New York State’s 2022 budget passed yesterday without a provision that would have granted New York City property owners an additional pathway for complying with Local Law 97.
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Owners say the law, which will limit buildings’ carbon emissions beginning in 2024, penalizes owners whose buildings may be energy efficient by LEED Standards but will be out of compliance because of dense tenancies and tenants who operate 24/7.
The law currently offers owners the option of purchasing Tier 4 renewable energy credits, which are generated by renewable energy projects that are located in the city or sync to the city. But, since those RECs are not widely available yet, owners have been seeking the ability to comply with the law by purchasing Tier 2 RECs, which are derived from legacy renewable energy projects located elsewhere in the state.
The governor had agreed to insert a provision in his draft budget that would have supplied owners with that Tier 2 relief. But the state legislature did not include the provision (formally known as Part R of the Transportation, Economic Development and Environmental Conservation) in its draft budget last month, and it did not make it into the final budget, either.
Environmental groups and many in the energy efficiency business argued that the provision would have flooded the market with low-priced energy credits and defeated the purpose of the law.