Firms are not protected by the energy price cap – here’s help
ENERGY broker Fidelity Energy, based in Park Street, Newbury, has been helping thousands of businesses since the pandemic began in 2020 by offering expert advice and helping customers to save money on their energy bills.
Now, with the energy crisis wreaking havoc on many small businesses with energy rates at all-time highs, it has seen an increase in businesses that require support and advice for their energy contracts, where the deemed rates are not capped in the same way domestic rates are.
Managing director John Haw said: “Many businesses are unaware that they are not protected by the price cap that came into play at the start of April.
“This is only applicable to domestic customers, many of whom are finding it is cheaper to keep the energy for their homes on an out-of-contract rate instead of switching to a new tariff. However, for businesses, this is not the case.
“Energy suppliers can amend their out-of-contract rates for businesses when they wish and have been increasing their deemed rates each month to keep up with the elevated wholesale prices of gas and power.
“If you let your business fall on out-of-contract rates you will likely end up paying a significant premium.
“We have seen an increase of business customers come to us for support and are unknowingly paying between 200 and 500 per cent extra by sitting on the deemed rates than if they were on fixedterm contract rates instead.”
Explaining why energy rates reached record highs in March, Mr Haw said: “Wholesale gas prices have surpassed UK records since the conflict in Ukraine escalated, causing extreme market volatility and concerns over supply and demand if Russia were to cease gas flows to Europe (who import 45 per cent of their gas needs from Russia).
“This resulted in the cost suppliers pay for wholesale gas peaking at over six times the record seen back in 2021, which surpassed the highest price ever paid for a wholesale product outside of network balancing actions.
“To give some context on the market, in March wholesale gas prices peaked at over £5 per therm, compared to 18 months ago when they were 13 times cheaper at just 45p.
“Many suppliers have been unable to afford these high costs, which is why over 25 suppliers have gone bust and we are seeing those remaining suppliers have to keep pulling their pricing or changing their conditions at the last minute to protect themselves and minimise their market exposure.”
Mr Haw continued: “If your business is currently out of contract or coming up to the end of your contract in the next few months, we recommend looking to secure a fixed rate with one of our suppliers who are still offering pricing now. This will help to ensure you do not end up on out-ofcontract rates which can fluctuate to an uncapped limit instead of on the most competitive rates available for you.”
Fidelity Energy offers free consultations to businesses.
Call 08000 484800 or email info@fidelity-energy.co.uk