A Practical Blueprint: Yorkville Co-op's Decarbonization Plan

A Yorkville co-op's successful HVAC upgrade demonstrates how boards can tackle Local Law 97 compliance while achieving significant cost savings. The $900,000 project, overseen by the ENPOWER Group, replaced an inefficient gas-powered absorption chiller with an electric heat pump system, eliminating $80,000 in annual carbon penalties and generating $80,000 in yearly energy savings, with a projected 5-year payback period. Habitat's Emily Myers interviews ENPOWER's Michael Scorrano, managing director, to understand this practical blueprint for other NYC buildings facing similar challenges.

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Transcript

Emily Myers: Welcome to Problem Solved, a conversation about challenges facing New York co-op and condo board directors. I'm Emily Myers with Habitat Magazine, and I'm joined by Michael Scorrano, managing director and founder of ENPOWER Group. The central question for many of the city's older co-op and condo buildings is how to affordably upgrade inefficient heating and air conditioning systems to avoid emission penalties under Local Law 97.

Michael, you've been helping a co-op in Yorkville with this problem. I understand one of the main challenges was an outdated absorption chiller system. Can you tell me a bit more about this building? 

Michael Scorrano: Thank you very much, Emily, for the opportunity to speak today. 

We work with a lot of clients, certainly all over New York City, but certainly a few of the buildings that we have are very special to us in terms of how we've helped them over time. We had a building over on the Upper East Side 5 25 East 82nd Street, up in Yorkville. Not a different building than many that we worked with.

Had an old antiquated heating and cooling system, being a late sixties vintage building. It had what they call a dual temperature, meaning it did heating in the wintertime, cooling the summertime. Originally it probably was a number six oil building that just made steam out of what they call low pressure absorption chilling.

So it was a device that would utilize fuel to make steam in the boiler to send to an air conditioning piece of equipment to help drive the refrigeration cycle to cool the building in the summertime. And that was very inefficient. But fortunately the building over time had converted over to natural gas, which was one key piece to help them save energy at the time where they weren't even thinking about Local Law 97.

But really, when Local Law 97 passed in 2019, many of the buildings started looking at what their projected carbon penalties were gonna be , and got very nervous. When they even made the improvements and updates of the emission calculation, the fact that we were able to use this ability even got worse in terms of emission penalties.

So if they had done nothing, they were facing around $80,000 penalties, not starting in 2030, like many of their peer group, but really starting this year for the first year of Local Law 97. So they were certainly faced with something they needed to do. Fortunately for them, they got ahold of us.

We started working with them and tried to give them advice for measures that were gonna be cost effective for them to go through. And one of the biggest measures we came through was replacing the antiquated absorption chiller with a new chiller, which we'll get into in a second.

Emily Myers: Okay, so it's a gas powered absorption chiller. What's the first step in removing this and replacing it, and what are you replacing it with? 

Michael Scorrano: Yeah, so the first thing we need to do is really figure out what their options were, right? So the building wanted to know what did we do if we just kept it running?

What did we do if we placed it in kind, but the same type of equipment? 'Cause this actually was the second generation piece of equipment that was probably replaced back in the eighties, early nineties per se. So what we settled on was to put electric equipment in there. So really, part of the whole point of decarbonization is to try to go to lower carbon sources of fuel.

And as the utility grid gets cleaner and cleaner using electricity opposed to using fossil fuels directly would have definitely a positive effect on the amount of carbon reduction. But really what drove the project was not necessarily the carbon reduction-- don't get me wrong. $80,000 a year penalty starting this year would've been huge for them, but it was also the fact of how much energy that they were really just wasting based upon the inefficiency.

So when we looked at various options for them, it really just became evident that, taking out the absorption shower, which really used fossil fuel directly there at the building, and replacing it with something that was modern, a modern electric heat pump technology that actually could do cooling in the summer and, potentially could in the future be converted to provide some amount of heating in the wintertime, was their best approach going forward.

Emily Myers: And in these situations, the electrical capacity typically needs to be increased. Was that the situation here? 

Michael Scorrano: Yeah, so the challenge always is when we do these type of conversions is that we need to bring in additional power to the building, and these buildings were set up with not much power in mind.

I think most of the apartments are probably 40 amp apartments because the building was centrally heated and cooled. And the building itself was designed in with that in mind. So part of what we had to do as part of this process was put a load request in to Con Edison and have them rule on the amount of capacity that they had available.

