Business Energy Renewal: Why the Letter Is Not the Deal

The single most expensive habit in business energy is treating the renewal letter as the price. It isn’t. It’s an opening offer from a supplier who knows most recipients will sign it — and after twenty-plus years in this market, I can tell you the pricing reflects exactly that.

How renewal pricing works

Your incumbent supplier knows two things: your consumption history, and the statistical likelihood that you won’t shop around. Renewal offers are priced against your inertia, not against the market. It’s why the same supplier will frequently quote a lower price for the identical meter when the quote comes through a competitive process rather than the renewal desk.

That’s not a scandal; it’s how any retention pricing works — your insurance renewal does the same thing. The fix is the same too: make them compete.

The dates that matter

Contract end date. On your contract, your renewal letter, and usually your bill. If you don’t know it, that’s the first fix.

Termination notice window. Many contracts still require written notice — commonly 30 to 120 days before the end date. Miss it and, while microbusinesses now have protections against long rollovers, you can still end up on expensive default or out of contract rates while things unwind.

Your shopping window. Suppliers will price new contracts up to twelve months ahead. Starting early doesn’t commit you to anything — it means you buy when the market dips rather than when the letter arrives.

A renewal done properly

1. Diary the end date and notice window the day you sign any contract — this renewal’s job starts at the last one’s signature.
2. Serve termination notice in time, in writing, keeping proof. This doesn’t force you to leave; it keeps your options open.
3. Benchmark the market on a like-for-like basis — see our note on what prices per kWh businesses actually pay.
4. Take the renewal offer back to the market — including to your own supplier through the competitive route.
5. Check the new contract’s terms, not just its rate: notice period, rollover clause, what’s fixed and what passes through.

Should you switch or stay?

Whichever is cheaper on true like-for-like terms — and roughly a third of the time in our procurement work, that’s the incumbent, once they’re competing rather than renewing. Switching for its own sake is as lazy as rolling over. The point is never the switch; it’s the competition.

Where a consultant fits

We run this process on a diary basis for clients: notice served on time, market watched across the window, offers benchmarked, terms checked. Our fee is agreed upfront — paid directly or via the supplier, your choice — and if staying put is the right answer, that’s the recommendation you get. The renewal letter stops being a bill you sign and becomes what it should have been all along: one quote among several.

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Johnny Arthur runs Telnergy Ltd, an independent commercial energy consultancy established in 2002 and based in Christchurch, Dorset. Ofgem registered TPI, ADR Ref E3561, CRN 04576876.