Small firms could save £1bn in energy
Small businesses in the UK could save up to £1 billion due to new rules set to be introduced into the energy industry today (April 1st).
Companies will now be in a better position to negotiate the rates they are paying for gas and electricity, while they will also find it easier to switch providers.
Energy companies are now forced to inform their consumers of any cut-off dates for a renewal of the service, which will appear on any bills sent to them.
Jonathan Elliott, founder and CEO of Make It Cheaper, said: "Suppliers are obviously not that keen to draw attention to key contract dates because it encourages their customers to, quite rightly, shop around.
"These new rules put the 'notice' back into a notice period and put the power back in the hands of customers to settle on a deal that's right for them. This has huge implications for pushing up switching volumes and pushing down prices as a result."
Approximately a quarter of businesses regularly miss the cut-off dates, which can land anywhere between 30 and 90 days before the current contract ends.
Industry regulator Ofgem reported last year that small firms can lose anything from £3,500 to £6,500 per year based on the rates they are being charged, rather than how much gas and electricity they are actually consuming.
Micro business protections will also be extended to large companies, meaning those that spend around £10,000 per year on energy will now be covered, as opposed to those who pay less than £5,000.
In addition, in situations when firms do fail to notify their supplier of their intentions before the cut-off date, providers will only be able to roll them into a new contract for a maximum of one year.
Make it Cheaper conducted research back in 2011 that showed the majority of business owners thought cut-off dates should be printed on bills.
Posted by Rachel Jenkins