How commercial electricity tendering works

Quick summary

A commercial electricity tender is a structured process for getting comparable quotes from multiple retailers. The contestable components of a commercial energy bill, including energy rates and environmental costs, are where retailers genuinely differ. Metering costs sit under a separate metering coordinator agreement and are arranged independently of the retail contract. Understanding what's contestable and what's a regulated pass-through is what makes a tender meaningful.

Key takeaways

• A strong tender starts with clean interval data and recent bills.

• Retailers price energy rates based on your load shape and total usage. Environmental costs are also a contestable component where offers genuinely differ, driven by the retailer's own environmental obligations.

• Metering is typically arranged separately through a metering coordinator rather than the retailer, so a thorough tender covers both the retail contract and metering arrangements. The metering coordinator appointed can vary depending on your broker or how you go to market, and that can affect the fee.

• Network charges and market fees are regulated pass-throughs. They are the same regardless of which retailer you choose.

• Twelve months of interval data gives retailers the most accurate picture of your load shape, which directly affects the rates they offer.

• The final decision should compare contestable components on a like-for-like basis, not just headline cents per kWh.

What is a commercial electricity tender?

A commercial electricity tender is a structured process where you ask multiple electricity retailers to price your business’s energy using the same information, the same assumptions, and the same contract start date.

The goal is genuine comparability. When retailers are each pricing based on different data or different assumptions about your load, offers can look similar on the page but produce very different costs once the contract is live.

For many businesses, a tender is also the first time they’ve looked at their electricity use as a consumption profile rather than a monthly dollar figure. That profile is what retailers price against, so understanding it is valuable.

How tendering differs from a basic business electricity comparison

A basic business electricity comparison is typically the process most small businesses go through to review their energy plan: a quick comparison of available offers from retailers, usually in a single conversation, with a switch happening on the spot if a better rate is found. It works well for businesses using under 100,000 kWh per year (under 40,000 kWh in Victoria, under 160,000 kWh in South Australia) or spending less than around $3,000 per month on electricity, where the bill is straightforward and one rate is broadly comparable to another.

Tendering is typically for businesses on commercial energy contracts: those using over 100,000 kWh per year (over 40,000 kWh in Victoria, over 160,000 kWh in South Australia) or spending more than roughly $3,000 per month. At that scale, the bill is made up of multiple distinct components, the contract runs for years rather than months, and a simple rate comparison won’t capture what actually drives cost.

Tendering is different because it engages multiple retailers simultaneously and asks them to price based on your actual load shape, not a generic estimate. It also gives you a structured way to compare the contestable components of your bill across those retailers.

It relies on interval data: time-series usage readings, commonly in 30-minute blocks, that show retailers exactly when your site uses electricity and how your consumption peaks and troughs over time. That granularity is what lets retailers price accurately.

Understanding your bill: Contestable vs pass-through

Before running a tender, it helps to understand how a commercial electricity bill is structured. Not everything on the bill is up for negotiation.

What retailers compete on

These are the components where retailers genuinely differ and where a tender creates value:

• Energy/retail rates:  the wholesale cost of electricity, hedging costs, and the retailer's margin, priced based on your load profile. Retailers manage price risk on your behalf by purchasing hedges against wholesale market volatility, and the cost of that risk management is reflected in the rate they offer.

• Environmental costs: retailers are required to meet obligations under a range of federal and state government energy schemes. They acquit these obligations by purchasing certificates, and that cost gets passed through as part of your bill. The rate can vary between retailers depending on how they manage their obligations and will differ by state.  

• Metering and management fees:  metering coordinator and management fees are set under a separate agreement, independent of the retail contract, but charged through the energy bill as a pass-through. The fee can vary depending on the metering coordinator and broker appointed, so there is room to secure a competitive arrangement as part of the broader procurement process. Some retailers also charge a small additional metering administration fee, though not all do.

What stays the same regardless of retailer

These are regulated pass-through costs. Every retailer charges the same amount because they pass them through at cost:

• Network charges: set by your network distributor and based on your usage and consumption profile under your assigned network tariff. They reset annually when the regulator publishes new charges.

• Market operator charges: fees set by AEMO, passed through at cost.

Because pass-through components move independently of contracted rates, total energy cost can shift over a contract term even when the headline energy rate stays fixed. Understanding this structure is the difference between a contract that performs as expected and one that surprises you.

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What is a network tariff?

