The UK's 'April Fuel' energy hike day approaches

On April 1, 2006, a quarter of all industrial energy contracts will be renewed and for companies coming to the end of 12 month contracts, will mean a rate rise of 30-60% and 100% for some.

On April 1, 2006, a quarter of all industrial energy contracts will be renewed (a legacy of the 'half-hourly' meter market being deregulated on 1.4.94).

For companies that are coming to the end of 12 months contracts, this will mean a rate rise of between 30% to 60% and those coming out of three year contracts are being quoted increases as high as 100%.

Although an increase is inevitable, the difference between the best and worst prices currently being offered by suppliers currently stands at 18%, according to Energyhelpline.com.

It is advising its customers, however, to act fast if they want any kind of choice between deals.

As most contracts require at least one month's notice, there is traditionally a scramble for renewal quotes and price enquiries in February.

This year demand is such that delays are already being created and will only worsen as the deadline approaches.

Jonathan Elliott, business services director at Energyhelpline.com, explained: "The dramatic price increases have meant there are now an unprecedented number of companies shopping around.

Suppliers previously prepared to quote have begun to shy away because of the volume of business they can physically price or take on.

Also, they know they have an increasing price advantage as the deadline draws nearer because their customers will be running out of options." Elliott continued: "The alarm bells should be ringing particularly loudly in any manufacturing or food processing business where energy consumption can be the second highest overhead after staff costs." Five Tips for a Happier Renewal: 1 - Shop Around - only a fool would not shop around for quotes with the energy market being as volatile as it has been over the past 12 months.

2 - Terminate Contract - send a termination letter to your supplier ASAP and save it as proof so you have all your options open when it is time for renewal.

Given that your current supplier knows this, they will also have to offer you competitive rates to stay.

3 - Do not try to DIY.

- the prices you are offered will never be as low as a consultant can achieve and quotes will only stay valid for 12 hours.

A consultant costing circa GBP 300 is money well spent and the fee is often waived if you follow their recommendation.

4 - Fix for longer - consider different contract periods as the length will usually affect the price you are offered.

5 - Hurry up - start to search for a new supplier at least eight weeks before your contract is due to expire so as to avoid the 'last minute rush'.

* Case Study - Illingworth Ingham is a timber importer based in Manchester that spends GBP 100K+ pa on energy.

Last April it was faced with a huge rise as it came out of an existing contract and contacted Energyhelpline.com to find the best quote elsewhere.

It was able to negotiate a 20% reduction from its original renewal price.

* About Energyhelpline.com - Energyhelpline.com is an Energywatch-accredited price comparison service and the biggest business broker, helping thousands of companies each year find cheaper deals on gas, electricity, water, landlines and mobile phones.

Back to top