Rockville Developer Puts Energy Into Green Concept

By SEAN MADIGAN

Sometimes developer Jeffery Abramson lets his ideals get the best of his bank book.

Abramson touts his Rockville-based, family-owned commercial real estate firm as a company "working to create environmentally sensible developments, preserve wilderness and arable land, promote pollution-free travel and control urban sprawl."

And his latest decision fits into that description.

Tower Cos. recently entered into an agreement with Pepco Energy Services (PES) to buy $1.7 million worth of renewable, or "green," energy to power all the buildings in the company's Washington-area real estate portfolio.

Under the 18-month contract, the Pepco Holdings subsidiary (www.pepcoenergy.com) will provide Tower with 25 million kilowatt hours of power -- enough to supply 25 to 50 percent of the energy needs for the company's 2.5 million square feet of commercial space.

Tower (www.towercompanies.com) is the first commercial developer to buy this type of energy from Pepco, although the World Bank and U.S. General Services Administration also have agreed to buy renewable energy from the power company.

PES is supplying the green energy to Tower through Sterling Planet, an Alpharetta, Ga.-based company (www.sterlingplanet.com) that uses the wind, sun, water, animal matter and other renewable resources to generate power.

After signing the agreement with Tower, PES President and CEO Ed Mayberry said in a prepared statement the agreement "demonstrates clean, green power can also be affordable power." While government organizations such as GSA have been actively adopting green design and construction, the private sector in general has lagged.

Traditional fuel sources -- coal, oil and natural gas -- are used to generate about 70 percent of the country's electricity, and nuclear power accounts for about 20 percent.

The main reason that green energy is moving slowly into the country's power systems is cost. Abramson says he estimates the 18-month energy contract will cost an additional $70,000 a year, or about 5 to 7 percent.

In some green-energy agreements, the price might be 25 to 30 percent higher than traditional energy costs, he notes.

Even though Abramson is paying more upfront, surely he expects the initial investment will pay off in the long run, right? Actually, no, he says.

"I get no benefit," he says. "What I've done is set an example."

Abramson argues that the true cost of using a traditional energy source needs to be considered in a broader terms than measurements such a price per gallon.

When people pay $2 a gallon to fill up their gas tanks, he says, they think they're paying just that -- $2. But, Abramson reasons, that $2 is just a fraction of the actual cost for using an oil fuel when you factor in federal subsidies on gasoline prices, acid rain created by vehicle emissions and Defense of Department budgets to protect U.S. interests. The same goes for the cost of providing electricity to an office building.

"What we need to do is create an environmentally based economy," Abramson says.

He not only wants other developers to join his company in green projects but also would like to see the federal government offer generous tax incentives to renovate old, less energy-efficient buildings.

Abramson says that when Tower's current contract with PES is up in 18 months, he'll look at where renewable energy prices are then and may even try to buy more green power.

E-mail: smadigan@bizjournals.com Phone: 703/816-0335