With energy prices rising and Ofgem pressing for an overhaul of pricing, kbbreivew has some tips on the best ways of dealing with the utility companies and how to save money by switching supplier...

In June 2011, energy regulator Ofgem said that it wanted to "radically overhaul" the energy market. It put the big six power companies on notice that their incredibly complex tariffs are going to be put under the microscope.

So with the background of rising prices can businesses do anything to lower their energy bills?

Suppliers rely upon inaction from customers when it comes to pricing. The supply of energy is no different. Tariffs are always changing, so what seemed like a good deal when you signed up may be hopelessly overpriced now. It's worth shopping around once a year.

Before you can make any changes, you need to be certain of the deal you're on, the terms of the contract, including the rate you are being charged, whether there's a standing charge and what the notice period is.

Energy companies are obliged to give notice of tariff changes. But this only applies to domestic users and micro-companies (less than 10 employees, annual gas usage under 200,000kWh or electricity usage under 55,000kWh).

If that letter doesn't arrive - or you fail to act upon it - you could be automatically rolled over into another contract with no exit route. Indeed, you may only have a 30-day period to instigate a switch.

Further, the window of opportunity when a switch can be made can come (and close) 90 to 120 days before the contract expires. Failure to give notice at the right time can leave you rolled into a new contract with a rate of the supplier's choosing.

However, according to energy consultancy utility-options.co.uk, if a business can prove that the letter wasn't sent, some suppliers will break a rolled-over contract. Arguably, if a letter was sent there should be an electronic reference to it; you should request a copy under data protection rules.

MakeItCheaper.com, another consultancy, offers a web page that can calculate how long a business has to switch provider - www.makeitcheaper.com/how-to-switch/window-checker.aspx. Diarise when your notice period starts and finishes when you take out a new contract. Consultancies such as utility-options.co.uk will do this for you, as well as manage your account, deal with queries and any metering problems.

Apart from the consultancies, moneysupermarket.com, gocompare.com, uswitch.com and others - can assist. But unlike comparison websites for consumers, these sites require you to make contact before they perform a search.

You can leave your old supplier if you move premises. However, don't move into the new premises and rejoice at being contract-free, because you will have inherited the supplier that the previous occupier was tied to and you'll be charged 'out-of-contract rates', which may be twice the going rate. You need to enter into a formal energy supply contract.

If you keep switching, you can take advantage of 'new customer' rates offered by the energy suppliers. These rates are often used as loss-leaders, but again, you'll need to keep tabs of your notice window to play this game.

Your credit rating has an impact on the rate quoted and some suppliers won't offer to supply businesses with a credit score under 46 out of 100.

Your postcode influences the rate too - electricity transmission costs charged by National Grid (which owns the power lines), for example, are built into the unit charge. While this is something you cannot affect it can add between 10 and 15% to the cost per unit.

The length of the contract affects the prices you pay. You'll pay more initially for longer-term deals because you're hedging against rises in unit rates, but, as rates rise, the better the value you will see being returned.

Energy suppliers are pushing businesses to install 'smart meters' on the basis that they will save money as they only pay for energy consumed instead of estimated. However, smart meters are in their technical infancy and while they can aid cash flow, they will restrict the suppliers as a number don't support these meters yet.

There are savings that can be made by paying for usage by direct debit rather than by cheque on receipt of the paper bill - at the time of writing you can save 2% with EDF and 4% with E.ON.

So whatever your situation, don't let inertia stop you from switching. Moving energy supplier is not difficult or time-consuming. The new supplier, or the consultant, will make the switch for you. However, do read terms and conditions carefully.

Problems?
Ofgem (www.ofgem.gov.uk) has delegated their complaints handling to:

Consumer Direct
www.direct.gov.uk/en/Dl1/Directories/UsefulCon-
tactsByCategory/Governmentcitizensandrightscon-tacts/DG_195948
For businesses and consumers and will help and advise on best course of action to complain.

The Energy Ombudsman
www.ombudsman-services.org/energy.html
For domestic users and micro businesses.

Consumer Focus
www.consumerfocus.org.uk
Similar to the Energy Ombudsman.

Statistics

According to Ofgem, business energy costs have almost doubled in the past five years.

Only 15% of small businesses know what rate they are paying for electricity.

A good price for electricity at the time of writing is just under 10p/kWh but some suppliers are renewing contracts at around 16p/kWh and out-of-contract (deemed) rates can be as high as 30p/kWh.

Savings to be made can average 30%.