One sentence in a 2005 office lease guarantees the landlord a profit on electricity it does not generate.
The lease was made on 1 July 2005 between SLG Graybar Sublease LLC, care of SL Green Realty Corp. at 420 Lexington Avenue, and FermaVir Research, Inc. The premises are small: Article 41 says “the rentable square foot area of the Premises shall be deemed to be 2,141 square feet.” Eight subsections of that article set up an elaborate machine for measuring the tenant’s electrical consumption, surveying it, disputing the survey, and converting between billing methods. Then, near the end, after a paragraph about risers:
Anything hereinabove to the contrary notwithstanding, in no event is the submetering Additional Rent or ERIF, or any “alternative charge”, to be less than an amount equal to the total of Landlord’s payments to public utilities and/or other providers for the electricity consumed by Tenant (and any taxes thereon or on redistribution of same) plus 5% thereof for transmission line loss, plus 15% thereof for other redistribution costs.[1]
Not more than. Less than. It is a floor, not a cap. Whatever the surveys say and whatever Con Edison charges, the tenant pays at least 120% of the landlord’s cost.
I went looking for how differently that number gets negotiated, and pulled four New York leases and amendments filed as exhibits with the SEC. The floor in the Graybar lease is 20% over cost. Two miles southwest at One Penn Plaza, Vornado agreed to a ceiling of 104% of cost. Those are the same clause doing opposite work, and on an identical utility bill the first landlord’s minimum is 15.4% above the second landlord’s maximum.
The 1970 tariff that does not protect anyone#
Before the floor, the Graybar lease looks like it is being generous. Section 41.07 governs what happens if the landlord switches the tenant to submetering, and it caps the rate:
Tenant covenants and agrees to purchase the same from Landlord or Landlord’s designated agent at charges, terms and rates set, from time to time, during the term of this Lease by Landlord but not more than those specified in the service classification in effect on January 1, 1970 pursuant to which Landlord then purchased electric current from the public utility corporation serving the part of the city where the Building is located; provided however, said charges shall be increased in the same percentage as any percentage increase in the billing to Landlord for electricity for the entire Building, by reason of increase in Landlord’s electric rates or service classifications, subsequent to January 1, 1970…[2]
A lease signed in 2005 prices electricity off a Con Edison service classification from 1 January 1970, then escalates it by every percentage increase in the building’s bill over the following thirty five years. It is standard New York boilerplate that has survived in forms for decades, which is the only reason a 1970 date appears in a 2005 document. Whether the compounding produces a number above or below current tariff rates depends on a chain of percentage changes nobody in the room could reconstruct.
It does not matter. The floor in 41.09 opens with “Anything hereinabove to the contrary notwithstanding,” and the 1970 cap is one of the things hereinabove. If the 1970 arithmetic lands below cost plus 20%, the tenant pays cost plus 20%. The protection is drafted to lose. So the tenant’s counsel could negotiate the rate cap all afternoon and move nothing, because the sentence that decides the price is four subsections later and does not mention rates.
A ceiling of 104%#
One Penn Plaza LLC, a Vornado entity, leased Suite 3508 on the thirty fifth floor to Ophthotech Corporation under a lease dated as of 30 September 2007, for a term of five years.[3] Article 5 covers electricity across five sections and runs to about six pages. Section 5.4(B) handles the same question the Graybar floor handles:
If Landlord exercises the Submeter Conversion Right, then Tenant shall pay to Landlord, as additional rent, an amount (the “Electricity Additional Rent”) equal to one hundred four percent (104%) of the sum of: (1) the product obtained by multiplying (x) the Average Cost per Peak Demand Kilowatt, by (y) the number of kilowatts that constituted the peak demand for electricity in the Premises for the applicable billing period, as registered on the submeter or submeters for the Premises, and (2) the product obtained by multiplying (x) the Average Cost per Kilowatt Hour, by (y) the number of kilowatt hours of electricity used in the Premises for the applicable billing period, as registered on the submeter or submeters for the Premises.[4]
Four percent, and the four percent sits on top of two quotients the lease defines by reference to the landlord’s own invoices. Average Cost per Kilowatt Hour is the utility’s aggregate charge for the building divided by the kilowatt hours the building used, “as reflected on the electric meter or meters for the Building.” Average Cost per Peak Demand Kilowatt does the same for the demand charge. Both numbers come off a bill the landlord receives and the tenant can ask to see.
