aep - c1 - week 2 slides

8/17/2019 AEP - C1 - Week 2 Slides

1/15

CERTIFICATEPROGRAM

Developed by:

With generous support from:


2/15

REAL ESTATE STRATEGY AND

ENERGY DE!S!"NS: PART 2

WEE# $


3/15

WEE# $: LEARN!NG G"ALS

Identify the factors that aect the value of a realestate asset

Categorize a real estate investment in terms of assetstrategy

Understand basic energy terminology

Understand how to read a utility rate schedule and autility bill

Describe the factors and systems that are included ina building conditions assessment

Dierentiate between the dierent types of energyeciency improvement strategies


4/15

WEE# $: READ!NGS

The Energy Management Handbook (Doty & urner!

• Chapter "#$ %lectric and as Utility 'ates for C & I Consumers

The Real Estate Game (oorvu!

• )ppendi* )$ +otes on roperty ypes

,'ecognition of %nergy Costs and %nergy erformancein 'eal roperty -aluation./ I0 & )ppraisal Institute(12"1!

CU+3 45 4uilding erformance ool6it


5/15

W%AT &AT"RS A&&ET T%E 'AL(E "& A

REAL ESTATE ASSET)

Physical attributes

• 7uality (). 4 or C!

• 8tructure and size

• 5ocation

• )ge and condition

Environmental

Tenant base

• enant 9uality

• -acancy rate

Lease-related

• 5ease type (gross. modi:ed gross;hybrid.net!. term. e*piration

• 4ase rent and base rent escalations

• 'ecaptured e*penses and real estate ta*es

• Capital e*penditures (C)%

Photo: PublicDomainPictures, via Pixabay.


6/15

Maret

• 0ar6et area (primary vs=

secondary. accelerating vs=

idling!

• hysical. legal and social

constraints• 8upply conditions and demand

• 0ar6et cycles

• 0ar6et factors (vacancy

rates. absorption rates.

mar6et rents. newconstruction starts!

• Causes

Economic

Ca!ital a!!reciation

Pro!erty im!rovementsCash "o#Photo: PublicDomainPictures, via Pixabay.

W%AT &AT"RS A&&ET T%E 'AL(E "& A

REAL ESTATE ASSET)


7/15

"pportunisti*!mprove +menities,

systems -.uestion /+r0s1

'+lue2Added/edium2term hold-St+rs1

oreLong2term hold

-+sh o3s1

Distressed!dentify improvements orsell -Dogs1

%"W D" Y"( ATEG"R!4E REAL ESTATE

!N'EST/ENTS)

A E 5 R e + l E s t + t e

A s s e t / + t r i 6

E6er*ise: Using the interactive AEP Real Estate Matrix , click an rag each o! the

A"P Port!olio #ro#erties into the $uarant %here you !eel it belongs. "x#lain your

reasoning !or each o! the #ro#erties.


8/15

D" Y"( #N"W Y"(R ENERGY 7AS!S)

Ener$y Terminolo$y

Ener$y units % most commonlyused

• 4tu per s9= ft= > any building

• ?ilowatt@hours (6Ah! per s9= ft= >

lighting• ?ilowatts per ton > chilled water

eciency

• Aatts per cu= ft= of airBow perminute > -)C systems

Electric demand vs& electric ener$y

• Demand > power in 6ilowatts (6A!

• %nergy > consumption in 6Ah

Photo: &' (Public Domain), via Pixabay.


9/15

Electric bill com!onents'

Demand

Consumption

ower factor

8ales ta*Electric rate structures

Customer classes and rateschedules (residential. commercialand industrial!

