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Do You Need to Prepare for Local Law 97? Do You Need to Electrify?

What Does That Mean to Your Building…and Bottom Line?

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A few years ago, New York City enacted Local Law 97 (LL97) as part of the Climate Mobilization Act with the goal of an 80% emissions reduction by year 2050, and its nearly time for the consequences. Beginning in 2024, there will be annual energy related fines based on building energy use carrying hefty fines unless your building meets prescriptive measures in order to be in compliance with the law. The parameters of these fines were recently updated, and as per those updates, the annual fines will continue from 2024, increasing in 2030, 2035, 2040, and 2050. The amount of these fines will be considerable, and it will depend on your property’s:

1. Tons of CO2 emissions per year

2. Square footage

3. Occupancy group

Do you have a building over 25,000 square feet or multiple buildings on the same tax lot exceeding 50,000 square feet? If so, you may have heard about LL97 already and the potential fines that accompany it. While the fines start in 2024, by 2050 eligible buildings are required to have a carbon footprint of ZERO.

Ok, what does this mean for you?

If your building(s) energy consumption exceeds the carbon emissions limits established by the law, you will be fined every year until the building decreases consumption below the target threshold. A useful tool is the Building Energy Exchange LL97 calculator (building search is case sensitive).


Look at the Empire State Building as an example. Based on the latest Local Law 84 utility benchmarking data for the building, no fines should be anticipated between 2024 and 2029. With the recent updates to LL97 penalties, they now also avoid fines through 2034. That said, if no further action is taken pertaining to energy efficiency and conservation, fines are expected by 2035, and they look big, up to almost $1.4 million annually starting in 2040!

LL97 Annual Carbon Threshold Summary.PNG

We’re sure the Empire State Building has a strategic plan in place to avoid these hefty penalties, but do you? Granted, your fines may be significantly less than that of a ~2.7 million square foot skyscraper, but likely so is the building’s budget.


Another helpful sign can be your buildings energy efficiency rating, as required by Local Law 33 (LL33). Don’t be fooled by your good grades though. Even with a B rating you could still be subject to fines. And your B rating might change next year. These scores and letter grades are dependent on nation-wide comparisons of utility consumption for similar type buildings, and as everyone prepares for 2024 and the looming LL97 fines, average energy consumption levels may decrease, bumping your score down even further.

What are you doing to stay ahead of the curve?

So, what does this mean for my building?

Do I need to pursue electrification?


Eventually, but maybe not right now.

We recently conducted a study for a 4-building affordable housing gut rehabilitation project where ownership was interested in full electrification to avoid LL97 related penalties. Specifying air-source VRFs and heat pump water heaters would have decreased each buildings carbon footprint below the LL97 thresholds until 2049, though there are further complications. Many affordable housing buildings are required to provide the space heating for tenants. How can ownership pay for heating then charge for cooling? There are several options, each with its own difficulties.

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Ultimately, this complication caused ownership of this project to assess other options.

Can specifying high-efficiency gas fired condensing boilers and an improved envelope eliminate these LL97 penalties as well?


The short answer is no. Based on the design of these particular gut rehabs, with high efficiency HVAC equipment and above average envelope U-factors, the expected LL97 penalties do decrease significantly, also falling into compliance through 2049, but the 2050 fines remain, about double that of the electrification scope. That said, eventually by 2050, gas-fired equipment will cause any building to fall out of LL97 compliance.


Will incorporating Passive House design components, namely a tighter shell, lower envelope Ufactor, and improved ventilation, help?


Sure, but right now it’s difficult to definitively state that gas powered buildings can’t meet LL97 targets leading up to 2050 goals. Our key takeaway from this study is that improving gas-fired HVAC efficiency and envelope can possibly delay LL97 fines for the next 28 years for these 4 buildings, but that may not be enough long term for your buildings.

This was valuable information and I feel more educated, but now what?

It’s time to ask yourself some questions. When is the next retrofit for your building(s)? Are you ready for capital improvements now, or in 10-20 years? Our recommendation would be to have a full building inspection and audit completed, tied in with a feasibility study to determine what your options are. Maybe it’s time for these capital improvements, or finally addressing the low-hanging-fruit. But without a detailed energy audit, utility savings analysis, and cost summary, it may be difficult to find the secret formula for your building, and the annual cost penalties will be substantial.


KOW Building Consultants can provide you with cost-competitive energy auditing, energy modeling,

and benchmarking to help you determine what next steps are needed at your buildings. With a

recommended scope of work and analysis into the LL97 penalties, together we can come up with a

plan to help you avoiding these excessive fines.

For more information, reach out to Jared Forman, LEED GA, Director of Sustainability Programs at

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