Apart from the number, this is a different kind of clause. The Graybar floor is a minimum, so the landlord’s downside is protected and its upside is open. The Ophthotech formula is the whole charge, so it is floor and ceiling at once: 104%, not at least 104%, not up to 104%.
Vornado also agreed to buy the meters. Section 5.4(A) says “Landlord shall pay the cost of installing such submeter or submeters,” with the tenant picking up only modifications its own alterations require. The Graybar lease puts that cost the other way: “Any meters, risers, or other equipment or connections necessary to furnish electricity on a submetering basis or to enable Tenant to obtain electric current directly from such utility and/or other providers shall be installed at Tenant’s sole cost and expense."[5] Same hardware, same purpose, opposite payer.
The factor that climbs without a survey#
Both leases start the tenant on rent inclusion, meaning electricity is bundled into fixed rent rather than billed separately. The Graybar lease sets that bundled amount at “an ERIF of $3.00 per rentable square foot,” which on 2,141 deemed square feet is $6,423 a year. The Ophthotech lease states it as a dollar figure: an Initial Electricity Inclusion Factor of $13,087.80 a year, inside a first year Fixed Rent of $274,842.84, so electricity is 4.76% of the rent.
What happens to that figure when power gets more expensive? The Graybar lease answers with surveys, below. The Ophthotech lease has a quieter provision that needs no survey at all, Section 5.3(I):
The parties shall increase the Electricity Inclusion Factor from time to time during the Term to reflect the percentage increase in the Average Cost per Kilowatt Hour from the Average Cost per Kilowatt Hour that is in effect as of the date hereof, or as of the date of the most recent adjustment in the Electricity Inclusion Factor pursuant to Section 5.3(H) hereof, as the case may be. If the Electricity Inclusion Factor increases pursuant to this Section 5.3(I), then the Fixed Rent shall also be increased correspondingly.[6]
“The parties shall increase.” No notice requirement, no engineer, no trigger beyond the utility raising its price. The tenant’s consumption is irrelevant to this clause; only Con Edison’s average cost per kilowatt hour matters. Use exactly the same electricity as last year and the fixed rent goes up anyway.
Run 2026 numbers through it. New York commercial electricity averaged 22.91 cents per kilowatt hour over January to July 2026, against 20.87 cents in the same months of 2025, a rise of 9.8%.[7] Apply 9.8% to a $13,087.80 factor and it becomes $14,367, an increase of $1,279 a year, and fixed rent rises by the same $1,279 because 5.3(I) says it shall. Nobody has to do anything. The clause is self executing on a number published by a utility.
That arithmetic is mine and it is illustrative. The Ophthotech lease ran five years from a 2007 commencement and expired long before 2026, and Average Cost per Kilowatt Hour is defined off this building’s meters, not a statewide average. I use the state figure because it is the published one; a building’s blended rate will differ.
What transfers is the structure, and the structure is a rent escalator keyed to a commodity price. We have written about the sibling problem in rent escalation from a CPI month that was never published, where an index based escalator pointed at a series that stopped existing. An electricity based escalator has the opposite failure mode: the input is always available and always moving.
