August 28, 2014

Cooling Off Your Summer A/C Bills

Work up a sweat just thinking about business’s air-conditioning bills this summer? Believe it or not, your electric company may be able to cut you a deal.

frozen dollar bill

Many electric providers are under pressure to reduce demand load in the hot summer months in order to avoid blackouts and brownouts and other electric grid issues. In doing so, many utilities now offer their commercial electric customers incentives (read: discounts) for signing up for programs that help them rein in electric use on the hottest days of the year. Some electric providers offer multiple types of programs geared to different types of businesses.

The easiest way to find out is to call your electric provider directly or check out its Web site, but the U.S. Department of Energy’s Federal Energy Management Program lists what’s available state-by-state.

Some utilities lower commercial customers’ bills in return for allowing them to cycle off air conditioning during times of peak demand. Xcel Energy, a large electric utility in Colorado and Minnesota, provides businesses who sign up for its Saver’s Switch program a $5 per air-conditioning unit ton monthly discount from June through September – which averages about $100 in discounts per business per summer. (A 15% monthly electric bill discount is also available to Xcel’s residential customers who participate in the same program.)

Using a remote control, the Saver’s Switch allows Xcel to turn off the A/C compressor in intervals on the hottest most electric demand-heavy days. But since the fan continues to run, the company says that some customers won’t even notice their air-conditioning is off.  (Certain types of businesses, such as restaurants and operations that require climate-control, are typically not good candidates for such a program.)

In California, Southern California Edison has a Summer Discount Plan, and San Diego Gas and Electric has its Summer Saver program, both of which lower bills in return for cycling off air conditioning.

Businesses using higher than normal amounts of electricity could also be eligible for electricity demand response programs in which they receive savings on their rates in return for voluntarily reducing usage during times of peak demand.

Notice times can vary. The New York Independent System Operator’s Emergency Demand Response Program, for example, provides a two-hour notice.

Some states have gone high-tech with these programs. In California, Pacific Gas and Electric, SCE, and SDG&E have an Automated Demand Response (Auto-DR) program in which commercial and industrial customers receive incentives for installing technology that automatically makes pre-programmed, pre-authorized load reductions through their facilities’ control systems.

In Washington state, PacifiCorp/Pacific Power’s Internet-based Energy Exchange offers real-time rate savings to large commercial customers during peak demand times. The customers can then decide whether the discount is enough to warrant reducing load.

Many electric utilities also offer rebates for businesses that replace their current air-conditioning units with more-efficient ones.

Do you participate in such a program through your electric provider? If so, how much money does it save you?


Frozen Bill Photo via Shutterstock

8 Comments ▼

Kelly Spors


Kelly Spors Kelly Spors is a former small-business and entrepreneurship reporter and blogger for The Wall Street Journal who has also written for Yahoo!, Entrepreneur, NFIB's MyBusiness magazine and The New York Times. Kelly is now a freelance editor and writer based in Minneapolis and has previously managed communications for an environmental non-profit that helps businesses find ways to be greener.

8 Reactions

  1. This is great news. Besides keeping cool, I won’t risk overheating my wallet anytime soon. Kudos for this informative post!

  2. Move to the UK. It’s rained here all summer. Cheap as chips.

  3. I was not aware of such programs, but are they only available for commercial subscriptions? The summer just started and our electric bill at home has already doubled. :(

    • Hi James,
      Some electric companies also offer discounts/incentives to residential customers who volunteer to let the company remotely cycle on and off their central air units on the hottest, demand-heavy days. The easiest way to find out is to call and ask, or it may have information on its web site.
      - Kelly

  4. Our power company sent us a letter about their program earlier this year and we opted in. It’s a great idea and saves us a few bucks.

  5. Isn’t this just typical. Governments underfund the infrastructure that consumers and businesses rely on, then put the blame and the onus to fix back onto the people they were supposed to be serving.

    All so they can spend our money on their pet projects such as non productive and totally unworkable green energy.

  6. Thanks for these tips, Kelly.

    Grids. Over usage.

    Summer always brings these discussions up, and they’re important.

    It’s nice to see some great programs in place that will benefit us all.

    The Franchise King®

  7. In addition to seeking out rebates for more efficient systems, we’ve found in many cases some basic HVAC maintenance and care can go a long way to re-capturing profits previously lost to high energy bills. There are many steps business owners can take without calling their HVAC maintenance company. We had a webinar on this recently for restaurant owners, but the recommendations apply to all small businesses, coincidentally entitled “Four by the 4th – Smart Moves to Cool-Off Your Cooling Costs”.

    Regards,
    -Jay Fiske
    Powerhouse Dynamics

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