![4[1]_edited.png](https://static.wixstatic.com/media/7eb697_f39f5ca5b43642d3b40c7d10c203f357~mv2.png/v1/crop/x_1,y_238,w_1201,h_642/fill/w_180,h_96,al_c,q_85,usm_0.66_1.00_0.01,enc_avif,quality_auto/4%5B1%5D_edited.png)
NO
MAGIC
JUST
MONEY
BETTER
THAN VEGAS
Don’t Gamble on Energy Costs
Hedging and Power Purchase Agreements (PPA) both lock in energy cost savings with no upfront investment. While they share the advantage of protecting against market volatility, they differ in structure, commitment, and applicability. The table below highlights these key differences.
Criteria | Hedging | PPA |
|---|---|---|
Onsite Infrastructure | No | Yes |
Activation Timing | Immediate | After Equipment Install |
Availability | Select Markets | Nationwide |
Savings Potential | 10-20% | >20% |
Contract Duration | 1-4 Years | 15-25 Years |
Natural Gas Minimum* | 200k Therms | |
Electricity Minimum* | 80Kw | 200Kw |
* Can be for a single hotel or spread throughout a portfilio
MONEY FOR NOTHING
CASHFLOWS FOR FREE
Win Big with Hedging and PPAs
Ideally suited for hotels or portfolios that consume a minimum amount of electricity and/or natural gas, Power Purchase Agreements and hedging can significantly improve cash flow and the bottom line.
By lowering energy bills, hotels can boost Net Operating Income (NOI), directly enhancing property profitability. This can translate into higher dividends for shareholders and stronger overall financial performance for the REIT.
The capitalization (CAP) rate is a key metric for evaluating profitability. By cutting operating costs through energy-efficiency solutions, REITs can improve their CAP rate, making properties more attractive to investors.
How Hedging and PPAs Create $16.5 Million in Value:
A hotel portfolio with $5M in energy costs that saves 15% gains $750K annually—$7.5M over ten years—plus a $9M boost in value at an 8.3% cap rate.
SUCCESS
FROM
SOUTH BEACH TO
Prime Markets for Hedging and PPAs
Power Purchase Agreements (PPAs) and hedging are a smart strategy for hotels in regions with high energy costs and intensive usage. By locking in competitive rates without upfront capital, they reduce operating costs and protect against market volatility—especially valuable in deregulated energy markets.
Key opportunities include:
-
High-cost electricity markets – Maximize savings where commercial rates are highest. (California, Hawaii, Northeast U.S., Alberta)
-
Demand-intensive climate zones – Offset heavy heating or cooling loads in extreme climates. (Florida, Texas, Arizona, New England)
-
Deregulated energy markets – More supplier choice and leverage for better terms for hedging. (Much of the Northeast and Midwest)
-
Urban and industrial corridors – Consistent, year-round energy demand supports stable, long-term pricing.
POWER
PAY FOR
NOT EQUIPMENT
PPAs Deliver Savings Without the Capital
Power Purchase Agreements (PPAs) allow hotels to benefit from on-site clean energy—like solar or Combined Heat and Power (CHP)—without the upfront capital investment or ongoing maintenance responsibilities. Instead of purchasing the system, the hotel buys energy produced at a fixed, often discounted rate over a set term, while the equipment is owned, operated, and maintained by a third-party investor. This structure provides cost savings and price stability without impacting your balance sheet.
To qualify for a PPA, the property or portfolio must meet specific criteria, including having a minimum electric load of 1.75 million kilowatt-hours (kWh) per year. The economics must be strong enough to justify the investment—as if the hotel were installing the system themselves. That means a PPA only moves forward when the energy savings are significant, the site conditions are favorable, and the usage profile supports long-term performance.
RELIABLE
AS YOUR DOG
(ALMOST) AS
SAVINGS
Hedge Today, Save Tomorrow
For hotels where CHP or solar carports may not deliver a strong return on investment, hedging offers another proven, capital-free way to reduce energy costs. It’s an essential strategy for properties looking to manage expenses and avoid price volatility without major infrastructure changes.
We support hotels in deregulated markets by securing electricity and natural gas contracts with North America’s largest utilities, ensuring highly competitive rates and terms tailored to their operational needs.
To qualify for energy hedging, a hotel or portfolio should use at least 700,000 kWh or 200,000 therms of natural gas annually. Meeting these minimums allows us to negotiate better rates and terms with major suppliers, helping reduce volatility and improve savings.
EXTRA ICING
SAVINGS
EXTRA
Have Your Cake and Eat it Too
Combined Heat and Power (CHP) is the solid cake at the center of a hotel’s energy plan—powering a 250,000 sq. ft. hotel in Massachusetts with natural gas can save about $1.6 million annually by generating 100% of its electricity onsite. This cuts energy costs significantly and boosts the bottom line.
Now, add the icing—hedging can slashes natural gas costs by 15%, saving the hotel an extra $200,000 annually at no upfront cost. This “icing” enhances the CHP savings, making the overall energy strategy even more profitable. Together, CHP and a hedging deliver stronger cash flow and greater value, maximizing returns for hotel owners and investors.
GOALS
YOUR
OUR
GUIDANCE
Expert Advice for Every Dollar
Our energy service providers support a broad spectrum of industries, serving over 100 clients with stable, cost-effective electricity solutions. With specialization in gensets, fuel cells, and structured financing, they have successfully executed projects totaling more than $250 million.
Complementing this, our commodity management partners focus on natural gas hedging for large-scale real estate—especially hospitality—with a proven track record spanning over 100 U.S. projects. This team, which includes a former senior energy executive, offers advanced expertise in renewable natural gas and operates flexibly across both the U.S. and Canada.
Together, these integrated teams deliver comprehensive energy solutions, blending technical execution with financial strategy to optimize performance and cost savings.