Who pays while you argue#
Both leases let the landlord’s engineer survey the premises and raise the charge. The difference is what the tenant can do about it. The Graybar version gives the landlord’s consultant a presumption, in Section 41.06:
The determinations by Landlord’s Electrical Consultant shall be binding. and conclusive on Landlord and Tenant from and after the delivery of copies of such determinations to Landlord and Tenant, unless, within fifteen (15) days after delivery thereof, Tenant disputes such determination. If Tenant so disputes the determination, it shall, at its own expense, obtain from a reputable, independent electrical consultant its own determinations in accordance with the provisions of this Article. Tenant’s consultant and Landlord’s consultant then shall seek to agree. If they cannot agree within thirty (30) days they shall choose a third reputable electrical consultant, whose cost shall be shared equally by the parties, to make similar determinations which shall be controlling. … However, pending such controlling determinations Tenant shall pay to Landlord the amount of Additional Rent or ERIF in accordance with the determinations of Landlord’s Electrical Consultant.[8]
Fifteen days, and the clock runs from delivery of a technical report the tenant must hire an engineer to read. Miss it and the number is conclusive. Hit it and you pay the landlord’s number anyway until three consultants resolve it, the third one’s fee split. The misplaced period in “binding. and conclusive” is in the filed document, as is the spelling of ERIF as “ERIE” in three places.
The Ophthotech version starts from the same idea and lands somewhere else. The landlord’s engineer must be one the landlord “selects reasonably,” and the landlord “shall give to Tenant a copy of the report prepared by Landlord’s Engineer.” The tenant gets thirty days to object and sixty to produce its own engineer’s report. If the two engineers cannot agree within thirty days after that, “either party shall have the right to submit the determination of such Usage Estimate and such Peak Demand Estimate to an Expedited Arbitration Proceeding."[9]
Expedited means something specific, and the lease spells it out: AAA Commercial Arbitration Rules under the Expedited Procedures, arbitrator list returned within five business days, objections by telephone within four, four business days’ notice of the hearing, hearing within seven business days of appointment. Plus a limit that cuts both ways: “the arbitrator shall have no right to award damages or vary, modify or waive any provision of this Lease."[10]
The increase is retroactive to the date the landlord handed over its report, so winning the schedule argument does not win the money. But the tenant with the 104% lease gets a neutral in under a month without fronting the disputed amount, and the tenant with the 20% floor pays first and argues second. Graybar also drops the shoe harder on late payment: bills unpaid “within five (5) days after the same are rendered” let the landlord “without further notice, discontinue the service of electric current to the Premises.”
The pattern is the one from CAM audit rights with a clock that expires first and from your base year is grossed up to 95% and then carved back down: the audit or dispute right exists, and the deadline and the pay-first condition are what decide whether it is worth anything.
Five percent, named in one sentence#
The most readable of the four documents is a first amendment made as of 1 July 2000 between 500-512 Seventh Avenue Limited Partnership, care of Newmark & Company Real Estate, and G-III Leather Fashions, Inc., covering the entire thirty fourth and thirty fifth floors at 512 Seventh Avenue. It deletes the lease’s Twenty-Second Article and substitutes a new one. Clause (ii):
Tenant covenants and agrees to purchase electricity from Landlord or Landlord’s designated agent at charges, terms and rates, including, without limitation, fuel adjustments and taxes, equal to those specified in the Con Edison SC#4-I rate schedule effective on the date Landlord first provides electricity to the demised premises on a submetering basis (the “effective” date), or any successor rate schedule or service classification, plus five percent (5%) for transmission line loss and other redistribution costs.[11]
One sentence, one named tariff, one number. No deemed watts per square foot, no deemed hours per week, no consultant. The rate is a published Con Edison schedule a tenant can look up; the markup is 5%.
Then the amendment carries the floor sentence anyway, at 5% rather than 20%: “in no event is the submetering additional rent or any ‘alternative charge’, to be less than an amount equal to the total of Landlord’s payment to public utilities and/or other providers for the electricity consumed by Tenant … plus five percent (5%) for transmission line loss and other redistribution costs.” Floor and rate agree, so the floor is harmless. That is what the Graybar clause would look like if its two numbers had been reconciled.
