What is the deemed rates contract? A deemed rates contract or out-of-contract normally applies if you move into new business premises and don’t agree a contract. You could also be on a deemed or out-of-contract contract if your current contract ends but the supplier continues supplying energy that you use. This might happen if the original contract does not state what will happen at the end of a contract or does not have renewal provisions. Deemed and out-of-contact contracts are usually among a supplier’s most expensive. It’s best to shop around and agree on a contract as soon as you take on premises or near an end-date to avoid paying more. Deemed or also known as out of contract rates are considered the worst in the industry, often they apply to businesses that are new or that have terminated a contract and have not switched a supplier. However, like the 28 day contract, you also have 28 days notice period is required to switch to the cheapest electricity prices. At the moment the prices around about 45 pence/day Standing charge and 26.5 p/kWh Day Rate depending on the type of meter you have in the property Types of contract How you use gas and electricity as a business will differ from the average household. So business energy contracts are different, with offers varying between business energy suppliers. It’s important to understand your type of contract so you can check you are getting the best deal for your business usage. If you are a microbusiness, certain rules apply which affect how you are billed too. Fixed You’re charged a set rate per unit of energy (measured in kWh) for the fixed term of the contract. This doesn’t fix your total bill, which will go up or down with your energy usage. Variable Where the rate charged per unit of energy (measured in kWh) is linked to market activity. So your rate per unit of energy could change throughout your contract. Rollover This normally applies if you’ve not agreed a different contract before your current contract end date and there are no renewal provisions. If you are a microbusiness, this contract can’t last more than 12 months. How business energy contracts differ They are usually longer Business energy contracts often last up to five years or more in length with most one to three years. You’re usually tied into the contract until you enter a switching window in the contract. Normally this is near the contract end date. If you don’t give notice to your supplier about a planned switch in this period, you could roll over to an expensive default contract. It’s important to know your business contract end date and the notice periods required. There’s not normally a cooling-off period Household energy contracts offer 14 days to cancel from the date you agree a contract if you change your mind. Most business energy contracts don’t offer this, though it is worth asking about. You don’t need to sign an energy contract for it to be binding You could agree a contract on the phone. It’s best to ask for all terms to be sent in writing before you agree to an offer. They are usually single-fuel You’ll typically need to get separate quotes for gas and electricity contracts when shopping around, and will be billed separately for each too. Broker costs If you use a business energy broker the rate you pay could incorporate their fee, depending on your broker’s agreement with a supplier. It’s best to ask for all terms of a broker agreement and the energy contract offer to be sent in writing before you agree to it, so you are clear on the terms. Check your business energy rights Deemed energy contracts Read less If you are on a deemed energy contract, a supplier must not: stop you from switching to another supplier, for any reason or at any time. For example, they can’t object to you transferring for reasons of debt or contract. say you need to give notice before ending the deemed contract or charge you a termination fee. If you use energy on a deemed contract, your supplier must: take all reasonable steps to provide the principal terms of the deemed contract, including charges and fees provide you with a copy of the full contract if you ask for it take all reasonable steps to tell you about other available contracts and how you can get information about them take all reasonable steps to ensure that the terms of its deemed contract are not unduly onerous. Full details are outlined in the Supply Licence Conditions. Rollover energy contracts Read less A supplier can move you onto a rollover energy contract if you have not told them you plan to end a contract before the notice period runs out. If you are a microbusiness the rollover contract can’t last more than 12 months. Microbusiness energy contract notice periods and switching Read less For microbusiness customers, suppliers must: put the contract end date and notice period on all bills for fixed-term contracts. The maximum notice period to end a microbusiness energy contract is 30 days. allow you to tell them if you want to switch at the end of your contract at any time before the notice period. Qualifying as a microbusiness Read less Suppliers must take all reasonable steps to identify if you are a microbusiness. If they do not think you qualify, supply them with supporting evidence. This should include evidence that your business either: employs fewer than 10 employees (or full time equivalent) and has an annual turnover or balance sheet no greater than €2 million uses up to 100,000 kWh of electricity per year. uses up to 293,000 kWh of gas per year. If you aren’t satisfied with their response, check our guide to making a complaint. Half-hourly energy readings (‘P272’ and ‘P322’ codes) Read less Industry rules mean suppliers record business energy use every half hour, as part of a process called ‘settlement’. You’ll be moved onto these arrangements when you renew a business energy contract or switch supplier. You’re only affected if you’re a business customer in profile classes 5-8 and have an advanced meter. If you’re not sure, check with your supplier. Our guide Moving to half-hourly energy readings (BSC P272 and P322) explains how these rules might affect you. Contact Energy4 today for further information Location: 25 Hartley Meadow, Whitchurch, Hampshire, RG28 7BW Opening Hours: 8:00 – 17:00 Mon to Sat To discuss further, please contact Energy4 Telephone: Call us on 01642 888814 & 01642 888816 Email: contact@energy4.co.uk Please provide the best date and time of day that we should contact you Click here to contact Energy4 today Contact Energy4 today for further information OfGem Information business electricity business gas What is the deemed rates contract?