A Guide to Managing Electricity Costs for SMEs

For Small and Medium-sized Enterprises (SMEs), improving profitability and maintaining competitiveness depend on managing operating expenses effectively. Energy costs are a significant expense item across many industries and are often perceived by businesses as a “fixed cost that cannot be controlled.” However, with strategic decisions and proper cost management, businesses can significantly control these expenses and create more room in their budgets.

Electricity cost management for businesses involves more than simple habits such as switching off lights at the end of the working day. It is a strategic financial process built around tariff classifications, regulatory thresholds, supplier agreements and contractual terms. In this guide, we will examine step by step how you can optimize your business’s electricity costs by making effective use of commercial and contractual opportunities, while protecting your budget and avoiding additional charges.

What Factors Affect Electricity Costs for SMEs?

The key factors affecting electricity costs for SMEs include the business’s consumption profile based on operating hours, the type of tariff subscribed to, the unit prices agreed with the electricity supplier, and additional charges reflected on the bill, such as penalties for exceeding reactive energy limits.

These factors that make up an SME’s electricity cost structure are determined not only by the power of the equipment used at the premises, but also by when electricity is consumed and under which commercial agreements it is supplied.

The first step in cost management is to map your business’s energy consumption. Does your business operate 24/7, or only during daytime working hours? At what times does your production line reach its highest capacity? The answers to these questions are among the most important factors shaping your electricity bill.

While distribution charges, taxes and statutory deductions shown on your bill are generally standard, your active energy cost is influenced by your commercial decisions.

In this article, we focus on the contractual and tariff aspects of cost management. If you are also looking for practical ways to reduce expenses through equipment-level measures, you can apply the methods in our electricity saving tips for workplaces guide to your daily operations.

How Do You Choose the Right Electricity Tariff for Your Business?

When determining the right tariff and supply model for your business, it is important to first assess your annual consumption, consumption profile and current tariff category.

For high-consumption consumers covered by the Last Resort Supply Tariff (SKTT), in particular, the cost of electricity is calculated according to a dynamic structure that reflects market costs. Therefore, monitoring when electricity is consumed is important for effective electricity cost management.

For businesses covered by SKTT, it is necessary to consider not only tariff thresholds but also consumption volume, the hours when electricity is consumed, and the impact of market prices on electricity costs.

According to information published by EMRA (EPDK), SKTT applies to high-consumption consumers who exceed the last-resort supply threshold and do not have a bilateral agreement. Under this mechanism, a dynamic tariff model reflecting electricity market costs is used.

By reviewing your business’s consumption patterns and current tariff structure, you can monitor your costs more closely. You can use the bill calculation and tariff comparison tool on our website to enter your monthly consumption and review your bill and available tariff options.

How Should You Evaluate Supplier and Eligible Consumer Offers?

When evaluating supplier offers, it is important to look beyond the unit price. You should also consider how the price is determined, the duration of any fixed-price guarantee, contractual terms, additional costs and the advantage the offer provides compared with your current supply conditions.

Choosing an electricity supplier requires a contract that is aligned with your business’s consumption profile and risk preferences.

What Is the Difference Between an Eligible Consumer and SKTT?

Being an eligible consumer means having the right to choose your electricity supplier. Eligible consumers can enter into bilateral agreements with licensed electricity supply companies and procure electricity at the prices and under the terms they agree upon.

The Last Resort Supply Tariff (SKTT), on the other hand, is a supply mechanism applied to high-consumption consumers who exceed the applicable last-resort supply threshold and do not have a bilateral agreement.

Therefore, being an eligible consumer and being covered by SKTT do not mean the same thing. A consumer’s annual electricity consumption is one of the key factors determining which category they fall under.

A consumer whose annual consumption does not exceed the last-resort supply threshold is not automatically covered by SKTT simply because they do not have a bilateral agreement. For high-consumption consumers who exceed the threshold and do not have a bilateral agreement, the active energy cost is calculated using a dynamic method reflecting market costs.

For this reason, you should assess separately whether your business qualifies as an eligible consumer and whether it exceeds the SKTT threshold.

