Why is it so difficult to get electricity / gas quotes for a business ?

[Justin Smith]

My business electricity bill is due to go up from 16.5p per unit to 32p per unit on the 23rd of Jan (plus a big rise in the standing charge), and, even worse, I have to sign up for 3 years to get that ! I do not understand why this is when the price of gas has come right back down. Surely there must be companies out there with cheaper quotes ?
I have obviously tried getting alternative quotes but none of the main comparison sites seem to quote for businesses, just domestic.
When one does find a comparison site which will quote for businesses they don't just give you the price there and then, they want your E Mail address and mobile number (which at least one of them has started using for marketing texts....) then eventually send you the quote, so it all takes far longer. When I eventually did navigate through that particular jungle their best price was 45p per unit (and an even higher standing charge), which was significantly more than I have already been quoted !

Who do the members of this forum use for power quotes, and has anyone recently (or currently ! ) got a quote for less than 32p per unit ?
Fortunately our power consumption is not that high, maybe a £1000 a year for gas and elec, but doubling that price (to £2000) still sees me £1000 out of pocket.

I can remember paying 6p a unit for electricity in the late 1990s, so this is all all like a bad dream !

 

[fisicx]

@NickGrogan is the man for this.

 

[WaveJumper]

As above he's the man to ask, I have to say seeing others peoples post on this topic 32p per unit seems very cheap, almost sounds like domestic rates.

 

[Justin Smith]

As above he's the man to ask, I have to say seeing others peoples post on this topic 32p per unit seems very cheap, almost sounds like domestic rates.

I am relatively happy (or should I say less unhappy) to pay 32p per unit now, but it's the fact I have to sign up for three years for that rate. I am pretty sure power prices will drop over the coming months and years. In fact I think power prices are too high now anyway if you look at the wholesale prices of oil and gas.

 

[SillyBill]

A lot of businesses, including mine, are on 60pkwh+ tariffs so I consider you to be in a quite fortunate position to a lot of the market and likely some of your competition. Perhaps ought to be taking advantage of your current low rate (relative to where a lot of contracts are) than worrying about a potential disadvantage 2 years from now. Ofc you are happy to pay 32p now; you get that rate because you will be paying 32p for 2 more years also. Can hardly complain IMO when you may be paying more at the tail end of a contract when at the start you're paying a (hell of a lot) less than many businesses. To quote a Boris favourite, sounds like you're in favour of cakeism. My view on 'leccy atm is suck it up, fwiw my increase will cost me well north of £100k extra per year so I do feel a bit entitled to moan too, albeit can onyl deal with cards as they're dealt.

 

[Justin Smith]

A lot of businesses, including mine, are on 60pkwh+ tariffs so I consider you to be in a quite fortunate position to a lot of the market and likely some of your competition. Perhaps ought to be taking advantage of your current low rate (relative to where a lot of contracts are) than worrying about a potential disadvantage 2 years from now. Ofc you are happy to pay 32p now; you get that rate because you will be paying 32p for 2 more years also. Can hardly complain IMO when you may be paying more at the tail end of a contract when at the start you're paying a (hell of a lot) less than many businesses. To quote a Boris favourite, sounds like you're in favour of cakeism. My view on 'leccy atm is suck it up, fwiw my increase will cost me well north of £100k extra per year so I do feel a bit entitled to moan too, albeit can onyl deal with cards as they're dealt.

TBH I think we all have a right to moan because perusal of the price graphs for gas and oil hints very strongly that there is no justification for the present prices.

 

[MITTIM]

We use a broker to arrange our supply - they do not charge our company a commission. However, you may all be interested to know that annual corporate gas and electricity bills in the UK amount to £25 billion and it is estimated that two thirds of these deals are bought through brokers. In many cases, these brokers have failed to disclose to their clients that a portion of their monthly energy bills are being syphoned off by the broker as commission. Over £290 million pounds have been paid back to companies over the last ten years but far more is still due.

If your company has used a broker, you can get a free assessment of your refund entitlement and the likely amount

 

[Paul Carmen]

You are looking at current spot prices, the gas suppliers will likely not have purchased gas at this low price. They will effectively not be making much money on what they've quoted you short term, but will hedge that over the 3 years on the basis that they then will.

Everyone is entitled to make a profit, the expectation is that prices wont go back to the lower levels we used to see. If you want a shorter term contract, you end up paying closer to the rates that have been paid to fill up the gas reserves this winter and the higher prices quoted over the last few months.

Ask the broker what their fees and commissions are up front, before you sign anything. You can then check with a different broker and you can potentially find a better deal (maybe not on the supply, but on the fees). Essentially though, the options currently are an OK rate longer term, or a high rate short term.

