How to Save on Energy Costs While Electricity Prices Are Rising

Electricity prices are rising rapidly and are predicted to continue climbing due to increased demand. However, your energy bills don’t have to follow suit.

In this article, I’ll explore intelligent strategies that any business can adopt to lower energy costs, improve efficiency, and stay ahead of rising prices without compromising operations. 

By understanding the challenges of today’s energy landscape, from soaring costs to sustainability goals, you can take proactive steps that lead to significant savings, improved efficiency, and long-term success.

Here’s how businesses can effectively address these challenges, leveraging insights and expertise from energy consultants like us, Energy Professionals.

“Something unusual is happening in America. Demand for electricity, which has stayed largely flat for two decades, has begun to surge.”
– New York Times

Why Are Electricity Prices Suddenly Increasing?

For decades, electricity demand in the U.S. remained relatively stable. However, recent shifts have caused demand to spike. According to industry analyses, electricity demand could rise by an average of 9% by 2028, with peak demand increasing by 5% over the same period.

Electricity demand and prices are climbing for several interconnected reasons, and understanding these factors provides clarity on why energy bills are increasing:

1. AI and Data Centers
   The rapid expansion of artificial intelligence technologies has significantly increased the number and size of data centers. AI data centers are far larger and consume 10 to 100 times more electricity than traditional facilities. As AI adoption grows across industries, these power-intensive operations are placing a significant strain on the grid.
2. Electric Vehicles (EVs)
   The adoption of EVs continues to grow, driven by state incentives and mandates and consumer demand for greener transportation. Charging these vehicles—both at home and at commercial charging stations—adds a substantial load to the grid, particularly during peak hours.
3. Electrification of Homes and Businesses
   Modern technology is increasingly integrated into our daily lives and operations, requiring more electricity to power devices, appliances, and business processes. As homes and businesses embrace automation, intelligent technologies, and digital tools, the electricity demand rises.
4. Resurgence in Manufacturing
   Efforts to bring more manufacturing back to the U.S. have led to a resurgence in industrial activity. Manufacturing facilities are highly energy-intensive, contributing to the overall increase in electricity demand.
5. Grid Upgrades and Capacity Charges
   The aging U.S. power grid requires substantial upgrades to keep up with rising demand and ensure reliable power delivery. Utilities are working to address these challenges, especially during peak demand periods, by increasing capacity. For example, PJM, one of the nation’s largest power grids, recently announced a 500–800% increase in capacity charges to meet these demands—costs passed down to consumers and businesses.
6. Transition to Renewable Energy
   Transitioning from fossil fuel-based power plants to renewable energy sources like wind and solar is critical for reducing carbon emissions, but it comes with significant costs. Building new infrastructure requires massive investment, including renewable energy storage, transmission lines, and grid upgrades.
   • Many consumers and businesses are already paying additional “renewable energy charges” on their utility bills to support this transition, further driving up costs.
   • Simultaneously, retiring traditional power plants before renewables fully scale up has created challenges in maintaining a consistent and affordable power supply.

Natural Gas Supply Constraints: Exporting More, Producing Less

Natural gas remains the largest source of electricity generation in the U.S., but its supply constraints are driving long-term price increases. Here’s why:

Increased Exports

The U.S. has become a significant exporter of liquefied natural gas (LNG), supplying energy to countries worldwide, mainly Europe and Asia. This export surge has significantly reduced the domestic supply available for electricity generation, creating a supply-demand imbalance within the U.S. market.

Reduced Production

At the same time, domestic natural gas production has declined. Many operational oil and gas rigs, which produce natural gas as a byproduct, have been shut down. This reduction in operational rigs further limits the total natural gas supply available to meet domestic electricity needs.

Compounding Effects

With less natural gas produced and more exported, domestic supply is under significant pressure. As electricity demand continues to rise—driven by factors like EV adoption, AI data centers, and the electrification of homes and businesses—this imbalance is expected to increase natural gas prices.

Historical Trends

While natural gas prices are currently low, history suggests this trend won’t last. The last four times prices were this low; they surged significantly over the following three years. With increasing exports and reduced production, the U.S. will likely experience another cycle of rising natural gas prices, directly impacting electricity costs.

How to Realize Energy Savings and Avoid Increasing Energy Prices

Rising energy costs don’t have to be inevitable. 

By taking a proactive and strategic approach, businesses can mitigate the impact of increasing energy prices while achieving substantial savings. 

Here’s how:

• Invest in Energy Efficiency: Upgrading energy-efficient technologies like LED lighting and optimized HVAC systems can significantly reduce energy consumption. Implementing smart energy management tools ensures that no energy is wasted, maximizing savings over time.
• Secure Competitive Energy Rates: Locking in fixed rates through energy procurement strategies helps shield businesses from market volatility. Companies can achieve long-term budget stability by negotiating favorable contracts with energy suppliers.
• Participate in Demand Response Programs: Reducing energy usage during peak times helps the grid and provides financial incentives and rebates. Curtailing energy consumption during high-demand periods directly lowers energy bills and capacity charges.
• Adopt Renewable Energy Solutions: Integrating renewable energy sources, such as onsite solar or community solar programs, allows businesses to reduce reliance on traditional grid power and avoid fluctuating energy prices.
• Utilize Advanced Utility Bill Management: Comprehensive bill management systems help identify inefficiencies and track energy usage in real-time. With data-driven insights, businesses can continuously adjust their strategies to optimize energy consumption.

