The energy supply market is a maze, but with the right guide you can take control of your bills, says Jac Roper
It comes dressed up in packages. You can't see or (hopefully) feel the contents, and although there are over a dozen major suppliers, it's exactly the same stuff they are supplying. No wonder most retailers can't get their brain around buying gas and electricity efficiently.
The first thing you need to know is that the energy market for commercial premises is very different to the domestic one. For the average c-store, refrigeration accounts for about half the cost of the total electricity bill so it would be worth a detour to the Carbon Trust's website for advice on things like energy-saving light bulbs to setting the air conditioning correctly.
With all the energy companies selling the same commodity, it's bound to be a cut-throat market, so the marketing tactics are often rough and tough. They don't take prisoners. Once they've got you on a contract they like to keep you there.
"The biggest issue for the market overall is that all energy companies have you on evergreen contracts," says Jonathan Elliott, director of energyhelpline.com and sister companies firsthelpline.com and makeitcheaper.com.
And it is at the point that your contract 'ends' that the energy company puts you on a rollover and then puts its prices up. There's nothing you can do at this point.
Energyhelpline negotiates contracts for some 200-300 businesses a week, 40% of which have contacted the group in the first place with complaints about sudden price increases. The company reckons it can save small businesses up to 50% off the price they are currently paying.
One of its standard pieces of advice is to change supplier every year. "A new supplier always gives you a better deal," says Elliott. However, he adds that with prices currently coming down, his company is on the verge of advising retailers to go on a fixed-price tariff and stay on a contract for a couple of years. "Since last autumn prices have been falling due to the fact that there has been more gas coming from the continent, coupled with milder winters leading to a stockpile."
Gas and electricity are closely aligned due to the way they are processed so if one comes down so does the other. "But another argy-bargy in the Middle East, acts of God or a cold snap could send prices straight back up," Elliott adds.
Energyhelpline is one of more than 300 accredited consultants on the Energy
Institute's register which act as brokers in the market, finding best deals through arrangements they have with the major suppliers.
Its services are free to retailers. "The supplier should pay the fee and you are entitled to know what that fee is," says Elliott, "which on average would be about £140 per client."
The free help approach doesn't work for everyone. Guardianenergy.co.uk is a paid-for service which helps customers cut their energy costs and reduce their energy consumption, ideally both. The company has 20 years of experience and is unusual in that all its staff are recruited from the energy industry, who therefore bring a wealth of insider knowledge.
Eddie Cumberland, director of Guardianenergy, doesn't recommend retailers go for 'free' services.
He says: "If it's cheap, it's going to be simple. If you think about it, the customer always does pay, either directly or alternatively.
"We prefer to charge directly and we give a guarantee and we offer a dispute service. The cost depends on the number of sites, their size, what they want - whether they want green energy or whatever."
Cumberland admits that most customers won't read the terms and conditions on their contract.
"Everybody wants to get everything onto an A4 sheet and unfortunately it's in something tiny like 4pt type. But even if it's 12pt, people still won't read it."
Independent watchdog Energywatch recovered £6.7m for consumers in compensation and reduced bills between 2005-2006.
Over the same period it resolved 60,075 complaints and dealt with more than 500,000 queries.
It is also involved in a joint campaign with the Federation of Small Businesses, which has a website to help guide businesses in their power struggle, as it were.
The Federation's site offers advice on how to handle calls from energy suppliers' reps; how to change your supplier; the basics about meters and bills; what to do when there are changes to the business; and
information about debt and
disconnection.
Challenge your supplier to improve your deal or lose your custom
Change suppliers regularly - a new client always gets a better deal
Do read the contract
The moment you sign a new contract put in your termination notice for a year hence and put a note in your diary at least two months' before so that you can start shopping around
A good broker will give you the bullet to fire: a template termination letter
C-Store's helpline regularly receives calls from confused-to-outraged retailers faced with unintelligible bills that go up and down like a fiddler's elbow.
Peter Watt - whose surname ironically is a unit of power - runs Ormsgill Post Office at Barrow-in-Furness in Cumbria. He got a bill last November from British Gas. He normally clocks the total, but not the details. This time he noticed that the night-time reading was higher than the day-time one.
After a few calls British Gas finally got back to him and admitted that his unit prices for day-time supply and night-time supply had been switched six years ago in error. The upshot? British Gas sent him an arrears bill for £5,000.
He consulted Energywatch, which informed him that the 'statute of limitations' rule applies for seven years, which meant that British Gas could go back six years and present a legal demand. Energy Watch advised him, basically, to 'grovel' for repayment terms.
And here's another irony. When Peter suggested to British Gas that he might like to terminate his contract, the company said he was on an old-fashioned tariff anyway. They offered a much better one that would be substantially lower (from 18p per unit down to around 9p) for the future.
"There's obviously something wrong here with both the meter and the supplier," says Energyhelpline's Jonathan Elliott. "It's a massive bill and the supplier should offer reasonable payment terms. We tell everyone to read their own meters for several reasons: you can make sure you are not paying grossly over the top; you might find something wrong that you can rectify before it gets worse; and you'll be more energy efficient because you will see what's using most of the energy."
Peter is still negotiating with British Gas over his £5,000 bill.
Energyhelpline
0800 970 2626
www.energyhelpline.com
Guardianenergy
01473 298545
www.guardianenergy.co.uk
Energywatch helpline
08459 060708
www.energywatch.org.uk
Carbon Trust Energy helpline
0800 585794
www.carbontrust.co.uk
It comes dressed up in packages. You can't see or (hopefully) feel the contents, and although there are over a dozen major suppliers, it's exactly the same stuff they are supplying. No wonder most retailers can't get their brain around buying gas and electricity efficiently.
