Summer is the most expensive season for commercial building operations in virtually every U.S. market. Cooling loads spike, demand charges reach their annual peak, and many utilities switch to summer rate schedules with higher per-kilowatt-hour prices. For property managers, the difference between proactive summer planning and reactive bill management can translate to tens of thousands of dollars per building per cooling season.
The best time to prepare for summer cooling costs is spring. By April and May, property teams should have their seasonal energy strategy in place, including HVAC optimization, demand management protocols, and budget adjustments that account for rate schedule changes. This guide provides a practical playbook for getting ahead of summer energy costs before the first heat wave hits.
Understanding Summer Rate Structures
Most commercial electric tariffs include separate summer and winter rate schedules, with summer rates taking effect between May and October in most jurisdictions. Summer rates are typically 20 to 40 percent higher than winter rates, reflecting the higher cost of generating and delivering electricity during peak cooling season. Both energy charges (per kWh) and demand charges (per kW) increase during summer months.
The transition from winter to summer rates creates a step change in utility costs that catches many property managers off guard. A building that paid $0.08 per kWh in March may suddenly be paying $0.11 per kWh in June, even if consumption remains constant. When combined with increased cooling loads, summer electric bills can be 50 to 100 percent higher than winter bills for the same building.
Review your tariff schedules now to understand exactly when summer rates take effect and how much the rate differential is. This information drives every other decision in your seasonal planning process.
Pre-Cooling Strategies
Pre-cooling is the practice of lowering building temperatures during off-peak hours, typically overnight or in the early morning, so that the building's thermal mass absorbs less heat during peak afternoon hours. This shifts cooling load from expensive on-peak periods to cheaper off-peak periods and reduces the maximum demand the HVAC system must deliver during peak hours.
How Pre-Cooling Works
A well-insulated commercial building has significant thermal mass in its concrete floors, walls, and structural elements. By cooling these elements to 68 or 69 degrees overnight (when electricity is cheapest), the building can coast through the afternoon peak with reduced HVAC output. Instead of the chiller running at full capacity from noon to 4:00 PM to maintain 72 degrees against exterior temperatures of 95 degrees, the pre-cooled thermal mass acts as a buffer, allowing the chiller to operate at partial load.
The effectiveness of pre-cooling depends on building construction, insulation quality, and window-to-wall ratio. Older buildings with substantial concrete construction respond well to pre-cooling strategies. Modern glass towers with minimal thermal mass are less responsive because heat gain through the glazing overwhelms the stored cooling quickly. For these buildings, other strategies may be more effective.
Implementation
Pre-cooling is implemented through the building management system by programming a lower cooling setpoint during off-peak hours (typically 10:00 PM to 6:00 AM) and allowing a wider temperature band during on-peak hours (typically 2:00 PM to 6:00 PM). The specific setpoints and schedules should be tuned based on building performance data. Start conservatively with a 1 to 2 degree pre-cool offset and adjust based on results and occupant feedback.
Monitor both energy consumption and demand profiles during the first few weeks of implementation. A successful pre-cooling program should show increased overnight energy consumption but reduced afternoon demand peaks, with a net reduction in total utility cost.
HVAC Staggering and Sequencing
Morning start-up is one of the largest contributors to peak demand in commercial buildings. When all HVAC units, lighting systems, and other major loads come online simultaneously, the resulting demand spike can set the peak for the entire month. Staggering equipment start-up across 15 to 30 minute windows is one of the most cost-effective demand reduction strategies available.
Program the building management system to start HVAC units in sequence rather than simultaneously. Begin with the core zones that take longest to condition and add perimeter zones progressively. Delay non-critical loads such as domestic hot water heating, parking garage ventilation, and decorative lighting until the HVAC start-up sequence is complete.
For multi-building campuses, coordinate start-up sequences across buildings to prevent simultaneous demand spikes on shared electrical infrastructure. Even if each building is individually metered, campus- level demand coordination can prevent transformer capacity issues and reduce demand charges on master meters.
Demand Charge Avoidance During Heat Waves
Heat waves are when demand charges do the most damage. Extended periods of extreme heat force HVAC systems to run at or near full capacity for days at a time, creating sustained demand peaks that set the billing demand for the month. A single five-day heat wave in July can account for the majority of summer demand charges.
Heat Wave Protocols
Develop a heat wave response protocol that activates when forecasted temperatures exceed a threshold, typically 90 to 95 degrees depending on your climate zone. The protocol should include aggressive pre-cooling the night before an extreme heat day, controlled temperature drift during peak afternoon hours (allowing setpoints to rise 1 to 2 degrees rather than running HVAC at maximum output), targeted load shedding of non-critical equipment, and manual overrides to prevent the BMS from calling for maximum cooling simultaneously across all zones.
Communicate with tenants before implementing heat wave protocols. Explain that minor temperature variations during extreme heat events are a deliberate strategy to control operating costs, which ultimately benefits tenants through stable operating expense pass-throughs. Most tenants are more understanding of planned temperature adjustments than of unexpected utility cost increases on their annual reconciliation.
Budget Planning for Summer Costs
Seasonal energy planning is incomplete without budget adjustments that reflect the reality of summer cost escalation. Too many property managers budget utility costs as a flat monthly average, which understates summer costs and overstates winter costs. This leads to mid-year budget surprises and reactive cost-cutting measures that may compromise building performance.
Build your utility budget with monthly granularity, using historical consumption data adjusted for expected weather conditions. Utility data platforms can generate weather-normalized consumption forecasts that account for cooling degree day projections. For properties without historical data, use regional benchmarks adjusted for building type and size.
Include a contingency of 10 to 15 percent above your weather-adjusted forecast for July and August to account for heat wave events that exceed normal conditions. It is far better to budget for extreme conditions and come in under budget than to be caught off guard by a record-setting summer.
Spring Maintenance Checklist
Equipment that is not maintained before cooling season runs less efficiently, consuming more energy and creating higher demand peaks. Complete these maintenance items before summer rates take effect.
- Clean condenser coils: Dirty coils reduce heat rejection capacity by 10 to 30 percent, forcing compressors to work harder and longer.
- Check refrigerant levels: Low refrigerant reduces cooling capacity and increases energy consumption. A system running 10 percent low on refrigerant can use 20 percent more energy.
- Inspect and replace air filters: Clogged filters restrict airflow, reduce cooling capacity, and increase fan energy consumption.
- Verify economizer operation: Economizers that are stuck closed waste free cooling during mild weather. Stuck-open economizers introduce hot outside air during peak cooling.
- Calibrate temperature sensors: Drifted sensors cause simultaneous heating and cooling, one of the most common and wasteful HVAC problems in commercial buildings.
- Test demand response enrollment: If your building is enrolled in a utility demand response program, verify that curtailment protocols work correctly before the first event notification arrives.
The best summer energy strategy is one you finalize in spring. By the time you are looking at July's utility bill, it is too late to do anything about it. Invest the time now to plan, optimize, and budget for the most expensive quarter of the year.