Energy contract renewal, stick or twist?

Renewal time for your business energy contract. Your gas or electricity supplier has sent you a renewal letter, now what? Allow me to guide you through the options, and explain the pitfalls you can face, depending who your current supplier is.


So you have received your renewal letter which means the end of your gas or electricity contract is approaching. Depending who your supplier is, the letter will take one of the following formats:

Renewal format 1

Your contract will end on 20 August 2015 (for example), your new prices from 21 August 2015 – 20 August 2016 are… If you want to switch supplier, you need to let us know before 20 May/June/July (depending on supplier), also known as your notice date.

In this instance, the pressure is on, you have a deadline to sort something out – otherwise you have no choice but to accept the prices on offer and you will be tied to them for a minimum of 12 months.

So what do you do? Diarise some time to spend on it perhaps, phone round some other suppliers (or one call to your broker and they can do all this for you), to see if there is anything better on offer.

Renewal format 2

Your contract will end on 20 August (for example), if you haven’t agreed a new contract with us or moved to a new supplier by then, we will put you on a variable rate plan and prices will be…

The pressure is off here, although you will save money by agreeing a fixed price contract with the same or different supplier – this is going to be cheaper than the variable rates they will put you on. However, if you don’t prioritise this as urgent, then you can switch when on the variable rate, just by giving your supplier 30 days notice.

This is the likely option you will be faced with (at the time of writing) British Gas, CNG, EON and Scottish Power.

How long does it take to switch supplier?

If you do decide to switch to another gas or electricity supplier, factor in around 4 weeks for the whole process – from agreeing a new contract to that supplier actually taking over your business energy supply. If you leave it too late, you can end up paying deemed rates for your energy during this period, which can prove very costly.

 

Perfect Clarity can help businesses save money on their energy and water contracts. Call 020 3372 6517 for more information.