Medium-sized businesses "forgotten" by suppliers

Medium-sized businesses are “forgotten” by suppliers who cater mainly for major energy users and SMEs, according to new findings. Nearly half of medium-sized businesses – or MSBs – don’t believe […]

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By Vicky Ellis

Medium-sized businesses are “forgotten” by suppliers who cater mainly for major energy users and SMEs, according to new findings.

Nearly half of medium-sized businesses – or MSBs – don’t believe current energy products meet their needs, suggests new research by energy firm npower.

The supplier is launching two new projects which offer a compromise between fixed and flexible energy contracts. It hopes these will appeal to MSBs who might not have the time or expertise to fit their energy buying strategies to their budgets.

Jon Davies, npower’s head of product management and strategy said at the press launch: “We don’t know the appetite… but as far as we can tell, everyone else is offering fixed contracts. We want a piece of that business.

“A key driver of ours is empowering businesses to take better control of their own energy purchasing by retaining budget certainty whilst making more informed buying decisions. Both products help to move the emphasis away from time-led to price-led energy purchasing.”

Effectively an energy buying package, the first scheme which is now on offer is called Direct Budget Management, for customers with an annual volume greater than 10GWh. It sees the supplier take on a role similar to that of an agent.

Crucially though, Mr Davies said npower is not trying to poach customers from energy brokers: “It’s not about stepping into their land but recognising our roles are getting closer together. We’re not going to compete directly.”

The second – as yet untested – scheme launching in a few weeks is called PriceWatch, for business customers with an annual consumption greater than 200MWh.

“It is about npower being the customers eyes”, says Magali Hodgson, optimisation desk manager. The supplier will alert customers when the wholesale cost of energy hits more attractive ‘trigger’ prices, rather than waiting for the renewal date of their contract to think about a good deal on energy.

She told ELN: “The wholesale market traditionally traded for 10MW or more. [Smaller] customers couldn’t access it. Now this market segment wants to access more flexible contracts.”