G-III also got a condition on service termination that the Graybar tenant did not. The Graybar landlord may stop furnishing electricity “at any time, upon thirty (30) days’ written notice,” full stop. The G-III landlord needs sixty days’ notice and must terminate “to at least fifty percent (50%) of the tenants of the Building (not including those retail tenants on the ground floor of the Building)."[12] A single tenant cannot be cut over alone. That is a real protection costing the landlord nothing it was likely to want.
Paying for capacity you do not use#
The fourth document turns the apparatus around. Empire State Building Company L.L.C., through Newmark as agent, signed a lease modification with Omagine, Inc. Exhibit A, paragraph D lets the landlord’s consultant determine the tenant’s electrical requirements over the preceding twelve months, no more than three times in any ninety day period:
If Landlord’s electrical consultant shall determine that Tenant’s electrical requirements are less than the electrical capacity then available or which Landlord is responsible hereunder to provide to the demised premises, then Landlord may, in its sole discretion, at any time following the fifteenth (15th) day after giving Tenant notice (hereinafter referred to as the “Electric Recapture Notice”) of Landlord’s intent to do so, recapture any excess electrical capacity then so determined to exist, unless Tenant shall have objected to such recapture in the manner hereinafter provided within such fifteen (15) day period, time being of the essence.[13]
Fifteen days, time of the essence, and an objection that must include “calculations of Tenant’s electrical requirements prepared by a licensed electrical engineer.” A tenant away for two weeks loses capacity it may need in year four.
Then:
If Landlord shall determine in the exercise of its reasonable judgment that it is impractical or uneconomic to recapture excess electric capacity, Landlord may from time to time impose a fee for having or making available such excess capacity to Tenant. Such fee shall be in an amount equal to the amount that Landlord estimates that Tenant would have paid … for the use of such excess capacity if Tenant were utilizing all such excess capacity. Such fee shall he payable within thirty (30) days after notice thereof is given to Tenant and shall be binding upon Tenant unless manifestly in error.
If taking the capacity back is inconvenient, the landlord charges for it as though the tenant had used every kilowatt hour. The tenant pays full consumption rates for electricity it did not consume, on the landlord’s estimate, binding “unless manifestly in error.” Manifest error is a harder standard than Ophthotech’s plain right to arbitrate and harder than Graybar’s fifteen day dispute right: the tenant must show the number is obviously wrong, not merely that its own engineer got a different one. And the fee is payable pending any dispute, which the paragraph makes “a condition to Tenant’s right to dispute any such fee.”
Hold this next to the data center problem in no rent until 25 megawatts are energized at the demarcation point. There, contracted capacity is what the tenant is paying for and the fight is about when it arrives. Here, unused capacity is a liability: the landlord would rather have it back, and if it cannot, it charges rent on it. Both leases treat electrical capacity as a commodity leasable separately from the space. Omagine’s is the version where the tenant holds too much.
Why the number matters more in 2026 than in 2005#
None of these four documents is new. The oldest is a 2000 amendment, the newest a 2013 filing of a 2007 lease. The language is form language and has barely moved in twenty five years, which is why a 1970 tariff is still cited in leases signed this decade.
What has moved is the input. Commercial electricity prices, January to July 2026 against the same months of 2025:[14]
- Ohio: 13.83 cents per kilowatt hour, up from 11.15, a rise of 24.0%
- Virginia: 11.21, up from 9.23, a rise of 21.5%
- Pennsylvania: 13.97, up from 12.12, a rise of 15.3%
- New York: 22.91, up from 20.87, a rise of 9.8%
- United States: 13.97, up from 13.23, a rise of 5.6%
And over the same period Texas commercial prices went from 8.59 to 8.56 cents, and Georgia from 11.72 to 11.70. Flat to slightly down.
The spread is the story. These are not national inflation numbers; they are the PJM footprint rising three to four times as fast as the national average while ERCOT and the Southeast sit still. EIA attributes commercial and industrial sales growth to data center development and manufacturing, and projects national sales of 4,135 billion kilowatt hours in 2026 and 4,211 in 2027.[15] Twenty three states had approved at least one large load tariff by May 2026, with seven more pending, and Pennsylvania’s PUC adopted its Large Load Tariff Framework on 30 April 2026.[16] That regulatory wave is about who pays for the grid to serve a hyperscaler. These lease clauses are about who pays for the resulting rate inside an existing building, and nobody is legislating that.
