Small vs. large: Identifying your business type for your energy plan

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Business customers are divided into ‘large’ and ‘small’ for energy purposes. National energy laws grant certain protections to small businesses that are similar to those given to residential customers. These laws are only in place in New South Wales, Queensland, South Australia, the Australian Capital Territory, and Tasmania. The distinction is made depending on the amount of energy you use each year.

For all of these states, gas thresholds are as follows:

  • Small energy customers use less than one terajoule of gas per year
  • Large energy customers use more than one terajoule of gas per year

One terajoule (TJ) equals one million megajoules (MJ)

Electricity thresholds for small businesses are as follows:

  • Queensland, NSW, and the ACT: up to 100 megawatt hours per year
  • Tasmania: up to 150 megawatt hours per year
  • SA: up to 160 megawatt hours per year

One megawatt hour (MWh) equals one thousand kilowatt hours (kWh)

Once you know what kind of business you are operating, it will give you a better idea of the tariffs available to you. Most energy companies offer a range of tariffs directed at small and large businesses, as energy requirements vary from business to business. No matter what size your business, getting the lowest price for your energy usage is an important consideration. Compare your options carefully before making a decision.

Special considerations for small businesses

As a small business, you are allocated certain rights by law. According to Energy Made Easy, you can expect the following from your energy supplier:

  • A written summary of your plan when you sign up
  • Up-to-date information on any changes to an offer
  • Bills that explain your energy charges in a clear and easy-to-understand manner

If you are establishing a new business, it may be difficult to budget for your annual energy usage from the beginning. Your best bet is to compare energy usage from similar businesses, then keep a close eye on your usage from month to month. If the site of your business was used in a similar way before (i.e. you are opening a retail shop in what was formerly used as retail space), then your energy supplier may consider the previous energy use on the premises to estimate your usage.

Special considerations for large businesses

Large business customers may be subject to annual rate adjustments. For example, many state governments implemented rate rises to gas and electricity rates from 1 January 2017. These rate rises were set by the government and passed to customers by energy suppliers. This is standard practice, though in some cases large businesses who have negotiated a separate contract with their local network operator may be exempt from these rate changes.

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