BES Price Rise on Fixed Price Business Electricity Contract

LouiseHarryH

I moved into a small office in Feb 2022 and signed a 3 year fixed price contract with BES for electricity at 35.02p kWh. They have just informed me by email that they are increasing this 'fixed' price from Oct to 55p kWh. Are they able to do this as its a fixed price contract? Having checked the paperwork it states that 'if unit rates are subject to change, prices will vary when wholesale and/or third party costs have changed significantly'. It seems that the fixed rate only works in their favour rather than mine! Can I challenge this rate increase? They state that as a gesture of goodwill they will allow me to terminate my contract!  Is it worth moving elsewhere on principle at this challenging time? Never had a business contract before so its all new to me.

macman

What you agreed does not in any way appear to be a fixed price contract.

LouiseHarryH

They sold it to me (in person) as a fixed price contract that would not change during my tenancy and the contract I signed which calls it a fixed rate contract did not include the 'if unit rates are subject to change paragraph. That came with a confirmation letter I received after I had signed up.

The contract I signed stated  'If you have selected our fixed price product, you will be charged at the price set out in your contract

offer for the full initial period of your agreement unless there are industry changes to BES’s costs

imposed by the Government and/or Energy Market Regulator, including but not limited to:

transmission and network operator costs, changes in tax and duties, and industry costs that remain

unpaid by other industry participants and have been duly distributed to BES'.  

I was certainly led to believe it was a fixed price contract.

Krakkkers

See a solicitor and ask for an opinion.

MWT

LouiseHarryH said:

They sold it to me (in person) as a fixed price contract that would not change during my tenancy and the contract I signed which calls it a fixed rate contract did not include the 'if unit rates are subject to change paragraph. That came with a confirmation letter I received after I had signed up.

As a business you are deemed to be able to read and fully understand any contract you sign, you do not benefit from any general duty of care in the way you would as a consumer.

The only question I might suggest asking is which of the contractual terms they are relying upon to make the increase...

Frankly, those terms are loose enough to drive a coach and horses through but they are what you signed, so unlikely to be much you can do, but never hurts to ask and see if they stick to their side by matching there reasons to those terms.

sevenhills

LouiseHarryH said:

Is it worth moving elsewhere on principle at this challenging time? Never had a business contract before so its all new to me.

At what rate can you get your electricity, I would be trying to stay with 35p or the cheapest.

pochase

I doubt that you find anywhere a business contract below 55p

Strange that there was no increase in April?

MWT

LouiseHarryH said:

They state that as a gesture of goodwill they will allow me to terminate my contract!  Is it worth moving elsewhere on principle at this challenging time? Never had a business contract before so its all new to me.

That is somewhat unusual, and makes it even more interesting to see which part of their contract they are relying upon for the change in the kWh rate...

Generally speaking the early termination penalties on business contracts are eye-watering, so if they are offering to let you walk it might indicate that they are not on firm ground with the justification for the increase...

Do check what terms you could get elsewhere though before you jump one way of the other, and do be excruciatingly careful if you talk to any other suppliers of brokers about your energy supply as you can enter a business contract verbally during a conversation even without seeing the terms, so proceed carefully...

tghe-retford

The trade body for nightclubs and such industries, the Night Time Industries Association is reporting that they have had anecdotal reports from their members of energy companies negating the fixed deals agreed with their business customers and is advising every business owner to check their contracts.

https://twitter.com/wearethentia/status/1565335144139214849

The OP may have some truth to what they are claiming.

daaave

Looks to me like a fairly obvious breach of contract. I’d need to see the actual contract, though.

Work out what your new rates are going to cost you over the fixed term. Then figure out if it’s worthwhile going to a solicitor. If you already use a solicitor as part of your business activities, approach them for an opinion.

Your legal fees - if your solicitor takes it on, are likely to be in the four figures though, so you do need to be confident that legal action won’t cost you more than the price increase.

You have to expect this kind of scummy practice, in the world of business, I’m afraid.  It’s likely your supplier is losing money hand over fist right now, so they’ve thrown all good practice and human decency out the window. They’re fighting for survival - indeed, from the way they’re acting, thy might not be far away from bankruptcy already - in which case any legal action you take will probably fail and you’ll still be left with the legal bills. Oh, and your contract will terminate and you’ll have to find a new supplier at much higher rates.

You have my sympathy, but I’m afraid this is just how business works.

TomMcGlynn

LouiseHarryH said:

I moved into a small office in Feb 2022 and signed a 3 year fixed price contract with BES for electricity at 35.02p kWh. They have just informed me by email that they are increasing this 'fixed' price from Oct to 55p kWh. Are they able to do this as its a fixed price contract? Having checked the paperwork it states that 'if unit rates are subject to change, prices will vary when wholesale and/or third party costs have changed significantly'. It seems that the fixed rate only works in their favour rather than mine! Can I challenge this rate increase? They state that as a gesture of goodwill they will allow me to terminate my contract!  Is it worth moving elsewhere on principle at this challenging time? Never had a business contract before so its all new to me.

hi Louise,

I'm a business energy broker, the prices that BES are offering their clients are actually a lot more competitive to what is currently available on the market so even though it would cost a lot more, you would be looking at even higher costs should you move (currently).

This happened back in November with Pozitive Energy as they had to increase their prices with the Gas prices at that time. The other option would have been for the business to close and all customers would then be subject to the market prices at that time - which would have been even more expensive! There is no cap on business energy currently which is horrendous

I'd say by all means, shop around but with the rates they are offering, you will see it is actually a lot cheaper than what is around currently unfortunately