Shopping around essential as MP warns hale gas no silver bullet for high energy prices
SHOPPING around for the best deals and reducing energy consumption remained essential after a parliamentary committee cautioned that shale gas might not deliver lower gas prices, according to the Energy Advice Line.
The UK’s leading price comparison, switching and advice service for energy users said the Energy and Climate Change Committee’s findings were a warning to consumers that shale extraction would not necessarily put a brake on spiraling energy costs.
In its report released last week, MPs warned the government not to count on shale gas extraction lowering future home and business energy prices.
Shale gas production in the UK could enhance energy security and boost tax revenues, but it is too early to say whether it would reduce energy prices, according to MPs.
“It is still too soon to call whether shale gas will provide the silver bullet needed to solve our energy problems. Although the US shale gas has seen a dramatic fall in domestic gas prices, a similar ‘revolution’ here is not certain,” according to committee chairman Tim Yeo.
Julian Morgan, managing director of the Energy Advice Line, said with energy prices likely to continue their upward climb consumers had no choice but to take care with their energy supplies.
“Shopping around for the best deals is more important than ever, as is making sure that you use expensive energy supplies thoughtfully,” Mr Morgan said.
“That means taking the time to compare electricity prices for your home or business, locking into the best deals and ensuring you don’t just stay with the same supplier year after year. It’s simply throwing money away if you do.
“It also means assessing where you can reduce your energy consumption. Ensure that you have a basic workplace energy policy in place and that everyone in your household knows the importance of not wasting gas and electricity.
“Go through your home and business room by room, and decide which appliances can be turned off when.”
Gas prices in the US are now the cheapest in the world following widespread investment in shale gas. However, the situation in the UK was very different, according to the Climate Change Committee’s report and the extent of recoverable shale gas resources as yet unknown, it found.
“The Government has dithered on this issue and should now encourage companies to get on and drill, to establish whether significant recoverable resources exist, MPs said in the report.
“Ministers should be careful, though, not to base energy policy on an assumption that gas prices will fall in future as a result of shale gas production. Rising global demand for gas, particularly from Asia, could limit any potential price reductions.”
The Energy Advice Line is the UK’s leading impartial comparison, switching and advice service for businesses and householders. It actively campaigns for reform of the UK’s energy market to boost competition, get consumers a better deal from suppliers and lower energy prices.
The Energy Advice Line’s price comparison and switching service is free and completely impartial. Consumers can obtain energy quotes with a few computer strokes based on a diverse panel of energy suppliers including the major players and smaller independent utility companies.
For further information visit www.energyadviceline.org.uk
Business Electricity Quarterly Price Review
Business electricity prices have spiralled by more than 11% on average in the past 12 months, according to figures released by the Energy Advice Line.
Firms that signed up to 1, 2 and 3-year energy contracts in the first quarter of 2012 paid an average 9.98p/kWh for electricity, compared to 11.12p/kWh during the same period in 2013.
According to Julian Morgan, managing director of the price comparison, switching and advice service for energy consumers, said that firms should now consider longer-term contracts because energy prices were set to rise further.
The Energy Advice Line’s Quarterly Review of energy prices shows that firms that signed up to 1-year energy contracts at the beginning of 2012 were hardest hit by the price rises.
A year ago, electricity tariffs under a 1-year contract cost an average 9.56p/kWh. By the time the contracts expired in the first quarter of 2013, prices had risen to 10.99p/kWh – an increase of almost 15%.
In contrast, firms that signed up to 3-year deals at the start of 2012 would have paid slightly more for their energy at the start of the contract – 10.58p/kWh. However, these firms will now be paying less than average today and the low tariffs are locked in for a further 2 years.
“Firms that signed up to the shortest-term deals a year ago would have been financially better off signing up to a more expensive 3-year year deal, “ Mr Morgan said.
“Firms would have paid a premium for a 3-year contract but because prices have risen so substantially, they are now better off.
“This is not about the benefit of hindsight. These figures illustrate very clearly that it’s well worth considering all available options when looking to sign up to a new energy deal.
