Week of February 5, 2001
  Snapshot from the Field

Will Federal Plan Help?
BOMA Conference's No. 1 Priority: Federal Policy 'Guaranteeing Adequate Energy Access'
By JACK LYNESite Selection Executive Editor of Interactive Publishing

WASHINGTON, D.C. -- A federal plan guaranteeing access to adequate energy supplies: That was the No. 1 priority emerging from the recent National Issues Conference of the Building Owners and Managers Association International (BOMA at www.boma.org), composed of 18,000 building owners and managers. Meeting in Washington, D.C., BOMA's Government Affairs Committee named energy as the association's top "area of concern." But mandated telecomm access and leaseholder tax relief "followed closely" as organizational concerns, the committee added.

BOMA President: Energy Policy 'Imperative'

Energy, however, got the highest-profile play. BOMA's Board of Governors unanimously adopted a new energy policy.
      Government Affairs Director Jerry Lederer said BOMA is urging the federal government to "enact a national energy policy which ensures [that] all consumers have access to adequate supplies of reasonably priced energy by addressing the energy challenge from both the demand and supply perspective."
      BOMA President Richard BaierBOMA's new energy policy call on the federal government to:
  • "Identify reliable sources of domestic and renewable energy;"
  • "Eliminate unreasonable regulatory burdens and restrictions that inhibit the development of these energy sources;"
  • "Identify and eliminate regulatory structures that impose artificial pricing schemes;"
  • "Ensure an uninterrupted transmission and distribution energy network;" and
  • "Protect consumers in the absence of competitive market forces."
Said BOMA President Richard Baier, managing director for CB Richard Ellis (www.cbrichardellis.com) in Kansas City, "While BOMA members will do their part to conserve energy and reduce demand, this alone will not solve our present and future energy shortages. It's imperative that the federal government put in place a national energy policy that addresses the supply side of the energy equation as well."

ABOVE: Said BOMA President Richard Baier, "It's imperative that the federal government put in place a national energy policy that addresses the supply side of the energy equation."

'Stay Out' of Telecom,
Accelerate Leaseholder Depreciation

In contrast, BOMA advocated a hands-off governmental approach to telecom access mandates. BOMA, said Lederer, views the telecom industry "as partners in the office market. The marketplace is working. We're going to have door hangers made. One side will say, 'partners are welcome,' and the other will say, 'government stay out.' "
      BOMA's leaseholder tax relief plan calls for reducing leasehold depreciation to 10 years from the current 39 years. "Seven years would be even more realistic, but 10 is an acceptable compromise [that] would provide leaseholders a much more realistic depreciation schedule for tax reporting," Lederer said.
      Federal legislation accelerating leasehold depreciation to 10 years was introduced last year, but never reached a vote. The issue is again on the current legislative agenda.

New Federal Energy
Proposals: Will They Help?

U.S. President George W. BushCoincidentally, part the Bush administration's energy policy emerged on the same day of BOMA's recommendations. A former oilman, Bush campaigned on an energy agenda that advocated more federal land exploration, more oil and gas pipelines, and greater assistance to Mexico in developing its energy reserves.
      Bush on Jan. 30 announced the formation of a task force, headed by Vice President Dick Cheney, to reduce U.S. "reliance upon foreign oil" and "to encourage the development of pipelines and power-generating capacity in the country."
      In addition, Bush said he would move "boldly and swiftly" to enact an energy plan including legislation to allow "environmentally sensitive exploration" in currently protected areas of the Arctic National Wildlife Refuge.
      Bush added that he would seek legislation to grant state waivers to run older plants at full capacity, even if that meant exceeding existing clean-air standards. Some Democrats are sure to oppose the proposals, as are virtually all environmental activists.

Bush's proposals came out on the same day that BOMA made its recommendations. Some critics, however, charged that the president is attempting to capitalize on the energy pinch to sell his own long-term energy plan.

Top Advisor Backs New Power Lines

Larry Lindsey, Bush's top economic adviser, broached an idea that many observers considered more directly related to California's energy crisis: building new, higher-capacity transmission lines.
      "The governors in Utah and Wyoming tell me that they have excess power now, but they can't get the electricity to California," Lindsey said.
      Gas turbine power could also be increased in California, Lindsey added. But that, too, would require constructing new pipelines, he added.
      Meanwhile, as politicians crossed policymaking swords, neighboring states were more sharply feeling the Golden State's broadening power pinch:
  • Bonneville Power Authority (www.bpa.gov), an Energy Dept. agency that wholesales electric power in the Northwest, said it's facing a 60 percent rate increase over the next five years because of the California power-grid spillover.
  • Several Northwest governors have protested that federal orders to sell surplus energy to California are requiring water-table drainage for hydroelectric power, reducing in-state energy supplies and endangering the environment.
  • Phoenix-based Phelps Dodge Corp. (www.phelpsdodge.com) said higher power costs may force a cutback in operations at its three copper sites that employ 2,360 workers in Chino and Tyrone, N.M., and Sierrita, Ariz.


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