Fortunately, what we do find when we do this is that generally there's at least enough capacity coming from the street into the building. Sometimes Con Ed has to bring in an extra set of cables or something along those lines. In some rare circumstances, we definitely have buildings that are looking to put in new transformer vaults to really significantly increase the power requirement.

But at least for the incremental chiller we've been lucky, in a lot of cases that, it hasn't required major investment, at least from the Con Edison perspective. Once the power's in the room though, we then need to figure out how can we increase the existing service.

And that requires a little trick sometimes, because a lot of times we get into these rooms that there's really not much available space. They took a closet that the original architect had designed, they put in electric service that was really designed to handle a less significant amount of load.

And we're trying to come up with solutions here to be able to increase the electric capacity to the building.

Emily Myers: Are you saying there isn't enough space to increase the electrical capacity in some situation? 

Michael Scorrano: Correct. So what we did find in this particular building is that we really didn't have a lot of space and we also had to go to the Department of Buildings and file a formal submission package to the electrical planning review board in order to basically have our design approved. And we did actually have a lot of back and forth with them because, as an engineer, we have to take into account how much electricity that we need. How much space is that new equipment gonna come?

Does it meet the proper clearances as required? Because a lot of these buildings, I can't speak for what my forefathers did prior, I can only take their mistakes and try to fix 'em going forward, right? We need to make those changes as they're required.

So fortunately, with a little bit of back and forth, we were able to come up with a design that met all the clearances that the Department of Building required and allowed us to have the electricity that we needed to power the chiller. 

Emily Myers: So obviously clearance is important for safety. How did you then go about meeting those clearances?

Michael Scorrano: We were fortunate in this case scenario, we were able to work with a custom switchgear manufacturer who was able to look at the available space in the room and work with us to provide a piece of equipment and switchgear that would allow us to integrate with the Con Ed service coming in as well as be able to come up with ,the proper switching that we needed to make that happen.

So we were able to with a couple back and forth with the manufacturer and some discussion with the Department of Building, allow us to move forward with a design that was sufficient to meet the clearances that they were looking for without having to try to get special exemptions or something that was not gonna work for them .

But at the end of the day, we're able to increase the power in this building by roughly around 400 kilowatts, which effectively doubled the amount of power used in the common areas in order for us to be able to power our a new air conditioning system.

Emily Myers: Is the electrical component the first step, and then it's the case of pulling out the old absorption chiller ? 

Michael Scorrano: Yep. Typically when we go through these type of buildings, we have to look to see if electric is gonna be available. Again, I said prior that in most cases we've been lucky that Con Ed and has the available power in a building and that it's for us to be able to fit the equipment in there in order to power new equipment.

But yeah, certainly, electricity is a huge component, right? Without the new power source, we really don't have anything that would power the equipment. But once we were able to prove and have approved plans in order to do that, then the rest of it was just mechanically looking at how we would do the equipment.

Now these buildings too, although this was the second chiller that we were dealing with, the first chiller when it was taken out was demoed in place and then brought in through the garage. So that required a huge opening of the garage wall and all that, and certainly extra cost that we didn't really wanna undertake if we could avoid it in this case scenario.

So we settled on what they call modular heat pump equipment. So we were able to break out the couple hundred tons worth of equipment that we needed in smaller modules. Have them put together, which made it much easier for us in terms of how we were gonna lay out the equipment in the room.

But even then, it's always a challenge too. Does the electric equipment have the same proper clearances? I don't know why that engineer put that column there originally when he designed this building, so we have to obviously fit and work things around. So we actually had to do some modifications as well on the mechanical equipment inside the room, 'cause there was some electric components that also needed proper clearances to fit around again, structures that were part of the equipment. So again, we were able to make it actually work for the building. 

Emily Myers: And so what was the cost of the project then?

Michael Scorrano: The project was almost a million dollars. That was $900,000 we were done, which included not only the cost of the equipment, but the soft cost of the engineering and all the things that go into that. So we were able to meet the project, on time and on budget. So I think if you ask the board president and the building staff, they're very happy with the way the project came out.

