magazine
32
Energy
Dealing with
the energy crisis
News that the ‘Big Six’ energy
companies were singled out for
criticism by industry regulator Ofgem
recently will not come as a surprise to
many of their commercial customers.
Despite ongoing energy price rises,
it seems that many customers feel
let down by poor service levels, with
increasing number of consumers
stating that they are ‘very dissatisfied’
with the service they receive from
their energy provider.
Price is often the major factor for
business users, and so many are prepared
to put up with poor customer service for
the sake of what they see as a good deal,
particularly if their business is a large
energy user.
As someone who deals with energy
companies and their clients every day, I
don’t believe that anyone should put up
with poor service. In fact, as a business
user you are likely to be a valued
customer, even if the level of service
you receive doesn’t reflect that fact. So,
remember that you are in a position
of strength because energy firms really
want your custom.
Find the finance
Energy conservation is a big deal for
companies and the government, which
has strict EU targets to meet. As a
result, there are some funding schemes
currently available that are worth
investigating. For example:
n
The Green Deal
(
-
deal-energy-saving-measures) in effect
helps companies to borrow against
future savings in energy consumption in
order to finance energy-saving initiatives,
such as insulation or more efficient
lighting and heating equipment.
n
The
Energy Efficiency Financing
Scheme
, run by Siemens Financial
Services and the Carbon Trust, allows
businesses to invest in energy-efficient
technology with payments that can be
offset against the energy savings made
from using the equipment.
n
The
Enhanced Capital Allowance
(ECA) Scheme
is part of the
government’s programme to reduce
energy consumption. The scheme
provides businesses with enhanced tax
relief for investment in equipment that
meets specific energy-saving criteria. It
enables companies to offset the cost of
equipment against their taxable profit as
a 100% first-year capital allowance.
Audit your energy use
If you haven’t done so before, it’s
advisable to carry out an energy audit
of your company. Start by monitoring
what and where energy is being used –
or wasted. For example, are computers,
photocopiers, heating or lights being left
on when there is nobody around? There
are also other simple changes you can
make to cut energy consumption:
n
Turn down the heat:
are thermostat
settings too high in your offices or on
the factory floor? For every degree
your thermostat is turned down, an 8%
saving is achieved.
n
Follow my leader:
appoint an ‘energy
champion’ who can take responsibility
for reducing and monitoring how energy
is used.
n
Shine a light:
lighting is a significant
cost for many businesses and energy-
James Longley of Business Energy Consultants (
discusses the energy issues facing businesses and offers some tips for
reducing energy spend
saving technology has come a long
way. You could invest in energy-saving
light controls that switch lights off
automatically when they aren’t needed,
or simply buy some energy saving LED
bulbs or fluorescent tubes.
Revisit your contract
One major way of saving money that’s
surprisingly simple and frequently
overlooked is to review your contract.
I am often surprised by just how many
businesses are either on the wrong tariff
or on the incorrect VAT rate (this varies
for different types of business).
Even if you are locked into a contract
for two or three years, if you were given
the wrong advice initially and have been
put onto a contract that is penalising
you (for over-use or under-use), you may
be able to renegotiate your deal and
potentially engineer a refund.
VAT is another issue that confuses
companies.We have come across a
significant number of businesses that
have been put on the wrong VAT rate,
subsequently paying more than they
need to. Again, if this is the fault of the
energy company (and it often is), you
should be able to claim a refund, which
could add up to thousands of pounds
over the course of a year. Brokers who
know the market and are used to dealing
with energy providers are best placed to
deal with this for you.
Of course, it’s preferable to be in
a good contract from the start, rather
than having to dig around to find out
where you have been overcharged. The
optimum time to investigate a new
contract is around six months before
the current one expires. Don’t be afraid
to state your terms and negotiate – or
appoint a broker to do it for you.
Energy is a major financial outlay and
an absolute necessity for any business. If
you are looking to reduce costs, improve
margins or finance growth, looking at
your energy costs is a good place to
start. Despite energy providers’ poor
reputation for customer service, being a
customer gives you a degree of power
when negotiating with your provider, so
use that influence to ensure that you get
a better deal.
James Longley is a Director of Business
Energy Consultants
.
co.uk). He researches the energy
market and negotiates on behalf of
the hospitality industry and facilities
managers to find the most competitive
energy deals on the market.
James Longley,
Business Energy
Consultants
Bizenergy office
interior
