How You Can Avoid a Rollover Business Energy Contract

business energy contract

A rollover energy contract is a type of energy contract that runs for a set number of months and then, without notice, moves to a new contract period. If a consumer does not want to renew the contract, they can terminate their participation in the contract. All of the consumer's energy use between the contract periods is then reported on their next bill. These contracts are not ideal, as they can lead to overpayments and decreased energy efficiency, but they are prevalent in the energy market. This blog post will detail the distinction between the two types and the ways that you can avoid a business energy contract.

It’s easy to fall into a rollover contract and can lead to higher energy rates for your business. Remember that as a business owner, you want to keep your energy rates low so that you can improve your bottom line. The good news is that you can avoid a rollover contract and you have the legal rights on your side to assist you. 

When your energy contract is about to expire, you must cancel it within a certain period otherwise the energy supplier can automatically place you onto a new energy contract, leading to higher energy rates. Unfortunately, you can be stuck with this new energy contract for at least a year. This article discusses how you can avoid a rollover business energy contract.  

A rollover energy contract

If you fail to renegotiate or renew your energy contract during the renewal window, which is at the expiry of your energy contract, then an energy supplier can roll you over. Energy suppliers offer these contracts automatically. Therefore, your business can be locked into a costly renewal tariff for about a year.

Most energy suppliers can contact you at least two months before the expiry of your energy contract to tell you that a rollover energy contract may start if you fail to take any action. Because energy suppliers send a lot of statements, this communication can be missed, especially if you are not expecting it. The rules for rollover contracts were approved, but these contracts are expensive for many businesses.

It’s worth mentioning that some energy companies decided to remove their rollover business contracts. This means that there can be no new energy tariffs, but business owners who fail to act at the expiry of their energy contracts can be placed on a rolling monthly tariff. The good thing is that you can switch to another energy tariff at any time with zero exit fees. But these rolling contracts are still more expensive than the standard energy rates available on the market.

Remember that many energy brokers understand that these energy rates are not good for small businesses. Therefore, Utility Bidder can help you avoid these rollover contracts by ensuring that you get a new energy deal after the expiry of the current one.

The difference between a deemed and a rollover contract

If your business energy contract expires and the energy suppliers don't roll you over, then they can put you on a deemed contract. A deemed energy contract can work when you cancel your energy contract without renegotiating a new energy tariff. Therefore, the energy supplier doesn’t cut off the energy supply but puts you at a deemed rate.

Thankfully, if the energy supplier puts you on a deemed rate, you can switch the energy tariff at any time. Deemed rates are also higher than any standard energy rates on the market. Hence, if you are on a deemed rate, then it’s crucial to compare energy prices so that you can switch the energy tariffs right away. Your business can save a lot by choosing another energy tariff.

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