Whether you are running a fast food restaurant, a manufacturing plant or a busy hotel in the heart of Singapore, managing the cost of your power supply is crucial to maximise savings and increase the profits of your business.
In fact, depending on the nature of your business, your power supply bill could form anywhere from 5% to 20% of your total business operating cost. That makes choosing the right energy plan crucial not just for your operations but the bottom line as well!
Understanding Your Power Supply Usage
Every business is unique and that extends to the way the power supply is consumed. A hotel’s energy usage would be rather stable throughout the day while spikes might only occur during seasonal changes while a manufacturing plant might see high usage during the daytime with minimal usage at night.
The key question to ask is if your energy usage is predictable throughout your business cycle and if price certainty is important in your operational budget. A wholesale trading company might see sudden intra-day spikes in their energy usage if a new shipment of goods suddenly comes in while a fast-food restaurant could predict their daily power supply usage through their historical usage over the months.
The 2 Power Supply Plans You Need To Know
Discount Off Tariff Plan (DOT)
The DOT Plan essentially allows your business to secure your power supply at a guaranteed discount rate for the duration of your contract. This means the rate of your power supply will be lower than the regulated SP Tariff, allowing you to lock in guaranteed savings regardless if the rate rises or lowers in the future.
Advantages of the DOT Plan:
This plan gives your business an assurance of savings compared to what you are enjoying right now plus takes away any need for you to monitor the oil market.
Disadvantages of the DOT Plan:
While you do enjoy guaranteed savings, your power supply pricing will track the overall price trend of the tariff as well as oil prices. That means if there is an increase in the tariff prices next month, you will be paying more for your energy than the previous month.
Businesses that might fit the DOT Plan:
If you are running a business where your energy usage is variable, do not have any energy hedging capabilities or your energy cost could be passed down to your consumers, the DOT Plan might be just for you.
The Fixed Price Plan
The Fixed Price Plans allows businesses to lock in their power supply at a fixed rate for the duration of their contract. That means your electricity rate will remain the same no matter how high or low the SP tariff is as the months or years go by. This allows you to prevent any sudden bill shocks should oil price suddenly spike.
Advantages of the Fixed Price Plan:
By choosing the Fixed Price Plan, you will have total certainty over your energy bills. This will help the financial planning for your business and improve your budgeting.
Disadvantages of the DOT Plan:
One key disadvantage is the need to have an effective knowledge of the oil markets. After all, you will be fixing the price of your power supply rate and should the SP Tariff fall below your fixed price rate over a certain time period, you will be paying more than the tariff itself!
Businesses that might fit the Fixed Price Plan:
Businesses such as manufacturers that require price certainty where the energy cost is a direct factor to the sale price of their product would find the Fixed Price Plan a suitable one.
At iSwitch We Power Businesses & Help Them Go Green Too
All our commercial plans are green, that means you get to do your part for the environment and enjoy 100% carbon neutral electricity while still enjoying either a fixed price or a guaranteed discount (DOT) off the SP Tariff as well!
Looking to discover how we can help your business brand go green while reaping monthly cost savings?
You can drop us a call at 1800 505 9900 or visit our webpage here
Keep in touch and join our mailing list to receive our monthly newsletter!