Preparing Commercial Occupiers for Energy Changes this Winter

Posted by Strettons on 16th September 2022 -

Reduce the impact of utility restrictions on occupiers of your properties

As the winter months draw close, so does the threat of significant price hikes for tenants and landlords alike, especially when it comes to important utilities such as gas and electricity. 

At Strettons, we are responsible for – and have financial custody of a number of service charge buildings, all of which are facing a significant rise in consumption. Budget reviews have never been more critical, and difficult cost of living conversations with both commercial and residential tenants are just around the corner. 

And we are not alone – this will be the case for all managing agents across the country as they prepare to communicate the inevitable increase in service charge budgets. Some agents, like ourselves, have access to online portals that allow a more accurate assessment of ongoing usage and how this translates into informed cost estimates going forward. But the rise in costs is troubling in itself, and there are other potential problems ahead. 

With the ongoing war in Ukraine, it is now within the realm of serious possibility that utility consumption will be rationed. If this is the case, with people unable to heat their own homes and businesses under pressure to reduce daily usage, there may be no other option but to ration or cap commercial usage.

 

An inside perspective

At Strettons, we manage a number of buildings that rely on gas for heating. And with gas firmly in pole position for any initial caps, it will be crucial for the vast majority of managing agents to source alternative heating methods. But with this comes new problems.  

We have experience with buildings without gas supplies and quickly learnt that a tenant’s first port of call is usually the electric heater. Quick to acquire and easy to use, electric heaters seem like an obvious choice, but they use a significant amount of energy and can just as easily short out the main fuse board, resulting in not only no heating but no power to other parts of the building, too.

Instead, a well-advised managing agent should make arrangements to establish what capacity their building has to support alternative methods of heating and start a dialogue with its occupiers. Strettons has worked closely with Clark Electrical Industries for over 30 years. Its Managing Director, Dave Burns, shared the following advice: “The first port of call is to carry out a clamp test which will ascertain how much power the building can draw from the grid, and how much power each floor can draw from the supply. Once we know what power is available per building and per floor, we can draw up a contingency plan.”

Such a plan might be to turn off other services such as lifts or hire emergency generators if you have enough outdoor space and available funds. A contingency plan will also enable managing agents to talk to their tenants to advise how many heaters they can use safely per floor while running other services to the same location without blowing the supply. 

If electric heaters are being used, care should be taken. Safety processes and procedures should be communicated to insurers to ensure fire safety protocol is adequately planned for and followed. 

As with many property management issues, communication and planning are essential. We advise having these conversations and developing plans now to help reduce the potential impact on your tenants this winter.