LIGHTING
Replacing outdated, inefficient incandescent bulbs, high pressure sodium, metal halide and fluorescent bulbs with LED bulbs and fixtures can make a dramatic difference in the appearance of a property while costing a fraction of the price to operate. Garage and hallway lighting at properties are normally on 24/7, 365 days a year. What kind of impression does a prospective condo buyer have upon entering your property? Is there a mixture of different bulbs replacing burnt out lamps and fixtures in your parking garage? Do some exit signs have a bulb or two not working? Does all of the lighting in the lobby and hallways match in intensity and color? Many boards acknowledge that they would like to change out their lighting to new, energy efficient LED lighting, but delay the project because the money to complete the project is, “not in the budget this year.” There are programs available today, in which all of the lighting at a property can be upgraded to energy efficient LED lighting, and the project paid for out of monthly savings! It’s called Lighting as a Service (LaaS). It is cash flow positive from day 1; no money down or upfront. There is no debt- it is just like Energy as a Service from your electric utility. The yearly savings in energy costs alone can be staggering! Also, monthly replacement and maintenance costs are completely gone.
Many residents and board members do not realize there are added benefits when doing a lighting upgrade. Besides using a fraction of the electricity to power the LED lighting as used to light a building with conventional lighting, there are other savings benefits. When shopping with electricity suppliers for the best pricing per kWh for a property, pricing is determined by several factors: How much electricity is used, when is it used (peak/off peak) and what is the Capacity Peak Load Contribution Charge which can be up to 25% of your cost per kWh? Your Capacity PLC is different than your Demand charge which is for delivery. Capacity
PLC is measured by ComEd during five of the hottest hours during the summer. During these measurement hours, typically the air conditioning systems are working hard and all of the 24/7 lighting in the building is using electricity. With LED lighting, a fraction of the electricity will be used during these measurement periods. Therefore, you will get a lower Capacity PLC Charge when they are reset. Having old, inefficient lighting is equivalent to taking a bushel basket full of money to the roof of your building once a year and throwing it off into the wind. Money spent overpaying on electricity bills for inefficient lighting can never be recovered! Also, the City of Chicago and several suburbs are Benchmarking properties (energy usage is compared to similar sized properties across the country). The results are now public record and a sign with a letter grade will be displayed in a prominent spot at a residential property showing the energy rating of the building. LED lighting can go a long way in lowering electricity consumption and raising the Benchmarking grade.
There are instances in high rise towers where the savings in electricity alone is over $55,000 annually when conventional lighting is replaced with LEDs. The property keeps a portion of the annual savings and pays a portion of the savings for the LED replacement program for a period of years. After the predetermined period, the property keeps all of the savings, the project is paid for and the property has new exterior, garage and hallway lighting that is modern and efficient, incurred no additional expense to do the project and was actually cash flow positive.
WATER/SEWER BILLS
In many parts of the country, water/sewer bills are actually much higher than in Chicago. However, there is a new tax on water/sewer bills in Chicago and that has made the cost of water in Chicago an issue that needs to be addressed by multi-family communities. This new tax is actually to help the City pay unfunded retirement pensions (has nothing to do with the water/sewer infrastructure or costs).
The tax started in 2017 and continues to rise each year through 2020:
2017 - $0.59 per 1000 gallons 2018 - $1.28 per 1000 gallons 2019 - $2.01 per 1000 gallons 2020 - $2.51 per 1000 gallons
So, what does this mean? Added to the current water/ sewer charge (not including any increase in the water/sewer charge over the next several years), this makes the cost of water in Chicago about 1 cent per gallon beginning in 2019.
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