“Energy prices are likely to continue to rise so locking in today’s prices is probably a good idea.”
However, the Energy Advice Line’s review found that most UK firms – 87% – continue to opt for the cheapest short-term deals.
“With tough economic conditions continuing to bite and drive profit margins down, businesses seem to be grabbing the cheapest deals possible and that means short-term contracts,” Mr Morgan said.
“However, our advice continues to be that they should not disregard the longer-term options. Taking a short-term view in a market where prices are rising could be the wrong decision.”
The Energy Advice Line is the UK’s leading energy price comparison and switching service exclusively for business, and enables firms to compare the market for the best possible business energy deals within minutes.
The free service is backed by a team of business energy experts who provide a complete contract management service including advice about business energy contracts, how to avoid expensive rollover contracts and a renewal reminder service.
The Energy Advice Line also campaigns for a better deal for business energy users from suppliers and has lobbied the government and energy regulator Ofgem for greater protection from practices such as cold calling.
Energy Advice Line urges business electricity users to say no to cold callers
The Energy Advice Line has urged UK business electricity users to say no to cold callers following the case of a rogue energy broker who switched a firm’s supplier without permission.
Julian Morgan, managing director of the UK’s leading price comparison and switching service exclusively for businesses, said it was an extreme case but underscored the need for firms to be vigilant when called out of the blue.
Mr Morgan said the business owner received an unsolicited telephone call from a person claiming to represent their existing energy supplier. The caller requested meter reading and other meter details, which the business owner provided.
“The customer only realized a couple of months later that the caller wasn’t in fact from their supply company and that they had been switched to a new supplier without their knowledge,” Mr Morgan said.
“For obvious reasons they were furious. We helped the customer switch back to their old supplier and all was well in the end.
“But this case highlights the dangers for businesses of dealing with unsolicited sales calls.
“We have also come across numerous cases where businesses have believed they have done nothing more than listen to what a cold caller has to say, but have in fact unwittingly “agreed” to an expensive energy contract.”
The Energy Advice Line has lobbied Ofgem to ban cold calling and provided the energy regulator with a dossier of evidence highlighting the tactics used by unscrupulous rogue brokers. This includes brokers who:
- Fraudulently claim to be “energy officials” or representatives of a businesses existing energy supplier in order to extract meter details
- Bombard businesses with heavy-pressure sales calls, in one case calling more than 100 times in 10 days
- Claim to offer the best energy deals on the market when in fact they were touting expensive and onerous deals
- Obtain, through questionable means, lists of firms who have recently moved premises and then hound them with unsolicited sales calls.
“The problem is getting worse and not better,” Mr Morgan said. “The big energy suppliers claim to have no active involvement in these practices but at best they are turning a blind eye to very dodgy dealing.
“Business should never accept a deal from a cold caller because these are likely to be 40% higher, or even more, above the current retail price.
“Ofgem needs to act now to prevent more businesses unwittingly switching to expensive deals.”
Mr Morgan said it was important for businesses to refuse to speak to cold callers. Instead, they should use an independent and reputable price comparison and switching service that had a large range of suppliers and displayed their tariffs online.
If they did engage with a caller, Mr Morgan said it was crucial to verify the person’s identity by calling the company back and asking to speak to an account manager.
“The most important thing to remember is that no-one from a reputable price comparison and switching service will put you under any pressure to take out an energy contract,” Mr Morgan said.
“If they do, put the phone down.”
If you believe you have been tricked into an expensive energy contract by a cold caller, one of our team of business energy contract experts may be able to help – call 0800 915 1800.
The Energy Advice Line is the UK’s only impartial business electricity price comparison and switching service exclusively for business. It has campaigned for utility companies to change their business energy contracts and billing arrangements to make it easier for firms to switch suppliers to get the best business electricity rates and gas deals.
The Energy Advice Line steps up campaign to ban cold calling
The Energy Advice Line has stepped up its campaign for Ofgem to ban cold calling after a rogue energy broker posing as an energy official telephoned a small firm more than 100 times in less than two weeks.
Someone claiming to be from “the meter registrations company” bombarded the business, which had just moved into new premises, with calls pressuring the owner to sign up to an energy deal.
