Issue #53 - About those business energy bills... 📄
Why don’t energy rates drop with wholesale prices? | Is Direct Debit the best way to pay your energy bills? | When is the right time to sell your business? | 5 businesses, 1 question | Tunes | Words |
🦾 G O
Why don’t energy rates drop with wholesale prices? 📉
Welcome to Issue #53 of The Backbone - the fortnightly newsletter from Bionic.
You’ve probably heard that the domestic energy price cap is going up next month, despite falling wholesale energy costs.
We don’t want to get bogged down in domestic energy (remember, there’s no price cap on business energy), but we thought now would be as good a time as any to give a quick explanation of why energy prices don’t immediately fall when wholesale prices do.
It’s largely to do with how energy is bought in advance and the risk involved in buying it that way.
Energy is bought in advance to try and keep supply and prices relatively stable. It’s like when you pay your business energy bills by Direct Debit - you’re paying a flat rate each month to cover the entire year, effectively hedging against bigger bills in winter by overpaying in summer.
Energy suppliers are continuously buying energy to make sure there's enough to cover demand. If demand exceeds supply, then they need to buy more at current market prices to cover the shortfall. But if supply exceeds demand, then suppliers need to sell the excess energy back to the grid - if the day-ahead price is lower than the price they bought the energy for, then they'll lose money.
When the market is so volatile, the risk to suppliers is greater and so prices go up. And this is also part of the reason why it can take time and a consistent run of lower rates for any price drops to be passed on to customers.
And when there’s a huge increase in demand, price rises are quickly passed on to consumers because suppliers haven’t hedged for the increase and have had to buy extra energy from the spot market, which is more expensive.
Suppliers need to factor risk into their price calculations in much the same way as finance providers factor risk into the prices they charge for credit.
We’re putting together a whole guide on how energy is bought and sold and how this affects prices, so keep an eye out for that.
In the meantime, check out issue #53 of The Backbone for all the usual tips…
📨 S U B S C R I B E
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🗞 R E A D
How to understand your business energy bills 📄
Business energy bills can be tricky to understand, but it’s worth getting to know your way around them as they contain loads of useful information that can help you get a handle on your costs and figure out ways to cut your energy usage and save money.
Is Direct Debit the best way to pay your energy bills? 💡
Paying by Direct Debit is a simple automated way to pay your energy bills. Once a Direct Debit is set up on your account, the money will be automatically taken out on an agreed date. This way, you won’t have to worry about paying for your energy once your bill arrives. It could also mean cheaper energy bills.
🗣 S H O U T O U T
#BionicBusinessStory - 5 businesses, 1 question 🤔
We love hearing all about how small business owners got to where they are. The stories of how they’ve built their business, the things that keep them awake at night, their biggest achievements, and how they cope when life feels like it’s going at 100 miles an hour. We asked five business owners one simple question, and here’s how they answered…
Bionic - What inspires your business ideas?
👻 “I’m hugely inspired by Deathly Tours in York. They have such a great social media presence, and amazing branding, everything about them is fantastic. They’ve really cracked social media.” Jonathon Fost - Dark Encounters
🙂 “One of the mums from the local nursery runs a really cool business called Maximia Bath Co. Her daughter previously had an allergic reaction to a
bath bomb bought from a well-known high-street shop. So, she wanted to create alternative bath products.” Jo Tiller - Social Club Clothing
🧷 “I’d say Maria Tash has been intrinsic in commercialising ear piercing so it would be unfair not to mention them. There are some non-piercing brands that inspire me too.
Warpaint is a good one, they’re always doing cool things and trying to neutralise male makeup. Amber Jean is a great brand too; they design high-end wigs and have created a community to help young people with alopecia discover how to pick out wigs.” Ben Harris - Metal Morphosis Piercing Studio
🐩 “Paul Smith and Vivienne Westwood are great brands. They’ve always stayed true to their values, and I think that’s important in running a business.” Lilly Shahravesh - LISH Pet Clothing
🧟♀️ “We’re inspired by horror movies, of course, and we usually take into account whatever the biggest movie of the year has been. When IT came out, we did a clown-themed maze.” Bex Williams - AtmosFEAR Scare Park
Want to read more small business stories? Head over to Bionic 🦾
📊 B U S I N E S S
Get your business costs sorted 💷
Bionic - the business price comparison experts - compare a range of business essentials to help you save time, money, and hassle.
Our tech-enabled team will answer all your questions in simple terms, and help you find the best deal on business energy, insurance, phone, broadband, or finance. No jargon. No-fuss. #BeABionicBusiness 🦾
Fantastic staff? Fantastic stuff! 🙌
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🎧 L I S T E N
Playlist 🎶
Nicole is the commercial operations manager at Bionic and she loves old classics. In fact, she loves old classics so much that she’s curated this playlist of 167 of them. That’s more than ten hours of Bee Gees, Stevie Wonder, Sister Sledge, ABBA, Miami Sound Machine, Barry White, Madonna, Sade, and everything in between - including favourites of The Backbone, New Order.
Podcast 🔊
We’re all bang into The Last of Us, aren’t we? Even Xbox owners that never had the option to get to grips with the game love the TV show. So we were made up when Dan, senior customer experience manager at Bionic, put us onto HBO’s The Last of Us Podcast. We’re sure you will be too.
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🚫 S T O P
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