CONSUMER GUIDANCE FOR BUSINESS ENERGY SUPPLY
Useful tips and questions to ask
Before deciding on whether to involve a third party or to approach the market yourself, ask yourself these pertinent questions:
- Do I really have the time required to do a thorough job
- Is energy a large part of my cost base or could I be usefully employed running my core business.
- Do I have the in-depth knowledge to make a cost effective deal
- If the deal goes wrong would I know how to get it back on track
Whether you decide to do-it yourself or use a third party
BEFORE entering into any agreement ask the following:
- What is the charge per unit and what other charges are involved?
- Can the price I pay for energy change during the life of the contract? If so what elements of the price can change, when and how will you tell me?
- What happens at the end of my contract or the fixed-term period if I stay with you as my supplier? What happens if I do not renew with you and what do I need to do if I want to leave you?
- What is the duration of this contract and will you remind me of the end date? What do I have to do if I want to end the contract early?
- How and when do I contact you if I want to switch energy supplier and in what circumstances can you stop me switching to another energy supplier?
- Who can I contact to find out more information about my contract and what information will they need from me to look up these details?
- Under what circumstances can my energy supply be cut off and what notification would I receive and what procedures must be followed?
- What options are available regarding payment terms? Note: If you are paying by DD double check with your supplier that monthly repayments are calculated to cover not only your usage but the complete bill.
- Am I committed to a minimum or maximum volume and if so what charges can be incurred in relation to this?
New protections apply for micro-businesses
For these purposes a micro business is defined as a business that:
- has less than 10 employees or full time equivalent and a turnover of less than €2 million p.a.
- uses less than 200,000 kWh of gas p.a.
- uses less than 55,000 kWh of electricity p.a.
These rules apply to micro-businesses who sign a new energy contract after 18 January 2010 and anyone falling into this category has the right to use the Energy Ombudsman scheme
Micro Business Protections
- Before you enter an energy contract your supplier must explain the key terms and conditions to you, this applies to contracts agreed on the phone or in person
- Within 10 days of you signing a contract you should receive written copies of the contract with full terms and conditions including renewal terms
- If your contract is fixed for a period of time (for example 12 months) you can notify your supplier at any time during your contract that you do not wish to roll over the contract at the end but you will need to remember to make a new one before the existing one expires
When your contract ends
- 60 – 120 days before the end of your contract your supplier must send you a letter outlining the key contract renewal terms, this will include information on the new prices you may pay – including what will happen if you take no action and what will happen if you do not want to renew your contract
- Once you have received your statement of renewal terms you have 30 days in which to contact your supplier and tell them you would like to negotiate a new contract or change to another energy supplier
- Once you have notified your supplier you would like to negotiate a new deal your supplier will then offer you new contracts, one of these contract must be valid for the duration of the 30 day period
- If you do not tell your supplier you want to renegotiate your contract or change supplier within this 30 day period your exisiting contract terms can only be rolled over for a further 12 months
Even if you are called by a broker they must still adhere to the suppliers responsibilities for micro-business as above
COLD TELEPHONE CALLS
When you change addresses, or take on a new business you are particularly vulnerable to incessant and/or aggressive tactics from call centres selling energy.
The reality is that you will be on expensive rates because you will be on a deemed contract with your existing supplier which allows you to change your supplier at any time. Taking a few days to research and make a decision will not be as expensive as being frightened into a long term expensive contract.
If you are going to enter into telephone contracts (remembering that these are legally binding) some key facts to be confirmed UP FRONT and BEFORE entering into any agreement are:
Obtain the caller's name, company and contact details getting them to spell out unusual names and always repeat the telephone number they have given you back to them. Tell them you will call them back, which is a good way of validating the above details. It will also give you time to think
If they state that they are representing ALL SUPPLIERS ask SPECIFICALLY which supplier(s) they are representing. In addition, ask the details of the callers contact at that supplier. Note: it is almost unheard in today’s markets that any one company could represent all suppliers!
THE CONTRACT - the questions
- How much does it cost PER UNIT?
- How long does the contract run? (beware of contracts with no end date)
- How do I end/cancel the contract?
- Can I have a copy of what has just been agreed?
INTERNET SWITCHING SITES
Always be streetwise when looking at switching sites, don't be lulled into a false sense of security by titles containing "advice" "help", "cheaper" "bargain" etc. these are still businesses who intend to make a profit.
Always look to see how many suppliers a site deals with
Always be aware that suppliers DO NOT have a fund from which they pay switching site commissions this is usually included in the price quoted by the site.
Be wary of sites claiming that it costs you nothing!
Be aware that the Consumer Focus Confidence Code ONLY applies to a site’s domestic services NOT to its business services
USING A Tpi (Broker/Consultant)
Always ask, "Where do you get your income from?" "What do you actually do for me?"
Always ask, when Tpis advertise their services as being "free", "Which services are free?"
Beware the all-encompassing clause which may read something like "(The Broker/Consultants name) may deal solely with the supplier in all matters relating to the purchase of gas and/or electricity………" This, in effect, could prohibit the customer speaking to their supplier or any other third party
Always ensure that you know who your supplier is for gas and electricity.
Always ensure that all the elements of a supplier's bill are on the quotation and that you have agreed to any others that may appear.
Always read your meters at the end of each month. Even if you do nothing with these readings, if anything goes wrong they are invaluable to back up any complaint.
Always ask the Tpi (broker/consultant) or telesales person you are talking to if they are signed up to a code of practice and Independent Redress Scheme. Check that any switiching site you consider using is signed to a business switiching accreditation and redress scheme
UIA Approved are signed up to a Code of Practice incorporating an independent Redress Scheme and can be easily identified by the above logo
Newtons Solicitors www.newtons.co.uk