Closed Factories Reduce Blackout Risk

Lord Mandelson, Secretary of State for Business, Enterprise and Regulatory Reform, told the audience of 1,200 at last night’s National Business Awards that the hole created in the UK economy by financial services industry could and should be replaced by a revival in the engineering sector. However, manufacturing activity has fallen for the sixth month in a row with output expectations now the weakest they’ve been for nearly three decades (CBI figures). All this means the closure of dozens of factories this winter as production is scaled back to cut costs and meet lower demand.

One organisation breathing a sigh of relief to this news is National Grid whose reaction was to point out that less demand for business electricity will minimise the threat of disruptions to Britain's power supplies. The operator of the UK's power network published new figures indicating normal peak demand will be between 500-1000 megawatts lower than previously forecast this winter meaning we are far less likely to face power supply shortfalls this winter because of a lack of spare generating capacity and any unexpectedly severe weather.

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Energy Probe Prods Suppliers

With just a couple of weeks until the end of the second consultation period ends, Ofgem has threatened energy suppliers with a further investigation from the fearsome Competition Commission if they fail to give a satisfactory response to its report on competition in the retail energy market: The Energy Supply Probe.

A link to the full 200 page report can be found on the homepage of the Ofgem website and is intended to pave the way for changes in the way that suppliers can and can’t treat customers, including business electricity customers. The recommendations from Ofgem - listed here – includes a code of practice and clearer explanations of the contract terms that often trick SMEs into paying more for their energy than they bargained for.
 

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Energy Cowboys

The House of Commons public accounts committee has found that the removal of price controls from gas and electricity supply has failed to benefit consumers. This, as reported in today’s Daily Telegraph, has led to power companies profiteering at the expense of consumers because of a confusing range of deals. MP, Richard Bacon, likened the energy market to "…a 'Wild West' town in need of a better sheriff".

The committee said the current sheriff – Ofgem - has failed to punish energy companies for mis-selling, a concern first raised in 2000 and “needs to do much better, especially in protecting vulnerable consumers, or it should hand in its badge”.

Committee chairman, Edward Leigh, said: "Consumers simply do not have the kind of good quality information needed to get the best deals on price and service. If people are inadvertently switching to more expensive deals then … Ofgem's approach is not working."

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Don't Let Energy Bills Scupper Your Supper

Research from E4B earlier in the year suggested that business energy has become the most expensive overhead after staff - outweighing professional advice, travel, entertaining and even rent. New research now reckons that the credit crunch is forcing a considerable number of companies to cancel their Christmas parties. However, one reason to go ahead with the celebration is that, providing certain criteria are met, it can be exempt from tax. Here are HM Revenue & Customs’ rules for Christmas parties to qualify for the tax break:

• Parties must be open to all employees
• They may have one guest each 
• A maximum of £150 per person can be spent – including guests
• This covers entertainment, accommodation, venue, transport and VAT
• If, however, £150 is exceeded then the full amount spent, not just the excess over £150, will be subject to income tax and NIC payments.

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SSE Prices Down in 09

Today's good news for business energy consumers is that the first of the Big 6 (Scottish & Southern) has finally indicated that it will respond to falling wholesale prices by cutting rates… the bad news is that we’ll have to wait until next year. This comes on the same day as Gazprom boss Alexei Miller said on the AFP newswire: "It's absolutely clear that prices for gas from the start of 2009 for European consumers will go down."

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Competition Broken by 'Herd'

Head of Consumer Focus  - Ed Mayo - speaking at the Commons Business Committee has told MPs that the supposedly free market for gas and business electricity is "broken," stopping falls in wholesale energy prices being passed on to consumers.

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CIPS Blackout Concerns

The CIPS (Chartered Institute for Purchase & Supply) Energy Group is reportedly the latest business organisation to write to Ofgem to ask what precautions it is taking to ensure a secure business energy supply this Winter.

Read all of CIPS Blackout Concerns

Winter Blackout Signals

Just six weeks since the National Grid warned of serious shortages of business electricity this Winter should any of Britain’s 38 aging power stations shut down…. Reuters is reporting that the Sizewell nuclear reactor is offline. Apparently this is unconnected to the National Grid having already notified generators of insufficient system margin last Friday.

Read all of Winter Blackout Signals

Oil Price Watchers

Anyone keeping an eye on rollercoasting oil prices will be interested to see a couple of predictions made recently. One, reported today in many of the national press webistes, is from the International Energy Agency and says the oil price will shoot back through $100 a barrel as soon as economic conditions return to normal as older fields dry up - unless a ‘new Saudi Arabia’ is found. The IEA also say that the problem will be magnified as the oil giants pull out of projects as the current low price of oil means costly excavations are no longer viable.

