Do I run a large business? Or a small business?
Give your books a look, and you’ll know pretty quick.
However, what about when it comes to your power bill?
There’s more to large business electricity than the size of your bank account.
Today we’re going to take a careful look at what separates the biggies from the smalls.
Remember Electricity Monster can help you large business search for a better deal.
Call us on 1300 232 848 and speak to a member of our team.
For more information keep reading below.
- 1 What makes my enterprise a large electricity customer?
- 2 Okay, I qualify as a large business. Now what?
- 3 Capacity and Demand Charges
- 4 Environmental Charges for Large Business
- 5 Unbundled contracts, fixed prices and exit fees
What makes my enterprise a large electricity customer?
When it comes to your power bill, it isn’t your yearly revenue nor how many people you employ.
Firstly, it’s based on how many megawatt hours of electricity your business uses each year.
However, where this line is drawn can vary wildly from state-to-state.
In most states and territories, the maximum amount of energy you can consume before being deemed a large business is upwards of 100MWh.
In contrast, Northern Territory sets its cap at 750MWh, whereas Victoria sets it at 40MWh.
The full list of thresholds is as follows.
In short, if your business is using more than this each year, you will be categorised as a large business and how you pay for your electricity will get a little different.
Okay, I qualify as a large business. Now what?
We’ll start by saying congratulations on all your hard work paying off.
However, now we need to let you know a few things about how your electricity bill is going to change.
Firstly you’re probably not going to be on any set plan like a regular customer.
Residential and SME electricity plans are pretty abundant and easily accessible, but large electricity customers generally have a different type of pricing structure.
Instead, you will receive special pricing.
This is what your bill could look like on the Essential network in NSW.
This can work out any number of ways for you and your business.
You might end up paying a much lower rate for the energy you use for peak, off-peak and shoulder tariffs.
But there might be other charges coming your way.
The first of which is capacity charges.
Capacity and Demand Charges
Capacity charges also known as demand charges, will usually be the second biggest charge on your large business electricity bill.
These are what your retailer will charge you for spikes in your electricity usage at certain times of the day.
Capacity and demand charges can get a bit complicated, so we’ll try to put them in simple terms.
First of all, let’s look at the meter.
Your meter takes readings of your electricity usage in 30-minute intervals.
Having done this, the meter can figure out what your highest rate of electricity usage is over a 30 day period.
At a certain point during this period, you will reach a peak in the amount of electricity your business usage.
This will be what your demand charge is formed out of.
In short, as a large business requiring a large amount of electricity, you may put a more significant strain on the grid.
And when you use a lot of power, it costs a lot of money.
So as a large business requiring a large amount of electricity, you may put a more significant strain on the grid.
This may require extra electricity to be feed in, which costs money.
Environmental Charges for Large Business
Secondly, you might be looking at the SREC and LREC charges.
These are charged in order to pay for a couple of the federal government's environmental programmes, such as reaching 20% renewable energy generation.
Finally, you might be hit with an AEMO participant or ancillary charge.
The AEMO is the Australian Energy Market Operator, and they’re kind of a big deal.
This is an administrative charge so that the AEMO can keep functioning.
Trust us, you wouldn’t want the see the energy market without them.
Unbundled contracts, fixed prices and exit fees
You might have noticed there’s a lot more going on with a large business’s power bill than with a residential or small business bill.
This is called an unbundled power bill.
However, while some electricity providers provide bundled bills for large businesses, typically you’re going to be dealing with the pricing we’ve outlined above.
Speaking of providers what happens when a large business wants to seek out a better deal.
For one thing, give the team at Electricity Monster a call, we might be able to help.
Just make sure you've got a bill in hand and you know when your contract ends.
If you got all that in hand, pick up the phone and call Electricity Monster, we might be able to help your large business into a sharper rate.
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Benjamin Tom covers the retail energy market, with a focus on electricity, solar, and Internet. His interests include helping people navigate the complexities of the energy market while saving money on their power bills.