Energy Utilities: Friend or Foe to Restaurant and Convenience Store Chains?

Share this post

 

Montgomery BurnsEnergy bills can often be one of the larger expenses for an organization – especially for companies managing chains of restaurants or convenience stores, which typically consume three times more energy per square foot than other commercial facilities.

Energy costs can also be frustrating to try to control, and many utilities don’t seem to be making it easy for companies to do so.

For many reasons, it’s easy to criticize utilities as a foe:

  •                                                                          Utility Bill
  • Electricity bills are expensive and getting more so.
  • Utility bills are almost indecipherable. Between charges for “kW” and charges for “kWh”, generation and transmission”, distribution charges, and charges for “transition”, whatever that is – it can seem so complex that the only option is to simply look at the bottom line, write the check, and move on to your next headache.
  • Electric bills reflect what you’ve already purchased. Unlike most other things you buy, with your electric bill, you don’t know the total cost until you’ve already bought it. In most cases, there is no warning if your usage suddenly surges, exposing you to an unusually large bill. Not to mention: did you really intend to purchase kilowatt hours?
  • Finally, in some (but certainly not all) cases, utilities can be large, bureaucratic organizations where it’s hard to get a human on the phone to answer questions and where it seems as though the needs of the customers are not core to their mission. The language many utilities – and to an even larger extent, their regulators – have used historically to refer to customers only helps to reinforce this notion. Does being referred to as a “ratepayer” – or worse, a “load point” – make it feel as though the utility values your business?

Despite these common criticisms of utilities, there are reasons for hope, and in some cases, even the possibility of considering a utility as a friend.

Deregulation, Competition and Brokers

Deregulation of utilities has opened up many electricity markets to competition, which can make utility industry – in the form of competitive suppliers (which go by different names in different states) – behave much more like the customer-centric businesses they should be. Simply put, if you are in a deregulated market (or a “restructured market” in utility-speak), you now have the option to shop for electricity suppliers, just as you would shop for any other commodity your business purchases. Gas has also been deregulated in many states.

Deregulated US electricity marketsTo alleviate the need to navigate the complexities of finding lower electricity rates, consider working with an energy broker. Typically, there is no cost to you to work with a broker; the companies selling electricity pay brokers for the contracts they close. There are many brokers, so a little googling should provide you with a number of options to consider.

Utility efficiency programs

Many utilities now have programs to support the reduction of energy consumption for their customers. Utilities offer incentives for efficiency not only because it may be mandated in their state, but also because it can be cheaper to pay customers to operate more efficiently than to build new power plants to support load growth.

For example, there may be rebates for purchasing high-efficiency lighting in your market. LED lighting manufacturer Cree provides a good list of LED rebates available by state. The complete list of utility rebates can be found at dsireusa.org (the Database of State Incentives for Renewables and Efficiency).

Southern California Edison’s (SCE) HVAC Optimization Program is a great example of a utility offering an incentive that not only cuts energy consumption, but offers other benefits to their customers as well.

SCE HVAC Optimization ProgramSCE customers receive rebates for signing-up for HVAC maintenance programs that will yield lower energy consumption, lower reactive repair costs, and longer equipment life span.

There are companies whose business it is to navigate and help their customers obtain utility rebates for projects that reduce energy usage. For example, Powerhouse Dynamics is pre-approved in many cases to obtain utility energy efficiency incentives that, where available, may cover as much as 50% of the up-front cost of our SiteSage energy and asset management system.

So, where to start? If you’re planning for retrofits, spend a few minutes on DSIRE to see where you may be able to recoup some of your investment in new, more efficient equipment. Their summary table, organizing efficiency programs by state, is a good place to start. Also, give an energy broker a call to explore options.

Finally, check with your local utility to see what resources they can offer to help. Things may have changed since the last time you looked. With a very modest investment of time, you may find a lot of money available that can drop directly to your bottom line.