Read all of Oil Price Watchers

'Catastrophic' Insolvency Rate

The Financial Times is reporting that insolvency rates for SMEs could rise by as much as 41% by the end of next year. The insolvency trade body R3 polled its members who have suggested that insolvencies are likely to reach the peak levels last seen in the 1992 recession. The survey noted the 'worrying trends in practices of securitisation of debt'. More than half of the respondents saw a growing number of lenders securing debt against individual homes.

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Wednesday Water Special

Thames Water is proposing a massive new 2.5 billion sewage scheme called the Thames Tunnel, running directly under the Thames River. The government has ordered Thames Water to undertake the work but, says The Guardian, is not financing it. So if it goes ahead, the cost will be added to the region's water bills, and we would essentially have a stealth tax.

Read all of Wednesday Water Special

UK Energy 2x EU Average

The latest research from the OEDC (Organisation for Economic Co-operation and Development) says energy prices in the UK have increased at double the pace as the European Union average. Gas and electricity bills rose 29.7% here in the past year compared with the 15% European average. Consumer Focus said we’re being hit "faster and harder" than those in Europe as energy firms appear to be raising prices 'with impunity'.  

 

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Energy Marshals

An idea being recommended by Dame Ellen MacArthur is appointing an ‘energy marshal’ in each organisation to remind staff to be more aware of their energy waste. She says: “I do it in my company of 50 and it only takes ten minutes a day.”  Her campaign, which is being launched in conjunction with electricity and gas provider E.ON, is aiming to find 10,000 willing energy marshals.


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BizzEnergy Acquisition Raises Concerns

Now the future of BizzEnergy customers has been decided by BG’s acquisition of its customer base, a couple of comments in today’s papers sum it all up. The Times says:  ‘It leaves the UK energy market even less competitive and even more dominated by the so-called Big Six suppliers…. who wasted no time in taking advantage of the insolvency to consolidate their grip on the industry.’ And the Telegraph points out that: ‘The BizzEnergy customers have more breathing space but service advisers say some could face increases of 50pc or more as long-term contracts, struck when prices were lower, come to an end.’

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E4B Exodus in the Regions

The regional press has taken on the plight of former E4B customers with the Eastern Daily Press and the Birmingham Post reporting confusion as a result of transferring from one business electricity supplier to another and the ‘market being distorted by the lack of competition’.

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Another Independent Absorbed by BG

British Gas Business has bought Bizzenergy and its 40,000 business energy customers following reports over the weekend in the Sunday Times and earlier this morning in The Guardian that the company had called in the receivers. 


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Poor Credit Raises Prices

Energy price swings and company creditworthiness mean that some business energy suppliers have stopped quoting prices to customers.  As reported in The Times “At least one supplier — E.ON — has effectively stopped bidding for new industrial customers altogether. Several others, including British Energy and BizzEnergy, are entertaining contract renewals only from existing clients. The situation has left some of the biggest companies struggling.”


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ElecTRICK-OR-TREAT

Eye’s peeled this weekend to see if more revelations appear from the Mail on Sunday’s investigation into the tricks that energy companies play on SMEs to tie them into expensive business electricity contracts. We’re seeing renewal rates hitting all time highs of 25 pence per unit, which is more than twice the going rate.

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Rolling Contract Investigation

The Financial Mail has published findings from its investigation into ‘rolling' contracts used by big energy companies to trick businesses into paying expensive rates.

It says more firms are being tied into these expensive business electricity contracts because they fail to realise their current deal is coming to an end. The investigation reveals that 'big suppliers obscure renewal dates to push them on to long-term deals if they fail to give 90 days written notice before the contract ends'. By automatically rolling them into another contract, the energy companies are removing the chance to secure a better deal elsewhere.


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Energy Price Yo-Yo

Gordon Brown has again urged energy firms to reduce bills to reflect the sharp fall in global oil prices in recent weeks. However any reduction in business energy prices could well be short-lived… According to participants at the Asia Pacific Petroleum Conference in Singapore, oil prices could rise to $150 a barrel or higher in the next five years as the global credit crunch will cut financing for the development of new supplies.

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E4B Latest

The latest update on the E4B situation from The Daily Telegraph ‘Small firms scramble for new power supplier’ which reports that Make It Cheaper has negotiated better rates and has been working non-stop since last week to help thousands of ex-E4B customers find the best new business electricity deal for them. If you were with E4B and would like free and independent advice on what to do next, call our hotline on 0800 970 0225.

