Best Natural Gas Contract Options For Wa Businesses: Bundled & Unbundled
What is the best option for natural gas contract in WA? If you are a business that consumes a large amount of gas for your day-to-day operation, you might want to know about this. Are you aware that there are significant savings by taking a more cost-effective and competitive gas contract?
To ensure both your operational efficiency and the operating cost for your business stays manageable, you will need to negotiate and arrange for a competitive natural gas contract.
Energy contracts protect both the customer and the energy supplier to ensure the rights and responsibilities of each party, respectively. It encompasses the fixed rates of the energy bills and the agreed variables that consist within.
This article explores tips on how to choose the most suitable natural gas contract options for your business. Especially the contract options commonly implemented in Perth, Western Australia; the Bundled and the Unbundled. These two types of energy contracts, if properly managed, will help your business to save money.
Read more about what advantages and disadvantages engaging with energy brokers have for your business procurement needs.
Natural Gas Contracts from WA Gas Companies
In terms of natural gas consumption for businesses, it is a common practice for businesses to set up an energy contract. While it seems trivial, these businesses can enjoy a stable gas supply at a fixed rate without worrying about the ever-increasing natural gas rate.
Be advised that not only does it protect your business from the unexpected rise of natural gas prices, but it also ensures your business be freed from any possible risk and exposure.
The energy contract will secure your business from the sudden unforeseen changes or potential liability in your gas consumption. This is especially important since the energy market in Western Australia is one of the most competitive in the country.
With up to 5 gas suppliers competing to provide their services to Western Australian businesses. The contract will be based on your annual business consumption; the supplier will give a rate and the terms and conditions of the contract to suit what your business wants and needs.
The gas suppliers in Western Australia commonly offer two types of energy contracts. These options are referred to as Bundled and Unbundled Contracts. Each offers different types of pricing and have distinct advantages and disadvantages.
Read more about BIG PROBLEMS associated with negotiating natural gas contracts for your business.
Natural Gas Contract: Bundled Options
The bundled contract option for your natural gas contract is a very transparent choice. Generally when you receive a bundled offer, the gas suppliers charge you by adding all the charges into a regulated tariff. This type of contract is simple to calculate and easy to understand.
What about the other charges or fees involved? In Bundled options, other components that make up your gas costs, such as the network cost and additional regulatory charges, are all lumped into the offer. Therefore, providing you with a more manageable yet more generalised gas rate for your contract.
This arrangement minimises the risks to your business. You are allowing safer and less frustrating approaches in managing your energy consumption while preventing any unexpected increase in cost due to the way the energy is consumed. Naturally then the biggest challenge with this kind of arrangement comes down to the primary contractual conditions of each energy supplier in their pricing policy.
To fully understand the best possible deal for your business, be advised that WA Gas Suppliers will market all kinds of “exciting offers” to potential customers. This is not limited to offering their services in the best and most presentable manner. Be very thorough with the offers they give you. Make sure to go over all the hidden fees. If you want to be a smart consumer these fees must be calculated and examined closely based on the value and relative risks. We see many energy providers release this bundled offer all the time. At first glance yes, the energy offer seems quite attractive. But look at it closely to be sure.
Therefore, you can often get confused and assume you are getting a quality energy offer without thoroughly analysing the package in complete detail and reading the fine print. However, upon closer inspection you will realise that this is only covering up the high minimum take component, supply rate and other various charges that have not been mentioned. On top of those rates, there are various other factors you will have to consider before taking the bundled offer. One such factor is the minimum take component, the annual Consumer Price Index (CPI) adjustment, an overrun charge, network pass-through cost and any changes in the law.
You can learn about what makes up your electricity bill and understand how the electricity suppliers quote your electricity cost.
Natural Gas Contract: Unbundled Options
The unbundled contract is standard in the Eastern states. Unbundled natural gas contracts are straightforward but have more quoting factors broken down, and each quoted differently. This type of contract option is directed to very large customers with large amounts of consumption. They allow the customer to manage their consumption to suit their needs, which will affect their billing statement.
Although it can be seen as a cheaper option if managed well, unbundled contract options have a complex billing structure compared to the bundled. However, most natural gas companies in Melbourne, Brisbane or Sydney apply this pricing policy into their commercial natural gas contracts. All the components that make up your gas bills, such as the mining cost, transmitting cost, retailer cost, etc, are fully disclosed and charged accordingly. Any variation in cost due to the market changes or how you use the energy will be passed through to you, generally at a price.
One must not try to run before knowing how to walk, don’t you agree? In that case, please ask yourself if you have what it takes to handle the unbundled contract? Especially with all the costs broken down and each with different types of calculation as well. It is worth remembering that the energy suppliers generate revenue from the energy you use. You, as the customer, have to manage your risks. Although the energy rates for consumption appear to be very low, you will need to know that other components will make up your final cost. An unbundled contract option may sound very enticing, in principle. However, in reality, as a business consumer, you may end up paying unnecessarily higher rates due to a lack of knowledge on how the costs are structured. Unbundled energy contracts are transparent. Although they have higher risks, they can be cheaper if managed well.
Read more about the WA gas quoting policy from ATCO.
How to Find the Most Competitive Contract Option
As we have mentioned, your business will have a tailored made arrangement that suits your energy consumption profile by having an energy contract. Thus, there is no such thing as the Best Gas Contract. This all depends on your annual consumption and the way you consume energy.
If your business is located in Perth, you spend less than $1 million per annum on energy (Electricity and Gas) and you do not have the workforce to manipulate the way you use energy. Then in that case the bundled offer is generally cheaper. It has a lower risk potential for your business.
However, if you spend more than $1 million per annum, and you have dedicated energy expert personnel on board. Then an unbundled energy offer will give you more of an opportunity to cut your cost, provided you have a clear understanding of how to manipulate your load. To take full advantage of an unbundled offer, you need a well-planned energy management system in place, as well as the resources to do so and not every business has this.
If you are unsure which one of these two suits your business more, what are you waiting for? Try our free energy cost audit valued at $2000.
Carbon Energy as your preferred Energy Broker
Carbon Energy prides itself on our immense knowledge and years of experience in the energy market. Engaging us to manage your energy requirements will be the best decision to start reducing your power bills. We will save your time and do all the painful work for you. We access the best solutions in the easiest, secure and convenient way possible. See more of our clients and what they said about us here.
Are you in the process of negotiating an energy contract with various suppliers in Perth, WA?
We encourage you to speak to one of our friendly, non-pushy consultants to understand your options further. We can assist you in navigating and finding the best deal that provides not only value for money but a low risk to your business.
Haven’t you used an energy consultant yet? So why wait any longer?
We will personally assess the requirements of your business in terms of cost, consumption, future growth and find you the most competitive electricity or gas supplier to supply your business here in Perth, Western Australia. Whether you are looking to save on electricity or gas, or commercial solar, we can assist you in finding the best deal for your business needs. Please speak to one of our energy specialists to get a free energy cost audit (valued at $2000) on 08 64601613.