With gas and electricity prices on the rise again in 2011, the hikes suffered by people who run businesses will be far worse than for homeowners, warns Make It Cheaper. Recently some business bill payers have seen their fixed price tariffs doubling as they come up for renewal at the end of the contract. Dodie Stark, a retail outlet in Haywards Heath, for example, has just received a renewal quotation from its supplier which increases its electricity unit price from 8p to 16p per kilowatt.
Most of the Big 6 gas and electricity suppliers (nPower most recently) have announced price rises in 2011 of as much as 19% for householders and it is widely expected that the rest will follow suit. Prices for businesses, however, are not published in the same way so anxious business owners must, instead, wait for contract renewal letters from their suppliers to discover how much their proposed new tariffs will be.
Jonathan Elliott, managing director of Make It Cheaper, commented: “Because the energy suppliers buy their electricity and gas in advance, they are having to hedge for a minimum of 12 months fixed term. But you also need to add into the equation that the energy companies are competing for hard to win new customers with low offers that are rarely extended to customers who have been with them a year or more. This situation is fine as long as you know how and when to switch but most people don’t. Only 7% of businesses switched last year compared to around 18% of householders.”
Elliott offers the following advice to businesses comparing energy prices and considering switching: “The key thing is to look out for your renewal letter. This is an annual communication from your supplier that spells out when your renewal window opens and how much more they plan to charge you for the next 12 months if you do nothing before it closes. If the suggested renewal price is anywhere near 10 pence per kilowatt or above then you’d be wise to shop around. And, with prices rising as fast as they are, do so now because the price you’ll be quoted when you shop around may not be available at the end of your window.”
A typical renewal window for a business energy contract will be between 120-30 days before the contract end date, and it is only during this period that a business can apply to switch or look to negotiate a better deal. Businesses worried that they may have missed their renewal letter can find out when their renewal window opens by calling the ELN SME Energy Cost Cutting Service on 0800 158 5265.
Make It Cheaper 1st Floor 111 Westminster Bridge Road London SE1 7UE