Many small and medium-sized businesses in the United Kingdom are still unaware of the practice of automatic contract renewal for business energy deals – also referred to as being rolled over – and don’t realise the implications that this can have on the businesses energy bills.
When a company is nearing the end of its current business energy contract, if they do not contact their energy supplier to terminate their current contract or renegotiate a new one, within the renewal window, their contract will automatically be renewed, or rolled over, as it is commonly known.
Being rolled over can cause a huge problem for businesses, as being rolled over on your contract can result in firms paying a much higher rate for business energy, whilst being prevented from shopping around for the best possible business energy deals – which in the current economic state is a vital step for business efficiency.
If an energy contract does get rolled over, and the business is unaware, or decides to sign a deal with a new supplier anyway, the current supplier will object to the transfer as it technically constitutes a breach of contract.
Within the last couple of years Ofgem has introduced new regulations, specifically designed to protect small and medium-sized businesses from automatic rolled over.
One of the key points in these regulations require business energy suppliers to highlight the important terms and conditions of the contract to businesses before they enter into the energy contract with the supplier, ensuring they are aware that the contract is binding meaning that key clauses may no longer be hidden.
Business Energy suppliers are now obliged to send written confirmation of the contract, within 10 days of the new contract or renewal contract being agreed, meaning businesses will now have a hard copy to study and keep for future reference.
At least 60 days before their fixed business energy deal is due to end business energy suppliers must now send customers a statement containing the renewal terms. In this statement, the supplier must also explain that the contract will automatically be rolled over if no action is taken, and how the customer can prevent this from happening.
However despite these regulations, there are many businesses unaware of when their current contract comes to an end, leaving them open to an automatic, and potentially more expensive business energy rates by being rolled over.
It is therefore so important for small and medium businesses, to ensure they know when their contract is due to end, so they don’t miss out on the chance to shop around using an energy price comparison service, such as UKPower.co.uk.
Business energy suppliers have varying termination notice periods, ranging from 30 days to 120 days. UKPower.co.uk advises that businesses make sure that they are aware of how much termination notice period their business energy supplier requires in order to ensure they don’t get rolled over.
What most businesses don’t realize though is that it is possible for businesses to sign a new contract with a new supplier up to three months before the end of their current contract, allowing a seamless transfer at the end of the contract from the old to new supplier.
As part of our Don't Get Rolled Over campaign, UKPower.co.uk have produced a checklist, designed to help businesses when signing a new business energy contract:
To ensure you don't get rolled over into a new, more expensive energy contract, contact one of our Business Energy Advisors on 0800 970 5494 or use our online business energy comparison service.