Business gas and electricity bills explained
Many business owners are often on the wrong energy deals for their business due to a lack of understand of their bills and their business’s energy requirements. The first thing to do to combat this is to better understand your gas and electricity bills. Here are some quick key facts:
Kilowatt Hours and MegaJoules
Your electricity usage is measured in Kilowatt Hours (KWh) and your gas will be measured in MegaJoules (Mj). To come up with the right level of kWh and Mj usage on your bill, your supplier will take your last, lower meter reading away from the current meter reading, providing you with a usage amount for that period. Sometimes, the kWh usage will be converted to MWh (Megawatt hours) - simply, there are 1,000 kWh in one MWh.
For a typical medium sized business, using between 20,000 and 160,000 kWh you are likely to be billed quarterly, but you may receive a monthly bill. For any business using more than 160,000 (160MWh), you will be billed monthly.
Most of the time, your usage is not charged back to you at a flat rate. Suppliers often create tiers of usage, and therefore tiers of pricing. You may be charged a low $ per kWh for the first 4,000 kWh of usage in a year, and then significantly higher price for the remaining usage. This means that it's not good enough to accept a set of prices, and take the suppliers word that it's cheaper. Our advice is to always calculate what a typical bill will be with the new prices compared to the old to properly assess how competitive or otherwise the deal is.
Peak vs. off-peak
Coupled with the usage breakdown, your kWh charges could also vary depending on the time of day you use the electricity. Simply put, using electricity at 4pm on a weekday could be much more expensive than 4pm at the weekend, not to mentioned charges being a lot cheaper at 4am in the morning.
You will always have a daily charge for the provision of electricity and gas to your business. These costs can vary massively between suppliers, especially when some supplier may look to re-coup margin through these charges not typically scrutinised by a business owner.
You may find that you have certain discounts on your business energy bills - they typically come in two forms:
- Pay on time: paying your bill within 10 days of receipt.
- Contract term discount: by committing to a supplier for 2 or 3 years, you may be offered additional discounts. In fact, if a supplier wants you to be a 'loyal' customer and give up your freedom to change suppliers for a period of time, we'd always recommend looking for an attractive discount incentive.
How are my energy bills calculated?
For each unit – Mj or KWh – of usage, every supplier has a specific charge. These charges will vary depending on the total amount of energy you use during the course of a year. There are even some charges that apply depending on the time of day you use your electricity or gas, whether you’re a business or home user. Keep in mind charges fluctuate, there are no pre-paid plans or electricity cap rates.
Why do you need to see a copy of my bill?
Your business energy bill tells us everything we need to know to help make your bills cheaper. It shows us a unique National Meter Identifier number (NMI) which we need to confirm what kind of energy meter you have, which supply area you are in and what kind of electricity user you are. It ensures that we quote you the correct electricity prices, and find you a deal suited to your business’s needs.
How does my new supplier know I want to switch?
If you decide to switch energy supplier, Make It Cheaper will contact your chosen new cheaper supplier, and they will inform your current provider that you will no longer be with them. Your electricity bill will then be switched over to the new electricity supplier.
Switch and Save with Make It Cheaper
Make It Cheaper are making it easier for our business customers, developing analytical cost comparison tools across Australian brands, and finding the best service for you.
We can help you to understand your energy bill costs and how they compare in an accurate way, so it's very easy to understand your usage and who will be cheaper for you.
Get in touch with Make It Cheaper today, and see if you could save.