When the business owner told the caller they had already signed up with an energy supplier, the caller insisted they were legally obliged to deal with them.
In another case, a caller claiming to be from “National Utilities” called a business five times in one week insisting the owner buy an energy contract through them. The same caller had previously called the business pretending to be from British Gas.
Julian Morgan, managing direct of the Energy Advice Line, the UK’s leading price comparison and switching service for business, said the problem of cold-calling was now out of control.
“It’s long overdue for the energy regulator to step in and ban this unscrupulous practice,” Mr Morgan said.
“Ofgem will shortly be announcing major reforms to the retail energy market to ensure that business electricity users get a better deal, and the issue of cold calling needs to be one of their priorities.
“These are very unscrupulous rogue brokers lying to and harassing potential customers in order to sell energy contracts in exchange for a commission.
“Somehow they are obtaining lists of companies who have just moved business premises and they know these organisations will be looking to get their energy supplies in order.
“At best, it’s harassment for firms that simply don’t have time to deal with this level heavy-pressure telephone selling. At worst, it’s fraud when callers present themselves as energy officials when they’re not,” Mr Morgan said.
“These rogue brokers are not selling good deals, they are touting expensive deals on behalf of one particular supplier. They are anything but independent, despite what they might claim, and are not working in the best interest of the customer.”
The Energy Advice Line has been lobbying Ofgem to ban the practice of cold calling and has compiled a list of examples of firms that have been hounded by rogue brokers using high-pressure sales techniques.
The service has produced guidance for firms to follow to avoid being locked into the expensive business electricity and gas deals being touted by cold callers.
- Speak to a price comparison service that has a large panel of suppliers: check that they are not just working for one specific supplier
- Say No to Cold Calling: do not accept an energy deal from someone who calls you out of the blue. The price is usually 30%–40% above of the current retail price.
- Verify who you are talking to: ring the company back and ask to speak to your account manager to ensure they are being truthful about the company they represent
- Price transparency: go with a price comparison service prepared to put the energy tariffs they offer on their website so you can be sure you are making the right choice
- Commission transparency: if you want to know how much commission the agency is earning from the switch just ask. A reputable service will tell you. If they will not tell you, be suspicious
- Pressure selling: a professional impartial and transparent service will not exert any pressure on you to enter into a contract, and will give you the information and time you need to ensure you are making the right choice
You can join the Say No to Cold Calling campaign and get further information at www.energyadviceline.org.uk/say-no-to-cold-calling
You can also follow the campaign on twitter @SayNoToColdCall
If you believe you have been tricked into an expensive energy contract by a cold-caller, one of our team of business energy contract experts may be able to help – call 0800 915 1800.
The Energy Advice Line is the UK’s only impartial business electricity price comparison and switching service exclusively for business. It has campaigned for utility companies to change their business energy contracts and billing arrangements to make it easier for firms to switch suppliers to get the best business electricity rates and gas deals.
Energy Advice Line urges firms to plan ahead to save money
The Energy Advice Line has urged more UK firms to reduce their spending by thinking ahead, after a survey showed that most businesses don’t plan beyond the next 12 months.
Julian Morgan, managing director of the UK’s leading price comparison and switching service exclusively for business, said firms were missing out on significant savings by being short-sighted.
“This is particularly the case when it comes to business electricity costs,” Mr Morgan said.
“Fixed-term energy deals that only last 12 months might cost less than 2 or 3 year contracts, but with energy prices still rising, many businesses could be much better off in the medium and long-term by locking in prices for longer.
“We have calculated that some businesses could have saved hundreds of pounds, or even more, per year on their energy bills if they had taken out a 2 or 3 year contract at the start of 2012 instead of a 12-month deal.
“That’s because prices rose by 15% over the course of that year. This is not just the benefit of hindsight. Energy prices will only go up further and we always advise our customers to consider all the options.
“Taking a cheaper short-term contract could well end up being a false economy.”
The survey of 500 businesses by Big Six energy supplier npower found that 57% of small businesses only planned six to 12 months in advance.
