Utility Costs: Are my projections off the mark?

[jesterking]

I am attempting to project utility costs as part of a business plan for a production brewery. The numbers I have calculated seem very expensive. I am hoping you could let me know if my projections seem off the mark. My projections are based off of the information found at Sound Brewing Systems, Inc.'s (http://www.soundbrew.com/)website:

Electrical: 10-15 KWH/BBL
Natural gas: 1.3 therms/BBL
Water usage: 3.0-7.0 BBL per BBL of beer sold

First full year of production with 30-barrel system producing 800 barrels:

Electricity
15 kwh per barrel X 800 barrels X local rate of $1.80 per kwh = $21,600

Natural Gas
1.3 therms X 800 barrels X local rate of appox. $14.00 per 1000 cubic feet of natural gas = $1,456

Water
7 barrels H20 per barrel of beer sold X 800 barrels X local rate of $4.55 per 1000 gallons H20 = $790

GRAND TOTAL = $23,846


Tacking on the various delivery fees, it would seem I'm looking at approximately $25k in utility costs in order to produce 800 barrels of beer. That breaks down to about $2,000 in utility costs per month. I'd really appreciate it if you could confirm or pick apart my reasoning.

What worries me is that $2,000 per month in utility costs at 800 barrels per year extrapolates up to $6,250 per month in utility costs at 2,500 barrels per year. Over $6k a month in utility costs really cuts into my projections on our ability to turn a profit.

I really appreciate any information you could offer on what to expect in terms of utility costs. Thanks in advance for any help.

Cheers,

Jeff

[jwalts]

My usage calculations are pretty similar to yours, but I have my local rates at $0.08 per kwh for electricity $0.14 per Therm of natural gas. For what it's worth, my utility rates are pretty similar to a sample calculation that used to be on the JV Northwest website.

[gitchegumee]

US$1.80/kWhr? That's unreal! I thought I was paying some of the highest prices for electricity anywhere at US$0.46/kWhr. You sure you have the right numbers?

[einhorn]

Just found this online

"as of 3/15/2007, nationally the residential average is currently $0.10220 per KWH, while commercial costs average $0.09350 and industrial costs average $0.06160 in the US; across the board, that averages $0.08770 for all services nationally."

Or check out here (http://www.ppinys.org/reports/jtf/electricprices.html) according to state.

[jesterking]

You're right. I am an idiot. I had the price per kwh way too high. Thanks for the feedback.

[ECB]

The electric may be much higher if you have peak demand rates in the summer.

Tom
ECBC

[wiredgourmet]

Jesterking; unless I am reading wrong, those projections are for a brew pub, not a production brewery. Your energy consumption will be significantly lower.

[leftnutbrown]

I have a brewery in Montana and we do about 6000 BBL per year. Our gas and electric are about 2500 per month and water/sewage is 200-500 per month.

[BarrierBrewer]

Hey everyone. I'm not sure if I'm missing it but do the kWh/bbl figures (from JVNW & sound brewing) take into account service & demand charges? I am also in the process of starting up a craft brewery in New York and my numbers look something like this for my first year of operation (600bbl):

Service Charges: $0.72/day*365 = $263
Demand Charges: $9.99/kW/month*144kW boiler*12months= $17,263
Energy Charge:$144kW*5hrs/day*5days/month*12months*$0.0536=$2,316

=$1,654/month for electricity
=~72kwh/bbl

Am I doing something wrong?....I hope so.
Any thoughts would be greatly appreciated.

Thanks

Evan