Utility contracts review can be performed by Energy4, who can negotiate to provide the most competitive prices and savings with suppliers on your contract, due to our utility supplier relationship. The review helps identify incorrect utility contracts with excessive rates. Customers have the right to review their contractual agreements and can demand a new competitive deal.
Utility contracts review is performed;
– To provide advice on when your utility contract is up for renewal, preventing unwanted rollover
– To continually track supplier prices, ensuring you are on the most competitive utilities
– To remind you of your renewal date so to avoid any “out-of-contract” price hikes
– To help identify incorrect utility contracts with excessive rates
– To assist Customers to understand there right to review their contractual agreements and can demand a new competitive contract
Utility contract reviews are to be performed due to the history of misselling, and criminal practices by utility providers, as exposed by Ofgem.
Understand energy contracts for businesses
Energy suppliers are changing the way they buy energy and transport it to your business. They are also changing the way your company pays for power too.
Whatever your business, setting up a new contract as soon as you move into your premises or switching supplier can make a big difference to your bills.
The following tips will help you understand business contracts and the rules.
Moving to half-hourly energy readings (BSC P272 and P322)
Recent changes to industry rules mean that suppliers will record your business’s energy use every half hour, as part of a process called ‘settlement’. You’ll be moved onto these arrangements when you renew your contract or switch supplier.
The new arrangements are due to changes to the Balancing and Settlement Code, known as P272 and P322. These may change the way your supplier bills you.
Our guide Moving to half-hourly energy readings (BSC P272 and P322) explains the changes, how they might affect you, and how to bring down any extra costs you may see from the difference.
These changes will only apply to you if you’re a business (‘non-domestic’) customer in profile classes 5-8 and have an advanced meter installed. If you’re not sure whether you have an advanced meter, please contact your supplier.
Do micro-business contracts differ from other business contracts?
So that the smallest firms know when they can compare the market, we require suppliers to put the end date and notice period on all bills for fixed-term contracts. We also allow smaller businesses to tell their supplier they want to switch at the end of their deal at any time before the notice period.
For contracts starting on or after 30 April 2015, we have reduced the maximum notice period for terminating a micro business contract from 90 to 30 days. Around 60 days before a fixed-term end, suppliers must also now tell the smallest firms how much energy they use each year and give them details on how the price of their current deal compares with the new prices. Having this information puts these businesses in the best possible position for negotiating a new deal when their current contract ends.
What information will my company need to provide to prove it is a micro business?
There are around 1.6 million micro-business energy consumers in Britain. Your company is a micro business if it meets one of the following criteria:
– Employs fewer than ten employees (or their full-time equivalent) and has an annual turnover or balance sheet no greater than £ 2 million, or
– Consumes no more than 100,000 kWh of electricity per year, or
– Consumes no more than 293,000 kWh of gas per year.
– If your business uses this much energy, it should equate to an annual spend of around £10,000 per fuel (excl. VAT and Climate Change Levy).
-If your supplier has limited information about your business, you will be asked for information on the number of employees (full-time equivalent), the turnover and energy consumption.
Your supplier is required to take all reasonable steps to identify whether you are a micro-business or may decide to treat you as a micro-business automatically.
My supplier decided my business does not qualify as a micro-business, but I think it does. What can I do?
In the first instance, you should approach your supplier with the supporting evidence that you do qualify. Your evidence should include the number of employees and annual turnover or consumption. It would be best if you also reminded them of their obligation to take all reasonable steps to identify whether you are a micro business.
In the first instance, you should approach your supplier with the supporting evidence that you do qualify. Your evidence should include number of employees and annual turnover or consumption. You should also remind them of their obligation to take all reasonable steps to identify whether you are a micro business.
My contract has been rolled over without my consent. Why is this?
If you failed to tell your supplier of your intention to end a contract before the notice period, it is possible your supplier has rolled you over onto a new contract. For micro businesses, we only allow suppliers to rollover a contract for a maximum period of one year.
What should I look out for when entering into new contracts?
You should: Consider what energy contract is suitable for your business needs, shop around and compare suppliers’ offers. Read the section on switching for advice on how to do this. See our factsheet for micro-businesses reviewing their options at the end of a business contract.
Make sure you understand the critical aspects of your contract.
Please read the full Terms and Conditions of your contract when you receive them and the Statement of Renewal Terms. Keep them for future reference. Keep copies of all correspondence, in case of any disputes with your supplier.
What is a deemed contract?
A deemed contract is generally in place when any customer moves into new premises and starts to consume gas, electricity, or both, without agreeing on a contract with a supplier. A deemed contract may also exist where an existing agreement comes to an end, but the customer continues to consume energy.
