ENERGY DISTRIBUTION AND PROCUREMENT T: 020 8050 3935

Firstly the procurement of energy needs to be understood, as there are many misconceptions that companies are not aware of and many have concerns regarding switching, this is an educational area that SME's need to become familiar with.  Many have concerns such as;

Loyally to existing provider.

Interruption to supply.

Price increases once they move.

Forward buying of a contract.

Many energy suppliers in the main are resellers of energy, i.e. do not produce and therefore not the original source of the energy.  So customers need to consider the loyalty aspect as it is often about price in the SME market why pay more?  In simple terms the energy gets produced, it is connected to the national grid (network of cables) it then goes to the substation and subsequently to the end user. The distribution company is responsible for getting the supply from the network to the substation and then to the consumer, this has little to do with the energy reseller. (who you buy from).

Once the energy has been connected, the reseller, (your energy provider who bills you) buys the supply from the power stations, via the Wholesale Markets and sells it to you aiming for a profit.  So it is in your best interest to get the best deal for supply to your premises from the reseller, hence why loyalty should be a smaller factor and companies need to think of price more, as the energy is coming from the same place to all reseller suppliers so achieve the best rate you can.  

Concerns with supply interruption, the power is always there and it is just about which reseller is responsible for that meter, i.e. they pay the producer in relation to the amount used via the meter and bill the customer for payment.  Therefore by switching there is never an interruption to supply and in fact a simple process providing you are not under contract and payments are up to date at the time of the proposed switch.  

Price increasing after moving, this is an area where most of our rates are fixed price for the contract duration, typically two years but can do 1-5 years, so the price does not increase.  Forward buying is always a risk and companies must decided how far they want to buy in advance.  The market is usually 180 days maximum prior to contract end date, however Henoc Ltd are able to arrange take over supply up to two years in advance of renewal, this enable companies to fix their price long term.  Companies can make an informed decision on this, as they have in the main historical data to use and can see the charges levied over the previous periods.  Therefore when they come within 6 months of their renewal date can take advantage of a more competitive rate, so the contract either renews or transfer to a cheaper deal at renewal.  

The reality is savvy companies will look at their rates and forward contract commitments together with contract period long before their renewal.  Analysing market trends and using a brokerage firm to establish what suits months or years prior to the actual renewal.  Leaving matters towards the end of the renewal date can leave you in a roll over position if timings are out i.e. missed renewal, meaning you miss out on a cheaper deal.  Also, if you fall out of contract period or you fail to negotiate a contract of supply you will be placed on deemed rates, meaning you are paying more, a penalty, always fix a supply agreement.  Take advantage of the registration scheme provided by HENOC LTD, meaning you avoid missing a renewal date.  Register your renewal now

So when assessing these concerns they actually do not exist fully.  Firstly whilst the big energy providers do in fact have their own power plants, they must still sell to the market at fair rates to all, OFGEM ruling, and do not cover the entire market using their power plans.  Also the service provided by the energy supplier only relates to your account and not generally issues with faults or actually arranging the connections of supply, this is done by the distributor network.  So in effect, if you have a fault it will either be the distribution network who fix it or you will require an electrician ,of which would be at your costs.  What actual service other than sourcing billing and queries is the energy reseller providing.  The same can be said for the gas market.  Therefore, as a business, always look at what is the best energy solutions for your business and maintain the best price possible.