Don’t pay for energy you haven’t used!
If your company is moving to new premises, you’ll need to be wary of inherited energy bills. You can end up paying for energy that the previous occupant used, and at an exorbitant price. What steps can you take to avoid this?
Moving premises
Reading the electricity meter may not be at the top of your list of things to do when you move into business premises. But if you don’t, it could lead to your company paying for electricity that was used by the previous occupant. It’s been reported that this happens surprisingly often, and companies that rent rather than buy property are particularly at risk.
Signing on the dotted line
When you buy a property it will usually say in the purchase contract who will be responsible for paying the energy bills; usually the purchaser is responsible from the time they take possession of the property. But in the case of rented property the landlord commonly has control over the energy supply and has the final say on how much the tenant should pay.
Tip 1. When you sign the rental agreement/lease or buy a property, make sure the contract includes a specific clause saying that you will only be responsible for energy supplies from the time of the handover, and agree a cut-off date and meter reading with your landlord or estate agent on the day you move in.
Tip 2. If you’re buying a property, you’ll automatically have the right to choose which energy company supplies you. But where you’re renting/leasing, ask for a clause in the tenancy agreement that allows you to choose your energy supplier; your landlord may not be too bothered about getting the best deal because he’ll be passing the cost onto you anyway.
Energy charges
It’s likely that when you move into the building the electricity and gas meters will still be connected. And where that’s the case you’ll be on a “deemed contract” with the previous business’ energy suppliers the moment you start to use their supply. The deemed contract will continue until you sign a proper contract.
Trap. The cost of energy under a deemed contract can be up to three times more than the rate you would pay if you sign a contract.
Tip. Don’t wait until you receive the first bill to discover who your electricity supplier is and how much they charge. Even where you intend to stay with the same supplier, it will almost certainly be cheaper if you sign a contract with them.
How to shop around
To check the cheapest energy suppliers, use one of the many comparison websites (see The next step). You’ll need to arm yourself with some information first: the reference number or Meter Point Administration Number (MPAN), also known as the Supply or “S” Number. You’ll also need the Meter Serial Number, this is usually printed on the meter, the nature of your business, and an estimate of your annual energy usage.
Tip. Ask the outgoing property owner or tenant, landlord or estate agent for this information before you move in. That way you’ll be able to sign up for the cheapest energy deal from day one.
For a list of comparison websites, visit http://companydirector.indicator.co.uk(CD 12.02.05).
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