Understanding Energy Contracts 2017-05-12T11:46:04+00:00

Generally, when selecting an energy contract in Perth, you will have the option of a bundled or unbundled offer.

When energy retailers charge bundled rates, it includes a network cost imposed by the network operator, Western Power, renewable charges, capacity cost, carbon cost and the energy charge. On some occasions there are other hidden components on top of these. One energy retailer imposes additional renewable charges separately. Other energy retailers impose CPI and minimum take.

When looking at bundled offers, there are many factors to take into consideration. These include:

  • Peak and off peak times
  • Terms of the contract
  • Daily supply charge
  • CPI component
  • Minimum quantity
  • Renewable charges
  • Clean energy charge or carbon cost
  • Maximum daily quantity
  • Shortfall charge
  • Termination payment
  • Pass through component

The list goes on and on. One energy retailer may have offered you a quote, but that may not always be your final cost. These hidden fees and clauses must be examined carefully to avoid unnecessary cost to your business. No electricity retailer can give you a fixed contract. As there are so many variables that make up the energy retailer costs that are impossible to predict.

When an energy retailer presents you with an unbundled offer. You need to be aware that the energy retailer passes through the risks to your business. These risks are network costs, capacity costs, and renewable costs. In some instances you may be exposed to unnecessary costs if you are unable to manage your energy usage. If you have the manpower, knowledge and resources, the unbundled offer generally will give you more savings.

However, understanding how the unbundled offer quoted by the energy retailer can be a major task. There are several risk factors that you need to be aware of that could potentially cost your business if you do not understand it.

When negotiating unbundled offers,  the following factors can apply:

  • Peak & off peak costs
  • Capacity cost
  • Network cost
  • Renewable cost
  • Carbon cost
  • CPI
  • Minimum take component

Carbon Energy Expert will examine all these factors to ultimately help you identify the most suitable package for your energy requirements.