Energy Contract Ending?

When Should You Start Your Renewal?

Switching works when your contract has ended or is about to. A contract end date is a contract end date: your renewal window normally opens 12 months before it, so you can line up your next contract well ahead, but leave before the end and suppliers will almost always charge a cancellation fee. On deemed or out-of-contract rates? You can usually move whenever you’re ready. Some contracts have variable rates but still run for a set term or need notice, so send us your terms and we’ll tell you exactly when you can move.

That window is the latest point you can comfortably act, not the best one. We always advise arranging your next contract as early as possible, normally 12 months before your renewal date. Starting early lets you take advantage of forward pricing, rather than taking the short-notice prices on offer when a renewal is left to the last month or two. Already closer than 12 months? Don’t worry: we’ll arrange it as early as we still can.

This is where we take the pressure off. Tell us your contract end date and our dedicated retentions team keeps it on record and sends you renewal reminders and a timetable, so the date never sneaks up on you. If you ask us to, we’ll plan the renewal around your sign-off or board meeting dates.

Now and then, your existing supplier may object to a switch, for example if you owe it money. If that happens, talk to one of our energy experts straight away and we’ll help you get the switch back on track.

Rollover, Out-of-Contract or Deemed: What’s the Difference?

These three terms cause more confusion than almost anything else on a business energy bill, so here’s what each one means for you.

• Rollover (evergreen) contracts: some contracts automatically renew at the end of a fixed term if you haven’t made a new arrangement or switched. The new arrangement is for a fixed term, usually 12 months, and may be on a higher rate.
• Out-of-contract rates: some suppliers move you onto out-of-contract rates if your fixed-term contract ends without you agreeing a new deal. They’re usually more expensive than fixed-term contracts.
• Deemed contracts: you’re put on a deemed contract automatically when you move into premises without arranging a formal contract. Deemed rates are usually higher than negotiated contract rates.

There’s one more way to end up on deemed rates. If your contract ends, you carry on using energy at the premises and the original contract doesn’t say what happens next, that can be a deemed contract too. Out-of-contract rates are different: they’re the rates your contract itself says you’ll move onto when it continues past its fixed term, so they aren’t “deemed”.

There is some protection on price. Under their licence conditions, suppliers must take all reasonable steps to make sure the terms of their deemed contracts aren’t unduly onerous, and a deemed rate that’s much higher than an equivalent contracted rate, without other justification such as higher supply costs, counts as unduly onerous. Even so, a deemed or out-of-contract rate isn’t a price anyone has negotiated for you. Picture a small hotel whose fixed deal ended in the spring and nobody noticed: every month on those rates is a month it could have been on a contract it chose. That’s exactly the kind of situation our Energy Team sorts out.

Running a Microbusiness? You’ve Got Extra Protection

If you’re a microbusiness, you have extra protections at renewal time. A microbusiness is a business that employs fewer than ten employees (or FTE equivalent) and has annual turnover or balance sheet of not more than £2 million; or consumes not more than 293,000 kWh of gas per year; or not more than 100,000 kWh of electricity per year. Your supplier must give you information about renewal prices before your contract ends. On evergreen (rolling) contracts only, it must limit your termination notice to 30 days and acknowledge a request to end the contract within 5 working days.

If you don’t change your contract before it expires, your supplier will roll it over, but a microbusiness can’t have a rollover contract for more than 12 months.

Since 1 October 2022, following Ofgem’s Microbusiness Strategic Review, suppliers have been banned from requiring microbusinesses to give notice of their intention to switch (evergreen contracts are exempt), and they’ve had to show brokerage costs in the contract’s principal terms as a total in pounds and pence.

Before you sign anything, we give you a written selection of the options that best suit your business, so you know exactly what you’re agreeing to and which small business energy protections apply to you.

Already on Out-of-Contract or Deemed Rates?

Don’t panic, but don’t wait either. If your contract has already ended, you can switch straight away, and the job is the same as any renewal. We’ll compare prices from suitable suppliers for you and present the most suitable options for you. You approve and sign, and we arrange the contract.

If you’ve just moved premises, a deemed contract is common and nothing to be embarrassed about. You’re responsible for any energy you use before your new contract starts, so get in touch and we’ll get a contract in place. If your old supplier has gone out of business, deemed rates can apply then too, so check with one of our energy experts before you do anything.

Still part way through a fixed contract? Tell us your end date and we’ll plan your switch for the right time. If you’d like to leave your contract early, talk to us first and we’ll go through it with you.