Providing the Incentive - Pricing Plans
Businesses understand that taking absolutely no risk is unlikely to result in significant reward; and this principle holds true for energy efficiency and demand response. One of the easiest and sometimes most financially rewarding steps an organisation can take is to ensure they are on the most appropriate pricing plan.
Most customer’s accounts can be divided into two sections: line charges and energy charges. While energy charges are set by retailers, line charges are set by your local network/lines company and are common to all electricity retailers, but it is important that you work with your local lines company and experienced retailer like TrustPower to ensure these charges are optimised.
With respect to energy charges, TrustPower, recognising that not all customers’ needs are the same has developed a range of pricing options for medium to large businesses. A number of these plans have been designed to allow businesses to gain cost advantages through energy efficiency and demand response:
Fixed Price Plan
This plan provides price surety for an agreed term, however the disadvantage of this plan is that it does smooth prices and it can reduce the incentive and reward for those wishing to target saving through energy efficiency and demand response.
Wholesale Market Plan
This plan allows businesses to purchase transparently at the wholesale market electricity rate ("spot price"). There is considerable volatility with this plan as it will have periods of very high and very low prices, but there can be big savings for those that can respond to the price signals and avoid the high prices.
Tailored Wholesale Plan
This plan is a hybrid of the first two options and allows you to set limits an your exposure to the wholesale market. It allows a foot in both camps and you may elect to purchase a percentage of your energy on fixed rates and the remainder at the wholesale rate. This option is ideal for customers that can respond to high prices (by running a generator or shedding load), but also require some certainty avoiding the risk of having the entire load exposed to the spot price.
This option is similar to the Tailored Wholesale Plan and is suited to larger customers, it allows managed exposure to the wholesale market while still providing the maximum reward from any demand response or energy efficiency initiatives.
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