Summit negotiates energy issue for restaurant

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Summit Energy Serves Up Savings for Pizza Restaurant in Utility Dispute

When a utility realized faulty energy metering had caused them to under-bill a leading restaurant chain company over a five-year period, the utility billed the restaurant back-charges of $180,000, payable immediately. Using energy usage and spend data from the company's other restaurants, Summit Energy calculated a more accurate charge, resulting in savings of $80,000 for its client.

Commercial Energy End-Users Face Site-Specific Challenges: The larger a company’s geographic footprint, the more difficult it becomes to manage energy separately at each site. With hundreds or thousands of sites around the world, organizations rarely have the time or expertise to identify and resolve every energy issue that arises. As a result, they often (unknowingly) pay for a utility’s mistake. Centralizing and carefully tracking energy costs and usage can prevent paying unnecessary costs.

SITUATION
A restaurant holding company opened a new location in Fairhaven, Mass. At the time the restaurant opened, the electric utility installed a faulty meter, and for the next five years the store was under-billed for electricity. When the utility finally realized the error, it billed the holding company an additional $180,000 - payable immediately. The amount due was based on the utility’s estimate, because the faulty meter prevented them from proving the precise amount of electricity the restaurant used. As the restaurant giant’s strategic energy partner, Summit Energy intervened to ensure that the situation was resolved in the company’s best interest.

LEADERSHIP
Summit set out to determine if the utility’s charge of $180,000 was fair. With access to the holding company’s complete energy usage and spend data, Summit was able to compare the utility’s usage assumptions against 30 other restaurants in Massachusetts. Summit also compared the usage data with sales numbers for that same period to determine if there were peaks and valleys in the store’s sales that may have corresponded to energy usage levels. During this process, Summit discovered that the utility tracked usage for only three months (July, August and September) and then extrapolated that usage for the entire five-year time period.

Summit proposed that the utility track the site’s electric usage for an additional three months to provide a more representative sample. Using this data as well as the sales numbers, Summit recalculated the store’s usage and challenged the utility’s original estimate. This information, as well as Summit’s market intelligence and expertise in commercial usage in Massachusetts, contributed to a successful negotiation on behalf of the restaurant.

RESULTS
The utility could not dispute Summit’s detailed analysis of the restaurant’s energy usage. After Summit provided more accurate calculations for the charge, the utility agreed to lower its estimate of back charges, and ultimately reduced the amount due to $100,000 - a savings of $80,000 for the company.

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