How Do You Calculate Restaurant Energy Costs?

Quick answer: work out each fuel on its own. For electricity, estimate how many kilowatt-hours (kWh) the restaurant will use in a billing period and multiply by the price per kWh in your utility’s rate schedule. Then add only the other charges that schedule actually bills, such as a fixed daily or monthly charge, and a demand charge if your rate class has one. Do the same for gas, in the unit your gas bill uses. What you get is an estimate, not a quote.

You need four things: a list of the equipment that will run, evidence of how much energy each piece uses, the hours and days it runs, and the current rate schedule for your address. Bills for the same space or a comparable operation are a second way in. Whichever you use, anything you can’t find stays on the sheet as unknown. It doesn’t become zero.

What follows is a method and a fictional example. None of the example’s numbers is a typical figure, a local rate or a prediction of what your restaurant will pay. Utility and agency pages were read on November 8, 2026.

Keep four things apart

• Energy, not power. Power is measured in kilowatts (kW): how hard something is drawing at a given moment. Energy is kilowatt-hours (kWh): power over time. The EIA’s example is a 40-watt (0.04 kW) bulb left on for five hours, which uses 0.2 kWh. The energy charge on a bill is based on kWh. A demand charge, where there is one, is based on kW. An oven rated at 10 kW uses 10 kWh in an hour only if it draws its full 10 kW for that whole hour.
• The monthly bill, not opening costs. A new electrical service, a gas line, a panel upgrade, or a deposit if your utility asks for one, belongs in your opening budget and cash calendar. This worksheet is only the recurring bill.
• Electricity, not gas. They come on separate bills, in different units, at different prices. Put each appliance on the line for the fuel it burns. A gas fryer goes on the gas sheet; if you also have a figure for its electric controls, that small part goes on the electric sheet. Nothing is counted on both.
• Energy, not water. Heating water takes energy, so a gas water heater goes on the gas sheet and an electric booster heater on the electric one. The water itself, and sewer, are a separate bill. ENERGY STAR keeps the same split when it says certified dishwashers, ice machines and steam cookers save water, which lowers water and sewer bills.

Two ways to get the number

Route 1: bills from a comparable period

If you’re taking over a former restaurant, or opening a second site that runs like your first, bills for that space or that operation are metered use, which no equipment list is. Ask the landlord or seller for twelve months so you see every season. If nobody has them, write that down. Don’t swap in someone else’s average.

Then adjust the bills. Don’t copy them:

• Take the kWh and gas units from each bill, not the dollar totals, and price them at the current rate schedule. Prices change.
• Adjust for hours. If the last tenant opened 10 hours a day and you’ll open 13, everything that runs only while you’re open runs longer. Refrigeration runs around the clock either way.
• Adjust for equipment. Take out what’s leaving and add what’s coming, using the equipment lines below.
• Check the rate class. Your schedule may not be the one the last tenant was on.

Route 2: build it up from the equipment

For a new space with no history, estimate each equipment group: energy per hour or per day, times how long it runs, times the days in the billing period. Add the groups, then price the total. Most of this answer works through this route, and it’s also how you make the Route 1 adjustments.

Neither route is a quote. The real bill depends on what you actually use and the schedule you’re actually on. Your first full bills replace the estimate.

Read the rate schedule before you price anything

There’s no price per kWh you can borrow. The EIA lists fuel costs, power plant costs, the grid, weather and regulation among the things that move electricity prices, and says prices are usually highest in summer. Its 2025 U.S. average retail price for commercial customers was 13.41 cents per kWh, from preliminary data, while state averages for all customer types ran from 8.20 cents in North Dakota to 35.72 cents in Hawaii. That spread is why you price with your own utility’s schedule.

Two utilities show how differently a business bill can be built. Neither is your tariff unless you’re in its service area:

• Seattle City Light (Seattle and nearby cities it serves) puts a business in a rate class by its maximum demand: small is under 50 kW, medium is 50 to 999 kW. Small-business rates include a daily base service charge and a per-kWh energy charge, with flat or time-of-use pricing. Medium rates add a demand charge per kW, based on the highest demand in the billing cycle. City Light classifies a new customer using its own estimate of maximum demand.
• Southern California Edison lists a fixed monthly customer charge for all business customers, energy charged as kWh times a time-of-use rate, and, for medium and large business customers, a demand charge of maximum kW times a rate. It also lists delivery, generation and program charges, and notes that not every charge applies to every bill.

So a fixed charge is daily in one place and monthly in another, a demand charge applies in one class and not the next, and the price of a kWh can depend on the hour you use it. On a time-of-use schedule, split each line’s kWh by the schedule’s periods and price each part separately. If you can’t split them yet, the price is unknown.

A demand charge needs a different input: the highest kW the restaurant draws, as the meter records it. Your kWh total doesn’t tell you that, and adding up nameplates doesn’t either, because not everything runs at full power at the same moment. If your schedule could include a demand charge, ask the utility which rate class and schedule would apply at your address with your planned equipment, and how it will set demand for the first bills.

