What belongs in the utility binder?
Twenty-four months if the load is seasonal. Rate schedules and demand ratchets. Who holds the accounts after close — especially when the building is carved out. Compressed-air leak logs and oven or kiln hours if anyone kept them. Chiller and laser service contracts next to the maintenance file.
Chemicals and coatings and heat-treat cells live on process energy. Plastics live on chillers. Fiber lasers live on power quality. None of those sentences is a national percent. They are why the bills matter.
Fed G.17 manufacturing utilization 76.0% in July 2026 (Source: Fed G.17) is climate for idle bays that still draw demand. A 50% utilized plant with a large ratchet can look cheap on kWh and expensive on the tariff page of the electric bill. Capacity and utilities are one conversation.
ISM August 2026 Prices 71.1 (Source: ISM) is mostly an input-price index. Do not treat it as your kWh. Do confirm whether any rider or tariff on the bill changed. This page will not freeze a rate.
How should buyers reset related-party arrangements?
If the owner’s building pays the electric and “allocates” a round number, throw the allocation out. Use the meters. If the operating company pays personal houses, throw those out the other direction. Same discipline as rent. SBA 7(a) still caps at $5 million (Source: SBA); DSCR cares about the bill the borrower will actually pay.
Environmental diligence still sits on the property — Phase I / AAI (Source: eCFR; Acquisition Stars). Utility trenches and pits are not a substitute for that report. They are why the engineer and the environmental professional both walk the floor.
How do utilities sit next to the valuation cell?
Inside it. A ebitda-1-3m fab file still uses 4.0x–5.5x. A spike that is a one-time rate case may be explainable. A structural second-shift load that was never in the P&L is a run-rate change. Do not add-back weather every year.
Census CBP 2023: 284,452 establishments (Source: Census). Most of them have a bill. Few of them have a published national energy ratio that would help a buyer. Plant-level math only.
| Utility fact | Diligence exhibit | Valuation move |
|---|---|---|
| Trailing-12 electric/gas | Invoices + rate schedule | Reset run-rate |
| Demand ratchet / idle bay | Peak vs utilization | Capacity + cash |
| Related-party allocation | Meters | Kill the allocation |
| Chiller / air / heat | Service + leak logs | Maintenance chip if deferred |
| One-time weather story | 24-month file | Habit add-backs die |
| National % of COGS | None published here | Do not invent one |
What sellers should not do
Do not hide a new demand charge. Do not call a leaky air system “normal.” Do not promise a solar story without interconnection facts. Tariffs and reshoring can change input mix; they do not replace the bill.
Buyers: buy a manufacturing business. Sellers: sell my manufacturing business. The valuation pillar keeps the cells. Jason Taken is a business broker, not an energy auditor. Educational information only. No value is guaranteed.
How to read a demand charge next to a utilization story
If the plant peaks at 7 a.m. start-up and then idles, you are paying for a spike. If a second shift is the plan, ask whether the ratchet already assumes that peak. Capacity and this page should share one spreadsheet. A load study that ignores the electric tariff is half a study.
Compressed-air leaks are maintenance. They also print on the kWh. Maintenance records should include leak surveys if anyone paid for one. If nobody did, a cheap survey is diligence, not a capital project.
Process families and the bills they actually produce
Heat treat and coatings: gas and permits. Plastics: chillers and dryers. Laser cutting: power quality and assist gas. Food: refrigeration and sanitation water. Electronics: HVAC for the line more than the process itself.
Still no national percent. Still the trailing-12. Still the meters if related parties allocated a round number.
What a “green” slide is worth
A solar array with a signed interconnection and a year of production data is a bill exhibit. A brochure about a future array is not. Lighting retrofits that already happened should already be in the trailing-12. Do not add-back the old lighting bill. Do not capitalize a rebate you have not received.
Environmental work remains on the property stack. A new transformer does not waive a REC. Phase I still starts the conversation. Utilities are not a substitute for AAI.
Real estate decides who holds the accounts after close. Put that sentence in the teaser if the building is staying with the seller.
