Less than 60 days to go - You can still act on carbon price increases

10 May 2012Archived News Climate Change Matters

There are choices that should be explored when it comes to carbon price increases that can achieve a better price outcome for smart energy buyers.

Carbon is a new cost to the Australian economy but companies have the right to question any contract price changes and ask for justification of any increases attributed to the carbon price. Many companies are starting to receive notifications from electricity/ energy suppliers of intended price rises.

There are two different mechanisms that energy suppliers will use to pass through carbon costs:

  • change of law clauses
  • carbon escalation clauses in contracts (if present)

Where a supplier seeks to increase your energy price using 'change of law' clauses you have the ability to ask for a reasonable explanation of the cost increase. Even where a contract has a carbon escalation clause it is still reasonable to ask for evidence of the increase in costs and the measures they have taken to minimise the increase.

In the case of non-energy contracts, where a supplier of other goods and services seeks to increase their price due to the carbon scheme, you should also consider asking them to explain and justify price increases.

Energetics can advise you on the best way to manage your energy supply contracts.

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