What should you look at before reviewing your business energy contract?
When a business energy contract is coming up for review, it is natural to ask, “What price can I get next?”
That is an important question, but it is not the first one I would ask.
Before comparing new options, I want to understand what the business has now, how it uses energy and whether anything is likely to change. Otherwise, it is possible to make a careful comparison using figures that no longer reflect the business.
Here is where I would start.
Find out what you have now
Gather a few recent bills and your current contract details, if you have them. Look for the supplier, contract end date, meter details, unit rate and standing charge.
If there is more than one meter or premises, gather the bills for each. It helps to see the whole arrangement rather than review one supply in isolation.
You do not need to understand every line on the bill before asking for help. The purpose of gathering the information is to make sure nothing important is missed.
Check the usage behind the cost
The amount you pay is important, but it does not tell the full story by itself.
Look at how much gas or electricity the business used over several billing periods. Was one month unusually high or low? Were the readings actual or estimated? Can you explain any large changes?
One bill may have been affected by a busy period, a closure, seasonal demand or an estimate. Looking at more than one period gives you a better starting point for thinking about future usage.
If a reading or charge does not make sense, that is worth investigating before you use the bill as the basis for a new decision.
Think about what has changed in the business
This is the part a bill cannot tell me on its own.
Have your opening hours changed? Are more people working on site? Have you added equipment, expanded into another space or changed the way you use the premises?
It is just as useful to know if energy use may fall. Perhaps a part of the building is no longer occupied, equipment has been replaced or the business will be moving.
You do not need to calculate the exact effect of every change. A short explanation helps put the past figures in context and highlights questions to explore before choosing a new arrangement.
Compare the whole quote
Once you have a clearer picture, you can start comparing options.
The unit rate matters, but check what else sits alongside it. Are the quotes based on the same estimated usage? What are the standing charges? Are they for the same contract length and the same meters?
Think about the decision that suits your business, too. For one owner, knowing what to budget for may be the priority. Another may be expecting changes and want to understand the implications of committing for a particular term.
A quote should help you make an informed decision. If the figures or terms are difficult to compare, ask for them to be explained before you agree.
Give yourself room to decide
Starting a review does not mean you must sign a new contract immediately. It means you know your dates, understand your current position and can consider your options without a deadline making the decision for you.
If your business energy bills have been sitting on the “I’ll get to those” pile, send them to joanne@yourenergyconsultant.co.uk. Tell me when you think your contract ends and anything that has changed in the business. I can start by helping you work out where things stand.