As part of New York City’s Climate Mobilization Act, Local Law 97 places carbon caps on most buildings. Co-op and condo buildings are taking a close look at how to reduce their building’s energy consumption and carbon footprint — without going broke in the process. In this episode, James Hannah, managing director at Parity, an AI-driven energy management platform, shares how an Upper East Side co-op in Manhattan did just that.
James Hannah is interviewed by Bill Morris for Habitat Magazine.
Thanks for listening. Subscribe to this podcast for more stories on how New York co-ops and condos have solved a myriad of problems. Brought to you by Habitat Magazine, the "bible" that hundreds of board directors turn to every day!
As part of New York City’s Climate Mobilization Act, Local Law 97 places carbon caps on most buildings. Co-op and condo buildings are taking a close look at how to reduce their building’s energy consumption and carbon footprint — without going broke in the process. In this episode, James Hannah, managing director at Parity, an AI-driven energy management platform, shares how an Upper East Side co-op in Manhattan did just that.
James Hannah is interviewed by Bill Morris for Habitat Magazine.
Thanks for listening. Subscribe to this podcast for more stories on how New York co-ops and condos have solved a myriad of problems. Brought to you by Habitat Magazine, the "bible" that hundreds of board directors turn to every day!
[00:00:00] Carol Ott: Problem Solved is supported by AKAM, a property management company serving the New York Metro area and South Florida since 1983. Focusing exclusively on third party property management. AKAM delivers a wide range of services, including capital project management, compliance, energy management staff, hospitality training, and industry leading technology.
To learn how AKAM can service your building, visit AKAM.com today.
[00:00:40] Bill Morris: Welcome back to Problem Solved, Habitat Magazine's ongoing series about challenges facing New York City co-op and condo boards, and how their professionals help them overcome those challenges. I'm Bill Morris, and with me today is James Hannah, managing director at Parity, a technology company.
Good morning, James.
[00:00:58] James Hannah: Morning Bill. Thanks for having me.
[00:01:00] Bill Morris: You're very welcome. Glad to have you. A lot of co-op and condo boards are in a state of panic about the looming fines under the Climate Mobilization Act, and that's your game. Tell me a story about a building that figured out a way to meet these carbon emission goals without spending a ton of money.
Have you had any experience along those lines?
[00:01:19] James Hannah: Absolutely. And you're absolutely right. Local Law 97 in particular is the law that's under the Climate Mobilization Act umbrella that I think has people taking a really close look at how they can reduce energy consumption, and therefore reduce the carbon footprint of their buildings.
A good example is a building that we're working with on the Upper East Side, a co-op with around 250 or so apartments, one of those classic white brick buildings. It's a building that was looking at fines starting in 2024 for Local Law 97.
The prevailing and traditional approach to energy efficiency is to say, okay, we've got to put a lot of new equipment in our building. It's going to be a big CapEx project. We've got to replace our boiler, our chiller, and it's going to be a whole big to-do.
But our approach is to say, let's get the most that we can, in terms of efficiency, out of your existing systems, and that's exactly what we did for this building .
[00:02:15] Bill Morris: So rather than bring in new technology, new stuff, maybe electric heat pumps – a lot of people are talking about electrification. They’re terrified of the cost of that.
You attack the existing system, and what, tried to make it more efficient?
[00:02:27] James Hannah: Exactly. Our approach is, Local Law 97 is going to be a journey, right? Energy efficiency is an ongoing process. So our approach is, let's start with getting the most that we can out of your existing systems.
Let's leverage software to help automate the way that your HVAC systems, in particular, are operating to maximize efficiency, eliminate energy waste. Because what we see in a lot of buildings is that the way that you're circulating water in these buildings, whether it's hot water or chilled water; the level to which you're heating or cooling the building; the amount of air that you're ventilating in the building – that tends to be where you're over-consuming energy.
You're providing hotter water or colder water, or circulating that water faster than it needs to. You're over-ventilating the building, and there's just a lot of savings and low hanging fruit that you can capture through real-time dynamic controls.
