Handling commercial energy debt
Commercial energy debt includes gas and electricity arrears and count as priority debts because suppliers have the power to disconnect your supply if you do not pay – and they don’t need to go to court to do this.
If you own a small business like a shop, newsagent’s, convenience store, hairdresser’s or a café, you’ll have chosen a specific energy supplier. Normally you’ll be tied into a contract that says how much you will pay, and how long for.
Many suppliers will agree contracts over the phone. Once a fixed price contract is agreed, however, your supplier must send a copy of all terms and conditions of the contract in writing within 10 days. They should also include information on future renewals (including how to prevent automatic renewals).
How can I keep control of energy costs?
Gas and electricity bills are significant running costs for a small business so getting into commercial energy debt can have serious consequences.
- Check your bills regularly. Estimated energy bills can often be higher than what you’re actually using so you could be paying more than you need to.
- Make sure your business is operating as efficiently as possible. For example, switch off computers and other equipment like microwaves and kettles overnight; change to energy efficient light bulbs; print only when necessary.
- Be wary of automatic renewal when your contract comes to an end – as your supply will continue but normally at a higher price. Your supplier should get in touch least 60 days before your renewal is due, with details of current prices, new prices and annual consumption.
- Shopping around is a good idea so that you find the best energy deal for you and your business. It’s a good idea to use a switching service with the Ofgem confidence code logo. You’ll benefit from ‘whole of market’ comparison, without bias so you can choose a supplier that’s right for you.
How often will my meter be read?
This tends to happen at least once a year. Get into the habit of reading your meters yourself on a regular basis – if you give these figures to your supplier, you’ll only be billed for what you use rather than estimated bills.
You could also ask your supplier about installing a smart meter.
I’m falling into arrears with my energy bills
As soon as this happens, get in touch with your supplier and let them know that you’re having difficulty with payments. You may find them willing to give you more time and agree affordable repayments, especially if you can pay for ongoing fuel as well as contribute towards the arrears.
If you use the same energy supplier for your business and your home, be aware that your supply could possibly be cut off at either property, so taking prompt action is the right thing to do.
How can my energy supplier help me?
Your energy supplier should explain how you can pay back what you owe; they should also offer a payment plan based on what you can afford. We can help you work this out.
If you are self-employed and worried about your finances, or find yourself in the early stages of debt, we may be able to help you find a solution. Running your own business can be lonely, especially when you’re facing money problems – we’re here to support you, by giving you free debt advice and a clear idea of your options. All you need to do is call 0800 316 1833 .