For business customers, it is important to secure the best value and quality of service from all suppliers, whether they provide energy, water, raw materials, or any other goods. Naturally, that means there will be times when a firm needs to scrutinise its deals and decide whether it can do better.
When it comes to energy contracts, the time when this is most obviously pertinent is when it is up for renewal. At this point, you may ask whether it offers the best value, or even whether it is truly fit for purpose at all, as your needs change.
With this in mind, it may be extremely frustrating to be told that the contract has an auto-renewal and thus will continually sign you up for another period, even if you would like to shop around for something better. If this happens, it can be more than irritating; it could mean you are locked into a contract that no longer suits you for far too long.
To answer the question of how you might get out of an autorenewal, the place to start is by understanding the basic nature of these contracts and when you need to start taking action.
Understanding Energy Contracts
Ofgem, the energy regulator, states that business energy contracts will typically last for up to five years. Notably, it states that “most energy suppliers will not let you switch suppliers before the end of the contract”.
However, that in itself may not be such a huge problem. Firstly, a five-year contract may be useful in some circumstances (especially for a fixed rate payment that protects you against price rises such as those that have hit firms after the Russian invasion of Ukraine), but, in addition, the duration may be less than this.
Moreover, not being able to bail out before the end of the contract does not mean you cannot switch at the end of it. What really matters is how you prepare for this situation.
As Ofgem explains, when the contract expires, in some cases, this means you will be out of contract. You can still be an energy customer with your supplier, but you will be charged a different (and probably higher) rate.
However, it is having a ‘rollover’ or ‘evergreen’ contract that can cause an issue. Ofgem notes that these are automatically renewed if you do not arrange a switch before they end. The issue is more pertinent to larger companies, as microbusinesses can only have a rollover contract that lasts a maximum of 12 months.
When To Act
The point in this case is that you need to take action before the contract expires. Without any out-of-contract option, you need to start looking and arrange a new deal that will kick in at the expiry of the contract. At this point, the automatic renewal will not occur because you have a switch set up through an energy broker.
What you must do to avoid autorenewal, therefore, is go about finding an alternative supplier in a timely manner. Your bill statement should state when the contract comes to an end, and you will also receive notification between 42 and 49 days before the contract ends (or 60 days if you run a microbusiness).
Your best approach to the situation is to keep tabs on when your contract will reach its end. You can start shopping around well ahead of time and set up a deal that will be timed to kick in once your contract ends.
By giving yourself this time, you can be less hurried as you assess your options. The amount of assessing you need to do might vary, of course; it could be that the scale and nature of your business hasn’t changed much over the course of your energy contract, but you feel you can get better value.
Alternatively, it may be that you need a new contract to reflect changes to the way your business operates.
Other Contract Issues
The other issue you may have with an automatically enrolled contract, like any other kind of contract, is if you have a problem with your supplier. In the worst case scenario, the supplier could go bust, in which case the contract is null and void (since they cannot fulfil their part by providing their energy). Other problems can be referred to the energy ombudsman.
In most cases, however, it is simply about being prepared. You should assess your energy contract well ahead of renewal time and decide if this is what you want to continue with. If not, we can help you find a new provider with the kind of contract that suits you, in order to provide you with the better deal you are looking for.
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