Six Steps to Cut Your Chain's Energy Costs

10/29/2013

Whether you realize it or not, today’s convenience store owners and operators have a new range of tools in their belt these days when it comes to increasing their bottom line. One of the most immediate and impactful options is energy efficiency. Yes, the term is bandied about a lot these days, but for a reason: Convenience store owners are missing an opportunity to save up to 33 percent off their energy bills.

Clearly, managing energy usage can go a long way toward cutting costs and improving the profitability of your stores, but what many franchise leaders don’t realize is how easy it is to use energy more efficiently. And, perhaps most importantly, many of these options are free and require no additional operating expense. Here are the top five steps to lowering your store costs, while making additional income.

First, evaluate your current position:

  • Gather zip codes, square footage and control systems for each location.
     
  • Use off-hand estimates to determine which power sources in which locations you can afford to turn down or off for limited durations.
     
  • Conduct research on the demand-response programs in your area and see which ones you might be able to participate in. We recommend starting with your local electric utility company.
     
  • Create and send out an RFP to all demand response (DR) providers. They will all offer slightly different terms, so be sure to evaluate their responses carefully.

Second, select your demand response provider using these criteria:

  • Market value of the programs for which they can register you. Curtailment services providers get your load curtailment into the market. They will take a percentage of your market revenue in return, so be sure you know what percentage they are taking.
     
  • Willingness of the provider to pay for your smart meters. This should be a given.

Third, follow system peak management best practices:

  • Understand how your bill is determined; it is not as straightforward as it may seem. In fact, in some areas, a large portion of your bill is determined by your consumption during only a few hours of the year.
     
  • Determine which of your locations are large enough to be impacted by additional charges due to excess consumption during peak times.
     
  • Reduce your store’s energy consumption whenever you receive an alert of high power peaks in these locations. Making this simple adjustment can significantly reduce your electricity bill next year, as this can impact nearly a quarter of some electric bills.
     
  • Bid out your electricity supply beginning in May of the year following your system peak management. If you have performed well, providers will be able to offer you reduced prices.

Fourth, evaluate your rebate opportunities:

  • Contact your local utility to find out about energy efficiency audits.
     
  • Use simple online tools like www.dsireusa.org to identify all your rebate opportunities as suggested in the audit.
     
  • Subtract expected rebates from projected measure costs and choose your payback hurdle rate.

Fifth, look into financing opportunities:

  • Property Assessed Clean Energy (PACE) programs -- visit sites like www.pacenow.org to identify areas that have implemented commercial DR programs to see if you’re PACE eligible.
     
  • Low-interest financing -- apply for these kinds of options for non-budgeted measures that have a payback of less than four years.

Finally, once you’ve followed these steps to create a program that will fit your criteria, the last step is to send out an RFP for the efficiency work that has been green-lighted.

As more c-store owners and operators realize the program benefits and financing options available to them, demand response and energy efficiency programs are becoming an integral part of the bottom line, reducing power consumption while generating revenues.

Mike Gordon is CEO of Joule Assets Inc., a provider of energy market analytics, tools and financing. As the strategic lead for Joule Assets, he is responsible for conceptualizing and developing products and services.

Editor’s note: The opinions expressed in this column are the author’s and do not necessarily reflect the views of Convenience Store News.

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