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• Category: Small Business Energy Savings
• Published: February 25, 2021
• Updated: March 17, 2022

How to Estimate Utility Costs for a Small Business

As a small-business owner, you know that making a profit has a lot to do with how you manage expenses . And utilities make up a big part of that overhead. Especially if you’re trying to get a startup off the ground, knowing the typical utilities cost for businesses like yours will be critical to the success of your business plan.

But even if you’ve been in operation for years, it’s a good idea to get a handle on what your business utility costs are. That information can make you nimbler and better able to improve efficiency and find savings — from month to month and season to season.

Understanding the typical utilities cost for businesses

The average cost of utilities in a commercial building, specifically with regard to energy consumption, is $2.14 per square foot . Lighting and HVAC systems tend to be two of the biggest factors for most companies. But how much utilities cost for a business like yours will depend on your industry and the specific nature of your work. For instance, energy expenses from major appliances will probably be higher for a restaurant than a retailer, and a florist is bound to use more water than an accounting firm.

It also helps to define what we mean by “utility.” Some are energy-related, but not all. For small businesses, utilities include the following:

• Electricity and natural gas
• Water and sewer
• Garbage pickup

How to calculate utilities for a small business

Creating a utility cost calculator for a business will be easier and more accurate if you’ve been operating for at least a year. That data is particular to your small business and is therefore more useful. But with some research, a startup can build a utilities estimator that can help with forecasting and planning. And then, after some time has passed, you can adjust your strategy by using your own bills as input.

1. Gather all your utility bills

Established small-business owners will want to gather their utility bills over a set period of time. The billing periods may differ — for instance, electricity bills tend to come monthly, while water and sewer bills may be issued quarterly. Ideally, you’ll want at least a year’s worth so you can capture the seasonal changes in costs for various utilities in your small-business calculation of energy expenses.

What to do if you’re about to launch a business and don’t have utility bills yet

If you’re still working on your business plan, you can put together an estimate on office utilities for the year by using publicly available averages (like $2.14 per square foot for energy expenses, as noted above). Or, if you plan on starting a brick-and-mortar business, you could reach out to a property’s real estate agent or former owner for the data you need for your utilities estimator.

Contacting each utility can also get you that information. Services like garbage pickup, phone and internet are often offered in standard packages, and electric and natural gas costs can be estimated based on property size.

2. Add all your utility expenses together to find your total utility costs

Adding the totals of all your bills (or estimates of bills) for your chosen period of time (such as a year) is how to calculate utilities for your small business. Special software can help with this, but even basic spreadsheet apps can be effective. And beyond just arriving at a grand total of utility costs, you can also compare monthly, quarterly or seasonal totals to look for patterns.

For instance if you were interested in what the business utility costs were for October, and wanted to compare it to January, you may notice a big difference in how much you spent on heating. If you have no bills yet and are only working with an estimate of office utilities for the year, you can still predict needing more heat in winter and air conditioning in summer, and budget accordingly.

3. Compare your total utility expenses to your overall costs for the period

Once you’re satisfied with the quality of the data from the utility cost calculator for your business, the next step is to compare the grand total (and subtotals) to your overall costs over the same period of time. Your expense total will be the sum of your total utility expenses and the remaining business costs, like office space, equipment, vehicles and their fuel, payroll, advertising, insurance and other supplies and services.

Comparing those totals can put your utility expenses — especially your energy usage — in perspective. And if you’ve also created monthly, quarterly or seasonal subtotals of overall business costs, you can see the changing impact of your utility expenses over time.

How to project energy costs vs. total operating expenses before starting a new business

You’ve answered the question “How much do utilities cost for a business like mine?” Now, you need to estimate your overall costs for your chosen time period (such as a year). The U.S. Small Business Administration has several resources that can assist you in projecting those expenses. Some figures — like rent, insurance or fees for licenses or permits — will be fairly easy to obtain and plug into your calculations. For other, less-cut-and-dried costs, such as payroll or marketing, it can help to reach out to similar businesses for input. Once you have your total operating expenses, you can examine how your startup’s projected utility costs stack up against them.

How to calculate your business’s utilities percentage

When examining the cost of utilities for your small business, the calculation should also show it as a percentage of overall costs. You can calculate the percentage of utility costs to overall costs using a simple online percentage calculator . Or you could do it yourself, following a few simple steps:

• Divide the utility costs by overall costs. You will get a decimal amount of less than 1.
• Multiply that decimal amount by 100 to get the percentage. You can round off as necessary.

For example, if your utility costs for last year were $30,000, and your total operating expenses were $300,000, your percentage of utility costs vs. overall costs would be 10% (30,000÷300,000 = 0.1; 0.1 x 100 = 10).

You’ve estimated the utility costs for your business — now what?

Congratulations! You now have a good idea of the impact your utility expenses have on your small business. This is invaluable information to have as you budget for the coming year, and specifically quarter by quarter, or even month by month.

You can also dig into that data to look for inefficiencies and savings. For example, as you break down your energy price , you may realize that your energy plan isn’t working for you as well as it could, and decide to change your energy procurement strategy . Perhaps you’ll realize that you’ve been making some energy mistakes , like using older, inefficient lighting and appliances. Or you may see how changing your business hours or better preparing for winter and summer temperature extremes could reduce costs.

Why should you track your small business’s utility costs?

Knowing how to calculate the utilities for your business is useful for the purposes of annual planning. But actively tracking how much you spend on utilities, especially the energy-related expenses, can also be valuable. There are many benefits of calculating utility costs regularly:

• Make your business nimbler. The sooner you know about changing costs, the sooner you can try to address them. For instance, if you see a spike in the number of kilowatt-hours your business used in last month’s bill, you might be able to pinpoint the reason and take cost-cutting measures.
• Spur innovation. When you think about a challenge more often, solutions will come to mind more quickly. Many small-business owners turn to smart technology to help with automation or monitoring their energy usage .
• Avoid paying for errors. Mistakes happen; even utilities make them on occasion. Paying attention to irregularities in your statements can help you get them corrected ASAP and avoid potentially overpaying.
• React quicker to rate hikes. If you’re just paying your bills without studying them, you may miss price changes. And then you would be paying more money over a longer period of time than if you made an early decision to go with a cheaper competitor.

Once you know how to estimate the utility costs for your business, try to make it a regular habit. That information gives you valuable insight into your operating expenses in both the near and long terms. And the more you know about your costs, the more power you have at keeping them under control — like reducing your business’s energy consumption — ensuring that you consistently turn a profit.

