Gas and electricity are among the biggest expenditures for any business. Many energy users are paying far higher prices than necessary, as they do not have the time or expertise to fully understand the market and the different cost-cutting options available. Barrie Jacobs explains how best to navigate the process.

Against a background of financial cuts, it is sensible for businesses to evaluate their contractual obligations and review ways to monitor energy efficiency. With the amount of energy used in business, along with the recent fluctuations in the energy price, it is more important than ever for businesses to ensure they are on the ‘best deal’.

Every month approximately 90,000 business energy contracts expire. Many firms fail to realise this and do not send suppliers the necessary written termination notice, as per the terms and conditions of their existing contract. If suppliers receive no notification they can automatically renew the contract on a rollover basis, in most cases on a noticeably higher rate.

Surveys published in the press suggest 84 per cent of small businesses are unhappy with their current supplier, but fewer than 14 per cent knew when their contract is due to end, now is time to investigate your contractual situation.

Smart metering

The vast majority of disputes between customers and suppliers are over-estimated reads that lead to inaccurate billing. Customers are often under-billed for a period, and eventually receive a large bill, which can put financial strain on a business.

Smart meter technology was first introduced in the UK in 2008. It records consumption in intervals of an hour or less using technology similar to the mobile phone network, communicating data back to the supplier, thereby ensuring that bills are calculated for the exact units used. Users can view all consumption data online, enabling them to view their usage patterns and giving them the opportunity to identify whether they are on the correct meter and if they are using their electricity economically. With this technology, users can cut 15 per cent from their electricity bill, while becoming more energy efficient.

Consulting outside advice

Navigating energy contracts and technology can be daunting and time consuming. Consulting a specialist broker such as LSI might be a useful step forward. LSI helps businesses switch suppliers when their contract renews to make sure they are receiving the best possible credit terms as well as the best rates for their energy. LSI finds suppliers that offer the payment terms suitable for each business, rather than the payment terms desired by energy suppliers. LSI also provides advice on the rights and obligations of businesses when suppliers try to enforce contract clauses demanding security deposits and large upfront payments and offer guidance on energy efficiency to further reduce electricity and gas bills.

LSI and Vital Venues work together to bring you cheaper energy- learn more

For a FREE assessment of your current utility contracts please contact Barrie Jacobs, SME Sales Manager.


T: 0800 019 95 95


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