The first thing you need to know is that the energy market for commercial premises is very different to the domestic one. For the average c-store, refrigeration accounts for about half the cost of the total electricity bill so it would be worth a detour to the Carbon Trust's website for advice on things like energy-saving light bulbs to setting the air conditioning correctly.
With all the energy companies selling the same commodity, it's bound to be a cut-throat market, so the marketing tactics are often rough and tough. They don't take prisoners. Once they've got you on a contract they like to keep you there.
"The biggest issue for the market overall is that all energy companies have you on evergreen contracts," says Jonathan Elliott, director of energyhelpline.com and sister companies firsthelpline.com and makeitcheaper.com.
And it is at the point that your contract 'ends' that the energy company puts you on a rollover and then puts its prices up. There's nothing you can do at this point.
Energyhelpline negotiates contracts for some 200-300 businesses a week, 40% of which have contacted the group in the first place with complaints about sudden price increases. The company reckons it can save small businesses up to 50% off the price they are currently paying.
One of its standard pieces of advice is to change supplier every year. "A new supplier always gives you a better deal," says Elliott. However, he adds that with prices currently coming down, his company is on the verge of advising retailers to go on a fixed-price tariff and stay on a contract for a couple of years. "Since last autumn prices have been falling due to the fact that there has been more gas coming from the continent, coupled with milder winters leading to a stockpile."
Gas and electricity are closely aligned due to the way they are processed so if one comes down so does the other. "But another argy-bargy in the Middle East, acts of God or a cold snap could send prices straight back up," Elliott adds.
Energyhelpline is one of more than 300 accredited consultants on the Energy
Institute's register which act as brokers in the market, finding best deals through arrangements they have with the major suppliers.
Its services are free to retailers. "The supplier should pay the fee and you are entitled to know what that fee is," says Elliott, "which on average would be about £140 per client."
The free help approach doesn't work for everyone. Guardianenergy.co.uk is a paid-for service which helps customers cut their energy costs and reduce their energy consumption, ideally both. The company has 20 years of experience and is unusual in that all its staff are recruited from the energy industry, who therefore bring a wealth of insider knowledge.
Eddie Cumberland, director of Guardianenergy, doesn't recommend retailers go for 'free' services.
He says: "If it's cheap, it's going to be simple. If you think about it, the customer always does pay, either directly or alternatively.
"We prefer to charge directly and we give a guarantee and we offer a dispute service. The cost depends on the number of sites, their size, what they want - whether they want green energy or whatever."
Cumberland admits that most customers won't read the terms and conditions on their contract.
"Everybody wants to get everything onto an A4 sheet and unfortunately it's in something tiny like 4pt type. But even if it's 12pt, people still won't read it."
The watchdog bites
Independent watchdog Energywatch recovered £6.7m for consumers in compensation and reduced bills between 2005-2006.
Over the same period it resolved 60,075 complaints and dealt with more than 500,000 queries.
It is also involved in a joint campaign with the Federation of Small Businesses, which has a website to help guide businesses in their power struggle, as it were.
The Federation's site offers advice on how to handle calls from energy suppliers' reps; how to change your supplier; the basics about meters and bills; what to do when there are changes to the business; and
information about debt and
disconnection.
Power games
Challenge your supplier to improve your deal or lose your custom
Change suppliers regularly - a new client always gets a better deal
Do read the contract
The moment you sign a new contract put in your termination notice for a year hence and put a note in your diary at least two months' before so that you can start shopping around
A good broker will give you the bullet to fire: a template termination letter
Watt's the right rate?
C-Store's helpline regularly receives calls from confused-to-outraged retailers faced with unintelligible bills that go up and down like a fiddler's elbow.
Peter Watt - whose surname ironically is a unit of power - runs Ormsgill Post Office at Barrow-in-Furness in Cumbria. He got a bill last November from British Gas. He normally clocks the total, but not the details. This time he noticed that the night-time reading was higher than the day-time one.
After a few calls British Gas finally got back to him and admitted that his unit prices for day-time supply and night-time supply had been switched six years ago in error. The upshot? British Gas sent him an arrears bill for £5,000.
He consulted Energywatch, which informed him that the 'statute of limitations' rule applies for seven years, which meant that British Gas could go back six years and present a legal demand. Energy Watch advised him, basically, to 'grovel' for repayment terms.
And here's another irony. When Peter suggested to British Gas that he might like to terminate his contract, the company said he was on an old-fashioned tariff anyway. They offered a much better one that would be substantially lower (from 18p per unit down to around 9p) for the future.
"There's obviously something wrong here with both the meter and the supplier," says Energyhelpline's Jonathan Elliott. "It's a massive bill and the supplier should offer reasonable payment terms. We tell everyone to read their own meters for several reasons: you can make sure you are not paying grossly over the top; you might find something wrong that you can rectify before it gets worse; and you'll be more energy efficient because you will see what's using most of the energy."
Peter is still negotiating with British Gas over his £5,000 bill.
Useful contacts
Energyhelpline
0800 970 2626
www.energyhelpline.com
Guardianenergy
01473 298545
www.guardianenergy.co.uk
Energywatch helpline
08459 060708
www.energywatch.org.uk
Carbon Trust Energy helpline
0800 585794
www.carbontrust.co.uk
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