[et_pb_section bb_built=”1″ _builder_version=”3.0.47″ custom_padding=”0|0px|0|0px|false|false” inner_width=”auto” inner_max_width=”none”][et_pb_row _builder_version=”3.0.48″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” width=”80%” max_width=”1080px”][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.22.7″ text_font=”Nunito Sans||||||||” text_text_color=”#383838″ text_font_size=”18px” text_line_height=”1.5em” header_3_line_height=”1.2em” header_4_font=”Nunito Sans|100|||on|||#004382|” header_4_font_size=”22px” header_4_line_height=”1.6em” header_6_font=”Nunito Sans||||||||” header_6_text_align=”left” header_6_text_color=”#383838″ header_6_font_size=”18px” header_6_line_height=”1.8em” z_index_tablet=”500″ text_text_shadow_horizontal_length=”text_text_shadow_style,%91object Object%93″ text_text_shadow_vertical_length=”text_text_shadow_style,%91object Object%93″ text_text_shadow_blur_strength=”text_text_shadow_style,%91object Object%93″ link_text_shadow_horizontal_length=”link_text_shadow_style,%91object Object%93″ link_text_shadow_vertical_length=”link_text_shadow_style,%91object Object%93″ link_text_shadow_blur_strength=”link_text_shadow_style,%91object Object%93″ ul_text_shadow_horizontal_length=”ul_text_shadow_style,%91object Object%93″ ul_text_shadow_vertical_length=”ul_text_shadow_style,%91object Object%93″ ul_text_shadow_blur_strength=”ul_text_shadow_style,%91object Object%93″ ol_text_shadow_horizontal_length=”ol_text_shadow_style,%91object Object%93″ ol_text_shadow_vertical_length=”ol_text_shadow_style,%91object Object%93″ ol_text_shadow_blur_strength=”ol_text_shadow_style,%91object Object%93″ quote_text_shadow_horizontal_length=”quote_text_shadow_style,%91object Object%93″ quote_text_shadow_vertical_length=”quote_text_shadow_style,%91object Object%93″ quote_text_shadow_blur_strength=”quote_text_shadow_style,%91object Object%93″ header_text_shadow_horizontal_length=”header_text_shadow_style,%91object Object%93″ header_text_shadow_vertical_length=”header_text_shadow_style,%91object Object%93″ header_text_shadow_blur_strength=”header_text_shadow_style,%91object Object%93″ header_2_text_shadow_horizontal_length=”header_2_text_shadow_style,%91object Object%93″ header_2_text_shadow_vertical_length=”header_2_text_shadow_style,%91object Object%93″ header_2_text_shadow_blur_strength=”header_2_text_shadow_style,%91object Object%93″ header_3_text_shadow_horizontal_length=”header_3_text_shadow_style,%91object Object%93″ header_3_text_shadow_vertical_length=”header_3_text_shadow_style,%91object Object%93″ header_3_text_shadow_blur_strength=”header_3_text_shadow_style,%91object Object%93″ header_4_text_shadow_horizontal_length=”header_4_text_shadow_style,%91object Object%93″ header_4_text_shadow_vertical_length=”header_4_text_shadow_style,%91object Object%93″ header_4_text_shadow_blur_strength=”header_4_text_shadow_style,%91object Object%93″ header_5_text_shadow_horizontal_length=”header_5_text_shadow_style,%91object Object%93″ header_5_text_shadow_vertical_length=”header_5_text_shadow_style,%91object Object%93″ header_5_text_shadow_blur_strength=”header_5_text_shadow_style,%91object Object%93″ header_6_text_shadow_horizontal_length=”header_6_text_shadow_style,%91object Object%93″ header_6_text_shadow_vertical_length=”header_6_text_shadow_style,%91object Object%93″ header_6_text_shadow_blur_strength=”header_6_text_shadow_style,%91object Object%93″]<\/p>\n

Delavan, Wisconsin<\/strong> \u2013\u00a0Consider this: if you own a commercial building and it\u2019s depreciating on a conventional scale of 27.5 to 39.5 years, a cost segregation study can change 20 to 50% of your building\u2019s components to depreciate in 5, 7 or 15 years, simply by re-categorizing some of the existing components.<\/p>\n

\u00a0<\/p>\n

Cost Segregation: It\u2019s an Approved IRS Procedure<\/strong><\/h4>\n

A cost segregation study is an engineering and accounting study that can increase your cash flow with the reduction of your income tax liability by utilizing shorter depreciation periods in order to accelerate the return on capital from your property investment.\\<\/p>\n

Whether it\u2019s new construction, a building purchased over the past several years, a major renovation getting started or recently completed, the components of your building can be classified with cost segregation into shorter recovery periods for computing depreciation. Bottom line: if you bought it, built it, or did a major renovation and paid income taxes, this program will work for you.<\/p>\n

The only way this program wouldn\u2019t be a good fit is if you acquired the building as part of an exchange or you\u2019re planning on selling within 5 years.<\/p>\n

