When working your way through the minefield that forms utility contracts these days, it is very easy to get bogged down with confusing details. Do you know what sort of contract you have? Quotemyenergy.co.uk is able to help you to understand the different business energy contracts.

Micro business contracts

If you have never heard of a micro business contract you are going to be wondering exactly what it is and how it is different to other types of contracts. Ofgem has put into place a number of regulations to help small businesses to figure out when they need to consider their energy supplier’s services. Business suppliers now have to put on every contract an end date and the required amount of notice for a contract when it is a fixed term contract. Quotemyenergy.co.uk was pleased to find out that Ofgem also allows small businesses to inform their supplier at any time before the required notice that they are going to want to switch.

If a contract has started either on or after 30th April 2015, the maximum notice period has been reduced. Where it was once 90 days it is now 30 days. Suppliers are now also obliged to contact businesses around 60 days before the end of a contract to provide details of their energy consumption and to provide information on tariffs so they can see if they would be better off on a new deal with their current supplier, helping with the negotiation of a new deal if needed.

Is my company a micro business?

Do you know if your company qualifies as a micro business? There are around 1.6 million in the UK at the moment. You are a micro business if:

• You have less than 10 employees
• An annual turnover of £2 million or less
• Electricity consumption is less than 100,000 kWh each year
• Gas consumption is less than 293,000 kWh each year

Usage of this amount of energy is the equivalent of an annual bill of around £10,000 on energy, not including taxes and levies. Your supplier may ask for a range of details about your business when trying to determine if you qualify as a micro business.

My supplier and I disagree on whether I qualify as a micro business – what should I do?

Provide supporting evidence and approach the supplier to discuss the issue. You will need to show that you meet the above criteria. Remind them that they are obliged to do everything they can to determine if your business is a micro business.

What should I do if my contract has been automatically rolled over?

There are occasions when a contract will roll over automatically. This is normally because you have not informed your supplier that you want the contract to end. In the first instance, you should speak to your existing supplier to have this matter resolved.

What should I be aware of in a new contract?

When you enter into a new contract you should consider:

• The type of energy contract that will best suit your business.
• Shop around and compare deals (quotemyenergy.co.uk can help here!)
• Read the contract carefully to be sure you understand it
• Read the terms and conditions as well as the statement of renewal. Ensure you keep these to refer to later.
• Keep copies of letters and other correspondence in case there is a problem later.

Deemed contracts

I’ve never heard of a deemed contract, what is it?

This is usually the type of contract in place when a business starts up at a new premises, before an official contract is put into place. The term may also be applied when a customer comes to the end of a contract but is continuing to use energy. This could happen because:

• The old contract does not specify what is going to happen when it ends. For example, some might state that the original terms will apply.
• If the customer is just using energy at the premises regardless of contract.
• The old contract does not offer any renewal conditions
• If the customer has told the supplier that they do not want to continue with the contract.

Ofgem estimates that there are around 10% of companies that are on deemed contracts * but most people do not know that they can be paying up to 80% more than if they were on a properly negotiated contract. Shopping around can save you a lot of money here.

Deemed contract rights

When you are on a deemed contract your supplier is obliged:

• To ensure that you have the Principal Terms of the contract – to include all fees and charges
• To ensure that you have (if you want it) a copy of the full contract
• To take all reasonable measures to inform you about other contract options
• To ensure that the terms of the contract are reasonable.

If you are on a deemed contract the supplier is not able stop you from switching to another supplier. You can do this for any reason and you can do it at any time. You will also not be asked to give notice and they cannot charge you a fee to terminate.

*Source : https://www.ofgem.gov.uk/information-consumers/business-consumers/energy-contracts-businesses