The U.S. retail and wholesale establishments make up one of the largest sectors of electricity consumption in the nation. And they’re likely to use even more within the next few years, according to the U.S. Energy Information Administration, whose recent annual report indicates that commercial and industrial entities will lead domestic growth in primary energy usage through 2040.
With consumption — and costs — on the rise for many chain store locations, building an effective energy management strategy today will play a critical role in maintaining productivity and profitability in the future. But is there a way for large retail sector electricity consumers to go beyond traditional procurement approaches to reduce expenses and consumption, while generating an entirely new revenue stream?
Good news. There is. And it’s a win-win for the retail store industry and the energy sector alike.
Through a unique approach that leverages load management strategies, retailers can earn profits while decreasing demands on the electric grid, reducing prices and consumption, and saving on charges that are typically passed from the utility to the supplier to the consumer.
Let’s start with the most appealing part of the equation — generating profits. Changes in electric utility regulation have empowered retailers in many markets to purchase their power from suppliers other than the traditional utility. Chain stores now have a wider range of products to choose from and more opportunities to tailor energy contracts to meet unique operating requirements.
Many retailers have responded by selecting product structures with a fixed price for all or part of the electricity spend. These structures are appealing because they add some certainty to the overall monthly cost. But that certainty comes at a price.
To enhance pricing and supply flexibility, consumers could benefit from the revenue-generating potential of load management programs.
The premise is simple: Utilities in most markets throughout the United States need consumers to cut back, especiall