I was touring the Penn Station renovation last month with a whole group of real estate professionals, and I struck up a conversation with MEP (Mechanical, Electrical, Plumbing) consultant, David Reiter of Consulting Engineering Services. He asked what I do, and when I mentioned residential brokerage, he told me about some innovation in construction, innovation that was so interesting I needed to regroup, and interview him for the blog to make sure I understood its implications. I’ll share what I learned here, because it could mean real savings for anyone doing a large-scale renovation in an old building.

Why an MEP Consultant?

MEP consultants are often brought in for various parts of a renovation project. It’s not too hard to imagine what items they come in for, since it’s in their name. Do you want to run plumbing for a new bath? Do you need a new ceiling electrical plan for your overhead lights? Are you trying to install central air-conditioning?

If you’re buying in a building built after 1950, it’s unlikely that this last item is going to be a question, since most Postwar buildings (WWII) already include hotel-style heating and cooling units, at the very least. Brand new construction today offers true central a/c and heating, like you’d see in a house anywhere in the US.

But what if you’re spending $3-10mm on an apartment in a building built in 1926 that needs a full renovation? It stands to reason that once the price tags reached a certain level, that you might want your new apartment to have all the bells and whistles, and really, the comforts of the most high-end apartments out there. Expectations for the outcome of a renovation are high.

This obviously includes modern appliances, humification, and the same central a/c I mentioned. And if you haven’t heard, New York City has made it its mission to phase out cooking gas from buildings, leaving owners to using electrical appliances for cooking and handling laundry as well (no gas dryers).

These buildings weren’t always constructed with enough power to handle modern life. The assemblage of appliances, once added up, can easily overwhelm the electrical service to an apartment. Too many things running, then, would cause the power to knock out. You have to consider this when making your plans.

Look—there are enough things to worry about in a renovation. And if you can’t get comfortable knowing that you can do the kind of renovation you want to do in an older building, you’re not going to buy it. I’m imaging the scene from Apollo’s 13, when Mission Control is relaying instructions on how to turn on a spacecraft without blowing the power. I remember being frustrated when that happened in my first apartment in Brooklyn. Annoying, but at a completely different level than when you’re about to sink a million dollars into a renovation. Think about it: do you really want a window a/c unit in your 5 million dollar apartment? Probably not.

Now you might be thinking, “Why don’t you just run the power necessary to upgrade things as you see fit?” It’s a perfectly rational question. This sounds fine, except this can cost you thousands of dollars, and you have to multiply this by the number of floors. This can add on as much as $100,000 to your renovation if you’re on, say, the 10th floor of a building. Not great, especially that’s an unexpected line item in an already-expensive plan.

The second issue is that running power into these buildings has become more of a challenge. I will avoid what your typical co-op allows or disallows. Let’s just say that the building gives you as much leeway as you need. What could go wrong? For starters, you have to connect to the building’s main power source, and “run it up” to the apartment. How will you do that? There are two ways: (1) Through a fire stair, and (2) along the outside of the building. The NYFD, our fire department, has made #1 pretty difficult. In some cases, they simply won’t allow it. So you’re left with running power along the outside of the building.

The Big News

So the table is set. There’s the potential cost of just running electrical to your new apartment, and the possibility that you can’t do it at all because of the physical constraints of doing so. What is this innovation that I heard about from the folks at CES?

Smart electricity.

David Reiter and his partner Michael Raffo have already installed more than ten systems that monitor electrical usage. We’re talking about relays and controllers that they install before appliances start to pull electricity. These smart controllers are, in essence, a little computer that changes the game completely.

As part of their work for apartment owners, architects and designers, MEP consultants have to write “load letters” which explain what the worst case scenario would be if everything were running at the same time. To explain in a bit more detail, Raffo told me that is far more rare than you’d think. He described the “wild party, while you’re cooking, and drying clothes plus running your a/c.” In other words, it almost never happens.

Yet it creates a problem for homeowners, or future homeowners. The code, for obvious safety reasons, requires these load letters to lay out this blue moon usage as their load calculation, and it will tell you that you need 200 amps, perhaps double or triple what most apartments have, and despite the risks being incredibly low.

The good news is that these controllers become a “load shedding system.” That is, the worst case scenario when you factor in for them is a much lower electrical usage than before in the load letter. Translation: you may not have to bring in new electrical at all, because it reduces the power deemed necessary to power your apartment

Originally designed add add-ons for generators, these controllers creates a buffer in the calculations that these consultants can do. Would you notice if your laundry turned off during your wild party? You probably wouldn’t notice it. Raffo and Reiter told me that it can be integrated into your thermostat, and even more exciting, you could incorporate smart elements. For instance, you could be notified by phone if something shut off, or the controller could learn your usage over time and make recommendations of times of day to avoid ever having a problem whatsoever. Never mind that you might like to know which appliances use the most power. I’d enjoy seeing which appliances add most to my electrical bill.

Best of all, and why I am telling you all of this in the first place: compare the cost of installing this controller to running electrical to our theoretical tenth floor apartment. The new electric? $100,000 or more. The controller? One-tenth that cost. So it promises to be a life saver for many people. “It gives a broader range of capacity to upgraded units,” Raffo said. Meaning that in the future, if you’re already done a renovation, but have to add electrical appliances, you can avoid having to deal with new electrical service as part of that.

Good for you, and Good For Buildings, Too

Not only is this a lifesaver for homeowners, but buildings could see the value, too. As I mentioned, there’s a non-zero chance that every building in the city will have to eliminate gas service. And smart controllers will allow buildings to upgrade from gas to electric more easily, with fewer problems—and fewer costs. These upgrades can be a killer to buildings already struggling with overhead. Any apartment dweller would be happy to know that their monthly bills could be lower as a result of smarter systems.

A Disclaimer and a Little More Upside

This controller won’t the the solution for an old apartment with woefully inadequate power, nor will it be able to save a building from running new power in that same situation.

But for many buildings, this could not only save homeowners significantly on their renovations. Buyers might be willing to spend more money on a property if they could do a renovation less expensively, or when they realize that the stumbling block—no central a/c or laundry—is no longer an issue. This could mean property appreciation for every unit in the building, as more properties sell at higher prices.

A much cooler outcome. Pun intended. – Scott & The HRT