By Phil Foster
I have always firmly believed in campaigning for greater regulation and transparency for business energy customers, especially when it comes to securing cheaper prices and being treated fairly by suppliers and third party intermediaries (TPIs); businesses that provide advice on electricity and gas use as well as procure and manage energy for businesses.
With Ofgem officially shelving plans to introduce official legislation into the TPI sector last year, SMEs remain vulnerable to a small number of unscrupulous TPIs that have exploited the current system. This includes significant overbilling of their customers, as well as signing them up to tariffs that result in higher levels of commission for the TPI rather than saving money for the client. We firmly believe that a TPI’s first priority is to save their customers the maximum amount possible on their electricity and gas bills, as well as using their in-depth sector knowledge to provide invaluable advice and guidance.
As part of this drive, we have produced an in-depth white paper that aims to clear up some of the myths that surround working with a TPI, while also providing practical advice on what to look out for when seeking to work with a reputable TPI.
When a TPI behaves in a less than honourable manner it casts a shadow over the whole sector, often tarring other reputable providers with the same brush. This is unfair and it creates disengagement in the market; preventing businesses from exploring all the options available to them. This ultimately costs them money in lost savings they could have made had they worked with a trustworthy third party.
This failing to properly engage with the process of signing up for the most cost-effective energy tariffs is a huge problem for many SMEs, who often see it as easier or simpler to simply allow their contract with their current supplier to roll over onto a new contract. Our own research conducted last year highlights the scale of the problem: 30% of SMEs failed to switch energy tariffs over the past five years, meaning they are paying on average 40% more than they could be doing on their utility bills. Across the UK, this adds up to a staggering £2.4 billion in lost savings over the past five years for SMEs, money that otherwise could have been invested in growth and employment. BEIS have acknowledged this issue, with an investigation from the Competition and Markets Authority finding that SMEs and micro-businesses had ‘little awareness of, or interest in, their ability to switch energy provider’.
We don’t just want our customers to trust us, we want businesses to become more informed about the energy switching process and actively seek a cheaper deal. We firmly believe the best way to do this is by using a reputable TPI.
A good TPI will have favourable relationships with all the major suppliers, plus numerous independents, and will negotiate with them on your behalf to secure you the cheapest deal available.
With supply margins expected to be amongst the tightest on record in 2017, it is of paramount importance that businesses act when making sure they are on the best tariff for their electricity and gas. It is set to be a turbulent few months as the UK economy adapts to changing geo-political circumstances, making it vital for businesses to assess their expenditure and streamline costs wherever possible.
Our white paper is available free of charge for all SMEs and can be accessed here
Phil Foster, pictured above, is the Managing Director of Love Energy Savings