Why Does Weather Impact Energy Costs?

There are many factors that impact how much your business’ energy bill is each month, and a major component is weather. Traditionally, energy bills tend to be higher in the summer. But why is that? And is there anything you can do to prevent rising energy costs? Read this blog to find out.

High Temperatures, High Energy Demand

It’s no surprise that businesses need to regulate the temperature in their facilities to ensure a comfortable environment for their employees and customers. So, during the warmer months, we turn to our air conditioning to keep us comfortable – and so does everyone else. The U.S. Energy Information Administration reported that in 2020, the commercial sector, which includes commercial and institutional buildings, used about 155 billion kWh for cooling. This equals approximately 12% of total commercial sector electricity consumption^1. Cooling systems require a lot of power to run, and in the summer when lots of businesses are cooling their buildings, it causes an increase in demand on the electricity grid. When demand is high, prices can tend to creep up, as well.

How to Protect Your Business

If your business has locked in a fixed rate electricity plan, you’re already taking great steps in protecting your business from variable energy rates. Securing your energy rate at one, consistent price for the duration of your energy contract ensures that you’re protected from fluctuating market costs. However, the amount of energy your business consumes has an impact on your overall energy costs because the amount of energy you use is multiplied by your energy rate. There are a variety of strategies you can use to make your business more energy efficient, including sealing drafts around doors and windows, increasing your air conditioning temperature when no one’s in the building (if that’s an option for your business), investing in smart energy technologies and more.

We’re Here to Help

Providing a cool, comfortable and safe environment for your employees and customers is a top priority during the summer months. As your trusted energy partner, AEP Energy is here to help you manage your energy costs and consumption. For more information about our fixed rate plan or if you have questions about your business’ energy usage, contact our Small Business Energy Consultants at this link or by calling 877-648-1936.

¹ U.S. Energy Information Administration – https://www.eia.gov/tools/faqs/faq.php?id=1174&t=1

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