Read all of E4B Latest

E4B Produces Silver Lining

A positive result is emerging from last week’s collapse of independent business electricity supplier, E4B. Such is the scramble among the ‘Big 6’ to win the business of the 40,000 ex-E4B customers now looking for a new supplier that a price war has started. Rates available via brokers such as Make It Cheaper are now tumbling lower than they were originally paying to E4B in the first place - that dispite the wholesale price going up throughout the year. If these competitive rates are extended to cover all ‘new business’ customers, not just ex-E4B, then the argument to switch supplier stacks up even more.  

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Weekend Helpline for E4B Customers 0800 970 0225

Due to the volume of enquiries we’re receiving as result of E4B going into administration, our helpline will be open this weekend from 9am to 4pm on Saturday and Sunday. Anyone wishing to discuss their business electricity supply options/costs are welcome to call for free on 0800 970 0225 and speak to an advisor. Alternatively you can send an email to E4Bcustomers@makeitcheaper.com with your name, phone number and an approximate time you’d like us call you back.

Other details that would help us and speed up your enquiry include: your business name, company registration number, your annual spend or consumption and your supply number (shown on bill, beginning with an ‘S’).

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The Heat Is On

British Summer Time officially ends this weekend (so don’t forget to put your clocks back an hour). Evenings will get darker and temperatures colder which means your business electricity and gas consumption is about to go up in a big way. Heating and lighting dominate business energy use, accounting for 75% of all energy in non-domestic buildings according to the Royal Institute of Chartered Surveyors.

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E4B Update:- BG Appointed

E4B Customer Hotline - 0800 970 0225 / E4BCustomers@makeitcheaper.com

All 40,000 customers of failed electricity supplier, Electricity4Business (E4B), are facing the prospect of finding a new energy supplier or paying emergency rates to Ofgem’s ‘supplier of last resort’: British Gas Business. These emergency – or ‘deemed’ - rates can be up to three times the cheapest price available to other business electricity users, which in itself has doubled in the past year.

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E4B in Administration

E4B Customer Hotline 0800 970 0225 / E4BCustomers@makeitcheaper.com

What’s happened?
Electricity4Business (E4B) has gone into administration and, as such, will have its supplier licence revoked by Ofgem.

Why?
Smaller energy suppliers are being caught out by rising wholesale prices because of the volume of fixed price contracts they’ve agreed in the past with customers.

Has this happened before?
Yes, five suppliers failed in similar circumstances in 2006 including: Zest4 Electricity, Utility Link, Eledor, Reepham and the Team Group.

So who is E4B and how many customers did it have?
It’s an independent business electricity retail company supplying 40,000 small and medium sized businesses in the UK.

Will its customers’ be cut off?
No, Ofgem guarantees uninterrupted supply under its ‘supplier of last resort’ (SoLR) policy and will appoint another company to continue the supply and billing.

How will customers know who their SoLR is?
The newly appointed supplier will write to let them know they are taking over the supply and billing.

Will their bills go up?
Ofgem does not consider that customers should be protected from any increase in prices as a result of their previous supplier failing. The SoLR must give five days’ notice of any increase in charges and is very likely opt for ‘deemed’ contract rates to compensate for administration costs and additional energy purchasing arrangements.

What are Deemed Rates and how long will E4B’s ex-customers be charged them?
Deemed rates can be charged by the SoLR for the period from appointment until customers have switched on to a replacement contract with the SoLR or another supplier of their choice, or the six month period of SoLR appointment expires, whichever is earlier.

How much higher than normal are Deemed Rates?
They can be three to four times as much as normal. Npower, who for example took on the Eledor customer base in 2006, charged one of its business customers an SoLR rate of 19p/kwh for supplying its electricity, plus a standing charge of £99 month. At the time, the same customer could have been on competitive rates of 6.01p/kwh with a £4.86 per month standing charge.

Can you choose who your SoLR is?
No but they can - and should - switch supplier to one that suits them as soon as the SoLR has written announce its appointment. Ofgem is likely to impose a switching window of 7-28 days from the appointment of the SoLR.

What do you need to switch?
Call a business energy broker with the meter point number - or MPAN - to hand (this number begins with an 'S' and should appear on all electricity bills) to seek advice about switching from the SoLR to the supplier offering the most competitive rates in the market. Make It Cheaper (0800 970 0225), for example, offers free and impartial advice across all suppliers in the market.

