Ever wondered where energy retailers buy your power from? Well like nearly everything else – there’s a wholesale market. It’s a variable market that moves based on supply and demand and your retailer sets your prices for fixed-rate contracts based on what they believe it will do. The prices are publicly available for you to see on AEMO’s website.
That’s great until the market drops and instead of you getting the benefit, your retailer does. Also, as your retailer is forecasting the outcome, they need to add in a risk premium to account for any possible variables – just like the difference between fixed and variable home loans. What might look great in the short term, will likely have added costs in the long term.
While no one can predict the future, taking a look at historical data can give insight into how the wholesale market will perform into the future. For example, in the last five years the wholesale market has outperformed retail rates by 5.6%.
Innovative retailer Flow Power has just launched a new service called “Fake Bill, Fake News” where they will review just one of your business’ power bills and tell you what you would have paid if you were buying wholesale power. It’s a rare glimpse into what your energy costs would have looked like over the past twelve months if they had been buying wholesale power instead of traditional fixed rates.
Recently Flow Power looked into the power use of 670 businesses and found they could have saved them $97million collectively. In the era of Fake News, many thought it was too good to be true but they had the numbers independently verified and published the methodology. Those conversations stimulated this free service.
To request a fake bill and see your savings from Flow Power all you have to do is send a copy of one of your bills to firstname.lastname@example.org with the subject heading ‘I want to see my savings’ and they will send you one back.