What is a PEF?

Every business is different. So, it makes sense that your energy price is unique to how and when you use power.

It isn’t a new idea. In fact, behind retailers’ offers lies a similar equation that they use to set the prices that they pass on as fixed-rate contracts. But they don’t put a name on it, give you visibility into that equation or the ability to change it.

We do this through our Price Efficiency Factor (PEF). It’s a simple equation that compares how you use power with the outcomes of the wholesale spot market. We use it to calculate your energy costs  on our Power Active plan and Power Up plan.

We want you to know your PEF, so that you know the make up of your energy costs. It also puts you in control and allows you to reduce costs with subtle changes to your operations.

Calculating your PEF

We calculate your PEF by dividing your load weighted price by the time weighted price. Your load weighted price is the average price of your business’s energy usage, while the time weighted price is the average spot market price.

 

Let’s look at how you can improve your PEF.

 

These graphs show the correlation between one business’s energy usage and the market’s usage.

Each graph represents a different quarter and has a different PEF.  These graphs show how small changes can make improvements to your PEF and contribute to your energy efficiency.  Put simply, the PEF can reward you for using power more efficiently than the market average.

Businesses that are more price efficient than the market have lower and better PEFs, because they use power when the price is low and not at peak times. Whereas, a business that undertakes the bulk of its operations at peak demand times, such as 9am or 5pm, will have a higher PEF.

This is good news if you’re a business with a high PEF as there are simple measures that can be taken to improve your PEF that can also help to reduce energy costs. This means that businesses can take back control over electricity costs and uncover energy efficiencies in the process.

But there is always room for improvement, investment and smarter technology for your business to better manage its energy prices. Businesses that learn to take advantage of the lows of the market and shift load to these times can improve their PEF.

Talk to Travis about how your business uses power today.

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