Switching tariffs could save big energy consumers millions

Large energy consumers could save up to $3.4 million a year by simply switching to a different network tariff, according to ERM Power.

The savings were revealed through analysis of almost 15,000 large customer sites since January by ERM Power, the second largest electricity retailer to commercial business and industrial customers in Australia by load.

The company regularly reviews the energy usage data of its commercial and industrial customers to assess whether they are on the right network tariff, as set by their network provider.

ERM Power executive general manager retail Steve Rogers said with network charges making up around a third of some customers’ total energy bill, the impact of being on the wrong tariff can be significant.

“Since January of this year alone through our Network Tariff Optimisation service, we’ve identified potential annual savings of over $3.4 million for our customers,” he said.

“Customers who have acted on our recommendations to move to a different tariff are estimated to be able to save up to $1.4 million each year across 350 sites.

“However, that still leaves just over $2 million in potential annual savings our customers could be missing out on.”

Customers who have changed network tariffs based on ERM Power’s recommendation are saving an average $3900 on their annual energy bill.

While ERM Power does not benefit financially from customers changing network tariffs, as they are a pass-through charge, Mr Rogers said the complimentary review is all part of the industry-leading service for ERM Power’s large customers.

“Energy is a significant input for many large businesses and remains a hot topic, given prices today remain well above historical levels,” he said.

“While we would love for our customers’ sake wholesale prices to be lower, in the mean time they should speak to us about other methodologies to reduce spend.”

Last year ERM Power identified potential savings of more than $260,000 for one customer  across their portfolio.

“It’s astonishing that a significant number of customers we’ve contacted about a potential saving from changing tariffs have failed to even respond to that advice,” Mr Rogers said.

To create cumulative energy benefits, businesses could consider putting their identified savings towards energy management solutions that would further reduce cost and consumption.

Upgrades to LED lighting, for example, can deliver an immediate payback to businesses, Mr Rogers said.

“ERM Power has a dedicated Energy Solutions business that can support customers looking to get more out of their energy.

“This is underpinned by our unique perspectives on both the supply and demand side of the energy equation, data science and customer led solutions.”