Commercial v Domestic Electric Prices

mcardler

Just came off a fixed contract commercial rate of 18.5c per kWh. The new commercial rates quoted are circa 55c per kWh. Given that domestic rates are around 22c per kWh, I am stunned - how can suppliers justify such a difference between and commercial and domestic rates for the same product?

drunkmonkey

Did you find a decent commercial rate anywhere. It's daylight theft at the moment, i'm out of contract but they all seem pretty bad.

mcardler

Looking through the options at the moment. Can't believe they can get away with charging commercial customers up to 3 times what domestic customers pay. Rip-off Ireland rears it's ugly head once more.

rob316

https://www.boards.ie/discussion/2058256374/commercial-v-domestic-electric-prices

I fixed for 12 months back in Feb before the war started for 35c a unit, its looking a very good decision now. I agree the commercial rates are a daylight robbery.

macvin

https://www.boards.ie/discussion/comment/119398533#Comment_119398533

Maybe before whining about rip-off, check why. You obviously have a business yourself - do you think all your customers should just shout rip-off about you if you had to increase prices?

Business tends to use electricity in daytime peak hours. That is the most expensive time for electricity. Electricity is a commodity just like oil and it is bought / sold on an open market. In the UK, daytime non domestic is now over 50p per unit. If you have a time specific plan, you can be paying over £1 a unit early afternoon but 20p a unit between 5 & 7pm. The same timed rates are available here too for larger users.

The bad news is there is little sign of these rates falling anywhere in Europe. And business all over Europe are paying huge daytime premiums. Rates are also quite volatile, so no supplier is publishing rates (same everywhere, not just in Ireland).

You literally have to look at every item that uses power and see if its necessary to leave on. We turn off all PCs and monitors every day, we leave overhead lighting off on sunny days, we don't use the air con unless its needed and we're lucky that we are in a fixed rate of 17c until next Feb (fixed for 2 years in Feb 2021), but making sure we get used to as much energy saving as possible.

mcardler

Thanks for your detailed explanation macvin. My carp is not about the increase in energy prices which is unavoidable at present, it relates to the discrepancy in the comparitive commercial/domestic rates. A quote from Bord Gais Energy's website:

"How does business energy pricing work?

Business energy prices and plans are calculated and set up differently to domestic ones.

Business electricity unit prices may be cheaper than domestic ones because of the amount of energy used, but most business customers pay a higher rate of VAT."

If you are going to hammer the small business with a flat rate of 55cent per kHw regardless of time of day usage (which is the case with us) then how is this justifiable when many domestic users use more electric than many small businesses?

macvin

In a normal market you don't have a gigantic difference in electricity costs between daytime, evening and night, so above is correct in a normal market.

If you were buying on the spot "tomorrow" market you could be paying in excess of 45c a unit between 1pm & 2pm. That's the raw electricity price before any transmission costs.

Here's a site with plenty of detail https://www.epexspot.com/en/tradingproducts#intraday-trading

Here's UK average day pricing for "day ahead" contracts https://www.epexspot.com/en/market-data - averages 30p overall on the day for the raw electricity. Intraday shows as high as 92p a unit at 1pm on some days (£920 per megawatt hour)

Iceland supermarkets has told the stock market that its electricity bill due to the running of freezers, will be £140m higher this year at £220m. In 2019 it was under £40m for the year.

It will be painful for this winter and businesses will see huge increases.