Think your fixed-rate energy deal locks in your business costs?
Many businesses sign a fixed-rate contract and assume it’s game over for energy cost headaches. But the truth is only part of the contract may really by fixed—and the rest change over time.
So, what’s actually “fixed”?
This very much depends on the type of contract you sign up for. Now’s the time to read the small print before it’s too late – or consult your friendly neighbourhood energy expert before taking the plunge.
In simple terms contracts can include fixed, pass-through and threshold elements.
If you opt for a fully fixed contract, then the supplier takes all the risk on things like wholesale market fluctuation and changes in Distribution and Transmission costs. Some elements however cannot be fixed such as government charges like the Climate Change Levy or CCL. These rates are published on the .gov website and generally change annually.
Suppliers may also offer contracts which are not fully fixed and have pass-through charges or threshold elements.
Pass-through charges are certain charges incurred by customers, which are payable to third-parties such as the Distribution Network Operator (DNO) and your Metering Agents – the Meter Operator (MOP) or Data Collector (DC).
Threshold elements such as Renewables Obligation (RO), Feed in Tariff (FiT), Transmission Network Use of System charges (TNUoS), Distribution Use of System charges (DUoS), Balancing Use of System charges (BSUoS) may become payable if the supplier’s predictions are set too low with a contract that isn’t fully fixed.
Unsure about which type of contract is best for your business? We explain all the options before you sign anything. We don’t do smoke and mirrors—we do clear, honest advice.
Ready for a proper fixed-price plan with no surprises?
Speak to a real energy expert at Modenergy today – no jargon, just clarity.