As a business
owner, it’s important for you to know and understand all aspects of your
business – all direct and indirect costs and everything that affects your
company’s bottom line. Energy costs
make up a significant portion of your overhead and directly affect profit
margins. As a result, your business’
energy costs are one of the items on the list that you should intimately know. That’s especially the case as the cost of
energy keeps increasing.
At Active Energy,
we’ve been offering energy solutions to businesses in Ontario, and Quebec since
2005. We are a natural gas and electricity supplier, which means that we buy energy futures for
our customers. As a result of our nearly
ten years in the industry, as well as the deep experience of our Business
Services team, we have an intimate knowledge of the natural gas and electricity
markets, knowledge which not only allows us to build the
best possible energy pricing structures for our customers, but also allows us
to explain the rationale behind our pricing structures. Additionally, we serve as an ongoing energy
consultant for our customers, offering an array of energy management tools like
hedging strategies and risk management analysis.
The electricity market
is one that can be particularly complicated when it comes to pricing, and it’s
one that we really seek to describe to both our new and existing
customers. Broadly speaking, energy
markets are continually influx. Prices
on energy commodities, such as natural gas and electricity, change every second
based on supply and demand, and these price changes eventually reach you, the
consumer.
The electricity
market functions on a more granular level compared to other energy markets. More specifically, electricity prices are
calculated every five minutes based on the level of supply and demand. Naturally, prices will rise if the demand or,
what’s called in industry parlance a “net system load shape”, is above the
level of supply; and on the other end, electrical prices will fall if the
demand is lower than the calculated level of supply. Once again, these ratios are calculated every
five minutes and prices change accordingly, which, in turn, has created the
system of on-peak and off-peak hours in the market.
The unfortunate
reality is that for residences and small businesses in Canada, these customers
pay time-of-use electricity rates, meaning that their electricity bills are
directly influenced by the dynamic five-minute price evaluation conducted by
their utility company.
That’s a mighty
large variable cost that small businesses in Canada have to face, especially
when trying to budget energy costs.
That’s one of the reasons why we at Active Energy offer multiple year
fixed rate plans on electricity for our customers. When a small business approaches us, we
closely evaluate their business’ energy needs and we offer a flat electricity rate
for the business that will remain exactly the same for the term of the
agreement. Our customers no longer have
to worry about doing business during ‘peak hours’ or how to budget a highly
fluctuating electricity bill – their electrical costs will be predictable, easily
forecasted and far more in line with the requirements of a business.









