Businesses stung by soaring electricity charges

Businesses in the North West are being urged to act now or risk being crippled by dramatically increasing ‘hidden’ electricity costs.

In the last five years, cost consultancy specialist, PCMG, has reported a significant increase in the distribution and transmission network charges that make up part of a business’ overall electricity bill.

And these rises, coupled with the Government-mandated ‘green’ taxes and subsidies are hitting unsuspecting companies hard, say PCMG.

Figures released by PCMG have revealed these charges made up on average around 24% of the total electricity rate for businesses in the North West in 2008. However, these costs have now jumped up to 40% of the total electricity rate.

Martin Chitty, Head of Energy at PCMG, said: “Our figures may paint a bleak picture however, it is a realistic wake up call that businesses need to sit up and listen to now.
“Network charges and green taxes, which include distribution, transmission and climate change levy costs, have increased in the North West by 88% in the last five years, which represents a 1.8 pence increase for every kWh of electricity used.”

Traditionally, smart businesses have been able to reduce their electricity costs by switching supplier, negotiating their suppliers’ margin or closely monitoring the wholesale energy markets. However, this approach is no longer enough.

Mr Chitty added: “As simple as it may sound, businesses need to scrutinise their electricity bills in detail. However, many are paying the price by ignoring this fundamental action, which is an extremely costly mistake to make. As a result, they are being stung by incorrectly applied network charges and green taxes and are not claiming discounts they are entitled to.

“Companies also do not realise that they can often actually recover overpayments on network charges and green taxes for up to six years. Many businesses that have taken this step have been able to recover six or seven figure refunds and received lower on-going costs.”