Business electricity contracts

3 min read

As a business, one can choose a number of different power agreements put together by the different suppliers, and here they have different types of offers for the company. The two most common types of deals offered are based on spot price and price hedging. These are the most common and usually the best deal types to go for as a business to get a good power deal and cheap power to your business. Spot price is a power agreement based on the Norwegian market and adjusted by the power exchange. This agreement allows the company to pay the price based on the same price that the suppliers purchase the power for in addition to a fixed fee or any fixed charge per kWh. This agreement is best for small and medium-sized businesses that want a regular spot price agreement similar to spot prices for individuals. This power agreement turns out to be the cheapest over a long period of time and is the most elected power agreement also for businesses. Price protection lets the company price hedge the entire agreed period or parts of it. The choices you have in this range vary from supplier to supplier. If you only choose to hedge parts of the contract period, you will pay spot prices for the remaining time. Here it is natural to choose price hedging in the winter months, where electricity prices will naturally be higher and unstable, and spot prices in the summer months where electricity prices are lower and more predictable. This agreement is best suited for small and medium-sized businesses looking for predictability. A third power agreement for companies is an active power agreement that is a power management product that aims to beat the spot price. This power agreement can quickly be perceived as the cheapest, but it implies a certain risk to the company. The terms of agreement depend on whether the supplier has gain or loss in the financial market. If they win you will get a cheaper price than the spot price, but if the supplier has a loss you will end up paying a price that is more expensive than the spot price. This agreement is best for small and medium-sized businesses that have the economy to risk that suppliers are losing financial market losses, and which are not dependent on predictability. Companies are very attractive customers for the suppliers, and in order to ensure a cheap electricity price for the company, it is important to carefully consider the offers received from the different suppliers. If you receive an offer that does not allow time for consideration or is only valid orally, you should control these. Ask to receive the offer in writing, and evaluate the offer against other deals. Make sure there are no extra costs in the background that have not been clearly informed. By being thorough in choosing a power agreement for the company, you can save your company for big expenses and end up with a cheap power deal with a certain predictability depending on the type of agreement you choose. Private Power Agreements vs. Business dealings are in some ways alike, but with corporate electricity agreements, one will make it clear that there will be a significantly higher consumption and the agreements will be set up accordingly. Spot-rate agreements, for example, work in the same way for individuals as for businesses. If you have a sole proprietorship, it is advisable to consider a power agreement for private than for business, as it will not be beneficial to enter into a company agreement for electricity prices if you are a small company. To ensure cheap power for your business, consider the size of your business and take this in mind when choosing a power agreement, as well as assessing by business type what one needs. Although spot prices have proved to be the cheapest over time, price hedging gives a predictability.

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