Dealing with Bill Shock

October 10th, 2016

It’s tough right now for organisations coming to the end of their fixed-rate contracts.

All Good Things…

Things have changed so much since the contracts began. There is an expectation, perhaps rightfully enough, from companies using more than 100,000 kWh per year:

“We use a lot of power, so we should get a great fixed-rate from our electricity retailer in return for the next 12-36 months of locked-in custom.”

However, just like securing a fixed-rate mortgage, when the fixed period finishes you are exposed to whatever the current the market rate is, good or bad. Trouble is, the cost of wholesale electricity has risen a lot since most fixed-rate agreements started.

Think about a home mortgage. Most of us can relate to that – I know my bank owns more of my house than I do. Maybe you paid too much, and the interest rates dropped. Maybe you saved a lot as you saw the interest rates rose. It is a question of your appetite for risk and, more importantly, your ability to read the market. That’s why some organisations lose out and take continual short-term energy positions and others see a rising market, understanding that the price of electricity is due to rise further across Australia and take a longer-term approach. It’s not like electricity is a “nice-to-have”, we need it and we will continue to use it.

One customer told me recently:

“It’s like tax. I don’t want the expense of it, I wish I didn’t have to pay it, but because I do, I’d rather have an expert sort it out for me.”

Couldn’t agree more. It’s a tough pill to swallow when energy rates have risen more than 30% in the past year. We see a very simple way forward. Engage an energy expert like Choice Energy who can secure you the best rates for your next agreement. We blind tender your business to multiple retailers who tend to sharpen their pencils when they know your contract is highly competitive and comes from a broker who, at the end of the day, works for their customers to secure them the best deal.

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