How do commercial energy tariffs work?

Sea_Shell

Obviously the focus is on Domestic suppliers at the moment,  but what of the commercial sector? 

How are they priced and billed?  Same set of suppliers?   Are fixed deals available? 

Shops, offices, pubs, hotels etc..the list is endless.

Are we looking at price hikes as customers,  if business energy costs increase by 20-40% too and they have no choice but to pass higher costs on.

I'm  guessing there's no equivalent "cap" for business users!!?

Robin9

They tend to be individual contracts - I have 2 gas and 2 electric with Total Gas and Power which run to end December. Wishing now I'd taken a 2 year option.

tacpot12

For smaller users, they seem to be priced and billed more or less exactly like residential tarrifs. I'm the treasurer for a small club that has a commercial arrangement for gas and electricity. We've just moved supplier to one of the largest and were able to get a four year fix on the prices, which were about 50% higher than the price we were started paying two years ago. There was a similar choice of suppliers, large and small, and various fixed periods available. There were no tarrifs available that didn't have a standing charge, which relects a change that seems to be common in the residential marketplace now.

Sea_Shell

Robin9 said:

They tend to be individual contracts - I have 2 gas and 2 electric with Total Gas and Power which run to end December. Wishing now I'd taken a 2 year option.

Will you have to pass increased costs on to your customers?  Are you a type of business who can?

Sea_Shell

tacpot12 said:

For smaller users, they seem to be priced and billed more or less exactly like residential tarrifs. I'm the treasurer for a small club that has a commercial arrangement for gas and electricity. We've just moved supplier to one of the largest and were able to get a four year fix on the prices, which were about 50% higher than the price we were started paying two years ago. There was a similar choice of suppliers, large and small, and various fixed periods available. There were no tarrifs available that didn't have a standing charge, which relects a change that seems to be common in the residential marketplace now.

Have you had to factor that 50% increase into your membership fees?

Sea_Shell

Anyone else have any info or thoughts on the future of commercial tariffs?

Sea_Shell

I realise that no one seems bothered by this at the moment, judging by the avalanche of replies 😉

However, having spent the morning at my local pool, and thinking "wow what must their gas bill be!!!" surely the inflationary pressure these rises will put businesses under, will end up hitting our pockets, through increased price of goods and services, ON TOP of our own increased household bills.

The domestic issue is the tip of a bigger iceberg floating our way IMO.

littlemissbossy

I've just renewed my employers gas and electric, we are a garage with two offices, so not too much gas usage but a lot of electric due to lifting equipment, machinery and power/air tools. 

Only by good luck rather than knowledge I chose a 3 year fix, it was more than we were paying but I have never renewed at a lower price.

Sea_Shell

There has still hardly been any talk in the media about the fuel price increases for business, other than large factories (CO2 issue).

If small/medium businesses aren't protected by a price cap, they'll have no choice but to pass the costs onto their customers or reduce usage (reduced opening hours).

A few of you here have mentioned long fixes, but I don't know if that's normal.

daveyjp

R4 covered it this morning from about 8.10am.

Ceramics industry rep, lots of building materials, tiles, bathroom suites, bricks etc rely on gas powered kilns which can't simply be turned off.  Food, steel industries will be similar.

Impact will be worsened because due to pandemic and reduction in demand for building products there was a huge drop in demand for gas, so companies didn't hedge in a normal way. 

Now demand for products and output is increasing gas demand is increasing and they have no choice but to keep equipment running.

It will be interesting to see how local authorities, NHS etc are impacted as they usually buy annually per financial year (April to March) and have huge utility needs.

Sea_Shell

Yes, it's now starting to be reported...

Some business' comments within this article today.

https://www.bbc.co.uk/news/business-58831110