Water – Sustainability, Resiliency and Risk Mitigation

August 24, 2023 by Brad A. Molotsky

HUD – over $4B in lending capacity and $840M in grant funds under its Green and Resilient Retrofit Program

The U. S. Department of Housing and Urban Development (HUD) has announced more than $4 Billion in loan capacity and $840 Million in grant funding availability for investments in clean energy at multifamily properties that receive HUD assistance.

The funding is designed to encourage investment in a variety of clean energy projects with a stated goal to improve the quality and the resilience of those properties.

The Green and Resilient Retrofit Program (“GRRP”) was created as a part of the Inflation Reduction Act of 2022 to incentivize investments that reduce energy and utility costs and hope to reduce greenhouse gas emissions at the applicable properties.

HUD put forth 3 key goals for the GRRP:

1. to reduce energy and water use in HUD-assisted multifamily properties;

2. to make HUD-assisted multifamily properties more resilient to extreme weather events and natural disasters, and

3. to reduce greenhouse gas emissions from HUD-assisted multifamily properties.

HUD’s view is that by achieving the stated goals the properties will reduce utility bills and costs of operations, which in turn benefit their tenants. By reducing consumption, a natural outcome will be to also reduce greenhouse gas emissions HUD’s goal is to reduce greenhouse gas emissions by 50% across all participating properties and to reduce modeled energy consumption by at least 25% in each property.

Eligible properties are those receiving HUD assistance through Sections 8, 202, 811 and 236.

Awards are available for the following categories of properties:

Element Awards are for properties that are materially advanced in a recapitalization transaction that includes targeted utility efficiency, carbon emissions, reduction, renewable energy and/or climate resilience measures.

Leading Edge Awards are for properties with a significant capacity to execute a rehabilitation that will achieve an advanced green certification.

Comprehensive Awards are for properties, including those not yet developed, where the property owner is interested in improving the utility efficiency and resilience to climate hazards.

Green Sprouts – The Inflation Reduction Act is a rather amazing cluster of potential benefits and incentive programs for the built environment. HUD has taken the baton and has proceeded to incentivize energy efficiency investments where they are lending money. $4 Billion in lending capacity and $840M in grants are now available. Worthy of checking it out.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on your Sustainability and ESG planning and initiatives. For more information, please contact Brad A. Molotsky, David Amerikaner, Sheila Rafferty-Wiggins, Alice Shanahan, Jeff Hamera, Nanette Heide, Joel Ephross, Jolie-Anne Ansley, Robert Montejo, Seth Cooley, or the attorney in the firm with whom you are regularly in contact.

September 8, 2022 by Brad A. Molotsky

ESG – NJBPU issues Order requiring Energy and Water reporting for all Buildings over 25,000 SF

In September, 2022, the New Jersey Board of Public Utilities (NJBPU) issued an order requiring the owner or operator of every commercial building over 25,000 square feet in the state to benchmark their energy and water use as part of an effort to spur energy efficiency.

Building owners must use the U.S. Environmental Protection Agency’s online Portfolio Manager Tool to measure and analyze their respective facilities’ energy and water usage. NJBPU’s website has information about how to report benchmarking. The first benchmarking submissions are due on Oct. 1, 2023, for energy and water consumed in 2022. Portfolio Manager is a FREE tool from the EPA that enables owners to input data and measure and monitor consumption.

“This is the next important step in implementing a best in class, statewide, energy efficiency program which will help us achieve Governor Murphy’s goal of 100% clean energy by 2050,” said NJBPU President Joseph L. Fiordaliso. “Creating a system of benchmarking allows us to measure the use of energy (electricity and gas) and water by the state’s biggest buildings and support building owners in reducing energy and water usage and operating costs.”

Benchmarking is intended to help commercial building owners and operators measure and analyze their respective facilities’ energy and water usage and compare it to other similar buildings. Building owners and operators can use this information to make informed decisions about taking advantage of financial incentives for energy efficiency improvements.

The NJBPU initiative is directed by the New Jersey’s Energy Master Plan, which calls for transparent benchmarking and energy labeling. The program it intended to enable building owners to obtain aggregated, building-level energy and water data from their utility companies through a data access service. The Board will also establish a “help desk” to assist building owners as they measure and analyze their respective buildings’ energy and water performance.

This program will also protect individual ratepayers’ energy and water use information by requiring utilities to securely provide aggregated, building-level data. Building owners are required to obtain their tenants’ affirmative, written consent for the utilities from which they receive services to provide building-level energy and water data to the building owner in certain situations to protect individual energy and water use information.

