All businesses want to reduce their cost base whether the economy is good or bad. One item that seems to be glossed over is business utilities especially when it comes to gas and electricity. The cost can be high for businesses that rely on energy for 24 hour lighting, cooking, manufacturing or even universities but many don’t look at this cost each year.
For most businesses business electric is on a one year business electricity contract. This contract will have fixed rates for the duration. But unlike other contracts when it comes to an end the chances of prices increasing by 40% or 50% is extremely high. With these business contracts you need to at least terminate the contract and move onto a new one either with the existing provider or switch to someone else.
If you don’t terminate your contract then all of the power companies in the UK will invoke what is termed as a rollover contract. And even then if you have terminated it and look elsewhere, if you don’t actually move onto a new contract you will be placed onto “out of contract” rates which can be over double what standard rates would be. Once this change has been enforced to be rolled over there is nothing a business owner can do about their prices for their electricity for another year.
Power companies are not obligated to send out either reminder or renewal letters and the first you would hear about it is when your new rollover contract tariff appears in the post. But there are ways in which you can avoid all of these increases and possibly get a reduction in prices as well.
First off you need to know both when your existing contract runs to and within that the specific date on which you can serve termination. You will need to write and terminate your contract (and there are plenty of examples of these letters online to use as a template). Then you will need to find new quotes and either accept those or go back to your current supplier to see if they will match them.
Certainly in the SME market in the UK companies such as British Gas will likely beat any like for like quote and beat it by around 10% – but they won’t do that unless you have terminated the contract and got a new contract with someone else.
This is a lot of work for business owners who simply want to run their businesses rather than get caught up with all the needless paperwork and effort just to get the latest value for money rates. If you don’t want to undertake this yourself then you might want to try the services of a business energy broker. These can help you both manage your contract as well as get quotes for new business electricity prices both online and direct with the suppliers.
With long term forecasts suggesting that the only way energy prices will go is up you might want to consider longer term contracts. The rates are only slightly higher than a one year, and you have the choice of 2 or 3 year prices. So don’t get caught up with a rollover contract. Either manage this internally or get the services of a specialist service. See more rates.