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Electrical Contractor Business Plan

Start your own electrical contractor business plan

Premiere Electric

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

The population in Richmond is growing. With more people come the need for more apartments and stores, in other words, new construction. New construction needs skilled electricians that can wire everything.

Premiere Electric is a new electrical contracting firm that Robin has started to serve the former Gardner and Miller customers, as well as expand her services to new customers in the tri-county area.

The market for commercial electrical contracting services is very fragmented and crowded. Among these, only a few are large firms with 20 or more electricians on staff. The remainder are small firms with less than three full-time electricians. Premiere Electric’s current niche is its strong relationship with former customers of Gardner and Miller, but this will not be sufficient for growth in a competitive market.

By focusing on data, communication and electrical installation and maintenance, Robin reduces her direct competitors to two large electrical firms that bid on the area’s largest projects. Though one day, Premiere Electric plans to be a force in the area’s largest projects, an opportunity exists now for new customers whose smaller projects are not being pursued aggressively by Robin’s competitors.

Competition

There are quite a few electric contractors in Richmond: Above Code Electric, Frazier Electrical, H.O. Feild Electric company, Prism Industries and Langhorne Electric to name a few. 

All of them advertise many years experience, training and customers who trust them. Electrical contractors enter their customer’s home. They need to do excellent work as well as be able to be in someone’s house without danger of invading privacy. 

Premiere Electric’s mission is to offer its customers the highest-quality electrical services. Robin focuses on personalized service by offering convenience and rapid service. Additionally, Premiere Electric has the technological expertise to install wireless voice and data systems, as well as intelligence systems in any size facility. Finally, Robin has strong vendor relationships with the most service conscious vendors who are capable of shipping major parts rapidly (on an overnight timeline in most cases) minimizing the system down time for Premiere Electric customers.

Expectations

Currently, there is $100,000 worth of business with former Gardner and Miller customers. Robin believes she can capture a lion’s share of it and build from that base. She will start as the firm’s only employee but will hire additional electricians as her sales grow.

Financial Highlights by Year

Financing needed.

We will be getting $62,000. Robin will invest $40,000 and we will get a $22,000 long term loan. 

Problem & Solution

Problem worth solving.

The population in Richmond is growing. With more people come the need for more apartments and stores, in other words, new construction. New construction needs skilled electricians that can wire everything

Our Solution

Premiere Electric’s focus is to meet the demands of the former Gardner and Miller customer base. Premiere Electric has established relationships with these companies and believes we will receive referral business from them over time. The company estimates that 80% of revenues will come from old Gardner and Miller clientele and 20% from new referrals and business. Though the former Gardner and Miller clientele will be important during the first year of business, Robin knows the future of the business is new referrals. 

Target Market

Market size & segments.

Many factors are contributing to this projected building growth, notably regulation, demographics, inexpensive capital, a strengthening U.S. economy, and technology. Alternative delivery methods are helping to make projects viable where they otherwise would not be.

Labor shortages may Impede growth to some extent will be. According to the Bureau of Labor Statistics, employment rose in 43 states in October, while declining in seven states. Finding qualified workers to perform the work has become onerous. Immigrant labor from Central America has helped somewhat, but the need for more skilled craftsman—electricians, pipefitters, plumbers etc.—will not be filled through immigration. Labor shortages will begin to slow growth and create wage inflation.

COMMERCIAL CONSTRUCTION FORECAST

RETAIL STORES AND MALLS

Online sales continue to grow, and extreme discounters keep expanding. Major retail chains and deep-discount stores will lead construction growth in this sector, although there will be some significant activity among regional and national grocery, drugstore, and quick-service restaurants. Specialty stores in urban cores will also contribute to growth, as will e-commerce warehouses. Look for increased activity in store renovations as well. There is the potential for 9% construction growth in this sector in 2016. Retailers will continue to fret about a possible increase in the federal minimum wage and the strength in the overall U.S. economy, which could slow growth.

COMMERCIAL WAREHOUSES

Commercial warehouse construction is being buoyed by regional distribution centers for major retailers and the positive effect of the Panama Canal expansion. The strong dollar and a weakened global are pushing up imports of cheaper goods into the U.S., driving up warehouse construction. We are looking at an 8-10% growth in this sector in 2016. A slowdown in the U.S. economy could be a drag on this sector, but not by much.

MULTIFAMILY HOUSING

Multifamily housing remains the star performer in this recovery. The 20-34 age demographic (children of Baby Boomers) is growing. This age group is the typical renter. The untypical renter is the growing 55-64 demographic of empty nesters. These two age groups are pushing up demand for rental housing. They are demanding walkability and high-end amenities in a work-live-play environment.

A significant amount of capital is chasing the apartment sector, a trend that does not seem to be abating anytime soon. Deals can be financed at 3%, making them easy to justify, especially in light of the available fixed-income alternatives, which can’t come close to real estate.

Expect growth to remain torrid at 17-20% in 2016. Rental demand is on the rise and shows no signs of slowing down. Most markets cannot keep up with current demand, making this segment a star performer for 2016 and most likely beyond.

Demographics and the strengthening U.S. economy are helping to drive construction growth. As the economy strengthens, employment is increasing. After sitting on the sidelines for the past few years, businesses and developers are building new office space.

Millennials (age 18-34), who now outnumber Baby Boomers, are traveling more than other demographic groups, which is feeding hotel growth and remodeling. The strengthening economy is increasing discretionary income, helping the lodging and retail sectors. Millennials are impatient shoppers, making it imperative for retailers to invest in more robust order fulfillment systems and fast and excellent customer service. Retailers who ignore Baby Boomers do so at their own risk. Boomers have significant financial resources and are much more active and educated buyers than previous older generations. 

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Baby Boomers and the Affordable Care Act are infusing life into what just a few years ago was a moribund healthcare construction sector. Emphasis will be placed on preventive care and wellness initiatives for younger Boomers, as well as more traditional acute care for the older demographic.

Inexpensive capital is flowing into urban-core areas, especially those with a strong presence in healthcare, education, and the life sciences. In general, areas with historically high rents are faring much better than areas that rise and fall with the economy. Lower rent areas are also seeing some growth, but it is more tepid than in the urban cores.

These are heady times for builders, and there is cause for optimism. While it is true that certain larger issues, such as industry labor shortages or another financial crisis emanating from China, could slow down growth, the way things look today, this train has miles to go before running out of steam.

