In recent days, the world has watched both gas prices at the pump and costs for natural gas and electricity skyrocket, the effects of which have left both regular consumers and businesses scrambling to deal with the fallout.
As a northern country, Canada primarily relies on its oil and gas industry to help fuel the economy by delivering affordable and reliable energy. However, Canada is sensitive to geopolitical events that are primarily out of its control, which can cause prices to spike.
While there are no delivery issues per se in most of the country, businesses have been left dealing with a surge in costs related to higher gas prices, which, if left unchecked in the coming months, will lead to a ripple effect in terms of higher costs which will have to be passed onto consumers, or end users.
But what can a business do to help “shockproof” them from the sudden spike in energy costs?
Every business must first look at their utility plans with their provider and then try and lock in the cheapest long-term rate possible. While some provinces’ utilities are still centralized, in Alberta, for example, with an open market, both consumers and businesses can choose their providers.
A business could consider hiring a commercial energy broker. Such brokers function as links between companies and energy utility providers and can help ensure your business has the best contract in place.
After this, a business should investigate whether their provincial governments have plans or rebates in place to help deal with rising costs. Natural Resources Canada has a webpage with links to all currently available Energy Efficiency Programs for the industry. You can go to the link at oee.nrcan.gc.ca/industrial/financial-assistance/programs.cfm.
A SmallBizDaily report lists additional practical ways businesses can help lower energy costs. Besides the obvious ways to cut costs, such as ensuring lights are off when not needed and using energy-efficient bulbs, the report suggests that businesses get an energy consumption audit. An audit is an effective way to identify areas where energy is being used unnecessarily.
If possible, businesses can use natural sunlight and programmable thermostats. Cost savings could also be found through energy efficiency equipment. According to Energy Star, “energy efficiency remains the single most cost-effective way to cut energy use in buildings.”
Energy Star says that compared to typical buildings, high-performing buildings can save up to $0.60 per square foot on operations and maintenance costs yearly, $0.50 per square foot on janitorial expenses, and $0.53 per square foot on utility expenses annually.
According to the London Business School, one area a business can ensure that they are running at peak performance is to make sure it is as agile as possible.
“The world is turbulent. Big shocks will come. We cannot predict when, but we could prepare for them” - Julian Birkinshaw, professor of Strategy and Entrepreneurship for London Business School.
With warmer weather approaching, businesses will see some relief in energy costs; however, agility is key in how one operates their business overall and ensuring they are on the ball when it comes to trends in the energy market.