A network tariff is not something a business selects. It is a pricing structure assigned to your site by the network distributor based on your consumption and load profile. It defines how your network charges are calculated, including whether you’re charged on flat consumption, time of use, demand, or some combination.

For businesses on commercial energy contracts, the network tariff is visible and itemised on the bill.  Retailers pass this cost through to you as a non-contestable charge. It is not part of the retail offer, but a thorough cost comparison should include it so you can see your full bill, not just the retail component. If your assigned tariff changes, your network charges change accordingly, regardless of which retailer you’re contracted with.

What data do you need before you start?

If you approach retailers before the data pack is right, the tender becomes a clean-up exercise. You spend time correcting quotes instead of comparing them.

At minimum, prepare one pack per site. Retailers and brokers like Zembl can obtain meter and network information directly through industry systems, but customers need to provide:

• Recent electricity bills. If interval meter data is available, one recent bill is sufficient. Where interval data is not available, up to 12 months of bills helps build an accurate usage profile.

• Interval meter data for the tender period, which Zembl obtains directly via the Letter of Authority.

• Current contract end date and any notice periods.

• Details of any on-site generation, such as solar, and whether exports occur.

Interval data and load shape

What interval data is

Interval data is a time series of your electricity use in regular blocks, commonly 30 minutes for business meters. It turns a single monthly usage figure into a shape: when load ramps up, when it peaks, and how consistent the base load is.

That shape is what retailers actually price against. Two sites with the same annual kWh can have very different load shapes, and a different load shape means a different price.

Why 12 months matters

Twelve months of interval data captures seasonal variation: summer cooling loads, winter heating, quieter holiday periods. Without it, retailers are pricing based on an incomplete picture of your site, which means their quotes carry more uncertainty and may not reflect your actual cost over the contract term.

Usage vs demand: Why the distinction matters

To understand what drives your electricity bill, it helps to think about it in two parts, and a simple analogy makes this clearer.

Think of your water supply at home. The total volume of water you use over a month is like your energy consumption, measured in kilowatt hours (kWh). But the size of the pipe supplying your property determines how much water can flow at any one moment. That pipe size is like demand, measured in kilowatts (kW) or kilovolt-amperes (kVA) depending on your network tariff. The network has to have that capacity available for your site at all times, and that comes at a cost.

Most businesses focus on kWh when comparing energy offers, and it's easy to see why: it's the most visible number on the bill. But for businesses on commercial contracts, demand charges can be just as significant, sometimes more so. A site that draws heavily in short bursts, say when multiple machines start simultaneously, requires a larger pipe than one that spreads the same total consumption evenly across the day.

Because network charges are a regulated pass-through, they follow the rules of your assigned network tariff and aren't something retailers compete on. But understanding your site's demand behaviour is still useful: it shapes your overall cost profile and is part of what makes your load shape distinct. Demand is also an area worth investigating independently of the tender process. Businesses that actively manage their peak demand, through equipment scheduling, load shifting, or operational changes, can reduce their network charges over time, and those savings compound across a long-term contract. This is where the right broker and metering coordinator can add value beyond the tender itself; identifying demand management opportunities and network tariff optimisation are services that a good energy partner should be able to offer alongside procurement.

How retailers price a tender

Retailers use your interval data and load profile to price their energy rate. Environmental costs are also contestable, driven by the retailer's own obligations rather than your load shape. Metering costs are contestable but sit outside the retail contract. The metering coordinator fee is set under a separate metering agreement. Large customers can appoint their own metering coordinator directly. Some retailers also charge a small additional metering fee, though not all do.

The energy rate reflects the wholesale cost of electricity and the retailer’s margin and hedging cost (the cost of protecting customers against price volatility). A flatter, more predictable load shape is generally easier to price. A peaky or volatile profile carries more risk for the retailer, which can be reflected in the rate they offer.

Environmental costs are a genuine point of difference in a tender. Retailers are required to meet obligations under a range of federal and state government energy schemes, covering both renewable energy and energy efficiency initiatives. They acquit these obligations by purchasing and surrendering certificates, and that cost is passed through as part of your bill. The rate varies between retailers depending on how they manage and hedge their exposure and will differ by state depending on which schemes apply to your sites.

What goes into a tender pack

A tender pack is the information every retailer receives. It should be consistent and unambiguous. If retailers need to guess, they will guess differently, and you won’t be able to compare the results.

• Interval data file for the tender period, with a clear date range.

• Contract preferences: start date, term, billing requirements, and any green product requirement.