Current Alternatives

All of them advertise many years experience, training, and customers who trust them. Electrical contractors enter their customer’s home. They need to do excellent work as well as be able to be in someone’s house without danger of invading privacy. 

Some try and stand out like Above Code Electric which focuses on electric fan installations, or Prism Industries which focuses on TV and television installations. Others like Frazier Electric and H.O. Feild Electric are general contractors but are not locals, they are are a couple towns over.

Then there are our direct competitors like Langhorne Electric who focuses on electrical wiring upgrading for residential and commercial buildings. 

Our Advantages

When Robin opted to start her own company and take matters into her own hands,  this was just another step in her quest to deliver services to customers that were second to none. As a woman in the male-dominated electrician profession, it has always been Robin’s competitive edge that has pushed her ahead with customers and employers. Her focus on new electrical technology places her in a unique situation. Both her major competitors had sought her services when Gardner and Miller announced the company’s departure from the area. Her reputation for quality work and excellent customer skills could have landed her with a new employer and a bigger pay check. The Richmond tri-county area is booming with new commercial construction, including a new research park and airport. Robin’s technical skills in data retrieval and communication systems will be a valuable asset for a company to have in the next five years.

Keys to Success

Premiere Electric’s keys to success include:

• Expedient and convenient electrical services.
• Growing and maintaining a referral network of customers.
• Focus expertise in data, communication and electrical installation and maintenance.
• Rapid order and delivery of electrical components.

Marketing & Sales

Marketing plan.

Premiere Electric’s focus is to meet the demands of the former Gardner and Miller customer base. Premiere Electric has established relationships with these companies and believes we will receive referral business from them over time. The company estimates that 80% of revenues will come from old Gardner and Miller clientele and 20% from new referrals and business. Though the former Gardner and Miller clientele will be important during the first year of business, Robin knows the future of the business is new referrals. The table below further estimates the total market potential of the type of services rendered by Premiere Electric in the Richmond tri-county area.

We plan on having a sales plan that takes advantage of the relationships we had before we re-organized. The millennials are the biggest growing part of the market. To gain new clients we will take advantage of Social Media. We will speak directly to them by Twitter and Facebook. We have green initiatives and a website that speaks directly to them. Our well-trained sales team will take over once they come our way. 

The services rendered by Premiere Electric can cover a project in its entirety from original concept to acceptance of completed construction work.

• Consulting services : engineering studies (functional analysis), evaluations and recommendations (value engineering analysis), feasibility studies, master planning.
• Design services : cost estimates, design analysis, project scheduling, conceptual drawings: electrical standards, specifications.
• Field services : 24-hour emergency service, troubleshooting, field engineering liaison and inspection, commissioning and checkout, customer representation at acceptance testing of equipment, preventive maintenance programs.
• Construction services : commercial and industrial.

Milestones & Metrics

Milestones table, key metrics.

Our key metrics are: 

• inventory turnover 
• Tweets and Retweets 
• Facebook views and shares 
• returning customers 
• customer referral program 

Ownership & Structure

Robin Sullivan is the sole owner proprietor and employee of Premiere Electric.

Management Team

Premiere Electric is owned by its sole employee, Robin Sullivan. Robin is a talented electrician who holds a Bachelor of Science degree from Eastern College that she obtained while working full-time as an electrician. Robin entered the world of electricity at just the right time when national legislation made it possible for her to join the electricians’ union. She started her apprenticeship and early training as an electrician in St. Louis, Missouri in 1978. She later relocated to the Richmond area in 1983 and has worked in the local number three jurisdiction for the past 18 years.

For the past 10 years with Gardner and Miller, Robin has focused on the new electrical technologies as new industries and commercial growth have come to the Richmond area. During that time, she has created a base of customer support that praises her ability to handle all aspects and responsibilities of the design and engineering process.

Personnel Table

Financial plan investor-ready personnel plan .">, key assumptions.

Our key assumptions are: 

• Buildings need electricity 
• Electricity wires fray and need repair 
• As technology gets more advanced it needs more electricity to accomplish its tasks
• Tech boom never dies, just changes. We will always have customers looking for services 

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

Our Startup Expenses are: 

Stationery etc.$100

Brochures$200

Start-up Inventory$10,000

TOTAL $10,300

Sources of Funds

We will be getting $69,000. Robin will invest $47,000 and we will get a $22,000 long term loan to cover the inventory as well as some machinery. 

Projected Profit & Loss

Projected balance sheet, projected cash flow statement.

Tax Season Savings

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• Utility Operations and Technology
• Strategic Assessment and Planning

Leading through Turmoil

Faced with macro challenges that threaten the traditional utility business model—stagnant demand, the emergence of distributed resources, decarbonization, unpredictable energy markets, increased regulatory pressures, and lingering impacts of COVID-19—utility leaders are under pressure to simultaneously reduce cost and improve performance.

Managing these disruptions requires a rigorous planning process. Too often, however, we see responses to these issues treated as one-off projects or high-level strategy that is disconnected from day-to-day operations. Common symptoms of a broken planning process include:

• Siloed and inconsistent approaches to planning across the enterprise
• Goals that are not integrated, comprehensive, or consistent among departments and do not tie to the overall strategy
• Focus on the short-term while neglecting needs for future years
• Budgets completed prior to planning that drive subsequent planning decision making
• Limited understanding of what the enterprise is getting in return for spend and whether those outcomes are valuable
• No external focus on competitors; poor understanding of “what good is”
• No accountability for follow-through on department plans and achieving targeted results
• Multiple parallel efforts that are not coordinated and struggle to come to fruition

In the worst cases, managers view planning as an annual waste of time. Plans stay on the shelf once completed and provide little transparency into how the business is truly run.

Adopting a Proven Approach

ScottMadden has worked with many of our utility clients to solve these challenges with gap-based business planning. We have seen organizations use this approach to translate strategy into actionable plans and achieve desired outcomes, from nuclear fleet turnarounds to top-quartile reliability performance to least-cost corporate support services. The gap closure planning process allows an organization to identify and understand the factors that contribute to gaps between current and desired performance and focuses management on defining initiatives that address these gaps. Equally important, it provides transparency into “bang for the buck” (i.e., what the enterprise expects to achieve in return for spending). Closing the gap between where a department is and where it wants to set the stage for effective business planning.

We commonly describe this process as a cycle or “a wheel” that is iterative and continuous with annual planning activities and monthly/quarterly reviews. Each time an organization repeats the cycle, it develops a more refined understanding of what data truly measures performance against goals, what actions or projects will have the greatest impact on those measures, and what accountabilities need to be in place to ensure follow-through on plans.

