Quick take: If more than half of the electricity or natural gas that flows through a single meter powers exempt manufacturing processes, the entire bill can be sales-tax free. A properly prepared predominant-use utility study is your ticket to the exemption—and to lowering your cost per kilowatt-hour without changing suppliers or rates.
Why This Matters Now
With ERCOT prices seesawing and pressure on margins everywhere, manufacturers are hunting for “easy wins” that drop straight to the bottom line. For many Texas plants, sales and use tax is a hidden 6–8.25 % surcharge on every power bill. A successful utility study can erase that surcharge and even open the door to four years of tax refunds on past invoices.
What Exactly Is a Predominant-Use Study?
A utility study is a PE-certified engineering report that:
- Inventories every load on a meter—from 300-hp extruders to LED high bays.
- Calculates annual energy consumption for each load (kW × hours × duty factor).
- Classifies loads as “exempt” or “taxable” under Texas Tax Code § 151.317 and Rule 3.295.
- Proves whether exempt use ≥ 50 % over a 12-month period.
- Supports the Form 01-339 sales-tax exemption certificate you hand to your utility.
If exempt use wins the 50-percent race, every kilowatt-hour on that meter becomes sales-tax free until the load mix changes.
Loads Your Plant Can Usually Classify as Exempt
| Exempt Category | Typical Examples in a Manufacturing Complex |
| Direct production equipment | Injection-molding presses, CNC mills, conveyors that move work-in-process |
| Process control & QA | PLCs, in-line vision systems, lab benches sampling in-process goods |
| Environmental control for production | Ovens, chillers, compressed-air systems maintaining spec-critical temps |
| Production-area lighting & HVAC | High-bay LEDs, makeup-air units serving only the shop floor |
| Pollution-control gear | Baghouses, scrubbers, wastewater pumps tied to production |
Loads That Stay Taxable
- Office lighting and HVAC
- Employee break-room appliances
- Finished-goods warehousing & shipping docks
- Outdoor security lighting and parking-lot poles
- Maintenance shops and R&D labs not in the production line
Pro tip: If taxable office loads are dragging your exempt percentage below 50 %, ask your utility to install a separate meter or sub-meter. That one change can swing the study in your favor.
The Step-by-Step Game Plan
- Gather 12 months of bills for every electric and/or gas meter.
- Walk the plant with an engineer to list loads, nameplate kW/MMBtu, and run hours.
- Run the numbers—spreadsheet or modeling software—to determine exempt vs. taxable kWh.
- Certify the study with a Texas-licensed Professional Engineer.
- File Form 01-339 and a copy of the study with your utility provider.
- Claim refunds for any over-paid tax going back up to four years (yes, checks in the mail!).
- Review annually; add new machines or circuit changes to keep the exemption bulletproof.
Why Partner with Amerigy Energy?
- Hands-on help: Our commercial energy specialists will coordinate with your staff and a PE-certified engineering firm to keep the study affordable and audit-ready.
- Multi-meter strategy: We’ll advise whether splitting office and production meters delivers a sure-fire exemption.
- Complete energy roadmap: Once the tax is off your bill, we’ll leverage our 100+ REP relationships to lock in market-leading supply rates—so you save twice.
Ready to Find Hidden Cash in Your Power Bill?
Call Lee Miller (Commercial Energy Expert) at 877-631-8875 or email info@amerigyenergy.com to schedule a free preliminary review. If a utility study pencils out, we’ll walk you through every step—engineering, filing, and refund recovery—so you can focus on making product, not paperwork.
Amerigy Energy provides guaranteed best-price electricity plans for Texas businesses every day. Discover more cost-saving insights on our blog or request a no-obligation bill evaluation at amerigyenergy.com