RUNAWAY business energy costs are hitting small firms hard as inflation spirals, according to a new survey.

Research by employer organisation the Forum of Private Business has found that 94% of firms saw their energy bills increase over the past year, followed closely by rises in transport costs (92%) and the price of raw materials (82%).

The Forum has called for a Code of Conduct to be developed to protect small firms from unfair treatment by utility companies, similar to that which protects domestic energy consumers.

In particular, the Forum has called for a cap to be introduced on ‘back billing’ where firms are charged retrospectively, for example, due to a faulty meter. Under the proposals, where a firm with fewer than ten employees has taken all reasonable steps to avoid being back billed, utility companies would have to limit retrospective business electricity charges to 3 years, and a negotiated period for business gas bills.

The Forum also wants to see fairer business energy contracts introduced to protect business energy users from being automatically ‘rolled over’ onto more expensive energy deals.

The Forum is working with energy regulatory Ofgem and the Energy Retailers Association (ERA) on the proposals.

Not surprisingly, the Forum’s research also shows that firms more reliant on energy such as manufacturers, and those in labour-intensive sectors such as catering, reported higher than average business energy cost increases.

Julian Morgan, managing director of the Energy Advice Line, the UK’s leading energy price comparison and switching service for business, welcomed the Forum’s calls for a fairer deal for small firms.

But he said that businesses could help themselves reduce the impact of business energy price hikes by using the services of an impartial price comparison and switching services like the Energy Advice Line.

“In this climate of rising business energy prices, we can help firms take control of their business energy arrangements by ensuring they don’t get trapped in expensive rollover contracts,” Mr Morgan said.

“We can also help firms save money by hunting out the best business energy deals from our panel of suppliers. In some cases we can offer exclusive deals that are not available elsewhere in the market.”

Mr Morgan said firms were most vulnerable to excessive business energy price increases where their business energy contracts expired, and they were rolled over onto more expensive deals, often without being aware it had happened.

“This is where we can really help,” Mr Morgan said. “We offer a free renewal reminder service and we can explain exactly what firms have to avoid being hit hard but this discriminatory tactic by the utility companies.”

For further information visit www.energyadviceline.org.uk

BUSINESS energy customers must be vigilant when their fixed-price fuel deals come up for renewal to ensure they do not get trapped in expensive and onerous new contracts, according to leading price comparison and switching service, the Energy Advice Line.

Managing director of the service, Julian Morgan, said businesses were better placed than domestic consumers to compare energy tariffs, but too many firms were failing to seek out cheap deals when their contracts ended.

Prime Minister David Cameron has joined the increasingly heated debate about spiralling energy bills by calling on the ‘big six’ suppliers to make it easier for consumers to compare prices, find lower tariffs, save energy and switch payment methods.

Mr Morgan said that price comparison in the domestic sector could sometimes be confusing because of the vast number of different plans available and the lack of transparency about the true unit price customers had to pay for the energy they consumed.

This was not the case for firms that compared business electricity and gas prices using the Energy Advice Line. Mr Morgan said the service displayed tariffs clearly so that customers could compare the market simply and very quickly. He urged the owners of small and medium-sized businesses to compare the market as they could be throwing away money as well as boosting the profits of the ‘big six’ suppliers if they did not look for better deals at the end of their fixed-price contracts.

“Most business electricity and business gas users are on fixed-price deals which temporarily protect them from the price increases that are announced – but only until their fixed-price contract ends,” Mr Morgan said.

“Once that happens, the prices the energy companies offer them will be very different and will reflect the increases in the retail price of energy.

“It is critical for firms to check what prices are available as they approach their contract renewal date, and we can help them do that.

“The renewal prices offered to a firm by their current supplier are very unlikely to be competitive. These deals will also have onerous terms and conditions attached, and suppliers will try to lock firms in for a further 12 months on much higher prices.

“This is where suppliers in the commercial sector make most of their money – on renewals. The worst thing a business energy customer can do is assume they will be offered a great deal on renewal. They often won’t.”

Mr Morgan urged business energy users to use the pricing information that appeared on their energy bills, or on the renewal letters sent to them by their current suppliers, to compare different products on a like-for-like basis when shopping around for the cheapest business energy deal.

