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Utility Renewals…Traps For The Unwary

By 8th August 2012No Comments

August is not my favourite month. It’s got nothing to do with bank holidays and traffic jams, or even the fact that I will be officially one year older.

Worse than all of that, August is the month when my car breakdown cover is due for renewal. A couple of weeks ago, my renewal letter arrived on the doormat with a heavy thud. No doubt weighed down with all the extra ink required to print a renewal offer 218% greater than (i.e. more than double) the previous year’s negotiated deal. Apparently, as a reward for my loyalty, I need take no more action. Simply sit back and let them charge 266% more than the best value equivalent from an alternative supplier.

The annual ritual has commenced. You see, being the canny financially-qualified Scot that I am, I have, for a number of years now, researched the market, compared policies, read copious amounts of small print, obtained quotes, and entered into negotiations with my incumbent breakdown cover supplier. Actually, I secretly enjoy it, even though I know how time-consuming it all is to arrive at a deal which meets my needs at a price point that I’m happy to agree. I’m not necessarily seeking the cheapest price, but definitely want a cost-effective policy which offers a particular level of cover, free from dubious exclusions which could otherwise come back to bite in the event that I need to call upon the services of a tow-truck.

Business Electricity and Gas Renewals

And so my mind instinctively turn to the thousands of businesses out there which routinely receive renewal offers for their electricity and gas services. There is a direct parallel.

Some utility suppliers are, believe it or not, so bold as to say you need do “nothing more”…usually the equivalent (if you heed their “advice”) of accepting my, frankly outrageous, breakdown cover renewal offer. Perfect if you like being locked in to uncompetitive rates for 12 months or more, but not music to most people’s ears.

Even for those businesses which do exhibit tighter control over the renewals process for utility services, how certain can they be that the contracts that they enter into are right for them? Are they aware of the nuances of the terms and conditions? Do they have sufficient time to aquaint themselves with the technicalities and the jargon that pervades? Here are just a few of the many questions to ponder:

  • Has correct notice been served to enable a change of supplier? This varies considerably from one supplier to the next.
  • What’s the significance of a “take or pay” clause? What are the potential effects of failing to meet the obligations?
  • Is there a contractual clause rendering company directors personally liable?

Away from T&Cs, a small selection of other aspects to consider include:

  • Which suppliers should be included in a tendering exercise?
  • Have DUoS and TUoS charges been included to allow for a fair comparison of offers between suppliers?
  • Eligible for CCL exemption? Who needs to be notified and when? Can backdated claims be made?
  • Are redundant supplies still being billed for? How can this be resolved and are refunds possible?
  • Are meter readings being correctly processed by suppliers? Supplier billing engines aren’t infallible, and errors can be replicated year on year.

Without specialist knowledge, it’s difficult to answer these (and similar) questions with accuracy and conviction.

Why Auditel?

By engaging with experts who handle business utility renewals on a daily basis, our clients tap into years of expertise, delivered with consummate professionalism. At Auditel, we can:

  • as independent consultants have access to the whole market.
  • compare renewal offers between suppliers on a “like for like” basis, not just on headline prices.
  • advise on onerous contract terms.
  • facilitate changes of suppliers.
  • time renewals to hedge risk or take advantage of movements in the wholesale market, according to client needs and wishes.
  • identify historical billing errors and obtain refunds on behalf of our clients.
  • provide supporting information to substantiate VAT refunds.
  • interpret half-hourly data and analyse energy consumption.
  • advise on, and implement, appropriate changes to meter profiles to the financial benefit of our clients.
  • leverage our strong supplier relationships to assist in resolution of ongoing issues.
  • demystify market myths.
  • save our clients the time-consuming aggravation of handling the renewals process.
  • ensure that, on an ongoing basis, procurement of business utilities is effectively managed.
  • give our clients access to cost, procurement and supplier management solutions for a wide range of other essential business services.

And all this is available for no upfront fee. Even if you’re convinced that your business overheads are already under control, I’d be delighted to meet with you…just so that you’re sure.

P.S. At Auditel we also deal with fleet management – including breakdown cover – for our clients, so none of my pain should ever be experienced by you! Now there’s a pleasant thought…