 

[Paul Kelly ICHYB]

TBH I think we all have a right to moan because perusal of the price graphs for gas and oil hints very strongly that there is no justification for the present prices.

Why do you say that?

 

[thetiger2015]

I think the Ofgem website has some handy tools to understand about wholesale pricing:

Wholesale market indicators

Interactive data charts on wholesale price trends, security of supply, access and liquidity, competition, and investment and sustainability.

www.ofgem.gov.uk

They want to lock you into a contract for 3 years because they think the prices are going to be volatile for that period of time, so they're either going to make bucket loads of profit over the 3 years or the same amount of profit they always make. They don't want people chopping and changing every year with this type of volatility in the market.

There's also an interesting piece here, its the Guardian but whatever?

Why are gas prices so high? These obscure traders are partly to blame

‘Nobody with power is looking at what they’re doing,’ but they’re helping to drive searing gas prices despite increased oil production

www.theguardian.com

 

[BobzYourUncle]

In all honesty 32p is a good price compared to what others have had to pay last year.. I'm paying same as you. Which was fixed last year around March/April time when prices was beginning to accelerate upwards at a faster pace We was very worried for our business having paid around 12p before. If we had waited an extra 3 months in hopes it would go down. We may well have gone bust. Adding on increases on gas which was much worse for us. In hindsight now we feel lucky we fixed when we did. Still had to make alot of changes and adaptations to or business model. As energy now accounts to 20% of our turnover . Cost of stock accounts to 30%. If you factor in VAT, staff wages, water, insurance etc aswell.. There's not much left. The fact your not in a energy hungry business your already in a fortunate position.

 

[Justin Smith]

Essentially though, the options currently are an OK rate longer term, or a high rate short term.

I think we'll have to agree to disagree on that !

 

[Justin Smith]

Why do you say that?

Look at the price of gas graphs :

UK Gas Prices Chart - Winter 2023
This Chart Tracks The Prices Of The Next Front Winter Season

 

[Justin Smith]

In all honesty 32p is a good price compared to what others have had to pay last year.. I'm paying same as you. Which was fixed last year around March/April time when prices was beginning to accelerate upwards at a faster pace We was very worried for our business having paid around 12p before. If we had waited an extra 3 months in hopes it would go down. We may well have gone bust. Adding on increases on gas which was much worse for us. In hindsight now we feel lucky we fixed when we did. Still had to make alot of changes and adaptations to or business model. As energy now accounts to 20% of our turnover . Cost of stock accounts to 30%. If you factor in VAT, staff wages, water, insurance etc aswell.. There's not much left. The fact your not in a energy hungry business your already in a fortunate position.

I have concluded I cannot find it cheaper than we are being offered it. That on its own means it was worth starting this thread !

>>The fact your not in a energy hungry business your already in a fortunate position.<<

I am at least grateful for that, though that is partly because I did invest a bit over the last 2 or 3 years upgrading all our lighting to LEDs etc.
At home we had solar panels fitted in Aug 2019. They were a relatively poor investment at the time and we only did it to help offset all the travelling we do (then we were stopped from doing any 6 months later !), but it has proved a wise decision since then. I am still of the view that not having the batteries fitted was still the right choice even with the subsequent energy price increases.

 

[Jon123]

Do you mind me asking which supplier offered 32p a unit?.

 

[Picture Bute]

Someone I know is currently renewing and the best she can get is 40p give or take some fractions. There's less than a penny between her 1,2 and 3 year offers.

 

[Jon123]

British gas lite is 38.5p a kwh for 1 year. There are also some 3 year deals at 36.5.

 

[Justin Smith]

Do you mind me asking which supplier offered 32p a unit?.

It's British Gas Lite, though as mentioned earlier, that offer was actually made last April !

TBH, all things being equal, I'm not sure how keen I am on BG Lite.
They are fine so long as there's no problem but contacting them is a nightmare. You cannot phone them up or even E mail them. The only way to contact them is via webchat and we all know how **** that is. I have only had one bill (for each, gas or elec) for months now and wanted to ask them why not, but when I found out I was number 184 in the queue for a webchat I gave up.

 

[Jon123]

British Gas Lite prices down again.

1 year fix 70k units 0.325p KWH.

Seems very positive. Anyone else have anything better? or market direction thoughts?.

 

[NickGrogan]

Prices are coming down, at the moment. Could turn around again, but we've had steady good news for a while. Next winter/spring is going to be expensive again.

 

[HFE Signs]

32p per unit seems very good, what is the standing charge?

 

[MarketGarden]

The Association of Convenience Stores and other industry lobby groups have written to the chancellor demanding that businesses that contracted at high rates last year should be allowed to renegotiate.

