Customer stories: Standing charges





Meet Steven. Steven runs The Sportsman Pub and Guesthouse in Whitworth. A family run pub who are on the final countdown to reopening and welcoming their customers back with open arms. He received a renewal letter in the post from his energy supplier. It did not give any choice and the rates were much higher than his current rates. Steven wanted an energy contract which offered some flexibility and no daily standing charges on his gas.

Standing charges.

Standing charges are daily charges applied to energy contracts, both electric and gas, to pay for the cost of transporting that energy to your business. They are applied regardless of the amount of energy you use. The range of standing charges can vary; for electric between 0p and 60p per day and for gas 0p to 80p per day, generally. Although, some standing charges may be higher than this.

No standing charge contracts means you only pay for the energy that you use. However, the unit rate is higher. They generally suit business who are seasonal or are not in constant need of energy, for example, a restaurant operating at the weekends only. After the recent experience of COVID and being forced to shut down, no standing charge contracts could be a good choice in the short-term going forward for hospitality businesses.

Energy industry helping hospitality businesses or not.

Since March 2020, hospitality have been on a roller-coaster of opening, closing, reopening only to close again. Hospitality has been worst affected since the COVID pandemic began, the reasons for this are being strongly questioned in the courts. Leading the charge for hospitality on these issues is Manchester’s own Sasha Lord.

But on a more fundamental level, is the energy industry helping or hindering hospitality businesses get back on its feet? Many energy providers are now also refusing to accept hospitality business due to the pandemic as these businesses are viewed as a higher risk. And look at Steven’s experience, he received a renewal letter for his energy which had one contract option and no explanation as to why the energy rates for his business had increased. This is something, as an industry, we need to assess and make reasonable decisions to help the hospitality sector during their time of need.

Advice when renewing your energy contract.

Hospitality has begun to reopen, but it may not be the best time to fix your energy contract for a long time. With the COVID pandemic having affected many hospitality businesses over the last 12-18-months, it may be the case that the credit score of your business has fallen through no fault of your own. If your credit score is lower than it normally would be, the options for your energy contract may also be lower.

We, at Energy PEAK, recommend taking a lower term (1-year or 2-year contracts) now to give your business time to recover. Then, in the future when normality resumes – whatever that means – you can reassess and possibly get a better energy deal down the road. This is of course up to you, the customer 😊


For expert energy advice tailored to your business, book a meeting with Energy PEAK today.


Photo by natasha t on Unsplash