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  • Utility Costs: Are my projections off the mark?

    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 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
    Jester King Craft Brewery
    Austin, Texas

  • #2
    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.

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    • #3
      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?
      Phillip Kelm--Palau Brewing Company Manager--

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      • #4
        Online find

        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 according to state.

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        • #5
          You're right. I am an idiot. I had the price per kwh way too high. Thanks for the feedback.
          Jester King Craft Brewery
          Austin, Texas

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          • #6
            The electric may be much higher if you have peak demand rates in the summer.

            Tom
            ECBC

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            • #7
              Production brewery

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

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              • #8
                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.

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                • #9
                  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
                  Last edited by BarrierBrewer; 01-07-2009, 11:06 AM.
                  Evan Klein
                  Barrier Brewing Co.
                  Founder/Brewmaster
                  3001 New St.
                  Oceanside, NY 11572
                  www.barrierbrewing.com

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                  • #10
                    I'm not familiar with boiler calculations, but I'll take a stab at it since this thread seems to be dead. Your service and energy charges seem valid, but your demand charge doesn't. I can't imagine demand fees being more expensive than the energy itself. $/kW/month is a strange unit and I'd call your future electrical provider to find out what it really means. Maybe you'll be given a certain usage allowance per month and you'll have to pay $9.99/kWh for any electricity you use in excess of that amount.

                    Joe

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