Small Businesses on Fixed Rate Tariffs can still have tariffs changed

liverydiy

Hi 
I have a micro business fixed rate tariff with Scottish Power which is fixed until Jan 2027. Except it's not. The tariffs are reviewed every 3 months and apparently change in line with government guidelines. The standing charge has increased from 58.75p per day to 134.27p per day. How on earth can we budget or run small businesses if this is what the electricity companies can do, and they don't even send you the information before it happens. 

Robin9

Is this a 3 year "fix" started Jan 2024 ?  and Electric ?   what's your estimated annual consumption in kWh ?

MeteredOut

liverydiy said:

Hi 
I have a micro business fixed rate tariff with Scottish Power which is fixed until Jan 2027. Except it's not. The tariffs are reviewed every 3 months and apparently change in line with government guidelines. The standing charge has increased from 58.75p per day to 134.27p per day. How on earth can we budget or run small businesses if this is what the electricity companies can do, and they don't even send you the information before it happens. 

What does your contract regarding it being "fixed until Jan 2027"? Is it just the unit rate that was fixed?

Scot_39

Business contracts are not the same as domestic.  

Not sure what if any difference the micro bit makes to the contract terms.

Fixed term is not the same as fixed rates or fixed price.

Business contracts can contain complex pages of tables detailing what changes are allowed - some of which are what you might essentially call "pass through" costs.  Their supplier changes their cost to them - your prices change to reflect it.

[There is AFAIK only one domestic pseudo fixed tariff that contains pass through cost charging - Scottish Power Flex - which is fixed term and primarily fixes for the underlying wholesale rates - but not other changes.  (I guess in part to protect them against policy changes - things like the doubling in Ofgem SVT standing charges).  So again in that case - fixed term is not the same as fixed rates or fixed price.]

One of my friends ran a small repair business - 2 man outfit - one of his offered supply contracts from a broker had iirc at least 3-4 A4 pages of tables defining how different parts of the price mix could or in fact would as it turned out be varied.  Trying to compare 2 offers side by side - as he was looking to switch - he decided was too difficult.  So just iirc went based on brokers advice and current pricing.

Electricity / Gas etc is only one price variation many businesses have to cope with.  Energy, raw materials (copper, timber, paint etc), transport etc.  Some changes can be hedged against (if big enough).  Some can be passed onto customers.  Others just eat into margins and profits

Going back to your question about notice - its going to be impossible for them to predict what these may or may not be in terms of crisis - to pre-warn you.

Just as no one really predicted average wholesale rates over trebling in the space of 18 months leading to last Jan Ofgem £4279 DF median TDCV cap.  Or that Ofgem would double domestic electric standing charges over the last 18m-2 years. 90% in one step in my case - in large part due to SoLR being added.

Check your contract terms and conditions to see if they are following them - if they are - I fear your options may be limited. 

You clearly think the rise was unfair - how does it's pricing compare to other similar business contracts - both now and then ?