By combining these strategies, businesses can reduce their energy costs and better position themselves to handle future price increases, ensuring greater financial and operational resilience.

Our Process for Securing and Negotiating Low Energy Rates

Securing low energy rates in the long term is one of the most effective ways to shield your business from rising electricity costs. 

At Energy Professionals, this has been our specialty for over 25 years. We’ve helped thousands of businesses save millions by locking in competitive energy rates and ensuring long-term budget stability. 

Our proven process minimizes energy expenses while providing peace of mind, even as market prices fluctuate. Here’s an overview of how we achieve this for our clients:

1. Understanding Your Energy Needs
   The first step is knowing your business—its energy consumption patterns, operational needs, and future goals. By analyzing historical energy data, we identify opportunities for cost savings and determine the type of energy contract that best suits your business.
2. Market Analysis
   We continuously monitor energy markets to identify the best opportunities for our clients. This includes analyzing current market trends, price forecasts, and supplier offerings to ensure we negotiate at the most favorable time.
3. Supplier Network and Bidding Process
   Leveraging our extensive network of trusted energy suppliers, we initiate a competitive bidding process. Suppliers submit their best offers, and we compare rates, contract terms, and service conditions to find the most competitive options.
4. Customized Contract Negotiation
   With the offers, we negotiate directly with suppliers to secure the lowest possible rates and the most favorable terms. Our experience allows us to address critical details like contract length, price stability, and hidden fees to ensure our clients receive a transparent and reliable agreement.
5. Final Review and Implementation
   Once we’ve secured the best deal, we present the contract to you for review. We walk you through every detail to ensure clarity and confidence in the agreement. After approval, we oversee the implementation process, providing a seamless transition to your new energy supplier.
6. Ongoing Monitoring and Support
   Our work doesn’t stop at securing a low rate. We continuously monitor your energy account to ensure contract compliance and identify future savings opportunities. As your business evolves, we remain a partner in helping you adapt to changes in the energy market.

Securing Competitive Energy Rates

One of the primary concerns for businesses is the rising cost of energy. By choosing their suppliers, companies can benefit from competitive energy rates in deregulated markets. Energy consultants analyze market trends, supplier relationships, and client needs to secure contracts with the best rates and terms.

• Long-Term Price Stability: Keeping fixed energy rates for several years can protect businesses from volatile market fluctuations and rising costs.
• Tailored Solutions: By understanding your business’s energy usage and goals, consultants can negotiate contracts that align with your operational needs.

Energy Efficiency and Cost Reduction

Reducing energy usage isn’t just about cutting costs—it’s also about optimizing processes and improving sustainability. Energy audits and upgrades are effective strategies for identifying inefficiencies and implementing solutions with straightforward returns on investment (ROI).

• Energy Audits: Comprehensive assessments identify areas of energy waste, such as inefficient lighting or HVAC systems.
• Efficiency Upgrades: Implementing LED retrofits or advanced energy management systems can lead to immediate and long-term savings.
• Proven ROI: Every proposed solution is designed to deliver measurable savings, ensuring that investments pay off over time.

Sustainability Goals and Renewable Energy

As businesses increasingly focus on environmental responsibility, renewable energy solutions are becoming a top priority. Whether adopting solar power, purchasing Renewable Energy Credits (RECs), or joining community solar projects, sustainability efforts can align with operational goals while reducing carbon footprints.

• Onsite Generation: Solar panels and other renewable systems allow businesses to generate clean energy.
• Community Solar and Green Energy Procurement: These options provide access to renewable energy without requiring significant upfront investments.
• Sustainability Planning: Energy consultants help businesses set and achieve their environmental goals while integrating cost-effective strategies.

Advanced Utility Bill Management

Utility bills contain a wealth of data, but analyzing that data for cost-saving opportunities can be challenging. Advanced utility bill management systems simplify this process by centralizing data collection, automating audits, and generating customized reports.

• Data Collection and Analysis: Comprehensive tools capture billing data to identify anomalies, trends, and inefficiencies.
• Real-Time Monitoring: Businesses can track energy usage and address issues proactively.
• Strategic Reporting: Customized reports provide actionable insights, helping businesses make informed energy decisions.

Demand Response and Curtailment Programs

Reducing electricity usage during peak periods benefits the grid and can also result in financial incentives for businesses. Demand response programs reward businesses for lowering their energy consumption during high demand.

• Peak Load Management: Businesses can avoid higher capacity charges by curbing usage during peak times.
• Incentives and Rebates: Many utilities offer financial incentives for participating in demand response programs.
• Grid Contribution: Businesses participating in these programs help stabilize the grid while reducing costs.

The energy market is becoming increasingly complex, and businesses feel the impact of higher costs, stricter regulations, and sustainability pressures. By taking a proactive approach to energy management, businesses can:

• Lower Costs: Reduce energy bills and operating expenses by securing better rates and optimizing usage.
• Improve Efficiency: Streamline operations and eliminate waste for greater productivity.
• Achieve Sustainability: Meet environmental goals while maintaining cost-effectiveness.

The energy challenges businesses face today require a strategic, data-driven approach. Whether securing competitive rates, implementing efficiency measures, or adopting renewable energy, working with experienced energy consultants can provide the guidance and tools needed to navigate these complexities.

Exploring these solutions is the first step toward achieving your energy goals if your business wants to optimize energy usage, reduce costs, and plan for a more sustainable future.

Article by James Lightning
Senior Editor
Energy Professionals