Most business owners are unaware of what goes into the pricing of their energy bill. This leads to understandable frustration when the bill continues to go up and up even as the price per kilowatt hour remains the same.
Understanding electricity pricing components is critical so that you can put yourself in a better position to know what product, offering, and supplier will work best for your business. Today we dive into these common components so you are fully aware what may or may not be included in your quoted price. Continue reading
When it comes to the cost of energy, pricing typically follows seasonal cycles. An example of this is the higher cost of electricity and natural gas in the summer and winter months (when demand is higher), compared to lower prices in the spring and fall where reserves are built up for the upcoming busy seasons.
This means energy prices would be somewhat predictable if not for other things that affect the markets we live in.
So why do our energy bills fluctuate so much?
The main influencers are weather, government regulations, outages, source fuels, and geopolitical events. Let’s take a look at why each might affect pricing.
Weather – One of the most influential variables on market pricing, weather directly affects energy consumption. Extreme hot or cold spells create higher demand for heating or cooling energy, naturally driving up the price. Stormy weather and catastrophic events can create extreme price volatility, especially if natural gas or electricity facilities are damaged. Even if extreme weather is merely forecast- but never arrives- you’ll still see price fluctuations in anticipation. Continue reading