Business Electricity Tariffs – What You Need To Know

A business electricity tariff is simply a form of commercial electricity deal designed specifically for business use. While business electricity is usually supplied through the same cables as domestic electricity and, in certain instances, even though the same power supplies, there are some major differences between commercial electricity and domestic electricity, which include:

Reduced unit price: In simple terms, the unit price of business electricity tariffs is determined by the cost of providing energy to your business. For instance, if you have a large number of employees, your company will pay more for the energy needed to run the office. As your company grows, so does the number of units needed to provide the necessary energy. It’s not uncommon for some businesses to require several megawatts of power for just one or two employees, so it’s in your best interests to negotiate a reduced unit price with the supplier.

 

Fixed term business gas and electricity tariffs

 

Different pricing for the kilowatt/hour: Most suppliers offer a standard, flat rate for the amount of energy used to operate a particular meter point, but this rate can change depending on the time of day. If your business regularly uses an increased amount of power (i.e. during the night), it may be more economical to purchase a meter that only displays a steady unit rate throughout the day. On the other hand, if your business only occasionally uses an increased amount of power (such as when weekends are busy and evenings are slow), you’ll want to purchase a meter that displays a per kwh rate. This pricing method is often less expensive than the flat rate, especially if your company operates on a tight budget. Per kwh rates are based on the unit rate multiplied by the number of kwh used in a year.

Commercial Variable Rate (CRR): A commercial rate, which can vary from place to place, is offered by some suppliers. Installing a CRR system can not only lower your business electricity rates, but can also allow you to take advantage of certain state, county, or federal tax credits. Installing a variable-rate commercial account will allow you to take full advantage of federal tax credits, while still maintaining savings within your business electricity costs.

 

Blend and extend tariffs

 

Customer meter information: Your energy company will also require basic information about your business electricity usage, such as how much energy you use, how much you use it overall, and your energy usage trends. Your meter will need to be installed professionally to ensure accuracy. Some meter suppliers offer a guarantee or warranty on their meters; others do not. Before you purchase your meter, be sure to ask what your provider offers in terms of a customer meter guarantee or warranty. It may be worthwhile to pay slightly more for an energy company guarantee; many suppliers offer a service plan with free meter repairs or exchange.

Standby tariffs: Some suppliers may also offer you the option to put into effect “standby tariffs,” which are temporary, floating charges that you can place in place even if there are no meter faults. Standby tariffs are commonly used by businesses when they have special events or large-scale events that will draw a high amount of traffic. In these situations, the standing charge could potentially be low, but your electricity supplier may choose to increase your tariffs during this period. When looking into business electricity tariffs, always check with your supplier whether you can put in place a standby tariff at any time.

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