- The Washington Times - Tuesday, October 16, 2007

Landlords in the Washington area could get their buildings retrofitted with environmentally friendly features at no charge under a partnership agreement announced yesterday.

Annapolis investment firm Hannon Armstrong is offering as much as $500 million over five years for the retrofits. The firm would be reimbursed through the energy savings of the buildings, which would be determined by an independent auditor.

Chevy Chase-based JBG Companies, the first developer to participate in the program, agreed to have energy-efficient lighting, heating and cooling systems installed at its Reston International Center and its buildings in L’Enfant Plaza.

The Reston project would involve installing new energy systems in a 15-story office and retail building. The buildings in L’Enfant Plaza — L’Enfant Plaza East and L’Enfant Plaza North — combine offices, retail and hotel rooms in 885,000 square feet of space.

Arlington County is considering outfitting some of its public buildings with the energy-efficient systems, according to a spokesman for the Energy Efficiency Partnership of Greater Washington. Negotiations are continuing with other government agencies and private companies.



The partnership was organized by Virginia Tech as part of an effort to reduce global warming. University officials said they hope the new systems will cut building energy consumption in half.

“There are many old structures in greater Washington that are ready to be audited and retrofitted but until now there has been very little incentive and few resources to drive change,” said Charles Steger, Virginia Tech president.

Pepco Energy Services, an affiliate of the Washington-area electric utility, estimates that installing so-called green building features could reduce the energy bill for all buildings in the Washington area by $3.6 billion a year. Pepco is participating in the venture in part to draw awareness to the need for energy efficiency.

“We hope it will bring greater focus to an immediate need for action,” said David Weiss, president of Pepco’s energy services division.

Pepco Energy Services has agreed to engineer and install the energy-efficient systems for the projects. The company also will perform “audits” of energy savings for each building to determine how much compensation Hannon Armstrong will receive.

“It depends on the credit risk we’re taking,” said Jeff Eckel, Hannon Armstrong’s chief executive officer.

Hannon Armstrong estimated it will recover its costs to retrofit the buildings in an average of five to seven years and earn the return on investment it seeks within seven to 10 years.

“The life of the assets could be 30 years, so the building owners would get the benefit of the extra energy savings afterward,” Mr. Eckel said.

Hannon Armstrong agreed to pay Pepco Energy Services to do the engineering and installation. The firm estimates that it will cost about $5 million to retrofit an average building.

Leo A. Daly, a Washington architectural firm, agreed to design the retrofits for buildings participating in the program.

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