Business Electricity and Gas contracts

Business Electricity and Gas contracts

Ofgem makes sure that business Gas and Electricity customers are well protected. Ofgem has conducted a review of business energy practises and implemented a set of new rules and guidelines that will come into effect from 18th January 2010.

However it's important to note that these changes are not taking effect retrospectively; so if you're still in a business gas and electricity contract, the rules do not apply until you renew your existing contract or take out a new one. Your business energy supplier can choose to apply these changes retrospectively, so the safest thing to do is check with them directly.

The review had a number of outcomes that might affect your business. The following list gives an indication of the most significant changes:

Before entering into a new business gas and electricity contract with a supplier, the supplier must give details of the key terms and conditions to the customer and make it clear that the contract is binding.

Within 10 days of the contract being agreed or an existing contract being extended, the customer should receive a written copy of the terms and conditions
Approximately 60 days before the end of a fixed term period, business energy suppliers must send customers a statement of renewal terms.

Upon receipt of the renewal terms, the customer has 30 days to switch or negotiate a new deal.

If customers do nothing within the 30 day notification period, their contract can only be rolled over for a maximum of 12 months.

Customers who don't want to have their contract automatically rolled over at the end of a fixed term period can now stop this from happening by writing to their supplier at any point and requesting to ‘opt out' of the contract.

Will the new rules apply to my business?

The new rules will apply to your business if it fits into any one of the following criteria. Your business must:

Consume less than 200,000 kWh of gas a year, or
Consume less than 55,000 kWh of electricity a year, or

have fewer than ten employees (or full-time equivalent) and an annual turnover or annual balance sheet total not exceeding €2m.

Ofgem refers to any business that fit the criteria as micro-businesses. But don't assume that your business energy supplier will know that you're a micro-business; you must make sure you tell them.

Why is the rules good news for my business?

From January 18th 2010, it is the energy supplier's responsibility to make sure that the terms and conditions of your contract are presented to you clearly. Previously, they may have been difficult to find and translate. This means you should always know where you stand with your business energy supplier and your contract terms.

Also, suppliers have been prevented from automatically rolling customers onto contracts any longer than 12 months. This gives your business protection from getting stuck on a long-term contract that might not be the cheapest or the right contract for your business. This puts you in a much better position to negotiate new contracts and better gas and electricity prices on a more regular basis.

What should I do next?

We've put together a few quick tips to make sure you and your business can take full advantage of the new rules:

Make sure you read any paperwork from your energy supplier thoroughly, and make a note of any important dates that are stated.

Make sure your supplier is aware that you are a micro-business customer.

When you renew or take out your next business energy contract, it may be a good idea to opt out of it. This means that when the term of your contract is over, you won't be automatically rolled over onto another long-term contract. Instead, you'll be placed on a 28 day rolling contract (with potentially higher prices) that you can switch away from at any time. This can be an advantage if you accidentally miss your renewal date, so simply write to your supplier and request to opt out if you want to do this.

Switch to get a better deal today.

Use our business energy form to request a quote or simply call 0845 226 0046 One of our experts will be happy to help you find the best business energy deal right then and there – and we'll handle all the paperwork too.

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28th April, 2010

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