Laundromat Utility Costs Explained: Water, Sewer, Gas, Electric

By Jason Taken, business broker · HedgeStone Business Advisors · Updated 2026-09-04 · 6 min read

The Four Components

That ranking is not universal. A store with electric dryers in a high-rate state has a completely different profile from a gas-dryer store in a low-rate one, which is why every underwriting starts from the actual bills rather than from a template.

Water and Sewer: The Local Problem

There is no national dataset for water and sewer rates, because they are set by thousands of individual utilities — sometimes a city, sometimes a district, sometimes a private operator. Two stores ten miles apart can face materially different structures.

What to pull for a specific address:

• The serving utility's current commercial rate schedule
• The meter-size charge and the volumetric rate blocks
• Exactly how sewer is calculated, including any multiple of metered water
• Seasonal averaging rules, if any
• Surcharges, taxes, and any pass-through fees
• Backflow testing requirements and costs
• Connection or impact fees if you plan to add machines
• Whether the meter and service line belong to the landlord or the tenant
• Whether any other premises share the service

The sewer question is the one buyers most often skip and most often regret. A laundromat discharging heavily under a high sewer multiplier can find that line alone approaching or exceeding its water charge.

Gas

Gas typically serves the dryers and the water heating, and it is the second-largest line in most gas-equipped stores.

What drives it: dryer minutes sold, the extraction efficiency of the washers feeding them (wetter loads take longer to dry), water heater or boiler efficiency, incoming water temperature, and the local gas tariff.

Two diligence items specific to gas: confirm the total connected BTU load against the meter, regulator, and service line capacity — which constrains any future equipment change — and check exhaust runs and lint accumulation, because restricted airflow lengthens cycles and raises consumption.

Electricity

The one component with a usable public benchmark. The EIA's State Electricity Profiles report all-sector average retail prices by state, with a 12.94 cents/kWh U.S. figure for 2024 and wide state variation around it. The state pages on this site carry each state's number.

Two cautions. A statewide all-sector average is not a commercial tariff, and commercial tariffs carry demand charges that a per-kWh average does not capture. And the number only matters much if the dryers are electric — in a gas-dryer store, electricity covers motors, lighting, controls, and HVAC, which is a smaller line.

The Ratio Test

Compute total utilities over twelve months, from original bills, divided by gross revenue over the same aligned period.

The six causes of a high ratio, in the order to check them:

1. A leak or running fixture — read the meter with everything off
2. A water heater or boiler cycling continuously
3. A softener regenerating excessively
4. A top-loader-heavy machine mix, or low extraction speed lengthening dryer time
5. An unfavorable local rate structure or sewer multiplier — permanent
6. Revenue lower than represented — the denominator, not the numerator

That last one is the trap. A high ratio can mean costs are high, or it can mean the revenue figure is inflated. The check that separates them is comparing metered water consumption against manufacturer per-cycle usage for the actual installed machines. See water bill analysis.

What Efficiency Can and Cannot Do

ENERGY STAR reports that certified commercial washers are on average 9% more energy efficient and use about 45% less water than standard models. That is a real effect, applicable to qualifying models, and it should be modeled from your own cycle volume and your own tariffs rather than applied as a blanket percentage.

The order that produces results:

1. Find leaks. Free, and frequently the whole answer.
2. Fix the water heating. A system cycling continuously or poorly insulated is burning money every hour.
3. Check the softener. Excessive regeneration is a quiet, ongoing cost.
4. Then consider equipment. A capital decision, usually belonging to whoever will own the store for the next decade.

What This Means for a Purchase

On a $300,000-revenue store, moving utilities from 26% to 21% of revenue is $15,000 a year — roughly $52,000 of value at a 3.5x multiple. That is why the utility investigation is worth doing properly rather than accepting a seller's summary.

And whichever way it goes, the bills serve double duty: they answer a cost question and, through the consumption cross-check, a revenue question at the same time. Ask for them in your first document request.

Who Pays for What: The Lease Question

Utility cost is not only about rates. It is also about which party owns and maintains the infrastructure, and that is a lease question a generalist review frequently skips.

Language putting all repairs "within the demised premises" on the tenant can, depending on how the premises are defined, include the sewer lateral and the gas train. Ask the question explicitly and get the answer in writing before closing. See laundromat lease review.

Budgeting Utilities in Year One

New owners consistently underestimate the opening months, because several utility items are one-time and none of them appear in a trailing P&L:

• Deposits on every account — water, sewer, gas, electric — since the accounts are new in your name
• Final meter reads and prorations at closing
• Backflow certification if it has lapsed
• Any capacity or connection charge if you add machines
• A leak you inherit, which is why the meter test in week one matters

Budget for these separately from ongoing operating expenses, and keep them out of the working-capital calculation so they do not quietly consume it.

Summary

Water and sewer are local and usually the largest combined line, with sewer often billed as a multiple of metered water. Gas serves the dryers and water heating and constrains any future equipment change through connected BTU load. Only electricity has a state benchmark, and even that is not a commercial tariff. Pull 24-36 months of original bills and the utility's rate schedule, compute the ratio, and if it is above 25%, work the six causes in order — including the possibility that the revenue, not the cost, is the problem.

The Next Step If You Are Looking to Buy

This page is general information about laundromat transactions, not legal, tax, or investment advice, and not a guarantee of sale price, timing, or financing approval. Verify current rules with your own CPA, attorney, lender, and the relevant state or municipal agency before acting.