Struggling to pay for expensive business energy bills can be quite an unpleasant experience to say the least – especially when you REALLY need business electricity and gas to stay operational. Should you find your business in a situation where you owe your energy supplier money, make sure to contact them to discuss potential ways to sort out the problem. Energy suppliers are obliged to help their customers come up with a solution – and these customers are also allowed to negotiate a deal that works for both sides. However, with a glass half full perspective, there is certainly a high likelihood of saving hundreds of pounds on business energy bills with efficient planning.
In this article we will be tackling the three main elements of a utility bill, legal rules, and the things you have to do if you are struggling to pay for your bills or if you are being overcharged by a supplier.
Are you struggling to pay your business energy bills?
If you’ve received an energy bill from your supplier, and suddenly realise that you can’t really afford to pay it right now – then they may allow you to repay any debt with the help of a payment plan.
Making an agreement with your supplier
Tell your supplier that you want to pay off your debts in instalments as part of a payment plan.
Remember, it is important to maintain proper communication with your supplier and inform them of any issues — that includes your struggle to pay the bills. Suppliers are mostly open to agreements, as long as both parties can meet each other halfway. You can tell them that you would like to pay off your debts in instalments: which is specifically a payment plan which will cover what you owe (including your current consumption).
Over a set period of time, your supplier will then give you the green light to pay fixed amounts.
Two things your supplier should keep in mind:
- They must know how much you are capable of paying – In order for them to take this into account – provide them with updated details about your debts, outgoings, personal situation, and income.
- The amount of energy you will be using in the future – Give your suppliers regular meter readings so they can make an accurate estimate of your consumption. Otherwise, they will estimate it based on your past usage.
Familiarize yourself with your business utility bill
These are the three main elements of a business energy bill:
Standing charge – This is a FIXED daily unit rate that consumers have to pay – regardless of how much energy they use. A portion of these charges covers energy procurement and other services including meter, electricity, and gas provisions and connections. Most energy tariffs include standing charges, although there are still a few energy suppliers that offer zero standing charge tariffs.
Unit rate – The unit rate is the price customers pay per kilowatt hour (kWh) of electricity and gas consumed.
Contract end date – This is when your current contract ends. If you exit the contract early – you will most likely be charged. Additionally, if you fail to renew or renegotiate your business energy contract prior to its expiration date – you could easily find yourself sinking in contracts that we like to call expensive traps.
Bonus: You can also find a Climate Change Levy (CCL) on your bill, depending on which sector your business falls under. The CCL is a government levy that some business consumers are obliged to pay for every unit of NON-renewable energy they use. This type of tax aims to encourage businesses to become more environmentally responsible by reducing carbon emissions to combat climate change.
Businesses that have a domestic element to them (B&Bs, Campsites, Care homes) don’t have to pay the CCL.
Understand ‘Back Billing’ rules
Has it been a year since you received a gas and/or electricity bill? Well, energy suppliers are not allowed to send their customers a bill for the business energy they have consumed MORE than 12 months ago. Meaning, you don’t have to pay for all the energy you have used, based on ‘back billing’ rules.
Is your energy supplier trying to overcharge you?
You should definitely write to your business energy supplier if you’re being charged for more than 12 months’ worth of energy consumption by your supplier.
All consumers are protected by back billing rules and are allowed to be ONLY charged for the energy they have used for 1 year, nothing more.
For example: you have not received an energy bill from your supplier in 2 years. You ask your supplier to send you a bill and provide them with a meter reading that is up-to-date.
Upon your request, they send you the bill – however, you notice that they are charging you for 2 years’ energy use.
Is this allowed? Most certainly not.
You must write them a letter stating that you know of the back billing rules and are protected by it.
Your supplier will then send you a new bill, charging you for 1 year’s use only.
Other things you can do if you are struggling to pay your business utility bills
There are numerous ways to cut down business energy costs, some of which include changing your payment method and switching from your current energy tariff or supplier.
Monitor your usage, and decrease it if possible
It’s always essential to monitor your gas and electricity usage so you can determine where it’s possible to cut down. You can do the basics such as turning off any appliances or equipment that are not in use, such as computers or coffee machines. A lot of people have developed a habit of leaving things on standby, which consumes a uses a considerable amount of energy than you think.
Additionally, smart meters are great for monitoring and decreasing your energy usage. You can still have it installed for free.
Ask for a payment plan
If you’re able to settle a deal with your utility provider, they can offer your business a proper payment plan that can ease your situation and prevent further financial decline. This will also help you set out a proper and effective budget for your business. It might even be all you need to improve your business cash flow!
The best possible option: Compare business energy quotes and look for a better deal
It’s essential to plan ahead for the end of your fixed term contract’s term. Make it a habit to check market prices and rates regularly, as it will keep you abreast of the best possible options.
The good news is: you don’t have to collect business energy quotes from every supplier one by one. You can use our Price Comparison Tool which can be found on top of our website! It’s free, and it will only take 60 seconds of your time!
Maximize energy-saving features that come with your equipment
There are a lot of energy-saving gadgets that are available in the market. Try plugging smart sockets into standard outlets to cut energy use, or buy LED light bulbs to replace all your traditional incandescent bulbs.
On top of that, devices such as desktops come with built-in energy-saving features too. Once activated, it will use 70% less electricity than it normally does when the energy-saving features are off.