He said firms could only really do this by using an impartial online switching service like the Energy Advice Line that set out the most competitive quotes by clearly listing the pence per kilowatt hour (p/kWh) charged for every energy unit consumed, as well as the fixed daily charge usually measured in pence per day (p/day).

Mr Morgan said this was the only way businesses would be able to make an informed choice when considering switching suppliers.

He urged businesses not to be misled into choosing a supplier that promised to reduce their monthly or quarterly direct debit payments, because in the long run they would not pay less. Under these promotions, customers’ payment plans would be altered to make a deal appear more attractive for the first three to four months, but monthly payments would then increase to recover the interim underpayment. Only then would customers realise the true unit price on the contract, by which time it was often too late to pull out of the deal as they may have signed up for 12, 24 or 36 months.

“Always compare on a like-for-like basis and check the actual unit price on the contract before signing,” Mr Morgan said.

The Energy Advice Line is the UK’s only impartial price comparison and switching service exclusively for businesses.

Firms can use the service to quickly and easily shop online for the best available business electricity and business gas prices from a panel comprising large suppliers as well as smaller independent utility companies.

The service also provides expert advice about energy contracts and how to switch suppliers, as well as a free renewal reminder service to help firms avoid being trapped in expensive contracts when their fixed-term contracts expire.

For further information visit www.energyadviceline.org.uk

ENERGY companies often fail to offer the best deals to customers who are interested in switching suppliers, according to consumers association, Which?

In a sample survey of the ‘big six’ energy suppliers, researchers found that in one-third of cases, energy company staff did not offer the cheapest tariff and sometimes the advice they offered about potential savings was questionable.

Researchers at Which? called each of the six major energy suppliers 12 times in one week and asked for the cheapest deal.

Telesales staff at Southern Electric, part of the Scottish and Southern Energy Group, mentioned the cheapest tariff in three of the 12 calls.

Responding to the findings, Southern Electric said there was little price difference between the tariffs that were offered, but it accepted there were lessons to be learned.

EDF Energy, which offered the cheapest deal in five of 12 cases, said that at the time Which? Researchers called, the cheapest tariffs were only available to those signing up online.

Which? researchers said that exit fees, which were often charged when customers left energy contracts, were not mentioned in a third of all cases. Scottish Power failed to explain its £51 exit fee in nine of the 12 calls.

Which? also suggested that British Gas offered a cash back deal to one caller, but not another in the same region.

However, British Gas said that the cheapest tariff was not necessarily the best option for every customer, such as those who would like to have paper bills and advice over the phone.

The Which? research related to domestic energy consumers, managing director of the Energy Advice Line, Julian Morgan, said energy companies also made it very difficult for business energy to try to find the best available deal.

“It’s fine for business energy users to go straight to the suppliers to find the best deal, but the Which? Survey shows how complicated this can be,” Mr Morgan said.

“For business gas and business electricity customers, there are literally thousands of tariffs on offer and it can be very complex and time-consuming to sift through them all. The energy companies should be doing better, but an impartial service like the Energy Advice Line can help.

“Our service is designed exclusively for businesses, and our team of business energy experts can help firms negotiate this minefield and help them find the best deal and in the process save them money.”

For further information visit www.energyadviceline.org.uk

PROFIT margins of the ‘big six’ energy companies have risen to £125 per customer each year from £15 in June – an inflation-busting increase of 700%.

According to calculations by the energy regulator Ofgem, the annual fuel bill for consumers has risen to £1,345 following significant price hikes announced over the summer that have hit both domestic and business energy customers.

However, the regulator expects profit margins to fall back to £90 per customer next year.

The figures were revealed as part of a review aimed at simplifying the energy market to make it more competitive.

“When consumers face energy bills at around £1,345 they must have complete confidence that this price is set by companies competing in a fully competitive market,” Ofgem head Alistair Buchanan said.

“At the moment this is not the case.”

Ofgem wants the utility companies to introduce a standard pricing system to allow consumers to compare prices more easily than the current arrangement where there are more than 400 different tariffs.

Under the new proposals, households wanting a no-frills tariff will get a simple unit price and a fixed standing charge set by Ofgem, but utility companies will still be able to offer a mix of products.

Next month, Ofgem plans to publish detailed proposals to help business gas and business electricity users.