[00:03:20] Bill Morris: Let's back up a little bit. Tell me a little bit about this building's infrastructure. What is it? Natural gas, a dual-fuel boiler, single piped steam – tell me about the building.
[00:03:28] James Hannah: This specific one we're talking about is natural gas. It's a fan coil building, so it has a cooling tower, central boiler plant, hot water circulation loop for space heating as well as domestic hot water, a chilled water loop, and also makeup air. There's mechanical supply and exhaust ventilation at the building.
[00:03:49] Bill Morris: Prewar buildings are notorious for being overbuilt and having too much heat and too much hot water. But even post-war buildings are frequently using more energy than they absolutely need to. Is that a fact?
[00:04:01] James Hannah: That's certainly what we've seen, particularly in these types of buildings where you have a lot of mechanical systems.
You've just seen that the controls and the way that those systems are optimized is really lacking. And it's not necessarily any one person's fault. There just hasn't really been a solution that's made sense, because what you see in a lot of the multi-family buildings in general, is the building staff are increasingly tasked with more and more things that they need to do in the building. And it's not really fair to ask them to spend even more time making control adjustments all day every day, or even really understanding where those control adjustments should be in order to eliminate energy waste.
You can leverage all these improvements and investments that companies like Parity have made in developing algorithms that help to automate some of that, so you can outsource some of the operation and control of these systems for efficiency.
[00:04:54] Bill Morris: Give me a specific example of what you monitored and where you saved money.
How did the software improve the existing hardware in the building?
[00:05:04] James Hannah: A good example just on the savings side is ventilation systems. We'll monitor CO2 content in the building, which is a good proxy for how much air you need to ventilate. What we found is that at this building, they were drastically over-ventilating the building, which means that you're running the fans and the associated motors much faster than you need to, so there's electricity savings there. It also means that you're pulling more conditioned air out of the building faster than you need to, so there's savings on both the cooling and heating side. By looking at that in real time and making more dynamic real time changes to the fan speeds, we're able to generate a lot of savings.
[00:05:47] Bill Morris: Without buying any equipment or any cash outlay, really.
[00:05:50] James Hannah: Minimal. We need to integrate into the existing systems – basically plug the building into our cloud so that we can see what's going on, and then receive and send signals to the building in real time.
[00:06:00] Bill Morris: How about the building staff? Do they need training to make these things happen? Or are you still there, hands-on, once the system is installed to make sure that it's being used properly?
[00:06:09] James Hannah: There's training. There's also a real partnership that we try to form with the resident managers and with the building staff. We're not naive enough to think that helping big residential buildings in a place like New York City operate more efficiently is strictly a software solution or strictly a technology solution.
There's a real partnership that needs to be formed there. So we spend a lot of time providing proactive and in some cases reactive human support. That comes in the form of being in the building quite a bit to help address issues that come up, resolve mechanical issues that might lead to heating or cooling issues, or not allow us to generate the savings that we're expecting.
We also do that remotely, because another thing that's unique about our approach is we guarantee the savings that we expect to generate. If we think we're gonna save a hundred thousand dollars at a building, we'll guarantee $90,000. And if the building saves less than that, we'll cut them a check for the difference. We have a real vested interest in making sure that the building performs and performs at a high level.
[00:07:12] Bill Morris: That leads to my next question. How much money did you save these people on the Upper East Side? Do you know yet?
[00:07:17] James Hannah: We went live in the building last year and we're on track in the first 12 months to save the building roughly $40,000 a year in utility costs. That equates to roughly $55,000 in avoided Local Law 97 fines. The building was looking at $60,000 in fines starting in 2025, which will be based on 2024 consumption.
We think we'll be able to get them to a point by then where they won't have any fines. And we're able to integrate with the building using a deal structure where there's no out of pocket cost to the building. They're paying for our services. They're paying for the limited amount of hardware that we needed to install completely out of the savings.
It’s a compelling business case.
[00:07:58] Bill Morris: Well, thank you, James. This is great news for co-op and condo boards who are in a real state of panic about the looming fines of the Climate Mobilization Act. James Hannah at Parity, thank you so much.
[00:08:08] James Hannah: Thank you, Bill. Thanks for having me.