Business Electricity Suppliers for Commercial Gas and Electric
Most businesses go with the “big 6” when it comes to choosing their electricity supplier but there are other options.
The UK energy market is made up predominantly of six suppliers who control most of the supply for gas and electricity. These providers are of course :
- British Gas
- Scottish Power
- Southern Electric
Since deregulation of the energy market residential customers and business users are free to choose who invoices them for their fuels. It’s a straight forward task although commercial tariffs are slightly different. For most businesses you get :
- Fixed prices for the duration of the contract
- A contract length of at least one year
- Contract options to two and three year in length
- Although the contract has a fixed period you must terminate it during the termination phase
This last point is where problems occur with price fluctuations for business users and is currently unavoidable. We’ll discuss this later but for now….
Additional Energy Suppliers in the UK
Apart from the six mentioned above there are some entrants you may have not heard of before. These are Gazprom (mainly for gas), good energy and green energy (for 100% renewable sources), OPUS energy (been around for a while now) and CNG. These can all supply businesses direct and are worth checking out. When you get online quotes with our service you will also get rates for the new entrants as well.
Avoiding Roll Over Contracts
This is where the business energy sector differs from residential. A new Ofcom ruling means that the energy suppliers need to inform micro businesses of their contracts completing each year. This is unfortunately only for new contracts taken since January 2011 and only for small businesses. For everyone else the standard process remains the same.
For every one year contract taken out it only lasts for exactly one year. Once that year is up and if your business doesn’t do anything the energy companies will extend that for another year (or roll it over). When they roll the contract term over they will likely increase your prices by around 30-40% and there is nothing you can do.
To avoid this price increase you must terminate your contract. Within the terms will be a fixed period of time when you can communicate that you wish to serve notice. And only then can you switch to cheaper rates. You need to do this whether or not you want to stay with your existing provider or not. There’s a handy online termination letter that you can use as a template.
How Prices are Set
Wholesale pricing is the driver of retail pricing as with any industry. For residential customers the energy providers update their tariffs perhaps 2 or 3 times per year. This is when they increase or reduce their standard tariff and then discount from there.
For business users the prices can change each and every day although mostly they change once per week. This is a direct result of changes in the wholesale energy industry and if you get live prices these are generally only valid for that day. As prices are always fixed for the contract term it’s best to wait whilst wholesale prices are falling but quickly sign up if they are rising.