•Classes vary in comple*ityof energy use. amount ofconsumption and priority ofneed

• Dierent rates apply todierent classes

Rate schedule terms

Revie3(sing + property from the

AEP Portfolio8 visit the

3ebsite for property9s lo*+l

ele*tri* utility *omp+ny to

find the +ppli*+ble r+te

s*hedule Revie3 the r+te

s*hedule8 using h+pter ; inthe


10/15

W%AT S%"(LD Y"( #N"W A7"(T

ENERGY 7!LLS)

Common Com!onents O( Electricity Rate )chedulesEner$y char$e % actual amount o( electricity consumed

• Flat rate constant rate charged for all energy used• *eclinin$ bloc charges one price for the :rst 6Ah used

and less for ne*t increments• Increase bloc where more is charged per increment as

the consumption level increases (not widely used!• Fuel cost ad+ustment surcharge passed on to customers

when utility pays more than e*pected for primary fuel (canalso reduce rates!

• *emand char$e used to allocate the cost of the capitalfacilities which provide the electric serviceE may be hiddenin the energy charge or separated out= For large customers.usually based on 6A demand load

• *emand ratchet charges a customer for creating a large6ilowatt demand in only a few months of the year

• Po#er (actor assessed when a large customer has a poorpower factor


11/15

%"W ARE "T%ER ENERGY "STS 7!LLED)

,atural $as' 'ate schedules are similar in structure toelectric rate schedules. but place customers intointerruptible priority classes instead of charging for pea6demand

Fuel oil' 4illing schedules for fuel oils vary widely by

geographic regionE priced at a Bat charge per goal. set bymar6et conditions

)team and chilled #ater' In some areas. customers canpurchase instead of generating their ownE typicallycharged for the energy itself and the demand

ater and #aste#ater' Gften related to facility energycosts. so monthly bills should be analyzed for consumptionpatterns and possible reduction;cost control measures


12/15

W%AT !S ADDRESSED D(R!NG A 7(!LD!NG

"ND!T!"NS ASSESS/ENT)

A conditions assessment hel!s you develo! a !lan (or#hat to re!lace in the buildin$. and #hen&Physical and desi$n attributes

?ey building characteristics. such as Boor area.e9uipment used. plug loads. special activities and spacetypes

%nergy cost information urchase cost of electricity. fuels. steam. compressed

air. chilled water and other utility bill information fromaccounting systems or bill@handling services

Out!ut or utili/ation data

Gccupancy levels. operating hours. number of shifts. etc=Climate variables % available (rom local #eatherstations or may be traced on-site. includin$'

eating and cooling degree days )ltitude and barometric pressure

Financial data % revenue and sales 0$ures


13/15

W%!% SYSTE/S ARE !N'"L'ED !N A 7(!LD!NG

"ND!T!"NS ASSESS/ENT)

1eatin$ and coolin$ systems

Mechanical systems

ater systems

Li$htin$

2uildin$ envelo!e• Insulation levels• 0asonry conditions• lazing. fenestration. etc=• )ir tightness of windows and

doors

• Aindow eciencyEner$y loads

E3ui!ment

ater heatin$

Plumbin$


14/15

WEE# $: !N2LASS E>ER!SES

"= Choose a property from the )% portfolio and imagine that youHvebeen hired to perform a building conditions assessment= Ahatcharacteristics of the property would you be e*amining Ahichsystems would you be loo6ing at 4ased on the age. size. andother available data about your chosen property. what conditions

would you e*pect to :nd

1= Consider the properties in the )% ortfolio. and sort themaccording the 9uadrants of the four@s9uare matri*= In 1@Jsentences. e*plain the reasoning that caused you to assign theproperties to each of the 9uadrants= 8ubmit your write@up below=


15/15

WEE# $: %"/EW"R#

Using what youHve learned this wee6. choose a building fromthe )% ortfolio and identify one advanced technology thatwould be appropriate as an energy conservation measure=

%*plain how your proposal will aect the buildingHs valuation.

in addition to operating costs= 4e sure to detail the reasonsbehind your choice. and submit supporting documents. ifappropriate. such as cash Bows or other :nancial proKections=

aep - c1 - week 2 slides

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