Hollister’s Burger King and 140 other chain stores throughout
Northern California signed a three year contract with supplier
Accent Energy to lock in natural gas prices Tuesday
– a move that could help the restaurants save money but won’t
affect the price, or taste, of a Whopper.
Hollister – Hollister’s Burger King and 140 other chain stores throughout Northern California signed a three year contract with supplier Accent Energy to lock in natural gas prices Tuesday – a move that could help the restaurants save money but won’t affect the price, or taste, of a Whopper.
Under the terms of the deal, the Burger King on Airline Highway will be able to lock in a fixed price for natural gas at a time of its choosing, even as natural gas prices are fluctuating wildly, Accent Energy Senior Vice President Tony Barnhart said Wednesday.
“Given the volatility of gas prices, this gives companies the opportunity to bring stability to their prices,” he said. “Although savings are a possibility, this is more about stability. If they don’t have to worry about the cost of energy, they can focus on running their business.”
Natural gas prices are nearly twice as high as they were last year, selling for about $12 per 1,000 cubic feet – slightly more than enough to heat a single-family home for three days, Barnhart said. In addition to being significantly higher than last year, natural gas prices have a tendency to fluctuate significantly based on supply and demand.
“A lot of that is due to the hurricane activity that really created supply constraints,” Barnhart said. “We’ve seen prices change a dollar or more over the course of a month.”
A fixed rate means companies can save money and don’t have to worry when natural gas prices jump, he said.
Burger King will use the natural gas to run everything from ovens and grills to fryers and dishwashers. Just how much money the company could save depends on when they choose to lock in a price and how the market changes.
Although Burger King officials did not return phone calls on Wednesday, the idea of fixed prices appealed to at least one local restaurant owner.
“We have no idea what our costs are going to be from month to month,” said Ignacio Velazquez, owner of the Vault Restaurant in downtown Hollister. “And from time to time we get hit with higher prices and never seem to see the lower ones. If we had a fixed rate we could plan ahead. It’s definitely something we’d be interested in.”
Accent Energy, a private Ohio-based company, works with local utilities such as Pacific Gas & Electric to distribute the natural gas. However, since it is a private company it can offer customers a wider variety of pricing options, such as a fixed rate, Barnhart said.
“Customers pay us for the commodity and pay PG&E for the distribution,” he said.