• Key assumptions: site closures, and any planned operational changes that could affect load.

Comparing quotes properly

Comparing quotes can be where tenders lose value. Small differences in assumptions, such as the treatment of pass-through charges or time-of-use windows, could have a larger impact on your total bill than the headline rate difference between retailers.

Use a consistent model that calculates estimated annual cost by applying each retailer’s quoted rates to your actual interval data.

What to standardise before ranking offers

• The same interval dataset and date range applied to every offer.

• The same contract start date and term.

• Consistent treatment of metering and any fixed fees.

• Environmental costs expressed in the same unit (cents per kWh) so they can be compared directly.

Network charges and market fees do not need to be compared across retailers because they are the same regardless of who you contract with.

It’s also worth testing each offer against any known operational changes over the contract term, such as extended trading hours, new equipment, or planned solar. If the preferred quote only holds under current conditions, that’s a risk worth knowing about before you sign.

Common contract structures in commercial tendering

• Fixed rate: energy charges are locked for the contract term, giving budget certainty. You won't benefit if wholesale prices fall, but you're also protected if they rise sharply.

• Variable rate: charges can move with market conditions. Over the long run this can deliver lower costs, but a significant upward swing in wholesale prices could result in a much higher bill, which creates real cashflow risk if your business isn't positioned to absorb it.

• Hybrid structures: fixed energy rates with some pass-through or indexed components, balancing certainty with some market exposure.

For most businesses, the downside of an unexpected cost spike outweighs the potential upside of lower variable rates. The right structure depends on how much bill certainty your business needs and how much cashflow risk you can comfortably carry.

The step-by-step tender process

Step 1: Six to 12 months before contract end

Confirm contract end dates and notice periods. Map sites and identify whether interval data is available and how far back it goes. If you have multiple sites, align what you can. Misaligned end dates create unnecessary complexity.

Step 2: Collect and validate data

Pull together recent bills and interval data. Check interval data for missing periods, duplicates, or obvious faults. Calculate summary statistics including annual kWh and peak demand so you have a clear picture of each site before you approach retailers.

Step 3: Prepare the tender pack

Build a consistent pack for each site. Include interval data, summary statistics, contract preferences, and key assumptions. The more complete and unambiguous the pack, the more comparable the responses will be.

Step 4: Run the tender and manage clarifications

Issue the pack to the retailer panel with a clear timetable. Log all clarification questions and answers in one place so every retailer gets the same information. If one retailer gets a different answer, you no longer have a fair tender.

Step 5: Normalise and compare offers

Load each offer into a consistent model. Convert all components into the same units and apply them to the same interval dataset. This is the only way to make a valid comparison.

Step 6: Choose a preferred offer

Choose the offer that holds up across price, contract structure, and operational fit, not the one that wins under a single scenario. Prioritise clarity: a contract where the bill drivers are transparent and predictable is often worth more than the lowest headline rate.

Move quickly once you have your preferred offer. Retailer pricing typically has a validity window of three to five business days, because wholesale market conditions can shift materially in that time. Delays in decision making can mean re-pricing, and in a moving market that doesn't always go in your favour.

Step 7: After signing

The contract is executed directly between your business and the retailer. Zembl supports onboarding and transition coordination once a retailer is selected.

After signing, keep monitoring your interval data. Your assigned network tariff and load profile can both change when operating hours, equipment, or on-site generation changes, which affects your network charges even when your retail contract stays the same.

What to expect when tendering through an energy broker

Running a tender through an energy broker is different from running one yourself. The process is largely handled on your behalf, but it helps to know what to expect at each stage.

• ‍Data collection: Your broker will typically obtain interval data and billing history directly via a Letter of Authority, so you won't need to chase your retailer for it. You'll usually need to provide one recent bill per site to get started. ‍
• Tender preparation and market access: Your broker builds the tender pack, issues it to their retailer panel, and manages all clarification questions. The quality of that panel and the rigour of the pack directly affects the quality of the offers you receive. ‍
• Offer modelling: A good energy broker doesn't just forward retailer responses. They model each offer against your actual interval data, so the comparison reflects your real load profile, not a generic usage assumption. ‍
• Recommendation and decision: You'll receive a comparison report showing total modelled cost across offers, with the key variables explained. The decision remains yours. You choose the offer; your broker coordinates acceptance and onboarding. ‍
• After signing: Ongoing support should include bill validation, monitoring for network tariff changes, and proactive renewal planning. If your broker only engages at tender time and disappears after signing, you're not getting the full value of the relationship.

