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Tuesday 27 September 2016
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Energy prices: Take a hike?

Energy prices: Take a hike?

With energy prices ever on the increase, changing suppliers to avoid price leaps can save your practice money

You would be forgiven for thinking that energy can be quite dull. Why worry about energy when you need to run a slick general practice and focus on patient healthcare and appointment targets? I understand it doesn’t come very high on your agenda. However results from a study by Business Juice, a team of 45 energy experts, shows that many businesses are worried about price rises; 8% of businesses (equivalent to 380,00 small and medium enterprises) say that price rises of 15% a year would force them to close. Would your practice come into this bracket?

Domestic prices rises from five of the ‘big six’ suppliers – British Gas, EDF, EON, Npower, Scottish Power, and Scottish & Southern Electric – hit the headlines, but behind the scenes, business energy prices have been rising too. There has been an increase of 12.8% so far this year, and that’s despite that fact that prices fell in late spring and early summer. Since January 2010, the average business energy bill has risen from £1,691.44 to £2,884.44 - a 70.5% increase.

Unlike the domestic energy that you pay for at home, you can’t just change your business energy supplier when you want. You need to be taking action at the right time. There are some really simple things you should know about your energy supply to ensure that you don’t get caught out. There’s no excuse not to know these most basic details:

 - Who is my supplier?

The most common situation where people don’t know their supplier is when they’ve just moved into new premises. If you’ve just moved and you’re not sure who your energy supplier is, you can ask the previous tenant or owner, or you can also make a phone call to the Meter Point Administration Service.

Your unit rate and standing charge

Expecting people to know their exact unit rate and standing charge might seem a bit unreasonable, especially when our research showed that 74% were confident that they know how much they pay a month. However, when the time to renew your contract comes, it’s good to know these details so that you can see how the renewal offer your energy supplier sends you compares, and be fully prepared to go out and start finding a better deal. You can find your unit rate and standing charge on your bills, or by calling your energy supplier. 

 - The date your contract ends

This is a crucial detail if you don’t want to be rolled over. Rollover is when your energy supplier automatically signs you up for a new 12 month contract (and in some cases even longer). These contracts are often a lot more expensive than the most competitive rates on the market, and you’ll be stuck with them for at least a year. You need to know your contract end date and your termination window so that you can make sure you don’t get ‘rolled’.

The date your contract ends will be on your contract. If you’re not sure where that is, try searching past emails or paperwork for any correspondence you might have from your energy supplier at the start of your contract. You should also keep your eyes out for your renewal letter - your energy supplier will send you a letter, around 60 calendar days (but no longer than 120 calendar days) before your contract is due to end, with details of the tariff they are going to roll you over to.

 - The termination window

Your energy contract has something called a ‘termination window’ - this is the period within which you can tell your energy supplier that you don’t want to be rolled over. You need to know the termination window because if you contact the supplier too early or too late, you can still be rolled over. As a general rule of thumb, you can cancel no more than 120 days and no less than 30 days before the end of your contract. This varies by supplier, so you need to check for yourself. The termination window will be in your energy supplier’s terms and conditions. If you don’t have a copy of these, you can call your energy supplier to ask.

Back to the future

When thinking about your next energy contract, look beyond today. Yes the cheapest price might be the one that gives you 12 months of energy and looks good right now, but taking into account historic increases that two or three-year contract might be the way to go. If you plan to move premises soon, stick short; otherwise, consider something longer. 

The items mentioned here are just the tip of the iceberg and you don’t need to do this alone. There are a great many intermediaries that can help you get the most out of your energy contracts moving forward, reviewing many, if not all of the suppliers in the marketplace. There are a lot more available to you as a business than what you would get at home. 

We will always need energy, and in all likelihood it will always get more expensive year after year, so don’t be a victim of rising energy prices and take action. If you do nothing else, make sure when your renewal notice comes through from your current energy supplier you keep them honest by ringing up and pushing them to confirm if they have given you their best possible price. 

 

Resources

Business Juice

Energy Forecaster

uSwitchforBusiness