Week of August 18, 2025
A 5-minute read for restaurant operators
Executive Summary
This week brings significant developments in energy markets that directly impact restaurant operations. Oil prices are trending downward with forecasts showing potential relief at the pump, while electricity demand continues its upward trajectory, driven by commercial sector growth. For restaurant operators in deregulated markets, strategic energy procurement remains critical as electricity prices climb faster than general inflation.
Key Takeaways for Restaurant Operators:
- Natural gas prices expected to rise 22% by Q4 2025
- Commercial electricity demand projected to grow 3.0% in 2025, 4.5% in 2026
- Deregulated markets offer competitive procurement opportunities
- Energy efficiency investments showing 10% cost reductions for early adopters
Market Outlook: Mixed Signals for Restaurant Energy Costs
Oil and Gas Trends
The energy landscape presents a tale of two commodities this week. According to the latest EIA Short-Term Energy Outlook, crude oil prices are set for a significant decline, with Brent crude expected to fall from $71 per barrel in July to approximately $58 per barrel in Q4 2025, and potentially reaching $50 per barrel by early 2026. This downward pressure stems from OPEC+ members' decision to accelerate production increases, leading to substantial inventory builds averaging over 2 million barrels per day in the coming quarters.
For restaurant operators, this translates to potential relief in delivery costs and transportation expenses. The EIA projects retail gasoline prices will average less than $2.90 per gallon in 2026, representing a 6% decrease from current levels. This reduction could provide meaningful savings for restaurants with significant delivery operations or those managing supply chain logistics.
However, natural gas presents a contrasting picture. Henry Hub prices are forecast to climb from $3.20 per MMBtu in July to $3.90 per MMBtu in Q4 2025, representing a 22% increase. This upward trajectory continues into 2026 with prices reaching $4.30 per MMBtu. The price increase reflects relatively flat domestic production combined with growing U.S. liquefied natural gas exports, creating tighter supply conditions.
Electricity Market Dynamics
The electricity sector shows robust demand growth that directly impacts restaurant operations. Commercial sector electricity consumption is projected to increase 3.0% in 2025 and accelerate to 4.5% growth in 2026. This growth is primarily driven by data center expansion, but the broader commercial demand surge affects pricing dynamics across all business segments.
Recent analysis indicates electricity prices are climbing more than twice as fast as general inflation, with the EIA projecting a 4% increase in retail electricity prices for 2025 compared to 2024. For restaurants already facing thin margins, this represents a significant operational challenge that requires proactive management.
The commercial sector is expected to surpass residential consumption for the first time in 2026, fundamentally altering market dynamics. This shift suggests sustained upward pressure on commercial electricity rates, making strategic energy procurement increasingly critical for restaurant operators.
Industry Benchmarks and Opportunities
Energy costs typically represent 3-5% of total restaurant operating expenses, but this percentage can vary significantly based on location, concept, and operational efficiency. In deregulated markets like Texas, Pennsylvania, and Illinois, restaurants face both challenges and opportunities. While deregulation can lead to higher baseline costs, it also enables competitive procurement strategies that can deliver substantial savings.
The key lies in understanding market timing and leveraging competitive bidding processes. Restaurants operating in deregulated markets have access to multiple energy suppliers, creating opportunities for cost optimization through strategic contract negotiations and market timing.
30-Day Forecast: What Restaurant Operators Should Expect
Near-Term Price Movements
The next 30 days present a mixed outlook for restaurant energy costs. Natural gas prices are expected to continue their upward trajectory as we approach the heating season, with industrial and commercial users facing increased competition for supply. Restaurant operators using natural gas for cooking equipment and water heating should anticipate higher utility bills through the remainder of 2025.
Electricity markets show regional variation, but the overall trend points toward continued price pressure. Peak summer demand is moderating in most regions, but the underlying growth in commercial consumption maintains upward pressure on rates. Restaurants in deregulated markets have the advantage of timing contract renewals to capture favorable pricing windows.
Oil-related costs, including delivery and transportation, should see gradual improvement as crude prices decline. However, the benefits may take several weeks to flow through to retail fuel prices, with the most significant relief expected in Q4 2025.
Strategic Recommendations
Immediate Actions (Next 30 Days):
- Review current energy contracts for renewal opportunities
- Implement equipment staging protocols to reduce peak demand
- Evaluate energy efficiency upgrades with rapid payback periods
- Consider fixed-rate contracts in deregulated markets to hedge against rising prices
Medium-Term Planning (3-6 Months):
- Develop comprehensive energy management protocols
- Explore renewable energy options where available
- Implement advanced monitoring systems for real-time usage tracking
- Evaluate kitchen equipment upgrades for energy efficiency
Competitive Energy Procurement: Maximizing Your Savings
The Power of Competitive Bidding
In deregulated energy markets, restaurant operators have unprecedented opportunities to control energy costs through strategic procurement. Unlike regulated markets where utility commissions set rates, deregulated markets allow businesses to choose their energy supplier and negotiate contract terms that align with their operational needs.
The key to successful energy procurement lies in leveraging competitive market dynamics. When multiple suppliers compete for your business, pricing becomes more aggressive, and contract terms become more favorable. This is particularly important for restaurants with multiple locations, where aggregated demand can command better pricing and more flexible terms.
