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Energy efficiency: protect your building or get left in dark.

It's something New Yorkers often take for granted. But when the power system fails to support the area's demand, the potential for chaos and loss of profit suddenly becomes very real.

Our aging electric infrastructure has hit its limit in certain load areas and demand for electricity will outpace current availability over the next decade in many neighborhoods throughout New York City and Westchester.

Over the next 25 years, advances in providing more reliable power by upgrading the energy infrastructure will be made. In the meantime, the threat of black outs and brown outs can be minimized by taking advantage of utility load reduction programs that provide cash incentives for customers to reduce energy consumption.

These initiatives have already shown positive results. In 2006, over 30,000,000 kilowatt hours were permanently eliminated from the New York City system. Utilities like Con Edison helped commercial, industrial and residential buildings save money while solving the area's massive energy problem. This crisis is not limited to the New York City area.

The entire Northeastern United States is in the process of developing programs to reward customers for their conservation efforts.

There has been little done to educate the public on what business and residential properties can do to ease the strain on the electric grid. When energy use is decreased on a large scale, as demonstrated in 2006, all consumers can save on electric costs.

Lighting upgrades are some of the most basic and quickest energy savings programs to implement. Lighting systems account for 40-60 percent of a typical facilities energy costs.

Most building owners or tenants don't realize today's technology can reduce lighting costs up to 60 percent and provide better lighting quality which can improve productivity.

In the New York area, lighting upgrades generally have a payback period of less than one year. For facilities that still use old lighting technology, results can be seen in less than one month.

Energy conservation can also include upgrading chillers, motors and air conditioners, which typically have payback periods of less than three years. Taking advantage of utility load reduction programs is easy, no stacks of paperwork and no extensive evaluations to muddle through.

In addition to incentives and quick paybacks, businesses can qualify for federal tax deductions on energy efficient upgrades.

The Energy Policy Act of 2005 provides tax deductions of up to $.60 per square foot for selected measures that exceed established guidelines.

While protecting yourself from expensive electrical interruptions should be a priority, there are other important benefits that may also prove to be profitable.

Building differentiation is crucial in many major markets. Upgrading to an environmentally-friendly energy system is an ideal way to enhance your facility's competitive position and value.

Compared to other building improvements, an energy upgrade is a low-risk investment that can pay dividends right away and for years to come.

The threat of black outs and brown outs is real. How prepared will your building be next summer? There may never be a better time to take advantage of load reduction programs and make your facility more energy-efficient.


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Title Annotation:Energy
Author:Hartman, Keith
Publication:Real Estate Weekly
Date:Jan 24, 2007
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