In December, the regulator will announce further initiatives to “break the stranglehold of the ‘big six’ in the wholesale electricity market”, and in the New Year will publish findings into making energy company accounts more transparent.

Julian Morgan, managing director of the Energy Advice Line, one of the UK’s first energy price comparison and switching service exclusively for business, welcomed Ofgem’s moves to make it easier for business energy users to compare the market.

“Shopping around for the best available business electricity and business gas deals is the best and simplest way to save money when energy prices are spiralling,” Mr Morgan said.

“Using the services of an independent service like the Energy Advice Line can save firms time and money, but we also have a team of experts to provide advice and back-up before and after firms switch suppliers.”

The Energy Advice Line enables firms to view the five most competitive energy offers from the UK’s leading suppliers online, compare their prices with their renewal quotation and switch to their preferred supplier at a click of a button.

For further information visit www.energyadviceline.org.uk

A LEADING UK business figure has urged small and medium sized firms to use an “expert” when switching utility companies to get a better business energy deal.

John Timpson, chief executive of multimillion pound shoe repair business Timpson, who is also an author and business adviser, has recommended that firms scrutinise the energy efficiency of their plant and equipment, as well as switching suppliers.

“Utility pricing doesn’t seem to reward loyal customers,” Mr Timpson told The Daily Telegraph newspaper.  “By switching suppliers and taking advantage of special tariffs or subsidies many a good deal can be done. But this is a specialist field so use an expert.”

He also said that whenever experts scrutinised his organisation’s energy costs, they succeeded in identifying ways to save money. Again, he recommended calling on specialists to carry out the calculations, for example, to determine whether it made financial sense to invest in energy-efficient lighting.

“You need to factor in the size of your warehouse, your working hours, the cost of the bulbs and maybe a solar panel on the roof,” Mr Timpson said.

“But don’t do the sums yourself, call in a consultant.”

He recommended that firms avoid paying an up-front fee for the energy consultation, and that payment should be based on a percentage of the energy cost-savings they achieved.

Julian Morgan, managing director the Energy Advice Line, the UK’s leading energy price comparison and switching service for business, said it made sound financial sense for firms to use the services of an expert when it came to shopping around for the best available business electricity or business gas deals.

“Comparing the market and shopping around for the best business energy tariffs is the best and easiest way for firms to reduce their energy costs. That’s well-proven,” Mr Morgan said.

“But business energy can be a complicated area and it takes time to shop around. That’s why it makes sense to use a free and completely independent price comparison and switching service like the Energy Advice Line.

“We help businesses of all sizes save money by identifying the best energy deal from our extensive panel of energy suppliers.”

For further information about the range of other services offered by the Energy Advice Line, or to get a free quote, visit www.energyadviceline.org.uk

SHARP increases in the cost of living, including spiralling energy prices, have led to widespread ‘bill phobia’ with many consumers reluctant to open their bills, according to a new survey.

One-in-five consumers delay opening their bills because doing so causes stress and anxiety, according to a survey of more than 2000 adults by moneysupermarket.com.

The poll also found that just over half of respondents were worried because their bills kept rising, and almost one-third were anxious that they had more money going out in bill payments than they had coming in.

Psychologists have warned that although it is natural to want to avoid bad news, delaying opening important documents like energy bills can lead to not opening them at all, or throwing them away.

Julian Morgan, managing director of the Energy Advice Line, an independent price comparison and switching service exclusively for businesses, said with gas and electricity prices rising by an average of 17.4% and 10.8% respectively, it was essential for firms to take control and not avoid their business energy bills.

One way to do this was to shop around for the best available business energy deals, he said. An impartial service like the Energy Advice Line could help businesses switch to cost-effective fixed tariffs so that they new how much their energy overheads would be each month.

“The Energy Advice Line is here to help firms take control of their business energy supplies so that they don’t have to feel anxious about opening their bills,” Mr Morgan said.

“Being pro-active and seeking out the best business electricity and business gas deals is a well-established way to save money and avoid nasty surprises when it comes to energy costs.”

The Energy Advice Line is the only independent price comparison and switching service in the UK designed exclusively for businesses.

You can view the five most competitive energy offers from the UK’s leading suppliers online, compare their prices with your renewal quotation and switch to your preferred option at a 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