12 Nov Is Your ‘Fixed’ Energy Contract Really Fixed?
Is Your “Fixed” Energy Contract Really Fixed?
That’s a great question!!
Over the past year, we’ve seen a wave of changes in the energy market, new taxes, new levies, and new ways suppliers are structuring their contracts. Most recently, charges like the RAB (Regulated Asset Base) and EII (Energy Intensive Industries) costs have started appearing separately on business energy bills.
It’s causing confusion, and rightly so. Many customers are asking:
“I thought I had a fixed contract, so why are these extra charges appearing?”
It’s a fair question.
The truth is, not all “fixed” contracts are created equal. While most businesses assume that “fixed” means everything, from unit rates to standing charges and taxes is locked in for the term, the reality can be a bit murkier.
Some suppliers interpret “fixed” as only fixing the wholesale energy element, while others might fix everything except government-imposed charges. The result? When new taxes or levies like RAB or EII are introduced, some suppliers simply pass them on to the customer.
That can leave a business with a nasty surprise partway through their contract and it’s something we’re seeing more often.
Why It Matters When Comparing Quotes
It’s tempting to go straight for the cheapest quote on paper, who wouldn’t? But if one supplier has chosen not to include potential future costs (and another has), then you’re not comparing like-for-like.
In effect, the “cheapest” contract might not stay the cheapest once those additional charges are passed through. A truly fixed contract, one that protects you from future changes to third-party costs may look slightly higher upfront, but it offers peace of mind and budget certainty for the duration of your term.
What You Can Do, When Reviewing Or Negotiating Your Next Energy Contract:
Ask the right questions.
Make sure you understand exactly what is included in the fixed rate. Are government or network charges covered, or can they be passed through?
Get it in writing.
Always ask for confirmation in the supplier’s Terms and Conditions or Contract Summary. It’s not enough to assume you want to see it clearly stated. Admittedly most suppliers still have caveats to protect themselves ie: We reserve the right to pass through additional charges.
Work with someone who checks for you.
This is where a consultant really earns their keep. We compare not just the prices, but the structures behind those prices so you know what you’re signing up for and won’t be caught off guard later.
In Summary
The market is changing, and suppliers are adapting to a complex landscape of new taxes and levies. As a result, what’s called a “fixed” contract today may not be quite as fixed as it used to be.
If you’re reviewing your current agreement or looking to renew, now’s the time to dig a little deeper. We’re here to help you make sense of it all and to make sure your “fixed” contract is truly fixed.
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