One line per equipment group

For each group, write down the evidence, the energy figure and how long it runs. Use the best evidence you have, in this order:

1. Measured use. Bills or interval data for the same equipment in the same space, or records from another location you run.
2. Manufacturer test data. A figure produced under a stated test, in writing, for the exact model. ENERGY STAR sets its commercial refrigerator and freezer criteria as a maximum kWh per day, and its fryer criteria include a cooking efficiency and a maximum idle energy rate. Those are the kinds of figures to ask the dealer for.
3. Nameplate rating. The most the unit can draw. Use it as a ceiling only. Rated kW times every open hour assumes the unit draws its full rating every minute, and the rating can’t tell you whether it does.

• Refrigeration. Runs 24 hours a day, every day, whatever your hours. Use each model’s rated kWh per day times the days in the period. Real use moves with door openings, room heat and condition; ENERGY STAR names leaky walk-in gaskets and freezer doors that don’t shut as energy waste. ENERGY STAR also says restaurants generally use the most electricity for refrigeration, then lighting, then cooling, so get this line right first.
• Cooking. The hardest line, because use depends on your menu and how long equipment sits hot and idle. Ask for each model’s test data: idle energy rate, cooking efficiency and any energy figure for a stated load. Write down your own hours on, and how many of them are idle. Without test data, enter a labelled assumption and test it in a range, as the example below does.
• Lighting. The simplest: each fixture’s listed watts, divided by 1,000 for kW, times the hours it’s on, times the days. Count prep and cleanup hours as well as open hours, and include exterior lights and signs. Dimmers, sensors and timers change the hours, so use the settings you’ll actually run.
• Heating and cooling. Depends on the weather, the building and how your kitchen ventilation runs; ENERGY STAR covers exhaust hoods in its heating and cooling tips. A list of units won’t give you an honest figure. Use comparable bills, or a written estimate from your HVAC contractor or designer for your space and season. With neither, this line is unknown and so is your total.
• Water heating and dishwashing. The energy to heat water goes on the sheet for whichever fuel heats it.
• Everything else. Exhaust fans, ice machine, coffee equipment, hot holding, POS and office. List them so they aren’t forgotten, even if the figure is unknown for now.

Gas: work in the bill’s unit

According to the EIA, U.S. natural gas can be priced per therm, per million Btu or per cubic foot. Use whatever unit your gas bill or schedule uses, and price the gas sheet with the gas schedule. Don’t assume the electric schedule’s structure carries over.

If a gas appliance’s spec sheet gives an input rating in Btu per hour, one therm is 100,000 Btu. A burner rated at a fictional 80,000 Btu per hour, firing at full input for one hour, burns 80,000 ÷ 100,000 = 0.8 therm. Like an electric nameplate, that’s a ceiling: it assumes the burner fires the whole hour.

If the bill is in hundreds of cubic feet (Ccf), you need the gas’s heat content to convert. The EIA’s 2025 U.S. average was about 1,037 Btu per cubic foot, so 1 Ccf was about 1.037 therms. That’s a national average; ask your utility for the figure it bills with.

A fictional worked example

The café, its equipment and every rating, hour and price below are invented to show the arithmetic. None of them is a typical figure, a manufacturer’s number or a real tariff.

A café is estimating electricity for its first full 30-day month. It plans to open 12 hours a day, with lights on for one more hour of prep and cleanup. The example covers only the electric lines it has evidence for. Gas, water, sewer and taxes are left out.

The café’s fictional schedule charges a flat $0.14 per kWh and a base service charge of $0.90 a day, with no demand charge in its rate class.

So the café’s estimate is $316.66 plus unknowns for one month of electricity. It isn’t the café’s energy bill, because gas is missing, and it isn’t even the whole electric bill until the unknown lines are filled in.

If the schedule did have a demand charge, the input would be different. At a fictional $6.00 per kW and a recorded peak of 20 kW, that line would be 20 × $6.00 = $120.00, however many kWh the café used that month. The 20 kW would have to come from the meter or the utility’s estimate, not from the kWh above.

Low, base and high

Run the same sheet with the weakest assumptions moved down and up. Refrigeration stays the same in all three because it runs whatever the hours. The price stays at $0.14 because it isn’t a guess; it comes from the schedule. If you don’t have the schedule yet, get it before you build a range.

All three still leave the same lines unknown: equipment not yet estimated, taxes and other charges.

The range is 964 kWh wide, from 1,656 to 2,620. Of that, 510 kWh comes from the oven, 400 kWh from heating and cooling and 54 kWh from lighting. Those first two lines are where better evidence matters.

Change the hours alone and the effect is smaller than the range suggests. Going from 12 to 14 open hours, with the base oven draw, adds 0.6 kW × 2 h × 30 = 36 kWh of lighting and 2.5 kW × 2 h × 30 = 150 kWh of oven time. That’s 186 kWh × $0.14 = $26.04 a month. Refrigeration doesn’t change. Whether heating and cooling changes is unknown until the contractor says, so the honest answer is $26.04 plus an unknown HVAC change.

