The Council of Smaller Enterprises (COSE) is urging all small businesses to act immediately to protect themselves against alarming increases projected in electricity costs. Small businesses are expected to see a minimum increase of 35 percent in their electric bills over the next three years due to an unprecedented "capacity pricing" surge, according to COSE.
A number of factors, including the booming shale industry and the shuttering of costly, older coal fired plants, have created an unstable electricity market that will result in increased costs for small businesses.
"The capacity cost is something we all pay on our utility bills to ensure there is enough electricity on the grid to meet our needs," said Steve Millard, president and executive director of COSE. "Due to market conditions, that cost is going to skyrocket over the next few years and small businesses need to protect themselves."
In 2013, the average Cleveland Electric Illuminating customer paid about 0.28 cents per kWh in capacity costs. This summer, that same customer will pay 1.26 cents per kWh and up to 2.94 cents per kilowatt hour in 2015, according to COSE.
If the average commercial business takes no action to protect against the price hikes, they could see an increase from $227 in 2013 to $1,058 in 2014, peaking at $2,470 in 2015. In just two years, that consumer will pay over $3,000 more in capacity charges.
"The price increase is unavoidable, but it can be mitigated," Millard said. "Locking into a three-year fixed rate is the best option for a small business, but they need to do so soon."
All small businesses in the First Energy territories are eligible to participate in the COSE Electric Savings Program. While COSE members will see an additional savings, you do not have to be a COSE member to participate and save.