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News: March 2010
01/03/2010
Heat's on energy prices
The Forum of Private Business (FPB) is urging firms to shop around for better deals because figures suggest big companies are able to secure far better energy prices than small businesses.
The latest industry data available from the government shows that average electricity prices for small and medium sized enterprises (SMEs) increased by 15%-17% between the third quarter of 2008 and the same period of 2009, while, prices increased by 9%-11% for large businesses and by just 5% for the UK’s biggest companies.
According to the figures from the Department of Energy and Climate Change, average non domestic gas prices went up by 8% for the smallest businesses but fell by between 14% and 52% for all other commercial customers.
The UK’s biggest energy companies have come under fire after revelations they are not passing on cuts in wholesale energy costs to domestic consumers and are instead raising their prices to boost their profit margins.
The situation has been even worse for small businesses. Between 2003 and 2008 average electricity prices in the energy-intensive manufacturing sector soared by 138% and average gas bills by 162%.
In recent research carried out by the FPB, more than 84% of respondents cited rising utilities costs as a ‘major concern’. In addition, many small firms have contacted the FPB in recent months to report that energy companies have tied them to often expensive ‘rollover’ contracts with little or no warning.
Others reported being unfairly handed huge back-dated bills following meter errors.
“While the big energy companies always pass on wholesale price increases in full the same cannot be said when prices fall,” explained Nick Palin, finance director, FPB. “This is the tip of the iceberg.
By refusing to play fair, some utilities giants have forced costs on small businesses they can ill afford.”
Following the FPB’s submission to its recent energy market probe, energy regulator, Ofgem, announced a series of measures designed to protect SMEs from the actions of energy companies, including limiting the use of automatic ‘rollover’ contracts.
Now, energy companies must ensure their business customers are fully aware of any contract changes and give them enough time (a minimum of 30 days before the end of their notification period) to switch to another supplier.
They also prohibit unjustified price differences between tariffs and payment types and give firms more flexibility to switch suppliers.
For more information, call the FP on 0845 1301722 (members), or 0845 6126266 (non-members), or visit www.fpb.org
The latest industry data available from the government shows that average electricity prices for small and medium sized enterprises (SMEs) increased by 15%-17% between the third quarter of 2008 and the same period of 2009, while, prices increased by 9%-11% for large businesses and by just 5% for the UK’s biggest companies.
According to the figures from the Department of Energy and Climate Change, average non domestic gas prices went up by 8% for the smallest businesses but fell by between 14% and 52% for all other commercial customers.
The UK’s biggest energy companies have come under fire after revelations they are not passing on cuts in wholesale energy costs to domestic consumers and are instead raising their prices to boost their profit margins.
The situation has been even worse for small businesses. Between 2003 and 2008 average electricity prices in the energy-intensive manufacturing sector soared by 138% and average gas bills by 162%.
In recent research carried out by the FPB, more than 84% of respondents cited rising utilities costs as a ‘major concern’. In addition, many small firms have contacted the FPB in recent months to report that energy companies have tied them to often expensive ‘rollover’ contracts with little or no warning.
Others reported being unfairly handed huge back-dated bills following meter errors.
“While the big energy companies always pass on wholesale price increases in full the same cannot be said when prices fall,” explained Nick Palin, finance director, FPB. “This is the tip of the iceberg.
By refusing to play fair, some utilities giants have forced costs on small businesses they can ill afford.”
Following the FPB’s submission to its recent energy market probe, energy regulator, Ofgem, announced a series of measures designed to protect SMEs from the actions of energy companies, including limiting the use of automatic ‘rollover’ contracts.
Now, energy companies must ensure their business customers are fully aware of any contract changes and give them enough time (a minimum of 30 days before the end of their notification period) to switch to another supplier.
They also prohibit unjustified price differences between tariffs and payment types and give firms more flexibility to switch suppliers.
For more information, call the FP on 0845 1301722 (members), or 0845 6126266 (non-members), or visit www.fpb.org
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