Gas Prices Spike for NY Metro Multifamily Just as Local Law 97 Phases In: Get a Sense of Current Costs Per Unit
By Team Lala of RM Friedland
July 2024
As New York City's multifamily buildings brace for the full implementation of Local Law 97, a new challenge emerges: the steep rise in natural gas prices driven by recent increases in Con Edison's delivery charges. This comes at a time when property owners are already grappling with tight margins, compounded by the substantial financial outlay required to comply with the city's ambitious emissions reduction mandates. Local Law 97, which audaciously aims to slash greenhouse gas emissions by 40% by 2030, necessitates extensive and costly retrofitting of buildings to improve energy efficiency. These expensive retrofits include upgrading heating systems, improving insulation, and potentially converting to all-electric systems. The combined burden of soaring gas prices and significant compliance costs threatens to squeeze already tight operating budgets, making it imperative for building owners to strategically manage their energy expenditures.
From our recent experience, we are seeing annual gas expenses exceeding $1,250 per unit, which now rivals the cost of oil. Some owners speculate that oil will soon become the cheaper alternative with more delivery charge hikes in the pipeline for 2025.
The tables below provide a detailed breakdown of the estimated annual gas costs for different building sizes in New York City, considering both fixed and variable charges, and also calculate the total cost per therm and total cost per unit annually based on different usage scenarios. Please note that all ranges are estimates, as Con Edison's pricing structure can be quite complex.
Lower Efficiency Scenario
| Building Size | Total Therms |
Service & Delivery Charges |
Commodity Cost |
Total Cost |
Annual Cost Per Unit |
|---|---|---|---|---|---|
| 10 Units 30 Rooms |
12,000 | $6,300 - $$8,800 | $6,000 - $7,800 | $12,300 - $16,600 $1.03 - $1.38 /therm |
$1,230 - $1,660 |
| 50 Units 150 Rooms |
60,000 | $30,300 - $42,400 | $30,000 - $39,000 | $60,300 - $1,400 $1.01 - $1.36 /therm |
$1,206 - $1,628 |
| 100 Units 300 Rooms |
120,000 | $63,000 - $84,400 | $60,000 - $78,000 | $120,300 - $162,400 $1.00 - $1.35 /therm |
$1,203 - $1,624 |
Mid-Efficiency Scenario
| Building Size | Total Therms |
Service & Delivery Charges |
Commodity Cost |
Total Cost |
Annual Cost Per Unit |
|---|---|---|---|---|---|
| 10 Units 30 Rooms |
10,500 | $5,550 - $7,750 | $5,250 - $6,825 | $10,800 - $14,575 $1.03 - $1.39 /therm |
$1,080 - $1,458 |
| 50 Units 150 Rooms |
52,500 | $26,550 - $37,150 | $26,250 - $34,125 | $52,800 - $71,275 $1.01 - $1.36 /therm |
$1,056 - $1,426 |
| 100 Units 300 Rooms |
105,000 | $52,800 - $73,900 | $52,500 - $68,250 | $105,300 - $142,150 $1.00 - $1.35 /therm |
$1,053 - $1,422 |
High-Efficiency Scenario
| Building Size | Total Therms |
Service & Delivery Charges |
Commodity Cost |
Total Cost |
Annual Cost Per Unit |
|---|---|---|---|---|---|
| 10 Units 30 Rooms |
9,000 | $4,800 - $6,700 | $4,500 - $5,850 | $9,300 - $12,550 $1.03 - $1.39 /therm |
$930 - $1,255 |
| 50 Units 150 Rooms |
45,000 | $22,800 - $31,900 | $22,500 - $29,250 | $45,300 - $61,150 $1.01 - $1.36 /therm |
$906 - $1,223 |
| 100 Units 300 Rooms |
90,000 | $45,300 - $63,400 | $45,000 - $58,500 | $90,300 - $121,900 $1.00 - $1.35 /therm |
$903 - $1,219 |
Assumptions Made:
- Usage per Room: Each room is estimated to consume either 400, 350, or 300 therms annually depending on the scenario.
- Basic Service Charge: A fixed charge ranging from $300 to $400 annually.
- Delivery Charge: Estimated Range of $0.50 to $0.70 per therm.
- Commodity Cost: Estimated Range of $0.50 to $0.65 per therm, based on time of day, current market conditions and fluctuations.
- Building Sizes:
- 10-Unit Building: Assumed to have 30 Rooms.
- 50-Unit Building: Assumed to have 150 Rooms.
- 100-Unit Building: Assumed to have 300 Rooms.
Sources:
- Con Edison Rates and Tariffs: This page provides detailed information about the rates and terms of service for electric, gas, and steam services offered by Con Edison. The rates and terms are regulated by the New York State Public Service Commission (NYPSC). You can review the rates and tariffs directly on Con Edison's website: Con Edison Rates and Tariffs
- Con Edison Guide to Rates: This guide helps customers understand how their bills are calculated, including the various rate options available. It includes information on how to save money and the specifics of different pricing plans. For more details, visit: Con Edison Guide to Rates
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