This second possibility could arise in two ways:
1. Contract is terminated, by either the supplier, or the customer, but the supply continues, there is likely to be a deemed contract, if:
– The original contract does not expressly say what will happen after termination. For example, if it does not say that the actual contract terms must apply when you are ‘out-of-contract.’
– The existing customer continues to consume gas, electricity, or both at the premises.
2. Where a contract expires, but the customer is still using gas, electricity, or both from the same supplier, a deemed contract is likely to exist if:
– The original contract does not expressly say what will happen after expiry, (e.g. it does not contain renewal provisions or state that the actual terms still apply)
– The existing customer has told the supplier that they don’t want the original contract to continue.
Around 10% of micro-businesses are on deemed contracts. They must be aware that prices on these contracts are on average 80 per cent more than rates charged in a negotiated agreement. If you are on a deemed contract, you should shop around and compare supplier offers for a new energy contract, as you could make significant savings.
Your rights when you are on a deemed contract
If you start taking supply on a deemed contract, your supplier must:
– Take all reasonable steps to provide you with the Principal Terms of the deemed contract including the charges or fees
provide you with a copy of the full contract if you ask for it
– Take all reasonable steps to tell you about other available contracts and how you can get information on these
– Take all reasonable steps to ensure that the terms of its deemed contract are not unduly onerous.
If you are a business customer using energy on a deemed contract, the supplier cannot:
– Prevent you from switching to another supplier, for any reason or at any time, (i.e. they cannot object to you transferring for reasons of debt or contract)
– Require you to give notice before terminating the contract or charge you a termination fee.
For more information, see the full electricity supply licence conditions, setting out the terms relating to deemed contracts.
Help with energy bills and budgeting
The Citizens Advice consumer helpline (opens another website), can offer help and advice if you’re having trouble paying your energy bills or if you’re not happy with the payment plan options your supplier is offering you.
You can also find free advice on managing debt and budgeting through the:
Business Debtline – for small businesses and people who are self-employed
Click here for further information –
Switch energy supplier and shop for a better deal
Switching business energy supplier or setting up a new account as soon as you move into new premises can make a significant impact on cutting your bills. Whatever your business, the following hints and tips will help you when you’re comparing deals and switching to a new supplier.
Talk to suppliers
Ask your supplier if it has any better offers, which will give you something to use as a benchmark when looking at other deals. Note that if you are consuming energy on a default – or deemed – tariff, your supplier should take all reasonable steps to tell you about other available contracts and how you can get information on these.
Check your meter
Taking regular meter readings will help build up a picture of your consumption over time. You may need to know your consumption so that other suppliers can provide a quote for you.
Your meter has unique registration numbers: the MPAN (meter point administration number for electricity meters) and MPRN (meter point reference number for gas meters). Give these to your new supplier. You can find them on your meter, as well as on your bill.
Know your contract
Make sure you know the terms of your current contract.
For example, how long before your existing contract ends can you tell your supplier that you want to switch? Many contracts will only allow you to do this at certain times.
When you are talking to a competing supplier, ask them to explain the terms and conditions of their deal so you can make sure you fully understand them before you sign up.
Most business deals do not offer a cooling-off period (this is the option of cancelling a contract within a certain amount of days after it is agreed). This includes when you have consented to the agreement over the telephone. So be sure that you are entirely happy with all the terms and conditions before you agree to it.
Further information on energy contracts for business consumers is available in our factsheet.
Can suppliers object to switching?
Your current supplier can object to you switching, but only under specific circumstances, which will be set out in your contract.
Some typical reasons include:
– If you are in debt with your supplier
– If your contract still bounds you because you are on a fixed-term contract where the term has not run out.
But your supplier cannot object if:
– You are not signed up to any contract because you are on a deemed contract
– Your Contract has expired, and its terms do not bound you.
If your current supplier does object to your switch, they are under licence obligations to tell you this as soon as possible. They must also tell you:
– The reason why they have objected
– How you can resolve this if you think you have a case.
In November 2011, we published an open letter reminding suppliers of their licence obligations. There are some examples of good practice set out in our Retail Market Review: Non-domestic Proposals consultation, in Appendix 2, page 49.
What to check when using a Third-Party Intermediary (TPI)
Some businesses choose to use Third-Party Intermediaries (TPIs) to help them compare their current deals with those of other suppliers.
If you do decide to use a TPI, ask them:
– Which suppliers they represent (so you know whether they will compare the whole market for you)
– How their services are paid for (for example, will its commission be included in the prices you are quoted or will they charge a one-off fee?).
– If you have any concerns about the actions of a TPI you can talk to your local trading standards department which, along with the Office of Fair Trading (OFT), has enforcement powers which may apply to some forms of misleading information and communications.
