Small business owners don’t benefit from an energy price cap: Here’s what to do if you’re worried about rising bills
- Small businesses could worry about rising energy bills in the future
- They don’t benefit from the price cap like other consumers
- We reveal everything you need to know about the current crisis
- Do you have an energy question? email@example.com
Small businesses may struggle to pay their energy bills this winter because they don’t benefit from the price cap safety net like households do.
The companies whose supplier goes bankrupt may also not get back the credit they have built up with their provider due to different rules.
This is just one of the issues arising from the energy crisis after rising wholesale costs led to the collapse of multiple suppliers in recent times.
Small businesses may struggle to pay their utility bills this winter because they don’t benefit from a price cap
While consumers worry about whether their provider will stop trading, small businesses may worry about not being able to keep up with rising bills.
This is Money, with help from Citizens Advice, reveals what you need to know if you’re a small business worried about your utility bill.
What is the energy crisis?
The energy crisis has been caused by a number of factors, but is ultimately due to the lack of natural gas being produced and an increase in demand.
As a result, wholesale costs for gas are rising, which means that suppliers have to pay more for delivery.
These costs are then passed on to the consumer, but if that is not possible, the supplier loses money and many stop trading.
This affects normal consumers as well as small businesses.
Should companies be concerned?
Ofgem and the Department for Business, Energy and Industrial Strategy (BEIS) are urging customers, including small businesses, not to worry about their energy supply.
However, many still worry about how much their bills could rise in the coming weeks.
BEIS told This is Money that small businesses struggling to pay their utility bills should contact their supplier as soon as possible.
Merchants may be able to pause or reduce their refunds or avoid disconnection.
A government spokesman said: ‘The Business Secretary is in regular contact with the energy industry and Ofgem to manage the impact of high global gas prices and will continue to monitor the situation incredibly closely, including the impact on small businesses.
“All energy customers, no matter who their supplier is, can rest assured that even if their supplier fails, there is a robust and well-practiced process to ensure continuity of supply.”
Due to the energy crisis, millions of people are concerned about whether their supplier will soon go bankrupt
What if a small business can’t pay its utility bill?
If your utility bill becomes much higher than normal and you can’t afford it, ask your supplier if you can arrange a payment plan.
Set up a budget before you call so you know you can afford the payments.
It’s also important to make sure you’re billed accurately, so take regular meter readings and send them to your supplier.
However, if you are in debt to your supplier, it is important to act quickly as your energy supply can be cut off within 30 days if you do not make arrangements to settle the money owed.
If the connection is lost, a connection fee is normally added to the money you owe and you often have to pay another fee to reconnect.
What happens if a supplier goes bankrupt and a small business gets credit?
Unlike normal consumers, if you are a small business with credit, you may not get all of your money back if your supplier goes out of business.
Ofgem will attempt to choose a supplier who can repay all or part of your credit, but this is not guaranteed.
As with other consumers, you will be assigned a new supplier through the supplier of last resort process. Wait for your new supplier to contact you and they will tell you what will happen to your credit.
If your new supplier cannot repay your credit, please contact your old supplier’s administrator who will take control of your old supplier and settle their debts. You should be able to find their details on your old supplier’s website.
Contact the administrator to register as a creditor – this is someone who owes money – when you need to prove that your account was on credit with the old supplier.
You can do this with old bills or statements.
If you have an online account, it’s also a good idea to log in to check your balance and download any bills or statements.
The administrator may be able to refund some of your credit, but this can take a long time – sometimes more than a year.
The amount you get will depend on how much the old supplier owes to all of its creditors.