What Factors Influence your Company’s Energy Unit Costs?

The cost per unit can vary depending on every utility bidder. Suppliers evaluate the parameters of your business, including variables like energy use and location, while putting together the industrial energy quote.

They then use this data to determine the cost of your quote and the cost per unit for the power your company consumes. A provider will consider the following aspects when preparing a quote for your company’s energy costs:

• The type of enterprise you run. While not all firms operate Monday – Friday, this impacts energy consumption levels throughout the week. Businesses that consume a lot of energy on evenings and weekends will be billed varying amounts than during the week; these charges are generally lower because the infrastructure is less busy.

• How much power you consume over a year. In most cases, consuming more energy results in a reduced price. However, if unit rates fall, the routine standing charge may rise. Rather than just focusing on unit prices, it is always a good idea to look at your whole offer in terms of the amount over a year.

• The scale of your enterprise. Running a small or a large corporation both affect your purchasing power. A few ‘group buying’ firms act on behalf of SMEs, but they are few and far between. A smaller firm usually can only choose from a set of defined tariffs.

• What kind of contract do you have? If you have a multiple fuel lease, you may realize that electricity and gas have marginally better costs. Since it is not valid with every energy provider, it is essential to compare single-fuel and dual-fuel plans.

• Your present energy supplier. You might already be with an affordable or most costly provider on the market, but you will not know unless you compare rates.

• Where your company is based. As prices vary across the country, the location in which your company is based has an impact on the estimates you receive.

• Your agreement’s duration. Both unit prices and daily expenses are affected by this. In general, for each year you renew your agreement, an additional six percent will be applied to your unit prices, and two – six percent will be deducted from your standing fee.

Aside from these variables, anything beyond your control and your supplier’s control can impact your cost per unit. Natural catastrophes, political events, and disputes, for example, can have an impact on the retail price of gas and electricity (the amount your provider pays for the power it provides to your firm).

Obtaining a fixed-term contract is ideal for saving money on your corporate energy cost, but it is not the only factor to consider. These factors, in addition to fluctuations in the retail cost of gasoline and electricity, will affect your rates:

1. Plans for Repair and Maintenance

Some distributors will offer to maintain and care for your commercial power system as a part of the service agreement. Make careful to figure out how much it will cost and whether it represents good value for money.

2. Contracts that can be Re-newed

You may be rolled over towards a more priced variable-rate plan at the expiration of your temporary contract. It is critical to be aware of when your contract is due to expire so that you can search around for the best deal.