Commercial Electricity for Office Buildings in Texas
Texas office buildings consume 15-25 kWh per square foot annually, with electricity costs ranging from $1.50-$2.50 per square foot depending on tenant density and building systems. By negotiating favorable contract terms and optimizing HVAC and lighting systems, office building owners and tenants typically reduce electricity costs by 15-25%, saving $15,000-$75,000 annually for a 50,000 sq ft building.
Last updated: January 2026
Common Cost Drivers for Office Buildings
HVAC & Climate Control Systems
Heating, cooling, and ventilation systems account for 40-50% of office building electricity consumption. Multi-story buildings with central HVAC systems must maintain comfortable temperatures (68-72°F) across all floors while dealing with varying solar heat gain and occupancy levels. Installing building automation systems (BAS), using economizers, and implementing demand-controlled ventilation reduces HVAC costs by 20-30%.
Lighting for Workspaces & Common Areas
Office lighting consumes 25-35% of total electricity. Buildings require adequate light levels (30-50 foot-candles) for workspaces, hallways, lobbies, and parking areas. Older buildings with fluorescent or incandescent lighting waste 50-70% more energy than modern LED systems. Upgrading to LED lighting with occupancy sensors and daylight harvesting reduces lighting costs by 50-70%.
Plug Loads from Computers & Equipment
Computers, monitors, printers, copiers, and other office equipment consume 15-25% of electricity. Buildings with high tenant density (150+ sq ft per employee) face higher plug loads. Implementing power management policies (automatic sleep modes), using Energy Star equipment, and encouraging employees to power down devices reduces plug load costs by 20-30%.
Elevators & Vertical Transportation
Elevators in multi-story office buildings consume 5-10% of total electricity. High-rise buildings (10+ floors) with frequent elevator usage face higher costs. Installing regenerative drive elevators (capture energy during descent), optimizing elevator dispatch algorithms, and encouraging stair use for 1-2 floor trips reduces elevator costs by 15-25%.
Peak Demand During Business Hours
Office buildings experience sharp demand spikes during business hours (8am-6pm) when HVAC, lighting, and equipment operate simultaneously. These peaks trigger demand charges that can add 15-25% to monthly bills. Pre-cooling buildings before 8am, staggering equipment startup, and using thermal energy storage reduces demand charges by 15-25%.
Common Area & Parking Lot Lighting
Lobbies, hallways, stairwells, and parking lot lighting operate 12-24 hours daily, consuming 10-15% of building electricity. Buildings with extensive outdoor lighting or 24/7 security lighting face higher costs. Upgrading to LED fixtures with timers, motion sensors, and photocells reduces common area lighting costs by 50-70%.
What to Ask Electricity Providers
When comparing electricity quotes for your office buildings business, ask providers these critical questions to ensure you're getting the best rate and contract terms:
- **What is your all-in rate including energy, TDU charges, and demand fees?** Office buildings often face demand charges. Get the total ¢/kWh cost based on your building's actual monthly usage (typically 50,000-200,000 kWh for a 50,000 sq ft building).
- **Do you offer fixed-rate contracts to protect against summer price spikes?** Texas summer heat drives electricity rates up 30-50% in July-August. Locking in a fixed rate for 12-24 months protects your budget during peak cooling season.
- **What are your demand charge policies for office buildings?** Clarify how demand charges are calculated and whether you can negotiate caps or seasonal adjustments to reduce costs during peak months.
- **Can you provide custom contracts for master-metered buildings?** Buildings with a single master meter serving multiple tenants need flexible billing options. Ask about submetering support and tenant cost allocation services.
- **What contract terms do you offer for multi-year commitments?** Locking in rates for 24-36 months aligns with typical 3-5 year lease agreements and provides budget certainty for landlords and tenants.
- **Do you offer green energy or renewable energy options?** Environmentally-conscious tenants increasingly prefer LEED-certified or green buildings. Ask about costs for 50% or 100% wind/solar energy sourcing to attract premium tenants.
- **What happens if the building expands or adds floors?** Clarify whether you can amend your contract to accommodate increased usage from building expansions, tenant improvements, or higher occupancy.