One question we are frequently asked is where to start or how to “get the wheel spinning.” Our experience is that the entry point is less important than dedication to the overall process. Whether the initial focus is on picking the right metrics, building robust plans, or habitually holding managers accountable for performance, the other steps in the cycle naturally follow so long as there is a commitment to the process and visible sponsorship from key leaders.

Following are the three common entry points to starting this process, common challenges faced, and how we have helped our clients overcome those challenges.

Aligning Around a Common Vision

In any organization, leadership must set a clear strategic direction for where the enterprise needs to go and why. An effective strategy includes specific performance aspirations across key focus areas, such as safety, reliability, human performance, and financial management.

Where many organizations struggle is translating the vision into concrete and actionable goals. The business planning process achieves this through annual strategic planning sessions, in which senior leadership consolidates multiple inputs into a clear strategic direction that serves as the basis for that year’s planning process. Outputs of these sessions should include performance goals for the year and measures of success against those goals. All business plan initiatives should tie back to this strategy in a measurable way.

With today’s focus on decarbonization, customer centricity, and new utility business models , translating strategy into measurable results is not intuitive. In recent years, ScottMadden has worked with many of our utility clients to identify new performance indicators for measuring the effectiveness of their strategies or how new strategies will impact existing measures. Grounding new strategies in concrete data and a well-defined planning process helps to filter out platitudes, manage competing priorities, and achieve intended results.

Leveraging Data for Gap Analysis and Target-Setting

Once a clear vision and meaningful metrics have been established, the next step is to identify gaps in performance and set targets for improvement. A common approach to target-setting is to use benchmarks.

Benchmarking allows an organization to understand current performance through rigorous, fact-based comparisons, and it can be a critical input in identifying gaps and opportunities for improvement.

While certain functions and metrics lend themselves well to benchmarking, a common challenge is a lack of available data. ScottMadden recently supported a physical security organization that was interested in incorporating metrics into its business planning process, but it found that reliable data on operating models, cost effectiveness, and key performance indicators did not exist. We helped the client assemble a peer group of utilities and solicited data on these dimensions on a give-to-get basis. The small group of peers was able to debate and eventually align on what information was most useful to managing their function, and they agreed to share it on an annual basis. As an added bonus, the participating companies gained access to other leaders in the industry who were facing similar challenges and eager to share lessons learned and best practices.

Ensuring Accountability for Results

Just as important as the front-end planning process, the back-end monitoring, control, and accountability can ultimately determine the effectiveness of a business planning program. Performance management keeps the business moving in the right direction through consistent monitoring of progress, objective discussions about results, and faster recognition of what is working and adjustment to what is not.

The key here, again, is visible sponsorship and participation by senior leadership to demonstrate that performance against the plan matters, and managers will be held accountable to their commitments. The organization must be rigorous in tracking and reporting on actual performance of business plan metrics and initiatives and regularly review results in management review meetings. When performance falls short of expectations, senior leaders must step in promptly to address the challenges. Without programmatic performance management reviews and significant senior leadership involvement, business plans will quickly lose their relevance and value.

ScottMadden recently worked with an organization that was struggling to align on priorities with its HR department. Our client, the chief operating officer, established a monthly management review meeting in which all support functions would report on key initiatives and performance indicators. Initially, the COO and HR VP could not agree even on what metrics to track, but the meeting provided a regular forum to debate the veracity and usefulness of the data. Over time, through ongoing dialogue, the two sides aligned on key results that mattered, including metrics in areas where performance was lacking, such as time to hire and hiring manager satisfaction, and together they were able to work toward demonstrable improvements.

Expected Results

High-performing utility leaders have found gap-based business planning valuable for several reasons:

• Aligning all planning around enterprise mission, vision, and values
• Creating practical, actionable strategies that employees own and implement
• Providing transparency to senior leaders on how functions are managed and ensuring resources are put toward the most valuable projects
• Programmatically improving effectiveness and efficiency year-over-year
• Allowing leaders to be more responsive and effective when faced with major strategic initiatives

This practical and logical approach has helped leaders achieve and sustain top-tier results, and it will do the same for your organization. To access more resources and learn more about the process and what is working well with organizations similar to yours across the United States and in Canada, please contact us .

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Navigating utility business model reform.

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In identifying, evaluating, and encouraging innovation in business models, the report offers a menu of regulatory options for policymakers, utilities, and electric customers to best support and manage the maturation of a 21st century grid.

Navigating Utility Business Model Reform seeks to establish foundational elements of different reform options, poses key questions to explore their applicability, identifies illustrative experiences for ideas and concepts, and explores policy implementation options to help spur action.

Navigating Utility Business Model Reform is being released alongside a set of case studies focused on experiences with business model reform options to help industry actors craft innovative approaches that are tailored to local context and circumstances. The report was produced in a joint collaboration between Rocky Mountain Institute, America’s Power Plan, and Advanced Energy Economy Institute.

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• clean energy
• Rate Design

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Small Business Electricity

Home / Business Electricity / Small Business Electricity

Updated: 03/13/2024

Electricity is one of the biggest expenses small business owners encounter, and getting the right electricity plan is critical to keep operational expenses low. Additionally, more and more consumers are searching for eco-conscious businesses. However, it's not always easy to navigate the maze of providers and plans to find the best small business electricity rates.

We will guide you through the things you should consider when shopping for a business electricity plan. We’ll talk about provider reputation, plan types, energy sources, rates, and getting the best small business electricity rate. We'll also show you how to use ElectricityRates.com marketplace to shop for small business electricity plans.

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Table of Contents

How do i compare business electricity rates, setting up electricity service, small business electric provider reputation, understanding small business electricity rates, demand, range, and load, types of small business electricity use rates, types of small business electricity plans, small business electricity contract length, energy sources for small businesses, why are home and business electricity rates different, small business electricity rates conclusion.

By default, the local utility company provides the electricity supply for your small business. If you live in an Energy Choice state , you have the right to shop and compare electricity plans from alternative suppliers.

As noted above, your meter type determines your TDU delivery rates and whether or not you will have a demand charge. Your TDU delivery charges will remain the same regardless of the electricity supplier you choose. The key is focusing on the price per kilowatt-hour for supply, or sometimes called the energy charge.

