CFO.com reports that high fuel costs are the number one concern reported by CFOs. Yet in spite of this, few have taken steps. In a survey conducted by OPEN, the small-business unit of American Express, two-thirds of small and medium-sized businesses are reporting that higher energy costs have had a significant or moderate impact on their business. Alcoa Aluminum recently closed a plant in Maryland because rising electricity costs force them to do business elsewhere. What can a business do if it doesnt want to shut its doors? Fortunately, there are answers. Businesses can save on their utility costs in three ways. First, they can look at energy efficiency monitoring and equipment. For example, new light fixtures. However, this involves spending money that might not be recouped for years. What can be done right now, and doesnt cost anything? There are two ways. First, a number of states have deregulated natural gas and electricity, so you dont have to buy that commodity from your local utility company. Sometimes it makes sense, and the savings can be substantial, as much as 20%. In other states, the savings are so minimal theres no point. What if you dont want to switch companies? You can also lock in a price. For example, right now natural gas is selling for about $1.40 to $1.50 a therm. Therms are the basic unit of measurement for natural gas. A few weeks ago you could have locked in a price of $1 a therm. Smart move if you didnt wait. What else can you do? One secret is that the utility rates and regulations are open to interpretation. What do I mean? Utility companies provide you with a smorgasbord of different rates from which to choose. You may have one or two, or ten different choices depending on where you live. This applies to not only your gas and electricity, but water and sewage as well. In many parts of the country water and sewage rates are going up 20% or higher next year. Water and sewage rates have areas open to interpretation as well. If you accept what the utility companies give you, its the same as going to the IRS and just saying, Hey I trust you guys. You look at my taxes and tell me whats fair. The point is you dont accept what the utility companies just tell you. Youre the boss and you can say, Youre fired! |
