August 10, 2011

Third of SMEs pay too much for energy

by Jan Harris

Energy broker uSwitchforbusiness claims that a third of SMEs could reduce their energy bills by switching providers.

However, the complexity of bills, rolling contracts and penalties for early termination, deters firms from switching.

A survey by uSwitchforbusiness found that most small businesses believe it is more difficult to switch energy suppliers than to change their bank, phone or broadband provider.

Ninety per cent of 1,000 SMEs surveyed did not switch provider in 2010, and a third had never switched provider.

A quarter of those surveyed were concerned that the energy market was dominated by a small number of big suppliers.

British Gas, Scottish Power, E.ON, and Scottish & Southern Energy have all recently announced price increases.

Energy regulator Ofgem hopes to increase competition in the sector by breaking up the dominance of the largest six UK energy providers, which together hold more than 99 per cent of the market.

It wants them to auction off up to a fifth of the energy they generate, to make space for smaller firms, such as the Co-op, to operate in the sector.

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