GWT2Energy's Reverse Auction Advantage
GWT2Energy's proprietary reverse auction bid software transforms the traditional energy procurement process by creating true market competition for your energy supply contracts. Rather than accepting standard utility rates or negotiating with individual suppliers, our platform enables multiple qualified energy providers to compete simultaneously for your business.
The reverse auction process works by having suppliers submit progressively lower bids in real-time, ensuring you receive the most competitive pricing available in the market. This transparent, competitive environment typically delivers savings of 10%+ compared to standard procurement methods, with the added benefit of improved contract terms and service commitments.
For restaurant operators managing multiple locations across deregulated markets, our platform aggregates demand to maximize purchasing power while maintaining the flexibility to structure contracts that match your operational requirements. Whether you prefer fixed-rate stability or variable pricing to capture market opportunities, our reverse auction process ensures you're getting the best available terms.
Market Intelligence and Timing
Successful energy procurement requires more than just competitive bidding—it demands market intelligence and strategic timing. Energy markets are influenced by weather patterns, economic conditions, regulatory changes, and supply-demand dynamics that can create significant pricing opportunities for informed buyers.
GWT2Energy provides ongoing market analysis and procurement timing recommendations to help restaurant operators capture optimal pricing windows. Our team monitors market conditions, regulatory developments, and supply trends to identify the best times to enter the market for new contracts or renegotiate existing agreements.
Energy Efficiency Spotlight: Quick Wins for Restaurants
Low-Cost, High-Impact Strategies
While major equipment upgrades require significant capital investment, many energy efficiency opportunities in restaurants can be implemented with minimal upfront costs. The Texas Wendy's case study demonstrates that operational changes alone can deliver 20% energy savings, providing immediate bottom-line impact.
Equipment Staging Protocols: Instead of powering up all kitchen equipment simultaneously at opening, implement a staged startup sequence. This reduces peak demand charges and allows equipment to reach operating temperature more efficiently. Start with essential items like fryers and grills, then add additional equipment as needed based on anticipated demand.
HVAC Optimization: Restaurant HVAC systems often operate inefficiently due to poor scheduling and inadequate maintenance. Simple adjustments like programmable thermostats, regular filter changes, and proper system balancing can reduce energy consumption by 10% without compromising customer comfort.
Lighting Upgrades: LED lighting retrofits offer some of the fastest payback periods in restaurant energy efficiency. Beyond the direct energy savings, LED systems generate less heat, reducing cooling loads during peak operating hours.
Monitoring and Measurement
Effective energy management requires visibility into consumption patterns and cost drivers. Modern energy monitoring systems provide real-time data on equipment performance, peak demand periods, and cost allocation across different operational areas.
For multi-location restaurant operators, centralized monitoring enables benchmarking across locations and identification of best practices that can be replicated system-wide. This data-driven approach to energy management typically delivers ongoing savings of 5-10% beyond initial efficiency improvements.
Regulatory and Policy Updates
Deregulated Market Developments
Several states continue to expand energy choice options for commercial customers. Recent developments in Ohio and Pennsylvania have created additional opportunities for restaurant operators to access competitive energy markets. These expansions typically include enhanced consumer protections and standardized contract terms that benefit commercial customers.
The trend toward increased market competition is expected to continue, with additional states considering deregulation legislation. For restaurant operators, this represents expanding opportunities to control energy costs through competitive procurement strategies.
Take Action on Your Energy Costs
Energy costs represent a significant and often overlooked opportunity for restaurant operators to improve profitability. In today's volatile energy markets, passive management of energy expenses can result in substantial unnecessary costs, while strategic procurement and efficiency measures can deliver meaningful savings.
Partner with GWT2Energy for Competitive Procurement
If your restaurants operate in deregulated energy markets, you have the power to choose your energy supplier and negotiate contract terms that work for your business. GWT2Energy's reverse auction bid software ensures you receive the most competitive pricing available by having multiple qualified suppliers compete for your business in real-time.
Our platform is specifically designed for commercial customers who want to maximize their purchasing power while minimizing the complexity of energy procurement. Whether you operate a single location or manage a multi-state restaurant portfolio, our reverse auction process delivers transparent, competitive pricing that typically saves 10%+ compared to standard procurement methods.
Get Started Today
Don't let energy costs eat into your restaurant's profitability. Contact GWT2Energy to learn how our reverse auction bid software can help you secure competitive rates in deregulated markets.
Contact Information:
Our energy consultants are ready to analyze your current energy costs and demonstrate how competitive procurement can improve your bottom line. We provide free market analysis and procurement recommendations with no obligation.
About This Newsletter
The GWT2Energy Weekly Energy Recap & Forecast is published every week to provide restaurant operators with timely, actionable intelligence on energy markets and cost management strategies. Our analysis combines real-time market data with industry-specific insights to help restaurant operators make informed decisions about energy procurement and efficiency investments.
Questions or feedback? Contact us at info@gwt2energy.com
This newsletter is prepared by GWT2Energy Consulting Services. Market data sourced from EIA, industry publications, and proprietary market analysis. All forecasts and recommendations are based on current market conditions and are subject to change.
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