3 Steps to Keep Your Small Business Energy Costs Manageable in Extreme Cold

During extreme weather – like the intense cold currently sweeping much of the United States – it's not just shivering customers you have to worry about. One of the biggest challenges small businesses face during cold months is preparing for potentially volatile energy prices. If the rate you pay fluctuates each month(known as a variable rate), you never know when your bill may go shooting up, leaving you struggling to keep up. Fortunately, you can prepare your business for rising energy prices this winter.

Step One: Review Your Energy Plan

If you chose your energy plan during temperate months, a variable rate plan may have looked great. After all, it allowed you to take care of your energy needs for a lower price. Unfortunately, energy prices can skyrocket during the winter, making your variable rate plan much less appealing.

With a variable rate plan, energy rates change based on market demand. When there is very cold or very hot weather, your energy costs can rise significantly. A variable rate plan can result in lower costs across the year as a whole, but your business must be able to take on the risk of price spikes – and the budget uncertainty that comes with it.

On the other hand, with a fixed rate plan, the price you pay per kilowatt of energy doesn’t change – regardless of the weather or energy market. A fixed rate plan may cost a little more per kilowatt hour initially, but the mark-up can significantly pay off by protecting your budget from market spikes – and giving you the peace of mind that comes from a stable rate.

Choosing a fixed rate plan is a good way to make sure your small business isn’t at the mercy of weather and energy market fluctuations. Review your last energy bill or your original contract to find out if you’re on a fixed or variable rate plan.

Step Two: Check Your Energy Plan Expiration

Do you know when your current energy plan will expire? When it does, will you need to take action to renew the plan, or will it auto-renew? For that matter, when was the last time you shopped around for energy suppliers? It's important to know when your current energy contract is expected to expire, what steps you'll need to take to renew it and if there are better plans and rates you should consider.

Thanks to the extreme cold this winter, you know firsthand that there’s more to a good energy plan than price. Before you shop or renew, consider how your energy plan helps your business meet its unique needs.

Step Three: Lower Your Usage

Whether your business is on a fixed or variable rate plan, you’re probably paying for energy based on how much you use per month. Businesses tend to use more energy during the winter than spring or fall because your furnace is constantly working to keep your business habitable. So another effective way to manage and potentially reduce your energy expenses is to use less energy. There are several strategies you can explore to help manage consumption:

•  Schedule an HVAC maintenance check early in the season. This will help ensure that your unit is working as efficiently as possible and give you time to repair any issues before cold weather strikes.
• Install smart thermostats. Smart thermostats allow you to schedule automatic temperature drops overnight and on weekends when no one is in the building. If your thermostat connects to your mobile device, you can also lower the temperature remotely during an unplanned business closure.
• Upgrade to energy-efficient equipment where possible. New equipment can be costly, but it often consumes much less energy than older models, and that can make a difference for your energy bill.
• Go automated! Automatic light switches can help substantially reduce your power usage by ensuring lights are off when no one is in the room.
• Check the insulation. A properly-insulated building will help keep your warm air in and cold air out.
• Incentivize employees for helping with energy-saving goals. This will help get them on board and encourage them to participate in the initiative.

The winter months can get cold quickly, and this year may see colder weather than you anticipated. Despite frigid temperatures, you can take control of your energy costs by preparing ahead of time and making sure your energy plan is best suited for your small business.

Take our quick assessment to see how well you're currently handling the extreme cold & see what else you can be doing to help potentially improve efficiency and reduce costs.