Get Switched On! Money to be saved

Jonathan Elliott of Energyhelpline suggests 10 ways by which you can cut energy bills at your pub.

With wholesale prices of UK gas and electricity hitting record highs it's not just domestic users who are feeling the knock-on effects. Business electricity prices have more than doubled from around 4p to 10p per kilowatt hour (kWh) over the past 12 months and, similarly, gas prices have shot up from 1.3p to 3.5p per kWh.

Publicans, in common with all business energy users, do not enjoy the same consumer rights as householders and find it harder to shop around for the best deals. Many feel they've been locked into expensive rates unfairly because suppliers automatically renew contracts months in advance of expiry without their consent.

This renewal process - called an "assumptive acceptance" - takes effect if you fail to reject a renewal offer in writing within a certain timeframe. Your supplier then deems it as an implicit and unconditional acceptance for another 12 or 24 months.

In addition, many licensees are automatically put on extortionate "out of contract" rates for energy supplies when they take over a new pub. Price comparison service Energyhelpline has, unsurprisingly, seen a four-fold increase in price enquiries from businesses over the last year. Here's some of the advice we've been offering.

• Get on a contract​

A third of all UK businesses are not on an energy contract and, with wholesale prices continuing to rise, they are vulnerable to regular increases. A fixed-rate contract would freeze your rates for up to three years. Don't believe vendors who tell you that fixed contracts no longer exist.

Serve notice immediately​

Keep track of when your contract is up for review as there are sometimes catches stipulating you need to serve three months to one year's notice. Send a letter immediately and save it as proof so all your options are open when it is time for renewal. If your current supplier knows this, it will also have to offer you competitive rates to stay.

Shop around​

With more than 30 different gas and electricity suppliers all offering different rates and pricing structures there is always likely to be a better option for you out there. If this sounds too time-consuming or tedious, consider going to a broker or an independent price comparison service.

Read the small print​

Many suppliers make it difficult for you to change at the end of a contract with the most common ruse being the "assumptive renewal" letter. Most people don't notice or are too busy to realise the implications of this letter. Worse still, some assumptive renewal letters are sent 120 days in advance when it is impossible to accurately shop around for a better deal.

Give yourself time​

Start to search for a new supplier at least eight weeks before your contract is due to expire. This allows enough time for you to get various prices and secure a start date that does not leave you out of contract.

Terminate cold calls​

Cold callers trying to sell you energy are becoming a regular irritant and are unlikely to offer you the best rates in the market. Politely tell them to go away or, better still, register with the Telephone Preference Service (www.tps online.org.uk) to help deter all unsolicited sales pitches.

Go green​

Environmental taxes - that is, the Climate Change Levy - at almost half-a-penny per kilowatt you use, are avoided completely if you take your energy from renewable sources such as wind power. Signing up to a green tariff can often work out as cheap as any other deal. See the light​

Energy-saving lightbulbs use 75 per cent less electricity than standard bulbs, provide the same amount of light and last up to 10 times longer. Any DIY or electrical shop should be able to advise you on choice.

Lower the temperature​

Set the thermostat at 19ºC when you have the heating system running. Costs jump by eight per cent for every 1ºC increase. The reverse applies for air conditioning in the summer.

Consult colleagues​

Ask your staff where they think energy is being wasted, and ask them for their ideas on saving energy. You might be surprised at what they come up with.

Jonathan Elliott is business services director at Energyhelpline.com, which is an Energywatch-accredited price comparison service and the biggest business broker, helping companies find cheaper deals on gas, electricity, water, landlines and mobile phones. It is recommended by the BII. Call 020 7960 4444 or visit www.energyhelpline.com.​

Let us know your horror stories​

The Publican has launched a campaign against soaring energy costs. Do you have any horror stories? Call the newsdesk on 020 7955 3710 or email arjf@gurchoyvpna.pbz​.

Case study: Holding the Front Page from heavy energy bills​

Front Page Pubs started out like many entrepreneurial businesses as a single outlet. Over the past 20 years it has developed into a profitable group of seven smart pubs in Central and South West London, generally found in backstreet locations away from the busy high streets. They include the Rampage in Covent Garden and the Racing Page in Richmond. With heating, lighting, kitchen equipment, cold-rooms and entertainment all constantly on the go, energy is one of the largest overheads eating into profits.

Co-founder and joint managing director Rupert Fowler explains: "Keeping the food, drink and customers all at the right constant temperature is an ever-increasing burden. Air conditioning, for example, is a must but the units are power hungry and that alone burns a hole in our pockets." In 2001 Front Page Pubs entered a five-year fixed electricity contract. At that time the annual energy bill totalled about £40,600 (exc VAT), an average of £5,800 per year for each venue.

Earlier this year, at the end of the contract, the forecast total energy bill based on the renewal offer for all seven pubs was approximately £70,000 for a 12-month contract. In other words, Rupert was suddenly facing a 72 per cent increase in his bills.

Before renewing the contract, though, he turned to Energyhelpline which negotiated an alternative rate for a two-and-a-half-year contract for which the forecast annual bill is £47,500 - a total saving of more than £55,000.

Significantly, the alternative offer was from a supplier which was, at the time, actively looking for customers with a similar profile to Front Page Pubs - hence the deep discount against the prevailing market.

And because Energyhelpline places hundreds of commercial energy contracts with suppliers every week, it is able to secure special deals.

"We were very fortunate to have found Energyhelpline at the right time," concludes Rupert. "It gave us some sound advice and did all the paperwork.

"Although we're not exactly ecstatic with any kind of cost increase, we could have been much worse off. The key message to anyone in a similar position is to shop around."