“You don’t need to lift a finger for continued peace of mind”- oh, really?12 Jul 2012 | Filed under: Supplier Management
Steve Ray and Claire Power-Browne
We feel that one of , if not the, biggest advantages to working with Auditel is that we continually manage your supplies going forward. This includes, amongst other things, the tendering of your supplies independently, ensuring your billing profile is correct, ongoing bill validation and managing the renewal of your supply at the correct time.
Leaving aside the complicated variations between suppliers on notice periods to allow you to leave your contract without penalty, one of the most common issues we come across is that of the “automatic renewal’ letter which arrive towards the end of an energy contract from many suppliers. The letter warmly invites you to renew automatically by doing absolutely nothing. In fact the title of this article was copied from a renewal letter sent to one of our clients from a major supplier. Sounds great, doesn’t it? Particularly when there is so much else to think about when running a business or organisation.
In actual fact, doing nothing is the worst thing you can do, renewal rates are notoriously uncompetitive and unpalatable as it is, energy suppliers rely on your apathy to push through higher rates and contract you to a further term of their choosing. If they do not put you in a contract, they may well place you on out of contract or ‘deemed rates’; one recent example of deemed rates was charging 17p/kWh on a supply previously charged at 10p/kWh. A 70% increase is not a recipe for peace of mind.
To manage your renewal process:
1. Serve notice/opt out at the correct time
2. Put your supply out to tender to as many suppliers as possible; we would always look to tender to at least 8 suppliers not just the big three.
3. Check T & C’s for Directors Clauses, security deposit clauses etc
4. Once you have decided upon a supplier, respond within the appropriate period to secure pricing
5. Ensure you take a final read for accurate billing going forward.
This takes time to do and can be a four week lead to deciding on prices but the returns are worth it. If you recognise that your time needs to be directed differently to undertaking this process internally, then call us and we would be delighted to help your business secure best value now and going forward. But whatever you decide, doing nothing should not be an option.