Energy Audit: CES Saves Small Enterprise $180,000 Over Five-Year Horizon as Study Shows Small Businesses Pay up to 52% More in Energy Costs

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Smaller businesses in some sectors pay as much as 52% more for electricity than their largest competitors, prompting Consumer Energy Solutions (CES) to release an audit in which the company helped a client create a net positive cash flow of over $3,000 per month.

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Consumer Energy Solutions addresses energy efficiency for small businesses, which pay up to 52% more in energy costs than large businesses.

“Our mission is to help organizations better manage their energy costs so as to add to their bottom line. Beyond that, it is to help future generations and the environment.

As reported in late July 2014 by the U.S. Chamber, energy costs are one of the top three business expenses for more than a third of all small businesses.1 To operate and effectively run their businesses, small business owners need to be able to obtain energy supplies at globally competitive prices. According to Patrick J. Clouden, CEO, Consumer Energy Solutions, Inc. (CES), many small businesses are not paying globally competitive prices for energy – rather, they’re paying double-digit percentages more per kilowatt hour of electricity or cubic foot of natural gas than larger companies in their category, prompting CES to assist these companies by strengthening their competitive position through commercial energy savings programs and energy efficiency.

According to the U.S. Small Business Administration, small entities in the manufacturing and construction sectors pay significantly higher prices than larger companies for electricity and natural gas. The smallest size establishment category (under 50 employees) pays 35% more for electricity than the sector average, while the largest establishment category pays 17% less than the sector average—amounting to a 52% cost difference for electricity between the largest and smallest manufacturing companies. This differential partially helps account for the fact that profit margins for smaller companies in 13 of the 19 manufacturing sector industries studied were lower than those of larger companies.

The study also found that in most categories of the commercial sector, small entities had a higher energy cost per dollar of sales than large ones. General merchandise stores and food and beverage stores were among those commercial sector industries with the highest energy cost to sales ratios relative to their larger counterparts.

But this does not mean, asserts Clouden, that small businesses are helpless in the face of rising and unequal utilities costs. There is much they can do to help level the playing field. One area in which most businesses can find immediate, substantial energy cost reductions, for example, is lighting.

Clouden cites a recent one-building lighting audit performed by CES on behalf of a client. Most of the lighting in the building was provided by 32-watt T-8 fluorescent tubes—among the most common types of lighting in business facilities in the United States. Supplementary ceiling lighting was provided by 400- and 175-watt incandescent bulbs—again, very standard lighting.

CES officials recommended upgrading all three types of lighting elements—the T-8 tubes, the 175-watt bulbs in the ceiling and external areas, and the very large 400-watt bulbs in the high ceiling and parking facility—to LED. While the initial replacement cost was substantial, CES arranged lease-purchase equipment financing for the upgrade on a 60-month term. The combined utility and maintenance savings greatly exceeded the monthly financing payment, creating a net positive cash flow of slightly over $3,000 per month.

“Looking out over a five-year horizon,” Clouden says, “for this one building alone, the company saved over $180,000—just by changing the light bulbs.”

Commercial LED lighting, along with other energy-efficient devices such as solar panels, can be particularly effective for facilities such as hospitals, which need to keep the lights on and the electrical systems running 24 hours a day, seven days a week. According to the Department of Energy’s Healthcare Environmental Resource Center, U.S. healthcare facilities that have implemented extensive energy efficiency programs have been able to cut energy use by 20%. For a 150,000-sq-ft hospital, this can mean annual savings of $111,300.3

Another type of business that can benefit significantly from energy efficiency and energy cost management is parking garages. Recently published statistics show that a common type of largely uninhabited space—parking garages—consume as much or more electricity per square foot as most types of commercial buildings.4

CES works with businesses of all kinds. The company has 300,000 commercial customers across the United States and Canada, including many Fortune 500 companies.

“Our mission,” Clouden says, “is to help organizations better manage their energy costs so as to add to their bottom line. Beyond that, it is to help future generations and the environment. When you reduce energy consumption, you reduce the amount of natural resources consumed, such as coal or gas, which are used to produce energy. This does not just save you money on your utility bills, but it is also better for the environment and prolongs the availability of these resources for mankind.”

About Consumer Energy Solutions, Inc.:

Headquartered in Clearwater, FL, Consumer Energy Solutions, Inc. (CES) is one of the nation’s foremost full-service energy consulting companies, with over two million residential and 300,000 commercial customers across the United States and Canada, including many Fortune 500 companies. Founded in 1999 by Patrick J. Clouden, CES transitioned in 2004 from selling primarily to residential customers to selling primarily to businesses. The company’s long-standing relationships with the largest independent energy suppliers in the U.S., coupled with its unparalleled knowledge of the industry, give CES customers access to the most competitive electricity and natural gas rates available in their area. CES is dedicated to educating its customers about the choices available to them as energy consumers, and to helping them, in a volatile energy market, to balance short-term savings against long-term risk. The company’s mission is to assist its commercial clients in better managing their energy costs so as to add to their bottom line. CES is an industry leader in providing its clients with effective strategies and solutions to reduce energy costs. References are available upon request. For more information, visit http://www.consumerenergysolutions.com.

1. Hackbarth, Sean. "3 Potent Arguments Against EPA's Carbon Regulations." 3 Potent Arguments Against EPA's Carbon Regulations. N.p., 29 July 2014. Web. 12 Jan. 2015. uschamber.com/blog/3-potent-arguments-against-epa-s-carbon-regulations.

2. Bollman, Andy, “Characterization and Analysis of Small Business Energy Costs,” SBA Office of Advocacy, April 2008.
archive.sba.gov/advo/research/rs322tot.pdf

3. “Facilities Management—Energy Efficiency,” Healthcare Environmental Resource Center. hercenter.org/facilitiesandgrounds/energy.cfm

4. “Energy Savings in Enclosed Parking Garages,” Macurco Gas Detection Inc.
images2.cableorganizer.com/3m-macurco/dvp-120/pdfs/energy-article.pdf

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