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Switch to cleaner fuel oils gets $100M lift

June 13, 2012 The city announced Wednesday that more than $100 million in financing will be available to property owners to help them convert from using heavy heating oils to cleaner fuels.

Last year, the city set new rules that ban heavy heating oils, Nos. 4 and 6, that are still being used by about 10,000 buildings and are significantly contributing to air pollution. Mayor Michael Bloomberg also announced a new goal of cutting emissions of fine particulate matter, the type emitted by burning heavier heating oils, by 50% over the next two years. The conversion to cleaner fuels is expected to generate $300 million in construction activity.

JPMorgan Chase & Co., Citigroup Inc., the Community Preservation Corp., Deutsche Bank and Hudson Valley Bank has committed $90 million, while the city's Housing Development Corp. and the city Department of Housing Preservation and Development will offer $18 million for mixed-income residential buildings. An additional $5 million will be available to low- and moderate-income buildings that could not afford to convert through the NYC Energy Efficiency Corp.

"I want to applaud key banks, energy providers and nonprofits who have entered into groundbreaking partnerships and whose commitment will save lives and improve the quality of living in New York City," said Mayor Bloomberg, in a statement. "By phasing out heavy heating oils, we are closer to achieving our PlaNYC goal for the cleanest air of any major U.S. city."

Mr. Bloomberg, who was joined by a number of city officials, bank executives and developers, announced the new financing at Eastchester Heights Apartments, a 1,400-unit, rent-stabilized building the Bronx. The building was one of the Top 10 users of heavy oil, consuming close to 1 million gallons annually before converting to natural gas.

Con Edison and National Grid, the city's utility providers, will invest in making it easier and cheaper for buildings to convert to gas by upgrading infrastructure, the city said. Meanwhile, the city's largest provider of heating oil, Hess Corp., will offer customers new incentives to switch to cleaner burning fuels such as ultra-low sulfur No. 2 heating oil and biodiesel.

"The heating oils used in 1% of New York City buildings create more soot pollution than all the cars and trucks in the city combined. That's why upgrading these buildings to cleaner heating fuel is the single largest step New Yorkers can take to solve local air pollution," said Fred Krupp, president of the nonprofit Environmental Defense Fund, in a statement.

The city is expanding its partnership with the Environmental Defense Fund to offer technical help to buildings that are going through a fuel conversion.

Click here to read the full story from Crain's New York.

National Oilheat Research Alliance ECC is funded in part through the National Oilheat Research Alliance.