I should be straight about the limits of what I found. I went looking for a wave of 2026 disputes over electricity rent inclusion, resurveys and submetering markups, and there is no evidence of one.[17] What surfaces is evergreen broker explainers and clause libraries, plus some 2024 items that search results misdate. The one live 2026 regulatory thread, large load tariffs, sits at the utility level rather than the lease level. What I can show is that the input to these clauses moved 15 to 24% in three large states in one year, and that four leases from one city allocate that movement four different ways.
A 20% markup floor was a modest annoyance while the underlying commodity was stable. On a bill that rose 24%, 20% of the increase is a separate increase the tenant pays for nothing.
Does your portfolio price electricity off your landlord’s bill or off a number in the lease?#
Four leases, four answers, all from forms, none reconciled internally. The Graybar lease contains a rate cap its own floor overrides, which a reader catches only by holding subsection 41.07 against subsection 41.09 and asking which governs. That is not hard. It is four subsections apart and nobody does it under deadline.
Acrebase drafts, redlines and proofreads leases and reads clauses across a whole portfolio, which is the level this question lives at. The useful output is not “your lease has an electricity article.” It is that eleven of your leases price the commodity off your landlord’s actual invoices while six price it off a formula with a floor, that four of those six also carry a rate cap the floor defeats, and that two escalate fixed rent automatically on a published utility average with no notice to you.
The clause library is where it stops recurring. If your house position is that electricity is billed at documented cost plus a stated administrative percentage with no floor, that any rate cap must control over every other provision in the article, that a survey need not be paid before it can be disputed, and that the landlord buys the submeters, then that should read the same in every lease your team signs, with the fallbacks your counsel already approved. Acrebase’s AI reads how your earlier negotiations went, so when a landlord’s form arrives with a floor of cost plus 20% and a 1970 tariff cap, the flag arrives with the concession your team took last time and the language it took it in. Related clauses we have covered: your base year is grossed up to 95% and then carved back down, the one-way ratchet: operating expense clauses when insurance prices fall, and a compliance-with-laws carve-out for future laws misses Local Law 97 by five years.
If you are a landlord, pick one of the two shapes and use only that one. A floor over documented cost and a cap tied to a historical tariff do not belong in the same article, because one of them is doing nothing and your tenant’s counsel will eventually work out which. If you want a guaranteed spread, say so in one sentence with a number, the way the G-III amendment does, and reconcile the rate provision to it. The 104% formula deserves a serious look even from your side: administratively cheap, survives a rate case without renegotiation, defensible to a tenant who asks to see the invoice, and in a year when your own cost rose 24% it collects 24% more without anybody surveying anything. Keep the survey right. Then look hard at what the Omagine clause actually gets you, because a fee on unused capacity, binding unless manifestly in error, is the most aggressive provision in any of these four documents and the one most likely to be read against you if it ever matters.
If you are a tenant, four things. First, read the whole electricity article in one sitting and find the sentence beginning “anything hereinabove to the contrary notwithstanding,” because that is the sentence that wins, and at Graybar it is the one that makes the negotiated rate cap irrelevant. Second, work out whether your charge is a percentage of your landlord’s actual metered cost or a formula running off deemed watts and deemed hours; the first you can audit against an invoice, the second you can only dispute by hiring an engineer. Third, check whether anything raises fixed rent automatically when the utility’s average cost rises, the way Section 5.3(I) does at One Penn Plaza, because that generates no notice and never appears as a disputed charge. It is just in the rent. Fourth, if you are agreeing to a survey right, negotiate two things ahead of the percentage: that you do not pay the landlord’s number while the dispute is pending, and that the objection deadline runs from delivery of the report with more than fifteen days on it. Ophthotech got thirty days to object, sixty to counter, and arbitration. That is the version to ask for.