If you're in charge of managing energy costs for a large, or commercial business that has an average energy bill of $2500+ per month click here to learn how to compare commercial electricity rates . We will help you find the best commercial electricity rates for your medium or large business.

When is the best time to shop for business electricity?

To keep control of your business electricity costs, it’s important to lock in a new rate before your contract expires. Otherwise, you will be switched to an index rate or month-to-month variable rate.

Electricity contract rates for businesses fluctuate based on the season. Typically, rates are elevated during the summer and lower in the winter. However, businesses have the option to secure their electricity rates up to six months ahead of time.

Suppose your contract is up for renewal in January. In that case, you can browse for new electricity rates as early as June. This way, you can obtain a reduced electricity rate and take advantage of the best electricity rates for small businesses.

New Businesses

It can be a bit challenging to establish electricity service for a new business because pricing is usually determined by usage, load factor, and demand. The electricity supplier might find it difficult to calculate your electricity pricing since you are just starting.

To calculate your usage, they can consider the occupancy rate and customer demand of the previous tenant or a nearby competitor. They will also take into account your square footage and business category.

Another important consideration is credit, which will be discussed later. If you are a new business, you may not have an extensive credit history. However, there are some business electricity providers that have more flexible credit requirements. Additionally, if you are a sole proprietor, some suppliers may accept your personal credit check.

If you’re moving into a new space, it’s possible that you’ll need a city permit for electricity. This depends on what city your business operates in. Speak with your landlord to determine what permit requirements exist if you’re renting. If you’re building a new property, your builder will have contacts with the permitting office. They will handle everything as part of your occupancy permit.

Whether you’re searching for the best business electricity rates texas, the cheapest commercial electricity rates in Pennsylvania, or small business electricity rates in another state.

Established Business

The types of utilities your business requires depends on the nature and type of your operation . Additionally, each state has their own specific regulations. Most small businesses that have a building and employees are required to provide electricity and running water.

To get started, Google how to set up electricity service for my business in [Insert your state]." There you will get a breakdown of the process and any permits needed. Additionally, you can contact your local Department of Energy official to learn more about small business energy programs and requirements.

When shopping for an electricity plan, it is important to research the reputation of the providers. Not all providers are created equal, and some may have a bad track record of service or customer satisfaction. It's essential to read online reviews and check the provider's rating with the Better Business Bureau (BBB). You need a reliable provider that supports your small business and keeps it running smoothly.

Fortunately, at ElectricityRates.com we have already done all of the research for you. Just contact us at (888) 480-7758 to speak with a small business energy consultant who will listen to your needs and help you quickly find the perfect plan!

Electricity plans come in different types of rates, demand, range, and load . Understanding these factors will help you choose the best plan for your business.

Demand charges refer to the amount of electricity your business uses at peak times. Range and load refer to your business’s electricity needs on a daily or weekly basis. The types of rates are non-time-of-use (TOU) and time-of-use rates (TOU). TOU rates vary according to the time of day when electricity is used. Depending on the needs of your business, one of these plans may be more cost-effective than others.

Electricity Demand:

Electricity demand refers to the amount of electrical power your business requires at any given time. It is typically measured in kilowatts (kW) or megawatts (MW). Understanding your electricity demand is crucial as it influences the size of the electrical infrastructure your business needs to support its operations.

Factors influencing electricity demand:

• Business size: The larger your business, the higher your electricity demand is likely to be.
• Equipment and appliances: Energy-intensive equipment, such as machinery, refrigeration units, or HVAC systems, can significantly impact your electricity demand.
• Operating hours: Businesses operating longer hours or around the clock may have higher electricity demand compared to those with limited operating hours.

Electricity Range:

Electricity range refers to the amount of electricity your small business consumes over a specific period, often measured in kilowatt-hours (kWh) or megawatt-hours (MWh). It represents the total energy consumed within a given time frame.

Factors influencing electricity range:

• Business activities: The nature of your business operations and the energy consumption patterns associated with it determine your electricity range.
• Seasonal variations: Certain businesses experience fluctuations in energy consumption due to seasonal demands. For example, heating or cooling needs may increase energy usage during extreme weather conditions.

Electricity Load:

Electricity load refers to the power consumed by your business at any given moment. It represents the actual electrical demand at a specific point in time and is typically measured in kilowatts (kW) or megawatts (MW).

Factors influencing electricity load:

• Peak usage: The highest level of electricity consumption during a specific period is considered the peak load. It’s important to understand your business’s peak load as it may affect the pricing structure of your electricity plan.
• Time of use: Electricity providers often offer different rates based on the time of day. Understanding your load patterns throughout the day can help you optimize energy usage and potentially save costs.

The two types of electricity use rates for businesses are non-time-of-use (TOU) and time-of-use rates (TOU). TOU rates vary according to the time of day when electricity is used. Depending on the needs of your business, one of these plans may be more cost-effective than others.

1. Non-Time-of-Use (TOU) Rates:

Non-TOU rates offer a fixed price per kilowatt-hour (kWh) of electricity consumed, regardless of the time of day. This rate structure is typically suitable for businesses with relatively stable and consistent electricity consumption patterns throughout the day.

Here are examples of businesses that may benefit from non-TOU rates:

a) Retail Stores: Retail businesses often have regular operating hours and consistent energy usage patterns throughout the day. Non-TOU rates can provide cost stability and predictable electricity bills. b) Offices: Businesses operating in office spaces, such as administrative offices, professional services, or small consulting firms, usually have standard working hours and a relatively constant electricity load. Non-TOU rates can be advantageous for these businesses. c) Small Restaurants/Cafes: Restaurants or cafes that have consistent lunch and dinner hours may find non-TOU rates more suitable. The energy usage during these operating hours tends to be relatively stable, making fixed-rate plans more predictable.

2. Time-of-Use (TOU) Rates:

TOU rates vary based on the time of day and the demand on the electrical grid. These rates have different pricing tiers for peak, off-peak, and sometimes shoulder periods. TOU rates can be advantageous for businesses that have flexibility in their energy usage and can shift certain operations to off-peak hours.

Here are examples of businesses that may benefit from TOU rates:

a) Manufacturing Plants: Manufacturing businesses that have the ability to adjust their production schedules to off-peak hours can take advantage of lower electricity rates during those times. By shifting energy-intensive processes to off-peak periods, they can potentially reduce costs. b) Large Restaurants/Catering Services: Restaurants or catering services that have flexibility in meal preparation schedules may benefit from TOU rates. By scheduling food preparation during off-peak hours, they can take advantage of lower electricity rates. c) Data Centers: Data centers often have high electricity demands but can adjust their cooling and server maintenance processes to off-peak hours. By utilizing TOU rates, data centers can optimize energy usage and potentially reduce costs during lower-demand periods.

