17 Jan I’m locked in to a contract. Can I get a better deal?
Chances are that if you run a business you’re always on the look out to cut your costs and maximise your profits. One of your business’ largest fixed costs is likely energy, so being a savvy business owner you’ll have fixed your prices for a number of years by entering into a contract with an energy supplier.
But what happens if a better deal comes along?
Your friend or someone you chat to at a networking event has found a better deal elsewhere or a broker contacts you offering you cheaper prices.
Suddenly your deal doesn’t seem so good. You feel like you’re throwing money away.
Is there anything that you can do?
A contract with your energy supplier is legally binding and they’re unlikely to let you go before your agreed term ends. The supplier will have purchased the energy you need in advance, so they won’t want to be left with excess.
It may all seem futile…but there are things you can do:
Review your contract. You’ll have agreed a fixed price with your supplier for a set period of time. Usually this will be between 1 and 5 years. Most suppliers also tell you when your contract is due to end on your bill, but the simplest way is to review the contract you originally signed. If you agreed your contract over the phone you should have been sent documentation, or you can call/email your supplier and obtain the information.
Review your Terms and Conditions. All suppliers will provide you a copy of their terms when you enter into a contract. If you’ve misplaced them give them a call and they’ll send you a replacement copy. Each supplier has different terms of business so it’s important to know the rules by which you are playing.
Some suppliers will let you break your contract for a fee. This is usually costly as they’ll bill you what they estimate you would have used had you honoured your contract in full, along with an administration fee.
Most suppliers will not allow you to break your contract, even if you want to pay.
All suppliers will tell you how to renew your contract, and the window of opportunity you have to negotiate with them or terminate your contract as you approach its end. This is vital information to know. Some suppliers play fair and give you ample opportunity to leave, others stack the deck firmly to their favour to keep you.
Some suppliers, such as Dual Energy, have unique products which allow you to submit competing quotes for review each year, and will let you break your contract free of charge if they can’t match or better it.
Avoid the traps
If you don’t monitor your energy contract you could end up paying even higher prices. In the worst case you could find yourself locked in to increased prices for a further year. Do not let this happen!
Most energy suppliers will move you to a standard variable tariff when your contract term ends. These tariffs are more significantly more expensive, but you are able to switch suppliers if you give 28 days notice, and you can re-negotiate a new contract with the incumbent.
Some suppliers have more draconian auto-renew terms, where if you don’t tell them otherwise, they’ll roll you onto a new 1 year contract at new (usually higher) prices. This contract remains legally binding so there is no way out of it. This practice has been mostly phased out, but still exists. Be careful.
Secure your lower cost future
You can manage all of the above yourself. That’s a lot of reminders, reading and risk to consider.
You could engage with an Energy Broker to take the hassle away.
A broker will:
Review your contract and terms and see if there is a favourable way to secure you a new deal immediately.
If there’s no way to secure you cheaper prices immediately we can ensure you don’t auto-renew or pay higher variable rates.
Scour the market up to a year in advance and secure you a cheaper rate for when your current contract ends. You get the benefit of today’s prices, and the knowledge that you’ll be moving on to the best deal available when your current contract ends
Speak to Rypro Energy for free today and we can advise you on the best action to take.
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