Ensuring your business is getting a good energy deal should be simple. However, with an increasingly complicated industry, and a growing number of suppliers and products available, it can be more of a challenge that it should be. At CUB we have been helping our business customers negotiate energy contracts since 1994. Here are a few helpful points to help you make the process as simple as possible.
1. Gather all the data first!
Your supply number, contract start date and annual energy usage are all essential pieces of information that a supplier will request when offering a supply contract. Your current supplier can provide all of this information and are obliged to do so.
2. Terminate your current agreement
Most suppliers require you to ‘terminate’ your agreement so they don’t roll you into a new agreement without your knowledge. You can do this at any time. I recommend you do this at least 3 months before the contract ends, as some suppliers require 90 days’ notice. Failure to do so will mean you are unable to move away from your current supplier, however you can still renew with them if you wish to do so!
3. Work with a broker
Having worked in the industry for 16 years, I have seen the best and the worst that working with an energy broker has to offer. If you want to streamline the process of obtaining offers and you require some support after the contract is live, then working with a broker to carry the process out can be a great move. But be aware of any contract that you are asked to sign. And I would strongly advise against agreeing to any verbal contract whatsoever. I have seen many brokers who ask customers to sign off ‘authority agreements’ which should only allow them to speak to suppliers on the customer’s behalf, whereas they actually give authority for the broker to sign you up for a supply contract at any time.
4. Choose the right product type
If you want the price fully fixed for the duration of the agreement, ensure you verify that before you sign. There are many contracts available in the market that will allow suppliers to uplift prices mid-contract, or even exclude some of these prices from the quote altogether. I have seen this catch many customers out. You should expect to see a variation of around 5-7% between the best and worst offer available. Remember, if an offer appears too good to be true, it probably is!
5. Consider the contract duration carefully
Typically, 12-month contracts have been the norm, although more recently suppliers are offering longer term agreements. The decision boils down to personal preference, wholesale market prices, and the importance of budget certainty within your organisation.
Energy is vital for any organisation. I am passionate about helping local businesses ensure that the process is as easy as possible, especially during these uncertain times. So please get in touch if you want some help or you want to pick my brains on any of the above.
WORDS Louis Fairfax – CUB (UK) Ltd