Because your operations are bursting at the seams, the time has come to expand.
With several years of steady growth, financing shouldn't be a problem. Now all you need is a site with sufficient space, proximity to transportation lines, and proper zoning. Any real estate professional ought to be able to find what you need, right?
Well, not exactly. When it comes to site selection today, the rules of the game are rapidly changing. Just ask the many real estate managers across the nation who are learning the hard way that site selection has become far more than an exercise in real estate acquisition.
Take, for example, the evolving deregulation of energy. Once a relatively simple process, securing dependable and affordable energy supplies for a new operation today has become highly technical -- and confusing. Power marketers. Power brokers. RTP. TOU. IOU. Welcome to the new language of energy acquisition, and that's just the beginning.
It is a fact that America's $215 billion electric utility industry is in the early stages of deregulation. With it is coming a complex array of economic, technical and political considerations, and a lot of choices for end users.
Unfortunately, deregulation is happening so quickly and with so many players, there soon will be a dizzying number of choices available for consumers entering this new power environment.
One major issue that will affect end users will be in the area of energy costs. Deregulation will break up one of the nation's final monopolies, and in the process bring lower rates to major users.
Traditionally, America's electrical service has been provided by investor-owned utilities (IOUs), which own the power plants and transmission lines that deliver electricity to customers.
Under deregulation, however, "power marketers'' can buy electricity on the wholesale market and resell it to certain areas. Or "power brokers,'' who are sort of like stock brokers, can act as a mediator between buyers and sellers, but never actually take title of the electricity.
For consumers, there will soon be numerous ways electricity can be acquired, but the rules governing that acquisition will depend on the whims of state legislatures.
| Once a relatively simple process,
securing dependable and
affordable energy supplies for a
new operation today has become
highly technical -- and confusing. |
Along with opening the door to far more sources of electricity, deregulation also will change the pricing structure for energy usage. In the future, there likely will be high and low-cost periods for energy consumption as the market moves to real-time pricing (RTP).
The second major issue that end users will have to address will be the reliability of the power provided. Like in any industry that is deregulated, reliability and accountability can be overlooked in the rush by new players to join the game.
For any company, but particularly manufacturers, telecommunications firms, hospitals and others that are crippled by power outages, dependability is at least as important as rates.
Fortunately, there are experts professionals can turn to for help. There are architectural and engineering firms -- as well as private consultants -- who are making it their business to become experts in deregulation, and in fact are actively engaged in the evolving process.
As deregulation continues, it will become another factor that may determine the ultimate selection of a site. Real estate managers and companies who understand these changes will be in the greatest position to take advantage of opportunities in this rapidly evolving area of the real estate business.
Gil Mayfield, P.E., is a vice president of Carter and Burgess, Inc., where he serves as director of Real Estate Services.
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