Third Party Charges now approximately 50% of electricity costs
Published: 27 February 2015 - Marianne Evans
Third Party Charges (TPCs) are generally increasing at a greater percentage than the wholesale energy price and are therefore having a big impact on energy costs. For example, for electricity, TPCs can now account for approximately 50% of the delivered electricity bill price compared to about 30% five years ago.
energyTEAM's latest infographic provides a breakdown of the TPCs that are built into the final price on commercial energy bills.
Businesses are beginning to realise the importance of these elements during the contract renewal and negotiation process. Some of these elements may not be recognisable within current electricity invoices or within tender negotiation reports. Therefore, working with an experienced energy broker or supplier that can help you to understand these costs, and how you can limit their impact, will be vital for businesses looking to place energy contracts going forward.
Additionally, with new Energy Market Reform (EMR) Charges such as Capacity Market (CM) and Contracts for Difference (CfD) to be introduced from April 2015, business procurement managers should be taking special care to ensure that they fully understand the terms and conditions regarding these costs within their new energy contracts.