Frequently asked questions about business energy bills
A guide to frequently asked questions about business gas and business electricity bills.
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How much do prices differ for businesses?
The prices that suppliers charge for business electricity, business gas and other utilities can vary massively. It's not unusual for one business to be paying three times the rate on their gas and electricity bills as the building next door. Over the past couple of years the highest unit rate for business electricity we have seen, for example, is 32 pence per kilowatt hour and the cheapest electricity is less than seven.
What rates are available to me?
Most energy suppliers require your business to have a minimum credit rating - so the better score you have, the more you can compare energy prices and the cheaper your energy bills will be. Other variables that determine which cheap business electricity prices each business is eligible for include: postcode, business type (sole trader, Ltd etc), sector (retail, manufacturing etc), annual consumption (average for an SME is 25,000 kWh/year), meter profile (the first two digits in a meter reference number range from 00-08 which is a classification related to consumption - most small businesses are 03/04 profile) and payment terms (direct debit being best).
How do I get a quote?
We ask customers to grab recent copies of their energy bills and we can usually quote immediately over the phone based on a search of cheapest energy suppliers in the market. Our system is updated daily with new prices from across the whole market - including all of the 'Big 6' energy suppliers. The quote will detail the savings you can expect from the rates we have offered. If you like the quote, we will arrange the contract between you and the supplier and work to make sure that the transfer happens smoothly. Our opening hours are 9.00am-5.30pm Monday- Friday. Call us free on 0800 970 0077 or fill in an online form for a call back inside our office hours.
Who are the 'Big Six'?
The large energy suppliers that are often referred to as the 'big six' are:
- E.ON (also known as Powergen)
- npower (also known as RWE)
- Scottish & Southern Energy (also know as SSE, incorporating Southern Electric, Scottish Hydro Electric, SWALEC, Atlantic Electric & Gas.)
- EDF Energy (incorporating London Energy, SWEB and Seeboard)
- British Gas Business (incorporating Scottish Gas, Electricity for Business, Bizzenergy, Enron and Electricity Direct)
How do I know that your prices are the best deal for me?
We are 100% independent and work with all energy companies, at least 10 of the telephone companies and each of the mobile networks. In some cases the rates we have from suppliers have been negotiated and are exclusive to our company. We're committed to offering you the lowest price and will always present the best available deals for you, no matter what commission we are being offered by suppliers.
How much does your service cost?
We provide a free service and only receive commission from suppliers once we have successfully set up your new contract with them. Price transparency is key to earning the trust of our customers and, whilst we are unable to publish all our commission rates here, we're happy to let you know on a case-by-case basis. Simply email your customer ID to email@example.com
Why do you need to see a copy of my bill?
Your business electricity or gas bill shows us a unique meter reference number (10 digit 'MPR' for business gas or a 21 digit 'MPAN' for business electricity) which we need to confirm your consumption. It also tells us what kind of meter you have, which supply area you are in and what kind of electricity/gas user you are. It ensures that we quote you the correct energy prices.
What does a meter reference number (MPAN/MPR) look like?
The number will start with an 'S' and is usually printed on a bill. It will look something like the image below:
What if I don't know my contract end date?
If you are unsure whether you are currently in a business energy contract or don't know when it ends, you can find this out from your supplier or authorise us to find this out on your behalf.
What is a rollover contract?
A rollover contract (also known as evergreen, assumptive renewal) is'an agreement between two parties that is automatically renewed (rolled over) after each completion - or maturity period, until cancelled by either party.'Unlike household energy contracts, nearly all gas and electricity for business contracts are evergreen, meaning they automatically renew themselves if you don't terminate them with a letter of notice. Some suppliers renew over 90% of their customers in this way, rolling them over on to new not-so cheap energy prices when often the customer is unaware this is happening.
How do I avoid getting rolled?
Watch this video guide to avoiding a Roll-over:
Each energy supplier has different, and often complex, rules about renewing your business electricity or gas contract with them and they will usually write to you anywhere from 120 days before your contract end-date to inform you of their intention to roll you over. This letter often triggers the opening of your renewal window, putting the onus on you to terminate the contract in writing before the window closes again which - in many cases - can be as little as one or two weeks later. To find out which energy supplier's terms & conditions apply to you, call us on 0800 970 0077.
Does it make any difference if I'm a Not-for-Profit organisation?
As far as utilities companies are concerned, businesses include all not-for-profit/community buildings such as churches, village halls and scouts huts. Still, this doesn't mean they can't compare business energy prices and switch to a better deal. Plus, they may also be eligible for a lower rate of VAT and Climate Change Levy exemption. The VAT on electricity bills and gas bills can often make a significant difference alone.
Are there any other types of contracts to be aware of?
The other most common types of contracts for businesses are '28 Day' and 'Deemed Rates'.
What is a 28-day contract?
Businesses that do not compare energy prices or have not attempted to switch energy suppliers since the market was de-regulated in the 1990s often find themselves on 28 Day supply contracts. The energy prices charged for these contracts can go up and down with the market and are rarely competitive. As such, we would always recommend a business switches on to a competitively-priced 'fixed-rate, fixed-term' contract for a minimum of a year - even with the same supplier. Thankfully, as the name suggests, switching to cheap business electricity can be carried out anytime after giving 28 days notice.
What are deemed (or out-of-contract) rates?
These rates are often the worst and usually apply to businesses that are either new to a premises or have terminated a contract but failed to switch to a new supplier. The good news is that, like 28-day contracts, there is only a maximum of 28 days' notice required to switch onto the cheapest energy rates.
