Shopping around for an energy supplier can save your business a lot of money. There are many different pricing structures to consider and it is important to compare quotes on a like for like basis in order to work out who the cheapest supplier may be. The below guide is certainly not comprehensive but will give a good indication of how to manage your energy suppliers effectively and how to get the best possible prices for your business.
Before you get a quote
Before you get quotes from energy suppliers it is important to have an idea of how much energy in kWh your business is using per year. This information can be found out by looking over previous bills and adding up kWh over the period of a year, alternatively if you speak to your current supplier they should be able to tell you approximately how much energy you are using per year. At this stage make a note of approximate annual consumptions in kWh for all of your business' sites.
Next construct a spreadsheet with the following information for each of your sites:
Site location
Meter location
Meter number (should be written somewhere on the meter)
MPAN or MPR (MPAN for electricity and MPR for gas, both should appear on current bills)
Account number with current supplier
Approximate annual usage in kWh
The date on which your current contract ends
It is very important to sign a contract with a new supplier before your current supplier's contract ends, this prevents your company from having to pay "out of contract rates" which are extremely high.
Getting your quotes
With the above information you should be able to get quotes for the supply of electricity and gas to your site. Most utility companies will only provide a quote for supply no more than 120 days in advance of the end date of your current contract. Some companies will quote outside the 120 days although this is only recommended if you believe the price will rise significantly across all the suppliers before the 120 day window.
You should look to get quotes from the following suppliers:
British Gas
Haven
Eon
EDF
Scottish and Southern
NPower
Corona
Where possible, phone to get quotes as you should get an immediate quote on the phone rather than waiting for a letter/email response. Take down the name of the person you speak to and their direct dial number and email address if possible. These details could become important later on if problems arise or to help with negotiations. Make it very clear that you are looking only for a quote at this stage and that you will not be making a decision yet.
Make sure you ask for a fixed price quote for a 1 year and a 2 year contract from each supplier. By getting a 1 and a 2 year quote you will be able to see what the supplier believes is happening to prices over that period. If the 2 year quote is much higher than the 1 year quote then the supplier believes prices will rise. Assuming that the price of energy will rise is usually a correct assumption. However I would still recommend 1 year contracts so that you can maintain more control over who is your supplier. For example if your supplier is giving you bad customer service or overcharging you may wish to change supplier and a 1 year contract would allow you to do this much sooner.
Comparing quotes
Comparing your quotes is the next step. First to consider is how much are you going to be paying per year in standing charges. Different suppliers quote in different ways for standing charge. A monthly standing charge should be multiplied by 12 and a daily standing charge by 365 to get a yearly standing charge price.
Next to consider is your usage. Again you want to know for each quote how much your supply will cost you in a year. Multiply your estimated annual consumption by your quoted price per kWh. Sometimes you will have a day and a night quote. You need to divide up your annual usage accordingly for example 28,000kWh divided: 25,000kWh day and 3000 kWh night. Multiply your quoted day rate by you annual day usage and your quoted night rate by your annual night usage. Add these together to get an accurate reflection of your annual total cost of usage.
Now add your total annual cost of usage to your total annual standing charge. Apply any discounts or credit offered (e.g. £100 cashback or 4% direct debit discount) to this final figure and you will now have a figure that can be compared with the same figure calculated for each supplier's quote.
Negotiation
There is not normally a lot of scope with energy companies to negotiate. However there is some and the most powerful tool you have is the fact that you have a comparison of costs from other suppliers. If supplier A is not as competitive as Supplier B then call Supplier A and tell them that they are not as competitive. Try to avoid giving out exact quoted figures and be firm in saying that you will be going supplier A unless supplier B can improve on their quote. Sometimes you will find that the quoted figure is the final figure and sometimes you will find that there is room for movement from the supplier in order to get your business.
If you have more than one site I would recommend ensuring that all your energy contracts are to be tied in to the same contract end date. Some suppliers are happier to do this for you than others but you will find it may affect the quoted price slightly. There are 2 reasons for tying in the contracts to the same end date. Firstly you will only have to deal with getting quotes once a year, and secondly you can sometimes negotiate a better deal by agreeing to sign a contract for more than 1 of your sites.
Doing the deal
Now you have got to the stage where you have made a decision you can sign or agree to a new contract. Ensure that anything you have agreed up to this point can be confirmed in writing and check carefully that the contract you sign is exactly what you have agreed to.
You may find mistakes on your first bill. This is common across all of the energy companies and these mistakes include:
A different price than the price you agreed to
A different contract start date than agreed
A charge that was not agreed to
It is therefore important to keep information on your agreement including written confirmations from your supplier so that you can back up your story when you call the supplier to complain.
And finally
Keep an eye on meter reads, especially when switching supplier, very often the closing read from one supplier is different to the opening read of another. Ensure you inform your new supplier of any issues. Take meter readings regularly so that you can spot any discrepancies between your reads and the estimated reads you are being charged for. These mistakes are very easily made by suppliers and don't always sort themselves out.
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