The project, like I said, was started off with they were facing roughly around $80,000, what the carbon penalty would've been for this year where they were operating. We effectively eliminated their first round carbon penalty. They still have some more options to go in order to get them down to zero, but they also were able to save because it was so inefficient, what they did and I should say that part of the project also involved us not only repiping, the mechanical equipment in the room, but also replacing all the pumps that somebody had put in years prior that was really not a very optimal design of how they operated. And we installed variable speed drives on the pump. We were able to certainly significantly reduce the amount of energy consumption. So when we went back and took a look after the first cooling season, we're actually pretty surprised. While we knew we would save a lot of fuel, that was a given, right? We're not burning natural gas anymore in the summertime, at least for cooling. We still have natural gas being used for domestic hot water heater. But we were actually fairly surprised on how inefficient the pumping was in the building before and by putting in properly sized pumps with variable speed drives and slightly reducing the flow in the building, we were definitely able to pick up additional efficiency. Overall we saved almost $80,000 a year as well in terms of operating expense just on the chiller itself. I think we did a pretty good job setting the building up where not only did they save energy going forward, which is always our primary view when we look at projects, but also a huge carbon penalty percentage. And if you look at the $900,000 that they invested, and if you take into account the savings as well as the carbon penalty, this building should pay for itself in five years or so. So again, I think it was a very good success story for a building like this.

Emily Myers: Great. And how involved were the board then in finding these solutions? 

Michael Scorrano: The board was very proactive. They knew two things. They knew their equipment was aged and they knew they needed to do something to replace it. 'Cause they had Local Law 87 studies in the past and always referenced replacing the chiller.

We got involved with the building. We were finishing up their local 87 report that they were working on. So they knew they had to do something. They also knew that Local Law 97 had passed. This is going back to about, I guess summer of 2022.

And they definitely saw that they were, getting to a cliff where they were gonna have a very big carbon penalty going forward. They were fortunate that they listened. They evaluated many different options for the building. They really were very fixated on and focused on having solutions that were gonna be cost effective.

And also when we actually did come up with a budget, that we were able to produce a solution for them in the budget that we had proposed. So they were very active, they asked good questions and they certainly did their homework in terms of what they wanted to do. So I think overall, the project was a huge success story.

Again, not only on the energy savings part, which is again, usually one of the first things we try to focus on, but also reduce the carbon. Decarbonization of this building is important and trying to do something that's gonna set them up for the future going forward. 

Emily Myers: So the upgrades basically allow the gas powered boiler to be switched off in the summer, which is part of the savings.

But you've also added these variables frequency drives that allow much more tweaking and sort of individual adjustments in the building. 

Michael Scorrano: Correct. The boilers switched off for the cooling. We still have another potential projects that they're gonna look at working on. 'Cause right now they still use their boiler for domestic hot water in the summertime and they use their boilers for heating in the winter.

So the next phase for them to further reduce their operating costs and savings and carbon would be to see how we wanna attack the boiler and look to evaluate retaining gas in the building compared to doing some type of electrification component or partial electrification, that may make sense for them, at least in the summertime to fully eliminate using fossil in the summer and maybe just relying on some gas fired heating in the winter.

But that may be the best approach for them going forward. 

Emily Myers: Okay, so there's further energy efficiency work ahead for the co-op, but what can other co-op and condo boards then learn from this case study? What's the takeaway for other boards? 

Michael Scorrano: The takeaway certainly is to obviously do your homework as a building and board.

The board has a fiduciary responsibility to the building and shareholders to really look at what options the building needs. Where they stand in terms of their Local Law 97 compliance, and how is the equipment operating and faring and when would capital replacement of that equipment be there?

So we always like to talk to boards and buildings that have either had some, investigative work themselves or sort of in tune to what's going on in the New York City marketplace or nationally in terms of decarbonization that obviously want to work with companies to try to evaluate that. 

And really just keep your options open. Replacing in kind equipment is really not gonna cut it in today's world. You really need to be a little creative on how you approach these things. You need to obviously look at what's gonna not only be effective for right now, but what also is gonna carry for the next 20 years.

Really the big push towards decarbonization is definitely forcing buildings to look at electrification. Which again, any building that is centrally cooled who continues using fossil fuel directly to make cooling is definitely in my mind, a very good candidate for electrification of the cooling system.

There are plenty of incentives and rebates to help pay for that. There's certainly studies that can be paid for to work on that. But the takeaway is really just, get involved, start early. 'Cause these projects do take a couple seasons to usually come to fruition. This building was a little unique, in 2024, they had a hard penalty starting with. Most of the buildings in our stock are really looking at 2030 as their first big period of penalties.

That's only six years away at this point. So really start now and work with a provider that can give you proper advice and somebody that can help pull the project off and on time and on budget. 

Emily Myers: Great. Michael, thank you so much. Michael Scorrano, managing director and founder of ENPOWER Group.