Should I renew my energy contracts?

Don’t let your energy contracts add to your problems

Since our collective worlds ground to a halt in March our utilities division has continued to work closely with our clients in respect of their energy costs and associated contracts. As contracts have come up to renew the main question we are asked is “Should I renew as I don’t know if I will be here in 6 months time!”

The alarming regularity of that question shows what a dire situation so many business are in. They are fighting daily to reduce outgoings to try and ensure they can come back. The thought of signing into a long term contract at such an uncertain time can sound counter-intuitive but in the case of your energy supplies it is the right decision to make.

There are three reasons why you must continue to deal with your energy supplies as you have done before

If you do not renew you pay more – a lot more!

If you fail to renew your energy contract then you will move to out of contract rates. Energy suppliers will not hold your current prices until you decide what to do. Increases in rates when you move out of contract can be up to 50% however we have recently seen a case where prices went up by over 300%!

Short term energy contracts are as rare as hens teeth!

You may think that you will have a better understanding of where your business will be in six months time so you would like to renew for that period of time. We can tell you from experience that such contracts are rarely offered if at all. It is just not something suppliers are interested in doing. However, this isn’t really an issue because –

If you leave your premises mid-term your contract does not follow you!

In business most of the contracts you sign you are liable for until the contract end date. For example, if you are midway through your telephone system contract and close your office you are still liable for the remaining payments. An energy contract is different. These contracts are “attached” to the property and the meter within that property.

This means that if have to leave your premises and there is still some term left on your energy contract then you are no longer liable. BUT you must tell your supplier you are leaving the premises, the date you will be vacating, and send them final meter readings at this date.

If you do not do this then you could still find yourself receiving bills from the supplier and this can be the start of a very messy, time consuming exercise to prove you are not liable for any “post-vacating” bills.

As a consequence of the unique situation with energy contracts you can approach your renewals as you have done before and look for the best deal available to you. Whether you then renew for 1, 2, 3 or more years then you can do so in the knowledge that the supply contract will remain with your premises even if you don’t.