Written by Tiana Lee-Collins
Reviewed by Meredith O’Brien
Last updated 23/01/2024
If you’re a small to medium business (SME) owner, you’ll need an energy contract. We’ll guide you through the industry jargon, so you can make more informed decisions about your energy plan and potentially save on energy costs.
When it comes to powering your business, you typically need to use less than 100 megawatt hours (MWh) of electricity per year to be considered a small to medium business. If your business uses a higher amount of electricity, you are generally considered a large business and you’ll need to contact a retailer directly to get connected.
When you sign up for a gas or electricity plan from an energy retailer (also referred to as your energy provider), you’re entering a contract which means you’re responsible for paying the energy bill.
However, you can break your contract and switch to another retailer (if your state or area has multiple retailer options and competition is allowed).
There are two main types of energy contracts for small to medium businesses:
You can ask your current energy retailer which type of energy contract you’re on.
Learn more about small business electricity and gas plans for businesses.
A tariff is the price you’re charged for using energy under your contract. The energy distributors (owners of energy infrastructure) that service your area set these tariff structures.
Tariffs typically consist of two parts:
You can find the supply and usage charges that make up the tariff on your gas or electricity bill. It’s also worth noting that your tariffs depend on the type of meter and your business model (e.g. an office will have different energy needs compared to a restaurant).
The type of tariff you’re on can affect the electricity costs for your business. There are several types of electricity tariffs in Australia:
Choosing the right business energy tariff can help your business become more energy-efficient and help keep costs manageable even during energy price increases.
Most business gas plans usually include non-seasonal single rate tariffs – meaning usage rates stay the same regardless of the time of day or year.
However, some distributors in Victoria may offer seasonal tariffs. A seasonal rate tariff means your usage rates differ between seasons, such as paying peak rates during winter, and off-peak in summer. Specific dates for these tariffs vary between distributors and states.
If you’re a small and medium business customer, you may be able to choose your retailer if your business is in one of the following places:
Keep in mind that state and territory governments may still set the energy rates in parts or all of Western Australia, Tasmania, regional Queensland and the Northern Territory.
You might have to pay an ‘exit’ or ‘early termination’ fee if you have fixed rates and cancel your contract during the benefit period. Check your plan information and contract terms and conditions to see whether the cancellation fee applies to you.
Your existing account transfers to your new account without disrupting your supply. The only thing that changes is your retailer’s customer service and the price you pay on your new plan. If you’re moving premises, contact your existing retailer so they can disconnect your power the day after you leave.
Be sure to give your new energy retailer at least five days’ notice in advance to ensure you’re connected before you move in, or on your move-in day.
Once you agree to a new energy contract, you have a cooling-off period of ten working days. A cooling-off period means you can exit your contract without incurring any exit or cancellation fees.