Energy Mod3 Page13
DUS - Energy Training
Standing Charges and kWh's.
Example of the benefits of using a Standing Charge.
For this example we will use a business with a high usage of Gas. We have based this quotation on 280,000 kWh
Contract Description
1. A Contract with a
HIGH pence per kWh and
NO Standing Charge -
2. A Contract with a
LOW pence per kWh and
HIGH
Standing Charge -
Contract Pricing
3.35 pence per kWh
No Standing Charge
1.95 pence per kWh
£3.60 per Day S/C
Annual Cost
£9,380 per Year
£6,774 per Year
The 1st
example you can see has no standing charge the business would pay £9,380 per year.
With a standing charge of £3.60 per day implemented and a lower the pence per kWh the new price would be £6,774 per year.
By implementing a Standing Charge with this customer it would save - £2,606
per year -
Example of the benefits of using a Standing Charge.
For this example we will use a business with a low usage of Gas. We have based this quotation on 12,500 kWh.
We have used the same pricing structure to compare the 2 businesses on the 2 different tariffs.
Contract Description
1. A Contract with aHIGHpence per kWh andNOStanding Charge -
2. A Contract with aLOWpence per kWh andHIGHStanding Charge -
Contract Pricing
3.35 pence per kWh
No Standing Charge
1.95 pence per kWh
£3.60 per Day S/C
Annual Cost
£418 per Year
£1,557 per Year
The 1st example you can see has a high standing charge the business would pay £1,557 per year.
By removing the standing charge of £3.60 per day and increasing the unit charge the new price would be £418 per year.
By removing a Standing Charge with this customer it would save - £1,139
per year
These examples are purely hypothetical and only to show where a standing charge is practical and where it is not.
Please do not focus on the standing charge or pence per kWh.
Your focus should really be on the annual figures that we have worked out on the report.
