It’s not just about the price!

Business electricity and gas suppliers are offering moderate and medium sized business consumers a bad deal by hiding behind the contract small imprint. Price is the driving factor when negotiating a new business electricity or gas deal but don’t fall into the commodity trap as suppliers will catch you out. Business Electricity and Gas suppliers in the UK are hiding behind the supply agree small print to the detriment of their customers. Supply contracts for small and middling sized business electricity and gas customers are heavily weighted in favour of the supplier as many of the contract terms mystical in the small print are very ambiguous and will undoubtedly win the consumer out if they are not explained before they agree to the contract. Hidden in the small print is information about the cancellation clauses, price variability conditions, advanced termination timescales and how long the contract lasts for. These clauses are crucially important when a traffic customer takes out a contract or switches electricity or gas provider. One of the most important questions the customer needs to ask before they agree to the business energy contract is how long the price is fixed for and what type of contract is being offered? Most business electricity and gas supply contracts for small and medium sized business customers in the UK are “evergreen”, which means that the contract will continually recreate unless the customer serves conclusion a specified number of days before the fixed excellence term renewal date. This price term is a very important factor. What should happen is that the pursuit electricity or gas supplier should write out to the customer a certain period of time before the price deal expires and them a new deal for a future contract term. This sounds reasonable but the business energy recommencement notice in many instances is disguised to look like junk mail so that the client does not act on the information and just files it, only realising that their pursuit electricity or gas costs have significantly increased when they receive their next bill. They in turn call their business energy supplier who then informs them that their contract automatically renewed because they did not hear back from them in time. A number of customers are also reporting that they did not even receive the renewal price notice before their business electricity or gas contract was renewed, but most suppliers “deem accepting of the notice being received by the client on it being sent by the supplier”. When the customer queries this very onerous article the supplier usually presents a print out from their computer screen showing a date when the cognizance was sent by their mailing department. This does little to appease the client when they did not receive it, it begs the question why the business electricity or gas supplier does not contiguity the client to make sure they received their renewal notice safely. Although the contract price is the “carrot” when negotiating a new profession energy agreement please ask the company the following questions before agreeing to sign up:

1. How long is my business electricity or gas price fixed for?
2. What type of contract am I being offered, is it an evergreen contract that will assume renewal if I do not serve limit?
3. How many days termination notice do I have to give you before my fixed price expiry date?
4. What method do you use to offer me renewal prices prior to the end of my fixed price expiry date – post, email or telephone?
5. Can I cancel the contract mid term and how much will it cost?

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Technology which can help farmers cut climate change gases from their cows and create renewable energy should get more backing from the Government, farming leaders have urged. Cattle have come under fire for the methane, one of the major global warming gases, they create during digestion but some farmers are now attempting to turn their cows into part of the solution. Under a process known as anaerobic digestion, the animals’ manure, which contributes around 20% to 30% of methane emissions from cows, breaks down in the absence of oxygen to create a bio-gas. The bio-gas can be used to generate heat and electricity to be used on-site or for power to be fed into the grid, while the leftover odourless “digestate” can be used as fertiliser. The NFU is calling for the Government to create incentives for landowners to invest in the technology to bring the UK, which is lagging behind other countries such as Germany, up to speed in its use. Investment of some £143 million in 20 centralised anaerobic digestion plants which can also be run on food or other organic waste, could cut methane from manure by three-quarters, the NFU said. The union also wants to see on-farm bio-gas production receive Government support through education, financial support and incentives, cost-effective electricity grid connections and establishment of standards. NFU president Peter Kendall said anaerobic digestion was a “brilliant example” of how farmers could improve their environmental performance and should be incentivised. The proposals form part of the findings of the agriculture industry’s Climate Change Task Force which lays out a series of ways farmers and landowners can meet the challenge of global warming. Some individual farmers are already taking the lead, such as dairy farmer Owen Yeatman who has spent around £750,000 installing one of the anaerobic digestion units which he hopes will generate enough electricity to power 500 homes. The process, using manure from his 400-strong herd in Blandford, Dorset, along with crops, will also generate waste heat which can be used for drying grain and heating farm buildings.

