Business Energy Contracts – How To Get A Good Deal?
You can usually only turn to business energy contracts when your existing contract is ending. That is when you should begin looking into switching contracts, else you will be transferred over to your new supplier s expensive out-of-date contract deals. This process of switching suppliers often affects the bottom line of your company. Contract prices often spiral upward when you are not able to keep up with the Jones’. So, to protect the investments of your staff and shareholders, it makes sense to look into a Business Energy Contracts (BEC) option.
A typical option in business energy contracts
is to sign a single long-term deal with a supplier who supplies the majority of your electricity needs. The contract would allow you to either buy electricity every month from that particular supplier or have the option to buy electricity in bulk at set prices, on a monthly or annual basis. The advantage of this approach is that you get certainty with the amount of electricity you purchase. Also, you get to lock in at least some of the prices for the period you require.
Another popular option
is to sign up for several short-term contracts, which are also known as ‘residuals’. A typical arrangement would give your business the freedom to purchase electricity during the specified time period. For example, you could sign up for a contract that guarantees you will have a certain level of energy supply for a month. The disadvantage to this approach is that businesses will usually need to make regular investments in their operations to guarantee that the levels of energy supplied are sufficient. This type of arrangement often results in higher than usual costs for businesses.
With Business Energy Contracts (also known as ‘rollover’ arrangements)
you can turn to suppliers for a temporary, less-than-permanent supply of electricity and gas. If, for example, your business operations require a large amount of electricity, you can make an application for a ‘roll-over’ arrangement to supply the required energy at a fixed price, usually higher than the retail price you would normally pay. You can also find that the charges involved in turning to this source of energy are generally less expensive than the alternative – increasing your businesses’ energy costs. A further advantage of this form of arrangement is that you do not have to commit to buying gas for a specified period of time, potentially allowing you to meet short-term demands for gas, such as when using a gas boiler or generating excess electricity in remote rural areas.
If your current contract ends
and you choose to take advantage of a ‘rollover’ or ‘gas only’ arrangement, you will usually be charged an exit fee by your current supplier. It is advisable, therefore, to consult your manager to confirm that you are not obliged to enter into a new long-term agreement with your current supplier before your current contract expires. This fee can be significant, particularly if you want to switch quickly to a different supplier, as you may need to pay a substantial amount to exit your contract early. However, in some circumstances, the fee may be waived if you agree to pay an exit fee in advance
Some people may prefer to switch their domestic energy tariffs
from one supplier to another regularly, for example, to keep up with the changing prices. In such cases, you can make a switch application to extend the duration of your contract or even to get a renewal of your existing contract earlier than anticipated if you meet the conditions to qualify. Your existing supplier may also offer you attractive business energy contracts to match your current market conditions.