I wondered @NickGrogan if you had any idea what legal mechanism would enable this please? Or is it sheer wishful thinking that has zero chance of happening?!

 

[NickGrogan]

The Association of Convenience Stores and other industry lobby groups have written to the chancellor demanding that businesses that contracted at high rates last year should be allowed to renegotiate.

I wondered @NickGrogan if you had any idea what legal mechanism would enable this please? Or is it sheer wishful thinking that has zero chance of happening?!

I can totally understand why they are asking for it, and agree that ideally something should be done to help businesses.

But

Legally they're asking for the right to break a business contract because it's expensive. I'm not sure what kind of legal precedent this would set. There are a lot of expensive telecoms and card machine contracts that people would like to get out of, for example. What about leases that were signed preCovid for sites near busy offices. They look very expensive now.

One of the core concepts is that when you sign a contract it's binding.

Financially, energy companies trade power, and the generation side is meant to be separate. This is how the government set up the market. This means to offer prices suppliers have to either hedge the market - meaning that they've contracted to buy the power at those high prices, or remain unhedged and play the market - this is what Bulb did and it cost them billions. If you let the businesses out of the contracts, the losses go back to the energy suppliers - many would go bust instantly or need massive government support.

If the energy companies don't honor the contracts they've agreed with the generators, then they start to feel financial pain as well. They're probably best placed to handle these costs - on average. But there are a lot with shallow pockets. If we take all from profits from all the generation companies, what will there investment plans for the UK be?

I dont think it will happen, because it's just too expensive, and there are too many ramifications.

But I didn't think they would be able to offer the level of support they have over the winter because it would be too expensive. It's cost about £15Bn so far and is only that low because we have had almost perfect weather.

The new scheme offers a pointless 2p discount and is supposed to cost £5Bn for a year.

I suspect that this scheme will be improved/extended, as this is probably cheaper, more effective, and has fewer unexpected side effects than letting people just end contracts.

Ultimately if it becomes a political question then all bets are off.

 

[MarketGarden]

Thanks Nick. Thought as much.

 

[Justin Smith]

Just had a quotes for gas for when our present contract expires in December.
Our current deal, with British Gas Lite dates from Dec 2021 and is 5.9p per KWh and 60p a day st cg.
We have just been offered an renewal of 11p per KWh and 25p a day st cg.
Is that any good ?
Do the esteemed members of this forum think the rates gas contracts will go up or down ?

 

[NickGrogan]

Just had a quotes for gas for when our present contract expires in December.
Our current deal, with British Gas Lite dates from Dec 2021 and is 5.9p per KWh and 60p a day st cg.
We have just been offered an renewal of 11p per KWh and 25p a day st cg.
Is that any good ?
Do the esteemed members of this forum think the rates gas contracts will go up or down ?

11p seems high, I'd expect 6p or 7p depending on location and usage.

Possibly a bit higher if very low usage, but not 11p.

 

[Justin Smith]

11p seems high, I'd expect 6p or 7p depending on location and usage.

Possibly a bit higher if very low usage, but not 11p.

Thanks Nick,
We don't use that much gas it's just for heating and less of that now it's so soddin' expensive ! In fact in the summer it's zero for months on end.
I think over the last year it's been about 550 units. Is that really low, as in we'd have to pay more than 7p per unit ?

 

[Justin Smith]

11p seems high, I'd expect 6p or 7p depending on location and usage.

Possibly a bit higher if very low usage, but not 11p.

We have just had our new quotes for gas from December,

British Gas Lite : 13.5p per kWH and 24p/per day st cg.

EDF : 11.9p per kWH and 25p/per day st cg. (same for 1 year or three years)

The quotes you gave seem much better. Are they still valid ?
We don't use a huge amount of gas (6,000 kWh a year), and are trying to use even less ! But any saving would be welcome.

 

[Justin Smith]

Just had a guy from Smartest Energy phone me up and offer us gas for 25p a day standing charge and 7.48p per kWH for a 1 year contract, or the same st/cg but 7.76p per kWH for a 2 year contract. I was surprised how much cheaper it was

They did, however, require a CreditsafeUK reference, but I am not on there so I am going through the procedure of doing that.
Is that normal ?
I have never been asked to do that before as far as I can remember and I have been in business (as a Sole Trader) for 29 years !

 

[AlanJ1]

They did, however, require a CreditsafeUK reference, but I am not on there so I am going through the procedure of doing that.
Is that normal ?

Creditsafe have a reporting function that report if you pay bills on time and how often. It's a good way if credit checking if someone is paying bills (not fool proof). I presume it relates to this.

