Smart Advice to Secure the Best Energy Deal for Big Business
Are you a large business considering switching business energy providers or hunting for the best energy deal? A word to the wise: lock in the best possible terms by thinking green and assuming nothing.
Having dealt with soaring energy costs, big businesses are becoming more savvy when it comes to energy. They know they can save significantly if they negotiate energy prices with retailers. But what many don’t realise is that’s not the only way you can control what you pay for energy.
You have the power
“People assume there’s nothing they can do about environmental scheme prices – possibly because they’re connected to Government energy efficiency policies – but that’s not true at all,” explains Steve Rogers, ERM Power’s Executive General Manager.
“The certificates created by these schemes are market-based, tradeable commodities, which can vary substantially in price.
“Given that environmental schemes account for around 10 per cent of the end bill for commercial and industrial customers, ensuring you get the best price is a smart move that translates into real savings,” he said.
Spark savings & avoid bill shock
The upshot is that organisations should have their eyes wide open when comparing offers in a tender process to get the best energy deal – and not just in regards to the ‘electricity usage component of retail charges. Ask questions about how the ‘green’ rates are calculated.
“Check whether the green rates specified are indicative or guaranteed. That way, you know you’re comparing apples with apples,” says Steve.
“With ERM, what you see is what you get. Our pricing is transparent. We guarantee our fixed rate for environmental scheme charges up front, so organisations know that what they’ve signed up to is what they’ll be charged for the duration of the agreement – subject only to legislative changes to the scheme,” he explains.
This isn’t true of every retailer. Some purposely provide attractive indicative rates during the tender process that are subject to change.
“On the surface this may make the offer look more attractive, but if the rate is indicative only it can create a false impression because retailers aren’t contractually locked into the price they’ve tendered. The actual price organisations are charged on their bills can be markedly different.
“If organisations want cost certainty, fixed rates for environmental scheme charges are the best way to go,” says Steve.
What environmental schemes apply?
Several State and Federal Government environmental schemes are in place to encourage renewable generation, minimise greenhouse gas emissions and boost energy efficiency. Charges are typically levied in connection with these schemes, which appear on electricity bills as individual line items under ‘environmental charges’.
The ones that commonly apply to our commercial and industrial customers (subject to location and limited exceptions) are:
The Federal Government’s Renewable Energy Target (RET) scheme launched in 2001 to reduce greenhouse gas emissions and encourage renewable energy generation.
It’s split into two parts – the Large-scale Renewable Energy Target (LRET) and the Small-scale Renewable Energy Scheme (SRES). Both incentivise investment in renewable energy sources through the creation and sale of market-based certificates.
Since the RET launched, a number of State Governments have also introduced energy saving schemes to reduce carbon emissions.
The Victorian Energy Upgrades (VEU) program (formerly known as VEET) is a Victorian Government initiative aimed at promoting energy efficiency. Established under the Victorian Energy Efficiency Target Act 2007, VEU initially focused on residential accounts and expanded to cover business customers from 2012. Learn more at esc.vic.gov.au/victorian-energy-upgrades-program
The Energy Savings Scheme (ESS) launched in 2009 in New South Wales to reduce electricity consumption by creating financial incentives for businesses to invest in energy saving activities. Learn more at ess.nsw.gov.au
So when it comes time to look at your energy contract again, and try to get the best energy deal, remember to think green and assume nothing.
To speak to an expert about how ERM could help you with your next energy contract, click here.