Around the same number reported wishing they could forecast further ahead, but said an uncertain economy and shortage of finances were stopping them from forecasting.
“Actually, business electricity prices is one area where firms can take control amid this economic uncertainty,” Mr Morgan said.
“Locking in prices for a 1, 2 or 3 year term gives businesses the certainty over one key overhead.”
Nearly 60% said businesses surveyed took a planned approach to their businesses’ energy consumption, but 25% admitted they had not put in place any energy efficiency measures.
“Shopping around for the best business electricity deal is essential these days, but so is ensuring that the energy your business uses isn’t being wasted,” Mr Morgan said.
“Many businesses are astonished at how much they can save by implementing a basic workplace energy policy. For example, by identifying which pieces of equipment are switched on when, and who is responsible for turning off the lights at the end of the day.”
The Energy Advice Line is the UK’s only impartial business electricity price comparison and switching service exclusively for firms. It actively campaigns for reform of the UK’s energy market so that businesses get a fairer deal and cheaper prices from the major suppliers.
It also offers a free and independent price comparison and switching service that enables businesses to shop the market and identify the cheapest available deal with the click of a mouse. The service includes a complete contract management arrangement to help firms with problems that arise in the course of their energy contract.
For further information and to compare business electricity prices visit www.energyadviceline.org.uk
UK business electricity users wasting money by losing track of their energy contracts, says Energy Advice Line
UK businesses risk losing thousands of pounds a year by failing to keep track of when their fixed-price energy contracts expire, according to the Energy Advice Line.
One small family butcher in Birmingham recently missed out on saving more than £11,000 a year on its business electricity bill by overlooking its contract renewal date.
The firm’s energy supplier, with whom it had been a customer for 10 years, automatically switched it to an expensive out-of-contract tariff when it failed to give notice on the required date.
Julian Morgan, managing director of the Energy Advice Line, the UK’s leading price comparison and switching service for business, said firms contacted them on a daily basis with similar problems.
“This situation is not uncommon and we help firms that, for a variety of reasons, have not given notice to their supplier in a timely way and told them they want to leave and go somewhere cheaper,” Mr Morgan said.
“This can be an extremely costly mistake for a business to make. Unfortunately if a business is rolled over at the end of a fixed term they will be locked into a contract that is usually 30% more, or even higher, than the current retail price.
“When this happens, it’s too late and the business will not be able to exit the contract until it expires in 12 months.
“Energy suppliers do not reward customer loyalty, in fact, the opposite is true. They make a significant proportion of their profits from loyal customers who stay with them year-on-year without shopping around and looking for a better deal.
“Suppliers simply charge them an inflated price for their energy compared to what they would be charged if they switched to a different company.”
Mr Morgan urged business electricity users to be vigilant and ensure they know when their fixed-price energy contracts expire. They also need to be absolutely certain of when to serve notice to their supplier.
“In the case of the Birmingham butcher, they only had 30 days to give notice from the date they received the renewal quote from their existing supplier,” Mr Morgan said.
“This short contract termination window leaves the customer very open to being automatically flipped to an expensive rollover contract.
“Letters can get lost in the post, be opened by colleagues or the wrong person, simply sent to the wrong address or arrive when the person responsible for dealing with energy bills is away on holidays.
”It’s an unfair strategy by energy companies but that’s what many of them do.”
Mr Morgan said it was essential for business energy users to compare the renewal rate they receive from their existing supplier with other deals available in the marketplace.
“Always use a reputable and independent online price comparison and switching service like the Energy Advice Line, that displays prices online and offers customers a completely transparent view of the deals available.
“Not only will we be able to find businesses a much better tariff than that offered by their existing supplier, but our service is completely free, independent and transparent.
“In addition, we offer a free contract management service, which means we help firms throughout the term of their contract with any problems.
“Importantly, this also includes a free renewal reminder service so they can never forget when their fixed-price deal is coming to an end.
“And if you have accidently been caught in a rollover contract, you can still get in touch with us and we’ll remind you when your contract’s up and help you find a better deal next time.”