You can check whether your business qualifies as an eligible consumer and monitor your consumption information through your electricity bill. You can also access information on consumption and suppliers for eligible consumers through EPİAŞ.

Where Can You Monitor Electricity Market Prices?

Businesses that are covered by SKTT or wish to monitor market price trends when evaluating supplier offers can access electricity market data published through the EPİAŞ Transparency Platform. The platform provides market prices as well as various other data related to the energy market.

When evaluating supplier offers, it is more appropriate not to consider market prices as the sole decision-making criterion. Instead, they should be assessed together with your consumption profile, the proposed pricing model and the contractual terms.

For detailed information about your rights as an eligible consumer and last-resort supply, you can review our What Is an Eligible Consumer and Who Can Become One? article.

If you also want to reduce your carbon footprint, align with global sustainability goals and strengthen your brand reputation, you can consider sustainability-focused agreements such as the Green Energy at Work Campaign. You can also visit our campaigns page regularly to discover other opportunities that can add value to your brand.

What Should You Consider in Your Electricity Contract and Bill?

When reviewing your electricity contract and bill, you should pay attention to how changes in national tariffs will affect pricing, contract expiry and early termination conditions, billing cycles, and reactive energy charges reflected on the bill.

For example, does your contract provide a fixed-price guarantee, or is it based on a model indexed to the Market Clearing Price (MCP)? If your contract is indexed to the MCP, fluctuations in the market will be directly reflected in your bill.

It is also important to clearly specify in the contract whether a single-term or dual-term tariff applies, depending on the transformer configuration of your business.

The contract should clearly state how additional charges such as imbalance costs, market participation fees and financing costs are reflected in the price, as well as the calculation and payment terms of any security deposit.

Checking whether contractual penalties apply in the event of termination and reviewing the customer service terms offered by the supplier can also help prevent potential disputes and unexpected costs in the future.

Frequently Asked Questions (FAQs)

Can SMEs become eligible consumers and choose their electricity supplier?

Yes. SMEs whose annual electricity consumption meets the eligible consumer threshold determined by EMRA (EPDK) for the relevant year can choose their electricity suppliers and receive offers from different suppliers.

Being an eligible consumer and being covered by the Last Resort Supply Tariff (SKTT) are not the same thing. A consumer’s annual electricity consumption is one of the key factors determining which category they fall under.

A consumer whose consumption does not exceed the last-resort supply threshold is not automatically covered by SKTT simply because they do not have a bilateral agreement. For high-consumption consumers who exceed the threshold and do not have a bilateral agreement, the active energy cost is calculated using a dynamic method reflecting market costs.

Therefore, you should separately assess whether your business qualifies as an eligible consumer and whether it exceeds the SKTT threshold.

Which is more suitable for businesses: a single-term or dual-term tariff?

This depends on whether your business has its own transformer and on its instantaneous power demand.

If your business has its own dedicated transformer and its instantaneous power demand is not particularly high, a dual-term tariff may offer a cost advantage. If you do not have a transformer or your consumption is relatively low, a single-term tariff is generally more suitable.

Can changing electricity suppliers reduce costs?

Yes. If a new supplier offers a lower active energy unit price than the one reflected on your current bill, special discounts or more favorable contractual terms such as a fixed-price guarantee, changing your electricity supplier can significantly reduce your business’s overall energy costs.

What is a reactive energy charge and how can businesses avoid it?

A reactive energy charge is a fee reflected on the electricity bill when reactive energy consumption exceeds the specified limits or when reactive energy is supplied to the grid beyond the applicable limits.

This practice is not limited to industrial businesses; it applies to consumers subject to reactive energy tariffs under the relevant regulations.

To prevent reactive energy limits from being exceeded, businesses should regularly inspect their electrical installations and power factor correction systems.

If the reactive energy limit is exceeded for the first time during a calendar year, the resulting reactive energy charge is cancelled under the applicable rules. In subsequent violations, the charge may be reflected on the bill.

For this reason, it is important to have the power factor correction system checked and monitor consumption following the first violation.