It’s important to note that the specific rates and availability of non-TOU and TOU options may vary depending on your location and electricity provider. When comparing plans on ElectricityRates.com consider your business’s operations, peak usage hours, and the feasibility of shifting energy-intensive activities to off-peak hours to determine which rate structure would be most cost-effective for your business.

There are four major plan types for energy consumption. Fixed-rate plans, indexed rate plans, variable month-to-month plans, and block & index electricity plans. Each plan has its benefits and drawbacks. Ultimately, it depends on your business needs on which plan you choose.

Fixed-rate Plan:

• A fixed-rate plan is an electricity plan that offers a fixed rate for energy consumption over a set period, usually 6, 12, or 24 months.
• The rate remains constant regardless of market fluctuations or changes in usage.
• The advantages of a fixed-rate plan include predictable monthly bills and protection against sudden price spikes in the market.
• However, the disadvantage is that you may end up paying more than necessary if the market prices drop significantly during your contract period.
• A fixed-rate plan is best suited for small businesses that want to budget their energy expenses and avoid unexpected costs.

Indexed Rate Plan:

• An indexed plan is based on an index that tracks energy prices in a specific geographical area. It is a type of electricity plan that fluctuates based on the current local market price of energy.
• This plan type offers a variable rate based on the wholesale market prices.
• The advantages of an indexed rate plan include the potential for saving money when market prices are low.
• The disadvantage is that you may end up paying more than necessary if the market prices rise significantly.
• An indexed rate plan is best suited for small businesses that are willing to take short-term risks and want to capitalize on market fluctuations.

Variable Month-to-Month Plan:

• A variable month-to-month electric plan is a type of plan that offers a variable rate each month.
• This plan type is subject to market fluctuations and changes in usage.
• The advantages of this electricity plan include flexibility and no contract commitments.
• The disadvantage is that the monthly bills can be unpredictable and subject to sudden spikes in the market.
• A variable monthly plan is beneficial for small businesses that wish to manage their energy usage closely. These businesses are comfortable with fluctuating prices.

Block & Index Electricity Plan:

• A block & index power plan is a type of plan that combines both fixed and indexed rate features.
• This plan type offers a fixed price for a minimum usage level, with any additional usage charged at the local indexed rate.
• The advantages of a block & index electricity plan include the ability to take advantage of market fluctuations while still having some price predictability.
• The disadvantage is that you may end up paying more than necessary if you exceed your minimum usage level.
• A block & index electricity plan is best suited for small businesses that have consistent energy usage levels but want to take advantage of market fluctuations.

When choosing an electricity plan, it’s important to consider how long the contract will last. Business electricity rate contracts can range from month-to-month to 6-12 months, or up to 60 months. The optimal electricity plan for your business will depend on your specific energy requirements and budget.

Most business owners choose a 12-month contract to match their yearly planning and avoid costly cancellation fees if unexpected changes happen.

Some providers offer one-year, two-year, or three-year contracts. If you choose a longer contract, the price may be cheaper. However, if you decide to cancel before the contract ends, there may be an early termination fee. A shorter contract may offer more flexibility, but the rate may be higher.

Another consideration for a business electricity plan is the source of the energy. Some providers offer plans based on renewable energy sources such as wind, biofuels or solar .

Renewable energy may be preferable for companies seeking to reduce their carbon footprint and meet corporate social responsibility goals. Depending on your business needs, it may also be possible to create a custom electricity plan based on specific energy sources.

Check out our Renewable Energy for Business page for more information.

Electricity suppliers price electricity differently for businesses and homes based on their respective “load profiles”. You can obtain these profiles from the local utility company or regional electrical system operator.

Load profiles display the monthly and daily electricity usage patterns of residential and small/medium commercial customers. They are key in determining electricity costs as the price of electricity changes depending on when it is used.

The way that homes, small businesses, and large businesses use energy is not the same. Electricity rates for homes are determined by assuming that 60% of energy is used for heating and cooling, especially during summer. Residential rates also consider how much energy is used during nighttime hours when people are home. Businesses usually operate on weekdays from 8am to 6pm, and their energy usage is more consistent throughout the year and week.

In Texas , the energy market is almost completely deregulated meaning businesses are in total control of shopping for their electricity provider. Also, there is a difference in the way electricity prices and residential electricity prices are quoted. Residential electricity prices in The Longhorn State include the cost of delivery, whereas electricity business rates in Texas only include the cost of energy supply. This is because the delivery rates for businesses depend on the type of meter and demand level so it is a separate charge in your electricity bill.

Choosing the right business electricity plan is essential to keep your operational expenses low and maintain a strong bottom line. Factors such as provider reputation, plan type and length, energy sources, business demand, range, and load, and types of rates all influence the total cost of your electricity.

By considering these factors and working with a reputable provider, your business can achieve cost savings and reduce its environmental impact. Use ElectricityRates.com to compare electricity rates for business and find the best electricity plan to meet your needs.

Call (888) 480-7758 for a free custom quote from our energy advisors and lock in a fixed-rate electricity rate today!

Business Electricity Service Map

Document features a template for an acquisition plan that can be used for a utility energy service contract (UESC). An acquisition plan for a UESC will address project-specific technical objectives and business considerations and identify the milestones in the acquisition process. The contracting officer will also ensure that agency acquisition policies, guidance, and practices are followed. Blue, italicized font is used throughout the document where optional language or guidance is provided.

Download the template.

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Compare Business Electric Rates in Texas

Business electricity rates are cheaper than residential rates. Here's what you can expect for your Texas business.

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The Dallas skyline. 

The old cliche that "everything is bigger in Texas" seems to apply to energy choices too. 

Texas is deregulated , meaning most residents there have choice in energy providers -- more than 130 different retail electric companies to be exact, according to the Public Utilities Commission of Texas.  

The Texas energy choice market is unique but complicated. Some experts say it brings strong competition, lower prices and a wide variety of plans and unique billing options. Others believe Texas is "deregulation on steroids" -- meaning too many options and consumers can be inundated by choices leading to paying more for electricity.

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"The complaints are usually about the clunkiness, the complexity, the sheer amount of choices," said Michael Kraten , director of accounting program initiatives at University of Houston's C.T. Bauer College of Business. "It's the same people who complain when they walk into a cookie aisle in a store. They say, 'I just want a package of Oreos,' and they find five dozen different options and no clear way to compare between them. It's a valid complaint. Yet, there is a valid reason for why the options are there."

