It’s vital for all businesses to control energy costs, particularly as wholesale gas and electricity prices rise. However, if your business is stuck on a deemed energy contract, you could be paying more than you need to for your business gas and electricity.
Here, British Business Energy offer advice on what deemed contracts are and how your business can avoid expensive deemed rates.
What are deemed contracts?
Deemed contracts are usually entered into when a business moves into new premises and consumes gas or electricity before agreeing a contract with an energy supplier.
If your energy deal comes to end and you haven’t agreed new rates or switched supplier, you will likely be moved to deemed rates.
Are deemed energy contracts expensive?
Deemed energy contracts are much more costly than negotiated tariffs. Micro business could find themselves paying rates 80% higher than a negotiated deals on a deemed energy contract. This means that they will be paying far too much for the gas and electricity they are using.
When can I leave a deemed contract?
The good news for businesses on a deemed contract is that they can switch supplier at any time without a fee. Your energy supplier cannot prevent you from switching for any reason or require you to give notice when you switch.
Your supplier must also take all reasonable steps to provide you with the Principal Terms of your deemed contract including your charges and fees. They will also be required to inform you of other contracts available and how you can get information on these.
What should I do if my business is switched to a deemed contract?
If you’re business is currently on a deemed energy contract, it’s important to switch business energy as soon as possible.
As there is no exit fee to pay to your supplier, you can switch free of charge at any time. This could see your business make real savings on your energy bills.
Starting your switch is easy, simply provide your business postcode and select the type of energy you’d like to compare prices for. You can find the latest business energy quotes here.
How can I avoid being switched to a deemed contract?
Under rules introduced by the energy regulator Ofgem, energy suppliers are now required to provide micro businesses with renewal letters detailing their current prices, renewal prices, and current energy consumption.
If you run a micro business, your supplier is required to provide a renewal letter under rules introduced by the energy regulator Ofgem. This should detail your current prices, your renewal price, and your current energy consumption.
However, energy suppliers are not yet required to provide this information to larger businesses. As a result, it’s vital that your business is aware of your renewal date and when your contract is coming to an end. All of this information should be included in your latest energy bill or in your energy contract.
If you do receive a renewal letter, it’s worth keeping in mind that your renewal prices will rarely be the best rates available. Comparing the latest energy prices allows you to switch to the best deal possible when your current contract comes to an end.
By switching with British Business Energy, you can receive renewal reminders including a range of tariff options from our trusted suppliers. Our goal is to ensure that your business stays on the right business energy tariff, and you’re never left overpaying for your gas and electricity.
What happens if I allow my contract to rollover?
If you simply allow your contract to rollover, you will likely be placed onto an expensive standard tariff by your supplier. These terms can be 50% higher than negotiated contracts and unlike a deemed contract, you may face an exit fee for switching early.
For any business approaching the end of their energy contract, it is vital to compare the latest energy prices to avoid being stuck on expensive rates.
To find out how much you could save by switching, simply complete our quick energy comparison engine.