What To Consider:
For your Commercial Energy Supply, there are some simple things to consider to ensure you get the best deal and then manage it effectively:
- How many Units are you buying?
When you have signed that contract make sure you regularly record your consumed units from your meter, otherwise you won’t know when you have used your agreed quota of kWh’s (See point number 2).
- What are the penalty charges?
Understand the cost, per unit, if you use more or less than any agreed upper and lower limits, respectively, in the timeframe of your contract. Like the excess mileage on a rental car, these can be quite steep and again it can be where they hide their profit.
- Cost of the standing charge
Some suppliers, both domestic and commercial, charge a low kilowatt hour rate BUT have an additional higher Standing Charge rate, per unit. This enables them to say they have cheaper energy charges but they compensate via this other per unit cost and this is often again where they hide their profit.
- Don’t go ‘out of contract’
Make sure you know and remember when your contract is up for renewal and don’t go over it. Make sure you renegotiate or change your supplier before you roll over to their Standard Tariffs. Out of Contract supply is the most expensive way to buy your energy and many of our business clients save money immediately by going back into a fixed-term contract.
- Not all brokers are the same
As in all walks of life, there are good brokers and bad brokers. Some have specialised and dedicated experts who understand their client’s requirements and operating pressures. Then there are others who are just agents of a franchise and know as much about energy and energy markets as you do about piloting a spacecraft. I met someone recently whose main job is as a freelance training provider but they also act as a broker for a well-known, utility supply franchise. In this instance, they may be able to reduce the cost of supply kWh but it isn’t really in their interests to help clients reduce their consumption. It’s all about commission and acquiring another sale. If you do go to a broker do some research and see whether brokering supply and cost reduction is their main specialism (Linkedin is good for that) rather than ‘something else they do’ and don’t forget to ask about the financial penalties for reducing usage.
- Buy in the Summer Time
The best time to buy energy is before January and ideally in the summer months.
- Good Housekeeping Counts
Finally, if you are paying your energy costs directly and they are not included in the rental of the premises, remember it is all about good housekeeping. Track your usage, identify and eliminate excess energy waste, make savings through behaviour change, non-negotiable processes and procedures and considered equipment purchases. If you have a simple routine right from day one, then wasting energy is less likely and you won’t need to pay unnecessary costs (which is direct profit) and less Climate Change Levy.