- **Do you provide interval meter data and usage analytics?** Access to 15-minute interval data helps identify demand spikes, HVAC inefficiencies, and opportunities to optimize building operations and reduce costs.
Frequently Asked Questions
What are typical commercial electricity rates for office buildings in Texas?
Texas office building electricity rates range from 9-13¢ per kWh total cost (energy + TDU charges + demand fees) depending on building size and usage volume. Small office buildings (under 50,000 kWh monthly) typically pay 11-13¢ per kWh, while large multi-tenant buildings (200,000+ kWh monthly) can negotiate rates as low as 9-11¢ per kWh through volume discounts. Demand charges add 1-2¢ per kWh for buildings with high peak-to-average ratios.
How much does electricity cost per month for a typical Texas office building?
A typical 50,000 sq ft Texas office building consumes 75,000-125,000 kWh monthly, resulting in electricity bills of $7,500-$15,000 per month ($90,000-$180,000 annually). Small single-tenant buildings with efficient systems pay $5,000-$8,000 monthly, while large multi-tenant buildings with extensive common areas and amenities pay $15,000-$30,000 monthly. Electricity typically represents 15-25% of total building operating costs.
Should office buildings choose fixed or variable electricity rates in Texas?
Most Texas office buildings choose fixed-rate contracts (24-36 months) to ensure predictable operating costs and protect against wholesale market volatility. Variable rates expose buildings to price spikes during summer heat waves (rates can jump 200-300% during grid stress events). Fixed rates provide budget certainty, which is critical for long-term lease agreements and tenant cost pass-throughs. Longer terms (24-36 months) align with typical 3-5 year lease cycles.
What are the biggest electricity-wasting mistakes office buildings make?
The biggest electricity-wasting mistakes include: (1) running HVAC systems 24/7 instead of reducing setpoints during unoccupied hours (wastes 30-40% of HVAC costs), (2) using outdated fluorescent lighting instead of LED fixtures (wastes 50-70% more energy), (3) neglecting building automation systems or manual overrides that prevent energy savings, (4) failing to implement plug load management policies (computers and equipment left on overnight waste 20-30% of plug load costs), and (5) accepting the first electricity quote without comparing providers (costs 15-25% more than shopping around).
Can Texas office buildings get discounts for using renewable energy?
Yes, many Texas electricity providers offer renewable energy contracts at competitive rates due to the state's abundant wind and solar resources. Office buildings can purchase 50-100% renewable energy through Renewable Energy Certificates (RECs) at little to no premium over fossil fuel-based electricity. Marketing your building as 100% renewable-powered attracts environmentally-conscious tenants, supports LEED certification, and can command 5-10% higher rental rates in competitive markets.
How can office buildings reduce demand charges in Texas?
Office buildings reduce demand charges by pre-cooling the building before 8am (shifting load to off-peak hours), staggering HVAC and equipment startup times, installing thermal energy storage systems (ice or chilled water), using building automation systems to monitor and limit peak demand, and negotiating custom demand charge structures with providers. These strategies typically reduce demand charges by 15-25%, saving $10,000-$50,000 annually for mid-sized buildings.
Do multi-building office campus owners get better electricity rates in Texas?
Yes, office campus owners with multiple buildings can aggregate total electricity usage across all properties to negotiate volume discounts. A campus with 3-5 buildings consuming 500,000-1,000,000 kWh monthly combined can secure rates 1-2¢ per kWh lower than single-building rates, saving $60,000-$240,000 annually. Brokers specialize in managing multi-building contracts, coordinating renewals, and providing consolidated billing and reporting.
What contract term length is best for Texas office buildings?
Most Texas office buildings choose 24-36 month fixed-rate contracts to balance rate stability with long-term lease agreements. Longer terms (24-36 months) lock in lower rates and provide budget certainty for landlords and tenants, aligning with typical 3-5 year lease cycles. Buildings planning major renovations, tenant improvements, or expansions should negotiate shorter terms (12-18 months) or include contract amendment clauses to accommodate increased usage. Start negotiations 90-120 days before contract expiration to maximize leverage.
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