The Real Estate Board of New York on The 2025 New York State Draft Energy Plan

DOWNLOAD THE TESTIMONY

The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association representing commercial, residential, and institutional property owners, builders, managers, investors, brokers, salespeople, and other organizations and individuals active in New York City real estate. Thank you for the opportunity to comment on New York State’s 2025 Draft Energy Plan (the “Plan”).

REBNY appreciates that the State has produced an honest and reasonable energy plan through the year 2040. While the Plan is mindful of and responsive to the ambitious goals established by the Climate Leadership & Community Protection Act (CLCPA), it also takes into consideration the difficulties that need to be overcome to decarbonize electricity while keeping costs down, maintaining reliability, and growing the economy. It also takes into consideration that these matters are only made more difficult by persistent inflation, supply chain failures, and changes in federal policies that negatively impact, amongst other things, the deployment of offshore wind farms. Given these factors, the Plan foresees a more modest, longer timeframe for decarbonization without delaying the significant efforts and investments necessary to achieve a true green economy.

REBNY largely agrees with the discussions and plans outlined in the “Buildings” chapter. Again, the Plan takes a reasonable yet aggressive approach to reducing emissions from buildings. Once again, the Plan recognizes many of the hurdles building owners face, especially in terms of cost, payback, and infrastructure needs related to electrification. Some of the issues noted, such as deploying heat pumps, are particularly problematic in large commercial buildings. In response, the Plan calls for gradual electrification, making changes as equipment reaches its useful end of life, and the deployment of significant state and other funding sources to assist with the transition. It is also critical that energy efficiency measures and incremental electrification be tied to the building’s capital budget cycle.

The Plan would be enhanced by further discussion and analysis of the Con Edison district steam system. While the Plan recognizes that district steam is an important resource it does not sufficiently address issues related to decarbonizing the district steam system. If the steam system in New York City cannot be decarbonized then many buildings will face enormous costs to electrify and add significant new electricity load in the core of Manhattan, imposing a major burden on the transmission and local distribution systems. Given these issues, it is critical that the State work aggressively with Con Edison to efficiently and cost-effectively create a green district steam system.

Finally, the Plan acknowledges the significant costs associated with decarbonizing buildings and discusses incentives. There are currently not enough public programs – including but not limited to incentive programs – to cover the gap between the costs of electrifying many buildings and any potential savings derived from lower energy use. The Plan emphasizes that efficient electric equipment and weatherization will reduce energy consumption and therefore costs. But it is very unlikely that these cost savings will approach the capital costs of electrification. Furthermore, some weatherizing measures such as major façade work can be extremely expensive, with little payback. Therefore, it is critical that the Plan identify more ways to invest public sector money in buildings, particularly without over-relying on ratepayers who are already struggling with their bills.