The UK general election is now a distant memory. On the campaign trail, both Labour and Conservatives made much noise on the inefficiencies of the domestic energy market and made many a false promise that consumers ought to get a better deal. Two months is a long-time in politics after all.
If you’re responsible for negotiating and contracting for your business electricity, gas, and water supply, then frustration, irritation, and false promises may be all too familiar. Here are my three top tips to prepare you and prevent that sinking feeling when thinking about this important cost:
- Diarise your contract end dates
An energy bill is typically between 12 and 60 months long and once you’ve signed a contract it’s tempting to file it away and forget about it. Stop! Check your contract end date. Alongside this small-print will be a second, equally important date: ‘Termination Date’. This is the date you must give notice to your supplier should you wish to switch provider. It’s important for two reasons:
- If you miss a termination date and fail to agree a new contract, you may be rolled onto a suppliers ‘deemed’ out-of-contract rates, or worse still, rolled into another fixed term contract. These penal rates can be 100% more than the market rate.
- Even if you’ve found a better deal with a new supplier, if you haven’t submitted and received confirmation you’ve given notice to your current supplier, this transfer may be blocked. This can cause delays, frustration, and be costly while placed on deemed rates until this is resolved.
- Check your bills
Too often we mis-place confidence in key service providers to get things right all of the time: Banks, Energy Suppliers, Phone Contracts, etc. Energy suppliers get it wrong more often than you’d think.
I’m in dialogue with a business owner in Consett who’s still resolving issues with British Gas some nine months after spotting a multitude of errors on his bills: The bill took readings from the wrong meter (unconnected to the property), bills were not correctly reconciled once accurate meter readings were provided (resulting in thousands of pounds of payments not being re-credit to his account), and the meter has not been upgraded to take automatic meter readings every half hour as was required by a directive called P272. These can be resolved but the time taken to-date has been extremely costly for this business owner.
- Make time to review your options
Too often the contracting process is rushed and a better deal could have been obtained had they started the review process earlier and asked key questions, including:
- Have I obtained my renewal offer from my current supplier? This is a good starting point but you should always negotiate this offer and consider alternative suppliers.
- How long a contract am I comfortable signing into? Typically, the longer the contract term, the greater the cost. If cash flow is important, shorter 12-24 month contracts are preferable, but if you believe energy prices will likely rise in the long-term (as this author does), then taking a longer-term contract can provide some protection.
- If using a third party to review the market on my behalf, what is their commission, and do they have my best interests at heart when making recommendations?
If you’re responsible for your business utility contracts and would like a professional and objective review of your current bills and options for new contracts, get in touch.