Backup Power: Generator and UPS Rights in a Lease

Backup power is expensive to install and to maintain, so the first step is deciding how much of it you need. For many office teams the honest answer is very little. Laptops run on batteries, the work lives in the cloud, and people can go home or to another location for an afternoon.

The answer changes when the office holds something that should not lose power abruptly.

• On-premises servers or storage where a hard shutdown risks data loss or a long recovery.
• Network equipment that connects remote staff or other offices to shared resources.
• Lab or test equipment running long processes that cannot be resumed midway.
• Security and access control systems that must keep recording and locking.
• Cooling for equipment that will overheat if it keeps running without it.
• A customer commitment or contract that requires continuity of a service operated from the office.

Sort your equipment into what needs a clean shutdown, what needs to ride through a short interruption, and what must keep running through a long outage. The first two are usually a UPS question. The third is a generator question, and it is the one that needs the most from the landlord. If a large share of your equipment falls in the third group, a colocation facility designed for continuous power may be the better home for it.

Many office buildings have a generator. Tenants on a tour hear that and assume their suite is covered. Usually it is not.

A base building generator is installed first to meet life safety requirements: emergency lighting, fire alarm, fire pumps, and elevator operation as the code requires. Some buildings size the generator for only that. Others have additional capacity for building operations, and a smaller number make capacity available to tenants.

• ✓Does the building have a generator, and which systems does it serve today?
• ✓Is any capacity available for tenant loads, and how much can be allocated to us?
• ✓Has capacity already been committed to other tenants?
• ✓How would our equipment connect, and what distribution and transfer equipment would have to be added?
• ✓What is the charge: a one-time connection fee, an ongoing capacity or reservation fee, a share of fuel and maintenance, or all of these?
• ✓How long can the generator run on stored fuel, and what are the refueling arrangements during an extended outage?
• ✓How often is it tested under load, and can we see the maintenance and test records?
• ✓How old is it, and is replacement planned during our term?
• ✓If the generator fails to start, what does the lease say about the landlord’s responsibility?

On the last point, expect the landlord to disclaim liability. A right to connect to a shared generator is a real benefit, but it is not a guarantee of power. If continuity is critical, your own engineer should review the system and its records, and your plan should not rest on a single shared machine.

If the building has no spare capacity, the alternative is a tenant generator. This is one of the more demanding installations a tenant can ask for, because almost every part of it sits outside the premises.

• Location. Roof, grade level beside the building, a parking area or a mechanical floor. Each has structural, zoning and access implications, and the landlord may charge for the space.
• Structure. A generator and its fuel are heavy and vibrate. A structural engineer has to confirm the location and design the support.
• Fuel. The type of fuel, where it is stored, how much the fire code allows in that location, how it is delivered, and how the tank is refilled during a long outage.
• Exhaust, air and noise. The unit needs ventilation and an exhaust route, and it must meet local noise limits and not disturb other tenants.
• Pathway. Power cabling has to run from the generator to your suite through risers or shafts, with transfer equipment that switches your load between utility and generator power.
• Permits. Expect building, fire, environmental and sometimes zoning review. Requirements vary by jurisdiction and should be confirmed by your engineer and contractor.
• Schedule. Equipment procurement and permitting can take a long time. A generator is rarely ready on the day a standard office build-out finishes.

Many downtown office buildings simply have nowhere to put one. Find that out during the search. A building’s answer to "where would a tenant generator go?" is a quick test of whether the conversation is worth continuing. Some tenants use a connection point for a rented portable generator as a lighter alternative, which still requires landlord approval, a place to park the unit and a cable route.

An uninterruptible power supply sits between the electrical supply and your equipment and carries the load on batteries for a limited time. It smooths out brief interruptions, gives servers time to shut down properly, and bridges the gap while a generator starts. It is not a substitute for a generator during a long outage.

Small units that sit in a rack raise few lease issues. Larger systems with separate battery cabinets do.

• ✓Does the lease allow us to install a UPS and batteries, and is landlord approval of the specific system required?
• ✓Has a structural engineer reviewed the weight of the battery cabinets in the planned location?
• ✓What do the fire and building codes require for the battery type we plan to use, including any limits on quantity, separation, ventilation or detection?
• ✓Does the landlord or its insurer restrict particular battery chemistries?
• ✓Is cooling for the UPS room on backup power as well, so the room does not overheat while the equipment keeps running?
• ✓Who maintains the system and replaces batteries, and how are old batteries removed and disposed of?
• ✓Have we told our insurance broker about the installation?

Battery rules have been changing as codes respond to newer chemistries, and local fire officials apply them differently. Treat this as a question for your engineer and the local authority, not something to assume from a previous office.

Backup power for servers without backup power for their cooling protects very little. Ask your engineer to size and plan the two together.

Standby equipment that is not exercised tends to fail when it is needed. Regular testing is part of owning it, and testing is noisy and sometimes disruptive, so landlords regulate it.

• Agree on a testing schedule and hours in the lease or the building rules, so the right to test is not left to case-by-case permission.
• Confirm your service contractor’s right of access to the generator location at all hours, including the roof.
• Clarify fuel delivery procedures and who must be present.
• Allocate responsibility for spills, emissions compliance and any environmental permits. Your attorney should review this section closely.
• Ask how building electrical shutdowns are coordinated with your equipment, and how much notice you receive.
• Keep maintenance and test records. Landlords and insurers may ask for them.

Backup power is tenant-specific, so landlords generally expect the tenant to pay. What is negotiable is how much comes from the improvement allowance, what the landlord charges for building capacity or space, and what happens at the end.

1. Raise backup power in the request for proposal, with a short description of what you need to keep running.
2. Have your electrical engineer review each building’s generator information and any proposed tenant location.
3. For a shared generator, state in the lease the capacity allocated to you, the fees, and that the allocation cannot be reduced or reassigned.
4. For a tenant generator, describe the location on a plan and grant the pathway, fuel storage, fuel delivery and testing rights that go with it.
5. Confirm that generator and UPS work is eligible for the tenant improvement allowance.
6. Address relocation: if the landlord can require you to move the equipment, it should pay and avoid any interruption.
7. Settle removal at the time plans are approved. Fuel tanks and rooftop equipment are costly to take out.
8. Have your attorney review the language, including the liability and environmental provisions.

Tenant Advisory Group represents tenants and buyers, and for technology companies that need continuity we ask about generator capacity and tenant equipment locations before tours, since this is a requirement that many buildings cannot meet at any price.