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“There needs to be scrutiny of non-domestic tariffs”
In response to continued low global gas prices, many energy suppliers have announced further cuts to their domestic tariffs of around 5 per cent.
It’s always good to see cost reductions being passed on to consumers and shows the energy market is responding to public scrutiny. Debate continues about whether these savings have been large or quick enough, but what is certain is that they don’t apply to small businesses on bespoke, fixed-term contracts.
As the name suggests, these deals are fixed until the contract comes to an end. There are pros and cons to this. Businesses don’t get the passed-on savings when wholesale energy prices fall. However, suppliers argue they also don’t get bill increases when wholesale prices rise. At least, not until it comes to renegotiating their individual contracts – a process that takes place out of the public eye.
The cost of energy is a major concern for domestic and small business customers alike. But for domestic customers there is at least a feeling that, in reducing tariffs, energy firms have finally responded to public, political and media pressure. There needs to be the same level of scrutiny around non-domestic tariffs. The continued lack of transparency or comparability around bespoke, fixed-term business tariffs reduces trust in the market and hurts competition. One way to ensure micro businesses can get the best deals and make the right decisions is to bring transparency by making comparable domestic-style tariffs available to them.
Allen Creedy, chair of energy and environment, FSB
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