The Energy Advice Line helps small firms through to large non-domestic energy consumers search the market for the best available business electricity and business gas deals.
The service saves firms the time and trouble of trawling through thousands of business electricity and gas tariffs by analysing prices from its panel of energy suppliers and matching them with the requirements of the organisation.
Significantly, tariffs are compared on a like-for-like basis without the use of product names or payment plans, which means that quotes are easy to understand and accurate.
For more information visit www.energyadviceline.org.uk
Energy Advice Line supports Bill to outlaw rollover contracts
The Energy Advice Line has thrown its support behind legislation aimed at stopping energy companies automatically rolling businesses over onto expensive new energy contracts.
The UK’s leading business electricity price comparison and switching service has endorsed a private members Bill put forward last week by MP Caroline Lucas aimed at making the practice illegal.
The Energy Advice Line has long campaigned for energy regulator Ofgem to ban rollover contracts, whereby suppliers lock firms into un-negiotiated and expensive energy contracts for a full 12 months without consultation.
“It’s a pernicious practice and we deal with business electricity users every day who have ended up paying thousands of pounds more for their energy than they need to as a result,” Mr Morgan said.
“When a fixed-price energy contract comes to an end, many businesses have a very small window of opportunity to give notice to their supplier that are leaving to take up a cheaper deal with another company.
“If this happens, they can automatically be rolled over onto an expensive contract that is often 30% more expensive, and sometimes even more than that, than the going retail price.
“By the time a business electricity user realizes what’s happened it’s too late and they are stuck in this contract paying much more than they need to for a full 12 months.
“Despite repeated calls from us and business groups, suppliers have refused to stop the practice. It’s long overdue for Ofgem or the government to step in and make it illegal.”
The Green Party’s Caroline Lucas has tabled the Micro Business and Energy Contract Rollover Bill, which would allow very small business electricity users to escape from these expensive rollover contracts after 30 days.
According to research by the Federation of Small Business (FSB), 25% of small firms have been rolled over on to a new energy contract without their knowledge. More than 80% of those questioned said they would support the abolition of rollover contracts.
Mr Morgan said many firms, in particular the smallest organisations, often were unaware that the terms of their business electricity contracts required them to give notice to their supplier within a fixed time frame.
“Suppliers simply take advantage of this fact and firms need protection from such an unfair practice,” Mr Morgan said.
“Ofgem signaled that it would crack down on this some years ago but to date has done nothing.”
Ms Lucas said: “With the rising cost of energy now a make or break issue for many small firms, it’s time to hold the energy giants to account for the damaging practice of contract rollovers that delivers a bad deal for micro businesses.
“It’s deeply unfair that, while micro businesses often consume products and services in a similar way to domestic consumers, they do not enjoy the same level of regulatory protection.
“This leaves them vulnerable to being ‘rolled over’ from their current energy contract into a new one without their knowledge – making it impossible for them to negotiate a better deal for another 12 months.
“My private member’s bill is about asking the Government to act to ensure the energy regulator finally delivers on its promise – and stands up for the UK’s micro businesses.”
The bill is scheduled to be debated by MPs on March 1.
The Energy Advice Line offers help and advice to firms of all sizes about how to save money on their business energy bills. The online service allows firms to input their details and with just a few computer strokes generate the five best energy quotes from a wide-ranging panel of business energy suppliers.
It also offers a free contract management service to help with ongoing questions or problems with the contract or energy supplier.
For further information about the Energy Advice Line’s services, or to obtain quotes or advice, visit www.energyadviceline.org.uk
Longer-term energy contracts could save firms money as business electricity prices rise, says the Energy Advice Line
UK firms should consider locking into longer-term fixed-price business electricity contracts instead of cheaper 12-month deals, according to the Energy Advice Line.
Two and three-year energy contracts were generally more expensive in the short term, but savings over the longer term could be significant as business energy prices were expected to continue to rise.
Julian Morgan, managing director of the UK’s leading business electricity price comparison and switching service, said most firms opted for fixed-term contracts of one year because they were cheaper than two or three-year deals.