There have been literally thousands of cost segregation studies performed and there are good rules of thumb on the tax savings potential by accelerating depreciation. A preliminary review can give you a good idea of the potential savings that could be available.<\/p>\n

The first key is the building type such as hotel, apartment building, car dealership, etc.<\/p>\n

The second is the actual cost of the building that you purchased or did a major renovation on.\u00a0 The cost of the land is subtracted so only the cost of the building is reviewed.<\/p>\n

Third is a review of your current depreciation schedules.<\/p>\n

According to the IRS, in order to take advantage of this program, you will need to hire a 3rd party firm to perform the Engineering Cost Segregation Study.<\/p>\n

\u00a0<\/p>\n

Steps of Cost Segregation<\/strong><\/h4>\n

1. The firm will review your current tax status and plans to determine the benefit of a Cost Segregation Study. Basically, if you have income tax liability, there could be great benefits in going forward.<\/p>\n

2. The firm will evaluate the construction costs by the various components such as HVAC, electrical, fire sprinklers, mechanical systems, walls, carpeting and finishes for example. The more complex the systems are or elaborate the decorating finishes, the greater the opportunity to accelerate depreciation benefits. There will also be a review of the construction documents, including as-built drawings and project specifications.<\/p>\n

3. Included in the study will be an actual visit to your building to identify how all of the components are utilized \u2013 this site visit is also to document the systems for the final report.<\/p>\n

4. The firm will then create a detailed engineering report of components and systems including covering special purpose mechanical and electrical systems, decorative finishes, site improvements, and any process related to special purpose construction. The building components will be reclassified into the appropriate depreciation schedule as prescribed by IRS guidelines and direct and indirect costs will be allocated to each component to establish the correct basis.<\/p>\n

5. The final engineering and accounting report will detail the tax depreciation schedules as well as the forms required to refile tax returns according to the Cost Segregation study.<\/p>\n

\u00a0<\/p>\n

Is Cost Segregation Right for You?<\/strong><\/h4>\n

Although the Cost Segregation study could be done for technically any building, the cost of engineering review, site visits, and accounting tend to not be cost effective for lower cost buildings or simplified property types like self-storage buildings. If you own a profit company that has an income tax liability for a building that is new construction, new purchase or a major renovation costing $500,000 or more, you are a good candidate for a study.<\/p>\n

To learn more about how your business can take advantage of cost segregation, schedule a free consultation call.<\/u><\/a><\/span><\/strong><\/p>\n

\u00a0<\/p>\n

About Onsite Utility Services Capital<\/strong>
Since 1993, OUS Capital has been dedicated to unlocking the power of energy efficiency for hospitality businesses nationwide through innovative solutions that lower energy consumption, reduce energy spend, and increase profits. The company\u2019s exceptional staff of energy experts look forward to helping hospitality properties accomplish their energy efficiency objectives through their Energy Savings as a Service<\/strong> program and can be reached at info@ouscapital.com.<\/u><\/strong><\/a><\/span><\/p>\n

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Commercial and multifamily residential buildings represent the largest consumers of electricity in the United States, using nearly two-thirds of all electricity produced. Effective building management control systems can dramatically reduce energy consumption – and create lasting savings.<\/p>\n","protected":false},"author":1,"featured_media":226625,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"

You know your lighting retrofit or energy efficiency project is saving you money, but did you know it can also generate a new revenue stream?\u00a0Imagine additional income without any additional risk or investment that could continue for up to four years. Within the PJM Interconnection, energy efficiency (EE) projects, originally done to reduce energy usage and maintenance costs, provide a payback and increase the profitability of the company \u2013 can now also serve as a source of additional revenue for your organization.\u00a0<\/p>

The PJM Capacity Market<\/strong><\/p>

PJM is the Regional Transmission Operator in Delaware, the District of Columbia, Maryland, New Jersey, Ohio, Pennsylvania, Virginia, and West Virginia, as well as parts of Indiana, Illinois, Kentucky, Michigan, North Carolina, and Tennessee. It is their responsibility, throughout those areas, to ensure that the electric grid has enough capacity to meet the demand for electricity. To do this, PJM has developed the PJM Reliability Pricing Model (RPM).<\/p>

The RPM is used to generate long-term pricing signals to capacity resources and Load Serving Entities (LSE) in a manner that is consistent with the PJM Regional Transmission Expansion Planning Process (RTEPP). Or more simply, it helps PJM determine where additional capacity is needed with respect to the electric transmission system, while also providing incentives for those need capacity resources to be developed.<\/p>

Traditionally, electricity generators (nuclear, coal and natural gas fueled power plants) have been the primary participants, committing their electricity output to the grid through an auction process. In return, PJM has compensated these generators financially for their capacity commitments and the lights have stayed on.<\/p>

But with fewer new power plants being constructed, older ones facing retirement, and certain planned transmission projects unable to get off the ground, grid congestion is not only a continuing threat but a growing one that can seriously impede the efficient distribution of electricity that Americans have come to expect.<\/p>

