The dilemma facing businesses is dire as energy prices rise and utility companies continue to employ unfair tactics to prevent firms switching to cheaper deals
A NEW guide has been launched to help firms combat unfair pricing tactics employed by utility companies, which have seen the energy bills of some businesses double overnight.
The Business Energy Best Practice and Advice Guide, produced by the Energy Advice Line, has been launched following pleas for help from struggling businesses as energy prices spiral and utility companies attempt to lock firms into excessively priced energy contracts.
The guide explains the tactics used by power companies to make it as hard as possible for firms to switch to cheaper business energy deals. It also offers advice on what businesses need to do to avoid being trapped in expensive and onerous energy contracts.
Julian Morgan, managing director of the Energy Advice Line, the UK’s leading independent price comparison and switching service for business, said debate about rocketing energy costs had focussed on households while the plight of businesses was being overlooked.
“The dilemma facing businesses is dire as energy prices rise and utility companies continue to employ unfair tactics to prevent firms switching to cheaper deals,” Mr Morgan said.
“The terms and conditions in business energy contracts are heavily weighted in favour of the supplier. That’s why it’s essential that businesses take control of their energy supplies and not give utility companies the upper hand.
“Our guide will help them to adopt a ‘best practice’ approach to their energy supplies. It sets out clearly and simply what to do and what not to do, so that businesses can stay in control.”
Most firms pay for their business energy on fixed-price contracts lasting 12 months or more, and when the contracts expire, utility companies provide renewal quotes.
Although energy prices for domestic consumers had risen by up to 19% in recent months, Mr Morgan said it was not uncommon for business tariffs to double on renewal, with many business owners shocked to discover they had been transferred to excessive ‘rollover’ rates and were locked in.
Sonia Butler, owner of Butler’s Baguettes in Bournemouth, said she felt like shutting her business earlier this year when she discovered that British Gas had almost doubled her business energy bill overnight. But she was even more shocked to learn that the UK’s biggest energy company had taken over her business energy contract without her authorisation in the first place.
Sonia said that like many business owners she had been focussing on keeping her company afloat in the economic downturn, and did not realise something had gone wrong with her energy arrangements until her bills almost doubled from £335 to £650 per quarter earlier this year.
Sonia had always assumed that her landlord arranged the business gas and business electricity supplies in her building. But when she contacted British Gas, on receipt of the much higher bill, she was told there was a fixed-term business energy contract in place and it was in her business name– a contract that Sonia had not agreed to and knew nothing about. And because she was unaware she even had a contract in place, she missed the expiry date and was automatically moved on to the much more expensive ‘rollover’ price.
Sonia sought the help of the Energy Advice Line to unravel the mess.
After a lengthy investigation, dozens of telephone calls and repeated failed requests for details of Sonia’s ‘contract’, the Energy Advice Line discovered what had happened. In 2008, an employee in the lettings agency where Sonia paid her rent had verbally agreed for her supply to switch from Southern Electric to British Gas, even though the employee was not authorised to do so. Despite this, British Gas went ahead and took over Sonia’s energy supply without her knowledge or approval.
Following the Energy Advice Line’s intervention, British Gas finally backed down this week and agreed to cancel Sonia’s energy contract. The Energy Advice Line has also arranged to switch Sonia to a new supplier, where she will save more than £100 each month on her energy bills.
“Although I’ve asked British Gas repeatedly, they still haven’t given me details of my so-called contract with them, or a copy of the renewal quote which they claim they sent to me but I didn’t receive. I’m fuming. It’s the injustice of it.”
Sonia is relieved that the Energy Advice Line helped her sort out the problem and find her a better energy deal, but is furious that other businesses may not be so lucky.
“I’m busy running a business and this would have been so difficult to sort out on my own, that’s what’s so unfair,” Sonia said.
“I wouldn’t have ever given up but it would have gone on and on without the help of the Energy Advice Line. That’s what so distressing – other people who don’t have the time, or the energy or the perseverance, would have just given up. It’s really outrageous.”
To obtain a copy of the Business Energy Best Practice and Advice Guide, and for further information about how the Energy Advice Line can help businesses, visit www.energyadviceline.org.uk
Contact: Julian Morgan
Energy Advice Line
0800 915 1800
The Energy Advice Line, an impartial online electricity and business gas price comparison service run by business energy experts for business energy customers, dedicated exclusively to the needs of small and medium-sized businesses in the UK. Realising that small and medium sized business electricity and gas consumers want product choice, EAL has developed an online price comparison and switching service exclusively dedicated to their needs. Visit http://www.energyadviceline.org.uk/ for more details.
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