Is there anything that E4B customers should be doing in the meantime?
Take a meter reading, cancel direct debit payments and send an email to register for free and independent help: E4Bcustomers@makeitcheaper.com

 

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BoE Blames Recession on Energy Bills

Mervyn King, Governor of the Bank of England, has said for the first time that the UK is entering a recession. High on his list of things to pin it (along with food prices) is the rise in energy bills. Steps therefore to minimize the length and depth of this recession should include attempts to reduce energy bills. This is where Make It Cheaper can help. 
 

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Gas Opec to be Formed

Russia, Qatar and Iran - which hold the world’s largest reserves of natural gas - are creating an organisation of gas exporting countries: a gas equivalent of Opec.

 

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Last Night's Double Bill

TV viewers yesterday were treated to back-to-back programmes about energy prices. Channel 4’s Dispatches ‘The truth about your energy bill’ was preceded by a similar piece on BBC1’s Watchdog. One man who was interviewed on both was Dr Garry Felgate, CEO of The Energy Retail Association. His most interesting comment came as Nicky Cambell pressed him on whether and when retailers intend to reduce bills to mirror falling oil & gas prices. His response was to say that ‘competitive rates will become available’ as the wholesale price of gas drops. One interpretation of this is that business electricity bills won’t automatically reduce just by sitting back and waiting – rather you will have to proactively seek out the best prices and switch to take advantage of them.

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Charter Lacks Power

The Daily Mail has offered the new Business Secretary, Peter Mandelson, its ‘charter for change’. This, produced with the help of leading economic experts, is aimed at getting a fairer deal for small businesses which are ‘going bust daily because of extortionate bank charges, crippling taxes and stifling red tape.’

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PM: Pass On Price Cuts

Here, here! Gordon Brown must have liked the sound of approval that Energy Minister Mike O’Brien received for urging a drop in fuel prices as he has echoed it himself. O’Brien himself has gone one further by telling energy suppliers: “We want to see that feed through into gas and electricity prices. If there are benefits we want to see them feed through not just to individuals but to the economy as a whole, to give it a boost.”  The Express optimistically predicts that bills will come down by the New Year.

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New Minister Encourages Switching

This Winter’s forward gas prices may be the highest ever – a bad sign for business electricity and gas prices. But there is some good news: oil has almost halved in price since July. It won’t come as a huge surprise to learn however that companies are failing to pass the cuts on to customers.  This has stirred Britain's new Minister of State for Energy - Mike O'Brien - to  encourage consumers to "punish" the worst laggards by buying elsewhere.

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Savings Calculated

We’re now calculating the savings we make for our new customers on a daily basis. Yesterday we saved them £277,660 on business electricity renewal prices alone. That’s an average of £2,700 over the contract term of the 100  or so customers we successfully switched. Multiply that over a year and we’re responsible for putting more than £70 million profit back into our customers businesses.

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The Blame Game

As inflation hits 5.2% thanks to energy bills, Ross Clark in Real Business magazine argues that soaring business energy prices have more to do with the government than suppliers.

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4 Times the Price

Soaring wholesale energy prices – driven by fears that our ageing power stations will not cope with winter demand – means British companies will have to pay four times more than rivals in France their business electricity.

The winter price for electricity is currently £130 per megawatt hour here and just £31 in France, according to figures released by Spectron, the supplier of energy market data.

Read all of 4 Times the Price

Tesco Fuels the Fire

Tesco has described Ofgem’s report this week on energy prices as “a missed opportunity” for not going far enough with the inquiry into energy markets and hit out at excessively high business electricity and gas prices.
As reported in the Financial Times, Tesco feels that companies are 'paying too much for their energy, and is trying to drive its costs down as it and other retailers compete to cut prices'.

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Don't Fall into This Trap

Now with energywatch disbanded and some time next year before Ofgem’s ‘unfairness remedies’ are taken forward, there has never been a better time for us to highlight the ‘assumptive renewal trap’ that energy companies use to tie SMEs into rip-off rates and prevent them from switching their business electricity and business gas accounts.

Assumptive Renewal Trap

• There are 1.8 Million SME electricity customers…
• Paying prices that are going up faster than at any other time since deregulation a decade ago (40% in 08).
• But 80% of them don’t know their contract renewal date, which is why…
• They only find out about their rates going up when their direct debit increases…
• By which time they’ve already been rolled into a new 1, 2 or 3 year contract by their supplier…
• Which is why a third of switching attempts by SMEs fail (the supplier objects) and so…
• Instead of taking advantage of the lowest rates currently available (12 pence per unit)…
• They end up stuck in a contract on ‘supplier default rates’ of up to 24p/unit.
• For an SME typically using 20,000 units a year, this means paying an extra £2,400 unnecessarily.
• SMEs in this sense include churches, community centres, Scout huts, working men’s clubs etc.
• See examples 
 

How to Avoid The Trap...

