Jul 02, 2021 08:43 PM EDT By Patrick Jones, UniversityHerald Reporter

The suppliers of electricity and gas provide a range of different contract types. With there being so much choice, it is important that businesses are on the right type so that they can ensure that they are paying too much for the energy that they are using. 

The 5 main types of energy contracts for businesses to be aware of are listed below in some detail.

• Rollover - when a business has not found an alternative tariff or supplier to move to come the end of their contract, they will be moved onto this type of contract. The rates that businesses have to pay on these contracts are very high.

• Deemed Rate - where a business energy deal comes to an end and a business has not moved over to another supplier, then they will be put onto an out of contract deal that keeps rolling on. However, these deals are typically very expensive, with very high rates.

• Fixed Term - with this type of contract, a single price per unit is set for the duration of the entire contract. Whilst this does not guarantee a fixed bill at the end of each month (that depends on how much energy a business uses), it does provide a certain level of guidance on how much a business can expect to pay.

• 28 Day - this is the contract that those businesses that have not switched since the deregulation of the energy market will find themselves on.

• Variable Rate - the individual unit rate is linked directly to activity within the wholesale market. This means that the rate can fluctuate greatly over the full term of the energy contract.

If you find that you are currently on the wrong type of deal for your business or if you suspect that you may be paying too much for the amount of energy that you use, go and visit an energy business comparison website to find a more suitable deal.

When A Contract Ends

As soon as the contract that a business has with an energy supplier comes to an end, they will be automatically moved onto an out of contract tariff that is usually very expensive. This is why it is important not to let the business energy contract run out and come to an end before arrangements have been put into place to either move onto another tariff or to another energy supplier.

The moment that a business's current energy deal enters into the renewal window, they will be contacted by their provider to make them aware of this fact and will offer them a new deal of some sort. However, this may not necessarily be the best deal out there and so it is important to shop around for something better rather than simply accepting that one. When a business does switch to another supplier, they will be sent one final bill and be asked to provide a final meter reading to ensure that everything is correct and there are no outstanding monies owed. A date by which this needs to be paid is also supplied.

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