Footnotes
[1] Lease made as of 1 July 2005 between SLG GRAYBAR SUBLEASE LLC, care of SL Green Realty Corp., 420 Lexington Avenue, New York, New York 10170, as Landlord, and FERMAVIR RESEARCH, INC., as Tenant, covering premises in the Graybar Building. Filed as Exhibit 10.7 to FermaVir Pharmaceuticals, Inc.’s Form SB-2 filed 3 February 2006. The quoted sentence is in Section 41.09, which also carries the landlord’s rights to change billing basis and to terminate service. The 2,141 square feet is from Section 41.03, which states it as a deemed figure “for purposes of this Article.” Reading 5% plus 15% as a guaranteed 20% markup over the landlord’s utility cost is arithmetic on the clause’s own two percentages. A different 20% appears in Section 41.03, where the parties deem “twenty percent (20%) of the Building’s payment to the public utility” to be payment for Building electric current; that one allocates common area electricity, has nothing to do with the markup floor, and the coincidence is not meaningful. https://www.sec.gov/Archives/edgar/data/1283383/000132154306000060/ex10-7.htm
[2] Same lease, Section 41.07, quoted in part; the elision replaces the rest of the proviso, which sets out how the percentage change is computed and provides that where a change makes comparison impossible the percentage runs off the building’s average consumption for the first three months after the change, projected to twelve months. Section 41.07 also carries the five day discontinuance right quoted later. That the 1970 reference is inherited form language is my inference from its presence in a 2005 document. I make no claim about whether the 1970 arithmetic lands above or below current rates; reconstructing it would need Con Edison’s full rate history for the building, which I do not have. https://www.sec.gov/Archives/edgar/data/1283383/000132154306000060/ex10-7.htm
[3] Lease between ONE PENN PLAZA LLC, as Landlord, and OPHTHOTECH CORPORATION, as Tenant, One Penn Plaza, New York, New York 10119, stated on its cover page as made “as of September 30, 2007,” for premises on the thirty fifth floor identified as Suite 3508 and shown on Exhibit A. Filed as Exhibit 10.7 to Ophthotech Corporation’s Form S-1 filed 15 August 2013. The term runs five years from the Commencement Date, which Section 1.2(A) defines as the date the landlord delivers a fully executed counterpart, and the Rent Commencement Date is the sixtieth day after. I identify One Penn Plaza LLC as a Vornado entity from public ownership of the building, not from the lease, which does not say so. The filed exhibit never states the rentable square footage of the Premises, which matters because Section 5.3(A) defines the “Electricity Inclusion Rate” as the Electricity Inclusion Factor divided by that figure. So I give no per square foot electricity number for this lease and did not back-compute one. https://www.sec.gov/Archives/edgar/data/1410939/000119312513336689/d560505dex107.htm
[4] Same lease, Section 5.4(B), quoted in full. Sections 5.3(B) and 5.3(C) define “Average Cost per Peak Demand Kilowatt” and “Average Cost per Kilowatt Hour,” each as a quotient of the utility’s aggregate charge to the landlord over the measured quantity “as reflected on the electric meter or meters for the Building.” Section 5.4(C) requires invoices at least quarterly, payment within thirty days and objection within ninety, after which the tenant may review the landlord’s readings and calculations and either party may go to an Expedited Arbitration Proceeding. Calling 104% both floor and ceiling is my reading of a clause stating one percentage with no minimum or maximum language around it. https://www.sec.gov/Archives/edgar/data/1410939/000119312513336689/d560505dex107.htm
[5] Ophthotech lease Section 5.4(A) for the landlord-pays sentence; Graybar lease Section 41.09 for the tenant-pays sentence. The Graybar subsection also provides that if the landlord discontinues rent inclusion entirely and the tenant takes direct utility service, “the Fixed Annual Rent payable under this Lease shall be reduced by the amount of the ERIF which was payable immediately prior to such discontinuance.” That reduction is available only on full discontinuance and not from any survey, which is how it coexists with Section 41.05’s statement that the ERIF is never to be reduced; reading the two as consistent on that basis is my analysis.
