17 November 2017
Charities need to think like consumers when it comes to their energy providers, or face missing out on the best deals, according to leading broker Utility Aid.
The energy regulator Ofgem, this week reported that the "Big Six" electrical and gas suppliers made over £1bn profit, increasing their profit margins by 4.5% along the way, by charging higher prices to those consumers that didn't switch.
Giles Hankinson, Chief Executive of Utility Aid, an energy broker that works with the not-for-profit sector said charities could dramatically reduce their bills, if they shopped across the whole market.
"The smartest customers shop around for the best deals. Charities should be no different. However, a quarter of organisations believe it's too complex or time-consuming to find a new tariff and the big firms rely on this concern to charge higher rates.
"By shopping across the whole market, charities can save hundreds if not thousands of pounds, all of which can be ploughed back into frontline services."
Ofgem's State of the Energy Market 2017, showed in June this year there were 60 suppliers offering electricity and or gas, 16 more than a year ago but more than half of consumers (58%) had never switched supplier or switched only once.
The report also revealed two- thirds of consumers were on a default variable tariff which can be around £300 more expensive than the cheapest fixed term deals.
It claims the energy retail market works well for larger businesses but smaller ones pay much more on average.
It states: "Larger business consumers can often negotiate good deals with suppliers, but smaller ones tend to pay more for their energy, and switch infrequently.
Average business electricity prices are around 50% higher for very small firms than for large or very large consumers, while non-domestic gas prices can be twice as high."
Utility Aid saved a branch of one leading charity nearly 10% on their gas and 40% on electricity when energy contracts came up for renewal.
The broker firm has developed a simple, three step process to help organisations understand what their options are and if they can save money.
Firstly, they gather data asking for a letter of authority (as required by Data Protection laws) which enables them to establish the clients consumption across the year. Then they use this information to search the whole market, finding the right supplier for a specific business.
Secondly, they review the cost of the current energy and check that a business is on the right tariff, and meter profile.
Lastly, they provide a proposal for a business's energy needs and then complete all the paperwork for you.
Giles added: "One of the best ways to find out if you are paying more than you should is to shop around, but if you are a small organisation making dozens of calls might not be possible.
"Getting energy through a broker can help with this and it also gives small organisations the chance to join forces and bid for a contract en masse."
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