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How to Avoid Energy Rate Hikes: Why Businesses Must Optimize Their Energy Consumption Now

Intro

As utility companies like DTE Energy and Consumers announce impending rate hikes for grid improvements, commercial businesses find themselves facing a new fiscal challenge. The impact of increased energy costs can ripple through operational budgets, affecting profitability and competitiveness. In this blog, we'll highlight how businesses can actually avoid paying higher energy bills with rates at an all-time high.


Understanding the Impact on Commercial Businesses

According to Crain's Detroit businesses can expect a rate raise of between 3.2% (for industrial) and 9.7% (for commercial). For commercial businesses, energy costs constitute a significant portion of operational expenses. Any increase in electricity rates directly impacts the bottom line, squeezing profit margins and potentially leading to financial strain. From small retail stores to large manufacturing facilities, businesses across all sectors must grapple with the repercussions of higher energy bills. However there are a few "loopholes" that business owners should be aware of - that would help mitigate the impact of these rate hikes.


How Optimizing Your Building's Energy will Help You Avoid Rate Hikes

Loophole number 1 - It's not really a loophole as much as it is a proactive approach to lowering your energy costs no matter how high the rate hikes are. There are many ways to "optimize" your buildings energy usage (lighting, HVAC, Solar etc). The specific way we help businesses have the most dramatic cost reductions, is through their lighting. Buildings with old lighting that upgrade to new energy efficient LED lighting can often see energy costs decrease by over 60% (our average project saves 67% on their energy costs).


Now that 3-9% increase doesn't hurt so bad, does it?


How To Pay for these Upgrades Without Using Your Own Money

Loophole number 2 - Now this one may be the biggest energy saving loophole that customers don't know about. Every month when all energy customers pay their bill (no matter if it's DTE, Consumers, or any other provider), a small line item called the "Energy Optimization Surcharge" gets collected and deposited into a large fund called (you guessed it) the "Energy Optimization Fund."



this graphic illustrates the flow of money for the Energy Optimization Program

This graphic is a screenshot of a page from DTE's Energy Efficiency Program


This fund gets used to pay for the completion of "Green Energy Projects" for businesses that are customers of the energy providers. All providers have a fund like this. And any customer can apply to have access to the fund for their project (we take care of this on behalf of all our customers). The kicker is that every year the fund does run out (because yes there are businesses out there taking advantage of this)! And when it does there are no more funds allocated for green energy projects until the start of the next calendar year.


Pro Tip: We typically see the Energy Optimization Fund run out by sometime in October each year.


Conclusion

Rate hikes do not have to cost you. Embracing energy optimization strategies such as updating your lights, is a proactive response, that enables businesses to lessen the impact of rising energy costs. And we help all Stellux customers take advantage of certain programs (like the Energy Optimization Program) to reduce your monthly energy costs and reduce the overall cost of the project.

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