[6] Ophthotech lease Section 5.3(I), quoted in full. Section 5.3(A) sets the Initial Electricity Inclusion Factor at $13,087.80 and Section 1.4(A)(2) sets Fixed Rent at $274,842.84 a year ($22,903.57 a month) for the twelve months from the Rent Commencement Date, rising to $281,386.68 ($23,448.89 a month). The 4.76% share is my arithmetic. One more drafting feature: Section 1.4(A)(1) sets Fixed Rent between the Commencement Date and the Rent Commencement Date as the Electricity Inclusion Rate times the Rentable Area, which is the Electricity Inclusion Factor by definition, halved before the tenant occupies for business. So during the free rent period the only rent is the electricity factor, $6,543.90 annualized before occupancy.
[7] U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.B, average retail price of electricity to ultimate customers by end-use sector and state, year to date January through July 2026 against the same period of 2025, commercial sector column: New York 22.91 cents against 20.87 cents. I read these off the table rather than from a secondary summary. The 2025 and 2026 figures are preliminary. The 9.8% change, the resulting $14,367 factor and the $1,279 increase are my arithmetic. https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_06_b
[8] Graybar lease Section 41.06, quoted in part; the elision replaces the parenthetical providing that if the two consultants cannot agree on a third within ten days, “either party may apply to the Supreme Court in the County of New York for such appointment.” Section 41.04 is the survey power: the landlord picks the consultant, and a survey showing connected load above the deemed 4 1/2 watts per rentable square foot, or usage above the deemed Ordinary Business Hours of 50 hours per week, raises the ERIF by a fraction that same consultant determines. Section 41.05 provides that the originally specified $3.00 per rentable square foot portion is in no event “to be reduced.” The typographical errors noted in the text are as filed and reproduced without correction.
[9] Ophthotech lease Sections 5.3(E), (F) and (G). Section 5.3(E) grants the survey right, defines “Landlord’s Engineer,” the “Usage Estimate,” the “Peak Demand Estimate” and the “Landlord Survey Report,” and makes the landlord hand the report over. Section 5.3(F) provides that the tenant may dispute it “only by” meeting the thirty day notice and sixty day counter-report deadlines. Section 5.3(H) sets the formula and makes the increase retroactive to the date the landlord gave the report.
[10] Same lease, the definition of “Expedited Arbitration Proceeding,” indexed at page 86 of the exhibit, quoted in part. It incorporates the AAA Commercial Arbitration Rules as administered under the Expedited Procedures provisions, then varies six of them: the five deadlines quoted plus the limit on the arbitrator’s authority. The decision is final and binding. I have not checked the current AAA Expedited Procedures against the section numbers the lease cites, which are those in effect when it was drafted.
[11] First Amendment to Lease made as of 1 July 2000 between 500-512 SEVENTH AVENUE LIMITED PARTNERSHIP, care of Newmark & Company Real Estate, Inc., as Landlord, and G-III LEATHER FASHIONS, INC., as Tenant, amending a lease dated as of June 1993 and covering the entire thirty fourth and thirty fifth floors at 512 Seventh Avenue, New York. It extends the term ten years and nine months, to 31 March 2011 against a prior expiry of 31 January 2003. Paragraph (e) deletes the Twenty-Second Article and substitutes a new Article 22, of which clause (ii) is quoted. Filed as Exhibit 10.7(a) to G-III Apparel Group, Ltd.’s Form 10-K/A filed 8 May 2006. I did not locate the 1993 base lease and make no claim about what the original Article 22 said. https://www.sec.gov/Archives/edgar/data/821002/000095013606003565/file008.htm
[12] Same amendment, new Article 22, for the floor sentence and the sixty day termination proviso; Graybar lease Section 41.09 for the unconditional thirty day right. G-III’s clause (iii) “alternative charge” fallback, applying if the submetering rent becomes uncollectible by law, is “the average per rentable square foot rate payable by Tenant for electricity during the prior twelve (12) month period”; the Graybar equivalent in Section 41.08 is a fixed $3.00 per rentable square foot escalated by the landlord’s cost increases since 1 September 2005. The judgment that a 50% condition costs the landlord little is mine.