What to ask when comparing energy brokers:

• How do you obtain and validate interval data?

• How do you model offers, and can I see the methodology?

• Which retailers are on your panel, and are any excluded?

• What ongoing services are included after contract execution?

• How do you handle network tariff reviews and bill queries?

Common mistakes that inflate commercial electricity costs

• Using only annual kWh figures without interval data, which gives retailers an incomplete load picture and leads to less accurate pricing.

• Comparing headline energy rates without accounting for differences in environmental costs or metering fees.

• Assuming a shorter data period is sufficient. Twelve months captures seasonal variation that a few months of data will miss.

• Signing without understanding which cost components are fixed and which can move over the contract term.

Frequently asked questions

What is the electricity tender process for a commercial site?

It’s a structured way to request comparable quotes from multiple retailers using consistent data and assumptions. You prepare a tender pack with your interval data and contract preferences, invite a panel of retailers, manage clarifications centrally, and then model each offer against your actual usage profile. The goal is to compare the contestable components of your bill, including energy rates, environmental costs, and metering fees, on a genuinely like-for-like basis.

What is interval data, and how do I get it for tendering?

Interval data is your site’s electricity usage recorded in regular blocks, commonly 30 minutes for business meters. It’s the most accurate way to show retailers your load shape. You can usually access it through your current retailer’s portal or by requesting it from your metering coordinator. Zembl can also assist with data collection as part of the procurement process.

What is a network tariff, and can I choose mine?

A network tariff is a pricing structure assigned to your site by your network distributor. It determines how your network charges are calculated, whether on flat consumption, time of use, demand, or a combination. You don’t choose it and retailers don’t set it. It’s based on your load profile and is reviewed periodically by the network. Network charges calculated under this tariff are a regulated pass-through on your bill.

What parts of my electricity bill can I actually negotiate?

The main contestable components are the energy/retail rate and environmental costs. These are what retailers compete on in a tender and where a better deal can be found. Metering fees can also differ depending on the appointed metering coordinator. Network charges and market operator fees are regulated pass-throughs: every retailer charges the same amount because they pass them through at cost.

Why can two retailer quotes look similar but produce different bills?

Retailers may calculate environmental costs differently, include different metering fees, or make different assumptions about your load profile. Even when the headline energy rate looks the same, differences in these components can change the total contracted cost meaningfully. The fix is a consistent model that applies each retailer’s rates to the same interval dataset.

Can I run a commercial electricity tender for multiple sites at once?

Yes. Multi-site tendering can streamline procurement and improve leverage. Retailers pricing a portfolio will often offer more competitive rates than they would for individual sites, because the aggregated load is more attractive. The key considerations are aligning contract end dates where possible so you're going to market with the full portfolio at once, and presenting consistent data and assumptions across all sites so retailers are pricing on the same basis.  

Do I need a broker to run a commercial electricity tender?

Not always, but for most businesses it’s worth it. Running a tender properly takes time: collecting and validating interval data, building a comparison model, managing retailer Q&A, and making sure you’re comparing like with like. A broker handles all of that, which frees you up to focus on the decision rather than the process.

A broker also adds value when sites are complex, when you want access to a wider retailer panel, or when you need structured analysis of the offers. Zembl runs commercial tenders for large businesses and presents the contestable components in a clear, comparable format so you can make an informed decision.

Once you sign a contract through Zembl, you also get access to Zembl Energy Intelligence, which gives you ongoing visibility of your energy use and identifies opportunities for energy efficiency. It’s a way to keep reducing costs beyond the contract itself.

When should a business start the tender process?

Start well before contract expiry: ideally six to 12 months out for a single site, longer for a portfolio. That gives you time to collect and validate data, run the tender, manage retailer Q&A, and complete internal approvals without pressure. Starting late often means accepting a rollover on your current contract rather than getting a competitive result.

Let Zembl handle it

Commercial electricity tendering involves a lot of moving parts: data collection, load shape analysis, retailer management, and offer comparison. For most businesses, it’s not a core skill, and getting it wrong costs more than it saves.

Zembl’s commercial energy team runs the full tender process on your behalf. We collect your site data, go to market across a panel of retailers, and present your options clearly, showing how the contestable components compare across each offer.

Once you’ve chosen, we handle the transition. You stay focused on your business.

Talk to Zembl about commercial energy procurement.