The range in commercial energy prices in the UK is such that the cheapest business electricity rates are a third of the price of the most expensive. The difference between ‘new customer’ and ‘repeat business’ electricity rates, for example, can mean a savings of thousands of pounds, even to the smallest of companies. Consequently, there are two types of business that switch regularly: those with a high consumption of energy in relation to their size and those on tight budgets that simply can’t afford not to.
Broadly speaking there are about 1.8 million business electricity customers on the UK mainland that are classed as neither residential nor heavy industrial. Of theses, Hotels and B& Bs are the most cost conscious when it comes to their business energy bills. In fact, providers of accommodation are three and a half times more likely than the average business to switch supplier, having topped a list of 100,000 companies that have shopped around throughout 2009 to compare business electricity and/or business gas prices. The list, worked out proportionately for each business type, also ranks Pubs, Bars & Restaurants in the top three, just after Wholesale premises. Other savvy business types include: Manufacturers, Post Offices, Printers and Membership/Sports organisations. The latter group includes clubs such as British Legions, Scout Groups, Community Centres and other not for profit organisations – all treated as business premises in the eyes of the energy suppliers.
Further evidence suggests that businesses that have recently changed hands are also among the most common types to switch. A ‘change of tenancy’ usually means the energy supplier to the previous occupier will charge the new business out of contract, or ‘deemed’, rates which are significantly higher than average.
Here’s how one typical hospitality business has managed to save £3,000 this year following its discovery that it was being charged out of contract for its business electricity and business gas.
‘The George’ is a traditional coaching inn set in the heart of the village of Silsoe, Bedfordshire, close to places of interest such as Woburn and convenient for Luton Airport. Accommodation is available in the form of six letting rooms on a bed and breakfast basis. Owner Sue Goldsmith s New Year Resolution was to do something about lowering her business energy bills which had crept up to a total of £10,000 for electricity and gas combined. Sue looked for help on the internet and we were her first port of call. When she rang we explained that she was actually being charged out of contact by both her gas and electricity suppliers and that these rates 16.5p/unit for business electricity and 3.5p/unit for business gas were much higher than rates normally available. Our suggestion was to take one year in contract rates of 9.8p/unit for electricity and 2.5p/unit for gas. Because Sue was not in an existing contract with her suppliers she was able to immediately accept, asking us to arrange for the cheaper energy contracts to go live and the paperwork to be sent out to her. Based on its energy consumption this year, The George has saved at least £2,000 on electricity and £1,000 on gas, bringing the annual energy bill down to a much more manageable £7,000.
In another example, here’s how one savvy shop owner managed to stop her business electricity contract from being automatically ‘rolled over’ onto more expensive rates.
Situated on the South Devon Coast, Bigbury Post Office & Stores operates all year round and, being the only shop in the village, is very much the centre of the community both in and out of the hectic holiday season. As well as newspapers and magazines, it offers groceries, fruit & veg, dairy, off licence, sweets and of course plenty of Devon ice cream.
With always on chillers, heating and lighting, the shop s electricity meter is dizzy enough to clock up in the region of 27,000 units a year. At 8p/unit and an annual standing charge of £230, this has been costing proprietor, Carolyn Hunt, about £2,400 for the past three years. However as her contract was due for renewal, she received a letter from her business electricity supplier informing her of the rates were about to double (to take into account of the massive energy price rises that had taken place since the start of her previous contract in 2006). This sent alarm bells ringing, prompting Carolyn to reply with a termination letter and shop around for the cheapest electric rates she could find. Selecting several price comparison services via the internet she was pleasantly surprised at how easy it was to obtain cheaper quotes over the phone.
We came up with the best deal at 10p/unit and £50 a year standing charge as a new customer with a different supplier. Although this is slightly more than she is used to paying, it is significantly lower than the renewal price her current supplier was suggesting. She instructed us to switch suppliers on her behalf which we did without charge. As a result, Bigbury Post Office & Stores is safe in the knowledge that it is unlikely to be paying any more than £2,900 a year for its electricity over the next three years.
Author Resource:
Make It Cheaper, the UK's leading independent price comparison and switching service for business electricity & business gas. Contacts For interviews, images or comments contact: Jonathan Elliott Marketing Manager Email: http://www.makeitcheaper.com 0800 970 0225
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