About to renew with your energy supplier? Read this first…

Did your business pay too much for energy last year? Are you struggling to reduce consumption? We explain how to save your business time and money by asking these questions of your supplier, so you can boost your profits and competitiveness this year…

1 How can you help me reduce my business energy consumption?

To truly drive down your energy bill you need to stop using so much. Is your supplier giving you the advice and help to do this?

2 Can you show me my daily energy use?

If you can see how much you are using day-by-day or hour-by-hour you can uncover ways to seriously lower your bills. One of the key questions is how much are you using when the business is closed.

3 How often will you be in touch?

You want a supplier that is going to be in regular contact and that you know will be available to answer any questions you have.

4 How many prices should I get?

The problem with going direct to an energy supplier for prices is that you now need to contact multiple suppliers to get a true spread of prices.

5 Can you tell me about the laws I have to comply with?

Is your supplier informing you about directives and laws that could hit your business in the pocket if you don’t comply? Ask them about the Energy Performance of Buildings Directive, the Energy Savings Opportunity Scheme (ESOS), Display Energy Certificates (DEC), Energy Performance Certificates (EPC) and ISO 50001.

6 Do you offer energy audit and water audits?

Audits can give your business insight into what you’re using, helping you to reduce consumption by 33% in terms of energy and 45% for water. Air conditioning inspections are also a legal requirement. Can your energy supplier deliver all of these?

7 Will you help me switch water supplier?

In Scotland you can already switch water suppliers – it’s helped businesses there save 20% on their bills. Now many firms can do the same in England. Has your energy supplier told you whether you’re one of them?

8 Can I have all my bills in the same time period?

It’s hard to budget when your utility bills arrive at different times. Can your energy supplier streamline them to suit your needs?

9 Our deal is restrictive – can you be more flexible?

Negotiating the right contract terms and package is a minefield. Are you confident you can secure the right one for your business from your current supplier? Is it offering multiple bespoke deals?

10 Is my electricity and gas bills correct?

Many businesses are paying too much for their energy, sometimes because they don’t understand their bills or they’re on the wrong tariff. Do you have time to check every bill down to the last penny?

 

How Utilitywise can help

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The easiest way to get the right answer to these questions is not by spending time chasing energy suppliers but by going to one place: Utilitywise.

For small firms, we can save you time analysing your power and water bills (to see what’s hidden) and take the hassle of trying to contact energy suppliers. Large businesses can benefit from our strategic approach to procurement and our expertise in areas where in-house they may not have a subject covered.

We can give any business total insight into power, gas and water consumption and put it in the palm of your hand with our utility insight app.

Whatever the size of your operation, we can help manage the entire portfolio energy procurement process, secure the right contract and manage the switch. By tracking your renewal dates, we can contact you with a new tariff at renewal so you don’t fall out of contract.

We found bingo hall operator Shipley Brothers the right contract and helped it save around £56,000 against budget for electricity, and it can now switch strategy to suit market conditions during it.

Our consultant team can inspect all your air conditioning systems – we contributed to the original TM44 Air Conditioning Inspections, so there’s little we don’t know about air con inspections and compliance. Our water audits and energy audits deliver impressive reductions in consumption.

The energy market is complex. No single energy manager can know everything. We have the expertise in-house at Utilitywise to understand energy, your position in the market and how to manage risk.

On top of this, we have a Utility Management Plan that can help you control your utilities once and for all, helping you reduce energy and water costs so you can concentrate on what you do best: running your business.

Krispy Kreme, the global doughnut experts, saved £84,000 thanks to a Strategic Utility Management Plan.

Let us answer all your questions and use our expertise to tailor a Utility Management Plan for you. Contact us today.

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Sherlock Holmes says the world is full of obvious things that nobody ever observes – like the opportunity Utilitywise has uncovered simply by choosing the right tariff type.

It took some detective work but eventually cost-savings were dragged out of the complexity and confusion cast between pass-through tariffs and all-inclusive tariffs. Also known as a fixed tariff, this is the option energy suppliers are nudging their customers towards after P272 comes into effect on 1 April 2017.

But it may not be right for your business and could cost you cash you don’t need to spend.