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Latest Make It Cheaper Newsletter

Check out Make It Cheaper’s latest newsletter. It includes details of our new free contract checking service which we’ve launched for business electricity & business gas customers to help the huge proportion of would-be switchers that are caught out because they don't know what energy contract they're on.

Read all of Latest Make It Cheaper Newsletter

Ofgem Remedies for SMEs

Ofgem’s full report tells of evidence it’s gathered that suppliers may be using SMEs' lack of knowledge about their business energy terms & conditions to misbehave – particularly in relation to objections and rollover contracts. The important bit of this 200 page report is the following section on how they plan to remedy the situation (subject to consultation)...

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Ofgem poised to help SMEs

Ofgem’s ‘price fixing cartel' probe into energy supply markets has been delivered today with a promise to help SMEs get a fairer deal for their business energy. An extract from its press release says:

‘proposed actions to help the small business market'
Ofgem’s probe uncovered concerns in the small business supply market over unfairness in contract terms. The regulator’s proposed actions include specific measures to guard against sharp practice in this part of the market.

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Advice to Office Movers

Two things are guaranteed to happen to anyone moving into new commercial premises:
1. You will automatically be put on ‘out-of-contract’ rates by the incumbent business energy supplier - which are two to three times as high as normal rates.
2. You will be incessantly bombarded by dishonest energy brokers who buy ‘new company details’ from data houses and pose as ‘Meter Registration Officials’ with the aim of tricking you into a legally-binding verbal contract for up to five years on uncompetitive rates.

Here are two things you can do to prevent this (NB both are free services)...

 

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Gas Price Milestone

Russia (where most of our gas comes from) is now charging over 500 dollars per 1,000 cubic metres of gas it exports, according to Gazprom. "The dynamics of price growth have exceeded Gazprom's expectations” its CEO Alexei Miller said in a statement – meaning it’s even taken them by surprise. It also means more bad news for anyone burdened with paying business energy bills.

Read all of Gas Price Milestone

Lights Go Out At energywatch

Contact details for the new replacement/s for energywatch below. However the Guardian warns that the new group will not deal with all business energy complaints as energywatch did. Instead, it reports, one unit will deal with those in the most vulnerable situations, such as people on the point of being disconnected. Others who have problems will now have to refer their case to the Energy Ombudsman after eight weeks or after they have received a 'deadlock' letter from their supplier. Worringly, energywatch say around a third of the cases it deals with each year will be left sidelined because they are too complicated for Consumer Direct but inappropriate for Consumer Focus or the ombudsman.


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Inflation is Double Trouble for SMEs

The quarterly Business Inflation Index has just hit a record high of 3.4% for small businesses. This is exactly double the 1.7% figure from when the Index started in 2005. The reason…

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Which? Shocked by Customer Service Levels

More evidence, if any were needed, that energy suppliers provide ‘abysmal’ customer service. Which? gives a firm thumbs down to the ‘Big 6’ for “letting customers down and charging them more and more for the privilege.  No other industry fares so badly when it comes to billing their customers correctly, answering their calls promptly and offering value for money.”

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National Grid Warns of Blackouts

National Grid, which is responsbile for distributung all our power, has warned that there is less surplus electricity in the network than had previously been thought. So, if one of the UK's 38 major power stations fell out of action (as often happens) factories would be forced to shut down to save energy, it said in the report in today’s Daily Telegraph. “Britain's ageing power plants have struggled this year, with record numbers falling out of action for emergency repairs.”

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Guardian's Energy Advice to SMEs

An article in today’s Guardian newspaper, appearing in the Enterprise section, has some handy advice for SMEs on managing their business electricity costs.

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Watchdog Boosts Role of Broker

More cries of concern about consumer protection being lost for SMEs with the scrapping of energywatch in favour of 'Consumer Focus'. Tory MP Peter Luff, who chairs the business committee, said: "This was never a good idea, but to abolish energywatch at a time of rapidly rising energy prices is a spectacularly bad idea.”  Even energywatch’s chief executive Allan Asher concedes: “I fear that it's going to be a rather limited service and most of us will be left to fend for ourselves.”

Whilst brokers can never replace the bite of a watchdog, they can – and do – lobby for changes to unjust industry practices. More importantly, they help steer business electricity & gas consumers around the common supplier pitfalls that cause the problems in the first place. Eg If you choose to take advantage of the rates and services provided by Make It Cheaper you can trust that...