What is half-hourly / 100kW supply?
Half-hourly meters are for energy-intensive businesses whose average peak electricity demand was greater than 100kW in any three months of the previous year. There are two simple ways of checking if you are a half hourly customer: usually a half hourly meter will have a communications link so that meters can be read remotely on a daily basis or if you check your meter reference number on your bill you'll see that it begins 00. We have a specialist team that arranges for the cheapest electricity prices to be sought from suppliers that cater for the half-hourly market.
What if I'm new to a business premises?
If you have just moved into a premises, you will be supplied by the same supplier(s) that the previous tenants used. However, this supplier is likely to be charging you out-of-contract rates which are significantly higher than average. It is important that you arrange new commercial energy contracts for your business as soon as you can after moving in. If you call us with your new address, we can find out who your current supplier is, your meter serial number, compare energy prices and advise you on the best option going forward. Please note that a meter serial number (or 'meter ID') is different to a meter reference number. It is the 9 or 10 digit reference located on the actual meter itself that usually appears in the following format A12B 34567.
Can you install a meter in to a new site?
In this instance, we would advise you to contact your local business energy supplier, have them install a meter at your premises and enter a fixed-price contract with them on the minimum fixed-term contract they have available (usually a year but sometimes as short as nine months). Once you are on supply and have a meter reference number we can search the market for a better deal to switch to once your initial contract expires.
Do I have to do anything to switch supplier?
The key thing is to send a letter of termination to your current electricity supplier to avoid getting rolled by them. Because each supplier has different rules about terminating, by far the easiest way to switch is to let us guide you through the process. However if you prefer to do more of the legwork yourself, we can advise you on what you need to do.
What happens if my supplier objects to my transfer?
Giving sufficient termination notice should prevent your current supplier objecting to you leaving them. However, electricity suppliers may object on the grounds of outstanding debt or existing contract. Our service is geared towards making sure every switch to cheap business electricity suppliers etc happens smoothly and successfully. Given the high number of switching attempts that fail because of suppliers raising objections - legitimate or otherwise - we are very proud of our near 100% contract 'live rate'.
How long will it take to switch supplier?
It takes approximately 4-6 weeks to switch suppliers and we will oversee the whole process on your behalf. Rest assured, your supply cannot be cut-off as a result of switching! We will keep you up to date at each stage and you will have the direct phone number of your advisor to ask any questions. Furthermore, we will also be there for you throughout the term of the contract and, significantly, offer you a renewal reminder to ensure that you always have the freedom to choose the cheapest electricity / gas option at the end date.
What rate of VAT should I be charged for my gas or electricity?
VAT on electricity and gas for business is normally charged at 20% (as of January the 4th 2011.) However, some businesses will meet the 'De minimis' requirements and then would be billed at 5%. This means using an average of no more than 33 kWh per day (1,000 kWh per month) for business electricity and/or less than an average of 5 therms or 145 kWh per day (150 therms or 4,397 kWh per month) for business gas. if a business falls within this criteria they will only attract the 5% VAT on gas and electricity bills.
What is the Climate Change Levy?
The Climate Change Levy (CCL) is a Government tax, introduced in 2001, on the use of energy by businesses, agriculture and the public sector which applies to both gas and electricity prices. The aim of the levy is to encourage industry, commerce and the public sector to improve energy efficiency and reduce greenhouse emissions. Current Electricity CCL is 0.524p per kWh and Gas CCL 0.182p per kWh (updated April 2013).
Do any types of business qualify for 5% VAT and CCL exemption?
- Residential / domestic buildings - including accommodation for children, the armed forces, care homes, rehab centres, hospices, monasteries & nunneries.
- An institution which is the sole or main residence of at least 90% of its residents - except hospitals, prisons or similar institutions, hotels, inns or similar.
- Self catering holiday accommodation, caravans & houseboats.
- Charitable organisations.
All of the above will qualify for a reduced rate of VAT on gas bills and electricity bills.
Ofgem's Key Questions
The energy regulator, Ofgem, has produced a series of key questions that small businesses should routinely ask their supplier about their contract. Just reading the questions (listed below) gives you an idea of how complex these contracts can be and why so many people become unwittingly stuck on extortionate rates. For those in any doubt, call us free on 0800 970 0077 and one of our independent experts will be happy to guide you through the process of saving money.
1. What is the charge per unit?
- Are there any fixed or standing charges?
- For electricity, are there any capacity charges per KVA?
2. Can the price I pay for energy change during the life of the contract?
- If so, how will you tell me about this or any other changes to the contract? Are charges fixed or variable?
- If they are fixed, how long for?
- If they are variable, which parts may vary?
3. What happens at the end of my contract or the fixed-term period if I stay with you as my supplier?
- What can happen at the end of my contract or the fixed-term period if I do not renew my contract?
- What do I need to do if I do not wish to renew my contract?
4. What is the duration of this contract?
- Will you remind me of the contract end date?
- What do I have to do if I want to end the contract early?
5. How and when do I contact my supplier if I want to switch energy supplier?
- In what circumstances can you stop me switching to another energy supplier?
6. Who can I contact to find out more information about my contract, and what information will they need from me to look up these details?
7. Under what circumstances can my energy supply be cut off?
- What notification would I receive and what procedures must be followed?
8. What options are available regarding payment terms?
9. Am I committed to a minimum or maximum volume?
- If so what charges can be incurred in relation to this?