AEP Rates Stun Small Businesses

Today the Dispatch posted an article about how new AEP rates have hurt small businesses. Some of them have seen increases of upwards of 45%.

This is a factor of many different influences and an increasingly complicated Ohio electricity market. Some day when we have more time we can share our perspective, but for now I want to focus on solutions for small business owners.

This rate increase is most likely a result of your load factor. A load factor is a way of comparing how much total energy you use versus the most you use at any one time.

Note: Utility tariff nerds leave me be. I'm focusing on explaining this at a level the average business owner needs to understand so detailed techical innacuracies need not be sent my way :)

On a utility bill you are charged for electricity in different ways. To make it simple I'll say that you are charged for how much you actually use and how much the utility has to keep ready that you might use. This second part is known as demand. Fior example, if at one time during a month you need 75kw of energy then the utility basically assumes that you could need that much at any time. So they have to have it available. If however that 75kw is a rare occurence and you use much less energy the rest of the time you still have to pay for the utilities need to be prepared.

That difference between your peak use and average use is known as your load factor.

There are ways to improve this. Looking at when and how you run machines in your workplace, looking at moving certain processes to off hours time, controlling your demand are all ways to improve this.

Solar energy, used correctly, can be a way to improve this.

Here is an article that goes into more details about load factor and potential solutions.

If you'd like to learn more about how you can reduce your bills please contact us and we would be glad to present solutions and see if we can help. As a small business ourself we know how unexpected cost jumps can be very painful.

Good luck to you!