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WOODLAND HILLS-Two major Southern California shopping malls will be among the first in the nation to develop on-site power plants under an agreement between Westfield America, Inc., the owner of 65 shopping centers, and RealEnergy, a power plant developer.

Westfield America, the US subsidiary of Westfield America Trust, will begin installing systems at the 1.1 million-sf Westfield Shoppingtown Santa Anita, in Arcadia, and the 1.178 million sf Westfield Shoppingtown West Covina, in West Covina, within the next few months. On-site power stations are also slated for development at an additional 12 Westfield America properties.

John Paul, CEO of RealEnergy, tells GlobeSt.com that the self-contained power units, which his firm has already installed in several hospitals and office buildings on both the east and west coasts, will be capable of generating about 60 percent of the electricity for the malls at a construction cost of between $1.5 and $2 million.

“When you think of a power plant, you think of this big ugly thing belching smoke,” says Paul. “These are small engines about six-ft high and 10-ft long that are enclosed in sheet metal with emissions that are basically invisible.”

Paul says the mini-power plants, which will be tied into the national energy grid but will make most of their own power using low-emission gas-fired engines, are small enough to locate on a roof or parking structure and virtually unnoticeable. Mall tenants won’t see any reduction in their electric bills thanks to the on-site energy generators, however.

Under a pact between Westfield America and RealEnergy, tenants will pay the same rate for electricity as they do now but Westfield America will reap some rewards in the form of rental income from RealEnergy along with a portion of revenue generated by electricity use.

“From a commercial standpoint, the building owner makes money off our rent and off the revenue sharing we give to the owner. They have no capital expenditure so there’s no investment required,” says Paul, noting that the initial $1.5 to $2 million outlay to build the power stations is borne by his company.

John Schroder, joint COO with Westfield America, says the project will enhance conditions and services at the malls without any capital outlay while reducing the impact the facilities have on the environment.

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