Business Electricity Contract Problems

lordie

I am starting this thread in an attempt to collate and highlight all the potential pitfalls and wrong-doing by business electricity suppliers with their contracts signed for by small to medium size businesses. I am now in a dispute over an electricity contract for the third year in a row. I think it would be a great help for customers to know in advance of the small print in the T & C`s of the various suppliers regarding the end of a customers contracts and what you have to do to end the contract and more importantly ensure that your original supplier will let you go and get your electricity from a more competitive company at contract end. It seems that many of the Electricity suppliers employ very underhand tactics to tie people into a contract for alot longer and at much greater expense than they originally wanted. Once locked into these contracts it is almost impossible to get out and they will bombard you with threats of legal proceedings and possible disconnection costing you £1000`s. If you treated your hand-earned customers like that how would your business get on? I know that I would be bankrupt within a year or less. The problem is that they rely on the fact that most of them employ these tactics and so there are only a few "good guys" out there. There is also very little help you can receive in resolving these dodgy dealings. Domestic customers are much better protected. Business customers are left with OFGEM or Energywatch, Both of which in my dealings have been practically useless. You are then left with the daunting option of court action.
So lets try and nip this huge problem in the bud and let small business owners know ahead of time what you need to do to get out of a shortly-to-end contracts with the numerous electricity suppliers. Hopefully then people will be able to use this thread as a point of reference when the time comes to review your electricity requirements. It would also be very useful to know what are the best uptodate deals and rates going for Business Electricity.

Cheers and happy posting, Paul.

lordie

My latest dispute is with E4B. Problems relate to a 1 year contract that automatically rolls over into a further 2 year contract unless you are very careful. First year rate was very attractive but then the price went up by 50% for the next 2 years.

When dealing with E4B you must:

1) Ensure you receive a notification from them at least 40 days before contract end with their new rates.

2) On receipt of this notice you then have 30 days to serve notice of termination to E4B.

3) You then have until a date 7 days after the new rates are due to take effect to have transferred to a new supplier. That is 7 days after your initial contract was due to expire/rollover.

In theory this gives you plenty of time to transfer supply. In my case I employed Energyadviceline.org to act as my broker. They arranged my new supply with Scottish Power at a hugely reduced rate to the new E4B rate. For some reason that I still am unaware of, I gave them 7 weeks leeway to arrange the transfer, and between the 2 of them they still managed to come up with a date 1 day beyond the 7 day threshold at the end of my contract. E4B were not at all leniant regarding this and said that I was now tied in for 2 more years at their hugely increased rates. Needless to say, legal proceedings are now being initiated.

All that said, I was very impressed with the Scottish Power rates. These being (as of 02/01/2008):

Standing Charge 26p/day

Unit Charge 6.98p/unit.

Terrylw1

Residential customers only have Energywatch & Ofgem to help them, so that puts them on an equal footing with SME's.

Residential customers do get far more protection and they don't get hammered with the Deemed contracts to the extent of charging higher unit prices but businesses do.

Is all of this not in the T&C's?

The underhand tactics are allowed by Ofgem. The UA actually states they can Deem contracts (which they have to for all customers to cover new tenancies) but to also charge higher rates on Deemed contracts. So, if you miss your date, you are on the Deemed rates.

I don't agree with the fact you sign up for 1 year and then get entered into a 2 year deemed contract when you miss you opt out period. You don't have to switch, you can negogiate a better deal but it may not be the best, which you need to switch for.

Businesses all have these issues but SME's get it worst because they don't have contracts managers in place and teams of solicitors watching these things. It all comes down to the SME owner.

In terms of stopping you changing contract part way through and charging you penalties - businesses do operate like that. Have a look at mobile phone contracts for instance. If you didn't you would be a charity for those underhand customers who want to move for constant better rates.

I don't agree with the fact SME's don't have an additional cooling off period either. Letters go missing, so their should be a colling off period as there are on any new contracts.

CharlesWW

Well done lordie for raising this topic and for MSE to still be carrying it, because 3 years on it is still relevant today.

Just because mobile phone companies (and business landline suppliers) tie you into contracts does not make it right for business electricity suppliers to renew your contract at a less favourable rate, and tie you into that rate, because you have been deemed to accept the new contract by not cancelling or re-negotiating your old contract.

This practise is unbelievable.

I have 4 commercial electricity supplies and only one is tied up in this rediculous contract renewal fiasco. The other 3 supplies are historical 'out of contract' (or should I say 'never were in contract') supplies that are CHEAPER than the contract I have just renegotiated, in the nick of time. I'm afraid once they get you playing their game, you MUST keep on playing it, to their rules.

I set you a challenge - without using a broker, try getting a business electricity quote without telling the supplier who you are! Only Britisg Gas (Centrica) would give me the figures I was looking for. What's the big secret? I know they need to know the size of your supply meter (1st two digits on the top line of your supply number) and your location (1st 2 digits on the bottom line of your supply number) but what's with the third degree from Eon, Npower, Scottish Power and EDF?

Thank you lordie, now that's off my chest I can sit down with a nice warm cup of tea and concentrate on running my business.