Section 1
The framework: four levers, pulled in order
Pass-through is one of four levers, and it is not the first. Pull them in this sequence, because the earlier levers reduce how much you have to pass through, which is what makes the surcharge acceptable when you get to it. Lever 1: Load-shifting, reduce the cost before you pass it The cheapest energy cost to pass through is the one you never incur. Before repricing, look at when you use energy and whether you can move it. Many DACH commercial tariffs, and time-of-use contracts, price energy differently by time of day. If a laundry can run its heaviest drying cycles in cheaper windows, or a bakery can stagger oven pre-heat to avoid a peak-demand charge, the energy cost per unit falls without touching the price. Load-shifting is the first lever because it is fully within your control, it is reversible, and every euro it saves is a euro you do not have to ask a customer to cover. Map your energy use by process and by time. Flag the processes that are both high-consumption and time-flexible. Those are your load-shifting candidates. The processes that are high-consumption but time-locked, the morning bake that has to be done by opening, set the floor on what you will have to pass through. Lever 2: Contract timing, decide your exposure window Energy cost is not a single number; it is a contract with a shape and an end date. A business on a fixed contract expiring next quarter has a known cliff; a business on a variable rate is already riding the market. Before you build a surcharge, know your window: when does the current contract reprice, and are you fixed or variable? That determines whether you are pricing against a known cost or a moving one. Locking a fixed contract can buy stability that lets you set a clean surcharge; staying variable keeps upside if prices fall but forces a surcharge that can flex. There is no universally right answer, but there is a wrong one: setting a fixed customer surcharge while sitting on a variable supply cost you have not hedged, which leaves you exposed to a gap in either direction. Match the shape of what you charge customers to the shape of what you pay your supplier. Lever 3: Surcharge design, structure beats a flat rise Now the pass-through itself. A separate, visible energy surcharge usually beats folding the cost into a flat price rise, for one reason: it is legible. When the customer can see "energy surcharge" as a line, they read it as a response to a known, external, widely-reported cost, not as you quietly getting more expensive. Fold the same money into a flat menu rise and it reads as a permanent grab with no explanation. Design the surcharge on three principles. Proportionality is the discipline that stops the flat rise. Energy did not raise the cost of your low-energy products much, so those barely move; it raised the cost of the oven-heavy, dryer-heavy, kiln-heavy lines a lot, so those carry most of the surcharge. Re-cost each product on energy per unit, from your bills, and let the surcharge follow the energy content. A customer buying a low-energy item sees little change and does not feel punished; a customer buying the energy-heavy item pays the real cost of serving it. Lever 4: Price communication, the message that makes it accepted The same surcharge lands very differently depending on how you frame it. The framing that works names the external cause, points to the value preserved, and signals the surcharge is tied to the cost rather than permanent. The framing that fails apologises, over-explains your financial difficulty, or implies the customer is bailing you out. People accept covering an external cost that is in the news; they resent covering your business problems. Keep the message short, factual, and about the cost, not about you. • Works: "An energy surcharge applies to reflect current energy prices. It is tied to those prices and will be reviewed as they change." • Fails: "Due to the difficult situation our business is facing with rising costs, we regretfully have to ask customers to pay more." The first is a business passing on a cost. The second is a business asking for help, and it teaches the customer to shop around.
Section 2
Worked shape: a bakery running the framework
Take a bakery where the pre-dawn oven run is the dominant energy cost. Lever 1: it cannot move the morning bake, but it can shift proofing and secondary baking into cheaper windows, trimming energy per loaf. Lever 2: its contract renews in four months on a variable rate, so it either locks a fixed price to set a stable surcharge or keeps the surcharge flexible to match the variable cost. Lever 3: the surcharge lands heavily on the oven-intensive lines, the artisan loaves that occupy the oven longest, and barely at all on the counter items that use little energy. Lever 4: the message names energy prices as the cause and signals review as prices change. The result is a bakery that recovered most of its energy shock, concentrated the recovery on the products that actually caused it, and kept the customer relationship intact, because the customer could see what they were paying for and why. The German bakers' trade body, the Zentralverband des Deutschen Bäckerhandwerks, warned during the crisis that energy costs threatened the survival of traditional bakeries precisely because the oven cannot be switched off to save money. The framework is the answer to that constraint: if you cannot cut the energy the craft requires, you shift what you can, time your contract, and pass through the rest in a form the customer accepts.
Section 3
The models under the framework
Two disciplines sit beneath the levers. The first is comparative statics: isolate the one input that moved, energy per unit, hold the rest still, and re-price each product on its own energy content rather than on a blanket average. This is what breaks the flat surcharge, because when you cost line by line on real energy use, the flat percentage never survives the numbers. Its limit is that customers react; a surcharge that looks clean on the sheet can still shift demand toward your lighter items, so watch the mix after you introduce it. The second is a risk-transfer read borrowed from how contracts allocate uncertainty. The whole contract-timing lever is about who carries the price risk: fix the contract and you take certainty at the cost of upside; stay variable and you keep upside at the cost of exposure. The surcharge is the same question pointed at the customer: a flexible surcharge shares energy-price risk with them, a fixed one keeps it with you. Decide deliberately who holds which risk rather than defaulting into a mismatch.
Section 4
What the framework cannot see
It cannot fix a business whose energy cost, even after load-shifting and pass-through, pushes the product above what the market will pay. If the energy-heavy artisan loaf costs more to make than customers will ever pay for it, no surcharge design saves that product; that is a menu or footprint decision. The framework also cannot predict energy prices or the next policy move on energy, so treat contract timing as a hedge, not a forecast. And it assumes you can measure energy per product; a business that has never metered its processes has to do that first, because a surcharge you cannot tie to real consumption is just a flat rise with a better label.
Section 5
The fitness test
You are running pass-through as a system if you can point to energy you have shifted to cheaper windows, state when your supply contract reprices and whether you are fixed or variable, show a surcharge that sits heaviest on your energy-heavy products, and frame it in a line that names the external cause. If you can do all four, you are recovering the cost in a form customers accept. You are not, if your response was a flat percentage on everything with an apology attached. That over-charges your light products, under-recovers on the heavy ones, and teaches customers that your prices are a problem rather than a cost. The DACH trades that survive the energy regime are the ones that shifted what they could, timed what they could, and passed through the rest in a form the customer could read as fair.