While both arguments may be true, if you live in Texas or run a business there, the fact is, you have no choice but to make a choice in energy providers. 

Looking for commercial and business rate plans?

Get a free customized rate quote today.

Businesses and commercial properties can avoid overpaying for energy with a customized rate plan that is tailored to your property's usage profile. Start saving on your utility costs today with a free commercial energy consultation.

*SaveOnEnergy and CNET are both owned by RedVentures. We may receive a commission if you get a quote or make a purchase through this link. 

Comparing business and residential electric rate in Texas 

In a deregulated energy market, consumers can choose who provides the energy that powers their homes or businesses. While you're still locked into a utility in deregulated markets, theoretically the amount of energy providers competing for your business could lead to getting a better deal, although consumers must do their homework or risk paying more, as mentioned above.

According to the latest available data from the U.S. Energy Information Administration (EIA) , the average Texas commercial electricity rate is 8.85 cents per kilowatt-hour , lower than the national average of 12.39 cents per kWh. In comparison, the average Texas residential electricity rate is 14.58 cents per kWh , also lower than the national average of 15.73 cents per kWh.  

The reasons why Texans enjoy lower rates is clear: Unlike in many states that aonly llow a single utility to sell energy, the Lone Star State sees energy businesses competing for consumers. That means savings for consumers. Of course, it also means bad actors who may take advantage of consumers who don't read the fine print. As businesses typically consume more power than homeowners, savvy business owners and executives could use their leverage to work out better deals.

The average Texas commercial electricity rate has been consistently lower than residential rate for the last 20 years. 

Factors impacting business electricity rates in Texas

The two biggest differences with commercial energy rates versus home energy rates are the cost and enrollment process.

Shopping for a home electricity plan is fairly self-sufficient. In Texas, that means logging onto a comparison site like PowerToChoose or SaveOnEnergy , entering your ZIP code, then choosing between the options available in your area based on rate, type of plan, type of energy (such as renewables) and other factors. Then enrolling online or by phone. 

The higher energy consumption for a business is why rates are cheaper -- and also complicates the enrollment process. "The issue is not just the gross amount or absolute amount of power, but also when you need it, and what structure of price you've agreed to," Kraten said. "Those are all factors that are related to supply and demand that also affect what you would pay."

These are the factors that influence the cost and type plan you choose for a business or commercial property.  

Type of business

There's a big difference between a factory with electricity-run machinery versus a professional services office with most of its electricity coming from computers and lighting. The latter uses less energy, whereas the former, depending on its size, consumption and load factor could negotiate a deal for better rate and terms due its higher consumption. 

Consumption

Most businesses will use more energy than a home. Typically, the more energy predicted to be used, the more negotiating power you may have to get a cheaper rate per kilowatt hour . "If you're running a business, you take certain responsibilities on your shoulders to a greater extent," Kraten said. "As is the case with most other purchases that such businesses make, they have enough market clout that they can strike the round deal."

Load factor

When a business enrolls in an energy program, it will be bucketed into three categories: high, medium or low load factor. Each category describes how much demand your business is expected to pull from the grid and will also influence your overall costs in two ways:

High, medium or low load factor is how power companies plan how much energy it will need and when. The higher the load factor, the lower the demand, and therefore a cheaper price per kilowatt-hour. 

Load factor will affect how much a business will pay in demand charges which are separate from the rates per kilowatt-hour itself. A higher load factor, for example, means lower demand and will yield lower demand charges -- a tariff placed by a utility or ERCOT and is classified by its forecasted demand . 

High load factor: A business that uses energy efficiently, and in a predictable and consistent flow. An example of a high load factor-low demand is a grocery store or a school with long predictable hours of operation. This business type tends to get the cheaper energy rate and lower demand fees. 

Medium load factor: A business that has inconsistent demand where there are periods of high and low usage. Retail stores and health care offices may be medium factor and medium demand since they don't use a ton of electricity to operate. 

Low load factor: Uses power in high doses over short periods of time inconsistency. This type of load factor required high demand from a grid due to its unpredictability. Small businesses such as restaurants and houses of worship tend to be classified with low load factor and high demand since hours of operation are periodic and not consistent. Small businesses with low load factors tend to pay more in demand charges. 

This is an important factor across the country, but even more so in Texas, which is "so large and diverse, that it's a microcosm of the country," Kraten said. Each region of Texas serves different business interests, such as energy in Houston, agriculture in Dallas or technology in Austin. Therefore, Kraten said, energy providers in each region will go lengths to accommodate certain types of businesses.

Each regional distribution utility will come with its own taxes, demand fees and delivery costs as well. For example, your commercial rate for the supply of energy may be one price, but the overall costs of your energy may vary if your business is located in the Oncor versus Centerpoint utility service areas. 

Length of contract

Typically, the shorter the contract, the cheaper the rates. Longer contracts usually come with higher rates. Kraten said market factors cause electric companies to make long-term assumptions and calculate those risks in the rate itself. Consumers will pay more for the longer commitment to a certain rate price in a "catastrophically uncertain world," Kraten said. 

Market factors

The overall US or global economy can influence energy rates. The Russian war on Ukraine , for example, shifted oil and natural gas prices, which in turn has global implications on energy costs. Less obvious factors like the energy intensive crypto mining where it's surprising energy demand may be driving up energy costs. 

Government regulations

A state government entity could influence the overall cost of electricity if it raises or lowers utility fees and state tariffs. For example, the TDU fee -- the cost to deliver the electricity -- is regulated by the Public Utility Commission of Texas . 

Types of electricity plans for business in Texas

Fixed-rate plan.

These types of plans offer energy consumers some predictability. The price per kilowatt-hour is known in advance and remains mostly flat over the course of a contract. For businesses that need energy throughout the day and expect consistent bills, fixed-rate plans are worth considering.

Variable rate plan 

For business owners who want to go with the flow, variable rate plans come with no contract commitment and charge based on market conditions. These rates fluctuate -- typically monthly -- based on seasonal market shifts. Electricity may be more expensive in the summer and winter when demand is higher while businesses and homes are using heating and cooling. And conversely, rates tend to be cheaper in the fall and spring when less strain and demand takes place. 

Renewable energy plans

Texas is a big player in the renewable energy space . A business could choose a "green" plan where some or all of the electricity comes from solar , wind or hydro power. 

