Going Green, One Step at a Time

Gerard J. Picaso has been managing co-ops and condos in New York City for more than 30 years and prides himself on his business acumen. But when it comes to greening the 48 buildings in his portfolio, Picaso says his motivation was as much common sense as it was dollars and cents.

“It’s just time,” notes Picaso. “There is a way to do it now that makes sense, so that the greening does not cost a fortune, and it saves the environment. People have entrusted us to run the co-op’s business, and for some people their apartment is their biggest investment. We have an obligation as the management to give them information on many things, and one of those things is how to save the planet. I know it sounds kind of silly, but it’s our job to tell them, ‘Here’s what you can do.’”

In the coming months, Picaso plans to roll out a host of environmental changes at his properties, from greener lightbulbs to more frequent boiler cleanings. The biggest – if approved by each building’s board – would be to sign up the properties for an energy-service company (ESCO) and then use the savings generated to make it more affordable to use green power.

“All of them will agree to the ESCO because it will save them money,” says Picaso. The state offers incentives to use an ESCO instead of traditional utilities as part of deregulation that began in 1999.

ESCOs save money because you only have to pay sales tax on the supply side, not the delivery portion, which is about a third of your total bill. Combine that with a retail access credit, and the savings can range from three to five percent, according to Picaso’s ESCO.

By doing this, Picaso says his buildings can convert to 100 percent green power options such as wind or low-impact hydroelectric and just pay about two or three percent more than they would using traditional power. Without the ESCO savings, using one hundred percent green power can cost as much as five to ten percent more than traditional options.

The ESCO that Picaso is working with is called Juice, and the company can provide portions of green and traditional power, ranging from one hundred percent green to just five or ten percent green. Clients can choose one type of green power – such as low-impact hydroelectric, solar, wind, landfill gas, or biomass, which creates electricity by burning plant materials – or they can choose combinations of green options.

“Some clients care about using local resources, so you might find low-impact hydro in New York or landfill gas,” explains Deirdre Lord, founder of the company. “Others just say, ‘I really love wind power and I want to buy wind, and I don’t care if it’s from Montana or New York State.’ We can provide all those options.” The company’s goal is to reduce costs so that clients can invest in green options. Lord adds that many clients choose ESCOs for budgetary certainty; the firm can lock in prices for up to three years.

Juice was born about a year and a half ago. Before forming the company, Lord worked for ten years in the retail electric field. She declined to say how many clients she has in New York City but reports that her client list does include “other large residential properties.”

Like all ESCOs, Juice takes a per-kilowatt hour fee from clients. Lord says her pricing structure is explained in detail to all clients, but she declined to reveal her rates. She did say that the more buildings a manager brings to the table the lower the rate will be.

One of the things Juice does for such residential clients as condos and co-ops is to provide managers and others with marketing materials to sell residents on green technology. When it comes to Picaso’s project, Lisa Dib, the company’s marketing manager, notes: “We can help him sell this to the boards and tenants.”

So how will Picaso convince boards to spend more money? “They have to decide if they want to green the planet and feel good about themselves,” he says. Several boards are already eager to sign up.

At 31 East 71st Street, board member Sheryl Asklund-Rock says she’s thrilled with the manager’s plans for the co-op, which has about 30 units. The board gave its preliminary approval at its February meeting and will revisit the issue in April. Even though using green power will cost a little more – about $900 a year – Asklund-Rock says the board was behind the proposal. “These are things worth spending money on,” notes Asklund-Rock, who has been trying to get green options like compact florescent bulbs for years.

Picaso started going to boards in February and will continue in the coming months. He hopes to have about 20 buildings on the ESCOs and to be using green power by summer. Those he plans to get online first are some of the larger buildings with higher consumption demands. Savings will be more dramatic and Picaso says he can use that information when he goes to other boards.

About eight buildings are submetered, and, in those cases, the co-op pays for all the electricity for the common areas, and a metering company reads individual meters in each unit, and then shareholders are billed through their maintenance.

“If the building goes green, so do all the shareholders automatically,” says Picaso. “It’s not just the common areas, you have 200 tenants who have gone green too.”

One of the changes that Picaso is making that does not need board approval is to start cleaning boilers more frequently at his buildings. Standard practice is to clean twice a year at the beginning and end of heating season, he says.

“If you do supplemental cleanings each month, we found you can save up to six percent in your fuel costs because you are starting each month with an absolutely clean boiler, and the cleaner they are the more efficient they are,” Picaso says.

More frequent cleanings have already begun in at least one building, 142 East 71st Street. Picaso is not sure exactly how much cleanings will cost; the more buildings he has signed up for the service the lower the cost will be. But he estimates it could be about $200 per cleaning. “If fuel for the building is $100,000 a heating season and you save six percent of that, that’s $6,000,” he says. “If you’ve cleaned the boiler six times, that’s only $1,200.”

At 142 East 71st Street, board president Barbara Sproul says the plan made perfect sense for the 42-unit co-op. “It costs more money [in the short run] to clean the boiler but by the end of the year you save a few thousand in oil costs,” she says. “You’d have to have a very short- range view not to think it’s a good deal.”

Sproul adds that the board is also enthusiastic about the green power plan. Picaso estimates that using 100 percent green power would cost only about $1,600 more than traditional methods. Sproul calls it a win for the building, the city, and the environment. “Everyone is interested in doing what we can to help the environmental situation,” she says. “It’s cost-effective to do the right thing because we all live here.”

One of the other changes Picaso wants to implement is to swap traditional incandescent lightbulbs for compact-florescent (CF) models. The U.S. Government Energy Star program estimates that compact fluorescents cost more than traditional models but that they use about 75 percent less energy and last ten times longer.

In some buildings, Picaso will put the CF bulbs in all common areas, in others he’ll test them on one floor at a time. He knows that some people don’t like the light cast from CF bulbs as much as traditional ones, so he is trying different models to find a type that works well and is pleasing. Picaso, who does not yet have a supplier, says he is currently using a bevy of different models that he purchased at a bulk supply store.

“When we get to the point where we want to purchase something, we want to do it in volume so that we can get a discount,” Picaso says.

At some point, Picaso would also like to put lights in some buildings on motion sensors to cut down on electrical use. Down the line, he’s even looking at whether to use green cleaning supplies at his buildings.

“When something is new, it takes a long time to mull it over and get through everything,” he admits. “You still have to run the building. It’s easy to just go order another case of 100-watt incandescent bulbs that we’ve been using for 20 years.

“But now is the time,” he continues. “The cost of fuel is astronomical, and it doesn’t look like anyone has any program for using anything but oil in the near future. There has to be a way to cut down on all of this. None of these are homeruns. But when you add them up, they can all mean real money savings, and they can mean a big difference environmentally.”