As CAM charges associated with operating a retail store in a mall or shopping center continue to rise, retailers are looking for every available means to reduce them. In addition, they want to ensure that as many of the charges as possible are based on their specific use of the product or service, rather than simply preset percentages of the property's total use.
The recent deregulation of the utility industries has brought this issue closer to the forefront. Both landlords and tenants realize they have an opportunity to negotiate better deals for electricity and other utilities if they can track usage.
This trend is creating a demand for metering technology at retail properties, with electricity among the first utilities where such a tracking system is being offered.
Harrisburg, Pa.-based AMP Inc. offers its AMPINNERGY Electrical Submeter to monitor and record electricity use at commercial properties. Installed downline from the utility meter, the 6.6" x 8.4" submeter gauges the power usage of each individual space, allowing the landlord to bill tenants individually for the amount of power they use.
Installation usually takes less than half an hour, and the submeter integrates easily with existing energy management systems. These are important considerations for companies, such as retail chains, with hundreds of units located throughout the country.
So far, the majority of installations of AMP's electrical submeters have been for Fortune 500 companies, where electrical consumption is high. The installations are also concentrated in states like California, Pennsylvania and New York, where deregulation is being implemented, says Hank Persia, director, facilities electrical market for AMP Inc.
Most of the sales within the shopping center world have been to retail chains rather than developers, but Persia expects sales to increase among both camps because the product is ideally suited for these centers.
"Power use has been a critical issue for the bigger firms for years, but awareness of the potential savings is migrating to retail developers and retailers as well," says Persia. "I believe our retail business will increase a great deal in the next 12 to 18 months as people in the retail industry become more informed on the issue."
Persia says studies have shown that utility metering can provide up to 20% savings. Developers and retailers can negotiate lower prices when they know their center's or store's electricity consumption.
The submeters allow retailers to pinpoint exactly how much electricity they use each month, and, just as importantly, the time of day when usage is highest.
"This information is called the users' Load Profile. With this data in hand, the retailer can go to the local utility company and get volume price breaks," Persia explains. In addition, large retail chains can track the data for all of their stores - a process called Load Aggregation - and cut similar deals all over the country. As competition continues to increase in retail, every method that proves beneficial to the bottom line will eventually be implemented.
>From the developer's point of view, installing such submeters can be >another tool for the leasing of space, particularly to large credit >tenants. "A developer may offer this as an incentive to attract tenants, >and the larger the chain, the more interest they are likely to have in the >system," says Persia.
The AMP product also offers other features that enhance its capabilities for retailers. A remote monitoring system assists in Load Aggregation by allowing the data from stores all over the country to be gathered by phone from the home office. The built-in diagnostic system means problems will be discovered more quickly and also indicates whether the meter has been installed properly.
The AMP submeter also provides surge protection from lightning as well as from a more common source of electrical surges: large electrical equipment such as elevator motors or air conditioning units cutting on and off frequently.
The submeter units can be scheduled to match utility time-of-use rates, to provide previous season billing data and to track cumulative and continuous demand data. The units include a 10-year lithium battery backup for their internal clocks.
The cost of AMP's AMPINNERGY Electrical Submeter ranges from $500 to $1,500 each depending on the features included, with one unit per breaker panel suggested. "Some bigger department stores may use one on the main panel and another to monitor an area where it uses a lot of electricity, such as its electronics department," says Persia.
Sears, Western Auto and RadioShack are three retailers that currently use AMP products in their stores. "The decision to use our products is usually made at the retailer's headquarters by their energy management department," says Persia. "Once approved, it usually becomes part of the chain's construction specifications."