Moving in on the office building market, Enron Energy Services(EES) last week formed alliances with two of the country’s largestcommercial property management companies.

By dealing with property managers, EES gets a foot in the doorto each of their clients instead of having to approach each clientcompany individually, explained Alan Butcher, general manager ofEES in Costa Mesa, CA.

“We have to deal with this divergent group of [property] owners.The thing that makes this alliance so good and so exciting for usis that we now have a common factor to work through. For all thesedivergent companies, the commonality is the facility managementgroup.”

EES made alliances with Los Angeles-based CB Richard Ellis,which has offices in 28 countries; and with Insignia/ESG Inc., asubsidiary of Insignia Financial Group with operations in New York,Chicago, Los Angeles, Dallas, Atlanta, Phoenix and Washington D.C.EES will provide energy services to the firms’ office andindustrial property clients.

Enron will analyze energy consumption of CB Richard Ellis’properties in the western United States, totaling about 87 millionsquare feet, and provide cost savings through efficiencyenhancements and competitively priced electricity. Building ownerswill be able to examine how and when they use energy, allowing themto budget and prepare for energy expenses more accurately. Thismonth, Enron will begin educational seminars for CB Richard Ellissenior managers and clients throughout the western states toexplain energy management services and the benefits of electricityderegulation.

The CB Richard Ellis properties’ average energy cost is about$2.50 per square foot per year, Butcher said. “In California alone,they’re looking at $100 million a year in electricity. We wouldprobably look at a commensurate level of services, such as lightingupgrades, chiller replacement, HVAC upgrades, building controls andautomation.” He said the alliance is targeting modest energysavings of about 20%. “Many of the buildings, we could actually doconsiderably more, but there’s a payback threshold that we have tolook at. So in order to stay within that payback threshold, 20% iswhat we’re targeting.”

Insignia/ESG and EES formed a similar alliance for EES toprovide energy services for a 215 million-square-foot portfolio ofcommercial and residential properties leased and managed byInsignia/ESG throughout the United States. Enron will analyzeenergy consumption and cut costs through efficiency enhancements.”This program will allow us to take advantage of marketopportunities that have arisen from deregulation of the energyindustry,” said Stephen B. Siegel, CEO of Insignia/ESG. Projects,which focus on both supply side and demand side efficiencies, caninclude equipment retrofits, replacement of heating andair-conditioning components, new generation equipment ortransformers. “This alliance is a testimony to the benefitscustomers can realize with energy-related savings, even withoutderegulation,” said Lou L. Pai, CEO of EES.

Joe Fisher, Houston

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