Take Advantage of Local Law 88 to Save Electricity Costs and Boost Your Bottom Line

Gord Echlin

There was a time when "utilities included" was a common commercial leasing sales model. Tenants were relieved to remove an additional fluctuating monthly expense, and able to ignore their energy consumption habits. However, this pattern of behavior is outdated in today's data empowered, flexible work schedule world where tenants know they're subsidizing their full-time energy intensive neighbors. The final nail in the “utilities included” coffin will come on January 1, 2025 when certain Local Law 88 requirements become applicable — requiring sub-metering in all non-residential commercial buildings over 50,000 square feet. [1]

Remove Utility Expenses to Boost the Bottomline

The reason this model is dead is simple; sub-metering reduces energy consumption in leased space by sending an accurate price signal to tenants. Tenants are more likely to practice positive energy efficiency habits when they are able to track, review and pay for their actual electric consumption. As a building owner/landlord, removing utility expenses from your balance sheet will automatically boost your bottom line as you reduce your net operating expenses.

Another good reason to sub-meter your tenants are the Con Edison price increases approved by the New York Public Service Commission (PSC) in 2017. On January 1, 2018 Con Edison increased their electrical rates by 3.7% on the delivery side of the electric bill for a total bill impact of approximately 1.7%. PSC has also approve increases of 2.4% in each of the next two years. [2] The increased rates are being implemented to fund infrastructure investments that will improve service reliability and help integrate new clean energy technologies into the grid. Like many municipal service projects, it will be the local tax payers (specifically in this case, the utility payers) who fund these upgrades. 

And That's Just the Beginning

These power grid upgrades are imperative as New York’s groundbreaking Reforming the Energy Vision (REV) future unfolds — so you can bet additional utility price increases are on their way. REV is perhaps the most ambitious energy proceeding ever undertaken in the U.S. It will create a next-generation energy system where building owners can take advantage of the initiative to integrate wide-scale solar, battery, cogeneration, and energy efficiency — enabling them to dynamically participate in economic time-of-use and demand response programs. 

 

In order to benefit from this new energy frontier, property owners will need to transform their buildings into “smart buildings” that automatically optimize efficiency, comfort, safety and other categories by collecting and analyzing real-time data — delivering valuable energy and operational results 24/7. With today’s low cost wireless controls, sensors and sub-meters, properties can be more competitive, more profitable and more valuable when utility bills are reduced.

Web Centric Means a Metering Fabric to Support Both Today's and Tomorrow's Programs

New cutting-edge sub-meters are the key component necessary to take advantage of these new market opportunities and to help ensure compliance with current and future New York City regulatory requirements. While there are dozens of sub-metering companies in the market, Triacta’s multi-point sub-meters, compatible with both internet protocol (IP) networks as well as building automation networks, clearly stand out from the crowd. Developed by telecom experts, Triacta’s sub-meters create cost and installation efficiencies that enhance the granularity of the commodity being measured – serving as the foundation of any tenant billing, building automation, or energy management solution.

 

Triacta utilizes advanced IP-based communications to transmit data over existing wireless, phone, or high-speed internet connections without the cost of a dedicated service. Triacta’s cloud-based meter and resource management platform are built using industry standard protocols. Meter firmware can be upgraded remotely — making the meters future-proof for years to come.  

Finally, Triacta’s meters are compliant with regulatory requirements, helping to ensure that sub-metering meets New York City local laws.

[1] www.nyc.gov, LL88: Lighting Upgrades & Submetering

[2] New York Public Service Commission, Press Release, January 24, 2017

About the Author

Gordon Echlin is Vice President Marketing and Business Development for Triacta Power Solutions LP, where he has been a management team member since 2009. Prior to Triacta, Gordon was a partner for a boutique venture capital firm, Venture Coaches from 2006 to 2009, and started a telematics company, Netistix Technologies, in 2002. Gordon is a Computer Scientist and technologist by education, and prior to Netistix worked in technical, management and sales roles in Mitel Corporation, Newbridge Corporation and several small startups, since graduating in 1982.

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