To combat these circumstances that have left PJM with less generation resources to meet electricity demand plus the 15% reserve capacity they need, PJM has begun to reward those that help reduce electricity demand just as they would a generator supplying more electricity.\u00a0\u00a0After all, a penny saved is a penny earned, right?\u00a0\u00a0EE projects and Demand Response (DR) participants, both of which reduce electricity demand (EE does it permanently and DR for up to 10 hours), are now considered capacity resources by PJM and are therefore eligible to participate in the RPM and receive capacity payments.<\/p>

What\u2019s a Capacity Payment Worth?<\/strong><\/p>

That really depends on many factors, such as what region of PJM you\u2019re located in and the availability of capacity resources.<\/p>

EE projects can earn this income for up to 4 years from the time that the project is commissioned.\u00a0Submit your project today for an estimate of additional revenue.<\/u><\/b><\/a><\/p>

How You Can Begin Receiving This Revenue<\/strong><\/p>

The RPM, which has been used since 2007, successfully gains capacity commitments three years in advance. These commitments are received through multiple auctions that occur each year within each of PJMs 26 regions; helping to stabilize pricing signals, yet still allowing pricing to be locational. In order to begin receiving capacity payments for your EE project, you will need to participate through an RPM auction(s).\u00a0\u00a0These auctions include a Base Residual Auction (BRA), which occurs each May and secures each region\u2019s capacity three years in advance,\u00a0while establishing the\u00a0compensation that capacity resources will receive for their commitments.\u00a0\u00a0There can also be up to three incremental auctions per delivery year to account for adjustments in resource commitments. Only those with PJM membership access, though, are able to participate in RPM auctions.\u00a0\u00a0PJM also requires EE projects to take the following steps before they will accept their capacity bids in RPM auctions:<\/p>

1. First you must submit an Initial Measurement and Verification (M&V) Plan to PJM. The Initial M&V plan will identify existing facilities and what they will be replaced with; provide details on the project; describe energy and capacity savings, and develop an on-going monitoring program for the project.<\/li>
2. You need to establish credit with PJM before you will be allowed to participate in the RPM auction.\u00a0<\/li>
3. Then an Energy Efficiency Resource Modification (EE MOD) can be submitted into the eRPM system.\u00a0<\/li>
4. An Initial Post-Installation M&V Report is submitted to PJM. This will include results from audits and monitoring of the project.\u00a0<\/li>
5. You must permit PJM or an independent third party to conduct post-installation M&V audits.\u00a0<\/li><\/ol>

   Once these steps are completed your EE project will be able to bid into the RPM auction and you will be eligible to receive capacity payments. Refer to PJM Manual 18 and 18b for the details of this PJM program.<\/p>

   As you might expect, though, the efforts to get your project qualified for capacity payments is time consuming, has financial costs, comes with some risk, (remember you are participating in a market) and is time sensitive.\u00a0\u00a0You can only receive payments for 4 years from the date of commission, so it becomes very important to be ready to bid your EE project into the capacity market as soon as possible to maximize your benefit.<\/p>

   To eliminate the costs and risks and to ensure access to the PJM RPM, you can partner with a third party, such as Onsite Utility Service Capital, LLS, which would split these proceeds equally with you for handling the complicated and onerous Energy Efficiency Capacity, RPM and monitoring processes as well as taking on the performance and market risks.<\/p>

   Act now to maximize your revenue from this newly found income stream.\u00a0Submit your project today for an estimate of additional revenue.<\/u><\/b><\/a><\/p>

   Onsite Utility Services' (OUS) Team has worked extensively with the PJM Reliability Pricing Model.\u00a0\u00a0Our energy professionals have helped our clients successfully bid developed Energy Efficiency projects into the RPM auction.\u00a0 OUS Team members come from diverse backgrounds in the energy industry, allowing us to provide our clients with a comprehensive view of energy opportunities.<\/p>","_et_gb_content_width":"","footnotes":""},"categories":[14,13],"tags":[],"class_list":["post-226619","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-news","category-ous-capital-news"],"_links":{"self":[{"href":"https:\/\/onsiteutilityservices.com\/wp-json\/wp\/v2\/posts\/226619","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/onsiteutilityservices.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/onsiteutilityservices.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/onsiteutilityservices.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/onsiteutilityservices.com\/wp-json\/wp\/v2\/comments?post=226619"}],"version-history":[{"count":0,"href":"https:\/\/onsiteutilityservices.com\/wp-json\/wp\/v2\/posts\/226619\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/onsiteutilityservices.com\/wp-json\/wp\/v2\/media\/226625"}],"wp:attachment":[{"href":"https:\/\/onsiteutilityservices.com\/wp-json\/wp\/v2\/media?parent=226619"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/onsiteutilityservices.com\/wp-json\/wp\/v2\/categories?post=226619"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/onsiteutilityservices.com\/wp-json\/wp\/v2\/tags?post=226619"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}