Smart Pay

Start before your contract ends

Your first job is to find the end date of your current energy contract.

You should be able to find it on your bill, renewal communication, online account or original agreement. Check whether there are any notice requirements and what happens if you do not arrange another contract in time.

Depending on your existing terms, your business could move onto an out of contract, deemed or rollover arrangement. These may be more expensive or less predictable than a negotiated contract.

Ofgem advises businesses to review their options carefully and not feel pressured into signing an unsuitable long term agreement simply because their current contract is ending. Read Ofgem’s business energy contract guidance.

Gather accurate information

Most suppliers will need:

Your business name and supply address
Your current supplier
Your contract end date
Your annual electricity or gas consumption
Your electricity MPAN or gas MPRN
Your preferred contract start date

You can usually find these details on a recent bill.

Using accurate annual consumption is particularly important. If one quote is based on 15,000 kWh and another is based on 25,000 kWh, the estimated annual costs cannot be compared fairly.

A recent meter reading can also help ensure the information held against your account reflects your actual usage.

Compare the total annual cost

The two most visible prices are usually the unit rate and standing charge.

The unit rate is the amount charged for every kilowatt hour, or kWh, your business uses. The standing charge is a fixed daily amount that may apply even when your premises is closed.

A low unit rate may suit a business with high consumption, but a high standing charge can have a noticeable impact on a smaller or seasonal site.

Ask every supplier to calculate an estimated annual cost using the same consumption figure. This gives you a more useful comparison than looking at either rate separately.

You should also confirm whether the quote includes:

VAT
Climate Change Levy
Network and metering costs
Broker or introducer commission
Other service charges
Costs that can change during the contract

For more information, read our guide to no broker fees in business energy.

Check what “fixed” actually means

A fixed business energy contract may fix the unit rate while allowing certain regulated, network or third party costs to change.

Ask the supplier to identify which parts of the quote are fully fixed and which are passed through at cost. The answer should be included in the written contract information.

You should also compare the contract length. A three year agreement may provide longer price certainty, but it also commits the business for longer. The lowest current rate is not automatically the most suitable long term decision.

Read before agreeing

Business energy contracts can be legally binding when agreed by phone. Ofgem’s current guidance states that there is no cooling off period after agreeing a business energy contract, so you should ask for the full offer in writing before accepting it.

Check: