Wiktor Wise
Shopping malls have a high energy demand due to enhanced lighting, electrical displays, and space heating and cooling. The cost of electricity for malls can be significant, and in some cases, they pay exactly what their state-appointed utility company charges for monthly electrical costs. However, in deregulated states, mall developers and managers can choose from various suppliers and plans to find the best rates and save on their electricity bills. This freedom of choice has made it slightly more complicated to manage utilities but has also opened opportunities to cut costs.
| Characteristics | Values |
|---|---|
| Who pays for electricity in malls? | It depends. In some U.S. states, commercial buildings pay exactly what their state-appointed energy utility charges for their monthly electrical costs. In other deregulated states, customers can shop around for the best possible monthly electricity rate from available suppliers. |
| How do mall developers choose an electricity plan? | In deregulated states, mall developers can choose a plan from one of the local, independent suppliers in their area and make choices about the type of electricity they receive and the rates they pay. |
| How do malls reduce electricity costs? | Malls can reduce electricity costs by decreasing their energy consumption or using an energy management system. |
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What You'll Learn
Commercial electricity rates and suppliers
In the United States, shopping malls account for approximately 18% of the available gross leasable areas, making electricity costs a significant consideration for mall managers. The cost of electricity for commercial buildings like malls can vary across states and is influenced by factors such as energy sources, demand, and state regulations.
In deregulated states, commercial customers have the freedom to choose their electricity suppliers and plans. This allows mall developers and managers to shop around for the most favourable monthly rates and plans that align with their sustainability goals. They can select from various options, including fixed or variable-rate plans, and negotiate better rates due to their higher and more predictable electricity consumption.
However, in some states, commercial buildings must pay the state-appointed energy utility charges without any negotiation power. For instance, states with high living costs or limited natural resources, such as Hawaii, Massachusetts, California, and Alaska, tend to have higher electricity rates. Conversely, states with abundant hydro, wind, or natural gas, like Idaho, often offer more competitive rates.
When choosing an energy supplier, commercial customers consider not only the price but also contract terms and renewable energy options. Reading customer reviews can also help identify potential hidden fees and provide insights into service quality.
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State-appointed utility charges
In some states in the US, shopping malls and strip malls have no choice but to pay the state-appointed energy utility charges for their electricity costs. These commercial buildings pay exactly what their state-appointed energy utility charges for their monthly electrical costs, with no opportunity to negotiate the cost of electricity.
However, in deregulated states, such as Texas, Maryland, Ohio, and Pennsylvania, shopping mall developers and managers can shop around for the best monthly electricity rates from independent suppliers. They can choose from various plans, such as fixed or variable rate plans, and select the type of electricity they receive. This has made it slightly more complicated for mall developers to manage utilities but has also allowed them to cut the costs of their monthly electricity bills.
In certain cases, landlords of shopping malls purchase electricity from utility companies and then resell it to their tenants, charging them for consumption and demand. This practice has been deemed exempt from certain sales taxes, as it is considered incidental to the rental of commercial premises rather than a separate transaction for furnishing utilities.
To optimize energy usage and costs, mall managers can utilize energy management systems that provide predictive analysis and detailed usage data. Submetering of tenants is another recommended strategy to reduce energy costs, encouraging tenants to conserve energy when they are billed for their actual energy usage.
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Energy management systems
Shopping malls are large-scale commercial spaces that account for a significant portion of the available gross leasable areas in the United States. They are major energy consumers due to their extensive lighting, large customer footfall, and extended operating hours. Common areas such as entrances, public restrooms, HVAC systems, and food courts are often noted to be energy inefficient.
One effective strategy is submetering of tenants, which can result in energy savings of up to 18%. By billing tenants based on their actual energy usage, malls can promote fairness and incentivize energy conservation. Additionally, EMS with AI capabilities can predict future energy usage, allowing mall managers to proactively implement energy reduction programs.
The benefits of effective energy management extend beyond cost savings. Malls can also improve their environmental sustainability by reducing carbon emissions and minimizing environmental impact. This not only helps the planet but also enhances customer satisfaction and brand image, as consumers increasingly prefer environmentally conscious businesses.
While the upfront investment in an EMS can be significant, payback periods have decreased substantially. Grocery stores, for example, can now experience payback in less than two years, and government incentive programs can further reduce this timeframe. By investing in EMS, businesses can achieve their sustainability goals, improve operational efficiency, and gain a competitive edge.
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Cost-saving opportunities
Malls account for approximately 18% of the available gross leasable areas in the United States, making electricity costs a significant expense. Here are some cost-saving opportunities for mall stores to reduce their electricity bills:
Choose an electricity plan in deregulated states
In deregulated states such as Texas, Maryland, Ohio, and Pennsylvania, mall stores have the opportunity to choose their electricity supplier and plan. They can select from options like fixed or variable-rate plans or choose a plan with the lowest kWh. Shopping for the best rate can lead to significant cost savings.
Improve lighting choices
Malls have a high lighting load due to their large spaces and long operating hours. By switching from incandescent light bulbs to newer LED light bulbs, malls can reduce lighting costs by up to eight times. LED bulbs are more energy-efficient, last longer, and produce less heat.
Install motion detectors
Since malls consume energy 24/7, installing motion detectors on lights and bathroom fixtures can significantly reduce electricity waste. Motion detectors are small investments that can quickly pay for themselves by ensuring energy is only used when someone is present in a room.
Implement energy management systems
Energy management systems, such as EnergyPQA.com®, provide data on energy consumption, allowing malls to identify inefficiencies and correct them. These systems can also track commodity usage, including water, air, gas, and steam, helping malls save resources and money.
Submetering of tenants
By implementing submetering, malls can bill tenants based on their actual energy usage rather than square footage. This encourages tenants to reduce their energy consumption, leading to immediate and long-term savings for both the tenants and the mall.
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High energy demands
Shopping malls have a very high energy demand due to their large, open spaces and heavy footfall. The energy demands of a mall are multifaceted, with enhanced lighting, electrical displays, and space heating and cooling all contributing to the overall energy consumption.
The cost of electricity for a shopping mall can be significant, and in some cases, there is no opportunity to negotiate the rates. The mall's management is responsible for covering these costs, which can vary depending on the state and the appointed energy utility company.
To manage these high energy demands, mall developers and managers need to make careful choices about their energy plans. In deregulated states, they can shop around for the best rates and choose between fixed or variable rate plans. This freedom to choose allows them to cut costs and select plans that align with their sustainability goals, such as opting for energy from renewable resources.
However, the variety of options available can also make it more complex to manage utilities effectively. To simplify this process and reduce energy costs, mall owners and managers can implement power monitoring systems. These systems provide data on overall energy consumption and can help identify areas where energy efficiency can be improved, ultimately reducing the mall's carbon footprint and operating expenses.
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Frequently asked questions
The shopping mall pays for electricity, covering the cost of lighting, electrical displays, heating, and cooling.
Shopping malls can choose from various electricity plans, with some states allowing them to shop around for the best monthly rate.
Shopping malls can implement energy tracking systems to monitor and manage their energy consumption, helping them save on their monthly electricity bills.
Shopping malls have to pay for leased space, maintenance, water, amenities, and other operating costs in addition to electricity.
