Renewing a business energy contract should be a planned commercial decision, not a last-minute administrative task. Starting early gives your organisation time to review current costs, compare offers and understand the terms attached to each quotation.
When a contract expires without a replacement, the supply may continue on deemed or out-of-contract terms. These arrangements are different, but both can leave a business paying rates that were not actively negotiated. A structured renewal process can reduce that risk and help you select an agreement suited to your budget, usage and future plans.
When should you review a business energy contract?
Businesses should usually begin checking their position several months before the current agreement ends.
Start by locating the signed contract and confirming:
- The contract end date
- Notice or termination requirements
- The unit rate and standing charge
- Annual electricity or gas consumption
- The MPAN or MPRN for each supply
- Any broker, metering or additional charges
Beginning early does not mean signing immediately. It gives you time to understand the market, correct account errors and compare offers without unnecessary pressure.
Businesses with several locations should create a schedule covering every meter. Different sites may have different suppliers, end dates and consumption profiles, so treating them as one account can lead to missed renewals.
What is an out-of-contract energy rate?
An out-of-contract rate may apply when a fixed-term business energy agreement ends and the contract explains what rates will apply afterwards.
The supplier continues providing electricity or gas, but the business pays according to default terms rather than a newly negotiated agreement. Prices and notice conditions differ between suppliers, so check the exact contract wording instead of relying on assumptions.
Out-of-contract terms provide continuity, but they may not be suitable long term. Contact the supplier promptly to confirm the price, switching process and notice requirements.
What is a deemed energy contract?
A deemed contract commonly arises when a business uses energy at premises without having actively agreed a contract with the current supplier. This often happens after moving into a new property.
For example, a restaurant may begin trading from a new location while electricity and gas are still supplied by the previous occupier’s supplier. Until the new business agrees its own contract, the energy may be charged under deemed terms.
A deemed contract may also apply after an agreement expires in certain circumstances. Ofgem distinguishes deemed contracts from out-of-contract rates, so ask the supplier to confirm which arrangement applies.
When moving premises, record opening meter readings, photograph the meters and contact the existing suppliers as soon as responsibility begins.
Information needed before comparing quotations
Accurate information makes quotations easier to compare. Before approaching suppliers or a broker, collect:
- Recent electricity and gas bills
- Current contract documents
- Annual consumption figures
- MPAN and MPRN details
- Supply and billing addresses
- Contract end dates
- Company registration information
- Details of planned operational changes
Tell the adviser about any expected increase or reduction in consumption. New equipment, longer opening hours, additional sites, electric vehicle charging, on-site generation or reduced production may affect the suitability of an offer.
Where possible, compare quotations using recent meter data and the same annual usage figure.
How to compare business energy offers
Look beyond the unit rate
The lowest price per kilowatt-hour is not automatically the lowest overall offer. Your estimated annual cost may also include a standing charge, metering costs, capacity charges, pass-through costs and broker remuneration.
Ask each supplier or broker to calculate the estimated annual cost using the same consumption assumptions. This creates a more useful comparison than reviewing unit rates alone.
Understand what “fixed” means
A fixed-rate contract normally fixes the price paid for each unit of energy for an agreed period. However, some contracts allow particular charges to change. Ofgem advises businesses to check the conditions because a contract described as fixed may still contain provisions permitting rate changes.
Request a written explanation of which elements are fixed and which may vary.
Consider the contract length
A longer agreement can offer budget certainty, while a shorter agreement may provide flexibility. Neither option is automatically better.
Consider expected occupancy, cash-flow requirements, growth plans and appetite for market risk. A company planning to leave a property should pay close attention to termination and change-of-tenancy conditions.
Check broker fees and commission
Energy brokers and comparison services may receive payment through a direct fee, supplier commission or an amount included within the energy price. Ask how the intermediary will be paid, how much it may receive and how the cost affects your quotation.
Ofgem’s current good-practice guidance says intermediaries should clearly explain commission or fee arrangements, including the amount and method of payment.
Keep the disclosure with your quotation and contract documents.
Common renewal mistakes
A common mistake is waiting until the final weeks of a contract. This can restrict the time available to investigate billing problems, compare suppliers and review detailed terms.
Other avoidable mistakes include:
- Comparing offers only by unit rate
- Using incorrect annual consumption
- Forgetting the standing charge
- Providing the wrong meter number
- Ignoring notice requirements
- Signing without checking the supply address
- Failing to ask how the broker is paid
- Assuming household cancellation rules apply
Never approve an agreement until the company name, site address, MPAN or MPRN, duration, start date and estimated costs have been checked.
What to do after signing
Save the signed contract, quotation, letter of authority, commission disclosure and supplier confirmation together. Add the new end date to your calendar and set advance reminders.
When the first bill arrives, compare it with the agreed terms. Check the unit rate, standing charge, billing period, meter readings and tax treatment. Report any difference quickly and keep written records.
Business energy renewal checklist
Before completing a renewal, make sure you have:
- Confirmed the contract end date
- Checked notice and termination conditions
- Collected recent bills and meter data
- Verified supply numbers and addresses
- Compared total estimated annual costs
- Reviewed fixed and variable components
- Considered future consumption changes
- Requested broker-fee information
- Checked the new contract start date
- Saved every relevant document
How Utility Market Watch can help
Utility Market Watch can review your current electricity and gas arrangements, examine key account information and compare options from its supplier panel.
A business utility health check can help identify contract dates, meter details, consumption information and charging issues before you select your next agreement.
Starting early gives your business more time to make an informed decision and reduces the chance of remaining on unplanned default terms.
Request a free business utility health check today.