By Max Clarke
Small businesses across the UK have been warned to prepare themselves for further rises in energy prices.
Figures released today by Power Solutions energy brokers show that in the last year the electricity base load price, which determines electricity prices, has increased by 22% for businesses, while gas prices are up more than a third.
In real terms, an average office with 30 employees using between 100,000 — 200,000 kWh of electricity, can expect a price increase of as much as £4,500 in the price of electricity as well as an increase of approximately £1,400 in the price of gas when negotiating their next contract. The hikes in energy prices are putting an additional strain on SMEs in the current economic climate.
“Energy prices are increasingly becoming one of the key issues for SMEs as the additional costs are directly hitting the bottom line,” said Power Solutions’ managing director, Jeremy Taylor. “Business owners and investors really need to sit up and take proactive action to help manage these costs.”
The research also reveals that as many as 25% of businesses either have no contract in place or have been rolled into a new contract by their energy providers and are therefore exposed to higher price rises. The lack of a contract, which affects more than one million SMEs in the UK, is estimated to be costing the sector more than £700m a year in unnecessary energy costs.
Jeremy Taylor continues: “As energy prices rise, SMEs need to keep a close eye on their contracts and be sure that they don’t pay even more by not renewing contracts in time. They need to know when an energy contract is due to end and find out what options are available to them. Remember energy costs are not necessarily fixed and any savings can bring considerable benefits to the bottom line.”
Organisations looking to benefit from an energy consultancy service need only send a copy of their recent gas or electricity bill to Power Solutions and let them know when their current contract period expires. Near the end of the contract period, Power Solutions will tender on behalf of their clients and provide different supplier quotes and contracts to choose from. Power Solutions facilitate the whole process on behalf of the customer and reclaim any costs directly from the power supplier. This means that the service is provided with no direct cost to users.
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