 

[Justin Smith]

Creditsafe have a reporting function that report if you pay bills on time and how often. It's a good way if credit checking if someone is paying bills (not fool proof). I presume it relates to this.

Thanks for that
How do Creditsafe get their info ?
How would they know if a company was a slow payer for instance ?
When I phoned them they said something about the fact they'd get 118118 to check me out !

 

[AlanJ1]

Thanks for that
How do Creditsafe get their info ?
How would they know if a company was a slow payer for instance ?
When I phoned them they said something about the fact they'd get 118118 to check me out !

Honestly, no idea. I used them in a past company so know this was on there / remember the demo they mentioned about it.

 

[IanSuth]

i know there is an option to report customers you have credit checked as bad payers

 

[Justin Smith]

i know there is an option to report customers you have credit checked as bad payers

Do those "bad payers" have any redress about it ?

 

[IanSuth]

Do those "bad payers" have any redress about it ?

no idea as not investigated it but could be related to this service of theirs

Creditsafe Launches Debt Chaser and Debt Collection | BIIA.com | Business Information Industry Association

www.biia.com

 

[Stephen Ball]

Just had a guy from Smartest Energy phone me up and offer us gas for 25p a day standing charge and 7.48p per kWH for a 1 year contract, or the same st/cg but 7.76p per kWH for a 2 year contract. I was surprised how much cheaper it was

They did, however, require a CreditsafeUK reference, but I am not on there so I am going through the procedure of doing that.
Is that normal ?
I have never been asked to do that before as far as I can remember and I have been in business (as a Sole Trader) for 29 years !

Was the caller actually from Smartest Energy, or calling "on behalf of" Smartest Energy, and so likely a broker? Unfortunately many brokers call customers pretending to be from the suppliers.

We also wouldn't say it's normal for you to provide a CreditSafeUK reference. It would be normal for them to check your credit, but they can do that with your DOB and Home address as a sole trader.

 

[Aqua2020]

We used a site called ***** for business electricity prices and gas prices for our business. We ere on variable, but noticed the change in wholesale prices. Tbh they're still not reflected in the fees from the energy suppliers - but we managed to get a much better deal than our variable we were on.

 

[pentel]

Businessenergydeals

this gets you contacted by utility bidder.... no prices on line.... I would recommend quoterunner.co.uk

 

[Aqua2020]

My business electricity bill is due to go up from 16.5p per unit to 32p per unit on the 23rd of Jan (plus a big rise in the standing charge), and, even worse, I have to sign up for 3 years to get that ! I do not understand why this is when the price of gas has come right back down. Surely there must be companies out there with cheaper quotes ?
I have obviously tried getting alternative quotes but none of the main comparison sites seem to quote for businesses, just domestic.
When one does find a comparison site which will quote for businesses they don't just give you the price there and then, they want your E Mail address and mobile number (which at least one of them has started using for marketing texts....) then eventually send you the quote, so it all takes far longer. When I eventually did navigate through that particular jungle their best price was 45p per unit (and an even higher standing charge), which was significantly more than I have already been quoted !

Who do the members of this forum use for power quotes, and has anyone recently (or currently ! ) got a quote for less than 32p per unit ?
Fortunately our power consumption is not that high, maybe a £1000 a year for gas and elec, but doubling that price (to £2000) still sees me £1000 out of pocket.

I can remember paying 6p a unit for electricity in the late 1990s, so this is all all like a bad dream !

It can feel like pulling teeth, can’t it? The main reason it’s so difficult to get electricity or gas quotes for a business is that the market works very differently to domestic energy.

Unlike household tariffs, which are pretty standard and easy to compare, business energy prices are tailored to your specific circumstances—things like your annual usage, business size, location, and even credit rating all come into play.

On top of that, suppliers don’t publish standard rates for businesses because they negotiate bespoke deals based on your needs. This means you’re often stuck filling in forms or speaking to someone on the phone to get an actual quote. To make things even trickier, many suppliers require a firm commitment before locking in a price since wholesale energy rates can fluctuate daily.

Comparison sites can be helpful but often require you to submit details and then wait for a callback, which isn’t exactly convenient. It’s frustrating when you just want to see prices upfront and make a decision without the hassle. That said, some tools like Love Energy Savings or Business Energy Deals are trying to streamline the process, and going directly to suppliers like Octopus Business or Bulb can sometimes be quicker.

Ultimately, the lack of transparency and reliance on tailored pricing is what makes it so much harder than switching at home. Hopefully, the market will move towards more straightforward options in the future!

 

[Wayne Mitchell]

It’s quite straightforward to get business energy quotes if you have the right relationships with suppliers.