$120k. That’s how much one NYC-based coffee chain overpaid for electricity before a bill audit revealed the error – and put that cash back in their pocket.  

While energy might not be top of mind for many businesses, issues like this are far more common than most realize. And when things go wrong, they can supersize your bills fast – to the tune of hundreds of thousands of dollars. 

As an operator, we know you pride yourself in keeping your business running in tip-top shape. But no matter how tight your ship is, overpaying for electricity can still happen. In a complex industry, it can be difficult to identify and resolve issues. Is the rate on my bill the right one? Are these month to month variations in my usage normal – or a sign of something gone wrong?

If you want to keep spend down and protect your P&L from inflated costs, it’s all about knowing where to start. Let’s break down the five most common ways multi-location businesses overpay for electricity, and how you can avoid them.

1. Paying volatile or higher-than-normal rates

Did you know that you can shop around for a better energy rate? Many businesses start out on one contract or the utility default rate, simply never realize there are better options out there. 

The default rates are often indexes, meaning that they fluctuate based on market conditions and can lead to unpredictable and often higher costs. Still other businesses find themselves paying overpriced rates due to old contracts that were simply never updated.

By exploring fixed-rate options or competitive plans, and working with a partner that can recommend the right fit for your specific needs, businesses can achieve more stable costs and land on the right strategy to lower their electricity expenses.

2. Overconsumption of energy from HVAC

HVAC is a critical component of keeping your business comfortable, welcoming, and running smoothly. It’s also a big cost center. For fitness businesses, HVAC makes up 40-60% of total energy consumption – meaning when things go wrong, they can run up costs fast. 

From inefficient systems to incorrect schedules, we’ve seen it all. At one health club, programming errors caused simultaneous heating and cooling of adjacent spaces – causing the system to overwork and expend large amounts of energy just to fight against itself. Or take the story of one Juice Press location, where employees would crank up the AC to combat hot summer temps and leave the system in a hold state as low as 50° for days on end. 

Not only is HVAC expensive, but it can also pose significant ops strain. One David Energy client reported hours lost each week as regional managers drove from location to location to check on each individual thermostat and try to keep them in compliance.

3. Utility billing errors and technical issues

Billing and technical issues, such as being placed in the wrong rate class or having a broken meter, can result in overcharges that aren’t often easy to spot. 

Being billed in an incorrect rate class can lead to the utility charging you higher demand rates, while a broken meter can provide inaccurate readings, causing businesses to pay for more electricity than they actually use. 

This is exactly what happened with our coffee chain client. What’s worse? There was little they could do about it. They got few answers about their increasing bills, leaving them to simply settle the bill each month and watch their margins shrink. Until we stepped in. A bill audit analysis we ran revealed that the meter was incorrectly reporting their consumption. Once we got the dispute settled with the utility, it not only put that $120k back in their pocket but also returned their upcoming bills to normal.

4. Slamming scams and deceptive energy rates

Energy supplier scams – often known as “slamming” – are unfortunately common in the energy market. These scams involve switching your account, unauthorized, to a different energy supplier with a higher rate. 

In addition to slamming, businesses often get tricked by what looks like a good energy deal on the surface – but is designed to squeeze them later. Shady providers might lure you in with a dirt-cheap introductory rate that then increases right under your nose. We’ve seen businesses paying over 200% of the average market rate when this happens, without realizing these costs are completely avoidable. 

5. Missed savings from incentive programs

While most businesses would like to just pay as little as possible for energy, did you know that your power company can also pay you?

Many businesses miss out on savings opportunities by not participating in incentive programs like demand response. These programs offer financial incentives for reducing energy usage during peak demand times, providing a dual benefit of lowering energy costs and earning additional revenue. 

When implemented across multiple locations and with easy automation software, these programs can be impactful. How impactful? Take one of our fitness club clients, who took advantage of demand response programs through the David Energy platform—and got a $42K check out of it.

The energy expert difference

At David Energy, we know that electricity is likely the last thing you want to worry about. 

But that doesn’t mean that you should be stuck overpaying. We’re big believers that businesses should be able to do it all with ease: Spend less, use less, and rest easy knowing that it’s all handled for them, without having to stress and labor over their electricity.

That’s why our software and advisory team are designed to protect you from all the ways overpaying happens, and catch the things that are commonly missed. Here’s how we can help:

• Prevent overconsumption: Our thermostat management tools and custom programming advice ensures your HVAC is set up to deliver optimal efficiency and operational ease.
• Protect from scams: We safeguard your business from slamming scams and ensure you are charged fairly.
• Automatically audit bills: Our automated tools continuously scan your bills for discrepancies and notify you of any issues.
• Access to incentive programs: We offer participation in incentive programs like demand response to maximize your savings.

It might feel like you have to be an energy expert to have a shot at running your electricity effectively. But with David Energy, you don’t have to be. We’re here to handle your electricity, so you can get back to business. 

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