Consent will be required only when there are fewer than four tenants in a building or if one tenant exceeds 50% of the energy or water consumption.

More information about building benchmarking through NJBPU is available at https://njcleanenergy.com/commercial-industrial/programs/energy-benchmarking.

Food For Thought – NJ through the NJBPU Order joins California and Washington state as well as over 42 cities and 2 counties in requiring some form of energy and water disclosure mandate. While many do not like being forced to report which is understandable, having this mandate will enable the State and tenants to better access which buildings are more efficient than others when it comes to energy and water consumption that are often paid for by common area charges assessed to these tenants. If and to the extent the SEC’s proposed rules on climate disclosure become effective, having a tool that allows for measurement and verification of various data sets will help bolster various companies ability to measure, verify and report on such data in the energy, water, waste, recycling, materials and air quality space.

Duane Morris has an active ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on your Sustainability and ESG planning and initiatives. We would be happy to discussion your proposed project and how these new rules might apply to you. For more information or if you have any questions about this post, please contact Sheila Rafferty-Wiggins, Brad A. Molotsky, Alice Shanahan, Jeff Hamera, Nanette Heide, Joel Ephross, Jolie-Anne Ansley, Robert Montejo, Seth Cooley, David Amerikaner or the attorney in the firm with whom you in regular contact or the attorney in the firm with whom you are regularly in contact.

June 10, 2022 by Brad A. Molotsky

Data Centers – From the Clouds – Much Ado about ESG!

We had the opportunity to chat with some of the leading owners and builders of data centers space today on our Data Centers Task Force group meeting. Fascinating and fun conversation with Aaron Binkley of Digital Realty and David Hall and David Sitkowski from Clune Construction Company.

Some key take aways from the conversation:

– multiple new entrants into the data center space are putting pressure on rents (upward) with a lot of venture capital funding the new entries

– Increased focus by Owners (and customer/users) on renewable energy with an understanding that the renewable energy is cheaper but NOT Free.

– Energy markets remain a bit volatile for renewable energy with federal tariff on solar panels continuing to negatively impact supply

– Climate related reporting from the EU taxonomy, Singapore and potential SEC proposed rules creating a continued ESG focus by owners and customers in the Date Center space

– Supply chain issues continue to negatively affect delivery times and cost – causing consternation but opportunity as well

– Noting generators are taking in certain locations over 72 weeks for delivery and switch gear breakers taking over 16 months for delivery from the normal 6 months

– Labor Shortages continue in various markets delaying jobs – e.g., Pacific NW on carpentry and Phoenix on electricians and other trades

– Deals continue to increase in size and scale despite increased need for local based service of smaller scale

– Increased cooperating and sharing of work pipeline to enable design and build on time

– increased federal work in the data center site space

– increased interest by customers in LEED and Energy Star certifications but not everywhere

– increased interest in power coming from solar and wind sources both on site and off site through power purchase agreements (e.g., in VA, TX, CA, Illinois and NJ)

– customers and employees continuing to ask about sustainable features in buildings and in power supply and other areas of design

– Communities are beginning to wake up to data centers and in certain locations object to their noise and power consumption, noting the lack of traffic and school impacts given their use

– Water is becoming more and more relevant to the conversation and how water is or is not used in cooling systems (noting – Digital Realty does not use water in its cooling solution but towns where they operate are starting to ask about this resource)

– Permitting for generators which used to be relatively easy to obtain is now starting to get a bit trickier and harder to get on an over the counter baiss given potential air quality issues and diesel for generator issues – resulting in additional time for development permits

– Site Selection – certain jurisdictions with a high amount of data centers are beginning to increase real estate taxes for the data center user/owner which will likely, in turn, have these owners focus on other locations which are not so pricey by way of taxes.

From the Cloud – on balance, labor shortages, supply chain and increased focus by customers on ESG is driving various changes to design and build in the data center space to ensure timely and on budget deliveries. While supply chain issues should clear up in Q4 to Q1 of 23′, the focus on ESG should continue well into the future as more and more customers are adopting GhG reduction targets and more and more owners follow the lead of big industry players like Digital Realty and Prologis.

Duane Morris has an active Data Centers Team as well as an ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on your data center project and your Sustainability and ESG planning and initiatives. We would be happy to discussion your proposed project with you. For more information or if you have any questions about this post, please contact Brad A. Molotsky, Jeff Hamera, Joel Ephross, Robert Montejos or David Amerikaner or the attorney in the firm with whom you in regular contact.or the attorney in the firm with whom you are regularly in contact.