Understanding electricity network charges and achieving long-term savings
Energy cost is a significant component of operating expenses for businesses across a range of industries. Many of our clients have now been through several cycles of energy contract negotiations and understand the benefit of tracking the market and gaining expert advice through the tendering process. Whilst negotiating a competitive rate on your energy bill is the logical place to start, most people don’t realise that there are a number of other controllable costs and unfortunately don’t explore the range of options available to them.
Understanding network charges
One of the common concerns we often hear from our clients is that their network charges are quite high. Network charges refer to the implementation and maintenance of the physical infrastructure, namely, the poles, wires and other equipment drawing power from the electricity grid. On average, network charges account for approximately 50% of a standard electricity bill. Historically, the biggest contributing factor behind electricity price movement on energy bills is due to changes to the network costs.
Energy users can influence the level of Peak Demand on the network and reduce this portion of their bill by ensuring that they are drawing power efficiently. Ongoing savings can be achieved via Power Factor Correction and Network Tariff Review.
We’ve put together the following FAQs to demystify these charges and help you achieve sustainable long-term savings. To receive your free Power Factor Rating for your site, send a recent bill to your Account Manager or upload it to our website. Alternatively, you can call our team on 02 9371 4153.