[13] Lease modification agreement between EMPIRE STATE BUILDING COMPANY L.L.C., by Newmark & Company Real Estate, Inc., as Agent, signed by William G. Cohen, Executive Vice President, and OMAGINE, INC., signed by Charles P. Kuczynski, Vice-President. Exhibit A, paragraph D, quoted in part across two passages. Filed as Exhibit 10.15 to Omagine’s Form 10-K filed 1 April 2013. Paragraph D sends disputes to “the dispute resolution provisions of subparagraph 3C(i) above,” and 3C(i) is not in the filed exhibit, so I cannot say what procedure it sets or who pays; the comparison in the text is limited to the standard of review and the pay-pending-dispute condition, both in paragraph D itself. The premises, square footage and rent are not stated in this exhibit. The misprint “shall he payable” is as filed. https://www.sec.gov/Archives/edgar/data/820600/000101376213000473/ex1015.htm
[14] EIA Electric Power Monthly, Table 5.6.B, commercial sector, year to date January through July 2026 against the same months of 2025: Ohio 13.83 from 11.15, Virginia 11.21 from 9.23, Pennsylvania 13.97 from 12.12, New York 22.91 from 20.87, Texas 8.56 from 8.59, Georgia 11.70 from 11.72, United States total 13.97 from 13.23. All percentage changes are my arithmetic, and the data are preliminary. Describing this as the PJM footprint rising faster than the national average is my characterization of state figures; PJM’s territory does not map onto state lines. https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_06_b
[15] EIA, Short-Term Energy Outlook press release, 9 September 2026, for the 4,135 and 4,211 billion kilowatt hour sales figures and the attribution of commercial and industrial growth to data center development and manufacturing. https://www.eia.gov/pressroom/releases/press592.php
[16] Pennsylvania Public Utility Commission press release, 30 April 2026, adopting a Large Load Tariff Framework 5-0: https://www.puc.pa.gov/press-release/2026/puc-acts-to-protect-ratepayers-guide-data-center-growth-with-new-large-load-tariff-framework-4-30-26 . For twenty three states with an approved large load tariff and seven pending as of May 2026, Columbia Law School Sabin Center climate law blog, 2 June 2026: https://blogs.law.columbia.edu/climatechange/2026/06/02/data-center-regulation-what-local-governments-should-know-about-large-load-tariffs-and-clean-transition-tariffs/ . For the state legislative picture including Texas SB 6, Oregon HB 3546, California SB 886 and SB 887 and Illinois SB 4016, ArentFox Schiff, “State Regulation of Data Centers in 2026,” 13 April 2026: https://www.afslaw.com/perspectives/alerts/state-regulation-data-centers-2026-shifting-landscape . My statement that none of it addresses allocation between landlord and tenant is about these sources, not about every measure in every state.
[17] I searched 2026 law firm client alerts, continuing legal education programs and trade press for anything specifically on electricity rent inclusion, electrical resurvey rights or submetering markups in commercial leases, and found none. What does surface is undated broker explainer content and clause library entries. Two items that read as current are not: a piece on New York submetering compliance under Public Service Law sections 40, 41, 41-a and 44(7) dates from 2 January 2024, and the commercial submetering item for PG&E territory reports an older CPUC rate case settlement. A negative search result is weak evidence, and these disputes would concentrate in state trial courts and unpublished decisions I did not search. The 2026 commentary that does exist is about data center leases rather than conventional offices, for example Torys Quarterly Q3 2026, “Why a data center lease looks and acts differently from a traditional commercial lease”: https://www.torys.com/our-latest-thinking/torys-quarterly/q3-2026/why-a-data-center-lease-looks-and-acts-differently
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