Don't be fooled by energy price cuts

Despite the ‘Big 6’ energy companies all having announced price cuts, fish and chip shops are more likely to see a rise than a reduction in their energy bills this year, according to cost comparison website Make It Cheaper.

Its monitoring of price movements shows that shops coming out of contracts are at risk of increases of more than 50%, unless they find a better deal before they are tied-in for another year by their current supplier.

However, only around 10% of shops actually manage to switch because the majority fail to act accordingly during their renewal window and end up being ‘rolled over’ into new contracts.

Jonathan Elliott, managing director of Make It Cheaper, commented: “Businesses expecting to sit back and watch their energy bills come down because of the price cuts announced by the Big 6 should think again.

“Business contracts typically renew once a year and when they do it’s quite common to see rates go up by 50% as contracts are automatically ‘rolled over’ into new 12 month terms.

“The best prices are only available to those who are proactive about shopping around during their renewal window and then manage to avoid being rolled over by sending a termination letter to their supplier.”

One business currently facing this dilemma is Whites Seafood & Steak Bar, a family-run restaurant, located in a Grade II listed building in the historic Old Town of Hastings.

Owner Ellie Chapman is paying 8.8 pence per unit for her electricity but was, last week, quoted 13p to stay with the same supplier. On the restaurant’s consumption of 76,000 units, this 47% increase means that the bills would be going up by £3,192 a year unless she acts before her renewal window closes in three weeks time.

Ellie has so far received a quote for alternative rates from Make It Cheaper of 9.3p, along with a template termination letter to send to her current supplier that will prevent her from being locked into paying the higher amount.