Three year fixed electric?

dirky_uk

Hi,
I'm out of contract with business electric and have found a reasonable alternative with Valda. It is 3 year fixed.
Do you think a 3 year fixed is a good option currently?
Thanks!
D

MWT

Right now I'd have thought a 3 year fix had significant risk attached to it, especially a business contract as the early termination costs will be significant.

The real question is how happy you would be paying that tariff for the next 3 years if the prices dropped after the first year or so?

If electricity isn't a large part of your costs and you just want the certainty of no price rises for three years then go for it if you like the price.

PennineAcute

I got a quote from Valda and what I noticed is that the two years is cheaper than the one year, and the three years is cheaper than the two years.

What this tells me is that they think that price of electricity will drop over the next three years. 

MWT

PennineAcute said:

What this tells me is that they think that price of electricity will drop over the next three years. 

That feels like a reasonable expectation, it is just a matter of how quickly and how far, compared to the cost of early termination if they drop faster....

QrizB

dirky_uk said:

I'm out of contract with business electric and have found a reasonable alternative with Valda. It is 3 year fixed.

Do you think a 3 year fixed is a good option currently?

A three year fix at 10p/kWh is definitely worth having. A three year fix at 50p/kWh, probably not.

I'm going to assume the rates you've been offered are somewhere in-between those two numbers   can you say what they are?

dirky_uk

QrizB said:

dirky_uk said:

I'm out of contract with business electric and have found a reasonable alternative with Valda. It is 3 year fixed.

Do you think a 3 year fixed is a good option currently?

A three year fix at 10p/kWh is definitely worth having. A three year fix at 50p/kWh, probably not.

I'm going to assume the rates you've been offered are somewhere in-between those two numbers   can you say what they are?

Sure, its Standing charge: 41p per day

Unit rate: 28.67p per kWh 

plus vat etc.

Etccarmageddon

What's the exit fees?

dirky_uk

Etccarmageddon said:

What's the exit fees?

Sadly the full term of the contract. Unless we move/vacate the building. (or go bust I assume!)

Robin9

Although my business supplier used to give 3 year figures  last week they were only giving 6 months

dirky_uk

dirky_uk said:

Etccarmageddon said:

What's the exit fees?

Sadly the full term of the contract. Unless we move/vacate the building. (or go bust I assume!)

Sorry, I realise that does not make sense now! I have asked them to clarify. I assume they would base it on a certain amount of kwh per month, and the exit fee would be the total of that remanning on the contract.

Robin9

Often your contract may assume a minimum annual consumption say 50,000 KWh plus a high standing charge.