With energy price increases due to take effect 1 July, when should energy customers shop around for a better deal? The answer is now – and there are 5 things you can do to help ensure your business doesn’t pay too much.
Over the past few months, we’ve witnessed substantial disruption in energy markets and a significant rise in rates across the country.
Relevant energy regulators have approved increases of between around 5% and 19% for households and businesses, depending on the location, and some retailers have already advised customers that their rates are going up by 100%+. Others have even taken the step to tell their customers to shop around for a better deal, so no-one will be immune from escalating energy costs.
Make It Cheaper’s Nathan Schofield says the issues driving this crisis, which include growing wholesale prices, increasing demand, and an over-reliance on fossil fuel energy, can’t be solved immediately.
“It requires government intervention and we need to bring more renewable energy sources online asap, so it’s not a short term fix,” he says.
So in the face of skyrocketing prices, what can businesses do to protect themselves from massive bill shock?
- Engage with your provider. They’re required to give you a certain amount of notice in regards to price hikes (varying state by state), so look out for price change notifications from energy retailers.
- Review your energy usage. It’s quick and easy to check your business’ meter data and audit your last 12 months of consumption. From there, you may find opportunities within your load profile to shift peak business activity to cheaper times of the day.
- Compare energy plans. This is the most powerful way to take control of your bill and make sure you’re not paying too much. After auditing your usage and rates, see if you have an opportunity to move to a cheaper network tariff, with your provider or a new retailer.
- Lock in long-term fixed rates. The further into the future that a business can “hedge” their electricity, the better their pricing will typically be. Long-term contracts typically present better pricing value over short-term contracts.
- Check eligibility for rebates. Businesses may be eligible for rebates or grants to help deal with these escalating costs: visit the government’s rebate finder to see what’s available.
Unfortunately, many businesses aren’t noticing price rises until they receive their bill. By then, they’re already several weeks (or potentially even months) into a new bill cycle, which exposes them to higher bills for a longer period of time. That’s why it’s so important to take action as soon as possible.
Make It Cheaper’s Jenny Gordon suggests businesses should review their pricing at least once per year.
“Customers should engage with a broker to help them understand which retailers offer a bit more flexibility on their contracts… so they can capitalise on any opportunities to re-set their contract, if the market comes down again,” she says.
What are the risks of sticking with your current energy plan?
With energy prices set to soar across the country, those businesses who choose not to review their current energy plan (or who delay it) face the real risk of over-paying on their energy bills.
The process of shopping around for a better deal can take some time, depending on how big and complex your energy needs are, so Make It Cheaper’s Ryan Morse suggests ticking it off the to do list sooner than later.
“It can take a few months to find a good energy deal for the commercial and industrial sectors, while finding a small market SME energy plan can be a faster process. Either way, businesses should start their procurement process early to ensure they’re maximising their potential for sharp pricing,” he advises.
“A commercial energy broker like Make it Cheaper can offer suitable advice and help businesses know an ideal time to shop around. Small market (SME) customers are likely to see an increase [in energy bills] in the next few weeks, and should attempt to sign a fixed-term energy contract ASAP,” he advises.
Longer-term, he adds that federal and state governments should “come together to design and rapidly implement an action plan that addresses the runway cost of energy generation in this country.”
“As a country, we are 16th in the world for natural gas production and we should be welcoming the high-price of natural gas on international markets. Instead, domestic customers are suffering, as Australia lacks a fixed-reserve of natural gas for electricity generation,” he explains.
“Natural gas needs to be reserved for domestic generation first, at a gazetted rate, before any gas is exported to international markets. Natural gas is our ‘transition fuel’, touted as our solution to bridge the gap between coal and renewable generation, and should be protected by our government under a separate domestic market or reserve.”
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At Make It Cheaper we constantly review the energy market, working with businesses to help them take control of their energy bills and achieve potential savings. Contact us for an obligation-free review today on 1300 957 721.
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