Piggybank News

May 27, 2008

Commercial energy – the “con” in your contract?

Filed under: Business Utilities — nspresources @ 7:20 pm
Tags: , , , , ,

99% of commercial energy is supplied on 1-3yr contracts. When the contract comes due for renewal the customer is sent a letter from their supplier telling them what the new rates are. Just at the moment, the percentage increase in renewal prices can be huge – 64% in one I saw recently. It is not surprising therefore that a lot of companies are feeling the need to look around for a better deal.

However, there is a catch. The renewal letter also carries words to the effect of “if we don’t hear from you by x/x/x date that you do not want to renew then you are deemed to have agreed to these terms” Generally the customer is given 30 days to respond in writing or they are automatically tied in for a new 1-3yr period and that 30 day period may even pre-date the actual contract end date by some weeks. Unfortunately a lot of SME’s simply don’t realise the importance of their renewal letter and leave it too late to contact their supplier. There is no get out of jail free card with this one – if you don’t make contact by the given date you are stuck! This isn’t really a “con” – it’s stated in the terms and conditions – but it can be a very costly oversight. (for example – I was recently able to quote a smallish company £7200 annual savings just from switching electricity supplier!)

However, help is at hand. One of the newer contenders in commercial energy supply, UWDC, has taken the unheard of step of supplying commercial energy along similar lines to thier already well established domestic product. No minimum contract period—no automatic tie ins—no renewal letters. For new start ups or smaller SME’s this presents an ideal solution.

UWDC energy for Business

For businesses whose contract is not yet up for renewal the best advice is to diarise your renewal date and shop around for the best deal in plenty of time. It is essential that you respond to the contract renewal letter promptly and include a clear statement of intent to switch supplier. Below are two very simple pro-forma letters which can be used for this purpose.

notice-to-existing-electricity-supplier

notice-to-existing-gas-supplier

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