Electricity at a Lower Cost With Even Less Headaches

You may think of electricity as a “sunk” cost, but when it comes to this expense, you might have more power than you realize. The truth is, you might not be bound to your local utility.

“In deregulated markets, operators can choose who supplies their electricity,” notes James McGinniss, CEO and co-founder of David Energy. “They are not required to purchase it from a utility. The operator cannot choose who delivers their electricity, though that will always be their local utility since they manage the infrastructure.”

What’s the Difference Between Vertically Integrated and Deregulated Markets?

In a vertically integrated electricity market, utilities cover the entire value chain with oversight from a public regulator. They are responsible for supplying and delivering electricity to consumers. In a deregulated electricity market, market participants other than utilities, such as retail electricity providers (REPs), can also sell electricity. They purchase electricity from a wholesale market and sell it to consumers.

Here's a current list of states in which electricity is deregulated: California, Connecticut, Delaware, Georgia, Illinois, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Virginia, and Washington, D.C. Expect that list to grow as 32 states have introduced some form of energy deregulation and retail energy choice as of 2024.

The Benefits of Deregulation and Choice

In deregulated markets, operators can choose to purchase electricity from their local utility or a REP. The benefits of partnering with a REP include more flexibility, savings, and sometimes access to value-added services. They may operate in a specific state or region, or throughout deregulated markets. Delivery is still handled by the utility.

“With REPs, operators get more choices of how they can purchase electricity. For example, they can choose a fixed or variable rate, or list their preference for renewable energy sources,” notes McGinniss. “Additionally, depending on who they partner with, they can get expert guidance on what’s in their electricity contract. These are typically complicated documents, and we always advise operators that if a provider is not willing to explain the terms or is being unclear about it, it likely contains something you wouldn’t want.”

What David Energy Brings to the Table

David Energy is an REP currently licensed in Massachusetts, New Jersey, New York, and Texas that takes a holistic approach to reducing not only energy costs, but also the headaches that come with it.

“Operators have way more important things to worry about than energy, but there are still some simple things that can be done to prevent those frustrating moments of an unexpected high bill or utility issue,” explains McGinniss. “Our software and team of energy experts behind the scenes do the heavy lifting for them, including everything from thermostat management to bill auditing, while keeping operators in the loop and in control. When they work with David Energy, operators have the peace of mind that their bills are as low as possible without getting stuck on long calls with their utility, paying rates that are too high, or walking into a freezing club location with temperature settings out of whack.”

In working with operators, David Energy starts by assessing their historical rates and usage. Taking their specific business needs and energy market trends into account, they then make informed recommendations about rates as well as operational changes that reduce costs and manual work.

“Employees are constantly messing with thermostats, and because some operators don't have smart thermostats, there's no way to manage that,” he says. “We help them install smart thermostats, set up basic SOPs, and most importantly, enforce these rules in an automated way, day in and day out."

Depending on the operator’s location, David Energy can also handle enrollment in Demand Response programs and, using their software, make it easy to participate. These are local incentive programs in which operators can earn money by reducing electricity usage at high-demand times.

A Focus on the Fitness Industry

David Energy specializes in partnering with franchisees and multi-unit operators of gyms, studios, health and wellness centers, and recreational facilities. Brands the company works with include Blink, Crunch, Gold’s Gym, Equinox, New York Sports Clubs, and more.

McGinniss offers an example of how a New York-based Crunch Fitness franchise benefitted from their David Energy relationship.

“Their monthly electricity bill was an uncontrollable expense,” he says. “They installed smart thermostats across their gyms but didn’t see a pay-off since they weren’t configured for efficient heating and cooling. On top of that, their HVAC systems were inadvertently driving their electricity bills up thanks to a core inefficiency in how the units switched on every morning.”

By bundling a competitive electricity rate with David Energy software that automatically manages Crunch’s smart thermostats, the franchise gained a view into real-time operations at their locations. Streamlined thermostat schedules and setpoints ensured their HVAC systems were running efficiently. Finally, Crunch was enrolled in energy incentive programs typically reserved for large commercial buildings to bring them additional earnings.

“We started by helping Crunch get their bill as low as possible, then we took it a step further and enrolled them in a Demand Response program that provided additional earnings on top of that,” McGinniss says. “Our team and software took care of the whole process, so they didn’t have to worry about it. That’s what we do best: ensuring operators have one less operational headache, reducing electricity spend, and providing a dedicated team for questions, support, and usage recommendations.”

To learn more about David Energy, visit their website.