SME owners: beware of massive energy cost increases |
|
|
| Finance | |
| Written by Paul Williams | |
| Friday, 30 January 2009 | |
|
A million SMEs will see their electricity and gas bills jump by as much 100% this year, according to comparison service – Make It Cheaper. The increases will apply to any fixed price business energy contract reaching its end date and being automatically renewed, which occurs at a rate of around 90,000 contracts every month.All of these contracts would have had their prices previously fixed at least a year ago when tariffs were available from 7p/kWh for business electricity (2.5p/kWh for gas). However, renewal tariffs are now typically 14p/kWh (5p/kWh for gas), thanks largely to the sharp increases in wholesale gas prices during 2008. Being renewed automatically - or ‘assumptively’ - means company owners often fail to serve notice in the narrow windows permitted by the energy suppliers and so become unwittingly tied-in to the new tariffs. In a Make It Cheaper survey of 323 businesses, 84% said they are not happy with their current supplier but only 14% know when their existing contract comes to an end. Jonathan Elliott, managing director of Make It Cheaper, explains: “Businesses, particularly small businesses, are either totally oblivious to the renewal trap, or confused by the small print which can run to 9,000 words in tiny font. If you fail to serve the correct notice, you will fall victim to the trap and rule yourself out of the best deals available upon renewal.” Serving notice enables a savvy business to shop around and take advantage of the more competitive ‘new customer’ tariffs, with the best deals currently around 9p/kWh for business electricity (2.8p/kWh for gas). For a typical small business using 20,000kWh a year, that means the difference between paying £1,800 and £2,800 for the same electricity. Anyone who is confused by which rates apply to their business, or need some advice on how to become eligible for the best deals in future, should contact one of the few price comparison services that cater for businesses. Make It Cheaper, for example, offers impartial advice across a range of products for small businesses and does not charge for any of its price comparison / switching services.
Comments (1)
 ... Posted by appliances, 31 January 2009
It's shocking how much they are going up- it doesn't seem to be something that anyone is in control of. I feel trapped as a business owner by the lack of providers and visibility of the pricing and service. This should be regulated more closely, and subsidies made to struggling businesses in poorer areas.
Post a comment
|
|
digg 
del.ico.us 
Newsvine 
Reddit 
Furl 
technorati 
Subscribe to this comment's feed
