As a business owner, you probably want to keep energy costs low. But given all the detailed information your retail energy provider (REP) puts on each bill every month, it’s no wonder that many customers simply skip to the bottom line. Unfortunately, that “bottom line” may not be your most cost-effective option.
This article will help you understand how your business uses energy, how business electricity rates are calculated, and how you can choose the best plan for your company.
Finally, we’ll help you identify where and how you can save on your energy bill.
Texas‘ Deregulated Energy Market Means You Have Choices
Before the Texas legislature deregulated the energy market with Senate Bill 7, Texas energy utilities monopolized the state’s energy production. Today, Texas allows consumer choice in the electricity market. As a result, Texas‘s electricity providers must offer fair prices and take advantage of technological advances in energy production and distribution.
How Do Business Electricity Plans Offer More Flexibility in Your Budget?
As a consumer, your micro or small business stands to gain from deregulation. Competition between energy providers for your business often means energy pricing is more flexible. Providers that vie for your business must be competitive to win you as a customer. That means if you find an energy plan that meets your business needs, you can lock in the price for an extended period.
Electric companies can help you increase your energy efficiency and reduce your electricity costs. With energy audits and custom quotes, providers help you find ways to decrease your energy usage.
How Does the Texas Energy Market Contribute to Renewable Energy Production?
Despite plentiful natural gas and oil production, energy companies in Texas are competing to develop and produce more energy from renewable sources, contributing to sustainability and appealing to a market that is more conscientious about going green.
Texas is a sunny place; it makes sense to use this abundant solar energy source. Similarly, wind power is increasing as a renewable resource.
Cheaper than natural gas, oil or coal-fired energy production in the long run, renewable energy sources don’t impact the environment like fossil fuels.
Because renewable energy companies offer plans that include different levels of renewable energy, you can go up to 100% green.
How Do Smart Meters Bring Efficiency to Electricity Consumption?
As smart meters replace traditional metering systems, there’s more information available about your energy consumption patterns. So not only is it easier to change your energy supplier, but you also can maximize your energy efficiency and control your business’s interior climate — meaning no more excessive temperature swings.
A smart meter can maximize energy efficiency and consumer comfort.
How Do Texas Electricity Suppliers Distinguish Themselves From Their Competition?
As energy experts, electricity suppliers look for ways to retain your business, as well as sign up new customers. Often, large suppliers partner with local Retail Energy Providers (REPs) and other energy providers to offer promotions and discounts.
In addition, you can request an energy audit or custom quote to get recommendations on how to reduce your consumption and save on your energy bill. Look for an energy provider that offers many energy plans, is innovative, and provides excellent customer service.
Why Should You Review Your Electricity Bill?
If you don’t review your electricity bill each month, you’re not alone. As a first step, check the last few months of your statements and review enough to understand your monthly energy costs.
Do you use about the same amount of electricity each month, or has your electricity usage increased significantly? Do you see indications of any trends, such as increased energy consumption at certain times of the day?
In addition to your actual energy usage, there will also be provider fees for electricity supplied to your business. That charge is in addition to your bill for your electricity usage. Those energy costs apply even if you didn’t use any electricity during the billing period.
If you’re noticing a lot of add-on utility fees, consider looking for a different energy provider. At the same time, you can decrease your bill by reducing your energy usage.
Suppose you see a lot of add-on charges. In that case, investigate another energy plan or consider another electricity provider.
Finally, do the math — mistakes do happen. If you think there’s an error on your bill, talk to your energy provider‘s billing department.
How Can I Understand My Energy Bill?
Before taking steps to reduce your energy usage, you need to know how to read your energy bill. Electric companies bill in kilowatt-hours (kWh). A kilowatt-hour equals the energy consumption of 1,000 Watts per hour.
For example, an LED light bulb uses 10 Watts in an 8-hour day. If your energy provider bills you 10 cents per kWh, that bulb will have an annual cost of $2.92. Multiply that by the number of LED bulbs, and you have the yearly cost of lighting your small business.
When you add in the energy cost of running computers, monitors, printers, and your HVAC, the energy usage and cost add up quickly.
How Do Tariffs Affect Electricity Prices for My Small Business?
A utility tariff is how your energy provider (electric or natural gas) charges you for your energy usage. A utility tariff is a detailed pricing structure or fee schedule per kWh used. Usually, these are multi-page documents that set out the charges for kWh usage on specific days and during specific hours. Electric energy suppliers must submit their tariffs to the government for approval.
A tariff has two parts:
- A fixed rate for supplying electricity to your business location
- A variable rate for your actual energy consumption.
What Tariffs Might Apply to Your Small Business?
Review the tariffs that your energy provider uses to bill your electric usage. It may be that by switching tariffs, you can save some money on your electric bill.
