Flexible

Contracts 

Flexible energy contracts can be complex and we recommend that only experienced property managers or organizations with expertise provide instructions to the Nü Savings Group ('NSG').

 

Disclaimer: If you undertake these contracts unassisted, you are fully responsible for any associated risks. 

 

HEDGING 

 

A contract in which we would receive an instruction to buy and sell energy, also known as 'hedging.' This would require a business or organization with an effective buying and risk management strategy, and collateral to make a large purchase of energy over 250 trading days.

 

PARTIAL PASSTHROUGH CONTRACT

 

In a partial pass-through contract, you agree to some, not all rates and charges upfront, with the remainder being a: 'partial pass-through' charge.  These additional administrative charges can vary depending on the terms and conditions of the supplier. On paper, the unit price may appear low, but this is because other charges need to be paid separately. 

 

This can include: 

 

  • Energy infrastructure costs – The cost of transportation of energy from where it’s generated to your site;

 

  • Energy-related costs – The costs for the National Grid to ensure that energy supply and demand are balanced each day and to ensure power can be transmitted to where it’s needed;

 

  • Low carbon generation costs – Costs from government schemes that all suppliers must pay, helping to fund low carbon and renewable generation;

 

  • Security of supply costs – These are government costs to ensure that supply security is maintained, as a more intermittent renewable generation is built.

 

The advantages are:

 

  • You can benefit if costs fall in the future;

  • You are flexible with your business operation hours  

 

The disadvantages are:

 

  • No budget certainty;

  • More administration burden as costs fluctuate;

  • More Complicated process to understand;

  • Estimates are no guarantee of future costs;

  • Consumption during 'expensive costs' 

 

Disclaimer: We can provide you with a side-by-side proposal outlining the costs of a fully fixed contract against a partial passthrough contract, so you can make an informed decision. DO NOT make the assumption because it appears to be a lower unit rate on paper, that it will meet the needs of your business. We advise you to think carefully before signing this type of electricity contract, particularly if you have budgetary constraints and operate during normal business hours. You will be fully responsible for the terms of the contract.

 

PASSTHROUGH CONTRACT

 

In a pass-through contract, you agree to few, but not all rates and charges upfront, with the remainder being a: ' pass-through' charge.  These additional administrative charges can vary depending on the terms and conditions of the supplier. On paper, the unit price may appear low, but this is because there many other charges that need to be paid separately.

 

This can include (but is not limited to): 

 

  • Transmission Loss (TLOSS) or Distribution Loss (DLOSS) - energy lost (as heat) as it travels from the power station;

 

  • Transmission Use of System (TUoS) - Delivery of electricity from power stations to the regional transmission networks

  • Distribution Use of System (DUoS) - infrastructure paid to a Distribution Network Operator (e.g. overhead cables etc.,) 

  • Balancing System (BSUos) - costs of the day-to-day operation of the transmission system

  • Availability Charge (or Capacity Charge) - investment and maintenance of the electricity network

  • Reactive Power Charge (KVAR) - Difference between the electricity supplied & converted into useful power

  • Combined Half Hourly (HH) Data Charge - collecting and handling your metering data

  • Settlement Agency Fee - Costs associated with distribution companies, suppliers, metering companies, and others 

  • Renewables Obligation (RO) - to pay toward obligation on UK suppliers to use renewable sources

 

The advantages are:

 

  • You can benefit if costs fall in the future;

  • You are flexible with your business operation hours.  

 

The disadvantages are:

 

  • No budget certainty;

  • More administration burden as costs fluctuate;

  • More Complicated process to understand;

  • Estimates are no guarantee of future costs;

  • Consumption during 'expensive costs' 

 

Disclaimer: We can provide you with a side-by-side proposal outlining the costs of a partial pass-through compared to a pass-through contract, so you can make an informed decision. DO NOT make the assumption because it appears to be a lower unit rate on paper, that it will meet the needs of your business. We advise you to think carefully before signing this type of electricity contract, particularly if you have budgetary constraints and operate during normal business hours. You will be fully responsible for the terms of the contract.

 

 

VARIABLE CONTRACT

 

A contract in which the unit price(s) and standing charges(s) for electricity and gas can rise and fall depending on live wholesale market conditions and external factors such as geopolitics. There are risks associated with volatile and changing energy prices. 

 

What are Flexible Contracts?