NavonLogic Blog
Utilities Infrastructure and Energy Costs in Site Selection
Utilities tend to fade into the background of a site visit. Power’s on. Water’s on. Gas runs out to the lot. It looks fine. Eighteen months later, the same project is rerouting a feeder, retiming a startup around a substation upgrade, or absorbing a demand-charge bill nobody modeled. Of all the variables in site selection, utilities have the longest memory — what you commit to up front shapes operating cost and uptime for the life of the plant.
Capacity without timing is a half-answer
“The site has the capacity” is the answer most often heard on a tour. The follow-up — “by when, under what interconnection terms, and with what redundancy” — is where useful information starts. A utility that can serve 12 MW today, but only 4 MW until a substation upgrade lands in 18 months, is a fundamentally different site than one that can serve 12 MW on day one.
For power-intensive operations, temperature-sensitive processes, and any plant that’s planning a phased expansion, that timeline question can’t be deferred. We’ve seen projects lose six to nine months of production because nobody asked, in writing, what the worst-case interconnection schedule looked like.
Average rates lie. Operating cost doesn’t.
The blended cents-per-kWh number that appears on a comparison sheet is a regional average. It’s almost never what the plant will pay. Real operating cost is shaped by demand charges (which can be 30–50 % of the bill on the wrong rate schedule), curtailment exposure if the utility has interruptible service in the region, time-of-use windows that punish second-shift production, and the back-up capacity you’ll need if reliability scores in the area are weak.
The honest way to compare two sites is to drop your real load profile — diurnal pattern, seasonal swing, expected ramp — onto each utility’s actual tariff structure and run the bill. Several of the projects where we’ve done this have flipped the ranking. The “expensive” market often isn’t.
Water, gas, and wastewater belong in the same conversation
It’s tempting to treat utilities as “the electrical question.” For most industrial operations, water and wastewater drive at least as much project risk. Source-water variability can affect process performance directly. Discharge permit lead times can dominate the construction schedule. Pretreatment requirements can pull a meaningful chunk of capital that wasn’t in the budget. And a gas service tariff with no firm capacity in winter is a different liability than the brochure suggests.
Why this is a first-round screen
Utility gaps that surface late are expensive in three ways: redesign cost, schedule slip, and lost production flexibility after launch. Screening utilities early — in detail, with the actual people from the local provider on the call — is the cheapest hour of due diligence on the entire project.
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