electricity4business - making a stand with UK small business.

The Big 6 Electricity Suppliers leave small businesses out in the cold

When electricity prices began to tumble after de-regulation small businesses were left out of the party. It was only after some forward-looking new entrants appeared that some small businesses began to see a modest reduction. But despite switching supplier to take advantage of cheaper prices most now find themselves back with their former supplier or one of the Big 6. In fact these Big 6 have a combined market share of over 96% after swallowing up the new entrants in virtually unchallenged takeovers.

Furthermore, some 2/3 of these companies are owned by French or German multi-nationals - hardly the healthy competition the Government announced would result from de-regulation in the 1990s. Perhaps if the Government had intervened to prevent the same companies from owning both the generation and distribution of electricity supplies then we would have seen far less concentration.

And small businesses are the most vulnerable of all electricity consumers.

Large industrial users can use their purchasing muscle to negotiate better rates.

Domestic consumers are heavily protected by the regulators. Domestic suppliers are legally bound to publish prices and the regulator actively encourages the consumer to visit independent and impartial price comparison sites in order to find the best deal.

It's also easy for the domestic consumer to change supplier whenever they like.

Not so for the small business who invariably finds price comparisons impossible due partly to the complex supply number system but also to the widely fluctuating wholesale prices experienced under current market conditions. You simply don't have the time to evaluate a quotation in the fear that it can change completely by the next day.

Then there's the timing. The window of opportunity for a small business to switch is very limited.

Complicating the comparison process still further are the various ways in which a supplier can quote. Some choose to load the standing charge whereas others load the unit price.

The worst load both!

This lack of transparency only leads to confusion on the part of the small business who has other more pressing activities to deal with. No surprise then why some small businesses just cannot be bothered looking around.

If you're sitting cosily on a large share of the market making ridiculously large profits there's no incentive to be lean. Bureaucracy reigns. Ever tried calling to sort out an incorrect bill? Then you'll know where we're coming from.

About the author:

Bernard Scally