Australian businesses could save thousands on energy bills

A recent survey by energy management company Energy Action revealed that more than 87% of businesses ranked price the most important consideration when selecting their energy retailer. However, the cost of energy itself is only one portion of the overall price that an organisation pays for its energy supply. Typically, energy charges only make up 40-50% of a bill, with the remainder made up of network, environmental and other service-related charges. The tariffs for network charges vary according to the amount of electricity consumed and when it is used.

Network tariff charges are reviewed annually to reflect the fluctuating costs of transporting and distributing electricity, and maintaining the infrastructure required to run the network.

As network charges make up a sizeable part of an organisation’s energy bills, switching tariffs can, in some cases, result in significant savings. Despite the fact that organisations are free to choose the best tariff for their needs, many organisations do not review their tariff when uplifts are applied to ensure they are remaining with the best option. It’s a complicated process to navigate, and as a result, many organisations may be forgoing additional cost reductions. Additionally, as network charges are applied based on your consumption, implementing energy-efficiency initiatives to reduce your usage effectively catapults your savings across your bill by reducing the overall impact of these charges.

In July, NSW, Qld, TAS, SA and ACT will have their annual network tariff reviews. This provides Australian businesses with an opportunity to review their current network tariff, ensuring they are making the best cost savings possible.

Energy Action’s Activ8 customers are reviewed annually to ensure they are on the correct tariff. In the January review of Victorian network tariffs, Energy Action found significant savings could be made for many clients who were eligible to change to a more favourable network tariff. The company highlighted potential savings for its Activ8 customers of more than $1.2 million. The customers identified as being able to change to a more favourable network tariff to secure further savings were able to achieve average savings of $5800, with several being in excess of $20,000 per annum.

Valerie Duncan, Managing Director, Energy Action, said: “Of course, changing your tariff is only one way to save on your energy charges. Most organisations can also find other quick-win efficiencies and should also consider securing future energy rates by negotiating a forward contract well before your current agreement expires. Reviewing your tariff is just one available option to consider when trying to reduce your energy bill.”