The contracts energy companies offer small businesses will almost always be for a fixed term, making it vital you are aware of some of the key terms and conditions before you sign anything.  You should ask the company and make sure you are happy with the answers.

• How much will you pay?  Short-term contracts of a year or less are likely to be on a fixed price, but longer-term contracts will normally be on variable prices which can be changed by the supplier.  Check how often this can happen and what notice the supplier has to give you of the increase.  Once a year is most common, but it may be more often.  Check how any increase is calculated, whether the price quoted is inclusive of all charges and costs or whether there are other costs that you will be billed for and whether you have any right to cancel the contract without penalty if the price goes up. More ...
  
  
• How long is the contract for?  You may get a better deal in return for committing yourself for longer. But, unless you have experience of the supplier you are contracting with, be cautious about committing yourself to long term contracts.  What rights do you have to get out of the contract?  Make sure you are aware of them and use them when you want to. More ...
  
  
• If you have to take meter readings yourself, how often do you have to take them? More ...
  
  
• How often do you have to pay and how much time do you have after receiving the bill?  If you have to pay a security deposit, make sure you know when you can get it back. When you are entitled to get it back, ask for it and make sure that you get any interest you are entitled to. More ...
  
  
• How can you get out of the contract? More ...
  
  
• Are there any penalty clauses in the contract? Or potential costs and risks that are not immediately apparent? More ...
  

 

Nine key questions customers should ask about an energy contract

1. What is the charge per unit?

• Are there any fixed or standing charges?
• For electricity, are there any capacity charges per KVA?

2. Can the price I pay for energy change during the life of the contract?

• If so, how will you tell me about this or any other changes to the contract? Are charges fixed or variable?
• If they are fixed, how long for?
• If they are variable, which parts may vary?

3. What happens at the end of my contract or the fixed-term period if I stay with you as my supplier?

• What can happen at the end of my contract or the fixed-term period if I do not renew my contract?
• What do I need to do if I do not wish to renew my contract?

4. What is the duration of this contract?

• Will you remind me of the contract end date?
• What do I have to do if I want to end the contract early?

5. How and when do I contact my supplier if I want to switch energy supplier?

• In what circumstances can you stop me switching to another energy supplier?

6. Who can I contact to find out more information about my contract, and what information will they need from me to look up these details?

7. Under what circumstances can my energy supply be cut off?

• What notification would I receive and what procedures must be followed?

8. What options are available regarding payment terms?

9. Am I committed to a minimum or maximum volume?

• If so what charges can be incurred in relation to this?

 

Glossary of frequently used business contract terms

energywatch has compiled a glossary on frequently used contract terms to help you decipher what the suppliers are referring to in their contract terms.