How a buyer should rebuild the bill when the allocation is friendly
Ask for the last twenty-four invoices, not a summary. Rebuild kWh, therms, demand, and any ratchet. Compare summer and winter. Compare the month the plant ran Saturday overtime to the month it shut a week for inventory. If the related-party building charged a flat monthly number, throw the flat number out and use the meters. Friendly allocations are how SDE gets inflated or deflated depending on who is talking.
Walk the air compressor room. Listen. Leak surveys are cheap relative to a wrong run-rate. Walk the chiller pad on a plastics file. Walk the oven or kiln on a coatings file. Walk the refrigeration on a food file. Each walk is a process-family test, not a national percent. This site still will not publish a single energy share of COGS.
Ask who holds the accounts after close. If the seller keeps the building, the lease must say who pays the spike when the buyer adds a shift. If the buyer buys the dirt, the 504 conversation and the bill conversation meet. Neither conversation changes the published earnings cell. Both change DSCR.
A solar story needs interconnection, a year of production, and a sentence about who owns the array. A rebate that has not arrived is not an add-back. Old lighting that has already been replaced is already in the trailing twelve. Do not normalize a bill that no longer exists and do not capitalize a bill that has not yet changed.
A bill-rebuild worksheet a credit analyst can check without a plant tour
Twenty-four invoices. kWh, therms, demand, ratchet. Summer versus winter. A Saturday-overtime month versus a shutdown week. Related-party flat allocations thrown out in favor of meters. Who holds the accounts after close. What the lease says about spikes if the seller keeps the dirt. That worksheet is the utility story.
Process-family walks still matter. Air leaks, chiller pads, ovens, refrigeration, power quality on lasers. They explain the worksheet. They do not replace it. There is still no national energy share of COGS on this site. Anyone who publishes one is guessing.
A solar array needs interconnection and a year of production. A rebate that has not arrived is not an add-back. Lighting that has already been replaced is already in the trailing twelve. Environmental RECs still sit on the property stack. A new transformer does not waive Phase I. Utilities are occupancy and conversion cost inside the current cell. They are not a new official multiple.
A closer read on utility worksheet
Rebuild twenty-four invoices by kWh, therms, demand, and ratchet. Compare a Saturday-overtime month to a shutdown week. Throw out related-party flat allocations and use meters. Write who holds the accounts after close and what the lease says about spikes if the seller keeps the dirt. Walk air, chillers, ovens, or refrigeration to explain the worksheet, not to replace it. There is still no national energy share of COGS on this site. A solar story needs interconnection and a year of production. A rebate that has not arrived is not an add-back. Lighting already replaced is already in the trailing twelve. A new transformer does not waive Phase I. Utilities change DSCR. They do not change the published earnings cell.
Why a Saturday overtime month and a shutdown week belong on the same worksheet
Demand charges and ratchets hide in months that look ordinary until you compare them to a week the plant was dark. Rebuild twenty-four invoices by kilowatt-hours, therms, demand, and ratchet. Foot a Saturday-overtime month next to a shutdown week. The difference is the process, not a national percent of cost of goods sold. This site still publishes no national energy share of COGS. Anyone who quotes one is inventing.
Related-party allocations that charge the operating company a flat monthly “utilities” line are not bills. Throw them out and use meters, or install meters before you claim a run-rate. Who holds the accounts after close, and what the lease says about spikes if the seller keeps the dirt, belong in the same folder as the invoices. A solar story without interconnection paperwork and a year of production is a slide. A rebate that has not arrived is not an add-back. Lighting already replaced is already in the trailing twelve.
Air compressors, chillers, ovens, and refrigeration explain the worksheet. They do not replace it. A new transformer does not waive Phase I. Utilities change debt-service coverage. They do not change the published earnings cell. A molder’s barrel heaters and a fabricator’s laser chiller will not produce similar bills. Write the family. Do not borrow a neighbor’s percent.
ISM Prices at 71.1 in August 2026 is a climate print. Your invoices are the plant. Cite the print with a retrieval date if you must mention the cycle, then return to the twenty-four-month rebuild.