Small Business Being Overcharged for Electricity - Please help!

Neil_Jones

Out of contract business energy is ridiculously expensive.  Always remember a supplier charged a place I used to work something like £3 a day standing charge and 26p per kWh at out of contract rates.  In contract was cheaper, significantly cheaper.  We got what turned out to be a dirt cheap electricity only deal at (bearing in mind this was business energy and I think it was back in the early 2010s) less than 9p per kWh for daytime, and something like 5p for Economy 7, I don't think it had a standing charge, but anyway the company had the tariff fixed for three years and as it turned out prices went north not long after, so we were practically robbing them for the next 30 odd months.

Ectophile

If you are going to sign up for a new contract with an energy supplier, then beware - there are a lot of sharks out there who will sign you up for an excessively expensive and long contract, with high exit fees. And auto-renewal, at an even higher price.

• Don't believe anything the sales person tells you unless it's in writing.
• Read every word of the contract to look for hidden nasties.
  

QrizB

QrizB said:

leahrhickey said:

Hi all, I'm new to this so please forgive me if I make any mistakes.
I am a young person renting a studio unit with my partner in central Birmingham.

What is your business, are you artisan plate-decorators or are you running a bronze foundry? Your electricity demand will depend on what you are using it for.

Ah, I see from your Instagram that you're an artist, although not exactly plate decorating.

It seems likely that E.On have drastically overestimated your electricity consumption. You need to get in touch with them with actual meter readings and ask for a revised bill.

leahrhickey

Hi all, firstly I'd like to apologise for being slow in my response - but also thank all of you for being so kind and helpful. As you can imagine, this is a little stressful and I know burying my head in the sand doesn't help! I'll try and attach some photos from the bills I can find. When we moved into the unit, we didn't register an account with E-On and as far as I'm aware, it was a rolling month-to-month contract from the previous tenant. I did not sign any paperwork or set up a standing order with this company. If anyone could make heads or tails of this I'd deeply appreciate it.

Gerry1

You appear to be on a deemed contract, paying on Receipt of Bills.  That will be very expensive.

You appear not to be sending monthly meter readings, so the bills are estimated and probably wildly inaccurate.  Again, likely to cause unnecessarily high bills if your actual usage is lower.

Commercial energy Ts & Cs are different to domestic, so you need to check everything very carefully, but the usual advice would be to register with E.On Next, send a meter reading, choose a tariff with no tie-in and no exit fees, set up a DD, pay off what's owed and switch to a more competitive tariff probably with a different provider.

Above all, check very carefully before signing because tie-ins can be lengthy with large exit fees.  Unfortunately, there is less protection for commercial users because it's assumed that they are savvy.

When you get an accurate bill, ask for a payment plan if you can't pay it all in one go.

jbuchanangb

The very first point is that your bills are estimated since 29 October 2020. Essential that you take a reading now and every month from now on to get accurate bills. I see that @Gerry1 has already made that comment.

The good news is that your consumption is low enough that you are only paying 5% VAT and zero Climate Change Levy.

The Business energy market is quite different from the domestic energy market. If you are on an "out of contract" tariff you can choose to change to another provider. Usually you would negotiate with the other provider first to decide on a tariff, then give your current provider 3 months notice of the date you wish to finish with them and change to the new one. Even if you are on a fixed term contract you still have to tell them 3 months ahead that you plan to switch at the end of the term.

To decide which provider to switch to, you can hawk around various providers asking for quotations - you will need to know your expected annual consumption - or you can use an energy broker to do it for you. There are several, e.g. https://bionic.co.uk/

Back in 2013 I was involved in choosing a business energy contract for a church. I have found my spreadsheet comparing British Gas(for gas), E.On (for electricity) with Opus Energy (for both) with a combined saving forecast at £400 per year. We did switch. Best of luck.

QrizB

Hi @leahrhickey and thanks for coming back to the forum with your bills.

The first thing that leaps out is that ther'e only one "real" meter reading on them, the "opening reading" of 108049 dated 19th Dec 2020. All the others are estimated.

However you do say that the reading when you moved into the unit on 21 Aug 2020 was 107890. By that reckoning you used 159kWh over a period of 120 days, about 1.3kWh per day.

If you've continued to use electricity at the same date, a more realistic estimate for the meter reading today would be 108289 for a total consumption to date of 399kWh rather than the 2633kWh they have estimated.

If this is accurate it will reduce your bill by about £520.

Can you read your meter today? Are you asble to share the current reading here? We can then give you a better estimate of what you actually owe E.On.

When you read your meter, can you provide that reading to E.On and ask for a revised bill?

Good luck, my wife's an artist and I know it's not an easy business to turn a prodit in!

Reed_Richards

Gerry1 said:

Unfortunately this is a domestic forum, not a business one.  Rightly or wrongly, business users are assumed to be clued up, so the Ts &Cs can be more onerous, there is less protection, costs are higher and VAT is 20% not 5%.

VAT on those bills is being charged at 5%.

Neil_Jones

IIRC there is a cut-off in business energy where if you go over a certain usage amount VAT is charged at 20%, otherwise it's the default 5%.  Climate Change Levy I think it's called?  I seem tor recall (as per the example I used previously in the thread) some bills were 5% VAT (often those in the summer), and 20% when winter came round.

btr30

Neil_Jones said:

IIRC there is a cut-off in business energy where if you go over a certain usage amount VAT is charged at 20%, otherwise it's the default 5%.  Climate Change Levy I think it's called?  I seem tor recall (as per the example I used previously in the thread) some bills were 5% VAT (often those in the summer), and 20% when winter came round.

Climate Change Levy is only applied when the consumption in the period is greater than deminisis (33 KWh per day for electricity). This is also the threshold when VAT rate changes from 5% to 20%