Business energy contracts set how your supplier charges for the electricity or gas your premises use. A fixed-term deal, a flexible deal, and a deemed or out-of-contract arrangement can work very differently. Check the rate, contract length, fees and end-of-contract terms before you agree.
Fixed-term: a set rate for an agreed period
A fixed unit rate keeps the agreed price per kilowatt-hour in place for the stated contract term. It does not fix your total bill: how much you use and any standing charges still affect what you pay. Do not assume that “fixed” means every cost or pass-through item is frozen; ask the supplier to list what may change.
Write down the contract start and end dates, the unit rate for each fuel, daily standing charge, VAT basis, exit terms and any special conditions. Check what the contract says will happen when the term ends.
Flexible or variable: understand how the price moves
Some business deals allow the price to change or expose the customer to wholesale-market prices. “Flexible” is not one standard contract design, so ask how and when each component can change, who makes that decision and how you will be told. Get the formula and any notice requirements in writing; a headline rate alone may not describe your future costs.
Deemed and out-of-contract rates
If a business uses energy without agreeing a contract with that supplier, it may be supplied on deemed terms. Ofgem also describes out-of-contract rates that can apply when a fixed term ends and no replacement arrangement has been made. These arrangements are not the same as a negotiated fixed deal and can be costly. Confirm your current terms directly with the supplier rather than guessing from an old bill.
If you move into premises or discover an unexpected supplier, ask which contract applies, how the rate is calculated and what steps are available to agree another deal or switch.
Renewal, rollover and notice dates
A contract can require you to give notice within a particular window if you do not want it to renew. Do not treat a reminder date as the deadline without checking the terms. Record the end date and the earliest and latest valid notice dates, and keep proof when you give notice.
Compare the whole arrangement
Before choosing, compare equivalent usage over the same term. Put the unit rate beside the standing charge and all fees. Ask whether charges can change, whether a broker's fee or commission is included, and what your supplier requires to end or renew the deal. Read the terms in writing before accepting; a phone call can create a binding agreement.
Useful next step: use the business energy estimator to put annual usage and standing charges in context. It is an independent estimate, not a live tariff or supplier quote.
Check the relevant Ofgem guidance for current rules and contract explanations. The terms available to your business depend on your supplier and circumstances.