Businesses could opt into a REC program (renewable energy certificates) to showcase its green initiative. 

Time-of-use plans

Similar to variable rate plans, time-of-use plans mean that energy prices change depending on the time of day. Energy could be more expensive in the daytime when demand is high, fall during lunchtime, rise again then lower at night when demand shrinks. If your business can adjust the time it uses energy, it could lead to savings.

Demand response programs

Under demand response programs , energy providers will use financial incentives to encourage the shifting of electricity usage based away from peak demand hours. If a business elects to participate in a demand response program, it may be financially compensated for a high demand period or during a conservation event . 

Indexed rate plans

These plans can be similar to variable plans, in that energy prices can change. But instead of prices being based on demand, indexed rate plans are connected to a commodity index. Indexed rate plans are complicated and time consuming. Be sure to understand the math equations at work before signing up for these plans.

How to find the best electricity rate for your business 

If you want to get the best electric rate for your business, the first step is understanding how you use electricity. Break down your past year's energy usage by pouring over your bills and see what times of day you need electricity the most. Create a 12-month historical lookback and a 12-month prediction looking forward. With this information in hand, a commercial energy consultant can guide you into a plan that best suits your business consumption profile. 

Ask for multiple quotes with differing contract lengths from a few different providers. Ask for quotes in writing so you can see if others will price match. 

Why are electric rates for business lower than residential rates?

Electric rates are lower for businesses than residences because the commercial properties typically use more electricity, have differing load factors and demand profiles. When you buy in bulk, the price per unit typically drops. But you could pay more in demand charges if your usage is inconsistent. 

Why can't I shop for business rates online like I can with my home?

Because businesses typically consume more power than homes, there are too many factors at play to allow them to shop for rates online. Use this inquiry form to get connected to a business or commercial energy specialist for a free rate quote. 

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California braces for new electric plan: Make more, pay more

California public utilities commission has until july 1 to impose new electric rate structure.

California may charge electricity customers based on income

Fox News senior national correspondent William La Jeunesse reports on proposed changes to California's electric bills on 'Special Report.'

LOS ANGELES – How to go green without going broke? That's the latest challenge in the alternative energy capital of California, where Democrats propose taxing the rich to make energy more equitable and affordable. To do so, lawmakers mandated utilities statewide begin billing ratepayers based not on how much electricity they use, but on how much money they make.

"This would be the first state to charge people based on their income rather than what they actually just use," said Shon Hiatt, director of the USC Business of Energy Transition initiative. 

"The problem here has been affordability. While California has focused almost completely on clean energy , it has disregarded reliability and affordability, and costs have continued to escalate. So, one of the (ways) they thought to address affordability (was), 'Let's just consider a tax and begin taxing people based on their income to address electricity rates.'"

The California Public Utilities Commission (CPUC) has until July 1 to impose the new rate structure. The state's three main utilities — Pacific Gas and Electric, Southern California Edison and San Diego Gas and Electric — proposed a tiered rate plan.

EVS MAY MAKE AIR DIRTIER THAN GAS-POWERED CARS AS CALIFORNIA PUSHES NEW MANDATES: STUDY

Gov. Gavin Newsom has been heavily criticized for California's new energy mandate. (Fox News / Fox News)

Households earning $28,000-$69,000 would be charged an extra $20 to $34 per month. Those earning $69,000-$180,000 would pay $51 to $73 per month, and those earning more than $180,000 would pay a $85-to-$128 monthly surcharge.

That's a lot considering California’s electricity rates are already among the highest in the nation. People living in California have been paying 32 cents per kilowatt-hour compared to the national average of 18 cents, according to Energy Sage, which has monitored energy prices nationwide. It claimed California residents have been paying $273 per month on average for electricity, or $3,276 per year.

The proposal is creating havoc for Sacramento Democrats, especially among higher-earning Californians along the coast. More than a dozen state Democrats have been trying to unwind their votes, echoing some Republicans who opposed the "graduated income fixed charge rule."

"Our constituents have had enough and so have we," said Thousand Oaks Democrat Jacqui Irwin. "It’s time to put some reasoning back into how we charge for electricity in California. At a time when energy conservation is badly needed to avoid rolling blackouts, this dramatic policy shift could actually result in increased usage by some Californians."

Irwin voted for the bill last year but changed her mind after constituents complained that middle-income residents who conserve energy may be paying more than neighbors who use more energy.

There's also the issue of privacy and income verification. It’s unclear who or which agency would be required to obtain ratepayers’ tax information to determine their electric bills.

"It would be nearly impossible to implement given the many legal and privacy challenges that there would undoubtedly be to accurately determine every taxpayer in the state's income," Irwin said.

"The assumption is, 'Well, if you're making $100,000 in the state, you must be super-wealthy,'" Hiatt remarked. "But what if you have five or six kids? Will they be treated the same as a single head of household?"

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Why did California entertain this bureaucratic nightmare? Many critics have blamed Gov. Gavin Newsom and his strict energy mandate that the state be carbon-free by 2035, along with the Democrat’s insistence that lawmakers fast-track the bill with no discussion.

Terrie Prosper, a CPUC spokeswoman, told a local TV station that implementation of the bill marked a critical step toward California's climate goals because a lower usage rate would lower costs for consumers to charge an electric vehicle or run an electric heat pump.

MIKE ROWE DETAILS 'UNINTENDED CONSEQUENCES' FROM CA'S $20 MINIMUM WAGE: 'BAD LOOK FOR THE GOVERNOR, PANERA'

Underscoring all of this is California's rush to embrace clean energy , which, contrary to what Californians were told, has not proven cheaper than fossil fuels.

"This electricity will be clean electricity," Vice President Kamala Harris said in January 2023 while dedicating a power line to carry green energy into California, "and the energy delivered by these lines will not just be cleaner, it will also be cheaper."

A year earlier in Carlsbad, while dedicating a solar plant, President Biden said, "It's also now cheaper to generate electricity from wind and solar than it is from coal and oil, literally cheaper."

Oil drilling equipment on federal land near Fellows, Calif., April 15, 2023. (REUTERS/Nichola Groom/File Photo / Reuters Photos)

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That is not proving true in California , where electric rates have been higher than in virtually every other state.

"Renewable energy is not cheaper than natural gas or coal or other types of baseload energy," said Hiatt. "The problem with intermittent renewables is that they're not on all the time. You still need natural gas or battery backup."

Laura V. Svendsen

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