P272 is a mandatory industry change made by Ofgem that affects meters in the 05 to 08 profile class (known as max demand meters). If your business has one or more of these meters, it must be reconfigured to a new way of billing called Half-Hourly (HH) settlement. You can read about how bills will change and its impact on business here.

Deducing the benefits

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After switching, energy suppliers say all-inclusive deals are easier for firms to budget with. They are less vocal about the budgetary advantages of pass-through contracts.

Chris Toole, Market Segment Manager at Utilitywise, says: “Energy suppliers haven’t exactly hidden the benefits of pass-through contracts compared to an all-inclusive or fixed tariff, but neither have they made them entirely clear.

“The P272 changes are multiple and very complex, so it took us a while to realise that with a fixed contract you won’t be able to take advantage of load managing and the resulting savings you could make.”

Load managing means moving or lowering consumption at peak times. So a pass-through contract is the better option if your business can change working patterns. If you can shift opening hours from peak-time red (4pm-7pm), for example, to less expensive amber or green time bands (1pm-4pm), it would save you money.

Exploding the easy-to-budget myth

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An all-inclusive contract looks good on the surface for budgeting energy spend. However, with HH billing you are billed for exactly what you use so the bill will vary each month anyway as consumption fluctuates, even just slightly. It means you can neither budget precisely every month nor do you have the potential to save through load managing.

Most suppliers have fixed and included third party costs like the DUoS charge – that’s the Distribution Use of System levied by Distribution Network Operators (DNOs) for using the National Grid – in the contract unit rate.

The DUoS has a published annual rate, which the DNO charges the supplier. It is then included in the overall unit rate within an all-inclusive contract. Even though the rate is fixed by the DNO some may see it as an opportunity to build in a margin to cover themselves for customers using energy at higher rate time-bands.

So if you shift your energy demand or load manage it away from peak times, you won’t get the benefit until you renew your contract and your DuOS charge is re-calculated and you’ll have spent a year giving the supplier money you didn’t have to.

For example, the DNO DUoS charge is 0.5p per kWh within the red band peak time. The supplier may charge 1p per kWh as a fixed charge within the overall unit rate as it has a 50% margin to cover itself from the customer using excessively in this expensive peak time. The customer then moves consumption to cheaper green peak time when the DNO actually charges 0.1p per kWh instead of 0.5p but they don’t benefit as they are on an all-inclusive tariff. The supplier, however, makes 0.9p profit instead of 0.5p.

Save immediately with a pass-through contract

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A pass-through contract puts you in control and allows you to load manage to achieve an immediate impact on your costs.

These contracts are based on a fixed unit rate per KWh where third party costs are completely ‘passed through’ directly from the DNO. These include DUoS charges but also others known as TNUoS and BSUoS.

With a pass-through contract:

  • The DNO passes actual DUoS charges directly to you, as a separate charge on your supplier bill with no margins added by the supplier. The charges show as an additional line on the supplier’s bill and are paid as part of that bill but at no more cost than the DNO charges
  • You can take advantage of load managing and reduce third party costs within the lifetime of the existing contract.

The only disadvantage is the bill itself will be slightly more complex than a fixed-rate’s.

How Utilitywise can help

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“If you can change your working patterns, our advice is to take a pass-through contract not an all-inclusive one,” says Chris.

The problem is that Utilitywise believes around 90% of suppliers are not offering pass-through contracts for those affected by P272. To adjust the balance, we have partnered with Engie, which will offer a one-year to a five-year contract that’s either fixed, pass-through or anything in between.

Chris adds: “The ability to determine whether it’s worth load shifting is to understand where you use energy. If you cannot move working times it’s probably not worth moving to a pass-through contract but you should at least have the option to choose rather than be driven down one path.”

To find out more, visit – www.utilitywise.com/products-services/procurement-and-tendering/p272/  call 0330 303 0233 (Small – Medium businesses) or 01527 511 700 (Large – Corporate)

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Scoop the best business electricity deal with little effort

April 5, 2017 Personal Finance

Is your energy sapped and your willpower dimmed at the very thought of looking for a new business electricity deal? If apathy hits when you think about switching, you’re in good company. Many small businesses know a new electricity contract could save them money, but are put off by the effort needed to switch – […]

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