Business Energy Rollover Contracts Explained

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Last updated: 20 May 2020

Not terminating your business energy contract in time and consequently being ‘rolled over’ is a costly and frustrating mistake that you will only make once! This guide talks you through what the term means, the law concerning these contracts, and how you can avoid being rolled over.

What is a business rollover contract?

If you fail to cancel your business energy contract before it ends, your energy supplier will automatically sign you up to a new ‘rollover’ contract. This new contract will inevitably be much more expensive and uncompetitive, and you will have to stick it out for at least another year.

Though these contracts seem unjust, and can prove catastrophic for micro-businesses, energy suppliers justify them by arguing they are essential for their own security.

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What is the law concerning business rollover contracts?

Rollover contracts are, sadly, perfectly legal. However, if your business is a micro-business, they are some rules in place which should help to protect you. Your business qualifies as a micro-business if it uses no more than 200,000 kWh of gas or 55,000 kWh of electricity a year, or its annual turnover is less than €2 million and it has fewer than ten (full-time) employees on average.

Energy suppliers are obligated to send all micro-businesses a letter 60 to 120 days before your contract is due to end. This letter should outline the conditions of your renewal offer and the contract you will be rolled onto if you do not act on your renewal.

If your business is a micro-business, suppliers cannot roll you over to a new contract lasting longer than 12 months.

How can you avoid your contract rolling over?

In 2013, all of the Big 6 energy suppliers agreed to end or amend their rollover policies by the end of 2014. As a result, opting to use one of these as your energy supplier will mean you will enjoy more freedom than you will with smaller suppliers, who mostly continue to operate rollover contracts.

Regardless of your provider, you should always make sure you are aware of your contract renewal date. It is worth entering it into a spreadsheet and setting some sort of reminder to ensure that you do not forget this crucial date.

As long as you provide termination notice to your supplier in accordance with their termination policies, you will not be automatically rolled over. Look on your supplier’s website for their termination notice policy, or give them a call if you are still uncertain.

You can terminate by email or fax if you would like, but you should also send a written copy to your supplier by recorded delivery in order to avoid any disagreement concerning your notice.

Your next task will be finding a new contract in plenty of time. On our website you can compare business energy deals, helping you find a cost-effective alternative quickly and efficiently.

What should you do if your contract has already been rolled over?

Unfortunately, if you have already been rolled over, there is nothing you can do to terminate your new contract. However, at least this costly setback will hopefully ensure that you never let you contract rollover again!

You can take this opportunity to compare business energy deals in preparation for the much anticipated end of the contract, so you’re ready to switch in time.

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Author: Danny Lord

Danny is our Editor-in-Chief, and has been writing news and guides for comparison sites for the last five years.

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Business energy suppliers

There are currently more than 50 energy suppliers to choose from in the UK. Most domestic energy suppliers also offer their services to businesses, including the Big Six, but there are also many firms that specialist in commercial energy supply.