An Energy Crisis Update from our CEO
Liz Truss made a statement on 8 September regarding a number of measures that the UK government would start to implement for all domestic energy users in the UK. Among other important takeaways from this announcement, Truss suggested that all companies, charitable organisations, and governmental bodies will receive assistance with an equivalent guarantee; for a period of six months. To ensure that those who need it most get support, further assistance will be provided to other vulnerable sectors after these first six months. This assistance will be decided upon following a review that will be finished in three months.
Numerous clients, both current and prospective, have come to us for support and advice regarding how these measures may impact them in relation to their upcoming renewals, or supplies that are out of contract and currently awaiting offers and, specifically, the lack of clarity regarding how it will be delivered and how it might impact them.
While we are still anxiously awaiting more information regarding the proposed support revealed a week ago, and in order to help you think about the implications for you and your organisation, we want to outline a few points that we believe are crucial to mention.
• Out-of-contract rates are not a solution. In order to benefit from support as well as the provision of data and our services you must be under contract and registered with a supplier.
• As evidenced by a statement yesterday, these out-of-contract charges are subject to change without prior notice and are purposefully created to be charged at a level above any contracts a supplier has committed to. Customers were informed by one supplier of an expected rate change from £0.81/kWh day rate to £1.35/kWh! Currently, several suppliers are adjusting Gas out-of-contract pricing to be close to £0.30/kWh.
• As suppliers pass through the 1 October inflection point and take advantage of the uncontracted sites, there is a widespread assumption that support may not arrive until November, albeit it may be backdated.
• Suppliers are once again providing quotes, giving us options to think about, but we must be mindful of time constraints, limited resources, and the possibility that they will once more stop offering contracts.
• Prices have decreased a little, but not nearly enough. We recognise that the present levels make it difficult to determine whether your organisation can function effectively, therefore, considering products other than a normal fixed contract can be an option.
• The absolute latest I think anyone can wait to agree an October contract is next Thursday 22 September. We may get some further information on the day after this (Friday 23 September) but it seems very unlikely it will be the detailed answers we need.
• You must begin preparing in advance. With danger and uncertainty in the markets, there is no guarantee that we won’t be in the same position at the start of next year should some of the key improvements not be executed as rapidly as they want. The government has been clear that support is for a six-month period. Prices outside of the winter are undoubtedly lower right now, but it’s crucial that you decide what the future will include so that everyone can minimise the risks in this difficult time. Would you buy now, or when opportunities present themselves in the upcoming weeks and months, if you knew it would provide you peace of mind while everyone figures out how to help you through this current crisis?
While many of our clients acted on our recommendation to sign long-term contracts when the pandemic was at its lowest point, we also have a large number of clients who are currently in a dire situation and have limited options. Naturally, we want to assist each and every one of our clients in coming to the right decision. Our senior leadership team meets daily, and our energy market professionals participate in this forum in order to give you the most recent interpretation of this advice and the best possible contract solutions for you and your company. As a result, we have access to the most up-to-date data and the best market knowledge. Everyone is different, therefore, there is never one recommendation that applies to everyone. You already know that we are not the type of business that will pressure you into taking any action; it’s simply not how we conduct business. There is, however, always a strict deadline or choice that must be made. We ask that you cooperate with us and decide how we can best satisfy your requirements as we strive to resolve this issue, because if we keep waiting for the government to respond, we risk not being able to protect you. As we approach the final few days for a new contract’s October start, our team will be getting in touch via email and phone to discuss with you the various options which best suit your own situation.
While policy is being developed, we are working assiduously in the background to ensure that our customers are represented in the discussion and within government. We are also getting ready to launch our counteroffensive suggestions in 2023 as we prepare to enter a new age. We will continue to do all in our power to give you the excellent advice and service you have come to expect from Zenergi as the pioneer in our industry, and we eagerly anticipate discussing with you the action plan for how we continue to accomplish our shared goals in the upcoming months.
Chief Executive Officer