Friday, 17 September 2010

Small businesses are paying too much for energy

Many small businesses are paying too much for their energy, according to a
Peterborough-based energy broker.

Suppliers are allowing business users to pay more than is necessary by
keeping them on inappropriate meter codes and tariffs. That's the claim
being made by Ken Perrin, a commercial energy consultant.

Mr Perrin said, "Since deregulation in the late 1990s, energy companies have
become driven by profits, not service, leaving the SME sector vulnerable to
high costs, inflexible contracts and generally poor service.

"Typically, businesses look only at unit rate (price per KWH), but are
unaware that having the correct meter code and tariff is also important in
cutting costs. No energy company offers a review of this. Many businesses
have the incorrect meter code and tariff - costing them more for their

Mr Perrin cites an example is of a Wisbech company paying approx £3200 per
annum for their office electricity. They were on the wrong meter code,
paying £2.34 per day instead of 35p per day standing charge. Having the
meter code changed saved them over £ 700 per annum.

Businesses also run into trouble and incur heavy costs when they forget or
are not aware of the contract end date. The energy supplier is supposed to
contact the customer 120 days prior to the contract end date, but according
to Mr Perrin, 60 per cent of letters never arrive. This leaves the business
in a vulnerable position if it also fails to remember the end date. The
supplier, on the first day after the contract ends deems the business to be
'out of contract' and can increase the unit rate by up to 40-50 per cent -
and the business will not know about this increase until the next quarterly
bill arrives.

No comments:

Post a Comment