Real Estate Tip – On-Site Power Generation Part 2: Who Pays Fuel Tax on Your Natural Gas Honda Civic?

Today’s tip expands the topic of on-site power generation. Instead of “going green” with renewable power, consider installing battery-buffered petroleum generators, natural gas generators or fuel cells to:

• Provide ultra-reliable power to combat power dips or spikes
• Capture heat for hot water
• Dispense fuel or power to vehicles on site

In focusing on reliable power, lease clauses addressing build-out, operating and capital expense sharing, code compliance, access to generating equipment spaces and insurance obligations now include some new language. The terms “7-nines” (99.99999% reliability), “redundancy,” “uptime” and “high availability,” are becoming more common.

New lease language regarding vehicle fueling is surfacing to address fuel-tax collection and safety protocol issues. When a tenant charges her Nissan Leaf or re-fuels his natural-gas Honda Civic or hydrogen fork lift fleet, the usual building lease must now address combined heat, fuel and power (not just combined heat and power).

For the best result, add a combined heat and power and fuel-savvy engineering professional to your legal, insurance and accounting team before you sign or amend a lease offering on-site power generation.

Today’s real estate tip is brought to you by Rick Smith, a LEED Accredited Professional and member of Bernstein Shur’s Real Estate Practice Group and Green Building Team. Stay tuned for more useful tips for real estate professionals.

For more information on on-site power generation, contact Rick at rsmith@bernsteinshur.com or 603 623-8700 ext. 8829 or 207 774-1200.