Commodity costs have fallen in the last few days but remain significantly higher than in February.
While European gas storage is currently around 78% full, similar to last year. There have been several supply interruptions to Norwegian gas as the largest European source and global LNG.
While lower than average temperatures at home have kept gas demand high. In Asia, a heat wave has increased LNG demand to meet higher electricity generation due to increased A/C use. This tightening of supply and higher demand has added pressure on costs, keeping them higher than was forecast at the start of the year.
Standing charge
It’s not just the unit rates that have increased. We have for the first time encountered a standing charge of over £100 per day on a renewal for a larger customer with an annual consumption close to 500,000kW’s.
Of course, it’s not just energy costs that impact a pub's ability to trade. Supplier practices can made an already challenging situation so much worse. Something of recent focus are the pros & cons of smart meters
Smart meters have several benefits for both customers and suppliers:
- Accurate billing.
- An understanding of consumption patterns to better match supply and demand.
- The ability to accurately profile consumption for more competitive rates.
Competitive rates
Over the past 15 years, some suppliers have operated business models relying on remotely changing meters to pay-as-you-go (PAYG) or disconnecting to manage credit risk. They can offer very competitive rates to businesses, who would otherwise pay a premium on their energy costs.
Where the customer's focus is solely on who’s cheapest. These suppliers pick up market share as operators prioritise savings over future costs. However, we are seeing more and more concerning practices from these suppliers. These include:
- Remote disconnection if they believe the pub is “high risk” even when a new operator has taken over.
- An increasing range of charges for contracts not going live, failed meter appointments, early termination fees etc. of up to £550 per incident.
In the worst-case scenario, a customer’s meter can be turned to PAYG or disconnected by failing to pay these additional costs, even though they may actively dispute them.
The importance of operators taking advice on their supply options can’t be overstated. The support of Nationwide Energy as a trusted partner mitigates many risks when reviewing business needs. Our field consultants and renewals advisors can explain the key features of different supplier contracts alongside a market review, and updates on available prices.
Any customers struggling to pay current rates or are at risk of default can contact our Billing Team for support and advice on their options. Please contact us on:02476 328995 or at info@nationwide-energy.co.uk. Also see here for a free guide to help your business.