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Brokers Offer More Protection

The Times has published a five-step guide for SMEs to boost their chances of staying afloat in troubled times. One piece of advice offered is to call several business energy suppliers direct to compare quotes. Really? How about calling an impartial broker instead and compare all prices in one go? Not only will a broker give free advice and save you a lot of time shopping around but they should significantly reduce your chances of being caught out by the supplier’s small print further down the line. Business energy users are far more exposed than domestic users. The small print can be up to 9,000 words long and regulator, Ofgem, has published a series of key questions that small business electricity customers should ask their supplier about their contract. Just reading the questions gives you an idea of how complex these contracts can be and why so many people become unwittingly stuck on extortionate rates.

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Make It Cheaper Newsletter

Take a look at our newsletter for tips on business cost saving and if you would like to receive it in your inbox regularly, give us your email address here. This form also lets you tell your friends about Make It Cheaper too by sending them an automatic email with your name in the subject line. The text of the email is copied below and rest assured we won't pester them or pass their details on to any third party.

Is there anyone you know who may be paying over the odds for their business energy but unsure of where to turn? Could they benefit from independent price comparisons for business electricity and commercial gas and free, impartial advice on what to do? Remember that ‘businesses’ in the eyes of utility companies include all non-domestic consumers, ie organisations that are often run by volunteers on a tight budget: local sports clubs, scout groups, churches and charities. So whatever cost increases you’re experiencing as a business, the same pain will be being felt by them.

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Restaurant Cut Off

‘Disgraceful’ tale of a restaurant’s busy Friday afternoon's electricity disconnection in the Caterer magazine is a warning to anyone taking over new premises to get a broker on your side – or at least listen to their advice - before tackling the business energy suppliers that you’ve inherited.
 

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Rollover Contract Revolt

The Daily Telegraph questions whether Consumer Focus will take up energywatch’s baton and, in doing so, turns up the volume on its campaign to protect the ‘far too many businesses that still get caught out’ by the small print in business energy contracts.

It specifically warns in today’s edition: “Automatically rolling over existing customers into new one, two or three years contracts if they have not cancelled their existing contract within a specified time is just one of the tricks energy suppliers use to ensure that they lose as few customers as possible.”


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Call for Transparency Among Brokers

The Mail on Sunday has provided a platform for the business energy market and its consumers to voice concerns about rogue brokers being less than transparent about the commission they earn from selling business electricity contracts. Bravo…

 

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Consumer Redress Ends for 375,000 SMEs

Tomorrow (12.9.09) energywatch, the watchdog that handles 30,000 calls a year from businesses about their electricity and gas suppliers, will begin to shut down. It is being absorbed into the Government's new consumer body: Consumer Focus. First to go is its website’s "Ask a Question" facility and, by October 1st, all energywatch’s operations will have ceased.

Its replacement, Consumer Focus, aims to be a more powerful consumer champion with stronger statutory powers…. but only if you are a ‘micro-business’. In December 2007 the Department for Business, Enterprise and Regulatory Reform announced the definition for this to be that a business must spend less than £5,000 a year on energy. Since then various SME representatives have argued the threshold to be too low, not least energywatch who pointed out to Ofgem that, whilst 90% of its business callers had fewer than 10 employees, only 75% fell under the £5,000 threshold.



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Utility Firms Keep Callers Hanging On

1-in-3 electricity, gas and telecoms company customers spend more than 30 minutes on the phone when calling their provider according to the Citizens Advice Bureau. Further, more than one in four (27%) customers who’ve contacted a utility company by phone recently said they were dissatisfied with the way in which their call was handled.

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Serving Time On High Energy Costs

A report out says 5 pubs are going out of business every day due to a combination of higher costs and a squeeze on consumers’ wallets.

Punch Taverns has already estimated its business electricity and gas prices for 2009 are likely to be between 30 per cent and 50 per cent higher than this year, prompting a leading City analyst to downgrade profit forecasts for the sector. London brewer Fuller, Smith & Turner said its gas and electricity prices had risen by £600,000 in the 2008 financial year and it expected these costs to more than double in the 2009 financial year. 

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Business Energy Bills Top Agenda

“As fuel costs rise alarmingly, cutting energy bills is at the top of the agenda for many companies”, reported the Sunday Times yesterday - exactly one year on from an open letter on the topic from energywatch (the watchdog) to Ofgem (the regulator). The watchdog expresses many concerns about the way commercial electricity is sold to its smaller business consumers and the difficulties they have in switching to a cheaper supplier, not least:

“energywatch has significant reservations about how certain non-domestic consumers are treated in the marketplace when they contract for their energy supplies. This is particularly the case for those non-domestic consumers which are small businesses.”

