Business Electricity Pricing
We believe in simple, transparent pricing – the quote you get is the price you pay. Not all providers make it so easy though, so here’s some background information to help you make the right decision.
If you have any questions about your quote, call us on 13 23 76. We’re here to help. You can even sign up while you’re on the phone with us.
The final price you’re charged on your electricity bill represents costs from all parts of the electricity supply chain. Providers, like ERM Business Energy, pass on the costs from each of the parts of the supply chain. For example, your distributor bills us for your portion of the distribution network costs and we pass this through to you on your bill. It’s all wrapped up in the price we quote.
Electricity pricing may seem like a bit of a ‘dark art’ at times, so we want to shine a light on your bill and help explain it so you feel more confident about the final price you pay.
Who’s who in electricity?
There are two broad types of electricity contracts offered by providers.
Market Retail Contract
If you’ve selected your provider and signed up over the past few years, you’ll probably find you’re on a Market Retail Contract. This is a contract negotiated between you and a provider and may offer you a better price or benefit than a Standing Offer. When you sign up with ERM Business Energy online or over the phone, you’re signing up on Market Retail Contract.
The terms and conditions and prices associated with Market Retail Contracts are different with every provider.
Here are the things to look out for:
- What other fees and charges might you be up for? Connection fees, late payment fees, exit fees.
- How often will you be billed? Does that suit you?
- Is there an end date to your contract? What happens to your price and terms and conditions at the end the contract period?
- How often could your price change? How and when will they let you know?
- Are there exit fees if I want to switch to a different provider?
Your provider should be able to answer each of these questions easily.
Standing Offer or Standard Retail Contract applies by default when you have not explicitly signed up to a Market Retail Contract.
If you have never changed your electricity provider by signing up to a Market Retail Contract, you will be on a Standing Offer and you’re probably paying too much for your electricity! For example, you might find that you’re on a Standing Offer if you have moved into premises where the previous tenant was being supplied by a particular provider and you didn’t change providers when you moved in. Sometimes you might default to a Standard Retail Contract after a Market Retail Contract ends. While it is possible to expressly choose to be on a Standard Retail Contract, it’s can often be more expensive than being on a Market Retail Contract.
If you see the words Standing Offer on your electricity bill, you are almost certainly paying more than you need to for your electricity.
How do you tell which type of contract you have?
Check your bill! If you see the words Standing Offer, you’re probably paying more than you need to for electricity. Get a quote now and compare for yourself. It’s quick and easy, and could save you thousands.
Your bill usually has two sections – the daily supply charge and the usage charges.
Daily supply charge
This is an amount per day that you pay for your business supply address to have access to electricity. It does not change with the amount of electricity you use.
These charges are based on how much electricity you actually use. Your meter tracks your usage in kilowatt-hours (kWh). Providers set your electricity price in cents per kilowatt-hour. To calculate this part of your bill, you just multiply the kilowatt-hours you use by the cents charged by the provider. There might be different kilowatt-hour rates for different times of the day. In some cases, you might be charged different rates for subsequent ‘blocks’ of electricity – e.g. One rate for an initial block and another higher or lower rate for usage over and above that.
There are also some more complex ways of charging for electricity which depend on your meter type. For example, some businesses (usually larger ones) have a tariff structure that includes a demand charge, which is based on the highest capacity required by your business during a given billing period.
Why prices vary from business to business
Electricity prices vary from location to location, sometimes even within suburbs. Also, small businesses can pay different prices to larger businesses and residential customers.
How much electricity you use is only part of the story when it comes to your electricity bill. The prices that small businesses will pay in your specific location also depends on:
- The distributor that owns and maintains the poles and wires in your local area. Each distributor passes through different costs to us as your provider, which we then pass to you.
- The type of meter you have. The type of electricity meter at your premises determines whether you can be charged different prices for different times of day e.g. Peak, Off-Peak and Shoulder.
- The tariff assigned to you by your distributor. The rules for how tariff types are assigned are different for each distributor and are usually based on your meter type and historical usage.
- The regulations in your State or Territory relating to price regulation and Government environmental schemes.
At ERM Business Energy, we believe in keeping things simple and transparent. That’s why we give you a straight price and not a discount offer, so you can quickly and easily work out how much you’ll actually pay.
You have two simple pricing options to choose from – Fixed and Adjustable. Your choice will depend on how comfortable you are with price changes, whether they be up or down.
- The rate you sign up for now is fixed* for the term of your contract.
- Great if you like to set a budget and stick to it
- No exit fees. Ever.
- Usually a slightly lower rate, which is reviewed at most, once each calendar year.
- Great if you want to take advantage of a good deal in exchange for the possibility of the rate changing (up or down) during the term of the contract.
- No exit fees. Ever.
*We won’t change the price you pay for your assigned electricity tariff within your contract period. However, if your electricity distributor assigns another tariff, we will change the tariff accordingly and this will change your prices.
Get a quote online now and view these Fixed and Adjustable Rate pricing options tailored for your business.
Either of our pricing options is available across multiple sites. If your business has more than one site, call us on 13 23 76 so we can discuss which option might suit your business.