What the range tells you to do

• Set the operating budget. If the high case fits, budget it, keep the list of unknowns beside it, and replace the estimate with your first full bills. The utilities line in the P&L builder is one monthly figure for every applicable utility expense, so gas, water and sewer go in it too, and a zero there means the cost is excluded. Don’t enter a zero for something you just don’t know yet.
• Choose equipment on running cost too. If one appliance drives the range, as the oven does here, get its test data before you buy. Compare models on kWh per day at your hours × your price × the days you expect to own it, next to the installed cost. ENERGY STAR makes the same point: the purchase price is often a small part of the total cost of owning equipment. If you’re looking at used units, check the installed cost first.
• Ask the utility. If the price, the rate class or a possible demand charge is unknown, no amount of equipment math fixes it. Ask which schedule would apply at your address with your expected load, whether demand or time-of-use charges would apply, and what fixed charges you’d pay. Get the answer in writing if you can.

Thinking of changing your hours later? Only the part of the bill that actually changes counts, and refrigeration keeps running while the doors are closed. Should you close during slow hours covers the rest of that decision.

Copy this worksheet

Use one sheet per fuel. Copy it into a notes app or spreadsheet.

RESTAURANT ENERGY ESTIMATE
One sheet per fuel. An estimate,
not a quote. Unknown is not 0.

Fuel: ELECTRIC / GAS
Bill unit: kWh / therm / Ccf
Address:
Utility:
Rate schedule:
Effective date:
Rate class:
Days in period:
Open hours a day:
Lights-on hours a day:

USE ONE ROUTE, NOT BOTH:
Route 1 total or Route 2 total.

ROUTE 1: COMPARABLE BILLS
Whose bills, which months:
Units used (not dollars):
Their hours a day:
Equipment changed since:
  (use group blocks only for
  equipment added or removed,
  as + or - units)
Adjusted units:

ROUTE 2: ONE BLOCK PER GROUP
Make one block each for:
refrigeration, cooking,
lighting, heating and cooling,
water heating, everything else.

GROUP:
Evidence: MEASURED / TEST /
  NAMEPLATE (ceiling only)
Rate: kW, or gas therms/h
  (Btu/h / 100,000 = therms/h),
  or units per day:
Hours on a day (if a rate):
Days:
Units = rate x hours x days,
  or per day x days:

TOTAL UNITS (one route only):
  + UNKNOWN GROUPS:

PRICE (from the schedule)
If billed in Ccf: therms /
  utility therms per Ccf = Ccf:
Price per unit:
Time-of-use? Y / N / UNKNOWN
  If Y, units in each period:
Energy charge
  = units x price:
Fixed charge per day or
  month x period:
Demand charge? Y / N / UNKNOWN
  Peak kW (meter or utility):
  Peak kW x rate:
Taxes and other charges:
SUBTOTAL:
  + UNKNOWN:

RANGE
Low:
Base:
High:
Biggest swing comes from:

NOT ON THIS SHEET
Deposits, connections and
  service upgrades:
  opening budget
Water and sewer: own bill
The other fuel: own sheet

NEXT CALL TO MAKE:

Before you commit to a number

• The rate schedule for your address, with its name and effective date, from the utility.
• Your rate class, whether demand or time-of-use charges apply, and how the utility sets demand for a new customer.
• Every fixed charge, tax and other line the schedule bills, in its own units.
• The gas schedule and its unit, and the utility’s conversion figure if gas is billed by volume.
• Twelve months of bills for the space if they exist, with the previous hours and equipment.
• Rated kWh per day for each refrigerator and freezer, model by model.
• For each ice machine, its rated kWh per 100 lb of ice and the pounds of ice you expect to make a day. kWh per 100 lb × pounds a day ÷ 100 = kWh a day.
• Test data for each major cooking appliance, and your own hours on and idle.
• Fixture wattages and lighting hours, including prep, cleanup, exterior lights and signs.
• A written heating and cooling estimate for your space and season, or comparable bills.
• Every line still marked unknown, listed beside the total.
• Deposits, connections and service upgrades moved to the opening budget, and water and sewer on their own line.

Sources, all read November 8, 2026; none showed a page date: U.S. Energy Information Administration, Measuring electricity; Electricity prices and factors affecting prices (2025 figures from Electric Power Monthly, February 2026, preliminary); and the natural gas price conversion FAQ. ENERGY STAR for Small Business: Restaurants; Commercial Refrigerators and Freezers; Commercial Fryers; and Commercial Ice Maker Key Product Criteria. Seattle City Light, Business Rates. Southern California Edison, Components of Your Energy Bill. The utility pages describe their own service areas only. We didn’t test equipment or use anyone’s bills for this answer.