Have you ever looked at your energy bill and wondered where the price spikes came from? Chances are, you’ve encountered pass-through costs—those extra charges that show up on your statement without much notice. But don’t worry; we’ll help you identify these costs and take control of your business’s energy expenses.
What Are Pass-Through Costs?
Pass-through costs are charges from the utility company used to recover expenses from external sources. These charges aren’t made up by the utility; instead, they cover things like government regulations, grid maintenance, and fuel price fluctuations. Here are a few common pass-through charges you might have seen on your bill:
- Fuel Adjustment Charges: The utility adjusts your bill when energy production costs rise (thanks to fuel price hikes).
- Transmission and Distribution Fees: This fee covers the upkeep of power lines and infrastructure and can vary depending on the state of the grid.
- Regulatory and Environmental Surcharges: These charges cover the cost of complying with energy regulations and environmental standards.
- Weather-Related Adjustments: Extra costs to repair or maintain infrastructure after extreme weather problems.
How to Spot Pass-Through Costs
Now that you know what you’re looking for, let’s talk about how to find these charges:
- Read Your Bill - The simplest step is also the most effective. Look for terms like “adjustment,” “surcharge,” or “recovery charge.” These line items are where pass-through costs usually appear.
- Know Your Utility’s Rate Structure - Utilities must publish their rate structures, and understanding yours can help you spot where pass-through costs fit. If your bill doesn’t make sense, a quick call to your utility can provide clarity.
- Watch for Seasonal Changes - Fuel adjustment charges, for example, often fluctuate with seasons. When heating needs increase, you may see higher costs during extreme weather or colder months.
- Track Your Usage - Monitoring your energy usage trends about pass-through costs can help you make sense of any unexpected jumps on your bill.
How to Minimize Pass-Through Costs
Understanding your pass-through costs is just the first step—there are ways to mitigate their impact:
- Negotiate Your Rates: Some utilities are open to rate negotiations for larger commercial customers. If you’ve been a loyal customer, it’s worth asking for a rate review.
- Consider Fixed-Price Energy Plans: Some suppliers offer fixed-rate contracts that can protect you from price fluctuations, including pass-through costs. Catalyst Power offers fixed-rate commercial electricity plans and more.
- Invest in Energy Efficiency: Reducing your overall energy consumption can lessen the blow of higher pass-through costs. Think of energy-efficient appliances or other renewable energy options.
- Explore Third-Party Energy Providers: In deregulated markets, you can switch to a third-party supplier like Catalyst Power for potentially lower rates, even if your utility still handles delivery.
Conclusion
Pass-through costs may be an unavoidable part of your energy bill, but with a little awareness and strategy, you can navigate them more easily. Understanding these charges and taking steps to manage them can help you keep your costs in check and avoid unexpected spikes. Contact our Energy Experts today to learn more about our custom-priced energy supply package.