“But they could be losing money by doing this,” he said. In the first quarter of 2012, 75% of customers went for 12-month contracts, as they were the cheapest price at an average of 9.58p/kWh for the quarter.
“But because business electricity prices have risen by 15% in that time, customers who locked into these cheapest deals would have been better off paying a premium and opting for longer-term contracts.
“These customers are now coming back onto the market because their 12-month deals have ended to find that business electricity prices are now 15% higher.”
Mr Morgan said that a customer who had taken out a two-year contract at the start of 2012 would have paid 6.7% more for their electricity than if they took out a 12-month contract. But as prices have since risen by 15% between now and then, the business would have recouped this and enjoyed the security of knowing their energy bills would not rise for a further year.
If the customer had agreed to a three-year contract, the savings could prove to be even more significant with business electricity prices expected to rise further.
“This isn’t about the benefit of hindsight, it’s about considering all the options and not just signing up to the cheapest short-term deal,” Mr Morgan said.
“We are strongly advising all our customers to consider the longer-term options, and our team can provide details about the various products available.
“The longer-term options will be slightly more expensive but the analysis from 2012 has proved that this might be the way to go in a rising market, and afford businesses greater price protection for longer.
“Our aim at the Energy Advice Line is to provide our customers with all the options so they have all relevant information they need to make a well informed decision.”
The Energy Advice Line is the UK’s leading commercial electricity price comparison and switching service exclusively for businesses, and enables firms to compare the market for the best possible business energy deals within minutes.
The free service is backed by a team of business energy experts who provide a complete contract management service including advice about business energy contracts, how to avoid expensive roll-over contracts and a renewal reminder service.
The Energy Advice Line also campaigns for a better deal for business energy users from suppliers and has lobbied the government and energy regulator Ofgem for greater protection from practices such as cold calling.
For further information visit www.energyadviceline.org.uk
Energy Advice Line calls on customers to lock in tariffs now
The Energy Advice Line has urged businesses to shop around and lock in the best business energy prices as soon as possible as commercial energy prices climb.
Julian Morgan, managing director of the UK’s leading business electricity price comparison and switching service, said firms could find they miss out on good deals if they don’t act quickly to protect themselves from the increases.
His comments come as ScottishPower increased its commercial energy prices by 6%.
Five of the Big Six suppliers have already increased their energy prices for domestic customers this winter, while E.ON has promised not to raise prices until April 2013.
“I can’t stress enough how important it is for businesses to take control of their energy bills and lock in good deals now while they’re still available,” Mr Morgan said.
“Firms need to understand that even if they are a few months away from the end of their existing energy contracts, they should start shopping the market to see what deals are out there. We can help them do this and our service is free.
“Once they find a good deal they should lock it in now. The deal will be valid for up to 150 days before and will come into effect once their existing deal has expired.
“Good deals are still out there and we can advise firms on the best tariffs and different products available.
“It is possible to lock in prices in for 1, 2 or even 3-year contracts. These longer contracts might involve paying slightly more for energy than you would on a shorter contract, but it’s worth considering.
“Prices are on an upward climb, so firms could end up saving even more money in the long term by opting for a longer deal, as well as enjoying peace of mind.
“With a little forward thinking, firms can reduce their energy spend significantly.”
The outlook for domestic and business electricity prices is for further increases. The Office for Budget Responsibility, which publishes official forecasts for the Treasury, is predicting another 5 per cent rise in energy bills next year.
It said it expected suppliers to respond to higher oil and wholesale gas prices as well as increased costs associated with the Government’s green agenda.
“With the current pressure on energy prices and the continuing upward trend, it really does make sound business sense to thoroughly investigate the cheapest energy deals and lock them in,” Mr Morgan said.
The Energy Advice Line is the only independent price comparison and switching service in the UK designed exclusively for businesses. Firms can view the five most competitive energy offers from the UK’s leading suppliers online, compare prices against their renewal quotation and switch at the click of a button.
The Energy Advice Line’s expert team can also offer advice on how to switch suppliers, as well as a renewal reminder service to ensure you do not get caught in an expensive business energy rollover contract.
For more information visit www.energyadviceline.org.uk
Previous Posts
