Small business owners don’t benefit from an energy price cap: Here’s what to do if you are worried about rising bills
- Small businesses may be concerned about rising energy bills in the future
- They do no benefit from the price cap like other consumers
- We reveal everything you need to know about the current crisis
- Have an energy question? [email protected]
Small businesses may struggle to pay their energy bills this winter as they do not benefit from the price cap safety net like households.
Those companies whose supplier goes bust may also not get back any of the credit they have built up with their provider, due to different set of rules.
This is just one of the problems to emerge from the energy crisis after rising wholesale costs have left to the collapse of multiple suppliers in recent times.
Small firms may struggle to pay energy bills this winter as they do not benefit from a price cap
Whilst consumers are left worried about whether their provider will cease trading, small firms may be concerned they will be unable to keep up with soaring bills.
This is Money, with help from Citizens Advice, reveals what you need to know if you are a small business concerned about your energy bills.
What is the energy crisis?
The energy crisis has been sparked by a number of factors but ultimately is due to the lack of natural gas being produced as well as an increase in demand.
As a result, wholesale gas costs are soaring which means suppliers are having to fork out more for supply.
These costs are then passed on to consumers but if they can’t be, the supplier then loses money and many are ceasing to trade.
This is affecting normal consumers as well as small businesses.
Should businesses be concerned?
Ofgem and the Department for Business, Energy and Industrial Strategy (BEIS) are urging customers, including small businesses, not to worry about their energy supply.
However, many are still concerned about how much their bills could rise by in the coming weeks.
BEIS told This is Money small businesses struggling to pay their energy bills should contact their supplier as soon as possible.
Providers might be able to pause or reduce their repayments or stop them from getting disconnected.
A Government spokesperson said: ‘The Business Secretary is in regular contact with the energy industry and Ofgem to manage the impact of high global gas prices and will continue to monitor the situation incredibly closely, including the impacts for small businesses.
‘All energy customers, no matter who their supplier is, can rest assured that even if their supplier fails, there is a robust and well-rehearsed process in place to ensure continuity of supply.’
The energy crisis has left millions concerned about whether their supplier will go bust soon
What if a small business’ can’t pay their energy bill?
If your energy bills are becoming much higher than normal and you cannot afford it, ask your supplier if you can arrange a payment plan.
Work out a budget before you call so you know you can afford the payments.
It is also important to ensure you are being billed accurately so take regular meter readings and send them to your supplier.
However, if you become in debt to your supplier, it is important to act quickly as your energy supply could be disconnected within 30 days if you don’t make arrangements to deal with the money owed.
If you’re disconnected, you will normally have a disconnection fee added to the money you owe and will often need to pay another fee to be reconnected.
What happens if a supplier goes bust and a small business is in credit?
Unlike normal consumers, if you are a small business in credit when your supplier goes bust, you may not get all your money back.
Whilst Ofgem will try to choose a supplier that can refund some or all of your credit, this is not guaranteed.
As with other consumers, you will be assigned a new supplier under the supplier of last resort process. Wait for your new supplier to contact you and they will tell you what will happen to your credit.
If your new supplier can’t refund your credit, contact your old supplier’s administrator which will take control of your old supplier and handle their debts. You should be able to find their details on your old supplier’s website.
Contact the administrator to register as a creditor – this is someone who is owed money – when you will need to prove your account with the old supplier was in credit.
You can do this with past bills or statements.
If you have an online account, it’s also a good idea to log into it to check your balance and download any bills or statements.
The administrator may be able to repay some of your credit but this can take a long time – sometimes more than a year.
The amount you get will depend on how much the old supplier owes to all of its creditors.