Navigating Complex School Energy Contracts
Are you feeling overwhelmed by the intricacies of managing your school’s energy contracts? We understand that energy procurement can be a complex puzzle, and the stakes are high. In this guide, we’ll illuminate the path to a more efficient and cost-effective energy strategy for your school.
Understanding Your Existing Contract
Before venturing into the labyrinth of energy contracts, it’s crucial to have a firm grasp of your current contract’s details. Here’s what you should know:
- Prices: Get acquainted with the energy prices you’re currently paying. Are they competitive, or are you paying more than you should?
- Annual Usage: Monitor your school’s annual energy consumption. Identifying unexpected spikes, such as summer usage, can prompt measures to reduce consumption and cut costs.
- Contract Type: Determine whether your current contract is a fixed-term agreement (typically 1-5 years) or a rolling contract (usually 28 days). This choice affects price stability and flexibility.
- Termination Details: Be aware of the contract termination deadline and the length of the notice period. Missing the termination deadline can lead to costly rollover rates.
- Supplier Information: Your school may have different suppliers for gas and electricity, and even various meters within the same facility. Ensure you have accurate information for each.
- Contact Details: Confirm that your supplier has the correct contact information. Missing renewal letters due to incorrect contact details can lead to unexpected contract rollovers.
If you’re uncertain about any of these details, your supplier can provide clarification. Understanding these factors will empower you to stay in control of your energy contracts and avoid expensive rollovers.
The Rollover Dilemma
If you haven’t actively signed a contract for a few years, chances are you’ve fallen victim to the “rollover.” This term refers to the automatic renewal of your contract, often at higher rates. If you suspect you’ve been rolled over, here’s what to do:
- Contact Your Supplier: Initiate a conversation with your existing supplier about cancelling the contract. They might offer you a more favourable rate to retain your business.
- Explore Other Suppliers: Don’t limit your options. While your current supplier might present an attractive rate, it’s wise to seek quotes from other suppliers for comparison.
Collaboration for Cost Savings
The realm of school energy contracts often presents opportunities for collaboration. Especially for smaller primary schools, aggregating with neighbouring schools can lead to more attractive commercial offers. Consider the following steps:
- Form a Project Group: If collaboration seems promising, create a project group comprising representatives from each school. This group will oversee the collaborative effort and ensure a smooth process.
- Memorandum of Understanding: Draft a short contract or memorandum of understanding between the participating schools. This document clarifies roles, responsibilities, and the process to be followed.
Finding a New Contract
When seeking a new energy contract, consider the following factors:
- Standing Charges: The importance of the standing charge varies with your energy usage. If your consumption is relatively low, look for a contract with a low daily standing charge. Consider location and annual usage when assessing the standing charge.
- Length and Type of Contract: Fixed-term contracts offer price stability but might not take advantage of market price drops. Consider your energy price predictions when opting for longer-term contracts.
- Overall Cost: Focus on the overall cost of proposed prices. A low unit rate may not necessarily lead to savings if coupled with a high standing charge. Consider your actual usage to assess the value.
- Comparison: Don’t settle for the first quote. As a business customer, you have more room for negotiation. Explore multiple options to secure the best deal.
- Service Quality: Evaluate the supplier’s track record. Do they handle customer complaints efficiently? Ensure that you can easily reach them when needed.
If you’re ready to switch suppliers, follow these essential steps:
- Termination: Ensure that you’ve successfully terminated your existing contract. Missing the deadline for termination could lock you into a rollover contract for another year.
- Swift Action: Move quickly with energy contracts. Suppliers often have time limits on valid quotes, and the time after the termination deadline could be short. Swift decision-making helps you avoid steep out-of-contract rates.
- Information Required: To switch suppliers, you’ll need your Meter Point Administration Number (MPAN) for electricity and Meter Point Reference Number (MPRN) for gas. These numbers can be found on your bills and contain only numbers.
- Address and Consumption: Provide your address, including the postcode, and your annual energy consumption. Inform your potential supplier about your current energy supplier and your preferred payment method.
Consider the option of utilising national Framework Agreements when purchasing your school’s gas or electricity. These agreements can save time and money, as they are compliant and provide cost-effective solutions.
Managing school energy contracts may seem complex, but with the right knowledge and preparation, you can secure cost-effective, efficient, and reliable energy services for your educational institution. Don’t let the complexity of energy contracts leave you in the dark; take control and make informed decisions.