Empire State Realty Trust Inc. (NYSE:ESRT) has signed a three-year contract with NRG Energy (NYSE:NRG) subsidiary Green Mountain Energy that will expand the power sourcing for Empire State's portfolio into 100% renewable wind energy.
What Happened: The contract will enable Empire State to purchase more than 300 million kilowatt-hours of renewable energy to power its office property portfolio, which covers more than 10.1 million square feet in Manhattan and the suburban Westchester and Connecticut markets.
According to the companies, Green Mountain Energy won the contract through competitive bidding and created a custom rate structure for Empire State's New York properties based on market conditions for both energy and capacity.
Yet tthe properties will not be directly powered from wind farms — instead, Green Mountain Energy and another NRG company, Direct Energy, will ensure the equivalent quantity of electrical power used by the Empire State properties will be produced from wind turbines elsewhere in the country, thus reducing the national carbon footprint.
Empire State and Green Mountain Energy first made cleantech headlines together in 2011 when the REIT's most famous property, the Empire State Building, began to be supplied through renewable energy sources after a $550-million retrofit that resulted in a 40% reduction in energy use and emissions.
Why It's Important: In the first year of the contract, Empire State said expects to see more than $800,000 in energy savings during the first year of the contract, while the full three-year span will result in 450 million fewer pounds of carbon dioxide being produced.
With this contract, Empire State is promoting itself as the country's largest 100% user of green power in real estate.
"We continue to advance our commitment to solutions that reduce our environmental impact," Dana Robbins Schneider, senior vice president and director of energy, sustainability and ESG at Empire State Realty Trust, said in a statement.
"Our tenants now work in carbon neutral offices and the investment community can recognize our leadership."