- Standard rate: This is a straightforward plan with a base charge and one kWh rate. Generally, it’s a Monday to Friday rate that does not factor in the time of day or season. This rate plan works best for business owners who are closed on weekends (when regular rates apply), want one price, and use electricity mid-day.
- Flat bill rate: Your bill is averaged over 12 months, which helps eliminate month-to-month fluctuations in your electric bill.
- Time-of-use rate: Kilowatt-hour charges vary by time of day, typically peak and off-peak hours. Peak hours are in effect when electricity demand is high and kWh charges reflect the demand. Off-peak hour rates can be much cheaper. Time-of-use can also be seasonal — lower in the spring and fall when HVAC demand is low and higher in winter and summer when heating and air conditioning require more energy usage.
- Tiered rate: A tiered rate begins with a base cost for a specific kWh usage. Pricing for subsequent usage tiers increases with each tier.
- Feed-in rate: Applicable to businesses that generate renewable energy, such as solar panels, the feed-in rate reflects the amount of energy you can return to the grid beyond your consumption. In essence, your electric company pays you for the electricity you supply to the grid.
What Factors Do Electricity Suppliers Consider Regarding Tariffs?
Many factors affect the tariff options your service provider offers, as well as the pricing. It’s no surprise that electricity providers put their operational costs at the top of their considerations.
Whether their electrical supply comes from renewable energy (wind or solar, for example), natural gas, or coal, the cost of generating and distributing that supply is their first consideration. After all, they are in business themselves to earn a profit.
Seasonal temperature changes also affect tariffs. A mild, year-round climate means electricity demand is relatively predictable. However, where the temperatures fluctuate more dramatically throughout the year, you’ll have higher demand to heat or cool your business.
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Can I Change My Tariff to Save Money?
If you shop carefully, changing your tariff rate plan can save your business money. First, to get the right one, consider how vulnerable your small or micro business is to sudden price changes. You will also need a good understanding of when and how you use electricity and a willingness to change your electricity usage patterns. Is your preference for stable electricity costs or for managing your energy consumption?
According to ElectricityPlans, the electricity trend for Texas in 2021 is that tariffs with term lengths of 12 months or more offer value for money. Currently, long-term plans are 24 months or more. If it makes sense for your business, make the switch in September when summer rates drop.
How Do I Calculate My Energy Usage?
Now that you know what a kilowatt-hour is, the next step is to calculate your business’s energy consumption. To do that, you’ll need to check the labeling of your air conditioning unit, heating, office equipment, break room appliances, and more to determine the wattage use. Add it all up and divide the total by 1,000.
The 600-watt microwave in the break room? Divide 600 Watts by 1,000, and that’s the energy consumption for an hour’s operation (0.6 kWh). Of course, a microwave only operates for a few minutes at a time, but it adds up over the course of a year.
The goal here is to understand which appliances and equipment use the most energy. Once you know that, you’re more likely to find ways to save on your energy bill.
How Can You Save on Consumption and Your Electricity Bill?
Commercial energy rates as of April 2021 in Texas were $0.1050 per kWh, according to the U.S. Energy Information Agency (EIA).
To cut energy costs, talk to your electricity supplier. They are an energy expert that can help you find ways to save. Whether your business is a large one or a micro business, here are some ways you can save on your energy usage.
9 Tips to Save on Your Business Electricity Usage
- Contact your electricity supplier and ask for an energy audit. Be sure to specify a night audit as well. An audit will help you identify your peak and off-peak usage and find out what might be running at night that shouldn’t be.
- If you don’t already have one, install a smart meter. It will help you identify future areas of savings.
- If possible, switch up your janitorial services. Instead of scheduling it for after hours, when lighting and power usage will need to continue, change to cleaning during business hours to reduce energy usage.
- Install Energy Star lighting and office equipment. An Environmental Protection Agency program, Energy Star-rated products are energy efficient.
- Use Energy Star-certified LEDs to create energy-efficient lighting systems. Using LEDs will improve light quality and eliminate heat. They use less energy — as much as 90% less — and last up to 50 times longer.
- Use LED task lighting wherever possible. Why pay to light more area than necessary?
- Install occupancy sensors. Add these to low-occupancy areas of your business, such as storage areas and meeting rooms. You’ll see savings of 15% to 30% on your lighting costs.
- Use sleep settings on your office technology. Computers, printers, copiers, and networked devices typically offer an energy-saving sleep setting.
- Save as much as 30%-40% on your bill by consolidating standalone, networked, and multifunction devices. The best ratio is 10 or more users per device.
Business Electricity Plans: You Have Options
According to the EIA, Texas produces more electricity than any other state by a large margin.
Deregulation and the sheer number of energy providers mean you have a choice of provider. As energy experts, they can help you identify ways to save on your energy costs.
By selecting a business electricity plan that benefits your bottom line and contributes to renewable energy efforts, not only will your business increase profits, your brand will appeal to customers or clients who care about sustainability and green energy.
Brought to you by energysavings.com
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