• Tue. Sep 20th, 2022

Commission proposes emergency market intervention to reduce Europeans’ bills

ByChad J. Johnson

Sep 16, 2022

Even at the best of times, energy costs are hard to predict, and the current level of market volatility makes it unclear whether energy prices will fall this year. Despite the fact that prices fluctuated throughout the year, the general trend was upward.

Energy researchers and research firm Cornwall Insight have predicted that prices could continue to rise until 2024.

The prices you face won’t change for the rest of the year and into 2023, thanks to the revelation that the energy price guarantee has capped prices for households and businesses.

Should energy prices be fixed until 2023?

The only approach to maintain bill stability in a volatile market and hedge against future price increases is to fix energy prices.

While it’s impossible to predict whether prices will rise further, they have increased significantly over the past year, and anyone with a fixed plan in September 2021 would have saved a lot of money on their energy costs.

It is unlikely that you will have to spend at least until April next year due to the implementation of the energy price guarantee in October. This is because most companies’ energy costs will be limited until then.

If in doubt, consider doing a commercial energy comparison of tariffs from various trusted energy providers in the UK.

What would happen if you were unable to pay your business electricity bills?

It is crucial to contact your supplier immediately to establish a payment plan if you are struggling to pay your business energy costs. Within 30 days of your missing payment, if you don’t resolve the issue with your supplier, they may take action to cut off your energy supply.

Will the rise in energy prices ever stop?

The chief executive of Centrica, the holding company of British Gas, said there was ‘no reason’ to expect gas prices to fall soon, despite the fact that it is difficult to predict exactly what will happen. will happen in such a volatile energy market. He even predicted that gasoline prices would be high over the next 1.5 to 2 years.

The government appears to be coping with the tensions by stepping in and helping customers by reducing VAT or other charges that are not clearly linked to wholesale energy prices.

Business organizations have urged the government to provide financial assistance to business owners in the form of a reduction in energy-related VAT, a cap on commercial energy prices, as well as a emergency government energy grant for SMEs – essentially, Covid-like aid for this most recent crisis.

Now that a cap on commercial energy prices has been established, few details are available. Starting October 1, the price cap will be in effect for six months.

After three months, there will be a review to determine whether the ceiling should be increased for particularly fragile sectors, such as the hotel industry.

How to reduce your company’s energy costs?

Businesses need to lock in current prices as soon as possible if they want to protect themselves against out-of-contract charges and any likely further price increases.

Determining how and when you use gas and electricity can be beneficial if you want to reduce the cost of your business’ energy bills. Consider the following, then:

• Review the times you heat your building.

• Turn off appliances,

• monitor the weather,

• and get a smart meter to reduce costs

• Be aware of the price of water.

• When not in use, turn off lights or install light sensors.

• Encourage your team to be energy conscious.

• Make sure your structure is watertight.

• Avoid using paper as much as possible.

• Obtain an energy audit.

But you also have to maintain reality. If your energy prices are going up, you might still notice it on your income statement even if you implement all the practical energy saving strategies and drastically reduce your consumption, because you still need to consume minimal energy. energy to run your business.

Considerations before choosing an energy deal

There are different energy tariffs for businesses; if you select the wrong one, your company will spend too much on energy supply.

Additionally, since you are bound by the terms of the contract when you sign a commercial energy agreement, you can overpay for up to 5 years.

Here’s why it’s absolutely worth comparing business gas and electricity packages, even if you might wonder if it’s really worth it.

If you haven’t yet changed energy supplier for your business, your current supplier will offer you an exorbitant ‘out of contract’ arrangement. These prices can be up to double the cost of contracted rates and even more in today’s market.

When switching, you should be aware that the prices you receive will depend on a variety of factors, including the amount of energy you use, the location of your business, and the financial stability of your business.

If your business has a low credit rating, you might end up paying higher prices because your business is considered riskier.

In addition, it is important to know that company energy suppliers do not offer dual-energy contracts, although if you take out a gas and electricity contract with the same supplier, it will always be two different energy contracts.

What happens if your business moves to a new location?

One of the two situations listed below will arise in your energy contract if your business moves:

• It will be moved to your new place of business.

• It will be canceled and you will have to establish a new agreement at your new location.

It is rare to have the option of canceling a commercial energy contract soon after signing one.

So your supplier won’t lose any money if you terminate the contract before the pre-determined end date, because they’ll buy the right amount of energy to keep you going for the duration of the contract.

Moving your business is a rare opportunity to terminate your existing energy contract a little early and transfer it at a better price, but you should carefully consider your alternatives before making the transition.

Your supplier will handle the transfer of your current energy contract to your new location, ensuring that no problems arise and that you are only charged for the period starting on the day of your move to the new location.

If you decide to switch to a new agreement with another supplier, you will need to arrange for payment of your last commercial energy bill or for any refunds that may be due to you if your account has been positive.