 

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10 Top Tips to Survive Recession

So it’s not if, but when. According to the Organisation for Economic Cooperation and Development (OECD), we’ll be in a recession (definition: two successive quarters of negative growth) by the end of the year. The British Chambers of Commerce says it’ll be within the coming year.  Business survival will depend on how overheads are managed. Here are our 10 top tips for keeping on top and staying on top of utility costs.

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Domestic versus Non-domestic Rates - Part 2

A survey of small businesses by 02 tells of a huge increase in small firms abandoning their offices in favour of working from home. 10% of those surveyed have chosen not to renew an office lease and a further two-thirds are considering giving theirs up over the next 12 months.

Most suppliers (although Scottish Power is a notable exception) offer business rates to companies run from domestic premises – whether limited or sole traders. These tend to be 01 (single rate) & 02 (two rate/economy 7) profile meters and most suppliers are happy to accept the customer’s word that they operate a business, others require proof such as a Yell.com printout but this is a formality.

‘Buyer beware’ however…

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Charities Seething with Injustice

Businesses – in the eyes of utility companies – include just about any non-domestic property including churches, charities, community centres and all sorts of not-for-profit organisations, often run by volunteers on a tight budget. Which is why the new method of charging by the water companies is drawing so much criticism...

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Hair Salons 'Rush' To Make It Cheaper

Case Study: Already with 34 salons across London and the South East and no less than seven British Hairdressing Awards, 'Rush' is now opening new sites at the rate of two a month and has a goal to open 200 over the next five years. Nine months ago Rush contacted Make It Cheaper for help in what had escalated into a complex and time-consuming task - comparing utility prices for each site - particularly as some of its business electricity contracts were on much higher rates than others.

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Bring Back energywatch!

The British Chambers of Commerce is adding its weight to the concerns over the demise of energywatch by calling for a new watchdog to be dedicated to assisting businesses. It says it is ‘totally unacceptable that hard pressed businesses are left so open to exploitation by energy suppliers’ who it accuses of a ‘very apparent lack of transparency and fairness in their dealings with business’. With 32,000 calls to energywatch from businesses seeking help and advice every year, it has a point.

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Dont Pass on Overheads, Challenge Them!

Several surveys out this week claim that SMEs are laying off staff and pushing up prices to counteract the higher overheads everyone is incurring on business electricity, gas and other utilities. 

Wait! There is another way. SMEs are collectively paying £2 billion more than they need to for electricity alone because of their poor choice of contracts. Make It Cheaper has a free contract checking service for people who want to know whether they could be paying less for their business utilities… but either don’t know where to start or don’t have the patience to shop around all the different suppliers. It won’t cost you a penny, it’s impartial, friendly and entirely without obligation. Here’s how it works...

 

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Sign Up To Our Newsletter

If you would like to receive regular news from Make It Cheaper about business utility costs, why not sign up to our newsletter? As an impartial price comparison and switching service it’s our job to find out (and tell you) where the best deals are to be had - not least with the cheapest business electricity prices. 

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How Will The Domestic Rises Affect Your Business?

You may not notice your business energy bills going up immediately in the wake of the latest round of domestic price rises but don’t think that means you’ve miraculously escaped. Far from it. Business tariffs are fixed for a period of between one to five years and reviewed / renewed near the end of the contract. During this renewal period your supplier will write to you with the new fixed rate they propose to charge, taking into account ALL of the rounds of price rises that have been imposed since your last renewal.

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Tariff-fatigue: New Figures from Make It Cheaper

As an impartial price comparison service with a comprehensive grasp of the SME market, it’s our job to know about every single tariff there is going for business electricity and gas. Staggeringly for a market with so little competition, we have counted over 500,000 different tariffs (no typo, that's half a million). Exactly which ones your business is eligible for depends on lots of variables: all those numbers on your bill beginning with an ‘S’, how much energy you use in year, your postcode, business type, credit rating etc etc. This presents a mindboggling minefield for anyone attempting to shop around and compare the cheapest business electricity prices for themselves.

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Cutting Costs Doesn't Have to Mean Jobs

KPMG’s quarterly national business confidence survey shows that 53% of businesses intend to reduce headcount (up from 29% three months ago). However, a survey of SMEs by Carbon Trust also found more employers are looking to save money on energy than redundancies or reducing staff bonuses with 69% either actively cutting energy costs or considering doing so.