Scottish & Southern Energy is said to be among the contenders to buy one of the world’s leading renewable energy firms. Airtricity, which is based in Ireland and is developing a portfolio of onshore and offshore wind farms, last month appointed advisers to work on the potential sale of the company. The process should be completed by the middle of next year. The business recently sold its US wind farms to German utility E.ON for £730m and could fetch the same again for its European assets, the Sunday Telegraph reported. A move by SSE would help spearhead its expansion a month after chief executive Ian Marchant recently set out plans to target the Irish market. Today’s report said SSE faced competition from several other European generators including Germany’s RWE, French group EDF and Iberdrola, the Spanish group behind the acquisition of Scottish Power earlier this year. Tough government renewable targets, together with difficulties in gaining planning permission for wind farms, should make Airtricity an attractive target. Airtricity was founded in 1999 and is both a generator and supplier of green electricity and currently supplies green electricity to more than 35,000 commercial customers in Ireland. The company is 51% owned by NTR, the former Irish national toll roads company, with the remainder in the hands of other investors. SSE, which operates as Southern Electric, Swalec and Scottish Hydro Electric, has 8.3 million energy supply customers. It also owns just over 10,000 MW of generating capacity, including 1,500 MW generated from renewable sources such as hydro-electricity plants and wind turbines.

If you want to compare all the UK electricity providers fuel mixes, particularly the percentage of renewables they each use:

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Confused.com has become Energywatch’s 13th accredited energy price comparison website. Energy consumer advocate organisation Energywatch has recently named Confused.com as its 13th accredited energy price comparison website. Price comparison sites are popular with consumers, but the proliferation and varying standards of these sites should make suppliers wary of whom they align with. Many customers use price comparison websites, not only for electricity or gas, but also to compare financial products, travel, and other goods and services. These sites provide a great opportunity for customers to compare different propositions from different companies based on criteria provided by the customer. However in many cases, customers fail to realise that these websites normally charge suppliers to be shown on their site, and as a result, customers are likely to be choosing from a segment of offers in the market not all available offers. The number of price comparison sites available and the lack of consistency between sites will most likely add to the confusion of customers. In addition, suppliers that are not clients of sites are less likely to be informing them of new prices when changes occur, and will usually leave it to the site administrators to update prices where incorrect information can mislead customers. Indeed, the large increase in uptake of ‘online only’ tariff options by customers could be attributed to the increased use of price comparison sites. Ofgem figures show that between 2006 and 2007 there was a 100% plus increase in accounts that were signed up online. One advantage for suppliers is that often the price comparison sites will collect all the required information and then pass it through for the supplier to activate the switching process, saving call center and back office costs. Recently, price comparison sites have attempted to differentiate themselves by introducing service and quality ratings on some sites, but these could be open to abuse. As these rankings are operated by the site administrators, their interests may be best served by promoting the suppliers that pay the highest fees. In addition, most service rankings could be disputed and suppliers could argue about their rankings. Ultimately, energy suppliers would want a consistent and robust pricing system across all of these price comparison websites, to ensure customers are not needlessly confused. However, for the time being, web portals can negotiate varying commission structures that suppliers may accept just to be able to win potential business.

British households should prepare for a rise in energy prices in the New Year because power companies on the Continent are hoarding gas. Consumer group Energywatch warns consumers will be hit despite there being plentiful reserves of gas that could be piped to the UK. It is not the first time that some of Europe’s energy giants have been accused of holding on to gas that could otherwise be exported to Britain for a profit. The concern about supply shortages comes despite the building of new infrastructure to increase import capacity. “The amount of gas available is greater than for many years, but there is market manipulation which is creating winter scarcity,” said Allan Asher, Energywatch chief executive. Last Monday, as cold weather hit Britain, the demand for gas from households and power generators rose to its highest since March 2006. Such was the strength of demand that importers like British Gas were paying suppliers 3p a therm more than was being paid on the Continent. But the key Interconnector pipeline supplying gas from Zeebrugge, Belgium, to Bacton, Norfolk, was operating at only 12 per cent capacity. “This [low capacity] would not happen if there was an open and transparent market throughout Europe,” Asher said. “But there isn’t, and as a result British consumers are about to be stuffed again.”

Telegraph

Contract Natural Gas, the UK’s largest independent supplier of natural gas for business, is marking more than a decade in business by re-launching as CNG. CNG has launched its new identity with sponsorship of Harrogate Town FC as well as announcing a new website. The firm is also planning a series of appointments over the next three months. CNG was set up by late entrepreneur Colin Gaines in 1994 and since then has built key relationships with major clients including Pizza Express and Ask restaurants. Managing director Jacqui Hall, formerly of British Gas, is currently leading the re-brand which is targeting commercial gas users, including more businesses in the catering and hospitality sectors. She said the Harrogate business’s goal was to be recognised as a leader in gas supply in these areas as well as the specialist site works market, providing supply to commercial and housing developments pre-completion.