Commercial Electricity for Restaurants in Texas
Texas restaurants consume 50-150 kWh per seat annually, with electricity costs representing 3-5% of total revenue. By comparing quotes from 150+ providers and negotiating favorable contract terms, restaurant owners typically reduce electricity costs by 15-25%, saving $3,000-$12,000 annually for a typical 100-seat establishment.
Last updated: January 2026
Common Cost Drivers for Restaurants
Kitchen Equipment & Cooking Appliances
Commercial ovens, fryers, grills, and ranges account for 30-40% of restaurant electricity consumption. High-volume kitchens running multiple pieces of equipment simultaneously during lunch and dinner rushes create demand spikes. Upgrading to Energy Star-certified equipment and using programmable controls to preheat only when needed can reduce kitchen electricity costs by 15-20%.
HVAC & Ventilation Systems
Heating, cooling, and kitchen ventilation systems consume 25-35% of total electricity. Restaurants must maintain comfortable dining temperatures while exhausting heat and smoke from kitchens. Installing variable-speed exhaust fans, maintaining HVAC filters, and using programmable thermostats can cut HVAC costs by 20-30%.
Refrigeration & Freezer Units
Walk-in coolers, freezers, and reach-in refrigerators run 24/7, consuming 20-25% of restaurant electricity. Older units with poor door seals or inadequate insulation waste 30-40% more energy than modern high-efficiency models. Regular maintenance (cleaning coils, checking door seals) and upgrading to Energy Star units reduces refrigeration costs by 25-35%.
Lighting (Dining & Kitchen Areas)
Interior and exterior lighting accounts for 10-15% of electricity consumption. Restaurants with extensive outdoor signage or patio lighting see higher costs. Switching to LED lighting throughout the facility reduces lighting costs by 50-70% while improving ambiance and reducing heat load on HVAC systems.
Peak Demand During Service Hours
Restaurants experience sharp demand spikes during lunch (11am-2pm) and dinner (5pm-9pm) service when all kitchen equipment, HVAC, and lighting operate simultaneously. These peaks trigger demand charges that can add 15-25% to monthly bills. Staggering equipment startup times and pre-cooling dining areas before peak hours can reduce demand charges by 10-20%.
Extended Operating Hours
Restaurants open for breakfast, lunch, and dinner (12-16 hours daily) consume significantly more electricity than single-service establishments. Late-night restaurants pay higher rates during evening peak hours (5pm-9pm). Negotiating time-of-use rates or shifting prep work to off-peak hours (before 11am or after 9pm) can reduce costs by 10-15%.
What to Ask Electricity Providers
When comparing electricity quotes for your restaurants 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 fees?** Providers often advertise low energy rates but add hidden fees. Get the total ¢/kWh cost based on your restaurant's actual monthly usage (typically 3,000-10,000 kWh for a 100-seat restaurant).
- **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 restaurants?** Some providers waive or reduce demand charges for small businesses under 50 kW peak demand. Clarify whether demand charges apply to your restaurant and how they're calculated.
- **Can you provide month-to-month contracts or flexible terms?** New restaurants may prefer short-term contracts (6-12 months) until they establish baseline usage patterns. Ask about early termination penalties if your business closes or relocates.
- **Do you offer green energy or renewable energy options?** Environmentally-conscious diners increasingly prefer restaurants using renewable energy. Ask about costs for 50% or 100% wind/solar energy sourcing.
- **What happens if my restaurant expands or adds a second location?** Clarify whether you can add new locations to your existing contract or if you'll need to renegotiate. Multi-location restaurants often qualify for volume discounts.
- **How quickly can you switch my service if I'm currently in a contract?** If you're locked into an expensive contract, ask about buyout options or whether waiting until contract expiration makes more financial sense.
- **Do you provide online account management and usage tracking?** Access to daily or hourly usage data helps identify equipment malfunctions (e.g., a failing freezer running constantly) before they cause costly damage.
Frequently Asked Questions
What are typical commercial electricity rates for restaurants in Texas?
Texas restaurant electricity rates range from 10-14¢ per kWh total cost (energy + TDU charges + fees) depending on location and usage volume. Small cafes or quick-service restaurants (under 3,000 kWh monthly) typically pay 12-14¢ per kWh, while larger full-service restaurants (5,000-15,000 kWh monthly) can negotiate rates as low as 10-12¢ per kWh. Rates are lowest in spring/fall (March-May, September-November) and highest in summer (June-August) when air conditioning demand peaks.
How much does electricity cost per month for a typical Texas restaurant?
A typical 100-seat Texas restaurant consumes 5,000-10,000 kWh monthly, resulting in electricity bills of $500-$1,200 per month ($6,000-$14,400 annually). Quick-service restaurants with minimal kitchen equipment and shorter hours pay $300-$600 monthly, while large full-service restaurants with extensive kitchens and long hours pay $1,500-$3,000 monthly. Electricity typically represents 3-5% of total restaurant revenue.
Should restaurants choose fixed or variable electricity rates in Texas?
Most Texas restaurants choose fixed-rate contracts (12-24 months) to ensure predictable monthly costs and protect against summer price spikes. Variable rates can save money during mild spring/fall months but expose restaurants to 30-50% rate increases during July-August heat waves. For budget stability, fixed rates are recommended. However, seasonal restaurants (e.g., outdoor patios closed in winter) may benefit from variable rates during off-season months.
What are the biggest electricity-wasting mistakes restaurants make?
The biggest electricity-wasting mistakes include: (1) leaving kitchen equipment on overnight or during closed hours (wastes 15-20% of monthly electricity), (2) neglecting refrigeration maintenance (dirty coils reduce efficiency by 30-40%), (3) using incandescent or halogen lighting instead of LEDs (wastes 50-70% more energy), (4) setting HVAC thermostats too low in summer or too high in winter (every degree costs 3-5% more), and (5) failing to compare electricity providers (accepting the first quote costs 15-25% more than shopping around).
Can Texas restaurants 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. Restaurants can purchase 50-100% renewable energy through Renewable Energy Certificates (RECs) at little to no premium over fossil fuel-based electricity. Marketing your restaurant as 100% renewable-powered appeals to environmentally-conscious diners and can be featured on menus, websites, and social media to differentiate your brand.
How long does it take to switch electricity providers for a restaurant in Texas?
Switching electricity providers for a Texas restaurant takes 30-60 days (1-2 billing cycles) after contract approval. The process involves no service interruption—your current TDU continues delivering electricity while your new retail provider handles billing. There are no technician visits or equipment changes required. To avoid auto-renewal penalties, start shopping for new rates 90 days before your current contract expires.
Do multi-location restaurants get better electricity rates in Texas?
Yes, multi-location restaurants can aggregate total electricity usage across all locations to negotiate volume discounts. A restaurant group with 3-5 locations consuming 30,000-50,000 kWh monthly combined can secure rates 1-2¢ per kWh lower than single-location rates, saving $3,600-$12,000 annually. Brokers specialize in managing multi-location contracts, coordinating renewals, and providing consolidated billing and reporting.
What contract term length is best for Texas restaurants?
Most Texas restaurants choose 12-24 month fixed-rate contracts to balance rate stability with flexibility. Shorter terms (12 months) allow you to renegotiate sooner if market rates drop, while longer terms (24-36 months) lock in lower rates and protect against future price increases. New restaurants should start with 12-month contracts to establish baseline usage patterns before committing to longer terms. Established restaurants can benefit from 24-36 month contracts when wholesale market rates are low (typically spring/fall).
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