Utility Distribution And Allocation

Introduction

Large, enclosed facilities, which contain common space shared by several tenants, represent an excellent opportunity for shared tenant services and the distribution of one or more utilities.

In the case of enclosed shopping centers, all tenants share the Mall Common, which uses electricity for lighting, miscellaneous use, and space conditioning purposes. Small tenants which do not have restricted entrances to their spaces and "fast-food" tenants by nature of their operation actually share space conditioning with the Mall Common. In these instances, the operation of Mall Common space conditioning equipment directly affects the space temperature, humidity and ventilation of tenants, and conversely.

Benefits

Properly installed and maintained utilities, which are operated by Landlord and distributed to tenants, can be a benefit to the Landlord, Tenants and Utility Company.

Benefits to Landlord

Benefits to Tenants

Benefits to Utility Company

Methodology

The methodology used in the distribution of utilities consists of the following:

This program considers all primary variables, which affect energy consumption at this facility. Some of the variables considered, include, but are not limited to, the following:

Subsequent to calculating the tenant monthly kWH and kW values for an annual period, appropriate utility company rates, average fuel adjustments and a discount factor are applied to the calculated kWH and kW values. The result is a budgeted annual electricity charge, which is levelized on a monthly basis. At the end of each fiscal year, the tenant's budgeted electricity charge is adjusted to account for changes in:

Also at the end of each fiscal year a "new" budged charge is determined for the ensuing fiscal year based on the following:

Economic Advantages

The master metering and distribution of electricity makes economic sense for the following reasons:

Fees

Valquest can usually provide an All-Inclusive Utility Distribution and Allocation Service for about 7% of the Net Revenue (Utility Income less Utility Expense) realized on the project. This All-Inclusive service would include: