late in a year affects only part of that year's emissions. Measures that require an electrical service upgrade also depend on utility review and construction timelines that sit outside the owner's control.
6. A capital plan
The rule required a capital plan that addresses financing and incentives, and owners need one regardless. A useful capital plan shows the cost of each measure by year, the incentives that may apply and the conditions attached to them, and the penalty that would be avoided. For co-ops and condominiums, it should be presented in a form a board can translate into a reserve or assessment schedule.
7. Stated assumptions
A plan rests on assumptions about energy prices, equipment costs, incentive availability, and future rules. These should be listed in one place, with an indication of which results are sensitive to them. A plan with stated assumptions can be updated when conditions change.
What Affects the Cost of a Plan
The cost of preparing a plan varies with the building and the depth of analysis. The main factors are:
- Building size and complexity. A mixed-use building with several systems requires more work than a single-use building with one central plant.
- Available data. A recent energy audit, interval meter data, and current drawings reduce the field work required. Buildings over 50,000 gross square feet complete an energy audit and retro-commissioning under Local Law 87 every ten years, and a recent audit is often the most useful single input to a plan.
- Number of scenarios. Comparing two or three compliance paths takes more effort than developing one.
- Level of development. A plan at the concept stage costs less than one developed far enough to support a permit application or a contractor bid.
Owners requesting proposals should specify which of these they need, so that proposals can be compared on the same scope.
Assessing a Plan
The following table summarizes features that distinguish a plan an owner can act on from one that will need further work.
| Area | Plan that needs further work | Plan an owner can act on |
|---|---|---|
| Baseline | Uses benchmarking data as filed, without review | Confirms floor area, use types, and energy data |
| Coefficients | One set of coefficients for all years | Coefficients specific to each compliance period |
| Measures | General recommendations | Each measure with cost, reduction, and basis |
| Schedule | Target years only | Design, permit, installation, and first full year of data |
| Equipment | Not considered | Timed to replacement where practical |
| Costs | Totals only | Annual capital plan with incentives and avoided penalties |
| Assumptions | Not stated | Listed, with sensitivity noted |
A plan does not need every feature to be useful. A board deciding whether to commission design work may need less detail than one setting an assessment. The plan should match the decision it is meant to support.
A useful test: the plan should let an owner state which measures will be done, in which year, at what cost, and what the building's emissions and limit will be afterward.
How the Work Is Organized
Preparing a plan draws on several disciplines. Energy analysis and emissions modeling establish the baseline and projections. Engineers and contractors provide the design and pricing that make cost estimates reliable. Where DOB requires a plan or an LL97 report to be certified, the certification is made by a registered design professional.
DE Energy Consultants provides technical advisory and consulting services for decarbonization planning. We prepare baselines, emissions projections, and measure analyses, review existing plans for completeness and assumptions, and work alongside the owner's engineers, contractors, and registered design professionals.
Next Steps
For a first estimate of a building's position in each compliance period, use the LL97 calculator. For background on the penalty calculation, see How NYC's Local Law 97 Fines Work. For buildings with multiple occupants, see how penalty costs are allocated between owners and tenants.
To discuss a new plan or a review of an existing one, see our services or contact us.
Planning for the 2030 Limits?
We prepare decarbonization plans and review existing ones for completeness, assumptions, and sequencing. Initial consultations are free.