Read our factsheet – Third-Party Intermediaries: what your business needs to know
Third-Party Intermediaries: what your business needs to know;
TPIs are organisations or individuals that give energy-related advice or help you to procure energy or manage your energy needs. They act as an interface between consumers and energy suppliers and can help you to make better energy choices. This factsheet gives information to help small businesses work productively with TPIs.
Third-Party Intermediaries: what your small business needs to know
– Third-party intermediaries (TPIs) are organisations or individuals that give energy-related advice, aimed at helping you to buy power and manage your energy needs.
– TPIs include switching sites, energy brokers and any company that offers support with energy procurement.
– Whether you approach a TPI directly or they contact you, you should not feel under pressure to use their services. Your energy supply contract will always be with an energy supplier: the TPI does not supply your energy.
A TPI can support you when getting a business energy quotation as the process is different from getting a quote for your home.
– There are very few published prices in the business market, and you need to contact suppliers to obtain a quotation.
– There is no obligation to supply you – a supplier may determine which customers they choose to provide by factors such as the size of supply or your credit rating.
– There is generally no cooling-off period after you agree to the Contract (even when this agreement is made over the telephone rather than in writing).
– The contracts may last for multiple years and may have an early termination fee if you wish to change supplier before then.
Essential questions to ask a TPI before you consider using their services
• Which suppliers will you be approaching to get prices?
• How many price offers will you give me?
• What will you do to help me switch supplier?
• What services will you provide during the life of the contract?
• How will I be charged for these services? Will I be assessed directly or indirectly (see over)?
Q: Do TPIs always research the whole market? A: No. Some TPIs research the whole market but others represent one or a small group of suppliers.
Q: Will a TPI always find the best energy deal for you? A: No, TPIs are not necessarily required to find the best deal for you. You could find a better deal by looking at different contract lengths or payment methods.
Q: Is agreeing to a contract over the phone binding? A: Yes, your verbal agreement is binding.
Q: Are you obliged to accept an offer from a TPI? A: No, make sure you understand the services they will provide for you, how
consultant fees are paid for, and all terms and conditions before you
Q: Are all offers presented in the same way? A: No. Some factors in energy bills may change during the life of the Contract (e.g. environmental tariffs). These may be presented on a pass-through basis (where they will be added to
the energy price when the charges are known by the suppliers). Check that you understand whether your price may vary within the term of the Contract.
Q: Is there a set duration for contracts? A: No. Many contracts are fixed term, and you should be clear how long you would be locked into the contract, and whether there is a termination fee.
what your small business needs to know
Paying for a TPI’s services
A TPI will charge for the services it provides you. This could be a direct charge paid by you to them (e.g. a flat fee, a cost per trade made on your behalf) or indirectly. For indirect payments, the TPI receives compensation from the supplier, which is added to your bill. Below is an illustrative example using simple figures to aid understanding
Basic cost of energy 10p/kWh > TPI commission 1p/ kWh > Your bill shows 11p/kWh (paid to supplier) > Supplier passes 1p/ kWh to TPI eg consumption 50,000 kWh/ annum, TPI receives £500 These figures are purely illustrative.
TPIs must comply with consumer protection laws, including those which relate to business customers. For example, a TPI is prohibited by the Business Protection from Misleading Marketing Regulations (BPMMRs) from carrying out misleading advertising activities and should therefore always identify itself and be clear about the purpose of its call.
In November 2013, Ofgem acquired powers to apply to courts for an injunction to prevent breaches of the BPMMRs.
In instances where breaches of the BPMMRs may be criminal offences (which can be enforced by Trading Standards and The CMA), Ofgem may notify these enforcers of concerns, where appropriate. Ofgem does not license TPIs but has set out voluntary principles showing how they should operate, below.
A. Honesty You should identify yourself, the services being offered and any organisations you represent (directly and indirectly) clearly at the start of any interaction with a customer and obtain their consent before any marketing
B. Respect You must at all times respect the consumer’s wishes and should cease the current contact and avoid future contact if the customer requests
C. Accuracy You should make the customer aware of how much of the market you searched to obtain the offers you propose to them and ensure all offers are accurately presented
D. Transparency Before obtaining their agreement to the contract, you should make the customer aware of all principal terms of the energy contract, including the services you provide and how the customer will pay (directly or indirectly) for those services.
E. Customer-focused You should record and investigate all complaints fully and act quickly to put things right when you make a mistake
F. Professionalism You should ensure staff are adequately trained for dealing with customers and adhere to these principles
A micro business is defined as one that:
• Consumes not more than 293,000 kWh of gas per year; or
• Consumes not more than 100,000 kWh of electricity per year; or
• Employs fewer than ten employees (or FTE equivalent) and their annual turnover or balance sheet is not greater than £2 million.)