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Australia follows an open grid model where energy retailers can purchase power from the main grid and sell it to customers. Hence, you will find many energy providers in NSW offering different rates.
As per the latest data, energy has gotten cheaper for SMEs, and they are paying less than they were in 2018. If you compare median energy bills for SMEs, they pay around $69 less now.
If you run a business in NSW and want to reduce your energy bills, you need to select your electricity plan for your business unit carefully. Here are some precautions to take when choosing an electricity plan.
Consider Your Needs When Selecting a Plan
According to the latest data, there are around 310,500 employing businesses in NSW, which is the highest in Australia. They account for 35.9% of Australia’s employing businesses.
There are two types of electricity rates plans – Fixed Rate and Variable Rate plans. Hence, it will help if you compare electricity plans NSW before making any decision.
Fixed-Rate Plan– It allows businesses to select an energy rate(kWh) price that fits their budget. Once both parties agree on the price, the price is locked, and a service contract is prepared. The length of the contract is a few years. With a fixed-rate plan, you do not get any shocks after seeing the electricity bills, as the energy retailer will not increase rates till the end of the contract.
Variable Rate Plan– According to the latest report, NSW consumes around one-quarter of Australia’s total energy, including domestic and commercial consumption.
The variable-rate plan might be suitable for SMEs that do not have high energy demands. In a variable-rate plan, the energy costs change with seasons, usage time, demand, and changes in the electricity market.
For example, the variable-rate plan has two electricity rates – peak rates and off-peak rates. Peak rates are higher than off-peak rates. Peak rates refer to times when there is higher electricity demand, like holidays and weekends. Off-peak times are times when there is less demand for electricity, like midnight.
Suppose you think a variable-rate plan suits your business needs. In that case, you need to compare electricity plans in NSW and choose an electricity plan that offers more significant savings.
Consider Additional Costs
According to the latest data, NSW’s electricity consumption is around 110 terawatt-hours. However, due to the higher energy requirements, the rates of electricity are constantly fluctuating.
The energy rates are not the only components in your electricity bills. It would help if you considered other factors too. These are:
- Transmission – covers the cost of bulk energy transfer from power plants to electric substations in your region.
- Delivery – the electricity retailer levies a specific charge on consumers for moving electricity through networks and meters to their homes.
- Capacity – the electricity supplier must maintain a specific electricity supply capacity to ensure everyone gets electricity supply even at peak load times.
- Ancillary services – these costs cover voltage control, black start, regulation, and other costs.
When you consider any electrical plan, check the additional costs you will be required to pay. These charges differ with electricity retailers, and you might see some difference even in energy plans offered by a particular electricity supplier.
You may also like: 4 Reasons To Compare Electricity Rates
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