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ph energy services
Information on your business electricity prices UK commodity prices
Contact PH Energy Services for free advice on how we can help you reduce the cost of your business gas and business electricity bills
          
How do you know if you are on the best possible electricity price for your business contract?
Most of the headlines we see in the papers regarding gas and electricity prices relate to the domestic market so it can be quiet confusing for business users.
If you want to check that you are on the best possible business rates call us now for a no obligation chat about you current electricity contracts.
The UK gas and electricity commodity market is one of the most volatile markets in the world.
Gas and electricity is bought on a forward curve in seasons i.e. winter and summer, quarters, months or days ahead. The liquidity of the market dictates how far down the curve one can purchase but it is usually around three years.
The commercial market prices are dictated by this forward curve, each time a contract is priced the unit rates can change whereas domestic contracts are priced off tariffs based on a volume of gas bought by suppliers covering a significant period of time going forward.
Most of the headlines we see in the papers regarding gas and electricity prices relate to the domestic market so it can be quiet confusing for business users.
If you want to check that you are on the best possible business rates call us now for a no obligation chat about you current contracts.
How are the commercial prices calculated?
The suppliers base their costs on:
1. Regulated charges – these are the costs of getting the electricity from A to B. The costs are published tariffs and the same for all suppliers. They are approximately 30% of the overall rates. The regulated charges have seen some significant increases on a regionalized basis over period April 11 - 12. All the suppliers use the same charges when pricing the contracts.
2. Commodity costs – this is the cost of the electricity on the day of the tender. It should be the same for each supplier but there is some variation on their view of the market which can make one supplier more competitive than another. The Commodity is about 69% of the overall rates.
3. Supplier margin – this is the suppliers view on the cost to serve the customer. This is the negotiable part of the cost and only represents about 1% of the price you pay.
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