Earlier this year British Gas blitzed the media with its announcement of a 7% cut in its domestic power prices after falls in the worldwide wholesale price of gas and electricity. On the face of it the reduction was welcome and put pressure on other suppliers to follow suit.
But how charitable was the price cut? Not very, if you're a small business. The latest industry data released by the government shows that average electricity prices for small- and medium-sized companies increased by 15-17% between the third quarter of 2008 and the same period of 2009.
According to the figures from the Department of Energy and Climate Change, average non-domestic gas prices went up by 8% for the smallest businesses.
The trend is worrying the Forum of Private Business (FPB), which says that 84% of its members cited rising utilities costs as a 'major concern'.
"While the big energy companies always pass on wholesale price increases in full the same cannot be said when prices fall," says FPB finance director Nick Palin. "This is the tip of the iceberg. By refusing to play fair some utilities giants have forced costs on small businesses they can ill afford."
David Mayne, energy analyst at the business analysis group Datamonitor, also lays the blame at the feet of under-motivated consumers. "Those that do switch gain significantly from the various opportunities available in the marketplace, but apathy seems to be the most common stance taken by most. In the face of a customer base that can switch but chooses not to, the incentive for suppliers to fiercely compete and cut prices further is dramatically reduced."
If the thought of battling the suppliers alone terrifies you, consider getting some expert help. FPB recommends the free service provided by its advisor Utility Options, a utilities consultancy which monitors when deals are up for renewal and negotiates the detail of contracts and service agreements. As a contract nears its end, the company will give the appropriate notice, and shop around on your behalf to secure the best price from the available suppliers.
But how charitable was the price cut? Not very, if you're a small business. The latest industry data released by the government shows that average electricity prices for small- and medium-sized companies increased by 15-17% between the third quarter of 2008 and the same period of 2009.
According to the figures from the Department of Energy and Climate Change, average non-domestic gas prices went up by 8% for the smallest businesses.
The trend is worrying the Forum of Private Business (FPB), which says that 84% of its members cited rising utilities costs as a 'major concern'.
"While the big energy companies always pass on wholesale price increases in full the same cannot be said when prices fall," says FPB finance director Nick Palin. "This is the tip of the iceberg. By refusing to play fair some utilities giants have forced costs on small businesses they can ill afford."
What you can do:
Dig out your gas and electricity contracts and check when they're due to end and when the notice period begins Write both dates in your diary. Once the notice period begins, put your notice in writing you may want to send it recorded delivery Contact other suppliers direct, or use a comparison service Put the notice of your new contract's termination date in next year's diary
And while the recently introduced market reforms designed to protect micro-businesses from the worst excesses of suppliers' questionable tactics are a step forward, Palin believes it's the put-upon customers themselves who need to act. "Ofgem's new small business protections are welcome and should help to improve competition and choice in the market, but the best advice to any business owner struggling to control costs is to shop around and switch suppliers for the best deal possible," he says.Dig out your gas and electricity contracts and check when they're due to end and when the notice period begins Write both dates in your diary. Once the notice period begins, put your notice in writing you may want to send it recorded delivery Contact other suppliers direct, or use a comparison service Put the notice of your new contract's termination date in next year's diary
David Mayne, energy analyst at the business analysis group Datamonitor, also lays the blame at the feet of under-motivated consumers. "Those that do switch gain significantly from the various opportunities available in the marketplace, but apathy seems to be the most common stance taken by most. In the face of a customer base that can switch but chooses not to, the incentive for suppliers to fiercely compete and cut prices further is dramatically reduced."
If the thought of battling the suppliers alone terrifies you, consider getting some expert help. FPB recommends the free service provided by its advisor Utility Options, a utilities consultancy which monitors when deals are up for renewal and negotiates the detail of contracts and service agreements. As a contract nears its end, the company will give the appropriate notice, and shop around on your behalf to secure the best price from the available suppliers.
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