Business Energy Quote...Am I missing something here? Huge Standing Charge Low rate and Vice Versa? 10 January at 2:10PM in Energy 9 replies 323 views

FrankFalcon

Hi all

I hope you can assist me here.  I have been trying to help my best friend get energy quotes for their family business but they are going around the twist with how complicated it seems to be.  I don't want to sound disrespectful but it would be fair to say that this family excels with their hands rather than their brains.  Indeed, their family business has been built upon years of physical toil and they would be the first to admit that 'education' wasn't their motive when growing up in a hands on business.  That's why I have decided to try and help.  So, the story goes that their ELECTRICITY contract with British Gas ended a couple of days ago and they have now moved on to variable.  My initial advice was for them to spend a day in front of the PC getting quotes from all the major brokers.  Problem... It turns out that all the brokers (Uswitch, Comparethemarket, GoCompare, moneysupermarket etc) use the same energy broker company called Bionic.  I tried this myself and was surprised to find it appears to be true.  So, you invariably end at Bionic (via one of the big compasion sites) and it promises to give you a list of rates on the screen.  It simply doesn't.  You get a call back from an agent.  I tried this on my friend's behalf and Lo and Behold the screen says that it will offer you the best prices (all the prices and company logos are blurred out) and an 'Energy Expert' calls you on your phone.  Suffice to say, you can't get a quote without giving a contact number.  So, in my case, the 'expert' asks me about the consumption of the business meters.  I tell him I'm not sure and he asks for permission to search the database.  We give him permission and he comes back and says that the annual usage (Per KW/H) is 67000.  On the renewal letter, this is confirmed.  So, the agent tells us of his preferred supplier and their rates.  I thank him but tell him I want to see every company's rates, not just the ones he recomends, but he appears very vague.  For the next half hour, I have to drag it out of him what the rates are from competing companies.  Some, such as EDF he said he had no prices for.  So, it turns out there is a vast difference between KW/H and standing charge prices and we genuinely don't know what to do for the best.  For example, the cheapest KWH rate is my friends existing supplier (British Gas) at 0.3929 PKWH but with a HUGE standing charge of £3.6637 per day.  Yes, £3.66 per day.  So, when we factor in the other quotes we get a higher KWH rate but a cheaper standing charge.  However, because of the amount of usage, the quotes are very similar priced in the end.  So, we genuinely don't know what to do.  Is it better to go with a low KWH rate and a high standing charge? What if tomorrow the energy crisis ends? What if the energy crisis goes worse? Is it better to have a low KW/H rate or a low standing charge?   To better show what I mean here are a couple of examples of the best 2 companies below.  What are your thoughts guys? Maybe someone on here has done a similar exercise recently and can educate us?

British Gas 67000 Units @ 0.3929 Works out at £26325.  Standing charge here is 365 days at £3.6637 works out at £1337 giving a total of £27663.
In total contrast:
YuEnergy (whoever they are) 67000 Units @ 0.3897 is £26109.  Standing charge here is 365 days at £1.23 works out at £448.95 totalling £26558.

So, would it be wise to stick with British Gas and swallow the £900 difference (because they are less likely to go bust then YuEnergy) or go with YuEnergy?  Sorry for all the minute detail etc but if anything this is actually teaching me a thing or two.  Maybe there are other comparison sites that don't rely on bionic? Maybe somebody reading this has ended up getting a great deal by going direct to a company (without using Bionic)? Maybe somebody reading this used to work in this sector and has some tips?

Thanks in advance all. 

Robin9

£3 ,67 is typical

Ignore the brokers go direct

Mister_G

I've just renewed our Village Hall electricity (small business contract) at 42p/unit plus 60p/day for a 3 year fix.  I shopped around all the major suppliers and ended up with Bionic as the cheapest.  Our consumption is only 6000kWh/year, so maybe that's why they were the cheapest.

LtMike77

Have you tried Octopus business energy? https://octopus.energy/business

They come out the cheapest for me followed by British Gas Lite

Robin9 said:

£3 ,67 is typical

Not from the quotes I've been getting.

Robin9

Sorry mixing my gas 70000 kWh and electric 5000 kWh  - 12 months from Nov for my Church Hall
Electric  34p  & £1.03
Gas 8.5p and £4.50

NB ERBS less 2.09p ie nett 31.9p

all plus  VAT


whatever you do don't get out of contract - I paid 55p last January

macman

The first thing you need to do is find out their annual kWh usage. Get it from their previous bills/meter reads/annual statements. Please don't rely on a broker to give you this info, as it's crucial. If too high, then their DD will be set much too high. What sort/scale of business is this, as 67,000kWh annually is very high?
To state the obvious, the higher the usage, the less important the standing charge. But ignore s/c and u/c-what matters is the total annual cost, which is why an accurate kWh usage figure is the key factor.

cnetwork

As Robin9 mentioned, I'm more inclined to go direct especially for business tariffs as you have less rights than domestic customers. From what I have heard from other local businesses, brokers such as Bionic are great at the start ; but some brokers are known to foul play, create unauthorised agreements, setup auto renewals before your contract ends - which then leads to two contracts being in place at the same time, and its your business that ultimately suffers due to their mistakes and you end up paying £000's in termination costs - its so common nowadays and the ombudsman is flooded with complaints as business contracts pretty much offer nothing in your favor.

I'd be more inclined that with a high kwh usage, you're likely better off going for lower kwh and higher standing costs, but obviously do a rough calculation and you'll see which way is better off.

Mstty

As others have said if you don't get their exact usage and know if there usage this coming year(s) is likely to increase or decrease then any help you give you friends could be majorly flawed and you may not end up being friends after your help.

So go ideas of who to get quotes from above once you know the simple details.

FrankFalcon

Thanks all.  I took all advice into account and went Direct with British Gas.
**THIS THREAD IS NOT SORTED**

Robin9

FrankFalcon said:

Thanks all.  I took all advice into account and went Direct with British Gas.
**THIS THREAD IS NOT SORTED**

What else do you want to happen ?