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Why Fuel Bills Are Going Up

Insightful article in today's Evening Standard by Robert Lea suggesting a whole range of reasons why energy prices are rising but that none of the suppliers will readily admit to.

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Firms with 'critical' problems up nearly 700%

Almost eight times as many companies are heading towards insolvency than at this point last year, according to a report published by the business restructuring specialist Begbies Traynor, in a further sign of a sharply worsening economic climate. It says that during the second quarter of the year, 4,258 companies faced "critical" problems (businesses with county court judgments of more than £5k against them or winding-up petitions). That compares to just 542 the same time last year. Begbies say about 15% of companies with critical problems will be insolvent within a year.

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Workplace Temperature Guide

The Summer’s finally arrived with weather forecasters predicting temperatures reaching 30ºC by the end of the week. There is no statutory limit to the upper temperature in workplaces but The Chartered Institute for Building Services Engineers suggests a comfortable office temperature range in summer of 22-24ºC.

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Energy crunch bites as fuel bills rise by a third

So there it is in black & white: the news we were all dreading - reported in today’s Times newspaper - prices for gas and electricity are to increase dramatically. They are going up by a third from next month and predicted to rise up to 60% in two years. So, business bill payers, if you do one thing today…

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Breaking News: More Price Rises on the Way

Alarm bells ringing tell us that there’s another round of big price rises for domestic electricity customers being announced imminently (possibly from today). As history dictates, this will lead to a knock-on effect across all tariffs, including commercial electricity, and mean that every business will be automatically hit with much higher rates from their suppliers when its time to renew their contracts.

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Putting the Record Straight

It seems that Make It Cheaper is upsetting a lot of other business energy brokers because of the exclusive rates it’s negotiated with suppliers. In a desperate attempt to win business with their more expensive rates, unscrupulous brokers are prepared to try and misinform those shopping around about rates and contract terms that are, frankly, already over-complicated enough. So for the record...

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BT unveils 1.5bn super-fast broadband plan

Good news from BT for SMEs and those running businesses from home as today it announced it is investing £1.5bn rolling out super-fast broadband to 10m addresses by 2012.

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This Week's Business Energy Surveys

Two separate surveys out this week - both polling opinions from over 1,000 small to medium sized enterprises...

One, from the Federation of Small Businesses, tell us that 57 percent have made complaints to their energy companies: billing problems (46%), difficulty switching supplier (24%), inaccurate meter reading (21%), customer service (9%). Only half felt they had their complaints dealt with satisfactorily.

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Schools: Latest Victim of New Water Charges

Schools are now being charged for water which falls off buildings and drains from the land under a new charging scheme introduced to businesses and public buildings which have a water meter.

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Ofgem's Nine Key Questions

Regulator, Ofgem, has published a series of key questions that small business electricity customers should 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.

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Maxy Minimises Bills

When local businessman, Mr S Kumar, took over the Maxy Superstore, a community convenience store in Croydon, he fully expected to inherit a can of worms sorting out the bills. He already owns a network of four other shops in the area and has fallen foul of the energy suppliers’ Terms & Conditions in the past.

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Gulp! Bills to Make Your Eyes Water

Businesses are seeing their costs jump because of a change in the way water companies calculate their bills. Charges under the new system are for the ‘drained area occupied’, rather than ‘rateable value’.

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Which? Helplines Report

Which? recently listed all those organisations using higher-cost numbers for helplines including: Eon, Npower, Scottish & Southern Energy, Scottish Power, British Gas, Tiscali, TalkTalk, AOL, Orange, Direct Line and more. Tut-tut!

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Don't Get Caught Out By The Small Print

The importance of using a broker to steer you through the process of switching business electricity supplier was underlined in a report about the energy market's inefficiencies in today's Daily Telegraph.

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Killer-Watt switch or be hoodwinked

With a record 10 consecutive months of wholesale energy price rises, you can expect a shock when your supplier next attempts to renew your contract... for which they don’t even need your signature. You can easily avoid this trap by switching supplier and taking advantage of ‘new customer’ rates which are half the price for business electricity and gas.

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Small Business Energy Bills Double

Business electricity and gas customers are seeing their bills double as suppliers react to unprecedented wholesale price.

Annual renewal rates of 24p/kWh (electricity) and 6p/kWh (gas) are not uncommon in the wake of an upward wholesale trend, now heading for a record tenth consecutive month*. This compares to highs of 12p/kWh and 3p/kWh this time last year and means that bills for those businesses coming out of one year contracts are about to double.

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