Think of forward contracting like securing your next materials order before prices rise. Instead of waiting until your current electricity or gas agreement is about to expire, forward contracting allows your business to arrange its next contract in advance.
This means you can review available offers, secure future pricing and schedule the new agreement to begin once your existing contract ends.
For businesses looking for greater certainty over future energy costs, it can be a valuable way to plan ahead.
How does forward contracting work?
Forward contracting means securing your next electricity or gas agreement before your current contract expires. Depending on your business, retailer and contract terms, this may be arranged several months in advance, often between 6 and 18 months before the new agreement begins.
Your current contract continues as normal. The new agreement is scheduled to commence after your existing contract ends. This allows your business to plan for the future without disrupting the energy agreement already in place.
Why should businesses consider forward contracting?
Energy market prices can change throughout the year due to shifts in demand, weather conditions, generator availability and broader wholesale market movements.
The most competitive pricing may not always be available at the exact time your contract is due to expire.
By reviewing your options early, your business may be able to secure a future agreement during more favourable market conditions rather than waiting until the final weeks of your current contract.
Right now (July 2026) the energy market is 3+ year lows in most states, making it the best time in years to secure rates.
Greater certainty over future energy costs
One of the main benefits of forward contracting is budget certainty. Securing your next energy agreement in advance can provide greater visibility over the rates your business will pay once the current contract ends. This can make it easier to plan operating expenses, prepare budgets and reduce exposure to sudden market movements.
While no one can predict future energy prices with certainty, forward contracting gives businesses an opportunity to make a considered decision rather than reacting at the last minute.
Reduce the risk of higher out of contract rates
When an energy agreement expires without a new contract in place, a business may move onto an out of contract or standing offer rate. These rates can be higher than negotiated market offers.
Arranging your next agreement early can help reduce the risk of being caught without a contract and give your business more time to compare available options.
Does it affect your current contract?
Forward contracting does not usually change or replace your current agreement. Your existing contract continues until its scheduled end date, and the new agreement begins afterwards. This means your business can secure future pricing without cancelling the contract already in place. Contract terms can vary, so it is still important to confirm the commencement date, pricing structure and conditions before accepting a new offer.
When is the right time?
There is no single best time for every business.
The right time to review your future energy options will depend on:
Your current contract expiry date
Market conditions
Available retailer offers
Your energy usage
Your business location
Your future operational plans
The key is to avoid waiting until your contract is about to end.
Starting the process early gives your business more time to assess pricing, compare contract terms and decide whether securing a future agreement makes sense.
What should you review before accepting an offer?
When comparing forward contract options, it is important to look beyond the headline rate.
Your business should also consider:
The contract term
The agreement commencement date
Fixed and variable charges
Network and pass through costs
Early termination conditions
Site changes or planned relocations
Expected changes to energy usage
The most suitable agreement will depend on your business requirements, not only the lowest advertised rate.
Plan ahead with greater confidence
You do not need to wait until your current energy contract ends to begin reviewing the market. Forward contracting can help your business secure future pricing, reduce exposure to sudden market changes and gain greater certainty over upcoming energy costs.
Choice Energy can review your current agreement, confirm your contract expiry date and compare available future offers from our retailer network.
